Company: VEEAW
Filing Date: 2025-07-07
Form Type: DRS
Source: 0001213900-25-061586
Chunk: 139

Company: VEEA INC.
Filing Date: 2025-07-07
Form: DRS
Chunk 139
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 require bifurcation and separate accounting of those derivatives apart from the host instruments,
if eligible, GAAP allows issuers to elect the fair value option (“FVO”) of accounting for those instruments. The FVO allows
the issuer to account for the entire financial instrument, including accrued interest, at fair value with subsequent remeasurements of
that fair value recorded through the statements of operations. We elected the FVO of accounting for the September 2024 Notes, including
contingently issuable common stock and accrued interest, as discussed in Note 3, Summary of Significant Accounting Policies and
Note 4, Reverse Recapatialization to the accompanying consolidated financial statements included elsewhere in this prospectus.

The September 2024 Notes,
which include the related contingently issuable common stock, contain embedded derivatives, which require bifurcation and separate accounting
under GAAP, for which the Company elected the FVO for the September 2024 Notes. The September 2024 Notes and accrued interest at their
stated interest rates were initially recorded at fair value as liabilities on the consolidated balance sheets and are subsequently re-measured
at fair value at the end of each reporting period presented within the consolidated financial statements. The changes in the fair value
of the September 2024 Notes are recorded in changes in fair value of convertible debt, included as a component of other income and expenses,
net, in the consolidated statements of operations. The change in fair value related to the accrued interest components is also included
within the single line of change in fair value of September 2024 Notes on the consolidated statements of operations. See additional information
on valuation methodologies and significant assumptions used in Note 7, Debt and Note 11, Fair Value Measurement to the
accompanying consolidated financial statements included elsewhere in this prospectus.

The Earn-out Share Liability

Certain shareholders of the
Company are eligible to receive up to 4.5 million earnout shares of the Company's common stock, contingent upon the fulfillment of certain
milestones. Each earnout is deemed achieved if, at any time within ten years following the Business Combination, (i) the volume-weighted
average price of the Company's common stock reaches or exceeds either $12.50 or $15.00, in each case, for any twenty trading days within
a thirty trading day period or (ii) a change of control occurs resulting in the shareholders receiving a per share price, or an implied
value per share equal to or in excess of $12.