Company: VEEAW
Filing Date: 2025-01-10
Form Type: S-1/A
Source: 0001213900-25-002701
Chunk: 248

Company: VEEA INC.
Filing Date: 2025-01-10
Form: S-1/A
Chunk 248
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 common share equivalents, including stock options, and warrants, to the extent
they are dilutive. Refer to Note 14 - Earnings Per Share.

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. See Note 7 “Debt” for further information.

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 Convertible Notes Payable. See Note 7 “Debt” for further information.

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, Distinguishing Liabilities 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.

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Veea Inc. and Subsidiaries

Notes to the Cond