VEEA INC.
For the period ended Dec 31, 2025. Filed Apr 15, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Apr 15, 2026
VEEA$4.89+8.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-04-15.
0001213900-25-032215
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-04-15.
0001213900-26-043667
Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 121 current paragraphs.
55 unchanged; 15 reworded; 49 added; 30 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (49)
Current report
Transfer of Listing Application
Current report
In response to the Nasdaq deficiency notices received by the Company on September 29, 2025, on March 27, 2026, the Company submitted an application to transfer the listing of its Listed Securities from The Nasdaq Global Market to The Nasdaq Capital Market. In connection with the submission to transfer the Company’s listing, the Company requested a second period of 180 calendar days, or until September 30, 2026, to regain compliance with the Minimum Bid Price Requirement for continued listing.
Current report
On April 7, 2026, Nasdaq Staff approved the Company’s request to transfer the listing of the Company’s publicly traded securities from The Nasdaq Global Select Market to The Nasdaq Capital Market. The transfer took effect at the opening of business on April 9, 2026 and did not have any immediate effect on trading in the Listed Securities. The Listed Securities continue to trade uninterruptedly under the symbol “VEEA” and “VEEAW”, respectively. The Nasdaq Capital Market operates in substantially the same manner as The Nasdaq Global Market, and companies on The Nasdaq Capital Market must meet certain financial and corporate governance requirements to qualify for continued listing.
Current report
As a result of the transfer to The Nasdaq Capital Market, Nasdaq granted the Company a second period of 180 calendar days, or until September 28, 2026, to regain compliance with the minimum bid price requirement for continued listing. To regain compliance, the closing bid price of the Company’s shares must meet or exceed $1.00 per share for a minimum of 10 consecutive business days on or prior to September 28, 2026. Nasdaq’s determination to grant the additional 180-day compliance period was in part based on, among other things, the Company meeting the continued listing requirements of The Nasdaq Capital Market with the exception of the minimum bid price requirement, and the Company having provided written notice of its intention to cure the deficiency during the additional compliance period, including by effecting a reverse stock split if necessary. Following Nasdaq’s approval of the extended compliance period, the Company intends to continue to actively monitor the minimum bid price requirement and, as appropriate, will consider available options to resolve any deficiencies and regain compliance, including by effecting a reverse stock split if necessary.
Current report
Issuance and Designation of Series A Preferred
Current report
In connection with the Company’s application to transfer its listing to The Nasdaq Capital Market, to ensure the Company’s compliance with the listing requirements of The Nasdaq Capital Market, on March 30, 2026, the Company entered into separate conversion agreements with each of NLabs and 83 rd Street LLC (“83 rd Street”) pursuant to which (i) NLabs agreed to convert (x) $16,876,400 principal and accrued interest of outstanding under certain promissory notes evidencing loans made by NLabs to the Company (the “NLabs 2025 Notes”) into 168,764 shares of Series A preferred stock, par value $0.0001 per share, of the Company (“Series A Preferred”) and (y) $2,000,000 of the accrued rent owed to it in respect of the 164 East 83rd Street office lease into 20,000 shares of Series A Preferred and (ii) 83 rd Street agreed to convert $2,323,600 of the accrued rent owed to it in respect of the 166 East 83rd Street office lease into 23,236 shares of Series A Preferred. Under the terms of the conversion agreements, NLabs and 83 rd Street are each entitled to certain registration rights with respect to the shares of common stock issuable upon conversion of shares of the Series A Preferred.
Current report
In connection with the conversion, on March 30, 2026, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Delaware to designate Series A Preferred. Each share of Series A Preferred is entitled to vote on an as converted basis along with the common stock, and holders of Preferred Stock are entitled to receive dividends that are economically equivalent to any dividends declared with respect to the common stock. Each share of Series A Preferred is convertible into 198 shares of common stock, at the option of the holder.
Current report
Each share of Series A Preferred is entitled to vote on an as converted basis along with the common stock, and holders of Series A Preferred are entitled to receive dividends that are economically equivalent to any dividends declared with respect to the common stock. Further each share of Series A Preferred is convertible into common stock, at the option of the holder, in an amount equal to a price per share of $100 (as adjusted for certain stock splits) divided by $0.503.
Current report
Issuance of Warrants to NLabs
Current report
On March 30, 2026, in connection with the execution of the note conversion agreement and in consideration of NLabs’s entering into the note conversion agreement, the Company and NLabs entered into the No. 1 Amendatory Agreement to the NLabs 2025 Notes, pursuant to which (i) the face amount of each NLabs 2025 Note was amended to adjust such face amount, prior to conversion, to equal the “Adjusted Face Amount” of such NLabs 2025 Notes reflected on Schedule I thereof and (ii) the Company issued to NLabs a warrant to purchase 33,551,486 shares of the common stock at an exercise price of $0.503 per share (the “NLabs 2026 Warrants”).
Current report
Secured Term Loans
Current report
On February 17, 2026, Private Veea, entered into a Loan Agreement (the “Secured Term Loan Agreement”) with Pasadena Private Lending, Inc. (the “Secured Lender”), pursuant to which the Secured Lender agreed to extend, on the terms provided in the Secured Term Loan Agreement, a secured term loan facility in an aggregate principal amount of up to $10,550,000. The initial loan amount of $5,500,000 (the “Initial Term Loan Amount”) was borrowed by Private Veea on February 17, 2026 (the “Initial Secured Loan Closing Date”) and is evidenced by a promissory note, dated the Initial Secured Loan Closing Date (the “Secured Term Loan Note”). The Initial Term Loan Amount matures on the fifth anniversary of the Initial Secured Loan Closing Date and bears interest at a rate per annum equal to the prime rate (subject to a floor of 5.75%) plus an applicable margin of 4.50% (subject to adjustment based on the balance in the Cash Collateral Account defined below). Interest is payable monthly in arrears. Principal is payable in monthly installments of $58,000 commencing March 17, 2027, with any remaining outstanding principal and accrued interest due at maturity. VeeaSystems intends to use the loan proceeds for general corporate and working capital purposes.
Current report
Private Veea has the ability, by written notice to the Secured Lender at any time prior to the one-year anniversary of the Initial Secured Loan Closing Date, to request that the Initial Term Loan Amount be increased by additional term loans (the “Accordion Term Loans” and collectively with the Initial Loan Amount, the “Secured Loans”) in an aggregate principal amount $2,500,000 each, with the total Accordion Term Loans not to exceed $5,000,000. The making of the Accordion Term Loans are subject to the conditions provided in the Secured Loan Agreement; and, once made, will be subject to the same terms and conditions as the Initial Loan Amount, including, without limitation, with respect to interest rate, maturity, guaranties, and security.
Current report
Private Veea’s obligations under the Secured Term Loan Agreement are separately guarantied (a) by the Company (b) jointly and severally by Allen Salmasi, Chairman and Chief Executive Officer of the Company, and his spouse (the “Individual Guarantors”), and (iii)the domestic subsidiaries of Private Veea. Private Veea’s obligations are secured by first-priority liens and securities interests in favor of the Secured Lender by (i) a pledge by the Company of 100% of the issued and outstanding equity interests of VeeaSystems, ); (ii) a pledge by Private Veea of 100% of the issued and outstanding equity interests of each of its domestic subsidiaries. The Secured Lender has further been granted first-priority liens and securities interest in (i) substantially all of Private Veea’s personal property, including accounts receivable, inventory, equipment, intellectual property, investment property, general intangibles, deposit accounts, and proceeds thereof). Further, until such time as Private Veea achieves a Debt Service Coverage Ratio (as defined in the Secured Term Loan Agreement) of at least 3.0 to 1.0, tested as of the most recently completed fiscal quarter end, Private Veeais required to maintain a minimum aggregate balance equal to the greater of (i) $550,000 and (ii) 10% of the then outstanding aggregate principal amount of the Secured Term Loans, in cash, liquid securities, and marketable securities, in a reserve account (the “Cash Collateral Account”).
Current report
The Secured Term Loan Agreement contains customary affirmative and negative covenants, including without limitation, on indebtedness, liens, fundamental changes, asset sales, investments, and restricted payments. Further (i) commencing on the Initial Secured Loan Closing Date until June 30, 2027, (x) Private Veea is required to maintain a “Maximum Total Liabilities to Total Tangible Assets” (as defined in the Secured Term Loan Agreement) of no greater than 70.00%; and (y) the Individual Guarantors maintain “Liquidity” (as defined in the Secured Term Loan Agreement) in an amount greater than or equal to 2x the outstanding principal amount of the Secured Term Loans and (ii) thereafter, Private Veea is required to maintain (x) a “Senior Debt to EBITDA Ratio” (as defined in the Secured Term Loan Agreement) of no greater than 3.00 to 1.00 and (y) a minimum “Debt Service Coverage Ratio” (as defined in the Secured Term Loan Agreement) of at least 2.00 to 1.00. The covenants are each tested quarterly.
Current report
The Secured Term Loan Agreement and the Secured Term Loan Note contain customary events of default, including payment defaults, covenant defaults, breaches of representations and warranties, cross-defaults to other material indebtedness, bankruptcy events affecting Private Veea or the Company, material judgments, and change of control. Upon the occurrence of an event of default, the Secured Lender may accelerate the Secured Term Loans and exercise remedies against the collateral, including foreclosure on the pledged equity interests and the personal property collateral.
Current report
White Lion Private Placement
Current report
White Lion Note Purchase Agreement
Current report
On January 14, 2026, the Company and White Lion entered into the White Lion Note Purchase Agreement. Pursuant to the White Lion Note Purchase Agreement, the Company agreed to issue, and White Lion agreed to purchase, at one or more closings, on the terms and conditions contained in the White Lion Note Purchase Agreement, unsecured promissory notes in the aggregate funded amount of up to $2,500,000 and the White Lion Warrants to purchase shares of the Company’s common stock. The first closing occurred on January 14, 2026 at which the Company issued, and White Lion purchased, a White Lion Note with a face amount of $555,556 and warrant to purchase 990,099 shares of common stock with an exercise price of $0.505 per share. At the first closing, the Company received cash proceeds of $475,000, net of original issuance discount and certain transaction expenses.
Current report
The White Lion Notes mature 12-months from the date of issuance and accrue interest at an annual rate of five (5) percent per annum. The White Lion Notes are convertible, in whole or in part, into shares of common stock at the option of White Lion, at a price per share equal to the lesser of (i) $0.75 per share and (ii) 90% of the lowest VWAP (calculated as set forth in the White Lion Notes) for the prior consecutive ten (10) trading-day period, in each case subject to certain equitable adjustments. The White Lion Notes contain ownership limitations pursuant to which White Lion does not have the right to exercise any portion of its White Lion Notes if it would result in White Lion (together with its affiliates) beneficially owning more than 4.99% (or, at the election of White Lion, 9.99%) of the outstanding common stock. The White Lion Notes are repayable by the Company at any time, in whole or in part, without premium or penalty, other than the White Lion Notes issued at the first closing. Upon an event of default, the outstanding principal amount of the outstanding White Lion Notes, plus accrued but unpaid interest will become immediately due and payable in full. Events of default include, among others, failure to pay any principal or interest amounts under the White Lion Notes, failure to perform covenants in the White Lion Notes and certain bankruptcy and insolvency conditions of the Company.
Current report
Under the terms of the White Lion Note Purchase Agreement, the Company agreed to sell at each closing, in addition to a White Lion Note one accompanying White Lion Warrant at a price per share equal to the common stock’s closing price on such closing date, subject to certain adjustments. The White Lion Warrants expire five years from the date of issuance. The White Lion Warrants, contain ownership limitations pursuant to which White Lion does not have the right to exercise any portion of such warrants if it would result in White Lion (together with its affiliates) beneficially owning more than 4.99% (or, at the election of White Lion, 9.99%) of the outstanding common stock. The Company may elect, by written notice to White Lion, (the “Call Notice”), to cause White Lion to exercise its unexercised White Lion Warrants, at the then effective exercise price, at any time that (i) all shares of common stock underlying the White Lion Warrants are fully registered for resale pursuant to an effective registration statement and (ii) the closing price of the common stock has been greater than $3.00 per share for at least thirty (30) consecutive trading days preceding the date of the Call Notice.
Current report
Concurrently with the White Lion Note Purchase Agreement, the Company entered into a related Registration Rights Agreement (the “White Lion 2026 RRA”) with White Lion, pursuant to which the Company agreed to file, within 60 days following the first closing on January 14, 2026, a Registration Statement with the SEC registering for resale by White Lion of the number of the shares of common stock underlying the White Lion Notes and the White Lion Warrants. The White Lion 2026 RRA also contains usual and customary damages provisions for failure to file and failure to have the Registration Statement declared effective by the SEC within the time periods specified therein. The White Lion Note Purchase Agreement, the White Lion Notes, the White Lion Warrants, and the White Lion 2026 RRA include other customary terms and conditions.
Current report
White Lion - Equity Line of Credit
Current report
During the year ended December 31, 2025, the Company issued 27,498 shares of common stock as a commitment fee (the “ELOC Commitment Shares”) 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 fair value of the ELOC Commitment Shares was $25,000, which pursuant to ASC 815, was recorded in transaction costs in the consolidated statement of operations and comprehensive loss of the Company for the year ended December 31, 2025. Further, the ELOC Purchase Agreement provided for the issuance of additional Commitment Shares to White Lion if the Company failed to sell at least $1,000,000 in gross proceeds to the White Lion by the sixth-month anniversary of signing of the ELOC Purchase Agreement.
Current report
White Lion has agreed that during the term of the ELOC Purchase Agreement, neither it nor any of its affiliates will engage in any short sales or hedging transactions involving the common stock. Effective of June 2, 2025, the Company and White Lion amended the ELOC Purchase Agreement effective of June 2, 2025 to provide for (i) an extension of the time period for the determination as to whether White Lion is entitled to additional ELOC Commitment Shares to December 15, 2025 and (ii) an increase the gross proceeds sold under the ELOC Purchase Agreement to $1,250,000. On January 14, 2026, the Company and White Lion further amended the ELOC Purchase Agreement (a) to provide for an extension of the ELOC Commitment Period from December 2, 2026 to June 30, 2027 and (b) to amend the provision relating to the issuance by the Company of additional ELOC Commitment Shares to White Lion such that White Lion is entitled to additional shares in amounts equal to (i) $25,000 at the time of the ELOC Amendment No. 2, (ii) $50,000, if the Company has not sold to White Lion under the ELOC Purchase Agreement an aggregate of $1,250,000 in gross proceeds of common stock through April 15, 2026, and (iii) $25,000, if the Company has not sold to White Lion under the ELOC Purchase Agreement an aggregate of $1,500,000 in gross proceeds of common stock through June 30, 2026. The number of shares of common stock issued in each instance is determined by dividing the dollar value of the shares of common stock to be issued by the average VWAP of the common stock for the ten-day trading period immediately prior to the issuance date.
Current report
Repayment of Line of Credit
Current report
On January 5, 2026, the Company repaid in full its line of credit (the “Line of Credit”) with JP Morgan Chase (the “JPM”) by making a cash payment to JPM of $14,076,218, representing the total outstanding principal and interest due as of January 5, 2026. See “Certain Relationships and Related Person Transactions - NLabs Demand Note” for more information.
Current report
Executive Management Changes
Current report
On April 13, 2026, the Company entered into a transition agreement with Janice K. Smith, the Executive Vice President and Chief Operating Officer. Pursuant to the agreement, effective as of April 30, 2026, Ms. Smith will step down from her current roles as the Executive Vice President and Chief Operating Officer of the Company and will serve as Senior Operations Advisor commencing on April 30, 2026 and ending on December 31, 2026. Ms. Smith will be entitled certain equity awards and cash bonus. See “Item 11. Executive Compensation - Existing NEO Employment Agreements – Smith Transition Agreement.”
Current report
Cost of goods sold remained materially consistent for the year ended December 31, 2025 as compared to the year ended December 31, 2024. Given the lack of a material fluctuation in Revenue, net, management would not expect a significant fluctuation in Cost of goods sold.
Current report
Sales and marketing expense decreased by approximately $0.5 million, or 57%, from approximately $0.8 million for the year ended December 31, 2024 to approximately $0.3 million for the year ended December 31, 2025. The decrease is primarily due to a reduction in unpaid customer pilots.
Current report
General and administrative expense decreased by approximately $9.0 million, or 34%, from approximately $26.6 million for the year ended December 31, 2024 to approximately $17.7 million for the year ended December 31, 2025. The decrease is primarily due to a decline in share-based compensation expense as compared to the prior year of approximately $6.8 million.
Current report
Transaction costs were primarily incurred during the year ended December 31, 2024 associated with the contingent earn-out share liability during 2024. No material transaction costs were expected by management during the year ended December 31, 2025.
Current report
Depreciation and amortization increased by approximately $0.3 million, or 131%, from approximately $0.3 million for the year ended December 31, 2024 to approximately $0.6 million for the year ended December 31, 2025. The increase was due to additional amortization for the technology assets acquired from Crowdkeep, Inc. in May 2025.
Current report
Other income, net
Current report
Interest expense increased by approximately $0.4 million, or 22%, from approximately $1.8 million for the year ended December 31, 2024 to approximately $2.2 million for the year ended December 31, 2025. The increase was due to additional draws on our revolving line of credit and new related party notes entered throughout the year ended December 31, 2025.
Current report
During the years ended December 31, 2025 and 2024, the Company incurred operating losses of approximately $18.8 million and $84.1 million, respectively, and had an accumulated deficit of $224.5 million as of December 31, 2025. Since its inception, it has incurred significant operating losses and negative cash flows. As of December 31, 2025, it had cash of approximately $0.1 million and outstanding debt of $19.8 million, of which $750,000 was outstanding under those unsecured convertible promissory notes issued by the Company and Private Veea to certain unaffiliated accredited investors pursuant to certain note purchase agreements entered into with such investors simultaneously with the Closing of the Business Combination for the sale of such notes (the “September 2024 Notes”), $1.0 million was outstanding under the Crowdkeep Convertible Notes, $14.0 million was outstanding under the working capital facility, $2.3 million was outstanding under a related party note payable, and $1.8 million was outstanding under a notes payable with an inventory vendor.
Current report
The Company plans to fund its operations and capital funding needs for the next 12 months with revenue generated from operations, including anticipated revenue generated under the Framework Agreement for the Licenses, Equipment and Services (the “Supply Agreement”) that the Company entered into with RadioMovil Dipsa, S.A. De C.V. (“Telcel”), a Mexican wireless telecommunications company owned by América Móvil, effective August 7, 2025, and using proceeds from its existing financing arrangements under the ELOC Purchase Agreement, its new secured term loan facility with Pasadena Private Lending (as described above) and note purchase agreement with White Lion. Further, the Company could pursue other equity and debt financing from new or existing investors, including related parties, which may continue to include the Company’s CEO and his affiliates.
Current report
Our principal sources of liquidity are proceeds from the issuance of notes, convertible notes, related party notes, and the issuance of common stock. The primary use of capital continues to be to invest for the long-term growth of the business. We regularly evaluate our cash and capital structure, including the size, pace, and form of capital return to stockholders.
Current report
The following table presents cash flows for the years ended December 31, 2025 and 2024, respectively:
Showing the first 40 of 49 passages. Open the source sections for the rest.
Removed paragraphs (30)
Previous report
Throughout this report, the terms “our,” “we,” “us,” “Veea” and the “Company” refer to Veea Inc.
Previous report
leading technology, telecom,
Previous report
Veea earns revenue primarily from the sale of its VeeaHub® devices, licenses and subscriptions.
Previous report
Business Combination
Previous report
On September 13, 2024 Plum Acquisition Corp. I. (“Plum”) (NASDAQ: PLMI), a special purpose acquisition company, Private Veea consummated its previously announced Business Combination. 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 the 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.” and Private Veea changed its name from “Veea Inc.” to “VeeaSystems Inc.”
Previous report
The Business Combination was accounted for as a “reverse recapitalization,” with no goodwill or other intangible assets recorded, in accordance with GAAP. A reverse recapitalization did not result in a new basis of accounting, and the financial statements of the combined entity represent the continuation of the financial statements of Private Veea in many respects.
Previous report
Under this method of accounting, Plum was treated as the “acquired” company for financial reporting purposes. For accounting purposes, Private Veea was deemed to be the accounting acquirer in the transaction and, consequently, the transaction was treated as a recapitalization of Private Veea (i.e., a capital transaction involving the issuance of stock by Plum for the stock of Private Veea). Accordingly, the consolidated assets, liabilities and results of operations of Private Veea became the historical financial statements of the combined company, and Plum’s assets, liabilities and results of operations were consolidated with the Company’s beginning on the acquisition date. Operations prior to the Business Combination were presented as those of Private Veea in future reports. The net assets of Private Veea were recognized at carrying value, with no goodwill or other intangible assets recorded.
Previous report
Private Placements
Previous report
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 Plum 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 $15 million in purchase price for such September 2024 Notes in the aggregate (the “Financing Closing”). The Company received $1.45 million in proceeds from the issuance of its convertible promissory note with a commitment from a convertible note purchaser for the remaining unfunded amount of $13.55, which is to be funded on or prior to November 15, 2024, subsequently extended to December 15, 2024. In addition, each Investor received as a transfer from NLabs immediately prior to the Financing Closing a number of shares of Private Veea’s Series A-1 Preferred Stock that upon the Closing became a number of registered shares of our common stock equal to such Investors’ original principal note amount divided by $7.50 (the “Transferred Shares”). 2,000,000 Transfer Shares were delivered to Investors at the Financing Closing. The Note Purchase Agreements include customary registration rights.
Previous report
The Transferred Shares were recorded at a fair value of $21.6 million on the Company’s consolidated financial statements, which reflected a significant discount to the face amount of the September 2024 Notes, In addition to the cash received at the Financing Closing, one of the Investors committed to purchase approximately $13.6 million (the “Commitment Amount”) of September 2024 Notes, on or prior to November 15, 2024, which date was subsequently extended to December 15, 2024. On December 31, 2024, the Company and the Investor entered into a mutual Settlement and Release Agreement pursuant to which the Company agreed to terminate the Investor’s obligation to purchase a note in the Commitment Amount and provided for a mutual release of claims, in exchange for a payment to the Company of an aggregate amount of approximately $5.4 million, which amount includes payments previously made to the Company in respect of the Commitment Amount. As the Company received approximately $1.5 million of the total expected $15 million proceeds at the Financing Closing, a proportional amount (approximately $19.5 million) of the substantial discount had been deferred and recorded as a deferred financing asset on the Company’s consolidated financial statements. At December 31, 2024, the deferred financing assets was reversed on the Company’s consolidated financial statements.
Previous report
The Company and Private Veea 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 18 months after the Financing Closing but is prepayable in whole or in part by the Borrowers at any time without penalty. The outstanding obligations under each September 2024 Note accrue interest at a rate equal to the Secured Overnight Financing Rate plus 2% per annum, adjusted quarterly, but interest is only payable upon the maturity of the September 2024 Notes as long as there is no event of default thereunder. Each September 2024 Note is unsecured and expressly subordinated to any senior debt of the Borrowers. The September 2024 Notes and the Note Purchase Agreements do not include any operational or financial covenants for the Borrowers. Each September 2024 Note includes customary events of default for failure to pay amounts due on the maturity date, for failure to otherwise comply with the Borrowers’ covenants thereunder or for Borrower insolvency events, in each case, with customary cure periods, and upon an event of default, the Investor may accelerate all obligations under its September 2024 Note and the Borrowers will be required to pay for the Investor’s reasonable out-of-pocket collection costs.
Previous report
The outstanding obligations under each September 2024 Note are convertible in whole or in part into shares of our common stock (the “Conversion Shares”) at a conversion price of $7.50 per share (subject to equitable adjustment for stock splits, stock dividends and the like with respect to our common stock after the Financing Closing) (the “Conversion Price”) at any time after the Financing Closing at the sole election of the Investor. The outstanding obligations under each September 2024 Note will automatically convert at the Conversion Price if (i) the Company or its subsidiaries consummate one or more additional financings for equity or equity-linked securities for at least $20 million in the aggregate or makes one or more significant acquisitions valued in the aggregate (based on the consideration provided by the Company and its subsidiaries) to be at least $20 million, (ii) the Investors holding a majority of the aggregate outstanding obligations under the September 2024 Notes expressly agree to convert all obligations under the September 2024 Notes or (iii) the Common Stock trades with an average daily VWAP of at least $10.00 (subject to equitable adjustment for stock splits, stock dividends and the like with respect to the Common Stock after the Financing Closing) for ten (10) consecutive trading days. The obligations under each September 2024 Note will also automatically convert in connection with a Brokerage Transfer, as described below.
Previous report
The September 2024 Notes and the Conversion Shares are subject to a lock-up for a period of 6 months after the Financing Closing (subject to early release for a liquidation, merger, share exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their equity holdings in the Company for cash, securities or other property, and subject to customary permitted transfer exceptions). The Transferred Shares are not be subject to any lock-up restrictions, but for a period of 6 months after the Closing they will be separately designated by SPAC’s transfer agent and kept as book entry shares on the transfer agent’s records and will not be eligible to be held by Depository Trust Company (“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 provides 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 will 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 will be extended for an additional 6 months to 12 months after the Financing Closing. As of December 31, 2024 $250,000 in aggregate principal amount of the September 2024 Notes, together with associated interest, had automatically converted upon the occurrence of a Brokerage Transfer.
Previous report
Equity Line of Credit
Previous report
As of December 31, 2024, the Company had sold no shares under the ELOC Program.
Previous report
Cost of goods sold decreased by $383,512, or 82%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease is immaterial as it is related to the costs incurred to generate our revenue earned from paid pilots for our VeeaHub® devices.
Previous report
Sales and marketing expense increased by $596,205, or 277%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The year-to-date increase was due primarily to an increase in customer evaluations and fees paid to third-party marketing firm during the period.
Previous report
General and administrative expense increase by $9.4 million, or 55%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase is primarily related to a $6.3 million increase to share based compensation, $1.2 million for employee benefits and other office related expenditures, $0.7 million increase related to professional fees, a the foreign exchange gain of $0.7 million and a $0.5 million increase in our inventory reserve for the year ended December 31, 2024 The year-to-date overall increase was primarily due to an increase in net foreign exchange losses, as well as an increase in professional and consulting fees relating to the Business Combination.
Previous report
Following the closing of the Business Combination, holders of certain capital stock of Private Veea immediately prior to the closing will have the contingent right to receive up to 4.5 million additional shares of the Company’s common stock if certain trading-price based milestones of the Company’s common stock are achieved or a change of control transaction occurs during the ten-year period following the Closing. Under accounting principles, the Company’s obligation to issue the earnout shares is recorded as a contingent liability (the “Earn-Out Share Liability”). The initial value of the Earn-out Share Liability of approximately $55 million is recorded as a transaction cost within operating expenses. The fair value of the Earn-out Share Liability was estimated using Monte Carlo simulation utilizing assumptions related to the contractual term of the instruments, estimated volatility, and current interest rates and the price of our Common Stock on the Closing Date and at December 31, 2024. A significant driver of the value of the earnout at the close of the Business Combination was our closing stock price on September 13, 2024 which was $12.00 per share and our closing stock price on December 31, 2024 was $3.81 per share. Additionally, the Company incurred approximately $1.4 million of professional fees relating to the Business Combination.
Previous report
Depreciation and amortization decreased by $544,431, or 67%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was due to certain intangibles reaching the end of their useful lives.
Previous report
UK R&D Tax Credit
Previous report
The increase is related to the receipt of an R&D tax credit of $1.3 million received by the Company’s UK subsidiary.
Previous report
Loss on initial issuance of September 2024 Notes
Previous report
The loss on initial measurement of the September 2024 Notes was $1,770,993 is recorded as a transaction cost within operating expenses.
Previous report
Interest expense decreased by $3.5 million, or 66%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease was due to loans coming to term or being converted into equity.
Previous report
To date, we have financed our operations primarily through private placements of equity securities and debt to related parties. 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. Since our inception, we have incurred significant operating losses and negative cash flows. As of December 31, 2024 and 2023, we had an accumulated deficit of $217.8 million and $170.3 million, respectively.
Previous report
As of December 31, 2024 and 2023, we had cash of $1.7 million and $6.0 million, respectively. As of December 31, 2024 we had $13.9 million outstanding debt, of which approximately $1.2 million was outstanding under the September 2024 Notes and $12.7 million was outstanding under our working capital facility.
Previous report
During the year ended December 31, 2024 compared to the year ended December 31, 2023, the Company has incurred net losses of $47.5 million and $15.6 million, respectively, and had an accumulated deficit of $217.8 million as of December 31, 2024. The Company expects to continue to incur net losses as it continues to grow and scale its business. Historically, the Company’s activities have been financed through private placements, of equity securities and debt to related parties.
Previous report
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) available cash proceeds from equity sales under the ELOC Program, (2) cash proceeds from a substantial strategic investment anticipated to close in the second quarter of 2025, and (3) savings from planned expense reduction measures.
Previous report
Taking into account these plans as well as (1) 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, (2) the anticipated refund by June 30, 2025, of up to $5.0 million of the Company’s prepayment for purchased inventory and (3) 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. 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.
Reworded paragraphs (15)
Previous wording
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 Platform Ô software stack.
Current wording
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 VeeaONE platform ☐ software stack.
Previous wording
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 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.
Current wording
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 123 granted patents and 32 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.
Previous wording
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.
Current wording
VeeaONE 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.
Previous wording
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, VeeaHub Ò 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.
Current wording
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. VeeaONE platform architecture and business model, VeeaHub ☐ and third-party devices on VeeaONE platform with Hybrid Edge-Cloud Computing and AI-enabled applications and services resemble the Android OS platform architecture and business model for Android devices.
Previous wording
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.
Current wording
The VeeaONE 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 VeeaONE 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.
Previous wording
On December 2, 2024, the Company entered into a common stock purchase agreement (“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 25,000,000 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.
Current wording
On December 2, 2024, the Company entered into a common stock purchase agreement (as amended, the “ELOC Purchase Agreement”) and related registration rights agreement (the “White Lion 2025 RRA”) with White Lion. Pursuant to the ELOC 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.
Previous wording
The Company controls the timing and amount of any sales to White Lion, which depended 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 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.
Current wording
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 ELOC 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 stock.
Previous wording
The Company generated revenue of $141,760 and $9,072,130 for the years ended December 31, 2024 and 2023, respectively. Revenue has been principally earned from paid pilots for our VeeaHub® devices. The decrease was due to $9 million income recognized in connection with the license of AdEdge™ in 2023.
Current wording
The Company generated revenue of approximately $0.2 million and approximately $0.1 million for the years ended December 31, 2025 and 2024, respectively. Revenue has been principally earned from paid pilots for our VeeaHub® devices.
Previous wording
Product development expense increased by $679,903, or 98%, in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase in product development expenses was due to increased internal development and additional costs incurred of outside contractors related to software development and product manufacturing during the period.
Current wording
Product development expense decreased by approximately $1.0 million, or 76%, from approximately $1.4 million for the year ended December 31, 2024 to approximately $0.3 million for the year ended December 31, 2025. The decrease in product development expenses was due to decreased internal development costs during the period.
Previous wording
Change in fair value of derivative liabilities comprised of the fair value adjustment to the conversion option, Private Warrants, and earnout shares at balance sheet date. The gain on the change in fair value of conversion note option liability was $840,933 for the year ended December 31, 2024 was determined using a Black-Scholes option pricing model. The loss on the change in fair value of warrant liabilities was $200,124 for the year ended December 31, 2024 was determined based on the trading value of the public warrants. The loss on the change in fair value of the Earn-out Share Liability was $38.0 million for the year ended December 31, 2024 was determined using a Monte Carlo simulation. A significant driver of the value of the earnout at the close of the Business Combination was our closing stock price on December 31, 2024 which was $3.81. These derivative instruments were entered into in 2024 related to the Business Combination.
Current wording
Change in fair value of derivative liabilities is comprised of the fair value adjustments to the convertible note option liability, SPAC Private Placement Warrants, the Earn-Out Share Liability, and the 2025 Investors Warrants at balance sheet date. The loss on the change in fair value of conversion note option liability of $60 thousand for the year ended December 31, 2025, was determined using a Black-Scholes option pricing model. The gain on the change in fair value of the SPAC Private Placement Warrants of $0.4 million for the year ended December, 2025, was determined based on the trading value of the public warrants and the Black-Scholes option pricing model. The gain on the change in fair value of the Earn-Out Share Liability of $13.0 million for the year ended December 31, 2025, was determined using a Monte Carlo simulation of 100,000 simulations. A significant driver of the changes in fair value was due to the decline in the Company’s stock price.
Previous wording
Our management's discussion and analysis of financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with GAAP. In preparing our financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our reported revenue, results of operations, and net income or loss, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods. These estimates, assumptions, and judgments are necessary because future events and their effects on our results of operations and the value of our assets cannot be determined with certainty and are made based on our historical experience and on other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.
Current wording
Our management’s discussion and analysis of financial condition and results of operations is based on our consolidated financial statements which have been prepared in accordance with GAAP. In preparing our financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our reported revenue, results of operations, and net loss, as well as on the value of certain assets and liabilities on our balance sheet during and as of the reporting periods. These estimates, assumptions, and judgments are necessary because future events and their effects on our results of operations and the value of our assets cannot be determined with certainty and are made based on our historical experience and on other assumptions that we believe to be reasonable under the circumstances. These estimates may change as new events occur or additional information is obtained, and we may periodically be faced with uncertainties, the outcomes of which are not within our control and may not be known for a prolonged period of time. Because the use of estimates is inherent in the financial reporting process, actual results could differ from those estimates.
Previous wording
The Company values inventory at the lower of cost or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value, if required, for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts, market conditions, technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. The write down for excess or obsolescence is charged to the provision for inventory, which is a component of cost of goods sold in the Company’s consolidated statements of operations and comprehensive loss. At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.
Current wording
The Company values inventory at the lower of cost or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out basis. At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable value, if required, for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts, market conditions, technological changes, product life cycle and development plans, component cost trends, product pricing, physical deterioration, and quality issues. The write down for excess or obsolescence is charged to the provision for inventory, which is a component of cost of goods sold in the Company’s consolidated statements of operations and comprehensive income (loss). At the point of the loss recognition, a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis.
Previous wording
We estimate the fair value of stock option awards granted using the Black-Scholes option pricing model, which uses as inputs the fair value of our common stock and subjective assumptions we make, including expected stock price volatility, the expected term of the award, the risk-free interest rate, and expected dividends. Due to the lack of company-specific historical and implied volatility data, we base the estimate of expected stock price volatility on the historical volatility of a representative group of publicly traded companies for which historical information is available. The historical volatility is generally calculated for a period of time commensurate with the expected term assumption. We use the simplified method to calculate the expected term for options granted to employees and directors. We utilize this method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk-free interest rate is based on a U.S. treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero, as we have never paid dividends and do not have current plans to pay any dividends on our Common Stock.
Current wording
We estimate the fair value of stock option awards granted using the Black-Scholes option pricing model, which uses as inputs the fair value of our common stock and subjective assumptions we make, including expected stock price volatility, the expected term of the award, the risk-free interest rate, and expected dividends. The historical volatility is generally calculated for a period of time commensurate with the expected term assumption. We use the simplified method to calculate the expected term for options granted to employees and directors. We utilize this method as we do not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term. The risk-free interest rate is based on a U.S. treasury instrument whose term is consistent with the expected term of the stock options. The expected dividend yield is assumed to be zero, as we have never paid dividends and do not have current plans to pay any dividends on our common stock.
Previous wording
When financial instruments contain various embedded derivatives which require bifurcation and separate accounting of those derivatives apart from the host instruments, if eligible, GAAP allows issuers to elect the fair value option (“FVO”) of accounting for those instruments. The FVO allows the issuer to account for the entire financial instrument, including accrued interest, at fair value with subsequent remeasurements of that fair value recorded through the statements of operations. We elected the FVO of accounting for the September 2024 Notes, including contingently issuable common stock and accrued interest, as discussed in Note 3,Summary of Significant Accounting Policies and Note 4,Reverse Recapatialization to the accompanying consolidated financial statements included elsewhere in this Annual Report.
Current wording
When financial instruments contain various embedded derivatives which require bifurcation and separate accounting of those derivatives apart from the host instruments, if eligible, GAAP allows issuers to elect the fair value option (“FVO”) of accounting for those instruments. The FVO allows the issuer to account for the entire financial instrument, including accrued interest, at fair value with subsequent remeasurements of that fair value recorded through the statements of operations. We elected the FVO of accounting for the September 2024 Notes, including contingently issuable common stock and accrued interest, as discussed in Note 3,Summary of Significant Accounting Policies and Note 4,Reverse Recapitalization to the accompanying consolidated financial statements included elsewhere in this Annual Report.
Previous wording
Certain shareholders of the Company are eligible to receive up to 4.5 million earnout shares of the Company's common stock, contingent upon the fulfillment of certain milestones. Each earnout is deemed achieved if, at any time within ten years following the Business Combination, (i) the volume-weighted average price of the Company's common stock reaches or exceeds either $12.50 or $15.00, in each case, for any twenty trading days within a thirty trading day period or (ii) a change of control occurs resulting in the shareholders receiving a per share price, or an implied value per share equal to or in excess of $12.50 or $15.00 per share. As the issuance of the earnout shares is contingent solely on meeting the earnout milestones, the Company’s obligation to issue the earnout shares is recorded as a contingent liability on the Company’s consolidated balance sheet. The Earn-out Share Liability was initially measured at fair value at the closing of the Business Combination and subsequently remeasured at the end of each reporting period. The change in fair value of the Earn-out Share Liability is recorded as part of “Other income and (expense)” in the consolidated statement of operations. The estimated fair value of the Earn-out Share Liability was determined using a Monte Carlo analysis of 30,000 simulations of the future path of the Company’s stock price over the earnout period. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones including projected stock price, volatility, and the risk-free rate. See additional information on valuation methodologies and significant assumptions used in Note 3,Summary of Significant Accounting Policies and Note 4,Reverse Recapatialization, to the accompanying consolidated financial statements included elsewhere in this Annual Report.
Current wording
Certain shareholders of the Company are eligible to receive up to 4.5 million earnout shares of the Company’s common stock, contingent upon the fulfillment of certain milestones. Each earnout is deemed achieved if, at any time within ten years following the Business Combination, (i) the volume-weighted average price of the Company’s common stock reaches or exceeds either $12.50 or $15.00, in each case, for any twenty trading days within a thirty trading day period or (ii) a change of control occurs resulting in the shareholders receiving a per share price, or an implied value per share equal to or in excess of $12.50 or $15.00 per share. As the issuance of the earnout shares is contingent solely on meeting the earnout milestones, the Company’s obligation to issue the earnout shares is recorded as a contingent liability on the Company’s consolidated balance sheet. The Earn-out Share Liability was initially measured at fair value at the Closing of the Business Combination and subsequently remeasured at the end of each reporting period. The change in fair value of the Earn-out Share Liability is recorded as part of “Other income and (expense)” in the consolidated statement of operations. The estimated fair value of the Earn-out Share Liability was determined using a Monte Carlo analysis of 100,000 simulations of the future path of the Company’s stock price over the earnout period. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones including projected stock price, volatility, and the risk-free rate. See additional information on valuation methodologies and significant assumptions used in Note 2,Summary of Significant Accounting Policies and Note 4,Reverse Recapitalization, to the accompanying consolidated financial statements included elsewhere in this Annual Report.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Other income, net relates to immaterial non-operating transactions incurred during the period. These amounts were immaterial for the years ended December 31, 2025 and 2024.
Current report — wording carried from elsewhere
See Note 2,Summary of Significant Accounting Policies to the accompanying consolidated financial statements included elsewhere in this Annual Report for a description of certain recently issued accounting standards which may impact our financial statements in future reporting periods.