Company: VEEAW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078177
Chunk: 267

Company: VEEA INC.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 267
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As discussed in Note 1, the Business
Combination was consummated on September 13, 2024, which, for accounting and reporting purposes under GAAP, was treated as the equivalent
of Private Veea issuing stock for the net assets of Plum, accompanied by an equity recapitalization of Private Veea, which was determined
to fall within the scope of Accounting Standards Codification (“ASC”) 805, “Business Combinations”. Plum
was treated as the acquired company, and its net assets were stated at historical cost, with no goodwill or other intangible assets recorded.
The excess of the fair value of shares issued to Plum over the fair value of Plum’s identifiable net assets acquired represented
compensation for the service of a stock exchange listing for its shares and was expensed as incurred.

The warrants issued at the time of
Plum’s initial public offering (the “Public Warrants”), and warrants issued in connection with private placement at
the time of Plum’s initial public offering (the “Private Placement Warrants”) remain outstanding and are now outstanding
warrants for the Company.

9

Earn-out Share Liability

Following the Closing, stockholders
who previously held certain capital stock of Private Veea have the contingent right to receive up to 4.5 million additional shares of
the common stock, par value $0.0001 per share, of the Company (“Common Stock”) if certain trading-price based milestones of
the Company’s Common Stock are achieved or a change of control transaction occurs during the ten-year period following the Closing.

Under accounting principles, the Company’s
obligation to issue the earn-out shares is recorded as a contingent liability (the “Earn-out Share Liability”) in the Company’s
financial statements and the initial value of the Earn-out Share Liability was recorded as a transaction cost within operating expenses
in the Company’s financial statements for the year ended December 31, 2024. For each subsequent reporting period, changes in the
fair value of the Earn-out Share Liability are reported in the Company’s financial statements.

6 - BALANCE SHEET COMPONENTS

Inventory

Inventory consists of the following:

    June 30, 2025  
    December 31, 2024 
  
    Inventory 
    $8,014,752  
    $7,377,966 
  
    Inventory allowance 
     (904,653) 
     (904,653)
  
    Consigned parts 
     2,301,975