Company: VEEAW
Filing Date: 2025-07-07
Form Type: DRS
Source: 0001213900-25-061586
Chunk: 138

Company: VEEA INC.
Filing Date: 2025-07-07
Form: DRS
Chunk 138
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solescence. Factors influencing these adjustments include changes in future demand forecasts,
market conditions, technological changes, product life cycle and development plans, component cost trends, product pricing, physical
deterioration, and quality issues. The write down for excess or obsolescence is charged to the provision for inventory, which is a component
of cost of goods sold in the Company’s consolidated statements of operations and comprehensive loss. At the point of the loss recognition,
a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration
or increase in that newly established cost basis.

Fair Value of Equity-Based Awards

We estimate the fair value
of stock option awards granted using the Black-Scholes option pricing model, which uses as inputs the fair value of our common stock
and subjective assumptions we make, including expected stock price volatility, the expected term of the award, the risk-free interest
rate, and expected dividends. Due to the lack of company-specific historical and implied volatility data, we base the estimate of expected
stock price volatility on the historical volatility of a representative group of publicly traded companies for which historical information
is available. The historical volatility is generally calculated for a period of time commensurate with the expected term assumption.
We use the simplified method to calculate the expected term for options granted to employees and directors. We utilize this method as
we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk-free
interest rate is based on a U.S. treasury instrument whose term is consistent with the expected term of the stock options. The expected
dividend yield is assumed to be zero, as we have never paid dividends and do not have current plans to pay any dividends on our common
stock.

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As there was no public market
for Private Veea’s common stock prior to the closing of the Business Combination, the estimated fair value of our common stock
was previously approved by our Board of Directors, with input from management, as of the date of each award grant, considering our most
recently available independent third-party valuations of Private Veea’s common stock and its board of directors’ assessment
of additional objective and subjective factors deemed relevant that may have changed from the date of the most recent valuation through
the date of the grant.

Fair Value of Certain Debt and Liability Instruments, and the Fair Value Option of Accounting

When financial instruments
contain various embedded derivatives which