Company: VEEAW
Filing Date: 2025-05-21
Form Type: 10-Q
Source: 0001213900-25-046124
Chunk: 78

Company: VEEA INC.
Filing Date: 2025-05-21
Form: 10-Q
Item: Part I, Item 8
Chunk 78
---
(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. (“VeeaSystem”)
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 respect to the Common Stock
after the Financing Closing) (the “Conversion Price”) at any time after the Financing Closing at the sole election of the
Investor. The outstanding obligations under each September 2024 Note will automatically convert at the Conversion Price if (i) the Company
or its subsidiaries consummate one or more additional financings for equity or equity-linked securities for at least $20 million in the
aggregate or makes one or more significant acquisitions valued in the aggregate (