UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM
For the Quarterly Period
Ended
OR
For the transition period from _______ to ________.
Commission file number:
(Exact name of Registrant as specified in its charter)
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| incorporation or organization) | Identification No.) | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone
number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| The | ||||
| The |
Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. ☒
Indicate by check mark whether the registrant
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of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
| ☒ | Smaller Reporting Company | ||
| Emerging Growth Company |
If an emerging growth company, indicate by check
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Indicate by check mark whether the registrant
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Yes
As of May 6, 2025, there were
VEEA INC.
FORM 10-Q
TABLE OF CONTENTS
i
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
VEEA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Cash | $ | $ | ||||||
| Receivables, net | ||||||||
| Inventory, net | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Goodwill | ||||||||
| Intangible assets, net | ||||||||
| Investments | ||||||||
| Other assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Revolving line of credit | $ | $ | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ||||||||
| Related party accrued rent | ||||||||
| Share issuance liability | ||||||||
| Deferred payables, current | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Related party notes | ||||||||
| Convertible note payable, net | ||||||||
| Conversion option liability | ||||||||
| Warrant liability | ||||||||
| Earn-out Share Liability | ||||||||
| Deferred payables | ||||||||
| TOTAL LIABILITIES | ||||||||
| STOCKHOLDERS’ DEFICIT | ||||||||
| Preferred stock, $ |
||||||||
| Common Stock, $ |
||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Accumulated other comprehensive income | ||||||||
| TOTAL STOCKHOLDERS’ DEFICIT | ( |
) | ( |
) | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
1
VEEA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Sales, net | $ | $ | ||||||
| Cost of goods sold | ||||||||
| Gross profit | ||||||||
| Operating Expenses: | ||||||||
| Product development | ||||||||
| Sales and marketing | ||||||||
| General and administrative, net | ||||||||
| Transaction costs | ||||||||
| Depreciation and amortization | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Other income, net | ||||||||
| Change in fair value of convertible note option liability | ||||||||
| Change in fair value of warrant liabilities | ||||||||
| Change in fair value of Earn-out Share Liability | ||||||||
| Other expense | ( | ) | ||||||
| Interest expense | ( | ) | ( | ) | ||||
| Total other income (expense) | ( | ) | ||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Net income (loss) per share: | ||||||||
| Basic | $ | $ | ( | ) | ||||
| Diluted | $ | $ | ( | ) | ||||
| Weighted-average common stock outstanding used in per share amounts: | ||||||||
| Basic | ||||||||
| Diluted | ||||||||
| Other comprehensive income (loss): | ||||||||
| Foreign currency translation adjustment | ||||||||
| Comprehensive income (loss) | $ | $ | ( | ) | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
2
VEEA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(Unaudited)
FOR THE THREE MONTHS ENDED MARCH 31, 2025
| Common Stock | Additional Paid-in- | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Income (Loss) | Deficit | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
| Stock based compensation | ||||||||||||||||||||||||
| Common stock issued upon exercise of stock options | ||||||||||||||||||||||||
| Common stock issued upon draw on the equity line of credit | ||||||||||||||||||||||||
| Common stock issued as compensation for equity line of credit commitment fee | ||||||||||||||||||||||||
| Settlement of convertible note agreement for shares issued | ||||||||||||||||||||||||
| Cumulative translation adjustment | ||||||||||||||||||||||||
| Net income | ||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||
FOR THE THREE MONTHS ENDED MARCH 31, 2024
| Common Stock | Additional Paid-in- | Accumulated | Accumulated Other Comprehensive | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Income (Loss) | Deficit | |||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
| Series A-2 Preferred Stock Issuances, net of transaction costs | ||||||||||||||||||||||||
| Conversion of vendor payable to Series A-2 Preferred Stock | ||||||||||||||||||||||||
| Stock based compensation for stock options | ||||||||||||||||||||||||
| Foreign currency translation (loss) | ||||||||||||||||||||||||
| Net loss | ( | ) | ( | ) | ||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
VEEA INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | $ | ( | ) | ||||
| Adjustments to reconcile net income (loss) to net cash used for operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of debt issuance costs | ||||||||
| Change in fair value of convertible note option liability | ( | ) | ||||||
| Change in fair value of warrant liabilities | ( | ) | ||||||
| Change in fair value of Earn-out Share Liability | ( | ) | ||||||
| Common stock issued as compensation for ELOC commitment fee | ||||||||
| Share based compensation | ||||||||
| Unrealized foreign currency transaction loss | ||||||||
| Amortization of operating lease right of use assets | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | ( | ) | ||||||
| Inventories | ( | ) | ( | ) | ||||
| Prepaid and other current assets | ( | ) | ||||||
| Other assets | ( | ) | ||||||
| Accounts payable | ||||||||
| Accrued expenses | ( | ) | ( | ) | ||||
| Accrued interest | ||||||||
| Other current liabilities | ||||||||
| Operating lease payments | ( | ) | ( | ) | ||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | ( | ) | ||||||
| Purchase of intangible assets and trademarks | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from revolving line of credit | ||||||||
| Proceeds from related party notes | ||||||||
| Proceeds from the issuance of shares under equity line of credit facility | ||||||||
| Proceeds from the issuance of Series A-2 preferred stock, net of transaction costs | ||||||||
| Proceeds from prepaid investor subscriptions | ||||||||
| Proceeds from exercise of stock options | ||||||||
| Net cash provided by financing activities | ||||||||
| Effect of exchange rate changes on cash | ( | ) | ||||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of year | ||||||||
| Cash and cash equivalents at end of year | $ | $ | ||||||
| Non-cash activities | ||||||||
| Settlement of convertible notes for shares issued | $ | |||||||
| Conversion of vendor payable to Series A-2 Preferred Shares | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Veea Inc. and Subsidiaries
Notes to the Condensed Consolidated Financial Statements
1 - DESCRIPTION OF BUSINESS
The Company is a provider of edge computing and communications devices (i.e., “VeeaHubÒ” devices), applications, and services hosted on its edge Platform-as-a-Service (“ePaaS”). Veea Edge Platform ePaaS is an end-to-end platform that is both locally- and cloud-managed. VeeaHubÒ products are converged computing and communications (i.e., hyperconverged) indoor and outdoor devices, about the size of a Wi-Fi Access Point (AP), that provide for networking and computing solutions for AI-assisted applications and solutions at the edge where people, places, and things connect to the network.
Veea Edge PlatformÔ provides for highly secure connectivity, computing, and IoT solutions through full stack platform for digital transformation of industries, as well as unserved or underserved communities that lack Internet connectivity and essential applications and services. It further enables the formation of highly secure, but easily accessible, private clouds and networks across one or multiple user(s) or enterprise location(s) across the globe. We have redefined and simplified edge computing and connectivity with Veea Edge PlatformÔ, easily deployable products that fully integrate hardware, system software, technologies, and edge applications. We are demonstrating, globally, that the Veea Edge PlatformÔ enables our partners and customers to champion digital transformations in multiple vertical markets.
Through our innovative Veea Edge Platform, we have created a new product category that brings cloud capabilities close to the user, as an alternative to cloud computing, with benefits in optimal latency, lower data transport costs, data privacy, security and ownership, Edge AI, “always-on” availability at the edge for mission critical applications, and contextual awareness for people, devices and things connected to the Internet. The Company was recognized in 2023 by Gartner as a Leading Smart Edge Platform for the innovativeness and capabilities of our Veea Edge Platform and a Cool Vendor in Edge Computing in 2021. Veea was named in Market Reports World’s research report published in October 2023 as one of the top 10 Edge AI solution providers alongside IBM, Microsoft, Amazon Web Services, and others.
On September 13, 2024, Plum Acquisition Corp. I. (“Plum”), a special purpose acquisition company, and VeeaSystems Inc., a Delaware corporation (“Private Veea”), consummated a business combination (the “Business Combination”), pursuant to that certain Business Combination Agreement, dated November 27, 2023 (as amended on June 13, 2024 and September 13, 2024, the “Business Combination Agreement”), between Plum, Private Veea, and Plum Merger Sub, a Delaware corporation) (“Plum Merger Sub”). In connection with the consummation of the Business Combination (the “Closing”), (i) Plum de-registered from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware, migrating to and domesticating as a Delaware corporation (the “Domestication”) and (ii) the merger (the “Merger”) of Plum Merger Sub with and into Private Veea was completed and the separate corporate existence of Plum Merger Sub ceased, with Private Veea as the surviving corporation becoming a wholly owned subsidiary of Plum. Following the Closing, Plum changed its name from “Plum Acquisition Corp. I” to “Veea Inc.” (hereinafter “Veea” or “the Company”) and Private Veea changed its name from “Veea Inc.” to “VeeaSystems Inc.” See Note 4 for more information.
The Company has five wholly owned
subsidiaries: VeeaSystems Inc., formerly known as Veea Inc., a Delaware corporation; Veea Solutions Inc., a Delaware corporation; VeeaSystems
Development Inc., formerly known as Veea Systems Inc., a Delaware corporation; Veea Systems Ltd., a company organized under the laws
of England and Wales; and VeeaSystems SAS, a French simplified joint stock company; and one majority owned subsidiary, VeeaSystems Mexico,
S. de R.L. de C.V., a limited capital company organized under the laws of Mexico (“VeeaSystems MX”). VeeaSystems MX is
5
2 - LIQUIDITY AND MANAGEMENT’S PLAN
During the three months ended March
31, 2025 and 2024, the Company incurred operating losses of $
Although the Company has had recurring
losses each year since inception, the Company plans to fund its operations and capital funding needs through a combination of private
and public equity and debt offerings, or a combination thereof, including (1) cash proceeds from the ELOC Program (as defined below) (2)
the expected cash tax refund of up to $
3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, certain information and footnote disclosures normally included in consolidated financial statements in accordance with GAAP have been omitted. In the opinion of management, all adjustments considered necessary for a fair presentation have been included.
All significant intercompany balances and transactions have been eliminated in consolidation. We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. The Company has one VIE, VeeaSystems MX. Transactions with VeeaSystems MX were immaterial during all the period presented and are not separately disclosed.
The condensed consolidated balance sheet as of March 31, 2025, has been derived from the unaudited consolidated financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for its year ended December 31, 2024.
Basis of Accounting
The accompanying condensed consolidated financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted under GAAP.
6
Use of Estimates
Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its condensed consolidated financial statements in accordance with GAAP. The Company believes that these estimates, judgments and assumptions are reasonable under the circumstances. These estimates, judgments, and assumptions impact the reported amounts of assets, liabilities, revenue, and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Changes in such estimates could affect amounts reported in future periods. On an ongoing basis, the Company evaluates its estimates and judgments including those related to: liquidity and going concern, the useful lives and recoverability of property and equipment and definite-lived intangible assets; the recoverability of goodwill and indefinite-lived intangible assets; the carrying value of accounts receivable, including the determination of the allowance for credit losses; inventory, including the determination of allowances for estimated excess or obsolescence; the fair value of warrants; the fair value of acquisition-related contingent consideration arrangements; the fair value of the ELOC; unrecognized tax benefits; legal contingencies; the incremental borrowing rate for the Company’s leases; and the valuation of stock-based compensation, among others.
Emerging Growth Company Status
The Company is an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.
Segment Information
The Company operates as a single operating
segment. The chief operating decision maker is the Company’s Chief Executive Officer, who makes resource allocation decisions and
assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated revenue information.
Accordingly, the Company has determined that it has a single reportable segment and operating segment. The majority of the Company’s
assets as of March 31, 2025 and December 31, 2024, were attributable to its U.S. operations. The Company does not have any customers that
make up more than
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of refunds received, by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, on a prospective basis with the option to apply it retrospectively. Early adoption is permitted. The adoption of this guidance results in the Company being required to include enhanced income tax-related disclosures. The Company adopted this guidance effective January 1, 2025; however, as there is a full valuation allowance on its deferred tax assets, income tax disclosures are not material to the condensed consolidated financial statements and are not included in this Quarterly Report on Form 10-Q but will be evaluated quarterly going forward necessary disclosures.
In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU includes amendments that expand the existing reportable segment disclosure requirements and requires disclosure of (i) significant expense categories and amounts by reportable segment as well as the segment’s profit or loss measure(s) that are regularly provided to the chief operating decision maker (the “CODM”) to allocate resources and assess performance; (ii) how the CODM uses each reported segment profit or loss measure to allocate resources and assess performance; (iii) the nature of other segment balances contributing to reported segment profit or loss that are not captured within segment revenues or expenses; and (iv) the title and position of the individual or name of the group or committee identified as the CODM. This guidance requires retrospective application to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance results in the Company being required to include enhanced disclosures relating to its reportable segments. The Company adopted this guidance effective December 31, 2024, and it did not have a material effect on the Company’s condensed consolidated financial statements.
7
4 - REVERSE RECAPITALIZATION
As discussed in Note 1, the Business Combination was consummated on September 13, 2024, which, for accounting and reporting purposes under GAAP, was treated as the equivalent of Private Veea issuing stock for the net assets of Plum, accompanied by an equity recapitalization of Private Veea, which was determined to fall within the scope of Accounting Standards Codification (“ASC”) 805, “Business Combinations”. Plum was treated as the acquired company, and its net assets were stated at historical cost, with no goodwill or other intangible assets recorded. The excess of the fair value of shares issued to Plum over the fair value of Plum’s identifiable net assets acquired represented compensation for the service of a stock exchange listing for its shares and was expensed as incurred.
The warrants issued at the time of Plum’s initial public offering (the “Public Warrants”), and warrants issued in connection with private placement at the time of Plum’s initial public offering (the “Private Placement Warrants”) remain outstanding and are now outstanding warrants for the Company.
Earn-out Share Liability
Following the Closing, stockholders
who previously held certain capital stock of Private Veea have the contingent right to receive up to
Under accounting principles, 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 and the initial value of the Earn-out Share Liability was recorded as a transaction cost within operating expenses in the Company’s financial statements for the year ended December 31, 2024. For each subsequent reporting period, changes in the fair value of the Earn-out Share Liability are reported in the Company’s financial statements.
5 - BALANCE SHEET COMPONENTS
Inventory
Inventory consists of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Inventory | $ | $ | ||||||
| Inventory allowance | ( | ) | ( | ) | ||||
| Consigned parts | ||||||||
| Total | $ | $ | ||||||
Property and Equipment, net
Property and equipment, net consists of the following:
| March 31, 2025 | December 31, 2024 | |||||||
| Furniture and fixtures | $ | $ | ||||||
| Computer equipment | ||||||||
| Leasehold improvements | ||||||||
| Total property and equipment gross | ||||||||
| Less - Accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment net | $ | $ | ||||||
Depreciation expense for the three
months ended March 31, 2025 and 2024, totaled $
8
6 - GOODWILL AND INTANGIBLE ASSETS
Goodwill
The following is a summary of activity in goodwill for the three months ended March 31, 2025 and 2024:
| March 31, 2025 | ||||
| Balance at December 31, 2024 | $ | |||
| Foreign exchange transactions | ||||
| Balance at March 31, 2025 | ||||
| March 31, 2024 | ||||
| Balance at December 31, 2023 | $ | |||
| Foreign exchange transactions | ||||
| Balance at March 31, 2024 | ||||
Intangible Assets
Intangible assets consist of the following:
| As of March 31, 2025 | ||||||||||||||||||||||||||||||||
| Amortization Period | Costs as of December 31, 2024 | Additions | Disposals | Ending Costs | Accumulated Amortization | Accumulated Impairment | Net Book Value | |||||||||||||||||||||||||
| Patents | $ | $ | ( | ) | $ | |||||||||||||||||||||||||||
| As of December 31, 2024 | ||||||||||||||||||||||||||||||||
| Amortization | Costs as of January 1, | Ending | Accumulated | Accumulated | Net Book | |||||||||||||||||||||||||||
| Period | 2024 | Additions | Disposals | Costs | Amortization | Impairment | Value | |||||||||||||||||||||||||
| Patents | $ | $ | $ | $ | $ | ( | ) | $ | $ | |||||||||||||||||||||||
| IPR&D | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Other intellectual assts | ( | ) | ||||||||||||||||||||||||||||||
| Intangible assets, net | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||||||||
Intangible assets primarily consist
of patents, patent applications, and in-process research and development (“IPR&D”) and other identifiable intangible assets.
Intangible assets are generally amortized on a straight-line basis over the periods of benefit. The Company’s patents have estimated
remaining economic useful lives ranging from
Intangible asset amortization expense
for the three months ended March 31, 2025 and 2024, totaled $
9
Future estimated amortization expense for the Company’s intangible assets is approximately as follows:
| Future estimated amortization as of March 31, 2025 | ||||
| Remainder of 2025 | $ | |||
| 2026 | ||||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| Thereafter | ||||
| $ | ||||
7 - DEBT
Total outstanding debt of the Company is comprised of the following, including convertible notes and other related party debt:
| March 31, 2025 | Principal | Debt Discount | Accrued Interest | Total | ||||||||||||
| Revolving Loan Facility | $ | $ | $ | $ | ||||||||||||
| Convertible note payable | ( | ) | ||||||||||||||
| Total | $ | ( | ) | $ | ||||||||||||
| December 31, 2024 | Principal | Debt Discount | Accrued Interest | Total | ||||||||||||
| Revolving Loan Facility | $ | $ | $ | $ | ||||||||||||
| Convertible note payable | ( | ) | ||||||||||||||
| Total | $ | $ | ( | ) | $ | $ | ||||||||||
Revolving Loan Facility
In June 2021, Private Veea entered
into a revolving loan agreement (the “2021 Revolving Loan Agreement”) with First Republic Bank, which was subsequently acquired
by JPMorgan Chase, (the “Bank”) providing up to $
Convertible Note Payable
Simultaneously with the closing of
the Business Combination, the Company and Private Veea issued convertible notes under note purchase agreements (the “Note Purchase
Agreements”) with certain accredited investors unaffiliated with the Company and Private Veea (each, an “Investor”)
for the sale of unsecured subordinated convertible promissory notes (the “September 2024 Notes”) as part of a private placement
offering of up to $
10
The Transferred Shares were recorded
at a fair value of $
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
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 $
The Conversion Shares were initially
subject to a lock-up for a period of 6 months after the Financing Closing. The Transferred Shares were not subject to any lock-up restrictions,
but for a period of 6 months after the Closing they were separately designated by the Transfer Agent and kept as book entry shares on
the Transfer Agent’s records and were not be eligible to be held by DTC without the Investor first notifying the Company of its
intent to transfer any such Transferred Shares to a brokerage account and/or to be held by DTC or another nominee (a “Brokerage
Transfer”). If the Investor provided such notice or otherwise has any Transferred Shares subject to a Brokerage Transfer within
6 months after the Closing, a portion of the outstanding obligations under such Investor’s Note would automatically convert into
a number of Conversion Shares equal to the number of Transferred Shares subject to such Brokerage Transfer, and the lock-up period for
such Conversion Shares would be extended for an additional 6 months to 12 months after the Financing Closing. As of March 31, 2025, $
11
The Company reviewed the conversion feature granted in the notes under ASC 815, “Derivatives and Hedging” (“ASC 815”), and concluded that the conversion price was based on a variable (enterprise value) that was not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815 - 40 and is therefore considered a conversion option liability that should be bifurcated from the debt host. As the fair value of the conversion option liability exceeded the net proceeds received, in accordance with ASC 470-20, the Company recorded the conversion option liability at fair value with the excess of the fair value over the net proceeds received recognized as a loss in earnings. See Note 14 for further information.
8 - INVESTMENTS
The Company accounts for its private
company investments without readily determinable fair values under the cost method. These investments, for which the Company is not able
to exercise significant influence over any one individual investee, is measured and accounted for using an alternative measurement basis
of a) the security’s carrying value at cost, b) less any impairment and c) plus or minus any qualifying observable price changes.
Observable price changes or impairments recognized on the Company’s private company investments would be classified as a Level
3 financial instrument within the fair value hierarchy based on the nature of the fair value inputs. Any adjustments to the carrying
values are recognized in other income, net in the Company’s consolidated statements of operations and comprehensive loss. As of
December 31, 2024, the Company performed the qualitative assessment for impairment of its investments. Based on this qualitative assessment,
impairment indicators were present for one of its investments; therefore, the company performed an analysis to estimate its fair value
and recognized an impairment loss of $
9 – STOCKHOLDERS’ EQUITY
On September 13, 2024, the Company
consummated the Business Combination which was accounted for as a reverse recapitalization. In connection with the consummation
of the Business Combination (i) the Company de-registered from the Register of Companies in the Cayman Islands by way of continuation
out of the Cayman Islands and into the State of Delaware, migrating to and domesticating as a Delaware corporation (the “Domestication”)
and (ii) restated our certificate of incorporation (“Restated Certificate of Incorporation”). In connection with the Domestication,
each share of outstanding Class A ordinary shares were converted by operation of law into shares of Common Stock, on a one-for-one basis.
Upon filing of the Restated Certificate of Incorporation, each issued and outstanding share of Class B stock outstanding immediately prior
to the filing of the Restated Certificate of Incorporation was converted into shares of Common Stock on a one-for-one basis. Under the
Restated Certificate of Incorporation, the Company is authorized to issue
Holders of Common Stock are entitled
vote on all matters submitted to the stockholders vote or approval, other than on any amendment to the Restated Certificate of Incorporation
(including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more
outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with
the holders of one or more other such series, to vote thereon pursuant to the Restated Certificate of Incorporation (including any certificate
of designations relating to any series of Preferred Stock). Holders of Common Stock are entitled to
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Equity Line of Credit
On December 2, 2024, the Company entered
into a common stock purchase agreement (“Common Stock Purchase Agreement”) and related registration rights agreement (the
“Registration Rights Agreement”) with White Lion Capital, LLC (“White Lion”). Pursuant to the Common Stock
Purchase Agreement, the Company has the right, but not the obligation, to direct White Lion to purchase up to $
The Company controls the timing and
amount of any sales to White Lion, which depend on a variety of factors including, among other things, market conditions, the trading
price of the Common Stock, and determinations by the Company as to appropriate sources of funding for its business and operations. However,
White Lion’s obligation to purchase shares is subject to certain conditions, including the daily trading volume of the Company’s
stock. In all instances, the Company may not sell shares of Common Stock under the Purchase Agreement if it would result in White Lion
and its affiliate beneficially owning more than
During the three months ended March
31, 2025, the Company received $
The Company agreed to issue to White
Lion
10 - STOCK INCENTIVE PLANS
In September 2014, the Private Veea’s
Board of Directors adopted the Max2 Inc. Equity Incentive Plan (“2014 Plan”). Upon adoption of the 2014 Plan, the aggregate
number of shares of Common Stock reserved for awards under the Plan were
On June 4, 2024, the stockholders of
the Company approved the Veea Inc. 2024 Incentive Award Plan (the “2024 Incentive Plan”, collectively with the Private Veea
Plans, the “Plans”), which became effective upon the Closing. The Company initially reserved
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On June 4, 2024, the stockholders of
the Company approved Veea Inc. 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective upon the Closing. An
aggregate of
In connection with the Business Combination,
each Private Veea option that was outstanding immediate prior to Closing, whether vested or unvested, was exchanged for a stock option
under the 2024 Plan (each an “Exchanged Option”) to acquire a number of shares of Common Stock equal to the product of (i)
the number of shares of Private Veea’s common stock subject to such Private Veea option immediately prior to the Business Combination
and (ii) the Exchange Ratio, at an exercise price per share equal to (A) the exercise price per share of such Private Veea option immediately
prior to the consummation of the Business Combination, divided by (B) the Exchange Ratio. Following the Business Combination, each Exchanged
Option continues to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the
corresponding former Private Veea option immediately prior to the consummation of the Business Combination. Unvested Private Veea options
did not accelerate nor vest on the consummation of the Business Combination. All stock option activity was retroactively restated to reflect
the effect of the Exchange Ratio. Generally, stock options vest
Stock Options
Stock option activity under the Plan was as follows:
| Number of Options | Weighted- Average Exercise Price per Share | Weighted- Average Remaining Contractual Term (years) | ||||||||||
| Outstanding at December 31, 2024 | $ | |||||||||||
| Granted | ||||||||||||
| Exercised | ( | ) | ||||||||||
| Forfeited | ( | ) | ||||||||||
| Outstanding at March 31, 2025 | $ | |||||||||||
| Exercisable at March 31, 2025 | ||||||||||||
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The fair value of each stock option
granted is estimated using the Black-Scholes option-pricing model using the single-option award approach.
| March 31, 2025 | ||||
| Stock Price | $ | |||
| Expected term (years) | ||||
| Volatility | % | |||
| Risk-Free Rate | % | |||
Stock compensation expense related
to the common stock options outstanding for the three months ended March 31, 2025 and 2024, was $
Restricted Stock Units
There were no RSUs granted or stock compensation expense recorded during each of the three months ended March 31, 2025 and 2024.
11 - WARRANTS
As part of Plum’s initial public
offering (“IPO”), Plum issued warrants to third-party investors where each whole warrant entitles the holder to purchase
The Public Warrants become exercisable
at $
The Company has agreed that as soon as practicable, but in no event later than twenty business days after the closing of the Business Combination, it shall use commercially reasonable efforts to file with the SEC a registration statement for the registration, under the Securities Act, of the shares of Common Stock issuable upon exercise of the warrants. Such registration statement was declared effective by the SEC on January 15, 2025.
With the exception of the Private Placement Warrants, in no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the shares of Common Stock underlying such Warrant.
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Redemption of Warrants When the
Price per Share of Common Stock Equals or Exceeds $
Once the Warrants become exercisable, the Company may redeem the outstanding Warrants (except with respect to the Private Placement Warrants):
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | upon not less than |
| ● | if, and only if, the last reported
sale price of our Common Stock equals or exceeds $ |
Redemption of Warrants When the
Price per Share of Common Stock Equals or Exceeds $
Once the Warrants become exercisable, the Company may redeem the outstanding Warrants:
| ● | in whole and not in part; |
| ● | at $ |
| ● | if, and only if, the closing
price of our Common Stock equals or exceeds $ |
| ● | if the closing price of our
Common Stock for any |
The Private Placement Warrants were initially issued in the same form as the Public Warrants with the exception that the Private Warrants: (i) would not be redeemable by the Company and (ii) may be exercised for cash or on a cashless baseless so long as they are held by the initial purchasers or their permitted transferees, the Private Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the Public Warrants.
The Public Warrants were initially classified as a derivative liability instrument. Upon the closing of the Business Combination, the Public Warrants in accordance with the guidance contained in ASC 815 are no longer precluded from equity classification. Equity-classified contracts are initially measured at fair value (or allocated value). Subsequent changes in fair value are not recognized as long as the contracts continue to be classified in equity.
The Company continues to recognize the Private Placement Warrants as liabilities at fair value as of the Closing Date, with an offsetting entry to additional paid-in capital and adjusts the carrying value of the instruments to fair value through other income (expense) on the condensed consolidated statement of operations and comprehensive income (loss) at each reporting period until they are exercised. As of March 31, 2025, the Private Placement Warrants are presented within warrants on the condensed consolidated balance sheet.
Private Veea Warrants
Upon the closing of the Business Combination,
the Related Party Common Stock Warrants were exercised in whole, on a net basis, for
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In connection with the Business Combination,
Private Veea’s outstanding equity-classified Preferred stock warrants were exchanged for common stock warrants of the Company (each
an “Exchanged Warrant”) to purchase a number of shares of Common Stock, after adjustment for anti-dilutive shares, equal to
the product of (i) the number of shares of Private Veea’s common stock subject to such Preferred Stock warrant immediately prior
to the Business Combination and (ii) the Exchange Ratio, at an exercise price per share equal to (A) the exercise price per share of such
Preferred Stock warrant immediately prior to the consummation of the Business Combination, divided by (B) the Exchange Ratio. On November
6, 2024, the warrant holder exercised warrants to purchase
12 - RELATED PARTY TRANSACTIONS
Lease Agreements
On March 1, 2014, Private Veea entered
into a sublease agreement with NLabs Inc., an affiliate of the Company’s CEO that held approximately
In April 2017, Private Veea entered
into a lease agreement with 83rd Street LLC to lease office space for an initial term of
Related Party Debt
In 2021 and 2022, NLabs made loans
to the Company evidenced by promissory notes aggregating $
In 2022 and 2023, NLabs made loans
to the Company evidenced by promissory notes in the aggregate principal amount of $
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At the Closing in September 2024,
the Related Party Notes were converted into shares of Common Stock at a price of $
During the three months ended March
31, 2025, NLabs made loans to the Company in the aggregate amount of $
13 - COMMITMENTS AND CONTINGENCIES
Purchase Commitments with Contract Manufacturers and Suppliers
As of March 31, 2025, the Company had no unconditional purchase obligations for the purchase of goods or services from suppliers and contract manufacturers. Unconditional purchase obligations are obligations that are enforceable and legally binding on the Company and specify all significant terms, including quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. Unconditional purchase obligations exclude agreements that are cancellable without penalty.
Leases
The Company leases office space in the U.S., including office space from related parties as disclosed in Note 12. These leases expire at various dates through 2025. Under the terms of the various lease agreements, the Company may bear certain costs such as maintenance, insurance and taxes. Lease agreements may provide for increasing rental payments at fixed intervals. The Company’s CEO has guaranteed the obligations under the office space leased in New Jersey. The Company also leases offices in the United Kingdom, France, and Mexico under short-term arrangements of twelve months or less.
Indemnifications
In the normal course of business, the Company has indemnification obligations to other parties, including customers, lessors, and parties to other transactions with us, with respect to certain matters. The Company has agreed to indemnify against losses arising from a breach of representations or covenants or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time or circumstances within which an indemnification claim can be made and the amount of the claim.
It is not possible to determine the maximum potential amount for claims made under the indemnification obligations due to uncertainties in the litigation process, coordination with and contributions by other parties and the defendants in these types of cases, and the unique facts and circumstances involved in each particular case and agreement. To date, the Company has made no indemnity payments. In addition, the Company has entered into indemnification agreements with its officers and directors, and its Amended and Restated Bylaws contain similar indemnification obligations to its agents.
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Litigation
In the normal course of business, the Company may become involved in various lawsuits and legal proceedings. The Company accrues contingent liabilities when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. While the ultimate results of these matters cannot be predicted with certainty, management does not expect them to have a material adverse effect on the financial position or results of operations of the Company.
Other Commitments
In connection with the Business Combination,
the Company agreed to pay certain legal expenses contingent upon the closing of the Business Combination, certain of which expenses were
mutually agreed to be deferred to periods after the Closing. As of March 31, 2025, the amount of the deferred fees totaled $
14 - FAIR VALUE MEASUREMENTS
Recurring Fair Value Measurements
Warrant liability
The Company’s initial value of the warrant liability was based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets and classified as level 3. The subsequent measurement of the Private Warrants is classified as Level 2 because these warrants are economically equivalent to the Public Warrants, based on the terms of the Private Warrant agreement, and as such their value is principally derived by the value of the Public Warrants. Significant deviations from these estimates and inputs could result in a material change in fair value. During the three months ended March 31, 2025, there were no transfers amongst level 1, 2, and 3 values during the period.
The conversion feature of the Convertible Promissory Notes is measured at fair value using a Monte Carlo model that fair values the conversion option.
The following table presents fair value information as of March 31, 2025 and December 31, 2024, of the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
| March 31, 2025 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Private warrant liability | $ | $ | ||||||||||||||
| Convertible note option liability | ||||||||||||||||
| Earn-out share liability | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
| December 31, 2024 | Total | Level 1 | Level 2 | Level 3 | ||||||||||||
| Assets | ||||||||||||||||
| Money Market Funds | $ | $ | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||||
| Private warrant liability | ||||||||||||||||
| Convertible note option liability | ||||||||||||||||
| Earn-out Share Liability | ||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||
Convertible Note Option Liability
The Company established the initial fair value for the convertible note option liability as of September 13, 2024, which was the date the Convertible Note was executed. As of March 31, 2025, the fair value was remeasured using an option pricing model. The option pricing model was used to value the convertible note option liability for the initial periods and subsequent measurement periods.
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The convertible note option liability
was classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs.
| March 31, 2025 | December 31, 2024 | |||||||
| Stock Price | $ | $ | ||||||
| Expected term (years) | ||||||||
| Volatility | % | % | ||||||
| Risk-Free Rate | % | % | ||||||
| Interest rate | % | % | ||||||
| Three months ended March 31, 2025 | ||||
| Balance, beginning of period | $ | |||
| Change in fair value | ( | ) | ||
| Balance, end of period | $ | |||
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
The following table presents the changes in fair value of the earn-out liability:
| Three months ended March 31, 2025 | ||||
| Balance, beginning of period | $ | |||
| Change in fair value | ( | ) | ||
| Balance, end of period | $ | |||
The key inputs for the Earn-out Share Liability were as follows:
| March 31, 2025 | December 31, 2024 | |||||||
| Stock Price | $ | $ | ||||||
| Expected term (years) | ||||||||
| Volatility | % | % | ||||||
| Risk-Free Rate | % | % | ||||||
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15 - EARNINGS PER SHARE
The computation of basic and dilutive net loss per share attributable to common stockholders for the three months ended March 31, 2025 and 2024, are as follows:
| Three Months ended March 31, |
||||||||
| 2025 | 2024 | |||||||
| Basic: | ||||||||
| Numerator: | ||||||||
| Net income (loss) attributable to common shareholders | $ | $ | ( |
) | ||||
| Denominator: | ||||||||
| Weighted-average common shares outstanding | ||||||||
| Net income (loss) per share – basic: | $ | $ | ( |
) | ||||
| Diluted: | ||||||||
| Numerator: | ||||||||
| Net income (loss) attributable to common and common equivalent shareholders | ( |
) | ||||||
| Denominator: | ||||||||
| Weighted-average common stock outstanding | ||||||||
| Stock options, warrants, Earn-Out Liability, and convertible notes outstanding to purchase shares of common stock | ||||||||
| Total common and common equivalent shares outstanding | ||||||||
| Net income (loss) per share – diluted: | $ | $ | ( |
) | ||||
The weighted average potential shares of common stock that were excluded from the calculation of net income (loss) per share-diluted for the periods presented because including them would have been anti-dilutive consisted of the following:
| Three Months ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Stock options outstanding to purchase shares of common stock | ||||||||
| Public and Private Warrants | ||||||||
| Earn-Out Liability | ||||||||
16 - EMPLOYEE 401(k) PLAN
The Company sponsors a 401(k) plan (the “Plan”) to provide retirement benefits for its employees.
As allowed under Section 401(k) of
the Internal Revenue Code, the Plan provides for tax-deferred salary contributions and after-tax contributions for eligible employees.
The Plan provides for tax-deferred salary contributions and after-tax contributions for eligible employees. Employee contributions are
limited to a maximum annual amount as set periodically by the Internal Revenue Code. The Company matches pretax and Roth employee contributions
up to
17 - SUBSEQUENT EVENTS
The Company evaluated subsequent events from March 31, 2025, the date of these financial statements, through the date on which the financial statements were issued (the “Issuance Date”), for events requiring recording or disclosure in the financial statements as of and for the three months ended March 31, 2025. The Company concluded that no events have occurred that would require recognition or disclosure in the financial statements, except as described below.
Asset Purchase Transaction with Crowdkeep, Inc.
Asset Purchase Agreement
On May 13, 2025, the Company entered
into an Asset Purchase Agreement (the “APA”) with Crowdkeep, Inc., a Delaware corporation (the “Seller”), pursuant
to which, subject to the terms and conditions set forth in the APA, the Company acquired, upon the closing (the “Crowdkeep Closing”,
and the date of such Crowdkeep Closing, the “Crowdkeep Closing Date”) certain assets of Seller relating to Seller’s
IoT technology platform business (collectively, the “Crowdkeep Assets”), free and clear of any liens other than certain specified
liabilities of Seller that are being assumed (collectively, the “Crowdkeep Liabilities” and such acquisition of the Crowdkeep
Assets and assumption of the Crowdkeep Liabilities together, the “Crowdkeep Transaction”) in consideration for the issuance
to the Seller of
The APA contains other customary representations, warranties and covenants of the parties. The foregoing summary of the APA is not complete and is qualified in its entirety by reference to the full text of the APA, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
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Note Purchase Agreements and Convertible Promissory Notes
On April 17, 2025, and May 13, 2025,
the Company and the majority stockholder of the Seller (“Crowdkeep Investor”), entered into two Note Purchase Agreements (the
“Crowdkeep Note Purchase Agreements”). Pursuant to the Crowdkeep Note Purchase Agreements, the Crowdkeep Investor loaned to
the Company an aggregate of $
Pursuant to the terms of the Convertible
Notes, upon an event of default, the outstanding principal amount of the applicable Crowdkeep Convertible Note, plus accrued but unpaid
interest, will become immediately due and payable in full. Events of default include failure to pay any principal or interest amounts
under the Crowdkeep Convertible Notes, failure to perform covenants in the Crowdkeep Convertible Notes and certain bankruptcy and insolvency
conditions of the Company. The Company may prepay all or any portion of the Crowdkeep Convertible Notes at any time. The Crowdkeep Convertible
Notes are convertible, in whole or in part, into shares of Common Stock (the “Crowdkeep Conversion Shares”) at the option
of the Crowdkeep Investor, at a price per share of $
The above description of the Crowdkeep Note Purchase Agreements and Crowdkeep Convertible Notes are qualified in their entirety by the text of the Form of Note Purchase Agreement and Form of Convertible Note, copies of which are attached hereto as Exhibit 10.2 and 10.3, respectively, and incorporated herein by reference.
Lock-Up Agreements
In connection with the Crowdkeep APA and the Crowdkeep Note Purchase Agreements, the Seller and the Crowdkeep Investor entered into lock-up agreements pursuant to which the Seller and the Crowdkeep Investor agreed not to effect any sale, distribution or transfer of any of the shares of Common Stock received in the transaction or any Crowdkeep Conversion Shares will be subject to transfer restrictions and restrictions against selling short or hedging the Company’s securities for a period of six (6) months following the applicable closing of the APA or the Crowdkeep Note Purchase Agreement, respectively, subject to certain limited exceptions.
The form of lock-up agreement signed by the Seller is herein referred to as the “Crowdkeep Lock-Up Agreement” and the form of lock-up agreement signed by the Investor is herein referred to as the “Crowdkeep Noteholder Lock-Up Agreement.” The Crowdkeep Lock-Up Agreement and the Crowdkeep 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.
Appointment of Chief Strategy Officer and Senior Vice President, Finance
On May 1, 2025, Randal V. Stephenson was appointed the Company’s Senior Vice President, Finance and Chief Strategy Officer.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of the financial condition and results of operations of Veea should be read together with our audited consolidated financial statements and unaudited consolidated condensed financial statements. In addition to our historical consolidated financial information, this discussion includes forward-looking information regarding our business, results of operations and cash flows, and contractual obligations and arrangements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from any future results expressed or implied by such forward-looking statements as a result of various factors, including, but not limited to, those discussed in the Company’s most recent Annual Report on Form 10-K filed with the SEC on April 15, 2025.
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “Veea,” “we”, “us”, “our”, and the “Company” are intended to refer to (i) following the Business Combination, the business and operations of Veea Inc. and its consolidated subsidiaries, and (ii) prior to the Business Combination, Private Veea (the predecessor entity in existence prior to the consummation of the Business Combination) and its consolidated subsidiaries.
Throughout this report, the terms “our,” “we,” “us,” “Veea” and the “Company” refer to Veea Inc.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements regarding, among other things, the plans, strategies and prospects, both business and financial, of the Company. These statements are based on the beliefs and assumptions, whether or not identified in this Quarterly Report, of the management of the Company. Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations. Forward-looking statements are inherently subject to risks, uncertainties and assumptions. Generally, statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. These statements may be preceded by, followed by or include the words “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “project,” “scheduled,” “seek,” “should,” “will” or similar expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements about the ability of the Company to:
| ● | failure to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows; |
| ● | sell shares of Common Stock under the ELOC Common Stock Purchase Agreement; |
| ● | risks related to its current growth strategy and the Company’s ability to generate revenue and become profitable; |
| ● | market acceptance of its platform and products; |
| ● | the length and unpredictable nature of its sales cycles; |
| ● | Veea’s reliance on distribution and partnering arrangements and third-party manufacturers; |
| ● | cybersecurity incidents, security vulnerabilities, and real or perceived errors, failures, defects, or bugs in its platforms or products; |
| ● | the ability to maintain the listing of our Common Stock and the warrants on Nasdaq, and the potential liquidity and trading of such securities; |
| ● | our public securities’ potential liquidity and trading; |
| ● | the ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably and retain its key employees; |
| ● | our success in retaining or recruiting, or changes required in, our officers, key employees or directors following the completion of the Business Combination, and our ability to attract and retain key personnel; |
| ● | macroeconomic conditions; and |
| ● | each of the other factors detailed under the section entitled “Risk Factors.” |
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Forward-looking statements are provided for illustrative purposes only and are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the factors discussed under the heading “Risk Factors” and elsewhere in this Quarterly Report and as disclosed on the Form 10-K filed with the SEC on April 15, 2025, could affect the future results of the Company, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements in this Quarterly Report.
In addition, the risks described under the heading “Risk Factors” in this Quarterly Report are not exhaustive. Other sections of this Quarterly Report describe additional factors that could adversely affect the businesses, financial conditions, or results of operations of the Company. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on the business of the Company, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
In addition, this Quarterly Report contains statements of belief and similar statements that reflect the beliefs and opinions of the Company on the relevant subject. These statements are based upon information available to the Company as of the date of this Quarterly Report, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements
Company Overview
We are dedicated to simplifying the journey towards creating a world in which virtually everyone and everything is intelligently connected, while bringing applications and AI to the edge of the network. Most service providers, equipment suppliers, system integrators and even hyperscalers have adopted or advocated for similar solutions to various degrees either independently or in collaboration with the Company. However, to our knowledge, we are the first to market with patented technologies that a) bring virtualized data center capabilities to the far edge of the network, commonly referred to as the Device Edge, where all wired and wireless devices connect to the network, b) spawns hyperconvergence of computing, multiaccess communications and storage, c) provides for Cloud-managed applications at the Edge, d) enables machine learning with AI training, inferencing, and agentic AI at the Edge including AI-driven cybersecurity for heterogenous networks. Such networks are given rise through any combination of our developed devices and third-party devices, with CPUs, GPUs, TPUs, DPUs and/or NPUs, that run the Veea Edge PlatformÔ software stack.
Veea has developed several generations of highly integrated all-in-one devices that incorporate a Linux server, with a virtualized software environment, supporting our patented secured docker containers, together with a Wi-Fi Access Point (AP) with a mesh router, a firewall, an IoT gateway, NVMe data storage and 4G/5G modules, referred to as the “VeeaHub” product. With an extensive patent portfolio of approximately 125 granted patents and 25 pending patent applications that cover 26 patent families, our end-to-end Hybrid Edge-Cloud Computing platform represents a new product category that has the potential for wide scale customer adoption in large segments of consumer and enterprise markets.
Veea Edge Platform’s products, applications, and services with a distributed computing architecture, offered as a Platform-as-a-Service capability, empower companies to capitalize on the transformative potential of Edge AI, where most of the data from smartphones, tablets, laptops, cameras, sensors, and other devices is generated, with data privacy and sovereignty, reliability, low latency for real-time decisions, bandwidth efficiency, scalability, and reduced costs compared to alternatives.
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VeeaHub products, about the size of a typical Wi-Fi Access Point (AP), are offered in variety of forms with different capabilities for indoor and outdoor coverage and are both locally- and cloud-managed. Veea Edge Platform architecture and business model, VeeaHubÒ and third-party devices on Veea Edge Platform with Hybrid Edge-Cloud Computing and AI-enabled applications and services resemble the Android OS platform architecture and business model for Android devices.
The Veea Edge Platform offers a complement, and in some cases an alternative, to cloud computing by enabling the formation of highly secure, but easily accessible, private clouds and networks across one or multiple user(s) or enterprise location(s) across the globe. Benefits of the Veea Edge Platform include optimal latency, lower data transport costs, data privacy, security and ownership, Edge AI, as well as “always-on” availability for mission critical applications, and contextual awareness for people, devices and things connected to the Internet.
Veea earns revenue primarily from the sale of its VeeaHub® devices, licenses, and subscriptions.
Recent Developments
Asset Purchase Transaction with Crowdkeep, Inc.
Asset Purchase Agreement
On May 13, the Company entered into an Asset Purchase Agreement (the “APA”) with Crowdkeep, Inc., a Delaware corporation (the “Seller”), pursuant to which, subject to the terms and conditions set forth in the APA, the Company acquired, upon the closing (the “Crowdkeep Closing”, and the date of such Crowdkeep Closing, the “Crowdkeep Closing Date”) certain assets of Seller relating to Seller’s IoT technology platform business (collectively, the “Crowdkeep Assets”), free and clear of any liens other than certain specified liabilities of Seller that are being assumed (collectively, the “Crowdkeep Liabilities” and such acquisition of the Crowdkeep Assets and assumption of the Crowdkeep Liabilities together, the “Crowdkeep Transaction”) in consideration for the issuance to the Seller of 4,065,689 shares of Common Stock (the “Purchase Price”).
The APA contains other customary representations, warranties and covenants of the parties. The foregoing summary of the APA is not complete and is qualified in its entirety by reference to the full text of the APA, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Note Purchase Agreements and Convertible Promissory Notes
On April 17, 2025, and May 13, 2025, the Company and the majority stockholder of the Seller (“Crowdkeep Investor”), entered into two Note Purchase Agreements (the “Crowdkeep Note Purchase Agreements”). Pursuant to the Crowdkeep Note Purchase Agreements, the Crowdkeep Investor loaned to the Company an aggregate of $1,000,000 in two tranches (the “Crowdkeep Loans”), of which $500,000 was provided on April 17, 2025 and $500,000 was provided on May 13, 2025. In connection with the entry into the Crowdkeep Note Purchase Agreements the Company issued to the Crowdkeep Investor unsecured convertible promissory notes (the “Crowdkeep Convertible Notes”). The Crowdkeep Convertible Notes have an aggregate principal amount of $1,000,000, and the interest under the Crowdkeep Convertible Notes accrues at an annual rate of 8%. The maturity date of the Crowdkeep Convertible Notes are April 17, 2026, and May 13, 2026, respectively.
Pursuant to the terms of the Convertible Notes, upon an event of default, the outstanding principal amount of the applicable Crowdkeep Convertible Note, plus accrued but unpaid interest, will become immediately due and payable in full. Events of default include failure to pay any principal or interest amounts under the Crowdkeep Convertible Notes, failure to perform covenants in the Crowdkeep Convertible Notes and certain bankruptcy and insolvency conditions of the Company. The Company may prepay all or any portion of the Crowdkeep Convertible Notes at any time. The Crowdkeep Convertible Notes are convertible, in whole or in part, into shares of Common Stock (the “Crowdkeep Conversion Shares”) at the option of the Crowdkeep Investor, at a price per share of $5.00 subject to certain equitable adjustments. The Crowdkeep Convertible Notes will automatically convert on the date that the closing price of the Common Stock is at $7.50 or above for ten (10) consecutive trading days within any consecutive thirty (30) trading day period, equal to the lesser of (i) $7.50 per share and (ii) 20% multiplied by the VWAP (calculated as set forth in the Crowdkeep Convertible Notes) for the prior consecutive thirty (30) trading day period, in each case subject to certain equitable adjustments. The Crowdkeep Note Purchase Agreements and Crowdkeep Convertible Notes include other customary terms and conditions.
The above description of the Crowdkeep Note Purchase Agreements and Crowdkeep Convertible Notes are qualified in their entirety by the text of the Form of Note Purchase Agreement and Form of Convertible Note, copies of which are attached hereto as Exhibit 10.2 and 10.3, respectively, and incorporated herein by reference.
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Lock-Up Agreements
In connection with the Crowdkeep APA and the Crowdkeep Note Purchase Agreements, the Seller and the Crowdkeep Investor entered into lock-up agreements pursuant to which the Seller and the Crowdkeep Investor agreed not to effect any sale, distribution or transfer of any of the shares of Common Stock received in the transaction or any Crowdkeep Conversion Shares will be subject to transfer restrictions and restrictions against selling short or hedging the Company’s securities for a period of six (6) months following the applicable closing of the APA or the Crowdkeep Note Purchase Agreement, respectively, subject to certain limited exceptions.
The form of lock-up agreement signed by the Seller is herein referred to as the “Crowdkeep Lock-Up Agreement” and the form of lock-up agreement signed by the Investor is herein referred to as the “Crowdkeep Noteholder Lock-Up Agreement.” The Crowdkeep Lock-Up Agreement and the Crowdkeep 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.
Appointment of Chief Strategy Officer and Senior Vice President, Finance
On May 1, 2025, Randal V. Stephenson was appointed the Company’s Senior Vice President, Finance and Chief Strategy Officer.
Equity Line of Credit
On December 2, 2024, the Company entered into a common stock purchase agreement (the “Common Stock Purchase Agreement”) and related registration rights agreement (the “White Lion Registration Rights Agreement”) with White Lion Capital, LLC (“White Lion”). Pursuant to the Common Stock Purchase Agreement, the Company has the right, but not the obligation, to direct White Lion to purchase up to $25.0 million in aggregate gross purchase price of newly issued shares of Common Stock, subject to certain limitations and conditions as described below (the “ELOC Program”), at a purchase price equal to (i) 96.5% of the volume weighted average stock price for the three consecutive business days after a purchase notice is given, (ii) 98% of the volume weighted average stock price on the day a notice is delivered, or (iii) the lowest traded price for a given purchase date.
The Company controls the timing and amount of any sales to White Lion, which depends on a variety of factors including, among other things, market conditions, the trading price of the Company’s common stock, and determinations by the Company as to appropriate sources of funding for its business and operations. However, White Lion’s obligation to purchase shares is subject to certain conditions, including the daily trading volume of the Company’s common stock. In all instances, the Company may not sell shares of its common stock under the Purchase Agreement if it would result in White Lion and its affiliate beneficially owning more than 4.99% of its outstanding voting power or shares of common stock at any one point in time, or the aggregate number of shares of common stock would not exceed 19.99% of the voting power of the issued and outstanding common.
During the three months ended March 31, 2025, the Company issued 27,498 shares of Common Stock to White Lion in payment of its commitment fee and sold 240,500 shares to White Lion under the ELOC Program for aggregate proceeds of $604,426, with the stock price of shares purchased by the White Lion ranging from $1.79 per share to $3.31 per share. The Company agreed to issue to White Lion 27,498 shares of Common Stock as a commitment fee (the “Commitment Shares”). The fair value of the Commitment Shares was $25,000, which pursuant to ASC 815, was recorded in transaction costs in the condensed consolidated statement of operations and comprehensive income (loss) of the Company for the three months ended March 31, 2025. The Common Stock Purchaser has agreed that during the term of the Common Stock Purchase Agreement, neither it nor any of its affiliates will engage in any short sales or hedging transactions involving the Common Stock.
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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 expenses into the following categories:
| ● | Product development expenses. Product development expenses primarily consist of employee compensation, employee benefits, stock-based compensation related to technology developers and product management employees, as well as fees paid for outside services and materials. |
| ● | Sales and marketing expenses. Sales and marketing expenses consist of compensation and other employee-related costs for personnel engaged in selling, marketing and sales support functions. Selling expenses also include marketing and the costs associated with customer evaluations. The Company does not currently incur advertising costs. |
| ● | General and administrative expenses. General and administrative expenses consist of compensation expense (including stock-based compensation expense) for employees and executive management, and expenses associated with finance, tax, and human resources. General and administrative expenses also includes transaction costs, expenses associated with facilities, information technology, external professional services, legal costs and settlement of legal claims and other administrative expenses. |
| ● | Depreciation and amortization: Depreciation and amortization expense consists of depreciation of Veea’s property and equipment and amortization of Veea’s patents and other intellectual property. |
| ● | Impairment: Impairment consists of impairment charges related to our in-process research and development (“IPR&D”) |
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Results of Operations
The following tables set forth the results of our operations for the periods presented, as well as the changes between periods. The period-to-period comparison of financial results is not necessarily indicative of future results.
For the three months ended March 31, 2025 compared to three months ended March 31, 2024
The following table sets forth Veea’s unaudited statements of operations data for the three months ended March 31, 2025 and 2024, respectively. Veea has prepared the three month data on a consistent basis with the audited consolidated financial statements as of and for the years ended December 31, 2024 and 2023, included in the Form 10-K filed with the SEC on April 15, 2025. In the opinion of Veea’s management, the unaudited three month financial information reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data.
| For the Three Months Ended | $ | % | ||||||||||||||
| March 31, 2025 | March 31, 2024 | Change | ||||||||||||||
| Revenues, net | $ | 14,262 | $ | 16,770 | $ | (2,508 | ) | -15 | % | |||||||
| Cost of Goods Sold | 12,330 | 11,984 | $ | 346 | 3 | % | ||||||||||
| Gross profit | 1,932 | 4,786 | ||||||||||||||
| Operating Expenses: | ||||||||||||||||
| Product development | 215,575 | 94,223 | $ | 121,352 | 129 | % | ||||||||||
| Sales and marketing | 349,251 | 86,264 | $ | 262,987 | 305 | % | ||||||||||
| General and administrative | 5,109,473 | 5,845,775 | $ | (736,302 | ) | -13 | % | |||||||||
| Transaction costs | 35,000 | - | $ | 35,000 | 100 | % | ||||||||||
| Depreciation and amortization | 60,116 | 68,916 | $ | (8,800 | ) | -13 | % | |||||||||
| Total operating expenses | 5,769,415 | (6,095,178 | ) | |||||||||||||
| Loss from operations | (5,767,483 | ) | (6,090,392 | ) | ||||||||||||
| Other Income (Expense): | ||||||||||||||||
| Other income, net | 772 | 2,584 | $ | (1,812 | ) | -70 | % | |||||||||
| Change in fair value of convertible note option liability | 59,000 | - | $ | 59,000 | 100 | % | ||||||||||
| Change in fair value of warrant liabilities | 420,497 | - | $ | 420,497 | 100 | % | ||||||||||
| Change in fair value of Earn-Out Share Liability | 10,530,000 | - | $ | 10,530,000 | 100 | % | ||||||||||
| Other expense | 2,750 | (2,836 | ) | $ | 5,586 | -197 | % | |||||||||
| Interest expense | (946,484 | ) | (456,768 | ) | $ | (489,716 | ) | 107 | % | |||||||
| Total other income (expense) | 10,066,535 | (457,020 | ) | |||||||||||||
| Net income (loss) | $ | 4,299,052 | $ | (6,547,412 | ) | |||||||||||
Revenue, net
The Company generated revenue of $14,262 and $16,770 for the three months ended March 31, 2025 and 2024, respectively. Revenue has been principally earned from paid pilots for our VeeaHub® devices. Our focus over the past several years has been on field testing and refining our product to meet customer needs as well as market developments. As a result of these efforts, we expect revenue to grow over the next several quarters through the sales of our hardware, licenses and subscriptions. We are especially focused in four principal market opportunities: 1) Digital Equity and Inclusion, 2) Energy and Sustainability solutions for Smart Buildings and Climate Smart Agriculture, 3) Convergence of Fixed, Wireless, and 5G Networks, and 4) Smart Retail and Smart Warehouses.
Cost of Goods Sold
Cost of goods sold increased by $346, or 3%, in the three months ended March 31, 2025, compared to the three months ended March 31, 2024. The decrease is immaterial as it is related to the costs incurred to generate our revenue earned from paid pilots for our VeeaHub® devices.
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Product Development Expense
Product development expense increased by $121,352, or 129%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase in product development expenses was due to increased internal development and additional costs incurred by outside contractors related to products manufactured during the period.
Sales and Marketing Expense
Sales and marketing expense increased by $262,987, or 305%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase is primarily due to increased program spend to support a greater investment in our go-to-market strategies and drive revenue growth.
General and Administrative Expense
General and administrative expense decreased by $736,302, or 13%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease for the quarter is primarily related to the Company’s cost reduction measures.
Transaction costs
Transaction costs increased $35,000 in the three months ended March 31, 2025, compared to the three months ended March 31, 2024, due to costs related to the Crowdkeep acquisition and the ELOC Commitment Shares.
Depreciation and Amortization
Depreciation and amortization decreased by $8,800, or 13%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The decrease was due to certain assets reaching the end of their useful lives.
Other income, net
Other income, net relates to immaterial non-operating transactions incurred during the period. These amounts were immaterial for the three months ended March 31, 2025 and 2024.
Change in fair value of derivative liabilities
Change in fair value of derivative liabilities is comprised of the fair value adjustment to the conversion option, Private Warrants, and earn-out shares at balance sheet date. The gain on the change in fair value of conversion note option liability of $59,000 for the three months ended March 31, 2025, was determined using a Black-Scholes option pricing model. The gain on the change in fair value of warrant liabilities of $420,497 for the three months ended March 31, 2025, was determined based on the trading value of the public warrants. The gain on the change in fair value of the Earn-Out Share Liability of $10,530,000 for the three months ended March 31, 2025, was determined using a Monte Carlo simulation. A significant driver of the changes in fair value was due to the decline in the Company’s stock price.
Other expense
Other expenses relate to immaterial non-operating expenses incurred during the period. These amounts were immaterial for the three months ended March 31, 2025 and 2024.
Interest expense
Interest expense increased by $489,716, or 107%, in the three months ended March 31, 2025 compared to the three months ended March 31, 2024. The increase was due to additional draws on our revolving line of credit.
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Liquidity and Capital Resources
During the three months ended March 31, 2025 and 2024, the Company incurred operating losses of $5.7 million and $6.1 million, respectively, and had an accumulated deficit of $213.5 million as of March 31, 2025. Since its inception, the Company has incurred significant operating losses and negative cash flows. The Company expects to continue to incur net losses as it continues to grow and scale its business. As of March 31, 2025, the Company had cash of $247,341 and outstanding debt of $15.2 million, of which $750,000 was outstanding under the September 2024 Notes, $14.0 million was outstanding under the working capital facility, and $485,000 was related party debt outstanding under the NLabs 2025 Notes.
Although we have incurred recurring losses each year since our inception, we plan to fund our operations and capital funding needs through a combination of private and public equity and debt offerings, or a combination thereof, including (1) expected cash proceeds from the ELOC Program, (2) the expected cash tax refund of up to $2.0 million in respect of the Company’s UK subsidiary’s 2023 and 2024 research and development activities (3) the anticipated refund by June 30, 2025 of up to $5.0 million of the Company’s prepayment for purchased inventory and (4) potential additional investments in the form of debt or equity to fund operating deficits from existing investors, including related parties, which may include the Company’s CEO and his affiliates. The Company expects it will be able to fund its operations over the next twelve months and has a reasonable basis to believe it has alleviated substantial doubt regarding its ability to continue as a going concern. Since January 1, 2025, the Company has received $826,000 in additional loans from related parties and $1.0 million of loans from unrelated parties in connection with the consummation of the acquisition of Crowdkeep. Although management continues to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding on terms acceptable to the Company, if at all.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use Adjusted EBITDA, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Adjusted EBITDA
The primary financial measure we use is Adjusted EBITDA. EBITDA is defined as net (loss) income, before interest, taxes, depreciation, and amortization. We define Adjusted EBITDA as net (loss) income excluding income tax provision, interest expense, net of interest income from related party loans, depreciation and amortization, stock-based compensation expense, and non-core expenses/losses (gains), including transaction-related costs, litigation-related costs, management fees, changes in fair value of liabilities, change in fair value of earn-out share liabilities and other expense, which includes asset impairments. Our management uses this measure internally to evaluate the performance of our business and this measure is one of the primary metrics by which our internal budgets are based. We exclude the above items as some are non-cash in nature, and others are non-recurring that they may not be representative of normal operating results. This non-GAAP financial measure adjusts for the impact of items that we do not consider indicative of the operational performance of our business. While we believe that this non-GAAP financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute for the related financial information prepared and presented in accordance with GAAP.
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The following table provides a reconciliation of net loss to adjusted EBITDA to net loss for the periods presented:
| For the Three Months Ended | ||||||||
| March 31, 2025 | March 31, 2024 | |||||||
| ADJUSTED EBITDA: | ||||||||
| Net income (loss) | $ | 4,299,052 | $ | (6,547,412 | ) | |||
| Adjustments: | ||||||||
| Interest expense | 946,484 | 456,768 | ||||||
| Depreciation and amortization | 60,116 | 68,916 | ||||||
| EBITDA | 5,305,651 | (6,021,728 | ) | |||||
| Change in fair value of conversion note option liability | (59,000 | ) | - | |||||
| Change in fair value of warrant liabilities | (420,497 | ) | - | |||||
| Change in fair value of Earn Out Shares Liability | (10,530,000 | ) | - | |||||
| Share-based compensation | 50,000 | 62,670 | ||||||
| Transaction costs | 35,000 | - | ||||||
| ADJUSTED EBITDA | $ | (5,618,846 | ) | $ | (5,959,058 | ) | ||
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not Applicable. As a smaller reporting company, we are not required to provide the information required by this Item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation and supervision of our Chief Executive Officer and our Chief Operating Officer and Interim Chief Financial Officer, have evaluated our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and our Chief Operating Officer and Interim Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Operating Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended March 31, 2025, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in actions, claims, suits and other legal proceedings arising in the ordinary course of our business. We are not currently a party to any actions, claims, suits or other legal proceedings, the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition and results of operations.
Item 1A. Risk Factors
We are a smaller reporting company and accordingly we are not required to provide information required by this Item. Risk factors that may affect our business and financial results are discussed within Item 1A “Risk Factors” of our annual report on Form 10-K filed with the SEC on April 15, 2025 (“2025 Form 10-K”). There have been no material changes to the disclosures relating to this item from those set forth in our 2025 Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
(c) Insider Trading Arrangements
Trading Plans
Item 6. Exhibits
| * | Filed herewith. |
| ** | Furnished, not filed |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
VEEA INC.
| By: | /s/ Allen Salmasi | |
| Allen Salmasi | ||
| Chief Executive Officer and Chairman | ||
| (Principal Executive Officer) | ||
| Date: May 20, 2025 | ||
| By: | /s/ Janice Smith | |
| Janice Smith | ||
| Chief Operating Officer and Interim Chief Financial Officer | ||
| (Principal Financial Officer and | ||
| Principal Accounting Officer) | ||
| Date: May 20, 2025 | ||
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