Company: VEEAW
Filing Date: 2025-05-21
Form Type: 10-Q
Source: 0001213900-25-046124
Chunk: 94

Company: VEEA INC.
Filing Date: 2025-05-21
Form: 10-Q
Item: Part I, Item 8
Chunk 94
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.41% 
     6.49%

    Three months
ended March 31, 
2025 
  
    Balance, beginning of period 
    $60,000 
  
    Change in fair value 
     (59,000)
  
    Balance, end of period 
    $1,000 

Earn-out Share Liability

Following the closing of the Business
Combination, holders of certain capital stock of Private Veea immediately prior to the closing have the contingent right to receive up
to 4.5 million additional shares of Common Stock if certain trading-price based milestones of the Common Stock are achieved or a change
of control transaction occurs during the ten-year period following the Closing. 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. The initial
value of the contingent Earn-out Share Liability of $53.6 million was recorded as a transaction cost within operating expenses. The fair
value of the Earn-out Share Liability was estimated using a Monte Carlo simulation utilizing assumptions related to the contractual term
of the instruments, estimated volatility, the price of the Common Stock, and current interest rates.

The following table presents the changes
in fair value of the earn-out liability:

    Three months ended  March 31, 2025 
  
    Balance, beginning of period 
    $15,560,000 
  
    Change in fair value 
     (10,530,000)
  
    Balance, end of period 
    $5,030,000 

The key inputs for the Earn-out Share
Liability were as follows:

    March 31,  2025  
    December 31,
2024 
  
    Stock Price 
    $1.49  
    $6.5 
  
    Expected term (years) 
     9.5  
     10 
  
    Volatility 
     75% 
     75.0%
  
    Risk-Free Rate 
     4.2% 
     3.81%

20

15 - EARNINGS PER SHARE

The computation of basic and dilutive
net loss per share attributable to common stockholders for the three months ended March 31, 2025 and 2024, are as follows:

    Three Months ended
March 31,

    2025

    2024

    Basic:

    Numerator:

    Net income (loss) attributable