Company: VEEAW
Filing Date: 2025-01-10
Form Type: S-1/A
Source: 0001213900-25-002701
Chunk: 259

Company: VEEA INC.
Filing Date: 2025-01-10
Form: S-1/A
Chunk 259
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 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.

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 13 “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, is 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 the fair value hierarchy based on the nature of the fair value inputs. Any adjustments to the carrying values
are recognized in other income, net in the Company’s consolidated statements of operations and comprehensive loss. As of December
31, 2023, the Company performed the qualitative assessment for impairment of its investments. Based on this qualitative assessment, impairment
indicators were present for one of its investments therefore the company performed an analysis to estimate its fair value and recognized
an impairment loss of $ due to a change in the fair value. As of September 30, 2024 and December 31,