Company: VEEAW
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032215
Chunk: 996

Company: VEEA INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 4
Chunk 996
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31, 2023.
The year-to-date increase was due primarily to an increase in customer evaluations and fees paid to third-party marketing firm during
the period.

General
and Administrative Expense

General and administrative expense increase by $9.4 million, or 55%,
in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase is primarily related to a $6.3 million
increase to share based compensation, $1.2 million for employee benefits and other office related expenditures, $0.7 million increase
related to professional fees, a the foreign exchange gain of $0.7 million and a $0.5 million increase in our inventory reserve for the
year ended December 31, 2024 The year-to-date overall increase was primarily due to an increase in net foreign exchange losses, as well
as an increase in professional and consulting fees relating to the Business Combination.

58

Transaction
costs including those incurred with Earn-Out Share Liability

Following
the closing of the Business Combination, holders of certain capital stock of Private Veea immediately prior to the closing will have
the contingent right to receive up to 4.5 million additional shares of the Company’s 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 earnout shares is recorded as
a contingent liability (the “Earn-Out Share Liability”). The initial value of the Earn-out Share Liability of
approximately $55 million is recorded as a transaction cost within operating expenses. The fair value of the Earn-out Share
Liability was estimated using Monte Carlo simulation utilizing assumptions related to the contractual term of the instruments,
estimated volatility, and current interest rates and the price of our Common Stock on the Closing Date and at December 31, 2024. A
significant driver of the value of the earnout  at the close of the Business Combination was our closing stock price on
September 13, 2024 which was $12.00 per share and our closing stock price on December 31, 2024 was $3.81 per share. Additionally,
the Company incurred approximately $1.4 million of professional fees relating to the Business Combination.

Depreciation
and Amortization

Depreciation
and amortization decreased by $544,431, or 67%, in the year ended December