Company: VEEAW
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032215
Chunk: 305

Company: VEEA INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 305
---
 straight-line method over the term of the applicable subscription
period.

Revenue from hardware sales is recognized at a
point-in-time, which is generally at the point in time when products have been shipped, right to payment has been obtained and risk of
loss has been transferred. Certain of the Company’s product’s performance obligations include proprietary operating system
software, which typically is not considered separately identifiable. Therefore, sales of these products and the related software are considered
one performance obligation.

The Company has service arrangements where net
sales are recognized over time. These arrangements include a variety of post-contract support service offerings, which are generally recognized
over time as the services are provided, including maintenance and support services, and professional services to help customers maximize
their utilization of deployed systems. A contract liability for deferred revenue is recorded when consideration is received or is unconditionally
due from a customer prior to transferring control of goods or services to the customer under the terms of a contract. Deferred revenue
balances typically result from advance payments received from customers for product contracts or from billings in excess of revenue recognized
on services arrangements.

Inventory

The Company values inventory at the lower of cost
or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. At each reporting
period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value, if required,
for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts, market conditions,
technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration, and quality
issues. The write down for excess or obsolescence is charged to the provision for inventory, which is a component of cost of goods sold
in the Company’s consolidated statements of operations and comprehensive loss. At the point of the loss recognition, a new, lower
cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase
in that newly established cost basis.

Fair Value of Equity-Based Awards

We estimate the fair value of stock option awards
granted using the Black-Scholes option pricing model, which uses as inputs the fair value of our common stock and subjective assumptions
we make, including expected stock price volatility, the expected term of the award, the risk-free interest rate, and expected dividends.
Due to the lack of company-specific historical and implied volatility data, we base the estimate