What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-14 · 239 added, 340 removed, 152 unchanged (79% of the section changed)

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The following discussion

and analysis of the financial condition and results of operations of Veea should be read together with our audited consolidated financial

statements and unaudited consolidated condensed financial statements.

In addition to our historical consolidated financial information,

this discussion includes forward-looking information regarding our business, results of operations and cash flows, and contractual obligations

and arrangements that involve risks, uncertainties, and assumptions.

Our actual results may differ materially from any future results

expressed or implied by such forward-looking statements as a result of various factors, including, but not limited to, those discussed

in the Company’s most recent Annual Report on Form 10-K filed with the SEC on April 15, 2025 (the “2024 10-K”).

Unless the context otherwise

requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

to “Veea,” “we”, “us”, “our”, and the “Company” are intended to refer to (i)

following the Business Combination, the business and operations of Veea Inc.

and its consolidated subsidiaries, and (ii) prior to the

Business Combination, Private Veea (the predecessor entity in existence prior to the consummation of the Business Combination) and its

consolidated subsidiaries.

Throughout this report, the terms “our,”

“we,” “us,” “Veea” and the “Company” refer to Veea Inc.

and analysis of the financial condition and results of operations of Veea Inc.

(the “Company” or “Veea”) should

be read together with our audited consolidated financial statements and unaudited consolidated condensed financial statements.

to our historical consolidated financial information, this discussion includes forward-looking information regarding our business, results

of operations and cash flows, and contractual obligations and arrangements that involve risks, uncertainties, and assumptions.

results may differ materially from any future results expressed or implied by such forward-looking statements as a result of various factors,

including, but not limited to, those discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,

2025, filed with the SEC on April 15, 2026.

Unless the context otherwise requires, references

in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “Veea,”

“we”, “us”, “our”, and the “Company” are intended to refer to the business and operations

and its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING

This Quarterly Report on

Form 10-Q contains forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation

Reform Act of 1995, including statements regarding, among other things, the plans, strategies and prospects, both business and financial,

of the Company.

These statements are based on the beliefs and assumptions, whether or not identified in this Quarterly Report, of the

management of the Company.

Although the Company believes that its plans, intentions and expectations reflected in or suggested by these

forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions or expectations.

Form 10-Q (the “Quarterly Report”) contains forward-looking statements for purposes of the safe harbor provisions under the

United States Private Securities Litigation Reform Act of 1995, including statements regarding, among other things, the plans, strategies

and prospects, both business and financial, of the Company.

These statements are based on the beliefs and assumptions, whether or not

identified in this Quarterly Report, of the management of the Company.

Although the Company believes that its plans, intentions and expectations

reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize

these plans, intentions or expectations.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions.

Generally, statements that are not historical

facts, including statements concerning possible or assumed future actions, business strategies, events or results of operations, and any

statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying

assumptions, are forward-looking statements.

These statements may be preceded by, followed by or include the words “anticipate,”

“believe,” “could,” “continue,” “estimate,” “expect,” “forecast,”

“intend,” “may,” “might,” “plan,” “possible,” “potential,” “project,”

“scheduled,” “seek,” “should,” “will” or similar expressions, but the absence of these

words does not mean that a statement is not forward-looking.

Forward-looking statements contained in this Quarterly Report include, but

are not limited to, statements about the ability of the Company to:

failure to maintain adequate operational and financial resources or raise additional capital or generate sufficient cash flows;

risks related to its current growth strategy and the Company’s ability to generate revenue and become profitable;

statements that are not historical facts, including statements concerning possible or assumed future actions, business strategies, events

or results of operations, and any statements that refer to projections, forecasts or other characterizations of future events or circumstances,

including any underlying assumptions, are forward-looking statements.

These statements may be preceded by, followed by or include the

words “anticipate,” “believe,” “could,” “continue,” “estimate,” “expect,”

“forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,”

“project,” “scheduled,” “seek,” “should,” “will” or similar expressions, but

the absence of these words does not mean that a statement is not forward-looking.

Forward-looking statements contained in this Quarterly

Report include, but are not limited to, statements about the ability of the Company to:

● failure to maintain adequate operational and financial resources or raise

additional capital or generate sufficient cash flows;

● risks related to its current growth strategy and the Company’s ability

to generate revenue and become profitable;

● market acceptance of its platform and products;

● the length and unpredictable nature of its sales cycles;

Veea’s reliance on distribution and partnering arrangements and third-party manufacturers;

cybersecurity incidents, security vulnerabilities, and real or perceived errors, failures, defects, or bugs in its platforms or products;

the ability to maintain the listing of our common stock and public

warrants on Nasdaq, and the potential liquidity and trading of such securities;

● Veea’s reliance on distribution and partnering arrangements and third-party

manufacturers;

● cybersecurity incidents, security vulnerabilities, and real or perceived

errors, failures, defects, or bugs in its platforms or products;

● the ability to maintain the listing of our Common Stock and the warrants

on Nasdaq, and the potential liquidity and trading of such securities;

● our public securities’ potential liquidity and trading;

our success in retaining or recruiting, or changes required in, our

officers, key employees or directors, and our ability to attract and retain key personnel;

● macroeconomic conditions;

each of the other factors detailed under the section

entitled “ Risk Factors .”

● each of the other factors detailed under the section entitled “Risk

Forward-looking statements

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those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements in this Quarterly

In addition, the risks described

under the heading “ Risk Factors ” in this Quarterly Report are not exhaustive.

In addition, the risks

described under the heading “Risk Factors” in this Quarterly Report are not exhaustive.

Other sections of this Quarterly Report

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Company Overview

are dedicated to simplifying the journey towards creating a world in which virtually everyone and everything is intelligently connected,

while bringing applications and AI to the edge of the network.

Most service providers, equipment suppliers, system integrators and even

hyperscalers have adopted or advocated for similar solutions to various degrees either independently or in collaboration with the Company.

However, to our knowledge, we are the first to market with patented technologies that a) bring virtualized data center capabilities to

the far edge of the network, commonly referred to as the Device Edge, where all wired and wireless devices connect to the network, b)

spawns hyperconvergence of computing, multiaccess communications and storage, c) provides for Cloud-managed applications at the Edge,

d) enables machine learning with AI training, inferencing, and agentic AI at the Edge including AI-driven cybersecurity for heterogenous

Such networks are given rise through any combination of our developed devices and third-party devices, with CPUs, GPUs, TPUs,

DPUs and/or NPUs, that run the Veea Edge Platform Ô software

We are dedicated to

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

applications and AI to the edge of the network.

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

have adopted or advocated for similar solutions to various degrees either independently or in collaboration with the Company.

to our knowledge, we are onf of the first to market with patented technologies that a) bring virtualized data center capabilities to the

far edge of the network, commonly referred to as the Device Edge, where all wired and wireless devices connect to the network, b) spawns

hyperconvergence of computing, multiaccess communications and storage, c) provides for Cloud-managed applications at the Edge, d) enables

machine learning with AI training, inferencing, and agentic AI at the Edge including AI-driven cybersecurity for heterogenous networks.

Such networks are given rise through any combination of our developed devices and third-party devices, with CPUs, GPUs, TPUs, DPUs and/or

NPUs, that run the VeeaONE platform software stack.

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, referred to as the “VeeaHub” product.

With an extensive patent portfolio of approximately 125 granted patents

our patented secured docker containers, together with a Wi-Fi Access Point (AP) with a mesh router, a firewall, an IoT gateway, NVMe data

storage and 4G/5G modules, referred to as the “VeeaHub” product.

With an extensive patent portfolio of 123 granted patents

and 32 pending patent applications that cover 26 patent families, our end-to-end Hybrid Edge-Cloud Computing platform represents a new

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efficiency, scalability, and reduced costs compared to alternatives.

products, about the size of a typical Wi-Fi Access Point, are offered in variety of forms with different capabilities for indoor and outdoor

coverage and are both locally- and cloud-managed.

Veea Edge Platform architecture and business model, VeeaHub Ò

and third-party devices on Veea Edge Platform with Hybrid Edge-Cloud Computing

and AI-enabled applications and services resemble the Android OS platform architecture and business model for Android devices.

VeeaHub products, about the

size of a typical Wi-Fi Access Point (AP), are offered in variety of forms with different capabilities for indoor and outdoor coverage

and are both locally- and cloud-managed.

VeeaONE platform architecture and business model, VeeaHub and third-party devices on VeeaONE

platform with Hybrid Edge-Cloud Computing and AI-enabled applications and services resemble the Android OS platform architecture and business

model for Android devices.

The VeeaONE platform offers

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private clouds and networks across one or multiple user(s) or enterprise location(s) across the globe.

Benefits of the Veea Edge Platform

Benefits of the VeeaONE platform

include optimal latency, lower data transport costs, data privacy, security and ownership, Edge AI, as well as “always-on”

availability for mission critical applications, and contextual awareness for people, devices and things connected to the Internet.

Veea earns revenue primarily

from the sale of its VeeaHub® devices, licenses, and subscriptions.

Recent Developments

August 2025 Public Offering

On August 14, 2025, the Company closed a public offering of 9,189,096

shares of common stock and warrants to purchase up to 9,189,096 shares of common stock at a combined offering price of $1.00 per share

and accompanying warrant (the “August 2025 Public Offering”).

The Company received aggregate cash gross process of approximately

$6.0 million, before deducting placement agent fees and other offering expenses.

The warrants have an exercise price of $1.10 per share,

are exercisable immediately, and will expire five years from the original issuance date.

Included in the aggregate securities issued are

3,239,096 shares of common stock and accompanying warrants that were issued to NLabs Inc.

in consideration and satisfaction of the NLabs

The Company is using the net proceeds from the August 2025 Public Offering for investments in inventory and the Company’s

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

Supply Agreement

August 7, 2025, Private Veea entered into a Framework Agreement for the Licenses, Equipment and Services (the “Supply Agreement”)

with RadioMovil Dipsa, S.A.

(“Telcel”), a Mexican wireless telecommunications company owned by América Móvil,

effective August 7, 2025.

The Supply Agreement was signed by the parties following the completion of an extensive certification and homologation

process with Telcel;

and the successful completion of trials with certain Telcel enterprise customers of the Company’s VeeaHub STAX Ò

-5G product, incorporating Telcel SIM cards.

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

as the provisioning of the services provided by VeeaSystems.

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

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

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

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

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

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

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

The agreement provides for an

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

prior notice.

Appointment of Acting Chief Financial Officer

On July 15, 2025, Randal

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

Appointment of Acting Chief Revenue Officer

On July 15, 2025, Mr.

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

Acquisition of Assets of Crowdkeep, Inc.

Asset Purchase Agreement

On May 13, 2025, the Company

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

to the terms and conditions set forth in the APA, the Company acquired upon the closing 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 are being assumed

in consideration for the issuance to the Seller of 4,065,689 shares of common stock.

Note Purchase Agreements and Convertible Promissory

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 accrues at an annual rate of 8%.

The maturity dates

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.

Crowdkeep Convertible Notes are convertible, in whole or in part, into shares of the 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.

Lock-Up Agreements

In connection with the Crowdkeep

APA and the Crowdkeep Note Purchase Agreements, the Seller and the Crowdkeep Investor entered into lock-up agreements pursuant to which

the Seller and the Crowdkeep Investor agreed not to effect any sale, distribution or transfer of any of the shares of Common Stock received

in the transaction or any Crowdkeep Conversion Shares will be subject to transfer restrictions and restrictions against selling short

or hedging the Company’s securities for a period of six (6) months following the applicable closing of the APA or the Crowdkeep

Note Purchase Agreement, respectively, subject to certain limited exceptions.

The form of lock-up agreement

signed by the Seller is herein referred to as the “Crowdkeep Lock-Up Agreement” and the form of lock-up agreement signed by

the Investor is herein referred to as the “Crowdkeep Noteholder Lock-Up Agreement.” The Crowdkeep Lock-Up Agreement and the

Crowdkeep Noteholder Lock-Up Agreement have substantially similar terms, but the Crowdkeep Lock-Up Agreement provides for distributions

by the Seller to the Seller’s stockholders, pro rata based on their ownership of Seller, subject to certain conditions.

Transfer of Listing Application

In response to the Nasdaq

deficiency notices received by the Company on September 29, 2025, on March 27, 2026, the Company submitted an application to transfer

the listing of its common stock and publicly trade warrants (collectively, the “Listed Securities”) from The Nasdaq Global

Market to The Nasdaq Capital Market.

In connection with the submission to transfer the Company’s listing, the Company requested

a second period of 180 calendar days, or until September 30, 2026, to regain compliance with the minimum bid price requirement for continued

listing on the Nasdaq Global Market under Nasdaq Lising Rule 5550(a)(2) (“Minimum Bid Price Requirement”) for continued listing.

On April 7, 2026, Listing

Qualifications Department of Nasdaq (the “Nasdaq Staff”) approved the Company’s request to transfer the listing of the

Company’s publicly traded securities from The Nasdaq Global Select Market to The Nasdaq Capital Market.

The transfer took effect

at the opening of business on April 9, 2026 and did not have any immediate effect on trading in the Listed Securities.

The Listed Securities

continue to trade uninterruptedly under the symbol “VEEA” and “VEEAW”, respectively.

The Nasdaq Capital Market

operates in substantially the same manner as The Nasdaq Global Market, and companies on The Nasdaq Capital Market must meet certain financial

and corporate governance requirements to qualify for continued listing.

As a result of the transfer

to The Nasdaq Capital Market, Nasdaq granted the Company a second period of 180 calendar days, or until September 28, 2026, to regain

compliance with the Minimum Bid Price Requirement for continued listing.

To regain compliance, the closing bid price of the Company’s

shares must meet or exceed $1.00 per share for a minimum of 10 consecutive business days on or prior to September 28, 2026.

determination to grant the additional 180-day compliance period was in part based on, among other things, the Company meeting the continued

listing requirements of The Nasdaq Capital Market with the exception of the Minimum Bid Price Requirement, and the Company having provided

written notice of its intention to cure the deficiency during the additional compliance period, including by effecting a reverse stock

split if necessary.

Following Nasdaq’s approval of the extended compliance period, the Company intends to continue to actively monitor

the Minimum Bid Price Requirement and, as appropriate, will consider available options to resolve any deficiencies and regain compliance,

including by effecting a reverse stock split if necessary.

Executive Management Changes

On April 13, 2026, the Company

entered into a transition agreement with Janice K.

Smith, the Executive Vice President and Chief Operating Officer (the “Smith Transition

Pursuant to the Smith Transition Agreement, effective as of April 30, 2026, Ms.

Smith resigned from her current roles

as the Executive Vice President and Chief Operating Officer of the Company and has served as Senior Operations Advisor for a period commencing

on April 30, 2026 and ending on December 31, 2026.

Smith is entitled certain equity awards and cash bonus.

Components of Results of Operations

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sales and the sale of licenses and subscriptions.

The Company applies a five-step approach as defined in ASC 606, “ Revenue from

Contracts with Customers ”, in determining the amount and timing of revenue to be recognized:

(1) identify the contract with

(2) identify the performance obligations in the contract;

The Company applies a five-step approach as defined in ASC 606, Revenue from Contracts

with Customers, in determining the amount and timing of revenue to be recognized:

(1) identify the contract with a customer;

the performance obligations in the contract;

(3) determine the transaction price;

(4) allocate the transaction

price to the performance obligations in the contract;

(4) allocate the transaction price to the performance

obligations in the contract;

and (5) recognize revenue when a corresponding performance obligation is satisfied.

Most contracts with customers are to provide distinct products or services within a single contract.

However, if a contract is separated

into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based

on the estimated relative standalone selling price.

Most contracts with customers

are to provide distinct products or services within a single contract.

However, if a contract is separated into more than one performance

obligation, the total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone

selling price.

For licenses of technology,

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Operating Expenses

We classify our operating

expenses into the following categories:

We classify our operating expenses into the following

● Product development expenses .

Product development expenses primarily consist of employee compensation, employee benefits, stock-based compensation related to technology developers and product management employees, as well as fees paid for outside services and materials.

development expenses primarily consist of employee compensation, employee benefits, stock-based compensation related to technology developers

and product management employees, as well as fees paid for outside services and materials.

● Sales and marketing expenses.

Sales and marketing expenses consist of compensation and other employee-related costs for personnel engaged in selling, marketing and sales support functions.

marketing expenses consist of compensation and other employee-related costs for personnel engaged in selling, marketing and sales support

Selling expenses also include marketing and the costs associated with customer evaluations.

The Company does not currently incur advertising costs.

The Company does not currently

incur advertising costs.

● General and administrative expenses.

General and administrative expenses consist of compensation expense (including stock-based compensation expense) for employees and executive management, and expenses associated with finance, tax, and human resources.

General and administrative expenses also includes transaction costs, expenses associated with facilities, information technology, external professional services, legal costs and settlement of legal claims and other administrative expenses.

and administrative expenses consist of compensation expense (including stock-based compensation expense) for employees and executive management,

and expenses associated with finance, tax, and human resources.

General and administrative expenses also includes transaction costs, expenses

associated with facilities, information technology, external professional services, legal costs and settlement of legal claims and other

administrative expenses.

● Depreciation and amortization:

Depreciation and amortization expense consists of depreciation of Veea’s property and equipment and amortization of Veea’s patents and other intellectual property.

Impairment consists of impairment charges related to our in-process research and development (“IPR&D”)

and amortization expense consists of depreciation of Veea’s property and equipment and amortization of Veea’s patents and

other intellectual property.

Results of Operations

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of financial results is not necessarily indicative of future results.

F or the three months ended September 30,

2025 compared to three months ended September 30, 2024 and the nine months ended September 30, 2025 compared to three months ended September

F or the three months ended March 31, 2026 compared to three months

ended March 31, 2025

The following table sets

forth Veea’s unaudited statements of operations data for the three and nine months ended September 30, 2025 and 2024, respectively.

Veea has prepared the data on a consistent basis with the audited consolidated financial statements as of and for the years ended December

31, 2024 and 2023, included in the 2024 10-K.

In the opinion of Veea’s management, the unaudited three and nine month financial

information reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of

For the Three Months Ended

September 30,

Revenues, net

Cost of Goods Sold

Operating Expenses:

Product development

Sales and marketing

General and administrative

Transaction costs including those incurred with contingent earn-out share liability

(55,038,544 )

Depreciation and amortization

Total operating expenses

Loss from operations

(57,497,381 )

Other Income (Expense):

UK R&D tax credit

Loss on initial issuance of convertible note

Change in fair value of convertible note option liability

Change in fair value of warrant liabilities

Change in fair value of Earn-Out Share Liability

(20,030,000 )

Other expense

Interest expense

Total other income (expense)

(24,173,826 )

Net income (loss)

$ (33,323,555 )

For the Nine Months Ended

September 30,

Revenues, net

forth Veea’s unaudited condensed consolidated statements of operations data for the three months ended March 31, 2026 and 2025,

respectively.

Veea has prepared the three month data on a consistent basis with the audited consolidated financial statements as of and

for the years ended December 31, 2025 and 2024, included in the 2025 10-K.

In the opinion of Veea’s management, the unaudited three

month financial information reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair

presentation of this data.

Three months ended March 31,

Cost of goods sold

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Sales and marketing

General and administrative

Transaction costs including those incurred with contingent earn-out share liability

(55,013,544 )

General and administrative, net

Transaction costs

Depreciation and amortization

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Loss from operations

(15,333,775 )

(69,896,852 )

Other income (expense):

Other income, net

UK R&D tax credit

Loss on initial issuance of convertible note

Change in fair value of convertible note option liability

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Change in fair value of Earn-out Share Liability

(11,230,000 )

Other expense

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The Company generated revenue

of $144,926 and $50,683 for the three months ended September 30, 2025 and 2024, and revenue of $232,094 and $108,264 for the nine months

ended September 30, 2025 and 2024, respectively.

Revenue has been principally earned from paid pilots for our VeeaHub ®

Our focus over the past several years has been on field testing and refining our product to meet customer needs as well as market

developments.

As a result of these efforts, we expect revenue to grow over the next several quarters through the sales of our hardware,

licenses and subscriptions.

We are especially focused in four principal market opportunities:

1) Digital Equity and Inclusion, 2) Energy

and Sustainability solutions for Smart Buildings and Climate Smart Agriculture, 3) Convergence of Fixed, Wireless, and 5G Networks, and

4) Smart Retail and Smart Warehouses.

of approximately $0.2 million and approximately $14,000 for the three months ended March 31, 2026 and 2025, respectively.

been principally earned from paid pilots for our VeeaHub ® devices.

Our focus over the past several

years has been on field testing and refining our product to meet customer needs as well as market developments.

As a result of these efforts,

we expect revenue to grow over the next several quarters through the sales of our hardware, licenses and subscriptions.

We are especially

focused in four principal market opportunities:

1) Digital Equity and Inclusion, 2) Energy and Sustainability solutions for Smart Buildings

and Climate Smart Agriculture, 3) Convergence of Fixed, Wireless, and 5G Networks, and 4) Smart Retail and Smart Warehouses.

Cost of Goods Sold

Cost of goods sold increased

by $38,009, or 253%, in the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Cost of goods

sold stayed flat for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

The disparity is

primarily related to an increase in service-based revenue in the quarter.

Cost of goods sold remained

materially consistent for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

Given the lack of

material revenues, management would not expect a significant fluctuation in cost of goods sold.

Product Development Expense

Product development expense

decreased by $356,761 or 100%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and

decreased by $988,052 or 86%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

in product development expenses was due to decreased internal development costs during the period.

decreased approximately $0.1 million from approximately $0.2 million for the three months ended March 31, 2025 to approximately $0.1 million

for the three months ended March 31, 2026.

The decrease in product development expenses was due to decreased internal development costs

during the period.

Sales and Marketing Expense

Sales and marketing expense

decreased by $65,382 or 81%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and sales

and marketing expense decreased by $94,485, or 21%, in the nine months ended September 30, 2025, compared to the nine months ended September

decreased approximately $0.3 million from approximately $0.3 million for the three months ended March 31, 2025 to approximately $42 thousand

for the three months ended March 31, 2026.

The decrease is primarily due to a reduction in unpaid customer pilots.

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General and administrative

expense increased by $2,533,495, or 127%, in the three months ended September 30, 2025 compared to the three months ended September 30,

2024 and increased by $1,440,379, or 11%, in the nine months ended September 30, 2025, compared to the nine months ended September 30,

The increase is primarily related to certain non-capitalized expenses associated with the August 2025 Public Offering, and increased

costs of additional personnel, resources, and administrative costs associated with the Company’s sales activities.

expense decreased approximately $0.3 million from approximately $5.1 million for the three months ended March 31, 2025 to approximately

$4.8 million for the three months ended March 31, 2026.

The decrease is for the quarter is primarily related to the Company’s cost

reduction measures.

Transaction costs

Transaction costs were immaterial for both the

three months ended March 31, 2026 and 2025.

Depreciation and Amortization

Depreciation and amortization

increased by $148,704 or 220%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 and

increased by $215,985 or 105%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

was due to additional amortization for the technology assets acquired from Crowdkeep, Inc.

increased approximately $0.1 million from $0.1 million for the three months ended March 31, 2025 to approximately $0.2 million for the

three months ended March 31, 2026.

This increase is due to additional amortization for the technology assets acquired from Crowdkeep,

Other income, net

Other income, net relates

to immaterial non-operating transactions incurred during the period.

These amounts were immaterial for the three months ended September

30, 2025 and 2024 and nine months ended September 30, 2025 and 2024.

Change in fair value of derivative liabilities

Other income, net increased approximately $0.2

million for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025.

This increase is primarily due

to the settlement of a vendor payable, resulting in a gain on the extinguishment of the liability.

Change in fair value of derivative liabilities

is comprised of the fair value adjustments to the convertible note option liability, SPAC Private Placement Warrants, the Earn-Out Share

Liability, and the 2025 Investors Warrants at balance sheet date.

The gain on the change in fair value of conversion note option liability

of $270 for the nine months ended September 30, 2025, was determined using a Black-Scholes option pricing model.

The gain on the change

in fair value of the SPAC Private Placement Warrant of $555,498 for the nine months ended September 30, 2025, was determined based on

the trading value of the Public Warrants and the Black-Scholes option pricing model.

The gain on the change in fair value of the Earn-Out

Share Liability of $4,720,000 for the nine months ended September 30, 2025, was determined using a Monte Carlo simulation.

A significant

driver of the changes in fair value was due to the decline in the Company’s stock price.

Change in fair value of derivative

liabilities is comprised of the fair value adjustments to the convertible note option liability, SPAC Private Placement Warrants, the

Earn-Out Share Liability, and the 2025 Investors Warrants at balance sheet date.

The change in the fair value of conversion note option

liability for the three months ended March 31, 2026, was determined using a Black-Scholes option pricing model, which yielded no change

to the liability.

The change in the fair value of the SPAC Private Placement Warrants was determined based on the trading value of the

public warrants and the Black-Scholes option pricing model, which a gain of approximately $0.5 million.

The gain on the change in the

fair value of the Earn-Out Share Liability of approximately $0.6 million for the three months ended March 31, 2026 was determined using

a Monte Carlo simulation of 100,000 simulations.

A significant driver of the changes in fair value was due to the decline in the Company’s

Other expense

Other expenses relate to

immaterial non-operating expenses incurred during the period.

These amounts were immaterial for the three months ended September 30, 2025

and 2024 and nine months ended September 30, 2025 and 2024.

Other expenses relate to immaterial

non-operating expenses incurred during the period.

These amounts were immaterial for the three months ended March 31, 2026 and 2025.

Interest expense

Interest expense decreased

by $9,014 or 2%, in the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Interest expense

increased by $469,625, or 35%, in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

was due to additional draws on our revolving line of credit and new related party notes entered into during the nine months ended September

approximately $0.1 million from approximately $0.9 million for the three months ended March 31, 2025 to approximately $0.8 million for

the three months ended March 31, 2026.

This decrease is due to the extinguishment of the Company’s line of credit in January of

2026 with the borrowing of related party convertible notes under more favorable terms.

Liquidity and Capital Resources

During the three months ended

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

ended September 30, 2025 and 2024, we 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 our inception, we have incurred significant operating losses and negative cash

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

As of September 30, 2025, we

had cash of $1,071,151 and outstanding debt of $17.5 million, of which $750,000 was outstanding under the September 2024 Notes, $1.0 million

was outstanding under the unsecured convertible promissory notes issued by the Company to the majority stockholder of Crowdkeep in May

2025, $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 August 2025 Public 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.

March 31, 2026 the Company incurred a net loss of approximately $4.6 million and had an accumulated deficit of $229.2 million as of March

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

As of March 31, 2026, it had cash

of approximately $1.6 million and outstanding debt of $13.3 million, of which $0.8 million was outstanding under those unsecured convertible

promissory notes issued by the Company and Private Veea to certain unaffiliated accredited investors pursuant to certain note purchase

agreements entered into with such investors simultaneously with the Closing of the Business Combination for the sale of such notes (the

“September 2024 Notes”), $1.0 million was outstanding under the Crowdkeep Convertible Notes, $4.0 million was outstanding

under a related party note payable, $1.9 million was outstanding under a notes payable with an inventory vendor, $5.0 million was outstanding

under the PPL Loan, and $0.6 million was outstanding under the White Lion Convertible Note.

The Company plans to fund

its operations and capital funding needs for the next 12 months with revenue generated from operations, including anticipated revenue

generated under the Framework Agreement for the Licenses, Equipment and Services (the “Supply Agreement”) that the Company

entered into with RadioMovil Dipsa, S.A.

(“Telcel”), a Mexican wireless telecommunications company owned by América

Móvil, effective August 7, 2025, and using proceeds from its existing financing arrangements under the ELOC Purchase Agreement,

its new secured term loan facility pursuant to a Loan Agreement that Private Veea entered into with Pasadena Private Lending, Inc.

February 17, 2026, and White Lion Note Purchase Agreement.

Further, the Company could pursue other equity and debt financing from new

or existing investors, including related parties, which may continue to include the Company’s CEO and his affiliates.

Our principal sources

of liquidity are proceeds from the issuance of notes, convertible notes, related party notes, and the issuance of common stock.

use of capital continues to be to invest for the long-term growth of the business.

We regularly evaluate our cash and capital structure,

including the size, pace, and form of capital return to stockholders.

The following table presents cash flows for the

three months ended March 31, 2026 and 2025, respectively:

For the Three Months Ended March 31,

Net cash used in operating activities

$ (5,191,022 )

$ (3,698,741 )

Net cash used in investing activities

Net cash provided by financing activities

Non-GAAP Financial Measures

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and amortization, stock-based compensation expense and non-core expenses/losses (gains), including transaction-related costs, litigation-related

costs, management fees, changes in fair value of liabilities, change in fair value of earn-out share liabilities and other expense, which

includes asset impairments.

Our management uses this measure internally to evaluate the performance of our business and this measure is

one of the primary metrics by which our internal budgets are based.

We exclude the above items as some are non-cash in nature, and others

are non-recurring that they may not be representative of normal operating results.

This non-GAAP financial measure adjusts for the impact

of items that we do not consider indicative of the operational performance of our business.

While we believe that this non-GAAP financial

measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant as a substitute

for the related financial information prepared and presented in accordance with GAAP.

The following table provides

a reconciliation of net loss to adjusted EBITDA to net loss for the periods presented:

For the three Months Ended

September 30,

costs, management fees, change in fair value of warrant liability, change in fair value of Earn-out Share Liability and other expense,

which includes asset impairments.

Our management uses this measure internally to evaluate the performance of our business and this measure

is one of the primary metrics by which our internal budgets are based.

We exclude the above items as some are non-cash in nature, and

others are non-recurring that they may not be representative of normal operating results.

This non-GAAP financial measure adjusts for

the impact of items that we do not consider indicative of the operational performance of our business.

While we believe that this non-GAAP

financial measure is useful in evaluating our business, this information should be considered as supplemental in nature and is not meant

as a substitute for the related financial information prepared and presented in accordance with GAAP.

The following table

provides a reconciliation of net loss to adjusted EBITDA to net loss for the periods presented:

Three months ended

ADJUSTED EBITDA

1 unchanged sentence

$ (4,673,046 )

UK R&D tax credit

Interest expense

Depreciation and amortization

(34,055,187 )

Other income, net

Other expense

Loss of initial issuance of convertible note

Change in fair value of conversion note option liability

Change in fair value of warrant liabilities

Change in fair value of Earn Out Shares Liability

(24,750,000 )

Transaction costs

Share-based compensation

ADJUSTED EBITDA

$ (4,127,015 )

$ (2,331,722 )

For the nine Months Ended

September 30,

ADJUSTED EBITDA:

$ (1,736,512 )

$ (46,620,619 )

UK R&D tax credit

Interest expense

Depreciation and amortization

(46,313,928 )

Other income, net

Other expense

Loss of initial issuance of convertible note

Change in fair value of conversion note option liability

Change in fair value of conversion note liability

Change in fair value of warrant liabilities

1 unchanged sentence

(10,530,000 )

(24,750,000 )

Transaction costs

2 unchanged sentences

$ (5,618,846 )

(14,258,963 )

Quantitative and Qualitative Disclosures

3 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis