Company: VEEAW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078177
Chunk: 40

Company: VEEA INC.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 40
---
     840,994  
     - 
  
    Convertible note option liability 
     60,000  
     -  
     -  
     60,000 
  
    Earn-out Share Liability 
     15,560,000  
     -  
     -  
     15,560,000 
  
    Total 
    $16,460,994  
     -  
     840,994  
     15,620,000 

Convertible Note Option
Liability

The Company established the initial
fair value for the convertible note option liability as of September 13, 2024, which was the date the Convertible Note was executed. As
of June 30, 2025, the fair value was remeasured using an option pricing model. The option pricing model was used to value the convertible
note option liability for the initial periods and subsequent measurement periods.

The convertible note option liability
was classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs. The key inputs into the option pricing
model for the convertible note option liability were as follows:

    June 30,  2025  
    December 31, 2024 
  
    Stock Price 
    $1.83  
    $3.81 
  
    Expected term (years) 
     0.70  
     1.2 
  
    Volatility 
     95% 
     75.0%
  
    Risk-Free Rate 
     4.16% 
     4.18%
  
    Interest rate 
     6.45% 
     6.49%

    Six months ended June 30,  2025 
  
    Balance, beginning of period 
    $60,000 
  
    Change in fair value 
     (59,730)
  
    Balance, end of period 
    $270 

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