Company: VEEAW
Filing Date: 2025-07-07
Form Type: DRS
Source: 0001213900-25-061586
Chunk: 133

Company: VEEA INC.
Filing Date: 2025-07-07
Form: DRS
Chunk 133
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) was $1,770,993 is recorded as a transaction cost within operating
expenses.

Change in fair value of derivative liabilities

Change in fair value of derivative
liabilities comprised of the fair value adjustment to the conversion option, SPAC Private Placement Warrants, and earnout shares at balance
sheet date. The gain on the change in fair value of conversion note option liability was $840,933 for the year ended December 31, 2024
was determined using a Black-Scholes option pricing model. The loss on the change in fair value of warrant liabilities was $200,124 for
the year ended December 31, 2024 was determined based on the trading value of the public warrants. The loss on the change in fair value
of the Earn-out Share Liability was $38.0 million for the year ended December 31, 2024 was determined using a Monte Carlo simulation.
A significant driver of the value of the earnout at the close of the Business Combination was our closing stock price on December 31,
2024 which was $3.81. These derivative instruments were entered into in 2024 related to the Business Combination.

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Other expense

Other expenses relate to
immaterial non-operating expenses incurred during the period. These amounts were immaterial for the years ended December 31, 2024 and
2023.

Interest expense

Interest expense decreased
by $3.5 million, or 66%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was due to loans
coming to term or being converted into equity.

Liquidity and Capital Resources

During the three months ended
March 31, 2025 and 2024, the Company incurred operating losses of $5.7 million and $6.1 million, respectively, and had an accumulated
deficit of $213.5 million as of March 31, 2025. Since its inception, the Company has incurred significant operating losses and negative
cash flows. The Company expects to continue to incur net losses as it continues to grow and scale its business. As of March 31, 2025,
the Company had cash of $247,341 and outstanding debt of $15.2 million, of which $750,000 was outstanding under the September 2024 Notes,
$14.0 million was outstanding under the working capital facility, and $485,000