Company: VEEAW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078177
Chunk: 23

Company: VEEA INC.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 23
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 Agreement pursuant to which the Company agreed to terminate the Investor’s obligation to purchase a note
in the Commitment Amount and provided for a mutual release of claims, in exchange for a payment to the Company of an aggregate amount
of approximately $5.4 million, which amount includes payments previously made to the Company in respect of the Commitment Amount. As the
Company received approximately $1.5 million of the total expected $15.0 million proceeds at the Financing Closing, a proportional amount
(approximately $19.5 million) of the substantial discount was deferred and recorded as a deferred financing asset on the Company’s
consolidated financial statements. At December 31, 2024, the deferred financing assets were reversed on the Company’s consolidated
financial statements.

The Company and VeeaSystems Inc. (“VeeaSystems”)
are co-borrowers under each September 2024 Note (together, the “Borrowers”) and are jointly responsible for the obligations
to each Investor thereunder. Each September 2024 Note has a maturity date of 18 months after the Financing Closing but is prepayable in
whole or in part by the Borrowers at any time without penalty. The outstanding obligations under each September 2024 Note accrues interest
at a rate equal to the Secured Overnight Financing Rate plus 2% per annum, adjusted quarterly, but interest is only payable upon the maturity
date of the September 2024 Note as long as there is no event of default thereunder. Each September 2024 Note is unsecured and expressly
subordinated to any senior debt of the Borrowers. The September 2024 Notes and the Note Purchase Agreements do not include any operational
or financial covenants for the Borrowers. Each September 2024 Note includes customary events of default including, without limitation,
failure to pay amounts due on the maturity date, failure to otherwise comply with the Borrowers’ covenants or for Borrower insolvency
events, in each case, with customary cure periods. Upon an event of default, the Investor may accelerate all obligations under its September
2024 Note and the Borrowers will be required to pay for the Investor’s reasonable out-of-pocket collection costs.

The outstanding obligations under each
September 2024 Note are convertible in whole or in part into shares of Common Stock (the “Conversion Shares”) at a conversion
price of $7.50 per share (subject to equitable adjustment for stock splits, stock dividends and the like with