Company: VEEAW
Filing Date: 2025-01-15
Form Type: 424B3
Source: 0001213900-25-003892
Chunk: 118

Company: VEEA INC.
Filing Date: 2025-01-15
Form: 424B3
Chunk 118
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Convertible Note Payable

When the Company issues
convertible debt, it first evaluates the balance sheet classification of the convertible instrument in its entirety to determine (1)
whether the instrument should be classified as a liability under ASC 480, Distinguishing Liabilities from Equity, and (2) whether the
conversion feature should be accounted for separately from the host instrument. A conversion feature of a convertible debt instrument
would be separated from the convertible instrument and classified as a derivative liability if the conversion feature, were it a standalone
instrument, meets the definition of a “derivative” in ASC 815, Derivatives and Hedging. When a conversion feature meets the
definition of an embedded derivative, it would be separated from the host instrument and classified as a derivative liability carried
on the consolidated balance sheet at fair value, with any changes in its fair value recognized currently in the consolidated statements
of operations.

Contingent Financing Asset

The Company recorded a contingent
financing asset on the condensed consolidated balance sheets for the fair value of the Transferred Shares issued to Investors for the
unfunded portion of the September 2024 Notes.

Warrants

The Company accounts for
warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms
and applicable authoritative guidance in FASB Accounting Standards Codification 480, DistinguishingLiabilities from Equity (“ASC
480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding
financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all
of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary
shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s
control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted
at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants
that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in
capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants
are required to be recorded at their initial fair value on the date of issuance, and