VEEA INC. 10-Q

Item 1. Financial Statements VEEA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31, 2025 2024 (unaudited) ASSETS Cash $ 1,071,151 $ 1,685,633 Receivables, net 147,438 84,655 Inventory, net 9,562,118 7,459,240 Prepaid and other current assets 5,535,918 5,649,594 Total current assets 16,316,625 14,879,122 Property and equipment, net 113,472 210,629 Goodwill 5,174,240 4,779,625 Intangible assets, net 7,594,415 786,061 Investments 236,519 235,596 Other assets 33,879 202,862 TOTAL ASSETS $ 29,469,150 $ 21,093,895 LIABILITIES AND STOCKHOLDERS’ DEFICIT Revolving line of credit $ 14,000,000 $ 12,700,000 Accounts payable 3,553,569 1,290,824 Accrued expenses 1,202,859 1,911,722 Related party liabilities 4,057,200 3,657,600 Share issuance liability - 250,000 Deferred payables, current 2,257,457 204,445 Notes payable 1,762,415 - Convertible note payable, net ,current 1,550,401 - Other current liabilities - 121,579 Total current liabilities 28,383,901 20,136,171 Convertible note payable, net - 37,316 Conversion option liability - 60,000 Warrant liability 3,310,724 840,995 Earn-out Share Liability 2,040,000 15,560,000 Deferred payables - 1,484,238 TOTAL LIABILITIES 33,734,625 38,118,720 STOCKHOLDERS’ DEFICIT Preferred stock, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding - - Common Stock, $ 0.0001 par value, 551,000,000 shares authorized; and 50,160,673 and 36,202,798 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 5,018 3,621 Additional paid-in capital 214,938,054 200,667,682 Accumulated deficit ( 219,567,030 ) ( 217,830,518 ) Accumulated other comprehensive income 358,483 134,391 TOTAL STOCKHOLDERS’ DEFICIT ( 4,265,475 ) ( 17,024,825 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 29,469,150 $ 21,093,895 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 1 VEEA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 Sales, net $ 144,926 $ 50,683 $ 232,094 $ 108,264 Cost of goods sold 53,006 14,997 58,156 57,687 Gross profit 91,920 35,686 173,938 50,577 Operating Expenses: Product development - 356,761 164,878 1,152,930 Sales and marketing 15,555 80,937 364,856 459,341 General and administrative, net 4,522,588 1,989,095 14,531,883 13,091,503 Transaction costs - 55,038,544 25,000 55,038,544 Depreciation and amortization 216,436 67,730 421,096 205,111 Total operating expenses 4,754,579 57,533,067 15,507,713 69,947,429 Loss from operations ( 4,662,659 ) ( 57,497,381 ) ( 15,333,775 ) ( 69,896,852 ) Other income (expense): Other income 879 8,739 2,112 21,398 UK R&D tax credit 1,223,328 1,251,243 1,223,328 1,251,243 Loss on initial issuance of convertible note - ( 1,770,933 ) - ( 1,770,933 ) Change in fair value of convertible note option liability 270 607,067 60,000 607,067 Change in fair value of warrant liabilities 555,498 ( 220,373 ) 660,622 ( 220,373 ) Change in fair value of Earn-out Share Liability 4,720,000 24,750,000 13,520,000 24,750,000 Other expense ( 19,155 ) ( 36 ) ( 46,351 ) ( 9,346 ) Interest expense ( 442,867 ) ( 451,881 ) ( 1,822,448 ) ( 1,352,823 ) Total other income 6,037,953 24,173,826 13,597,263 23,276,233 Net income (loss) $ 1,375,294 ( 33,323,555 ) ( 1,736,512 ) ( 46,620,619 ) Net income (loss) per share: Basic $ 0.03 $ ( 1.49 ) $ ( 0.04 ) ( 2.31 ) Diluted $ 0.03 $ ( 1.49 ) $ ( 0.04 ) ( 2.31 ) Weighted-average common stock outstanding used in per share amounts: Basic 45,644,909 22,292,374 40,325,293 20,217,081 Diluted 45,670,396 22,292,374 40,325,293 20,217,081 Other comprehensive income (loss): Foreign currency translation adjustment 35,099 ( 1,597,335 ) 224,092 ( 1,109,232 ) Comprehensive income (loss) $ 1,410,393 $ ( 34,920,890 ) $ ( 1,512,420 ) $ ( 47,729,851 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 2 VEEA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited) FOR THE THREE MONTHS ENDED SEPTEEMBER 30, 2025 Common Stock Additional Paid-in- Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Capital Deficit Income Deficit Balance, June 30, 2025 40,926,445 $ 4,094 $ 209,682,257 $ ( 220,942,324 ) $ 323,384 $ ( 10,932,589 ) Stock based compensation - - 319,211 - - 319,211 Common stock issued in connection with public offering, net of transaction costs 9,189,096 919 4,936,583 - - 4,937,502 Common stock issued upon exercise of stock options 14,529 1 6 - - 7 Common stock issued upon vesting of RSUs 30,603 4 ( 3 ) - - 1 Foreign currency translation gain - - - - 35,099 35,099 Net income - - - 1,375,294 - 1,375,294 Balance, September 30, 2025 50,160,673 $ 5,018 $ 214,938,054 $ ( 219,567,030 ) $ 358,483 $ ( 4,265,475 ) FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 Common Stock Additional Paid-in- Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Capital Deficit Loss Deficit Balance, June 30, 2024 21,357,113 $ 2,136 $ 172,052,711 $ ( 183,579,814 ) $ ( 173,251 ) $ ( 11,698,218 ) Stock based compensation - - 59,385 - - 59,385 Common stock issued upon exercise of stock options, pre Business Combination 19,618 2 53,998 - - 54,000 Exercise of Common Stock Warrants - related party 756,912 76 ( 76 ) - - - Issuance of Common Stock in exchange for services in connection with A-2 Preferred Stock Issuances, recasted 615,385 61 ( 61 ) - - - Issuance of Common Stock upon conversion of debt at Business Combination 3,147,970 315 15,739,531 - - 15,739,846 Issuance of Common Stock upon conversion of Sponsor and related party notes and warrants at Business Combination 817,453 82 2,205,415 - - 2,205,497 Issuance of Common Stock to Plum Sponsors and Investors at Business Combination 6,102,562 610 241,638 - - 242,248 Issuance of Common Stock to Plum Shareholders at Business Combination 603,077 60 ( 6,901,658 ) ( 6,926,598 ) Issuance of Common Stock related to new financing 2,000,000 200 23,999,800 24,000,000 Common Stock issued for services 241,667 24 3,214,596 3,214,620 Common stock issued upon exercise of stock options, post Business Combination 25,000 2 ( 2 ) - - - Foreign currency translation loss ( 1,597,335 ) ( 1,597,335 ) Net loss ( 33,323,555 ) - ( 33,323,555 ) Balance, September 30, 2024 35,686,757 $ 3,568 $ 210,665,277 $ ( 216,903,369 ) $ ( 1,770,586 ) $ ( 8,005,110 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 VEEA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT (Unaudited) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 Common Stock Additional Paid-in- Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Capital Deficit Income Deficit Balance, December 31, 2024 36,202,798 $ 3,621 $ 200,667,682 $ ( 217,830,518 ) $ 134,391 $ ( 17,024,824 ) Stock based compensation 759,123 759,123 Common stock issued in connection with public offering, net of transaction costs 9,189,096 919 4,936,583 4,937,502 Common stock issued upon exercise of stock options 32,806 2 16 18 Common stock issued upon vesting of RSUs 91,453 10 ( 9 ) 1 Common stock issued upon draw on the equity line of credit 358,000 37 836,730 836,767 Common stock issued as compensation for equity line of credit commitment fee 27,498 3 24,997 25,000 Common stock issued as consideration for Crowdkeep 4,065,689 407 6,829,951 6,830,358 Common stock issued for services 100,000 10 182,990 183,000 Settlement of convertible note agreement for shares issued 93,333 9 699,991 700,000 Foreign currency translation gain 224,092 224,092 Net loss ( 1,736,512 ) ( 1,736,512 ) Balance, September 30, 2025 50,160,673 $ 5,018 $ 214,938,054 $ ( 219,567,030 ) $ 358,483 $ ( 4,265,475 ) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 Common Stock Additional Paid-in- Accumulated Accumulated Other Comprehensive Total Stockholders’ Shares Amount Capital Deficit Loss Deficit Balance, December 31, 2023 19,635,912 $ 1,964 $ 159,475,010 $ ( 170,282,750 ) $ ( 661,354 ) $ ( 11,467,130 ) Class A Common Stock Issuances, net of transaction costs 1,675,502 168 11,955,239 - - 11,955,407 Common stock issuances, net of transaction costs 7,297 2 54,725 54,725 Conversion of vendor payable to Common Stock 27,654 1 207,405 - - 207,408 Common stock issued upon exercise of stock options 10,748 1 25,483 - - 25,484 Stock based compensation - - 394,234 - - 394,234 Common stock issued upon exercise of stock options, pre Business Combination 19,618 2 53,998 - - 54,000 Exercise of Common Stock Warrants - related party 756,912 76 ( 76 ) - - - Issuance of Common Stock in exchange for services in connection with A-2Preferred Stock Issuances, recasted 615,385 61 ( 61 ) - - - Issuance of Common Stock upon conversion of debt at Business Combination 3,147,970 315 15,739,531 - - 15,739,846 Issuance of Common Stock upon conversion of Sponsor and related party notes and warrants at Business Combination 817,453 82 2,205,415 - - 2,205,497 Issuance of Common Stock to Plum Sponsors and Investors at Business Combination 6,102,562 610 241,638 - - 242,248 Issuance of Common Stock to Plum Shareholders at Business Combination 603,077 60 ( 6,901,658 ) ( 6,926,598 ) Issuance of Common Stock related to new financing 2,000,000 200 23,999,800 24,000,000 Common Stock issued for services 241,667 24 3,214,596 3,214,620 Common stock issued upon exercise of stock options, post Business Combination 25,000 2 ( 2 ) - - - Foreign currency translation loss ( 1,109,232 ) ( 1,109,232 ) Net loss ( 46,620,619 ) - ( 46,620,619 ) Balance, September 30, 2024 35,686,757 $ 3,568 $ 210,665,277 $ ( 216,903,369 ) $ ( 1,770,586 ) $ ( 8,005,110 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 VEEA INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities Net loss $ ( 1,736,512 ) $ ( 46,620,619 ) Adjustments to reconcile net loss to net cash used for operating activities: Depreciation and amortization 421,096 205,111 Amortization of debt issuance costs 963,085 45,648 Loss on initial issuance of debt - 1,770,933 Change in fair value of convertible note option liability ( 60,000 ) ( 607,067 ) Change in fair value of warrant liabilities ( 660,622 ) 220,373 Earn-out liability initial loss - 53,600,000 Change in fair value of Earn-out Share Liability ( 13,520,000 ) ( 24,750,000 ) Interest income on investment - ( 768 ) Share based compensation 759,123 394,234 Share based vendor payments as compensation for services 183,000 - Share based payment as compensation for ELOC commitment fee 25,000 Interest expense on convertible notes converted - 868,853 Unrealized foreign currency transaction (gain) loss ( 218,537 ) ( 1,686,348 ) Amortization of operating lease right of use assets 117,365 340,496 Changes in operating assets and liabilities: Receivables ( 62,498 ) ( 31,736 ) Inventories ( 705,230 ) ( 602,235 ) Prepaid and other current assets 119,002 ( 5,034,546 ) Other assets 53,493 - Accounts payable 2,576,523 793,161 Accrued expenses ( 216,700 ) 1,618,881 Other liabilities 569,269 - Operating lease payments ( 121,579 ) ( 353,929 ) Net cash used in operating activities ( 11,514,722 ) ( 19,829,558 ) Cash flows from investing activities Purchase of property and equipment - ( 33,439 ) Purchase of intangible assets and trademarks ( 224,949 ) ( 174,258 ) Net cash used in investing activities ( 224,949 ) ( 207,697 ) Cash flows from financing activities Proceeds from revolving line of credit 1,300,000 3,700,000 Proceeds from related party notes 3,176,000 - Proceeds from issuance of convertible notes 1,000,000 1,450,000 Proceeds from the issuance of shares under equity line of credit facility 836,766 Proceeds from reverse recapitalization - 1,103,640 Proceeds from lock-up share release - 242,248 Proceeds from the issuance of common stock, net of transaction costs 4,828,750 9,961,356 Proceeds from exercise of stock options for common stock 19 79,484 Net cash provided by financing activities 11,141,535 16,536,728 Effect of exchange rate changes on cash ( 16,346 ) 293,421 Net decrease in cash and cash equivalents ( 614,482 ) ( 3,207,105 ) Cash and cash equivalents at beginning of period 1,685,633 6,010,075 Cash and cash equivalents at end of period $ 1,071,151 $ 2,802,970 Non-cash activities Initial measurement of debt discount on the convertible note - ( 1,450,000 ) Conversion of related party notes to Common Stock 3,176,000 2,205,497 Conversion of interest on related party notes to Common Stock 63,096 3,141,846 Initial measurement of the convertible note option liability - 1,450,000 Conversion of principal on related party notes to Common Stock - 12,598,000 Crowdkeep asset acquisition 6,957,456 - Settlement of convertible notes for shares issued 700,000 24,000,000 Conversion of vendor payable to Common Stock - 3,422,028 Supplemental cash flow information Interest paid 640,441 504,431 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 Veea Inc. and Subsidiaries Notes to the Condensed Consolidated Financial Statements 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. 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 (“Hybrid Edge-Cloud Computing”), and (d) enables machine learning with AI training, inferencing, and agentic AI at the edge (“Edge AI”) including AI-driven cybersecurity for heterogenous networks. Such networks have given rise through any combination of our developed devices and third-party devices, with CPUs, GPUs, TPUs, DPUs and/or NPUs, that run on the VeeaONE platform’s software stack. Our end-to-end edge-cloud platform is referred to as VeeaONETM (“VeeaONE”) platform. 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 with a mesh router, a firewall, an IoT gateway, NVMe data storage and 4G/5G modules. 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. VeeaONE platform’s products, applications, and services with a distributed computing architecture, offered as a Platform-as-a-Service capability, empowering 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. VeeaHub products, about the size of a typical Wi-Fi Access Point, are offered in variety of form factors with different capabilities for indoor and outdoor coverage and are both locally- and cloud-managed. VeeaONE architecture and business model, VeeaHub and third-party devices on VeeaONE platform with Hybrid Edge-Cloud Computing and AI-enabled applications and services. The VeeaONE platform offers 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. The benefits 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. Our products and services have been deployed across multiple countries and industries; however, we are focused on high-growth market segments such as fixed-line or 5G-based fixed wireless broadband access, and subscription-based managed Wi-Fi for unserved and underserved communities. In both cases, broadband or Internet connectivity services are offered with a variety of Edge applications and value-added services, including advanced AI-driven cybersecurity, through Mobile Network Operators, Multiple System Operators, Internet Service Providers and other types of Managed Service Providers. The industrial applications include climate smart buildings, smart farming with precision agriculture, smart warehouses and smart retail as cloud-managed converged private networks. 6 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 Allen Salmasi, our Chief Executive Officer and a pioneering wireless technology leader. Mr. Salmasi helped to drive industry transformation through his contributions to the development of CDMA/TDMA-based OmniTRACS, the largest mobile satellite messaging and position reporting system with integrated IoT solutions during the 1980s and 1990s; CDMA-based 2G/3G technologies and products at Qualcomm in 1990s; OFDMA-based 4G technologies and products at NextWave during the 2000s, and hyper-converged edge computing and communications during the 2010s; and 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 R.L. 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 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 flows. The Company expects to continue to incur net losses as it continues to grow and scale its business. 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 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. 7 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, certain information and footnote disclosures normally included in consolidated financial statements in accordance with GAAP have been omitted. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. All significant intercompany balances and transactions have been eliminated in consolidation. We consolidate any variable interest entity (“VIE”) where we have determined we are the primary beneficiary. The primary beneficiary is the entity which has both: (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and (ii) the obligation to absorb losses or receive benefits of the entity that could potentially be significant to the VIE. The Company has one VIE, VeeaSystems MX. Transactions with VeeaSystems MX were immaterial during all the periods presented and are not separately disclosed. The condensed consolidated balance 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 statements should be read in conjunction with the consolidated financial statements and accompanying footnotes included in the Company’s Annual Report on Form 10-K for its year ended December 31, 2024. Basis of Accounting The accompanying condensed consolidated financial statements have been prepared on the accrual basis in accordance with accounting principles generally accepted under GAAP. Use of Estimates Management of the Company is required to make certain estimates, judgments, and assumptions during the preparation of its condensed consolidated financial statements in accordance with GAAP. The Company believes that these estimates, judgments and assumptions are reasonable under the circumstances. These estimates, judgments, and assumptions impact the reported amounts of assets, liabilities, revenue, and expenses, and the related disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Changes in such estimates could affect amounts reported in future periods. On an ongoing basis, the Company evaluates its estimates and judgments including those related to: liquidity and going concern, the useful lives and recoverability of property and equipment and definite-lived intangible assets; the recoverability of goodwill and indefinite-lived intangible assets; the carrying value of accounts receivable, including the determination of the allowance for credit losses; inventory, including the determination of allowances for estimated excess or obsolescence; the fair value of warrants; the fair value of acquisition-related contingent consideration arrangements; the fair value of the ELOC; unrecognized tax benefits; legal contingencies; the incremental borrowing rate for the Company’s leases; and the valuation of stock-based compensation, among others. Emerging Growth Company Status The Company is an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. 8 Segment Information The Company operates as a single operating segment. The chief operating decision maker is the Company’s Chief Executive Officer , who makes resource allocation decisions and assesses performance based on financial information presented on a consolidated basis, accompanied by disaggregated revenue information. Accordingly, the Company has determined that it has a single reportable segment and operating segment. The majority of the Company’s assets as of September 30, 2025 and December 31, 2024, were attributable to its U.S. operations. 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 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The ASU requires that an entity disclose specific categories in the effective tax rate reconciliation as well as reconciling items that meet a quantitative threshold. Further, the ASU requires additional disclosures on income tax expense and taxes paid, net of refunds received, by jurisdiction. The new standard is effective for annual periods beginning after December 15, 2024, on a prospective basis with the option to apply it retrospectively. Early adoption is permitted. The adoption of this guidance results in the Company being required to include enhanced income tax-related disclosures. The Company adopted this guidance effective January 1, 2025; however, as there is a full valuation allowance on its deferred tax assets, income tax disclosures are not material to the condensed consolidated financial statements and are not included in this Quarterly Report on Form 10-Q but will be evaluated quarterly going forward necessary disclosures. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU includes amendments that expand the existing reportable segment disclosure requirements and requires disclosure of (i) significant expense categories and amounts by reportable segment as well as the segment’s profit or loss measure(s) that are regularly provided to the chief operating decision maker (the “CODM”) to allocate resources and assess performance; (ii) how the CODM uses each reported segment profit or loss measure to allocate resources and assess performance; (iii) the nature of other segment balances contributing to reported segment profit or loss that are not captured within segment revenues or expenses; and (iv) the title and position of the individual or name of the group or committee identified as the CODM. This guidance requires retrospective application to all prior periods presented in the financial statements and is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance results in the Company being required to include enhanced disclosures relating to its reportable segments. The Company adopted this guidance effective December 31, 2024, and it did not have a material effect on the Company’s condensed consolidated financial statements. In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). In January 2025, the FASB issued ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date to clarify the effective date of ASU 2024-03. The amendments in this ASU require a public business entity to disclose specific information about certain costs and expenses in the notes to its financial statements for interim and annual reporting periods. 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. Early adoption is permitted. The Company is currently evaluating the impact of this ASU on its condensed consolidated financial statements. 9 4 - ACQUISITION On May 13, 2025, the Company entered 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 an asset acquisition, as the Company determined that substantially all of the fair value was concentrated in a single identifiable intangible asset, proprietary technology, and therefore applied a model consistent with asset acquisition accounting. The total purchase consideration 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 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. The transaction was considered a related party transaction due to the involvement of a Company board member who was also the CEO and shareholder of Crowdkeep. The Company established a special committee of the Board comprised of independent members of the Board, that evaluated and approved the transaction, concluding that the terms were commercially reasonable and negotiated at arm’s length. The patented technology, which is recorded as part of intangible assets, net in the condensed consolidated balance sheet, will be amortized over its estimated useful life of 10 years. 5 - REVERSE RECAPITALIZATION As discussed in Note 1, the Business Combination was consummated on September 13, 2024, which, for accounting and reporting purposes under GAAP, was treated as the equivalent of Private Veea issuing stock for the net assets of Plum, accompanied by an equity recapitalization of Private Veea, which was determined to fall within the scope of Accounting Standards Codification (“ASC”) 805, “ Business Combinations ”. Plum was treated as the acquired company, and its net assets were stated at historical cost, with no goodwill or other intangible assets recorded. The excess of the fair value of shares issued to Plum over the fair value of Plum’s identifiable net assets acquired represented compensation for the service of a stock exchange listing for its shares and was expensed as incurred. The warrants issued at the time of Plum’s initial public offering (the “Public Warrants”), and warrants issued in connection with private placement at the time of Plum’s initial public offering (the “SPAC Private Placement Warrants”) remain outstanding and are now outstanding warrants for the Company. Earn-out Share Liability Following the Closing, stockholders who previously held certain capital stock of Private Veea have the contingent right to receive up to 4.5 million additional shares of the common stock, par value $ 0.0001 per share, of the Company (“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 earn-out shares is recorded as a contingent liability (the “Earn-out Share Liability”) in the Company’s financial statements and the initial value of the Earn-out Share Liability was recorded as a transaction cost within operating expenses in the Company’s financial statements for the year ended December 31, 2024. For each subsequent reporting period, changes in the fair value of the Earn-Out Share Liability are reported in the Company’s financial statements. 10 6 - BALANCE SHEET COMPONENTS Inventory Inventory consists of the following: September 30, 2025 December 31, 2024 Inventory $ 7,724,496 $ 7,377,966 Inventory allowance ( 904,653 ) ( 904,653 ) Consigned parts 2,742,275 985,927 Total $ 9,562,118 $ 7,459,240 Property and Equipment, net Property and equipment, net consists of the following: September 30, 2025 December 31, 2024 Furniture and fixtures $ 710,241 $ 702,122 Computer equipment 335,498 327,166 Leasehold improvements 390,742 390,742 Total property and equipment gross 1,436,481 1,420,030 Less - Accumulated depreciation ( 1,323,009 ) ( 1,209,401 ) Total property and equipment net $ 113,472 $ 210,629 Depreciation expense for the three 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. 11 7 - GOODWILL AND INTANGIBLE ASSETS Goodwill The following is a summary of activity in goodwill for the nine months ended September 30, 2025 and 2024: September 30, 2025 Balance at December 31, 2024 $ 4,779,625 Foreign exchange transactions 394,615 Balance at September 30, 2025 5,174,240 September 30, 2024 Balance at December 31, 2023 $ 4,797,078 Foreign exchange transactions 279,713 Balance at September 30, 2024 5,076,791 Intangible Assets Intangible assets consist of the following: As of September 30, 2025 Amortization Period Costs as of December 31, 2024 Additions Disposals Ending Costs Accumulated Amortization Accumulated Impairment Net Book Value Patents 15 years $ 7,551,468 $ 218,718 $ - $ 7,770,186 $ ( 6,823,892 ) $ - $ 946,295 Proprietary technology 10 years - 6,904,306 - 6,904,306 ( 256,185 ) - 6,648,120 Intangible assets, net $ 7,551,468 $ 7,123,024 $ - $ 14,674,492 $ ( 7,080,077 ) $ - $ 7,594,415 As of December 31, 2024 Amortization Costs as of January 1, Ending Accumulated Accumulated Net Book Period 2024 Additions Disposals Costs Amortization Impairment Value Patents 15 years $ 7,332,227 $ 219,241 $ - $ 7,506,485 $ ( 6,765,407 ) $ - $ 786,061 IPR&D 5 years 5,015,694 -       - 5,015,694 ( 3,554,784 ) ( 1,460,910 ) - Intangible assets, net $ 12,347,921 $ 219,241 $ - $ 12,552,179 $ ( 10,320,191 ) $ ( 1,460,910 ) $ 786,061 Intangible assets primarily consist of proprietary technology, patents, patent applications, and in-process research and development (“IPR&D”) and other identifiable intangible assets. Intangible assets are generally amortized on a straight-line basis over the periods of benefit. The Company’s patents have estimated remaining economic useful lives ranging from 5 - 15 years and the proprietary technology acquired from Crowdkeep Inc. has an estimated remaining useful life of 10 years. Management reviews intangible assets for impairment when events and circumstances warrant. During the nine months ended September 30, 2025 and 2024, there were no events that necessitated additional impairment of intangible assets. Intangible asset amortization expense 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. 12 Future estimated amortization expense for the Company’s intangible assets is approximately as follows: Future estimated amortization as of September 30, 2025 Remainder of 2025 $ 187,619 2026 742,124 2027 742,124 2028 743,941 2029 742,124 Thereafter 4,436,483 $ 7,594,415 8 - DEBT Total outstanding debt of the Company is comprised of the following, including convertible notes: September 30, 2025 Principal Debt Discount Total Revolving Loan Facility $ 14,000,000 $ - $ 14,000,000 Convertible note payable, net 1,750,000 ( 199,599 ) 1,550,401 Notes payable 1,762,415 - 1,762,415 Total $ 17,512,415 $ ( 199,599 ) $ 17,312,816 December 31, 2024 Principal Debt Discount Total Revolving Loan Facility $ 12,700,000 $ - $ 12,700,000 Convertible note payable 1,200,000 ( 1,102,684 ) 97,316 Total $ 13,900,000 $ ( 1,102,684 ) $ 12,797,316 Revolving Loan Facility In June 2021, Private Veea entered into a revolving loan agreement (the “2021 Revolving Loan Agreement”) with First Republic Bank, which was subsequently acquired by JPMorgan Chase, (the “Bank”) providing up to $ 14.0 million of advances (collectively, the “Loan”). The Loan accrues interest at a variable rate based on an index rate established by reference to the average 12 -month trailing one-year US treasuries plus a spread of 1.80 % per annum and a minimum floor rate of 1.5 % per annum. Interest is payable monthly in cash. Private Veea was not required to provide collateral for the advances or comply with any covenants. The advances were secured by a lien on certain personal assets of the CEO. In consideration for the security provided by the CEO, Private Veea issued common stock warrants (the “Related Party Common Stock Warrants”) to NLabs, a principal shareholder of the Company and affiliate of Allen Salmasi (“NLabs”), in consideration for the CEO’s guaranteeing the advances. See Note 12 for further information. In December 2023, Private Veea repaid $ 5,000,000 of the principal balance of the Loan. Following the acquisition of First Republic, the Loan was transferred to the Bank. There were no borrowings during the three months ended September 30, 2025, and $ 1.3 million of borrowings during the nine months ended September 30, 2025. 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 the Business Combination, the Company and Private Veea issued convertible notes under note purchase agreements (the “Note Purchase Agreements”) with certain accredited investors unaffiliated with the Company and Private Veea (each, an “Investor”) for the sale of unsecured subordinated convertible promissory notes (the “September 2024 Notes”) as part of a private placement offering of up to $ 15.0 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 notes. In addition to a September 2024 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 Closing. The Note Purchase Agreements include customary registration rights. 13 The Transferred Shares were recorded at a fair value of $ 21.6 million on the Company’s consolidated financial statements at issuance, 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 one of the Investors 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 $ 15.0 million proceeds at the Financing Closing, a proportional amount (approximately $ 19.5 million) of the substantial discount was deferred and recorded as a deferred financing asset on the Company’s consolidated financial statements. At December 31, 2024, the deferred financing assets were reversed on the Company’s consolidated financial statements. The Company and VeeaSystems Inc. (“VeeaSystems”) 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 accrues 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 date of the September 2024 Note 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 including, without limitation, failure to pay amounts due on the maturity date, failure to otherwise comply with the Borrowers’ covenants or for Borrower insolvency events, in each case, with customary cure periods. 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. The outstanding obligations under each September 2024 Note are convertible in whole or in part into shares of Common Stock (the “Conversion Shares”) at a conversion price of $ 7.50 per share (subject to equitable adjustment for stock splits, stock dividends and the like with respect to the 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. The Conversion Shares were initially subject to a lock-up for a period of 6 months after the Financing Closing. The Transferred Shares were not subject to any lock-up restrictions, but for a period of 6 months after the Closing they were separately designated by the Transfer Agent and kept as book entry shares on the Transfer Agent’s records and were not be eligible to be held by DTC without the Investor first notifying the Company of its intent to transfer any such Transferred Shares to a brokerage account and/or to be held by DTC or another nominee (a “Brokerage Transfer”). If the Investor provided such notice or otherwise has any Transferred Shares subject to a Brokerage Transfer within 6 months after the Closing, a portion of the outstanding obligations under such Investor’s Note would automatically convert into a number of Conversion Shares equal to the number of Transferred Shares subject to such Brokerage Transfer, and the lock-up period for such Conversion Shares would be extended for an additional 6 months to 12 months after the Financing Closing. As of 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. 14 The Company reviewed the conversion feature granted in the notes under ASC 815, “ Derivatives and Hedging ” (“ASC 815”), and concluded that the conversion price was based on a variable (enterprise value) that was not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815 - 40 and is therefore considered a conversion option liability that should be bifurcated from the debt host. As the fair value of the conversion option liability exceeded the net proceeds received, in accordance with ASC 470-20, the Company recorded the conversion option liability at fair value with the excess of the fair value over the net proceeds received recognized as a loss in earnings. See Note 15 for further information. Convertible Notes Payable Issued in connection with Crowdkeep Acquisition On April 17, 2025, and May 13, 2025, the Company and the majority stockholder of the Seller (“Crowdkeep Investor”), entered into two Note Purchase Agreements (the “Crowdkeep Note Purchase Agreements”). Pursuant to the Crowdkeep Note Purchase Agreements, the Crowdkeep Investor loaned to the Company an aggregate of $ 1,000,000 in two tranches (the “Crowdkeep Loans”), of which $ 500,000 was provided on April 17, 2025 and $ 500,000 was provided on May 13, 2025. In connection with the entry into the Crowdkeep Note Purchase Agreements the Company issued to the Crowdkeep Investor unsecured convertible promissory notes (the “Crowdkeep Convertible Notes”). The Crowdkeep Convertible Notes have an aggregate principal amount of $ 1,000,000 , and the interest under the Crowdkeep Convertible Notes accrues at an annual rate of 8 %. The maturity date of the Crowdkeep Convertible Notes are April 17, 2026, and May 13, 2026, respectively. Pursuant to the terms of the Convertible Notes, upon an event of default, the outstanding principal amount of the applicable Crowdkeep Convertible Note, plus accrued but unpaid interest, will become immediately due and payable in full. Events of default include failure to pay any principal or interest amounts under the Crowdkeep Convertible Notes, failure to perform covenants in the Crowdkeep Convertible Notes and certain bankruptcy and insolvency conditions of the Company. The Company may prepay all or any portion of the Crowdkeep Convertible Notes at any time. The Crowdkeep Convertible Notes are convertible, in whole or in part, into shares of Common Stock (the “Crowdkeep Conversion Shares”) at the option of the Crowdkeep Investor, at a price per share of $ 5.00 subject to certain equitable adjustments. The Crowdkeep Convertible Notes will automatically convert on the date that the closing price of the Common Stock is at $ 7.50 or above for ten ( 10 ) consecutive trading days within any consecutive thirty ( 30 ) trading day period, equal to the lesser of (i) $ 7.50 per share and (ii) 20 % multiplied by the VWAP (calculated as set forth in the Crowdkeep Convertible Notes) for the prior consecutive thirty ( 30 ) trading day period, in each case subject to certain equitable adjustments. The Crowdkeep Note Purchase Agreements and Crowdkeep Convertible Notes include other customary terms and conditions. 9 - INVESTMENTS The Company accounts for its private company investments without readily determinable fair values under the cost method. These investments, for which the Company is not able to exercise significant influence over any one individual investee, is measured and accounted for using an alternative measurement basis of a) the security’s carrying value at cost, b) less any impairment and c) plus or minus any qualifying observable price changes. Observable price changes or impairments recognized on the Company’s private company investments would be classified as a Level 3 financial instrument within the fair value hierarchy based on the nature of the fair value inputs. Any adjustments to the carrying values are recognized in other income, net in the Company’s consolidated statements of operations and comprehensive loss. As of December 31, 2024, the Company performed the qualitative assessment for impairment of its investments. Based on this qualitative assessment, impairment indicators were present for one of its investments; therefore, the company performed an analysis to estimate its fair value and recognized an impairment loss of $ 216,278 . 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. 15 10 - STOCKHOLDERS’ EQUITY On September 13, 2024, the Company consummated the Business Combination which was accounted for as a reverse recapitalization. In connection with the consummation of the Business Combination (i) the Company de-registered from the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware, migrating to and domesticating as a Delaware corporation (the “Domestication”) and (ii) restated our certificate of incorporation (“Restated Certificate of Incorporation”). In connection with the Domestication, each share of outstanding Class A ordinary shares were converted by operation of law into shares of Common Stock, on a one-for-one basis. Upon filing of the Restated Certificate of Incorporation, each issued and outstanding share of Class B stock outstanding immediately prior to the filing of the Restated Certificate of Incorporation was converted into shares of Common Stock on a one-for-one basis. Under the Restated Certificate of Incorporation, the Company is authorized to issue 551,000,000 shares of capital stock, consisting of (a) 550,000,000 shares of Common Stock with a par value of $ 0.0001 per share and (b) 1,000,000 shares of preferred stock with a par value of $ 0.0001 per share. Holders of Common Stock are entitled vote on all matters submitted to the stockholders vote or approval, other than on any amendment to the Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to the Restated Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock). Holders of Common Stock are entitled to one vote per share on all matters submitted to the stockholders for their vote or approval. Equity Line of Credit On December 2, 2024, the Company entered into a common stock purchase agreement (“Common Stock Purchase Agreement”) and related registration rights agreement (the “Registration Rights Agreement”) with White Lion Capital, LLC (“White Lion”). Pursuant to the Common Stock Purchase Agreement, the Company has the right, but not the obligation, to direct White Lion to purchase up to $ 25.0 million in aggregate gross purchase price of newly issued shares of Common Stock, subject to certain limitations and conditions as described below (the “ELOC Program”), at a purchase price equal to (i) 96.5 % of the volume weighted average stock price for the three consecutive business days after a purchase notice is given, (ii) 98 % of the volume weighted average stock price on the day a notice is delivered, or (iii) the lowest traded price for a given purchase date. The Company controls the timing and amount of any sales to White Lion, which depend on a variety of factors including, among other things, market conditions, the trading price of the Common Stock, and determinations by the Company as to appropriate sources of funding for its business and operations. However, White Lion’s obligation to purchase shares is subject to certain conditions, including the daily trading volume of the Company’s stock. In all instances, the Company may not sell shares of Common Stock under the Purchase Agreement if it would result in White Lion and its affiliate beneficially owning more than 4.99 % of its outstanding voting power or shares of the 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. 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 Lion shares of Common Stock as a commitment fee (the “Commitment Shares”). The fair value of the Commitment Shares was $ 25,000 , which pursuant to ASC 815, was recorded in transaction costs in the condensed consolidated statement of operations and comprehensive income (loss) 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. 16 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 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 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 purposes. 11 - STOCK INCENTIVE PLANS In September 2014, the Private Veea’s Board of Directors adopted the Max2 Inc. Equity Incentive Plan (“2014 Plan”). Upon adoption of the 2014 Plan, the aggregate number of shares of Common Stock reserved for awards under the Plan were 1,250,000 . In September 2018, Private Veea’s Board of Directors adopted the Veea Inc. 2018 Equity Incentive Plan (“2018 Plan” and collectively with the 2014 Plan, the “Private Veea Plans”). Upon adoption of the 2018 Plan, 4,900,000 shares of the Common Stock were reserved for the issuance of incentive awards. In January 2021, the 2018 Plan was amended to increase the total number of authorized shares reserved for issuance to 12,492,910 . Under the Private Veea Plans, option awards were generally granted with an exercise price equal to the fair market value of the Company’s stock at the date of grant; those option awards generally vested with a range of one to four years of continuous service and had ten-year contractual terms. Certain option awards provided for accelerated vesting if there was a change in control, as defined in the Private Veea Plans. The Private Veea Plans also permitted the granting of restricted stock and other stock-based awards. Unexercised options were cancelled upon termination of employment and became available for reissuance under the Private Veea Plans. On June 4, 2024, the stockholders of the Company approved the Veea Inc. 2024 Incentive Award Plan (the “2024 Incentive Plan”, collectively with the Private Veea Plans, the “Plans”), which became effective upon the Closing. The Company initially reserved 4,460,437 shares of Common Stock for the issuance of awards under the 2024 Incentive Plan (“Initial Limit”). The Initial Limit represented 10 % of the aggregate number of shares of the Common Stock outstanding immediately after the Closing plus the number of shares of Common Stock issuable under the 2014 Plan and the 2016 Plan and is subject to increase each year over a ten-year period. The 2024 Incentive Plan provides for the grant of stock options, which may be ISOs or non-statutory stock options (“NSOs”), stock appreciation rights (“SARs”), restricted shares, restricted stock units (“RSUs”) and other stock or cash-based awards that the Administrator determines are consistent with the purpose of the 2024 Incentive Plan. As of September 30, 2025, the Company had 464,776 shares available for grant. On June 4, 2024, the stockholders of the Company approved Veea Inc. 2024 Employee Stock Purchase Plan (the “ESPP”), which became effective upon the Closing. An aggregate of 1,070,603 shares of Common Stock has been reserved for issuance or transfer pursuant to rights granted under the ESPP (“Aggregate Number”). The Aggregate Number represented 3 % of the aggregate number of shares of Common Stock outstanding immediately after the Closing and is subject to increase each year over a ten-year period. The ESPP provides eligible employees with an opportunity to purchase Common Stock from the Company at a discount through accumulated payroll deductions. The ESPP will be implemented through a series of offerings of purchase rights to eligible employees. Under the ESPP, the Company’s Board of Directors may specify offerings but generally provides for a duration of 12 months. The purchase price will be specified pursuant to the offering, but cannot, under the terms of the ESPP, be 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 September 30, 2025, there have not yet been any offering periods available to purchase Common Stock under the ESPP. 17 In connection with the Business Combination, each Private Veea option that was outstanding immediate prior to Closing, whether vested or unvested, was exchanged for a stock option under the 2024 Plan (each an “Exchanged Option”) to acquire a number of shares of Common Stock equal to the product of (i) the number of shares of Private Veea’s common stock subject to such Private Veea option immediately prior to the Business Combination and (ii) the Exchange Ratio, at an exercise price per share equal to (A) the exercise price per share of such Private Veea option immediately prior to the consummation of the Business Combination, divided by (B) the Exchange Ratio. Following the Business Combination, each Exchanged Option continues to be governed by the same terms and conditions (including vesting and exercisability terms) as were applicable to the corresponding former Private Veea option immediately prior to the consummation of the Business Combination. Unvested Private Veea options did not accelerate nor vest on the consummation of the Business Combination. All stock option activity was retroactively restated to reflect the effect of the Exchange Ratio. Generally, stock options vest 25 % on the first anniversary of the vesting commencement date and then quarterly thereafter for 12 quarters, or pursuant to another vesting schedule as approved by the Board and set forth in the option agreement. Stock options have a maximum term of ten years from the date of grant. The aggregate intrinsic value is the fair market value on the reporting date less the exercise price for each option. The fair value of each stock option award is estimated on the date of the grant using the Black-Scholes option-pricing model. 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. Stock Options Stock option activity under the Plan was as follows: Number of Options Weighted- Average Exercise Price per Share Weighted- Average Remaining Contractual Term (years) Outstanding at December 31, 2024 3,790,702 $ 1.04 5.98 Granted 2,596,137 0.66 Exercised ( 15,006 ) - Forfeited / Expired ( 140,307 ) 2.64 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 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, 2025 Stock Price $ 0.66 - 1.34 Expected term (years) 4.2 - 5.0 Volatility 75 % Risk-Free Rate 3.74 - 3.84 % Stock compensation expense related 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 September 30, 2025, was $ 1,082,949 , which will be recognized over a weighted average period of 3.9 years. 18 Restricted Stock Units RSU activity under the Plan was as follows: Number of RSUs Weighted- Average Grant Date Fair Value Unvested at December 31, 2024 - $ - Granted 695,034 1.60 Vested ( 91.454 ) 1.60 Forfeited ( 3,580 ) 1.60 Unvested at September 30, 2025 600,000 $ 1.60 Stock compensation expense related 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 offering (“IPO”), Plum issued warrants to third-party investors where each whole warrant entitles the holder to purchase one share of the Common Stock at an exercise price of $ 11.50 per share (the “Public Warrants”). Simultaneously with the closing 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 holder. 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 Warrants. Such registration statement was declared effective by the SEC on January 15, 2025. 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. 19 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; ● at a price of $ 0.01 per warrant; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; and ● 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 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; ● at $ 0.10 per warrant upon a minimum of 30 days’ prior written notice of redemption provided that holders will be able to exercise their warrants on a cashless basis prior to redemption and receive that number of shares, based on the redemption date and the “fair market value” (as defined above) of our Common Stock; ● 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; and ● 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 in equity. 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. 20 Private Veea Warrants Upon the closing of the Business Combination, the Related Party Common Stock Warrants were exercised in whole, on a net basis, for 3,880,000 shares of common stock of Private Veea at a conversion price of $ 0.01 per share for an aggregate purchase price of $ 38,800 . A total of 21,798 shares of common stock were surrendered 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 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 parties. Each 2025 Investor Warrant entitles the holder to purchase one share of the Common Stock at an exercise price of $ 1.10 . The exercise 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. In lieu 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. 21 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 Lease Agreements On March 1, 2014, Private Veea entered into a sublease agreement with NLabs Inc., an affiliate of the Company’s CEO that held approximately 35 % of the Company’s outstanding capital stock at September 30, 2025, for office space for an initial term of five years . In 2018, Private Veea renewed the sublease for an additional five-year term, with all other terms and conditions of the sublease remaining the same. The renewal term expired February 28, 2024, and was subsequently extended to December 31, 2025. Rent for the office space is accrued and not paid in cash. The 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 31, 2025. Rent for the office space is accrued and not paid in cash. 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. 22 Related Party Debt At the Closing of the Business Combination, promissory notes evidencing loans made by NLabs to the Company from 2021 through the Closing (the “Related Party Notes”) in the aggregate amount, including accrued interest, of $ 15,739,897 , were converted into shares of Common Stock at a price of $ 5.00 per share, which shares were not considered Existing Veea Shares and were in addition to the shares of Common Stock issued to holders of Existing Veea Shares. See Note 4 for further information regarding the conversion of the Related Party Notes. 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”). Interest 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 share. 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 Purchase Commitments with Contract Manufacturers and Suppliers 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 exclude agreements that are cancellable without penalty. Leases The Company leases office space in the U.S., including office space from related parties as disclosed in Note 13. Under the terms of the various lease agreements, the Company may bear certain costs such as maintenance, insurance and taxes. Lease agreements may provide for increasing rental payments at fixed intervals. The Company’s CEO has guaranteed the obligations under the office space leased in New Jersey. The Company also leases offices in the United Kingdom, France, and Mexico under short-term arrangements of twelve months or less. Indemnifications In the normal course of business, the Company has indemnification obligations to other parties, including customers, lessors, and parties to other transactions with us, with respect to certain matters. The Company has agreed to indemnify against losses arising from a breach of representations or covenants or out of intellectual property infringement or other claims made against certain parties. These agreements may limit the time or circumstances within which an indemnification claim can be made and the amount of the claim. It is not possible to determine the maximum potential amount for claims made under the indemnification obligations due to uncertainties in the litigation process, coordination with and contributions by other parties and the defendants in these types of cases, and the unique facts and circumstances involved in each particular case and agreement. To date, the Company has made no indemnity payments. In addition, the Company has entered into indemnification agreements with its officers and directors, and its Amended and Restated Bylaws contain similar indemnification obligations to its agents. Litigation In the normal course of business, the Company may become involved in various lawsuits and legal proceedings. The Company accrues contingent liabilities when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. While the ultimate results of these matters cannot be predicted with certainty, management does not expect them to have a material adverse effect on the financial position or results of operations of the Company. Other Commitments In connection with the Business Combination, the Company agreed to pay certain legal expenses contingent upon the closing of the Business Combination, certain of which expenses were mutually agreed to be deferred to periods after the Closing. As of September 30, 2025, the amount of the deferred fees totaled $ 2,257,457 , recorded in deferred payables, current in the condensed consolidated balance sheet. 23 15 - FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements 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. During the nine months ended September 30, 2025, there were no transfers amongst level 1, 2, and 3 values during the period. September 30, 2025 Total Level 1 Level 2 Level 3 SPAC Private Placement Warrant liability $ 367,935 - $ 367,935 $ - 2025 Investor Warrant liability 2,958,889 2,958,889 Convertible note option liability - - - - Earn-out share liability 2,040,000 - - 2,040,000 Total $ 5,366,824 - $ 367,935 $ 4,998,889 December 31, 2024 Total Level 1 Level 2 Level 3 SPAC Private Placement Warrant liability $ 840,994 - $ 840,994 $ - Convertible note option liability 60,000 - - 60,000 Earn-out Share Liability 15,560,000 - - 15,560,000 Total $ 16,460,994 - $ 840,994 $ 15,620,000 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 as level 3. 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, 2025 August 14, 2025 Stock Price $ 0.62 $ 0.60 Expected term (years) 4.9 5.0 Volatility 75.0 % 75.0 % Risk-Free Rate 4.20 % 4.16 % Nine Months Ended September 30, 2025 Balance, beginning of period $ - Initial value, August 14, 2025 3,130,352 Change in fair value ( 171,463 ) Balance, end of period $ 2,958,889 24 Convertible Note Option Liability The Company established the initial fair value for the convertible note option liability as of September 13, 2024, which was the date the Convertible Note was executed. As of 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 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 for the convertible note option liability were as follows: September 30, 2025 December 31, 2024 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 % Nine Months Ended September 30, 2025 Balance, beginning of period, December 31, 2024 $ 60,000 Change in fair value ( 60,000 ) Balance, end of period $ - Earn-out Share Liability Following the closing of the Business Combination, holders of certain capital stock of Private Veea immediately prior to the closing have the contingent right to receive up to 4.5 million additional shares of Common Stock if certain trading-price based milestones of the Common Stock are achieved or a change of control transaction occurs during the ten-year period following the Closing. The Company’s obligation to issue the earn out shares is recorded as a contingent liability (the “Earn-out Share Liability”) in the Company’s financial statements. The initial value of the contingent Earn-out Share Liability of $ 53.6 million was recorded as a transaction cost within operating expenses. The fair value of the Earn-out Share Liability was estimated using a Monte Carlo simulation utilizing assumptions related to the contractual term of the instruments, estimated volatility, the price of the Common Stock, and current interest rates. The following table presents the changes in fair value of the Earn-Out Share Liability: Nine Months Ended September 30, 2025 Balance, beginning of period, December 31, 2024 $ 15,560,000 Change in fair value 13,520,000 Balance, end of period $ 2,040,000 The key inputs for the Earn-out Share Liability were as follows: September 30, 2025 December 31, 2024 Stock Price $ 0.62 $ 6.5 Expected term (years) 9 10 Volatility 80.0 % 75.0 % Risk-Free Rate 4.18 % 3.81 % 25 16 - EARNINGS PER SHARE The computation of basic and dilutive net loss per share attributable to common stockholders for the nine months ended September 30, 2025 and 2024, are as follows: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Basic: Numerator: Net income (loss) attributable to common shareholders $ 1,375,294 $ ( 33,323,555 ) $ ( 1,736,512 ) $ ( 46,620,619 ) Denominator: Weighted-average common shares outstanding 45,644,909 22,292,374 40,325,293 20,217,081 Net income (loss) per share – basic: $ 0.03 $ ( 1.49 ) $ ( 0.04 ) $ ( 2.31 ) Diluted: Numerator: Net income (loss) attributable to common and common equivalent shareholders 1,375,294 ( 33,323,555 ) ( 1,736,512 ) ( 46,620,619 ) Denominator: Weighted-average common stock outstanding 45, 644,909 22,292,374 40, 325,293 20,217,081 Stock options, RSUs, warrants, Earn-Out Liability, and convertible notes outstanding to purchase shares of common stock 25,487 - - - Total common and common equivalent shares outstanding 45,670,396 22,292,374 40, 325,293 20,217,081 Net income (loss) per share – diluted: $ 0.03 $ ( 1.49 ) $ ( 0.04 ) $ ( 2.31 ) 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Stock options outstanding to purchase shares of common stock and RSUs 4,453,687 - 4,299,474 - Public Warrants 6,384,326 1,179,712 6,384,326 397,559 SPAC Private Placement Warrants 5,256,218 971,258 5,256,218 327,310 Private Veea Warrants 159,307 29,437 159,307 9,920 2025 Investor Warrants 4,694,429 - 1,582,006 - Convertible Notes 233,333 193,333 139,288 64.444 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Earn-Out Liability 4,500,000 - 4,500,000 - 17 - EMPLOYEE 401(k) PLAN The Company sponsors a 401(k) plan (the “Plan”) to provide retirement benefits for its employees. As allowed under Section 401(k) of the Internal Revenue Code, the Plan provides for tax-deferred salary contributions and after-tax contributions for eligible employees. The Plan provides for tax-deferred salary contributions and after-tax contributions for eligible employees. Employee contributions are limited to a maximum annual amount as set periodically by the Internal Revenue Code. The Company matches pretax and Roth employee contributions up to 4 % of eligible earnings that are contributed by employees. All matching contributions vest immediately. The Company’s matching contributions to the Plan for the nine months ended September 30, 2025 and 2024, totaled $ 73,899 and $ 116,879 , respectively. A total of $ 237,997 is reflected in accrued expenses in the condensed consolidated balance sheet for matching contributions accrued but not yet paid. 18 - SUBSEQUENT EVENTS The Company evaluated subsequent events 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, 2025. The Company concluded that no events have occurred that would require recognition or disclosure in the financial statements. 26