Company: VEEAW
Filing Date: 2025-05-21
Form Type: 10-Q
Source: 0001213900-25-046124
Chunk: 110

Company: VEEA INC.
Filing Date: 2025-05-21
Form: 10-Q
Item: Part I, Item 8
Chunk 110
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31, 2025 compared to the three months ended March 31, 2024. The
decrease for the quarter is primarily related to the Company’s cost reduction measures.

Transaction costs

Transaction costs increased
$35,000 in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due to costs related to the Crowdkeep
acquisition and the ELOC Commitment Shares.

Depreciation and Amortization

Depreciation and amortization
decreased by $8,800, or 13%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease
was due to certain assets reaching the end of their useful lives.

Other income, net

Other income, net relates
to immaterial non-operating transactions incurred during the period. These amounts were immaterial for the three months ended March 31,
2025 and 2024.

Change in fair value of derivative liabilities

Change in fair value of derivative
liabilities is comprised of the fair value adjustment to the conversion option, Private Warrants, and earn-out shares at balance sheet
date. The gain on the change in fair value of conversion note option liability of $59,000 for the three months ended March 31, 2025, was
determined using a Black-Scholes option pricing model. The gain on the change in fair value of warrant liabilities of $420,497 for the
three months ended March 31, 2025, was determined based on the trading value of the public warrants. The gain on the change in fair value
of the Earn-Out Share Liability of $10,530,000 for the three months ended March 31, 2025, was determined using a Monte Carlo simulation.
A significant driver of the changes in fair value was due to the decline in the Company’s stock price.

Other expense

Other expenses relate to
immaterial non-operating expenses incurred during the period. These amounts were immaterial for the three months ended March 31, 2025
and 2024.

Interest expense

Interest expense increased
by $489,716, or 107%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due
to additional draws on our revolving line of credit.

29

Liquidity and Capital Resources

During