Company: VEEAW
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032215
Chunk: 377

Company: VEEA INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 377
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, and subject to customary permitted transfer exceptions). The Transferred Shares are not
be subject to any lock-up restrictions, but for a period of 6 months after the Closing they will be separately designated by the Transfer
Agent and kept as book entry shares on the Transfer Agent’s records and will not be eligible to be held by DTC without the Investor
first notifying the Company of its intent to transfer any such Transferred Shares to a brokerage account and/or to be held by DTC or another
nominee (a “Brokerage Transfer”). If the Investor provides such notice or otherwise has any Transferred Shares subject to
a Brokerage Transfer within 6 months after the Closing, a portion of the outstanding obligations under such Investor’s Note will
automatically convert into a number of Conversion Shares equal to the number of Transferred Shares subject to such Brokerage Transfer,
and the lock-up period for such Conversion Shares will be extended for an additional 6 months to 12 months after the Financing Closing.
As of December 31, 2024, $250,000 in aggregate principal amount of the September 2024 Notes, together with associated interest, had automatically
converted upon the occurrence of a Brokerage Transfer.

The
Company reviewed the conversion feature granted in the notes under ASC 815 and concluded that the conversion price was based on a variable
(enterprise value) that was not an input to the fair value of a “fixed-for-fixed” option as defined under FASB ASC Topic
No. 815 – 40 and is therefore considered a conversion option liability that should be bifurcated from the debt host. As the fair
value of the conversion option liability exceeded the net proceeds received, in accordance with ASC 470-20, the Company recorded the
conversion option liability at fair value with the excess of the fair value over the net proceeds received recognized as a loss in earnings.
See Note 14 “Fair Value Measurements” for further information.

8
- INVESTMENTS

The
Company accounts for its private company investments without readily determinable fair values under the cost method. These investments,
for which the Company is not able to exercise significant influence over any one individual investee, are measured and accounted for
using an alternative measurement basis of a) the security’s carrying value at cost, b) less any impairment and c) plus or minus
any qualifying observable price changes. Observable price changes or impairments recognized on the Company’s private company investments
would be classified as a Level 3 financial instrument within