Company: VEEAW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078177
Chunk: 302

Company: VEEA INC.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 8
Chunk 302
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keep Noteholder Lock-Up Agreement have substantially similar terms, but the Crowdkeep Lock-Up Agreement provides for distributions
by the Seller to the Seller’s stockholders, pro rata based on their ownership of Seller, subject to certain conditions.

The foregoing description
of the Crowdkeep Lock-Up Agreement and Crowdkeep Noteholder Lock-Up Agreement do not purport to be complete and are qualified in its entirety
by the terms and conditions of the form of Crowdkeep Lock-Up Agreement and form of Crowdkeep Noteholder Lock-Up Agreement, copies of which
are attached hereto as Exhibit 10.4 and Exhibit 10.5, respectively, and are incorporated herein by reference.

27

Components of Results of Operations

Sales, net

The Company recognizes revenue
based on the satisfaction of distinct obligations to transfer goods and services to customers. The Company generates revenue from hardware
sales and the sale of licenses and subscriptions. The Company applies a five-step approach as defined in ASC 606, “Revenue from
Contracts with Customers”, in determining the amount and timing of revenue to be recognized: (1) identify the contract with
a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction
price to the performance obligations in the contract; and (5) recognize revenue when a corresponding performance obligation is satisfied.
Most contracts with customers are to provide distinct products or services within a single contract. However, if a contract is separated
into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based
on the estimated relative standalone selling price.

For licenses of technology,
recognition of revenue is dependent upon whether the Company has delivered rights to the technology, and whether there are future performance
obligations under the contract. Revenue from non-refundable upfront payments is recognized when the license is transferred to the customer
and the Company has no other performance obligations. Revenue for licenses delivered under a subscription model having terms between one
and twelve-months are recognized over time. Subscription revenue is generated through sales of monthly subscriptions. Customers pay in
advance for the licenses and subscriptions. Revenue is initially deferred and is recognized using the straight-line method over the term
of the applicable subscription period.

Cost of Goods Sold

Cost of goods sold consists
primarily of the cost of finished goods, components purchased for manufacturing and freight. Cost of goods sold also includes third-party
vendor costs related to cloud hosting fees.

Operating Expenses

We classify our operating