Company: VEEAW
Filing Date: 2025-08-06
Form Type: S-1/A
Source: 0001213900-25-072342
Chunk: 225

Company: VEEA INC.
Filing Date: 2025-08-06
Form: S-1/A
Chunk 225
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 | % |
| Risk-Free Rate        |     |   |      4.05 | % |     |   |         4.18 | % |
| Interest rate         |     |   |      6.41 | % |     |   |         6.49 | % |

|                              |     | Three months 
 ended        
 March 31,    
 2025         |         |   |
|:-----------------------------|:----|:-------------|--------:|:--|
| Balance, beginning of period |     | $            |  60,000 |   |
| Change in fair value         |     |              | (59,000 | ) |
| Balance, end of period       |     | $            |   1,000 |   |

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 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”) in the Company’s financial statements. The initial
value of the contingent Earn-out Share Liability of $ million was recorded as a transaction cost within operating expenses. The fair
value of the Earn-out Share Liability was estimated using a Monte Carlo simulation utilizing assumptions related to the contractual term
of the instruments, estimated volatility, the price of the Common Stock, and current interest rates.

The following table presents the changes
in fair value of the earn-out liability:

|                              |     | Three months 
 ended        
 March 31,    
 2025         |             |   |
|:-----------------------------|:----|:-------------|------------:|:--|
| Balance, beginning of period |     | $            |  15,560,000 |   |
| Change in fair value         |     |              | (10,530,000 | ) |
| Balance, end of period       |     | $            |   5,030,000 |   |

The key inputs for the Earn-out Share
Liability were as follows:

|                       |     |   | March 31, 
      2025 |   |     |   | December 31, 
         2024 |   |
|:----------------------|