What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-11-14 compared with 2025-08-19 · 506 added, 399 removed, 842 unchanged (52% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

Receivables, net

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Notes payable

Convertible note payable, current

Related party notes

Convertible note payable, net ,current

Other current liabilities

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Common Stock, $ 0.0001 par value, 551,000,000 shares authorized;

and 40,926,445 and 36,202,798 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

and 50,160,673 and 36,202,798 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Additional paid-in capital

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AND SUBSIDIARIES

CONDENSED CONSOLIDATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Cost of goods sold

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General and administrative, net

Transaction costs

Depreciation and amortization

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Other income (expense):

Other income, net

UK R&D tax credit

Loss on initial issuance of convertible note

( 1,770,933 )

Change in fair value of convertible note option liability

1 unchanged sentence

Change in fair value of Earn-out Share Liability

( 1,730,000 )

Other expense

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( 1,822,448 )

Total other income (expense)

( 1,352,823 )

$ ( 7,410,858 )

Total other income

Net income (loss)

( 33,323,555 )

1 unchanged sentence

( 46,620,619 )

Net loss per share:

Net income (loss) per share:

Weighted-average common stock outstanding used in per share amounts:

1 unchanged sentence

Foreign currency translation adjustment

Comprehensive loss

( 1,597,335 )

( 1,109,232 )

Comprehensive income (loss)

$ ( 34,920,890 )

$ ( 1,512,420 )

$ ( 47,729,851 )

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

FOR THE THREE MONTHS ENDED JUNE 30, 2025

FOR THE THREE MONTHS ENDED SEPTEEMBER 30, 2025

Comprehensive

Stockholders’

Balance, March 31, 2025

Balance, June 30, 2025

$ 209,682,257

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Stock based compensation

Common stock issued in connection with public offering, net of transaction costs

Common stock issued upon exercise of stock options

Common stock issued upon vesting of RSUs

Common stock issued upon draw on the equity line of credit

Common stock issued as consideration for Crowdkeep

Common stock issued for services

Settlement of convertible note agreement for shares issued

Cumulative translation adjustment

Foreign currency translation gain

Balance, September 30, 2025

$ 214,938,054

$ ( 219,567,030 )

$ ( 4,265,475 )

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

Comprehensive

Stockholders’

Balance, June 30, 2024

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$ ( 173,251 )

FOR THE THREE MONTHS ENDED JUNE 30, 2024

Comprehensive

Stockholders’

Income (Loss)

Balance, March 31, 2024

$ ( 11,698,218 )

Stock based compensation

Common stock issued upon exercise of stock options, pre Business Combination

Exercise of Common Stock Warrants - related party

Issuance of Common Stock in exchange for services in connection with A-2 Preferred Stock Issuances, recasted

Issuance of Common Stock upon conversion of debt at Business Combination

Issuance of Common Stock upon conversion of Sponsor and related party notes and warrants at Business Combination

Issuance of Common Stock to Plum Sponsors and Investors at Business Combination

Issuance of Common Stock to Plum Shareholders at Business Combination

( 6,901,658 )

Series A-2 Preferred Stock Issuances, net of transaction costs

Conversion of vendor payable to Series A-2 Preferred Stock

Common stock issued upon exercise of stock options

Stock based compensation for stock options

( 6,926,598 )

Issuance of Common Stock related to new financing

Common Stock issued for services

Common stock issued upon exercise of stock options, post Business Combination

Foreign currency translation loss

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( 1,597,335 )

Balance, June 30, 2024

( 33,323,555 )

Balance, September 30, 2024

$ 210,665,277

$ ( 216,903,369 )

$ ( 1,770,586 )

$ ( 8,005,110 )

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

FOR THE SIX MONTHS ENDED JUNE 30, 2025

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025

Comprehensive

Stockholders’

Income (Loss)

Balance, December 31, 2024

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Stock based compensation

Common stock issued in connection with public offering, net of transaction costs

Common stock issued upon exercise of stock options

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Settlement of convertible note agreement for shares issued

Cumulative translation adjustment

Foreign currency translation gain

( 1,736,512 )

Balance, June 30, 2025

Balance, September 30, 2025

$ 214,938,054

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$ ( 4,265,475 )

FOR THE SIX MONTHS ENDED JUNE 30, 2024

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Comprehensive

Stockholders’

Income (Loss)

Balance, December 31, 2023

$ 159,475,010

Series A-2 Preferred Stock Issuances, net of transaction costs

Conversion of vendor payable to Series A-2 Preferred Stock

$ ( 170,282,750 )

$ ( 661,354 )

$ ( 11,467,130 )

Class A Common Stock Issuances, net of transaction costs

Common stock issuances, net of transaction costs

Conversion of vendor payable to Common Stock

Common stock issued upon exercise of stock options

Stock based compensation for stock options

Stock based compensation

Common stock issued upon exercise of stock options, pre Business Combination

Exercise of Common Stock Warrants - related party

Issuance of Common Stock in exchange for services in connection with A-2Preferred Stock Issuances, recasted

Issuance of Common Stock upon conversion of debt at Business Combination

Issuance of Common Stock upon conversion of Sponsor and related party notes and warrants at Business Combination

Issuance of Common Stock to Plum Sponsors and Investors at Business Combination

Issuance of Common Stock to Plum Shareholders at Business Combination

( 6,901,658 )

( 6,926,598 )

Issuance of Common Stock related to new financing

Common Stock issued for services

Common stock issued upon exercise of stock options, post Business Combination

Foreign currency translation loss

Balance, June 30, 2024

( 1,109,232 )

( 46,620,619 )

Balance, September 30, 2024

$ 210,665,277

$ ( 216,903,369 )

$ ( 1,770,586 )

$ ( 8,005,110 )

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

$ ( 1,736,512 )

$ ( 46,620,619 )

Adjustments to reconcile net loss to net cash used for operating activities:

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Amortization of debt issuance costs

Impairment loss on investment

Loss on initial issuance of debt

Change in fair value of convertible note option liability

Change in fair value of warrant liabilities

Earn-out liability initial loss

Change in fair value of Earn-out Share Liability

Share based vendor payments

( 13,520,000 )

( 24,750,000 )

Interest income on investment

Share based compensation

Share based vendor payments as compensation for services

Share based payment as compensation for ELOC commitment fee

Interest expense on convertible notes converted

Unrealized foreign currency transaction (gain) loss

( 1,686,348 )

Amortization of operating lease right of use assets

1 unchanged sentence

Prepaid and other current assets

( 5,034,546 )

Accounts payable

Accrued expenses

Accrued interest

Other current liabilities

Other liabilities

Operating lease payments

Net cash used in operating activities

( 11,514,722 )

( 19,829,558 )

Cash flows from investing activities

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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 exercise of stock options

Proceeds from reverse recapitalization

Proceeds from lock-up share release

Proceeds from the issuance of common stock, net of transaction costs

Proceeds from exercise of stock options for common stock

Net cash provided by financing activities

1 unchanged sentence

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

( 3,207,105 )

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

Non-cash activities

Initial measurement of debt discount on the convertible note

( 1,450,000 )

Conversion of related party notes to Common Stock

Conversion of interest on related party notes to Common Stock

Initial measurement of the convertible note option liability

Conversion of principal on related party notes to Common Stock

Crowdkeep asset acquisition

Settlement of convertible notes for shares issued

Issuance on Series A-2 preferred stock in exchange for Investor Deposits

Conversion of vendor payable to Series A-2 Preferred Shares

Conversion of vendor payable to Common Stock

Supplemental cash flow information

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1 - DESCRIPTION OF BUSINESS

The Company is dedicated to simplifying the journey towards creating

a world in which virtually everyone and everything is intelligently connected, while bringing applications and

artificial intelligence to the edge of the network.

The Company is dedicated to simplifying

the journey towards creating a world in which virtually everyone and everything is intelligently connected, while bringing applications

and artificial intelligence to the edge of the network.

Most service providers, equipment suppliers, system integrators and even hyperscalers

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smart retail as cloud-managed converged private networks.

Gartner recognized the innovativeness and capabilities of the platform

by naming the Company a Leading Smart Edge Platform in 2023 and Cool Vendor in Edge Computing in 2021.

Market Reports World in its research

report published in October 2023 named the Company as one of the top 10 Edge AI solution providers alongside of IBM, Microsoft, Amazon

Web Services and others.

Gartner recognized the innovativeness

and capabilities of the platform by naming the Company a Leading Smart Edge Platform in 2023 and Cool Vendor in Edge Computing in 2021.

Market Reports World in its research report published in October 2023 named the Company as one of the top 10 Edge AI solution providers

alongside of IBM, Microsoft, Amazon Web Services and others.

Private Veea was founded in 2014 by

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beyond with the Company.

The Company has six wholly owned subsidiaries, VeeaSystems Inc., formerly

known as Veea Inc.

a Delaware corporation, (“Private Veea”), 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, VeeaSystems SAS, a French simplified joint stock company and VeeaSystems CK Inc., a Delaware corporation;

and one majority owned

subsidiary, VeeaSystems Mexico, S.

de C.V., a limited capital company organized under the laws of Mexico (“VeeaSystems MX”).

VeeaSystems MX is 95 % owned by VeeaSystems Inc., and due to local law requirements, the remaining 5 % is held by the Company’s CEO.

The Company has six wholly owned subsidiaries,

VeeaSystems Inc., formerly known as Veea Inc.

a Delaware corporation, (“Private Veea”), 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, VeeaSystems SAS, a French simplified joint stock company and VeeaSystems CK Inc., a Delaware corporation;

and one majority owned subsidiary, VeeaSystems Mexico, S.

de C.V., a limited capital company organized under the laws of Mexico

(“VeeaSystems MX”).

VeeaSystems MX is 95 % owned by VeeaSystems Inc., and due to local law requirements, the remaining 5 % is

held by the Company’s CEO.

The Company is headquartered in New York City with offices in the United States, Mexico and Europe.

2 - LIQUIDITY AND MANAGEMENT’S PLAN

During the three months ended June

30, 2025 and 2024, the Company incurred operating losses of $ 4.9 million and $ 6.8 million, respectively, and during the six months ended

June 30, 2025 and 2024, the Company incurred operating losses of $ 10.7 million and $ 12.4 million, respectively, and had an accumulated

deficit of $ 220.9 million as of June 30, 2025.

Since its inception, the Company has incurred significant operating losses and negative

During the three months ended September

30, 2025 and 2024, the Company incurred operating losses of $ 4.7 million and $ 57.5 million, respectively, and during the nine months ended

September 30, 2025 and 2024, the Company incurred operating losses of $ 15.3 million and $ 69.9 million, respectively, and had an accumulated

deficit of $ 219.6 million as of September 30, 2025.

Since its inception, it has incurred significant operating losses and negative cash

The Company expects to continue to incur net losses as it continues to grow and scale its business.

As of June 30, 2025, the

Company had cash of $ 238,008 and outstanding debt of $ 20.2 million, of which $ 750,000 was outstanding under the September 2024 Notes (as

defined below), $ 1.0 million was outstanding under the Crowdkeep Convertible Notes (as defined below), $ 14.0 million was outstanding under

the working capital facility, $ 2,626,000 was related party debt outstanding under the NLabs 2025 Notes (as defined below), and $ 1.8 million

was outstanding under a notes payable with an inventory vendor.

As of September 30, 2025, it

had cash of $ 1,071,151 and outstanding debt of $ 17.5 million, of which $ 750,000 was outstanding under the September 2024 Notes (as defined

below), $ 1.0 million was outstanding under the Crowdkeep Convertible Notes (as defined below), $ 14.0 million was outstanding under the

working capital facility, and $ 1.8 million was outstanding under a notes payable with an inventory vendor.

Although the Company has had recurring

losses each year since inception, the Company plans to fund its operations and capital funding needs for the next 12 months through a

combination of private and public equity and debt offerings, or a combination thereof, including (1) ) cash proceeds of approximately

$ 6.0 million from the Offering (as defined below), (2) the ELOC Program (as defined below)(3) the expected cash tax refund of up to $ 1.0

million in respect of the Company’s UK subsidiary’s 2023 and 2024 research and development activities, and (4)) potential

additional investments in the form of debt or equity to fund operating deficits from existing and/or new investors, including related

parties, which may include the Company’s CEO and his affiliates.

The Company 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 approximately

$ 3.2 million in additional loans from related parties and $ 1.0 million in loans from unrelated parties in connection with the consummation

of the acquisition of Crowdkeep.

See Note 13 for additional information.

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.

losses each year since inception, the Company plans to fund its operations and capital funding needs for the next 12 months with revenue

generated from operations and through a combination of private and public equity offerings including, without limitation, anticipated

revenue generated under the Supply Agreement entered into with Telcel, the proceeds of the Company’s Common Stock Offering completed

on August 14, 2025, receipt of the cash tax refund of approximately $ 1.2 million in respect of the Company’s UK subsidiary’s

2023 and 2024 research and development activities, and potential additional investments in the form of debt or equity to fund operating

deficits from existing and/or new investors, including related parties, which may include the Company’s CEO and his affiliates.

Based in part on the above-referenced

opportunities and initiatives, the Company has a reasonable basis to believe it has alleviated substantial doubt regarding its ability

to continue as a going concern.

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.

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Transactions with VeeaSystems

MX were immaterial during all the period presented and are not separately disclosed.

MX were immaterial during all the periods presented and are not separately disclosed.

The condensed consolidated balance

sheet as of June 30, 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.

sheet as of September 30, 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

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Actual results could differ from these estimates.

Changes in such estimates could affect amounts reported in

future periods.

Changes in such estimates could affect amounts reported in future

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;

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

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The majority of the Company’s

assets as of June 30, 2025 and December 31, 2024, were attributable to its U.S.

For the three months ended June 30, 2025,

one customer accounted for more than 10% of the Company’s consolidated revenues.

For the six months ended June 30, 2025, two customers

accounted for more than 10% of the Company’s consolidated revenues.

The Company’s long-lived assets are based on the physical

location of the assets.

assets as of September 30, 2025 and December 31, 2024, were attributable to its U.S.

The Company’s long-lived assets

are based on the physical location of the assets.

For the three months and nine months ended September 30, 2025, revenue was negligible

and not materially concentrated among customers.

Recent Accounting Pronouncements

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2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

In January 2025,

2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic

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The objective of the disclosure requirements is to provide disaggregated information about a public business entity’s

expenses to help investors (a) better understand the entity’s performance, (b) better assess the entity’s prospects for future cash flows,

and (c) compare an entity’s performance over time and with that of other entities.

The additional disclosures under this update include

(1) disclosing the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation,

depletion, and amortization recognized as part of oil and gas-producing activities (DD&A) (or other amounts of depletion expense)

that are included in each relevant expense caption, (2) include certain amounts that are already required to be disclosed under current

generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements, (3) disclose a qualitative

description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, and (4) disclose

the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments

in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after

December 15, 2027.

expenses to help investors (a) better understand the entity’s performance, (b) better assess the entity’s prospects for future

cash flows, and (c) compare an entity’s performance over time and with that of other entities.

The additional disclosures under

this update include (1) disclosing the amounts of purchases of inventory, employee compensation, depreciation, intangible asset amortization,

and depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (DD&A) (or other amounts of depletion

expense) that are included in each relevant expense caption, (2) include certain amounts that are already required to be disclosed under

current generally accepted accounting principles (GAAP) in the same disclosure as the other disaggregation requirements, (3) disclose

a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively,

and (4) disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses.

The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods

beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of this ASU on its condensed consolidated

financial statements.

The Company is currently evaluating the impact of this ASU on its condensed

consolidated financial statements.

4 - ACQUISITION

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, the Company acquired (the “Crowdkeep Closing”), certain assets of Seller relating to Seller’s IoT technology

platform business (the “Crowdkeep Assets”), free and clear of any liens other than certain specified liabilities of Seller

that were assumed (the “Crowdkeep Liabilities”).

In consideration for the acquisition, the Company issued 4,065,689 shares

of its Common Stock (the “Purchase Price”).

into an Asset Purchase Agreement with Crowdkeep, Inc., a Delaware corporation (the “Seller”), pursuant to which the Company

acquired certain assets of Seller relating to Seller’s IoT technology platform business, free and clear of any liens other than

certain specified liabilities of Seller that were assumed.

In consideration for the acquisition, the Company issued 4,065,689 shares of

its Common Stock (the “Purchase Price”).

The transaction was accounted for as

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of $ 6,957,456 was comprised of equity consideration of $ 6,830,358 based on the number of shares issued at the closing share price, and

direct acquisition-related costs for legal and advisory of approximately $ 127,098 , the total of which was allocated to the acquired assets

on a relative fair value basis.

direct acquisition-related costs for legal and advisory fees of $ 127,098 , the total of which was allocated to the acquired assets on a

relative fair value basis.

Because this was not a business combination, no goodwill was recognized.

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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

the time of Plum’s initial public offering (the “SPAC Private Placement Warrants”) remain outstanding and are now outstanding

warrants for the Company.

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Inventory consists of the following:

September 30,

Inventory allowance

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of the following:

September 30,

Furniture and fixtures

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Depreciation expense for the three

months ended June 30, 2025 and 2024, totaled $ 36,335 and $ 54,000 , respectively.

Depreciation expense for the six months ended June 30,

months ended September 30, 2025 and 2024, totaled $ 29,036 and $ 56,000 , respectively.

Depreciation expense for the nine months ended September

30, 2025 and 2024, totaled $ 106,425 and $ 166,000 , respectively.

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The following is a summary of activity

in goodwill for the six months ended June 30, 2025 and 2024:

in goodwill for the nine months ended September 30, 2025 and 2024:

September 30,

Balance at December 31, 2024

Foreign exchange transactions

Balance at June 30, 2025

Balance at September 30, 2025

September 30,

Balance at December 31, 2023

Foreign exchange transactions

Balance at June 30, 2024

Balance at September 30, 2024

Intangible Assets

Intangible assets consist of the following:

As of June 30, 2025

As of September 30, 2025

Period Costs as of

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Patents 15 years $ 7,551,468 $ 218,718 $ -

$ 7,770,186 $ ( 6,823,892 ) $ -

Proprietary technology 10 years -

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The Company’s

patents have estimated remaining economic useful lives ranging from 5 - 15 years and the proprietary technology associated with the Crowdkeep

Transaction, as defined below, has an estimated remaining useful life of 10 years.

Management reviews intangible assets for impairment

when events and circumstances warrant.

During the six months ended June 30, 2025 and 2024, there were no events that necessitated additional

impairment of intangible assets.

patents have estimated remaining economic useful lives ranging from 5 - 15 years and the proprietary technology acquired from Crowdkeep

has an estimated remaining useful life of 10 years.

Management reviews intangible assets for impairment when events and circumstances

During the nine months ended September 30, 2025 and 2024, there were no events that necessitated additional impairment of intangible

Intangible asset amortization expense

for the three months ended June 30, 2025 and 2024, totaled $ 108,272 and $ 14,000 , respectively.

Intangible asset amortization expense for

the six months ended June 30, 2025 and 2024, totaled $ 127,272 and $ 28,000 , respectively.

for the three months ended September 30, 2025 and 2024, totaled $ 187,400 and $ 11,000 , respectively.

Intangible asset amortization expense

for the nine months ended September 30, 2025 and 2024, totaled $ 314,671 and $ 39,000 , respectively.

Future estimated amortization expense

for the Company’s intangible assets is approximately as follows:

Future estimated amortization as of June 30, 2025

Future estimated amortization as of September 30, 2025

Remainder of 2025

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is comprised of the following, including convertible notes:

June 30, 2025

September 30, 2025

Revolving Loan Facility

Convertible note payable, current

Convertible note payable, net

Notes payable

$ ( 199,599 )

December 31, 2024

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Following the acquisition of First Republic, the Loan was transferred to the Bank.

were no borrowings during the three months ended June 30, 2025, and $ 1.3 million of borrowings during the six months ended June 30, 2025.

As of June 30, 2025, the outstanding principal amount of the Loan was $ 14.0 million, and there is no availability to borrow additional

Convertible Note Payable

were no borrowings during the three months ended September 30, 2025, and $ 1.3 million of borrowings during the nine months ended September

As of September 30, 2025, the outstanding principal amount of the Loan was $ 14.0 million, and there is no availability to borrow

additional funds.

Convertible Notes Payable

Business Combination Convertible

Notes Payable

Simultaneously with the closing of

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In addition to a September 2024

Note, 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 Common Stock equal to such Investors’ original

principal note loan amount under their respective notes divided by $ 7.50 (the “Transferred Shares”).

2.0 million Transfer

Shares were delivered to Investors at the Financing Closing.

Note, each Investor received, as a transfer from NLabs Inc., an affiliated of Allen Salmasi, our Chief Executive Officer (“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 Common Stock equal to such Investors’ original principal note loan amount under their respective

notes divided by $ 7.50 (the “Transferred Shares”).

2.0 million Transfer Shares were delivered to Investors at the Financing

The Note Purchase Agreements include customary registration rights.

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such Conversion Shares would be extended for an additional 6 months to 12 months after the Financing Closing.

As of June 30, 2025, $ 700,000

in aggregate principal amount of the September 2024 Notes, together with associated interest, had automatically converted upon the occurrence

of a Brokerage Transfer.

As of September 30, 2025,

$ 700,000 in aggregate principal amount of the September 2024 Notes, together with associated interest, had automatically converted upon

the occurrence of a Brokerage Transfer.

The Company reviewed the conversion

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See Note 15 for further information.

Convertible Notes Payable Issued

in connection with Crowdkeep Acquisition

On April 17, 2025,

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an impairment loss of $ 216,278 .

As of June 30, 2025, there were no indicators of impairment.

The carrying value of the Company’s

private company investments was $ 235,737 as of both June 30, 2025 and December 31, 2024.

These investments, which do not have a stated

contractual maturity date, were classified as Investments on the Company’s consolidated balance sheets.

As of September 30, 2025, there were no indicators of impairment.

These investments, which do not have

a stated contractual maturity date, were classified as Investments on the Company’s consolidated balance sheets.

10 - STOCKHOLDERS’ EQUITY

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Common Stock.

During the three and six months ended

June 30, 2025, the Company received $ 232,340 and $ 836,766 , respectively, in proceeds and issued 117,500 and 358,000 shares, respectively,

of Common Stock, pursuant to the ELOC Program.

The Company did not draw on the ELOC

during the three months ended September 30, 2025, and received $ 836,766 in proceeds from draws on the ELOC during the nine months ended

September 30, 2025, and issued 358,000 shares of Common Stock, pursuant to the ELOC Program.

The Company agreed to issue to White

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which pursuant to ASC 815, was recorded in transaction costs in the condensed consolidated statement of operations and comprehensive income

(loss) during the six months ended June 30, 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.

the Common Stock Purchase Agreement provided for the issuance of additional Commitment Shares to the Common Stock Purchaser if the Company

failed to sell at least $ 1,000,000 in gross proceeds to the Common Stock Purchaser by the sixth-month anniversary of signing of the Common

Stock Purchase Agreement.

The Company and the Common Stock Purchaser amended the Common Stock Purchase Agreement effective of June 2,

2025 (the “ELOC Amendment”) to provide for (i) an extension of the time period to December 15, 2025 and (ii) an increase the

gross proceeds sold under the Common Stock Purchase Agreement to $ 1,250,000 .

If the Company fails to sell such amount of, the number of

additional Commitment Shares would be equal to $ 50,000 divided by the volume weighted average stock price of the Common Stock 10 days

prior to December 15, 2025.

(loss) during the nine months ended September 30, 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.

Further, the Common Stock Purchase Agreement provided for the issuance of additional Commitment Shares to the Common Stock Purchaser if

the Company failed to sell at least $ 1,000,000 in gross proceeds to the Common Stock Purchaser by the sixth-month anniversary of signing

of the Common Stock Purchase Agreement.

The Company and the Common Stock Purchaser amended the Common Stock Purchase Agreement effective

of June 2, 2025 (the “ELOC Amendment”) to provide for (i) an extension of the time period to December 15, 2025 and (ii) an

increase the gross proceeds sold under the Common Stock Purchase Agreement to $ 1,250,000 .

If the Company fails to sell such amount of,

the number of additional Commitment Shares would be equal to $ 50,000 divided by the volume weighted average stock price of the Common

Stock 10 days prior to December 15, 2025.

August 2025 Public Offering

On August 14, 2025, the Company closed a public offering (the “August

2025 Public Offering”) of 9,189,096 shares of its common stock and warrants to purchase up to 9,189,096 shares of common stock (the

“2025 Investor Warrants”) at a combined offering price of $ 1.00 per share and accompanying warrant.

The Company received aggregate

cash gross proceeds of approximately $ 6.0 million, before deducting placement agent fees and other offering expenses.

The 2025 Investor

Warrants have an exercise price of $ 1.10 per share, are exercisable immediately, and will expire five years from the original issuance

Included in the aggregate securities issued are 3,239,096 shares of common stock and accompanying warrants that were issued to NLabs

in consideration and satisfaction of the NLabs 2025 Notes and associated interest.

The Company is using the net proceeds from the Offering

for investments in inventory and the Company’s customer support infrastructure and for other working capital and general corporate

11 - STOCK INCENTIVE PLANS

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are consistent with the purpose of the 2024 Incentive Plan.

As of June 30, 2025, the Company had approximately 429,724 shares available

As of September 30, 2025, the Company had 464,776 shares available for grant.

On June 4, 2024, the stockholders of

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less than 85 % of the lower of the fair market value per share of the Common Stock on either the offering date or on the purchase date.

As of June 30, 2025, there have not yet been any offering periods available to purchase Common Stock under the ESPP.

As of September 30, 2025, there have not yet been any offering periods available to purchase Common Stock under the ESPP.

In connection with the Business Combination,

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Black-Scholes option-pricing model.

For options granted during the six months ended June 30, 2025 and 2024, respectively, the weighted

For options granted during the nine months ended September 30, 2025 and 2024, respectively, the weighted

average estimated fair value using the Black-Scholes option pricing model was $ 0.81 and $ 1.49 per option, respectively.

8 unchanged sentences

Forfeited / Expired ( 140,307 ) 2.64

Outstanding at June 30, 2025 3,936,107 $ 3.60 8.5

Exercisable at June 30, 2025 3,806,983 3.66 8.46

Outstanding at September 30, 2025 6,231,526 2.47 9.03

Exercisable at September 30, 2025 3,766,429 $ 3.64 8.45

On September 29, 2025, the compensation

committee of the Board of Directors approved equity awards to certain Named Executive Officers (“NEO”), employees, and consultants

in the form of options to purchase 2,375,000 shares of the Company’s common stock (the “September 2025 Grants”), subject

to (i) with respect to September 2025 Grants to the NEOs and other officers of the Company, to the Company’s performance and time

vesting schedules and (ii) with respect to September 2025 Grant to non-NEO officer employees and consultants, time vesting schedules.

In addition, no portion of the September 2025 Grants may be exercised unless both (A) the Company’s stockholders approve the September

2025 Grants or approval of an amendment to increase the number of shares under the 2024 Plan to a sufficient number of shares such that

the full number of shares underlying the September 2025 Grants may be delivered from the Plan’s share reserve and (B) the Company

files a Form S-8 with the SEC to register the shares subject to the September 2025 Grants, and if either (A) or (B) is not satisfied,

the September 2025 Grants may be fully unwound and cancelled.

The fair value of each stock option

granted is estimated using the Black-Scholes option-pricing model using the single-option award approach.

The assumptions used to calculate

the fair value of the options granted during the six months ended June 30, 2025, were as follows:

Stock Price $ 1.64

The range of weighted average

assumptions used to calculate the fair value of the options granted during the nine months ended September 30, 2025, were as follows:

September 30,

Expected term (years)

Volatility 75 %

Risk-Free Rate

Stock compensation expense related

to the common stock options outstanding for the six months ended June 30, 2025 and 2024, was $ 158,257 and $ 334,774 , respectively, which

is included in general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive

to the common stock options outstanding for the nine months ended September 30, 2025 and 2024, was $ 203,616 and $ 394,234 , respectively,

which is included in general and administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive

income (loss).

Total unrecognized expense related to unvested options outstanding as of June 30, 2025, was $ 179,076 which will be recognized

over a weighted average period of 2.43 years.

Total unrecognized expense related to unvested options outstanding as of September 30, 2025, was $ 1,082,949 , which will

be recognized over a weighted average period of 3.9 years.

Restricted Stock Units

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Unvested at December 31, 2024

Unvested at June 30, 2025

Unvested at September 30, 2025

Stock compensation expense related

to the RSUs for the six months ended June 30, 2025 was $ 281,655 which is included in general and administrative expenses in the Company’s

condensed consolidated statements of operations and comprehensive income (loss).

There were no RSUs granted during the six months ended

June 30, 2024.

Total unrecognized expense related to unvested RSUs as of June 30, 2025, was $ 824,670 which will be recognized over a weighted

average period of 0.8 years.

to the RSUs for the nine months ended September 30, 2025 was $ 555,507 which is included in general and administrative expenses in the

Company’s condensed consolidated statements of operations and comprehensive loss.

There were no RSUs granted during the nine months

ended September 30, 2024.

Total unrecognized expense related to unvested RSUs as of September 30, 2025, was $ 550,820 which will be recognized

over a weighted average period of 0.58 years.

12 - WARRANTS

Public Warrants

As part of Plum’s initial public

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Simultaneously with the closing

of the IPO, Plum completed the private sale of warrants (the “Private Placement Warrants” and together with the Public Warrants,

the “Warrants”) where each Private Placement Warrant allows the holder to purchase one share of the Common Stock at $ 11.50

At June 30, 2025, there were 6,384,326 Public Warrants and 5,256,218 Private Placement Warrants outstanding.

The Public Warrants become exercisable

at per share, subject to adjustment, at any time commencing 30 days after the completion of the Business Combination;

provided that the

Company has an effective registration statement under the Securities Act covering the shares of Common Stock issuable upon exercise of

the Public Warrants and a current prospectus relating to them is available (or the Company permits holders to exercise their warrants

on a cashless basis under the circumstances specified in the warrant agreement) and such shares are registered, qualified or exempt from

registration under the securities, or blue sky, laws of the state of residence of the holder.

The warrants will expire five years after

the completion of the Business Combination or earlier upon redemption or liquidation.

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.

of the IPO, Plum completed the private sale of warrants (the “SPAC Private Placement Warrants” and together with the Public

Warrants, the “SPAC Warrants”) where each Private Placement Warrant allows the holder to purchase one share of the Common

Stock at $ 11.50 per share.

At September 30, 2025, there were 6,384,326 Public Warrants and 5,256,218 SPAC Private Placement Warrants outstanding.

The Public Warrants are exercisable

at per share, subject to adjustment, provided that the Company has an effective registration statement under the Securities Act covering

the shares of Common Stock issuable upon exercise of the Public Warrants and a current prospectus relating to them is available (or the

Company permits holders to exercise their warrants on a cashless basis under the circumstances specified in the warrant agreement) and

such shares are registered, qualified or exempt from registration under the securities, or blue sky, laws of the state of residence of

The warrants will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation.

The Company filed with the SEC a registration

statement for the registration, under the Securities Act, of the shares of Common Stock issuable upon exercise of the SPAC Private Placement

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.

Redemption of Warrants When the

Price per Share of Common Stock Equals or Exceeds $ 18.00

Once the Warrants become exercisable,

the Company may redeem the outstanding Warrants (except with respect to the Private Placement Warrants):

With the exception of the SPAC 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.

Redemption of SPAC Warrants When the Price per Share of Common Stock

Equals or Exceeds $ 18.00

Once the SPAC Warrants become exercisable, the Company may redeem the

outstanding Warrants (except with respect to the SPAC Private Placement Warrants):

in whole and not in part;

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● if, and only if, the last reported sale price of our Common Stock equals or exceeds $ 18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within a 30 -trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders.

Redemption of Warrants When the

Price per Share of Common Stock Equals or Exceeds $ 10.00

Once the Warrants become exercisable,

the Company may redeem the outstanding Warrants:

Redemption of SPAC Warrants When the Price per Share of Common Stock

Equals or Exceeds $ 10.00

Once the SPAC Warrants become exercisable, the Company may redeem the

outstanding SPAC Warrants:

in whole and not in part;

1 unchanged sentence

● if, and only if, the closing price of our Common Stock equals or exceeds $ 10.00 per public share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant) for any 20 trading days within the 30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders;

● if the closing price of our Common Stock for any 20 trading days within a 30 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant holders is less than $ 18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price of a warrant), the Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding Public Warrants, as described above.

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 June 30, 2025, the Private Placement

Warrants are presented within warrants on the condensed consolidated balance sheet.

● if the closing price of our Common Stock for any 20 trading days within

a 30 -trading day period ending on the third trading day prior to the date on which the Company sends the notice of redemption to the warrant

holders is less than $ 18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise or the exercise price

of a warrant), the SPAC Private Placement Warrants must also be concurrently called for redemption on the same terms as the outstanding

Public Warrants, as described above.

The SPAC Private Placement Warrants

were initially issued in the same form as the Public Warrants with the exception that the SPAC Private Placement 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 SPAC Private Placement 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

The Company continues to recognize the SPAC 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 September 30, 2025, the SPAC Private Placement Warrants are presented

within warrant liabilities on the condensed consolidated balance sheet.

Private Veea Warrants

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in payment of the purchase price.

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 79,654 shares of Common Stock at an exercise price of $ 0.05 per share for an aggregate purchase

price of $ 3,983 .

The outstanding Exchanged Warrants are exercisable at the option of the holder until September 28, 2028, for an exercise

price of $ 10.19 per share.

As of June 30, 2025, there are 159,307 Exchanged Warrants outstanding.

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 79,654 shares of Common Stock at an exercise price of $ 0.05 per share for an aggregate purchase price of $ 3,983 .

The outstanding Exchanged Warrants are exercisable at the option of the holder until September 28, 2028, for an exercise price of $ 10.19

As of September 30, 2025, there are 159,307 Exchanged Warrants outstanding.

2025 Investor Warrants

In connection with the August 2025 Public Offering, the Company issued

the warrants to purchase up to 9,189,096 shares of common stock investors (the “2025 Investor Warrants”), including related

Each 2025 Investor Warrant entitles the holder to purchase one share of the Common Stock at an exercise price of $ 1.10 .

price is subject to appropriate adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations,

reclassifications or similar events affecting our common stock and also upon any distributions of assets, including cash, stock or other

property to our stockholders.

No fractional shares of common stock will be issued in connection with the exercise of the warrant.

of fractional shares, the Company will pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price.

The 2025 Investor Warrants will expire five years from their issuance date.

The 2025 Investor Warrants have not been listed on Nasdaq

or any other national securities exchange or other nationally recognized trading system.

Each 2025 Investor Warrant is exercisable,

at the option of the holder thereof, in whole or in part, by delivering to a duly executed exercise notice accompanied by payment in full

in immediately available funds for the number of shares of our common stock purchased upon such exercise (except in the case of a cashless

exercise as described below).

A holder (together with its affiliates)

may not exercise any portion of the 2025 Investor Warrant to the extent that the holder would own more than 4.99 % (or, at the election

of the holder, 9.99 )% of the outstanding common stock immediately after exercise, except that upon at least 61 days’ prior notice

from the holder to the Company, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s

2025 Investor Warrants up to 9.99 % of the number of shares of our common stock outstanding immediately after giving effect to the exercise,

as such percentage ownership is determined in accordance with the terms of the 2025 Investor Warrants.

If the holder of 2025 Investor Warrants

exercises its warrants and a registration statement registering the issuance of the shares of common stock underlying the warrants under

the Securities Act is not then effective or available (or a prospectus is not available for the resale of shares of common stock underlying

the warrants), then in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment

of the aggregate exercise price, the holder shall instead receive upon such exercise (either in whole or in part) only the net number

of shares of common stock determined according to a formula set forth in the common warrants.

Notwithstanding anything to the contrary,

in the event the Company does not have or maintain an effective registration statement, there are no circumstances that would require

the Company to make any cash payments or net cash settle the common warrants to the holders.

Subject to applicable laws, the 2025

Investor Warrants may be offered for sale, sold, transferred or assigned at the option of the holder upon surrender of such holder’s

warrants to the Company together with the appropriate instruments of transfer.

In the event of a fundamental transaction,

as described in the 2025 Investor Warrants and generally including any reorganization, recapitalization or reclassification of our common

stock, the sale, transfer or other disposition, in each case, of all or substantially all of our properties or assets, our consolidation

or merger with or into another person, the acquisition of more than 50 % of our outstanding common stock, or any person or group becoming

the beneficial owner of 50 % of the voting power represented by our outstanding common stock, the holders of the common warrants will be

entitled to receive upon exercise of the common warrants the kind and amount of securities, cash or other property that the holders would

have received had they exercised the warrants immediately prior to such fundamental transaction.

In the case of certain fundamental transactions

affecting us, a holder of the 2025 Investor Warrants, upon exercise of such warrants after such fundamental transaction, will have the

right to receive, in lieu of shares of our common stock, the same amount and kind of securities, cash or property that such holder would

have been entitled to receive upon the occurrence of the fundamental transaction, had the warrants been exercised immediately prior to

such fundamental transaction.

The Company recognized the 2025 Investor Warrants as liability-classified

at fair value as of the closing date, with an offsetting entry to additional paid-in capital and adjusts the carrying value 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 September 30, 2025, the 2025 Investor Warrants are presented within warrant liability on the condensed

consolidated balance sheet.

13 - RELATED PARTY TRANSACTIONS

2 unchanged sentences

into a sublease agreement with NLabs Inc., an affiliate of the Company’s CEO that held approximately 35 % of the Company’s

outstanding capital stock at December 31, 2024, for office space for an initial term of five years .

outstanding capital stock at September 30, 2025, for office space for an initial term of five years .

In 2018, Private Veea renewed the

3 unchanged sentences

Rent for the office space is accrued and not paid in cash.

Company recognized rent expense of $ 122,400 for each of the six months ended June 30, 2025 and 2024, which was classified as general and

administrative expenses in the Company’s condensed consolidated statements of operations and comprehensive income (loss).

and unpaid rent expense included in the Company’s condensed consolidated balance sheets was $ 1,836,000 as of June 30, 2025 and $ 1,713,600

as of December 31, 2024.

In April 2017, Private Veea entered

into a lease agreement with 83 rd Street LLC to lease office space for an initial term of two years .

The sole member of

83 rd Street LLC is the Salmasi 2004 Trust.

At December 31, 2024, the Salmasi 2004 Trust held approximately 8 % of Veea’s

outstanding capital stock.

Veea’s CEO is the grantor of the Salmasi 2004 Trust.

In 2018, Private Veea renewed the lease for

an additional five-year term, with all other terms and conditions of the lease remaining the same.

The renewal term expired February 28,

2024, and was subsequently extended to December 31, 2025.

Company recognized rent expense of $ 61,200 and $ 183,600 for each of the three and nine months ended September 30, 2025 and 2024, respectively,

which was classified as general and administrative expenses in the Company’s condensed consolidated statements of operations and

comprehensive income (loss).

Accrued and unpaid rent expense included in the Company’s condensed consolidated balance sheets was

$ 1,897,200 as of September 30, 2025 and $ 1,713,600 as of December 31, 2024.

In April 2017, Private Veea entered into a lease agreement with 83 rd Street

LLC to lease office space for an initial term of two years .

The sole member of 83 rd Street LLC is the Salmasi 2004 Trust.

At December 31, 2024, the Salmasi 2004 Trust held approximately 8 % of Veea’s outstanding capital stock.

Veea’s CEO is the

grantor of the Salmasi 2004 Trust.

In 2018, Private Veea renewed the lease for an additional five-year term, with all other terms

and conditions of the lease remaining the same.

The renewal term expired February 28, 2024, and was subsequently extended to December

Rent for the office space is accrued and not paid in cash.

The Company recognized

rent expense of $ 144,000 for each of the six months ended June 30, 2025, which is classified as general and administrative expenses in

the Company’s condensed consolidated statements of operations and comprehensive income (loss).

Accrued and unpaid rent expense included

in the Company’s condensed consolidated balance sheets was $ 2,088,000 and $ 1,944,000 as of June 30, 2025 and December 31, 2024,

The Company recognized rent expense of $ 72,000 and $ 532,800 for each

of the three and nine months ended September 30, 2025 and 2024, respectively, which is classified as general and administrative expenses

in the Company’s condensed consolidated statements of operations and comprehensive income (loss).

Accrued and unpaid rent expense

included in the Company’s condensed consolidated balance sheets was $ 2,160,000 and $ 1,944,000 as of September 30, 2025 and December

31, 2024, respectively.

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See Note 4 for further information regarding the conversion of the Related Party Notes.

During the six months ended June 30, 2025, NLabs made loans to the

Company in the aggregate principal amount of $ 2,626,000 .

Subsequent to June 30, 2025, NLabs made additional loans to the Company in the

aggregate principal amount of $ 550,000 .

(collectively, the “NLabs 2025 Notes”).

Interest on the loans accrue at a rate of 10 %

per annum, calculated on the basis of a 365-day year.

Accrued interest on the NLabs 2025 Notes through June 30, 2025 was $ 28,432 .

Company satisfied the payment of the outstanding NLabs 2025 Notes, plus accrued interest, in the aggregate amount of approximately $3,239,096,

with the issuance of approximately 3,239,096 shares of Common Stock with accompanying common warrants issued in the Offering, based on

the assumed offering price of $ 1.00 per share.

See Note 15 for additional information.

During the nine months ended September

30, 2025, NLabs made loans to the Company in the aggregate principal amount of $ 3,176,000 (the “NLabs 2025 Notes”).

on the loans accrued at a rate of 10 % per annum, calculated on the basis of a 365-day year.

The Company satisfied the payment of

the outstanding NLabs 2025 Notes, plus accrued interest, in the aggregate amount of $ 3,239,096 , with the issuance of 3,239,096 shares

of Common Stock with accompanying common warrants issued in the August 2025 Public Offering, based on the offering price of $ 1.00 per

In October and November 2025, NLabs

made additional loans to the Company in the aggregate principal amount of $ 130,000 pursuant to certain promissory notes.

Interest on the

NLabs promissory notes accrue at a rate of 10 % per annum, calculated on the basis of a 365-day year.

Principal and accrued interest is

payable upon the earlier of on demand and March 31, 2026.

14 - COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

Manufacturers and Suppliers

As of June 30, 2025, the Company had

no unconditional purchase obligations for the purchase of goods or services from suppliers and contract manufacturers.

As of September 30, 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 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.

obligations exclude agreements that are cancellable without penalty.

The Company leases office space in

the U.S., including office space from related parties as disclosed in Note 13.

These leases expire at various dates through 2025.

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.

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

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

24 unchanged sentences

mutually agreed to be deferred to periods after the Closing.

As of June 30, 2025, the amount of the deferred fees totaled $ 2,257,457 ,

As of September 30, 2025, the amount of the deferred fees totaled $ 2,257,457 ,

recorded in deferred payables, current in the condensed consolidated balance sheet.

1 unchanged sentence

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 six months ended June 30, 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 June 30, 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.

June 30, 2025

Private warrant liability

The following table presents fair value information as of September

30, 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.

nine months ended September 30, 2025, there were no transfers amongst level 1, 2, and 3 values during the period.

September 30, 2025

SPAC Private Placement Warrant liability

2025 Investor Warrant liability

Convertible note option liability

1 unchanged sentence

December 31, 2024

Money Market Funds

Private warrant liability

SPAC Private Placement Warrant liability

Convertible note option liability

Earn-out Share Liability

Warrant Liabilities

The Company’s initial value of

the SPAC Private Placement Warrant liability as of September 13, 2024, 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 was classified

The subsequent measurement of the SPAC Private Placement Warrants is classified as Level 2 because these warrants are economically

equivalent to the Public Warrants, based on the terms of the SPAC Private Placement 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.

2025 Investor Warrants

The Company established the initial

fair value of the 2025 Investor Warrants liability as of August 14, 2025, the date of the August 2025 Public Offering.

As of September

30, 2025, the fair value was remeasured using an option pricing model.

The option pricing model was used to value the liability for the

initial period and subsequent measurement periods.

The 2025 Investor Warrant liability

was classified within Level 3 of the fair value hierarchy due to the use of unobservable inputs.

The key inputs into the option pricing

model were as follows at August 14, 2025 initial value, and at September 30, 2025:

September 30,

August 14, 2025

Expected term (years)

Risk-Free Rate

September 30,

Balance, beginning of period

Initial value, August 14, 2025

Change in fair value

Balance, end of period

Convertible Note Option

1 unchanged sentence

fair value for the convertible note option liability as of September 13, 2024, which was the date the Convertible Note was executed.

of June 30, 2025, the fair value was remeasured using an option pricing model.

of September 30, 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.

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 convertible note option liability

2 unchanged sentences

model for the convertible note option liability were as follows:

September 30,

2025 December 31,

Stock Price $ 1.83 $ 3.81

Expected term (years) 0.45 1.2

Volatility 75.0 % 75.0 %

Risk-Free Rate 4.16 % 4.18 %

Interest rate 6.24 % 6.49 %

Balance, beginning of period

September 30,

Balance, beginning of period, December 31, 2024

Change in fair value

11 unchanged sentences

The following table presents the changes

in fair value of the earn-out liability:

Balance, beginning of period

in fair value of the Earn-Out Share Liability:

September 30,

Balance, beginning of period, December 31, 2024

Change in fair value

( 8,800,000 )

Balance, end of period

1 unchanged sentence

Liability were as follows:

September 30,

Expected term (years)

2 unchanged sentences

The computation of basic and dilutive

net loss per share attributable to common stockholders for the six months ended June 30, 2025 and 2024, are as follows:

net loss per share attributable to common stockholders for the nine months ended September 30, 2025 and 2024, are as follows:

Three Months Ended

Six Months Ended

Net loss attributable to common shareholders

$ ( 7,410,858 )

September 30,

Nine Months Ended

September 30,

Net income (loss) attributable to common shareholders

$ ( 33,323,555 )

2 unchanged sentences

Weighted-average common shares outstanding

Net loss per share – basic:

Net income (loss) per share – basic:

Net income (loss) attributable to common and common equivalent shareholders

2 unchanged sentences

( 46,620,619 )

( 13,297,064 )

Weighted-average common stock outstanding

1 unchanged sentence

Total common and common equivalent shares outstanding

Net 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:

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

Six Months Ended

September 30,

Nine Months Ended

September 30,

Stock options outstanding to purchase shares of common stock and RSUs

Public and Private Warrants

Public Warrants

SPAC Private Placement Warrants

Private Veea Warrants

2025 Investor Warrants

Convertible Notes

The weighted average potential shares of common stock that were excluded

from the calculation of net loss per share-diluted because the performance or market conditions associated with these awards were not

met are as follows for the periods presented:

The weighted average potential shares

of common stock that were excluded from the calculation of net income (loss) per share-diluted because the performance or market conditions

associated with these awards were not met are as follows for the periods presented:

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

Earn-Out Liability

11 unchanged sentences

The Company’s matching

contributions to the Plan for the six months ended June 30, 2025 and 2024, totaled $ 37,240 and $ 77,697 , respectively.

A total of $ 202,050

contributions to the Plan for the nine months ended September 30, 2025 and 2024, totaled $ 73,899 and $ 116,879 , respectively.

$ 237,997 is reflected in accrued expenses in the condensed consolidated balance sheet for matching contributions accrued but not yet paid.

1 unchanged sentence

The Company evaluated subsequent events

from June 30, 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 six months ended June 30, 2025.

The Company concluded that no events have occurred that would require recognition or disclosure in the financial statements, except as

described below:

Public Offering

On August 14, 2025, the Company closed

a public offering to purchase up to 9,189,096 shares of common stock and warrants to purchase up to 9,189,096 shares of common stock at

a combined offering price of $ 1.00 per share and accompanying warrant (the “Offering”).

The Company received aggregate cash

gross process of approximately $ 6.0 million, before deducting placement agent fees and other offering expenses.

The warrants have an exercise

price of $ 1.10 per share, are exercisable immediately and will expire five years from the original issuance date.

Included in the aggregate

securities issued are 3,239,096 shares of common stock and accompanying warrants that were issued to NLabs in consideration and satisfaction

of the NLabs 2025 Notes.

The Company intends to use the net proceeds from the Offering for investments in inventory and the Company’s

customer support infrastructure and for other working capital and general corporate purposes.

Supply Agreement

August 7, 2025, VeeaSystems Inc., a Delaware corporation (“VeeaSystems”), a wholly owned subsidiary of Veea Inc., a Delaware

corporation (the “Company”), entered into a certain Framework Agreement for the Licenses, Equipment and Services (the “Supply

Agreement”) with RadioMovil Dipsa, S.A.

(“Telcel”), a Mexican wireless telecommunications company

owned by América Móvil, effective August 7, 2025.

The Supply Agreement was signed by the parties following the completion

of an extensive certification and homologation process with Telcel;

and the successful completion of trials with certain Telcel enterprise

customers of the Company’s VeeaHub STAX Ò -5G

product, incorporating Telcel SIM cards.

Supply Agreement sets forth the general guidelines, terms and conditions that govern the solution implementation and marketing, as well

as the provisioning of the services provided by VeeaSystems.

Under the agreement, VeeaSystems will supply a comprehensive Platform-as-a-Service

solution featuring 5G-based Fixed Wireless Access (FWA) through its VeeaHub STAX Ò -5G

device, which incorporates 4G and 5G cellular connectivity, Wi-Fi 6 Access Point, IoT gateway, storage and Linux server capabilities to

deliver connectivity with integrated AI-driven cybersecurity services, managed connectivity, and monitoring tools while capable of hosting

applications on STAX-5G including third-party application.

The parties have agreed to work together in the development of the marketing

strategy, branding and promotion of VeeaSystems’s services to Telcel’s customers in Mexico.

The agreement provides for an

initial term of three years and automatically renews for successive one-year terms, unless either party elects not to renew upon 90 -day

prior notice.

Appointment of Acting Chief Financial

On July 15, 2025, Randal V.

was appointed as the Company’s Acting Chief Financial Officer.

Appointment of Acting Chief Revenue

On July 15, 2025, Mr.

Helder Antunes

a current member of the Company’s Board of Directors was appointed acting Chief Revenue Officer.

from September 30, 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 nine months ended September 30,

The Company concluded that no events have occurred that would require recognition or disclosure in the financial statements.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements