Company: VEEAW
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032215
Chunk: 399

Company: VEEA INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 399
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 the Company has gross state net operating loss carryforwards of approximately $72,622,999 with an expected net tax impact
$4,984,749. The state NOLs have varying expiration dates as determined by each state.

The Company also has net operating losses in foreign
jurisdictions that can be utilized to offset future taxable income in the United Kingdom, France, or Mexico based on the jurisdiction
of generation. The gross value of these NOLs is 28,276,145 with an anticipated future tax benefit of $7,069,870. The expiration of the
foreign NOLs are also based on the law in each respective jurisdiction, with the earliest of these being 2034.

As of December 31, 2024, the Company has federal
R&D credit carryforwards of $4,092,749, these credits will begin to expire in 2038. The Company has also reduced the anticipated future
benefit of these credits by recording an uncertain tax benefit equal to 30% of the credit claimed.

IRC Section 382 imposes limitations on the use
of net operating loss carryovers when the stock ownership of one or more 5% shareholders (shareholders owning 5% or more of the Company’s
outstanding capital stock) has increased on a cumulative basis by more than 50 percentage points. As of December 31, 2024, the Company
has not completed an analysis on the 382 limitation. A 382 limitation calculation will be considered prior to the usage of tax attributes.

The Company's effective tax rate could also fluctuate
due to changes in the valuation of its deferred tax assets or liabilities, or by changes in tax laws, regulations, and accounting principles.

The Company has evaluated both positive and negative
evidences and determined that all of its worldwide deferred tax assets will not be realized for the foreseeable future. As a result, the
valuation allowance is recorded against all existing deferred tax assets. The current business operations and resulting need for a valuation
analysis will be considered annually.

Beginning on January 1, 2022, the Tax Cuts and
Jobs Act (the "Tax Act”) eliminated the option to deduct research and development expenditures in the current year and requires
taxpayers to capitalize such expenses pursuant to Internal Revenue Code (“IRC”) Section 174. The capitalized expenses are
amortized over a five-year period for domestic expenses. As a result of this provision of the Tax Act, deferred tax assets