Company: VEEAW
Filing Date: 2025-05-21
Form Type: 10-Q
Source: 0001213900-25-046124
Chunk: 46

Company: VEEA INC.
Filing Date: 2025-05-21
Form: 10-Q
Item: Part I, Item 1
Chunk 46
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price to the performance obligations in the contract; and (5) recognize revenue when a corresponding performance obligation is satisfied.
Most contracts with customers are to provide distinct products or services within a single contract. However, if a contract is separated
into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based
on the estimated relative standalone selling price.

For licenses of technology,
recognition of revenue is dependent upon whether the Company has delivered rights to the technology, and whether there are future performance
obligations under the contract. Revenue from non-refundable upfront payments is recognized when the license is transferred to the customer
and the Company has no other performance obligations. Revenue for licenses delivered under a subscription model having terms between
one and twelve-months are recognized over time. Subscription revenue is generated through sales of monthly subscriptions. Customers pay
in advance for the licenses and subscriptions. Revenue is initially deferred and is recognized using the straight-line method over the
term of the applicable subscription period.

Cost of Goods Sold

Cost of goods sold consists
primarily of the cost of finished goods, components purchased for manufacturing and freight. Cost of goods sold also includes third-party
vendor costs related to cloud hosting fees.

Operating Expenses

We classify our operating
expenses into the following categories:

●Product development expenses.
Product development expenses primarily consist of employee compensation, employee benefits, stock-based compensation related to technology
developers and product management employees, as well as fees paid for outside services and materials.

●Sales and marketing expenses.
Sales and marketing expenses consist of compensation and other employee-related costs for personnel engaged in selling, marketing and
sales support functions. Selling expenses also include marketing and the costs associated with customer evaluations. The Company does
not currently incur advertising costs.

●General and administrative
expenses. General and administrative expenses consist of compensation expense (including stock-based compensation expense) for employees
and executive management, and expenses associated with finance, tax, and human resources. General and administrative expenses also includes
transaction costs, expenses associated with facilities, information technology, external professional services, legal costs and settlement
of legal claims and other administrative expenses.

●Depreciation and amortization:
Depreciation and amortization expense consists of depreciation of Veea’s property and equipment and amortization of Veea’s
patents and other intellectual property.

●Impairment: Impairment
consists of impairment charges related to our in-process research and development (“IPR&D”)

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Results of Operations

The following