UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to ________.

Commission file number: 001-40218

VEEA INC.

(Exact name of Registrant as specified in its charter)

Delaware		98- 1577353
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

164 E. 83rd Street, New York, NY		10028
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 535-6050

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	VEEA	The Nasdaq Stock Market LLC
Warrants, each whole warrant exercisable for one Common Stock at an exercise price of $11.50 per share	VEEAW	The Nasdaq Stock Market LLC

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of large accelerated filer, accelerated filer, smaller reporting company, and emerging growth company in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller Reporting Company	☒
		Emerging Growth Company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

As of May 13, 2026, there were 50,407,567 shares of the registrant’s common stock issued and outstanding.

VEEA INC.

FORM 10-Q

TABLE OF CONTENTS

		Page

PART I. FINANCIAL INFORMATION		1

ITEM 1.	Financial Statements	1

	Condensed Consolidated Balance Sheet as of March 31, 2026 (Unaudited) and December 31, 2025	1

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2026 and 2025	2

	Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three Months Ended March 31, 2026 and 2025	3

	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 and 2025	4

	Notes to Unaudited Condensed Consolidated Financial Statements	5

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27

ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	33

ITEM 4.	Controls and Procedures	33

PART II. OTHER INFORMATION		34

ITEM 1.	Legal Proceedings	34

ITEM 1A.	Risk Factors	34

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

ITEM 3.	Defaults Upon Senior Securities	34

ITEM 4.	Mine Safety Disclosures	34

ITEM 5.	Other Information	34

ITEM 6.	Exhibits	35

SIGNATURES		36

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VEEA INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2026			2025
	(Unaudited)
ASSETS
Cash	$	1,594,473		$	133,860
Receivables, net		261,832			139,833
Inventory, net		9,631,376			9,653,912
Prepaid and other current assets		5,648,525			5,638,399
Total current assets		17,136,206			15,566,004

Property and equipment, net		70,291			91,809
Goodwill		5,105,911			5,101,625
Intangible assets, net		7,258,491			7,426,864
Investments		253,984			-
Other assets		34,281			34,323
TOTAL ASSETS	$	29,859,164		$	28,220,625

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Revolving line of credit	$	-		$	14,000,000
Accounts payable		3,064,647			4,053,523
Accrued expenses		1,875,947			1,531,498
Related party liabilities		2,211			4,215,980
Deferred payables, current		2,285,957			2,257,457
Note payable		1,762,415			1,762,415
Convertible note payable, net - current		2,070,664			1,662,371
Related party notes		4,035,614			2,335,000
Total current liabilities		15,097,455			31,818,244

Warrant liabilities		3,151,558			3,610,661
Earn-out Share Liability		1,985,000			2,543,600
Note payable, noncurrent		4,607,007			-
TOTAL LIABILITIES		24,841,020			37,972,505

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; 212,000 and zero issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		21			-
Common Stock, $0.0001 par value, 551,000,000 shares authorized; and 50,467,421 shares issued and outstanding at March 31, 2026 and December 31, 2025		5,047			5,047
Additional paid-in capital		235,374,477			215,985,403
Accumulated deficit		(229,163,602	)		(224,490,556	)
Accumulated other comprehensive income (loss)		(1,197,799	)		(1,251,774	)
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		5,018,144			(9,751,880	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	29,859,164		$	28,220,625

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VEEA INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

	For the Three Months Ended March 31,
	2026			2025
Sales, net	$	180,417		$	14,262
Cost of goods sold		22,667			12,330
Gross profit		157,750			1,932

Operating Expenses:
Product development		148,600			215,575
Sales and marketing		42,115			349,251
General and administrative		4,792,284			5,109,473
Transaction costs		-			35,000
Depreciation and amortization		204,992			60,116
Total operating expenses		5,187,991			5,769,415
Loss from operations		(5,030,241	)		(5,767,483	)

Other income (expense):
Other income		240,345			772
Change in fair value of convertible note option liability		-			59,000
Change in fair value of warrant liabilities		459,103			420,497
Change in fair value of Earn-out Share Liability		558,600			10,530,000
Other income (expense)		(90,177	)		2,750
Interest expense		(810,676	)		(946,484	)
Total other income		357,195			10,066,534

Net income (loss)	$	(4,673,046	)	$	4,299,052
Net income (loss) per share:
Basic	$	(0.09	)	$	0.12
Diluted	$	(0.09	)	$	0.12

Weighted-average common stock outstanding used in per share amounts:
Basic		50,467,421			36,369,224
Diluted		50,467,421			36,583,665

Other comprehensive income (loss):
Foreign currency translation adjustment		53,975			20,411
Comprehensive income (loss)	$	(4,619,071	)	$	4,319,462

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VEEA INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(Unaudited)

FOR THE THREE MONTHS ENDED MARCH 31, 2026

	Series A Convertible Preferred Stock				Common Stock				Additional Paid-in-		Accumulated			Other Comprehensive			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Gain (Loss)			Equity (Deficit)
Balance, December 31, 2025		-	$	-		50,467,421	$	5,047	$	215,985,403	$	(224,490,556	)	$	(1,251,774	)	$	(9,751,880	)
Issuance of White Lion Warrants		-		-		-		-		216,149		-			-			216,149
Settlement of related party note payable and related party liabilities for preferred stock		212,000		21		-		-		18,877,993		-			-			18,878,011
Stock based compensation		-		-		-		-		294,935		-			-			294,935
Foreign currency translation gain		-		-		-		-		-		-			53,975			53,975
Net Loss		-		-		-		-		-		(4,673,046	)		-			(4,673,046	)
Balance, March 31, 2026		212,000	$	21		50,467,421	$	5,047	$	235,374,477	$	(229,163,602	)	$	(1,197,799	)	$	5,018,144

FOR THE THREE MONTHS ENDED MARCH 31, 2025

	Common Stock				Additional Paid-in-		Accumulated			Other Comprehensive			Total Stockholders’
	Shares		Amount		Capital		Deficit			Gain (Loss)			Deficit
Balance, December 31, 2024		36,202,798	$	3,621	$	200,667,682	$	(217,830,518	)	$	(134,391	)	$	(17,024,824	)
Stock based compensation		-		-		50,000		-			-			50,000
Common stock issued upon exercise of stock options		24,420		2		9		-			-			11
Common stock issued upon draw on the equity line of credit		240,500		24		604,402		-			-			604,426
Common stock issued as compensation for equity line of credit commitment fee		27,498		3		24,997		-			-			25,000
Settlement of convertible note agreement for shares issued		46,666		5		349,995		-			-			350,000
Foreign currency translation gain		-		-		-		-			20,411			20,411
Net income		-		-		-		4,299,052			-			4,299,052
Balance, March 31, 2025		36,541,882	$	3,655	$	201,697,086	$	(213,531,466	)	$	154,802		$	(11,675,924	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VEEA INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Three Months Ended March 31,
	2026			2025
Cash flows from operating activities
Net loss	$	(4,673,046	)	$	4,299,052
Adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization		204,992			60,116
Amortization of debt issuance costs		187,920			740,363
Change in fair value of convertible note option liability		-			(59,000	)
Change in fair value of warrant liabilities		(459,103	)		(420,497	)
Change in fair value of Earn-out Share Liability		(558,600	)		(10,530,000	)
Stock based compensation		294,935			50,000
Share based vendor payments as compensation for services		-			25,000
Unrealized foreign currency transaction (gain) loss		66,097			340,728
Amortization of operating lease right of use assets		-			87,956
Changes in operating assets and liabilities:
Receivables		(121,999	)		18,259
Inventories		19,664			(318,475	)
Prepaid and other current assets		(15,048	)		100,491
Other assets		1,960			(1,699	)
Accounts payable		(988,876	)		2,222,819
Accrued expenses and deferred payables		850,082			(829,394	)
Other current liabilities		-			606,656
Operating lease payments		-			(91,116	)
Net cash used in operating activities		(5,191,022	)		(3,698,741	)
Cash flows from investing activities
Purchase of intangible assets and trademarks		(15,536	)		(131,973	)
Purchase of investments		(253,984	)		-
Net cash used in investing activities		(269,520	)		(131,973	)
Cash flows from financing activities
Proceeds from revolving line of credit		-			1,300,000
Repayment of revolving line of credit		(14,000,000	)
Proceeds from related party notes		15,850,000			485,000
Proceeds from issuance of convertible notes		475,000			-
Proceeds from the issuance of shares under equity line of credit facility		-			604,426
Proceeds from exercise of stock options		-			11
Proceeds from note payable		4,599,250			-
Net cash provided by financing activities		6,924,250			2,389,437

Effect of exchange rate changes on cash		(3,095	)		2,985

Net increase (decrease) in cash		1,460,613			(1,438,292	)
Cash and cash equivalents at beginning of period		133,860			1,685,633
Cash and cash equivalents at end of period	$	1,594,473		$	247,341

Non-cash activities
Settlement of convertible notes for shares issued		-			350,000
Settlement of related party note payable and related party liabilities for preferred stock		18,878,011			-

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Veea Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

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.

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” or “VeeaSystems”), 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.

Liquidity

During the three months ended March 31, 2026 and 2025, the Company incurred operating losses of approximately $5.0 million and $5.8 million, respectively, and had an accumulated deficit of $229.2 million as of March 31, 2026. 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 the September 2024 Notes (as defined below), $1.0 million was outstanding under the Crowdkeep Convertible Notes (as defined below), $4.0 million was outstanding under a related party note payable, $1.9 million was outstanding under a note payable with an inventory vendor, $5.0 million was outstanding under the PPL Loan (as defined below) (Note 6), and $0.6 million was outstanding under the White Lion Convertible Note (as defined below) (Note 6).

The Company’s founder has funded operations through related party notes and advances. 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 Supply Agreement (as defined below) entered into with Telcel, and using proceeds from its existing financing arrangements under the ELOC Purchase Agreement (as defined below), its new secured term loan facility with Pasadena Private Lending (as defined below) and the White Lion Note Purchase Agreement (as defined below) with White Lion Capital, LLC (“White Lion”). Further, the Company could pursue other equity and debt financing from new or existing investors, including related parties, which may continue to include the Company’s CEO and his affiliates. The Company’s founder will continue to support the Company if it does not secure other equity or debt financing.

In response to the Nasdaq deficiency notices received by the Company on September 29, 2025, on March 27, 2026, the Company submitted an application to transfer the listing of its listed securities from The Nasdaq Global Market to The Nasdaq Capital Market. In connection with the submission to transfer the Company’s listing, the Company requested a second period of 180 calendar days, or until September 30, 2026, to regain compliance with the Minimum Bid Price Requirement for continued listing.

On April 7, 2026, the Nasdaq Listing Qualifications department 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. The transfer of the Company’s listing to The Nasdaq Capital Market is not expected to have any impact on trading in shares of common stock and public warrants. The common stock and public warrants 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. Nasdaq’s determination to grant the additional 180-day compliance period was in part based on, among other things, the Company meeting the continued listing requirements of The Nasdaq Capital Market with the exception of the 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.

2 - 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 unaudited condensed 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 accompanying condensed consolidated balance sheet as of December 31, 2025, has been derived from the consolidated financial statements included in the Company’s Annual Report on Form 10-K for its year ended December 31, 2025 filed with the SEC on April 15, 2026 (the “2025 10-K”). The accompanying unaudited condensed consolidated financial statements do 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 2025 10-K.

Basis of Accounting

The accompanying unaudited 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 unaudited 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 (Note 8); unrecognized tax benefits; legal contingencies; and the valuation of stock-based compensation, among others.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Segment Information

ASC Topic No. 280, Segment Reporting (“ASC 280”), establishes standards for the way that public business enterprises report information about operating segments in their annual consolidated financial statements and requires that those enterprises report selected information about operating segments in interim financial reports. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company’s business segments are based on the organization structure used by the chief operating decision maker (“CODM”) for making operating and investment decisions and for assessing performance.

The Company operates as a single operating segment. The CODM assesses the performance of and decides how to allocate resources for the one segment based on consolidated net loss. Further, EBITDA (earnings before interest taxes, depreciation and amortization), which is not presented on the face of the Company’s unaudited condensed consolidated statements of operations, is used to assist with the measurement of segment performance and allocate resources. The CODM also uses net loss and adjusted EBITDA, to decide the level of investment in various operating activities and other capital allocation activities. Accordingly, the Company has determined that it has a single reportable segment and operating segment. The majority of the Company’s assets as of March 31, 2026 and December 31, 2025, 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 ended March 31, 2026 and 2025, substantially all of the Company’s revenue was attributable to its U.S. operations and not materially concentrated among customers. The measure of segment assets is reported on the Company’s unaudited condensed consolidated balance sheets as Total Assets.

Investments

The Company holds non-marketable equity and other investments (“privately held investments”), which are included in noncurrent assets in the Company’s unaudited condensed consolidated balance sheets.

Equity investments that do not result in consolidation or the application of the equity method are accounted for in accordance with ASC Topic 321, Investments—Equity Securities (“ASC 321”). For certain eligible investments, the Company has elected the fair value option under ASC Topic 825, Financial Instruments (“ASC 825”), whereby such investments are measured at fair value on a recurring basis with changes in fair value recognized in earnings.

For investments for which the fair value option has not been elected and that do not have a readily determinable fair value, the Company applies the measurement alternative, under which investments are carried at cost, adjusted for observable price changes in orderly transactions for identical or similar investments and for impairment.

The fair value of investments accounted for under the fair value option is determined in accordance with ASC 820, Fair Value Measurement, and may involve the use of significant unobservable inputs (Level 3). The Company evaluates its investments each reporting period for changes in fair value or impairment, as applicable.

Recent Accounting Pronouncements Not Yet Adopted

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 unaudited condensed consolidated financial statements.

3 - 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 the Seller relating to the Seller’s IoT technology platform business, free and clear of any liens other than certain specified liabilities of the 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 a 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 accompanying unaudited condensed consolidated balance sheet, will be amortized over its estimated useful life of 10 years.

4 - BALANCE SHEET COMPONENTS

Inventory

Inventory consists of the following:

	March 31,			December 31,
	2026			2025
Inventory	$	7,787,053		$	7,809,589
Inventory allowance		(904,653	)		(904,653	)
Consigned parts		2,748,976			2,748,976
Total	$	9,631,376		$	9,653,912

Prepaid and other current assets

Prepaid and other current assets consists of the following:

	March 31,		December 31,
	2026		2025
Prepaid expenses	$	294,953	$	300,063
Inventory purchase deposit		5,000,000		5,000,000
Production deposit		336,643		336,643
Other current assets		16,929		1,693
Total	$	5,648,525	$	5,638,399

In January 2024, the Company placed an inventory order and paid a $5.0 million deposit against the order. The inventory was to be delivered on or before June 30, 2024. The inventory was not delivered by such date; and as a result, the Company is entitled to a refund of its deposit. The Company was granted a security interest in the purchased inventory. Upon the return of the Company’s down payment, the order will terminate.

Property and Equipment, net

Property and equipment, net consists of the following:

	March 31,			December 31,
	2026			2025
Furniture and fixtures	$	712,059		$	712,153
Computer equipment		336,253			336,385
Leasehold improvements		390,742			390,742
Total property and equipment gross		1,439,054			1,439,280
Less - Accumulated depreciation		(1,368,763	)		(1,347,471	)
Total property and equipment net	$	70,291		$	91,809

Depreciation expense for the three months ended March 31, 2026 and 2025, totaled approximately $21,083 and $35,697, respectively.

5 - GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following is a summary of activity in goodwill for the three months ended March 31, 2026:

Balance at December 31, 2025	$	5,101,625
Foreign exchange transactions		4,286
Balance at March 31, 2026	$	5,105,911

The following is a summary of activity in goodwill for the year ended December 31, 2025:

Balance at December 31, 2024	$	4,779,625
Foreign exchange transactions		322,000
Balance at December 31, 2025	$	5,101,625

Intangible Assets

Intangible assets consist of the following:

	As of March 31, 2026
	Amortization Period		Costs as of January 1, 2026		Additions		Disposals		Ending Costs		Accumulated Amortization			Accumulated Impairment		Net Book Value
Patents		15 years	$	7,790,596	$	15,536	$	-	$	7,806,132	$	(6,865,081	)	$	-	$	941,051
Proprietary technology		10 years		6,904,306		-		-		6,904,306		(586,866	)		-		6,317,440
Intangible assets, net			$	14,694,902	$	15,536	$	-	$	14,710,438	$	(7,451,947	)	$	-	$	7,258,491

	As of December 31, 2025
	Amortization Period		Costs as of January 1, 2025		Additions		Disposals		Ending Costs		Accumulated Amortization			Accumulated Impairment		Net Book Value
Patents		15 years	$	7,551,468	$	239,128	$	-	$	7,790,596	$	(6,844,695	)	$	-	$	945,901
Proprietary technology		10 years		-		6,904,306		-		6,904,306		(423,343	)		-		6,480,963
Intangible assets, net			$	7,551,468	$	7,143,434	$	-	$	14,694,902	$	(7,268,038	)	$	-	$	7,426,864

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 three months ended March 31, 2026 and 2025, there were no events that necessitated additional impairment of intangible assets.

Intangible asset amortization expense for the three months ended March 31, 2026 and 2025, totaled $183,909 and $19,000, respectively.

Future estimated amortization expense for the Company’s intangible assets is approximately as follows:

Future estimated amortization as of March 31, 2026
2026 – Remaining	$	574,091
2027		742,464
2028		744,281
2029		742,464
2030		742,464
Thereafter		3,712,727
	$	7,258,491

6 - DEBT

Total outstanding third-party debt of the Company is comprised of the following, including convertible notes:

March 31, 2026	Principal		Debt Discount			Total
Convertible notes payable, net	$	2,305,556	$	(234,892	)	$	2,070,664
Notes payable		1,762,415		-			1,762,415
Notes payable, noncurrent		5,000,000		(392,993	)		4,607,007
Total	$	9,067,971	$	(627,885	)	$	8,440,086

December 31, 2025	Principal		Debt Discount			Total
Revolving Loan Facility, noncurrent	$	14,000,000	$	-		$	14,000,000
Convertible notes payable, net		1,750,000		(87,629	)		1,662,371
Notes payable		1,762,415		-			1,762,415
Total	$	17,512,415	$	(87,629	)	$	17,424,786

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, (“JPM”) 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 11 for further information. Following the acquisition of First Republic, the Loan was transferred to JPM. As of December 31, 2025, the outstanding principal amount of the Loan was $14.0 million. On January 5, 2026, the Company repaid the principal and interest and terminated the 2021 Revolving Loan Agreement. On January 5, 2026, the Company repaid the Loan in full by making a cash payment to JPM of $14,076,218, representing the total outstanding principal and interest due as of such date. The Loan was repaid with the proceeds of a loan from NLabs during the three months ended March 31, 2026. See Note 11 for further information regarding the NLabs loan.

Convertible Notes Payable

Business Combination Convertible Notes Payable

Simultaneously with the closing of the business combination (the “Closing of Business Combination”) by and among Plum Acquisition Corp. I, Plum SPAC Merger Sub, Inc, and Private Veea (the “Business Combination”), the Company and Private Veea issued convertible notes under 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 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 September 2024 Notes include customary registration rights.

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 financial statements.

The Company and 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 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 both March 31, 2026 and December 31, 2025, $700,000 in aggregate principal amount of the September 2024 Notes, together with associated interest, had automatically converted upon the occurrence of a Brokerage Transfer. The September 2024 Notes matured on March 13, 2026. The Company and the Investors are in active discussions to, among other items, extend the maturity date. Non-payment at maturity is a default under the September 24 Notes; however, the Company has received no notices of default from any Investors, nor has any Investor commenced enforcement actions.

The Company reviewed the conversion feature granted in the notes under ASC 815, “Derivatives and Hedging” (“ASC 815”), and concluded that the conversion price was based on a variable (enterprise value) that was not an input to the fair value of a “fixed-for-fixed” option as defined under ASC 815-40 and is therefore considered a conversion option liability that should be bifurcated from the debt host. As the fair value of the conversion option liability exceeded the net proceeds received, in accordance with ASC 470-20, the Company recorded the conversion option liability at fair value with the excess of the fair value over the net proceeds received recognized as a loss in earnings. See Note 14 for further information.

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.

White Lion Convertible Notes

On January 14, 2026, the Company entered into a note purchase agreement with White Lion (the “White Lion Note Purchase Agreement”) providing for the issuance of unsecured convertible promissory notes (the “White Lion Convertible Notes” or the “Initial Issuance”) and warrants (the “White Lion Warrants”) for aggregate gross proceeds of up to $2.5 million. At the initial closing, the Company issued a convertible note with a face amount of approximately $0.6 million and received net proceeds of approximately $0.5 million, net of original issuance discount and certain transaction expenses. The notes mature in 12 months, bear interest at 5% per annum, and are convertible into shares of the Company’s common stock at a price equal to the lesser of $0.75 and 90% of the lowest VWAP (calculated as set forth in the Convertible Notes) for the prior consecutive ten (10) trading-day period, in each case subject to certain equitable adjustments. In connection with the financing, the Company issued warrants to purchase approximately 990,099 shares of common stock at an exercise price of approximately $0.51 per share, with a five-year term, subject to customary ownership limitations.

The proceeds received in connection with the Initial Issuance was allocated between the convertible notes and the White Lion Warrants based on their relative fair values. The fair value of the White Lion Warrant was estimated at the debt issuance date using the Black Scholes option pricing model. The White Lion Warrants were classified in 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 January 14, 2026:

Stock Price	$	0.51
Expected term (years)		5.00
Volatility		88.7	%
Risk-Free Rate		3.72	%

On April 16, 2026, the Company and White Lion consummated the second closing pursuant to the White Lion Note Purchase Agreement (“Second Closing”), and the Company issued, and White Lion purchased, an additional White Lion Convertible Note with a face amount of $555,556 and an additional White Lion Warrant to purchase up to 734,214 at an exercise price of approximately shares $0.6806 per share. The convertible note and warrants issued at the Second Closing contain provisions similar to those in the First White Lion Note and First White Lion Warrant, respectively, except for the number of shares available for exercise and the exercise price. At the Second Closing, the Company received cash proceeds of $500,000, net of original issuance discount.

Term Loan Facility

On February 17, 2026, VeeaSystems, entered into a Loan Agreement with Pasadena Private Lending, Inc. providing for a secured term loan facility of up to $10.6 million, of which approximately $5.0 million (the “Initial Loan Amount”) was funded at closing (the “PPL Loan”). The Initial Loan Amount matures in February 2031 and bears interest at a variable rate equal to the prime rate (subject to a floor of 5.75%) plus 4.50% per annum. Interest is payable monthly in arrears and principal is payable in monthly installments of $58,000 commencing March 17, 2027, with any remaining outstanding principal and interest due at maturity. The Company may, at any time prior to February 17, 2027, request to increase the Initial Loan Amount by up to $5.0 million in separate tranches of up to $2.5 million each. The facility is guaranteed by the Company and the Company’s Chairman and Chief Executive Officer, and is secured by substantially all assets of the Company and its subsidiaries. Further, until such time as the Company achieves a Debt Service Coverage Ratio (as defined in the Loan agreement) of at least 3.0 to 1.0, tested as of the most recently completed fiscal quarter end, the Company is required to maintain a minimum aggregate balance equal to the greater of (i) $550,000 and (ii) 10% of the then outstanding aggregate principal amount of the loans, in cash, liquid securities, and marketable securities, in a reserve account. The agreement contains customary financial covenants and minimum liquidity requirements. On April 23, 2026, the Initial Loan Amount was increased by an additional $2.5 million additional borrowing.

The Initial Loan Amount of $5.0 million is included in Notes payable in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2026, net of the remaining unamortized debt discount of $392,993.

Future principal payments on the PPL Loan are as follows:

Future principal payments as of March 31, 2026
2026 – Remaining	$	-
2027		580,000
2028		696,000
2029		696,000
2030		696,000
Thereafter		2,332,000
	$	5,000,000

7 - INVESTMENTS

Investments recorded using the cost method

During the fourth quarter of 2025, the Company determined that its cost method investments were fully impaired, resulting in an impairment loss of $235,877. As of March 31, 2026, the carrying value of these investments was zero. No impairment losses were recognized during the three months ended March 31, 2026 and 2025.

Investments recorded at fair value

For investments for which the Company has elected the fair value option under ASC 825, the investments are measured at fair value on a recurring basis with changes in fair value recognized in earnings.

During the three months ended March 31, 2026, the Company acquired a non-controlling equity interest in a privately held entity. The Company does not have the ability to exercise significant influence over the investee and accounts for the investment at fair value under ASC 825. The initial carrying value of approximately $0.3 million reflects management’s estimate of fair value at the acquisition date, which considers the transaction price and other available information. Subsequent changes in fair value are recognized in earnings in the period in which they occur. As of March 31, 2026, the fair value of the investment is approximately $0.3 million.

The investment will be measured based on unobservable inputs and, as such, is a level 3 asset in the fair value hierarchy. As of March 31, 2026, the fair value of the investment approximates the initial investment amount.

8 - 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 its 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. On March 30, 2026, of the 1,000,000 shares of preferred stock available, the Company’s Board of Directors designated 212,000 shares of Series A Preferred Stock. See Note 11 for further information regarding the Preferred Stock issuance.

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.

Series A Convertible Preferred Stock

On March 30, 2026, the Company filed a Certificate of Designation establishing its Series A Convertible Preferred Stock (the “Series A Preferred Stock”) and authorized the issuance of up to 212,000 shares. Each share of Series A Preferred Stock has a par value of $0.0001 and a stated value of $100 per share.

Conversion Rights

Each share of Series A Preferred Stock is convertible into Common Stock, at the option of the holder, in an amount equal to a price per share of $100 (as adjusted for certain stock splits) divided by $0.503.

Dividends

Holders of Series A Preferred Stock are entitled to receive dividends, when and if declared by the Company’s board of directors, on an as-converted basis with holders of common stock. The Series A Preferred Stock does not provide for a stated or fixed dividend rate.

Liquidation Preference

In the event of any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, holders of Series A Preferred Stock are entitled to receive, prior and in preference to any distribution to holders of common stock, an amount equal to $100 per share plus any accrued and unpaid dividends. The Series A Preferred Stock ranks senior to the Company’s common stock with respect to liquidation rights.

Voting Rights

Holders of Series A Preferred Stock vote together with the holders of common stock as a single class on all matters submitted to stockholders, with voting power determined on an as-converted basis.

Equity Line of Credit

On December 2, 2024, the Company entered into a common stock purchase agreement, as amended by Amendment No. 1 dated June 2, 2025 and Amendment No. 2 dated January 14, 2026 (“ELOC Purchase Agreement” or the “ELOC”) and related registration rights agreement (the “Registration Rights Agreement”) with White Lion. Pursuant to the ELOC Purchase Agreement, the Company has the right, but not the obligation, to direct White Lion to purchase up to $25.0 million in aggregate gross purchase price of newly issued shares of Common Stock, subject to certain limitations and conditions as described below (the “ELOC Program”), at a purchase price equal to (i) 96.5% of the volume weighted average stock price for the three consecutive business days after a purchase notice is given, (ii) 98% of the volume weighted average stock price on the day a notice is delivered, or (iii) the lowest traded price for a given purchase date.

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 ELOC Purchase Agreement if it would result in White Lion and its affiliate beneficially owning more than 4.99% of its outstanding voting power or shares of 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.

Through March 31, 2026, the Company has received $836,766 in proceeds from draws on the ELOC 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 consolidated statement of operations and comprehensive income (loss) during the year ended December 31, 2025. 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 White Lion amended the ELOC Purchase Agreement effective of June 2, 2025 to provide for (i) an extension of the time period to December 15, 2025 and (ii) an increase the gross proceeds sold under the ELOC Purchase Agreement to $1,250,000. On January 14, 2026, the Company and White Lion further amended the ELOC Purchase Agreement (a) to provide for an extension of the commitment period for sales of shares of common stock to White Lion from December 2, 2026 to June 30, 2027 and (b) to amend the provision relating to the issuance by the Company of additional shares of common stock to White Lion in consideration for its commitments under the ELOC Purchase Agreement in amounts equal to (i) $25,000 at the time of the ELOC Amendment No. 2, (ii) $50,000, if the Company has not sold to White Lion under the ELOC Purchase Agreement an aggregate of $1,250,000 in gross proceeds of common stock through April 15, 2026, (iii) $25,000, if the Company has not sold to White Lion under the ELOC Purchase Agreement an aggregate of $1,500,000 in gross proceeds of common stock through June 30, 2026. The number of shares of common stock issued in each instance is determined by dividing the dollar value of the shares of common stock to be issued by the average VWAP of the common stock for the ten-day trading period immediately prior to the issuance date.

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.

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 a corresponding portion 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.

9 - 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 March 31, 2026, the Company had 3,714,269 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 March 31, 2026, there have not yet been any offering periods available to purchase Common Stock under the ESPP.

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 three months ended March 31, 2026 and 2025, the weighted average estimated fair value using the Black-Scholes option pricing model was $0.33 and $1.16 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, 2025		6,216,527		$	2.47		5.86
Granted		7,000			0.47		5.00
Exercised		-			-		-
Forfeited / Expired		(74,266	)		0.72		-
Outstanding at March 31, 2026		6,149,261			2.50		5.57
Exercisable at March 31, 2026		4,142,987		$	3.38		3.72

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 three months ended March 31, 2026 were as follows:

	March 31, 2026
Stock Price	$	0.47
Expected term (years)		5.09
Volatility		88.70	%
Risk-Free Rate		3.97	%

Stock compensation expense related to the common stock options outstanding was $0.1 million for both of the three-month periods ended March 31, 2026 and 2025, included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations. Total unrecognized expense related to unvested options outstanding as of March 31, 2026, was $0.5 million, which will be recognized over a weighted average period of 1.9 years.

Restricted Stock Units

RSU activity under the Plan was as follows:

	Number of RSUs		Weighted- Average Grant Date Fair Value
Unvested at December 31, 2025		600,000	$	1.60
Granted		-		-
Vested		-		-
Forfeited		-		-
Unvested at March 31, 2026		600,000	$	1.60

Stock compensation expense related to the RSUs for the three months ended March 31, 2026 and 2025 was $0.2 million and zero, respectively, which is included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss). Total unrecognized expense related to unvested RSUs as of March 31, 2026, was $0.1 million which will be recognized over a weighted average period of 0.1 years.

10 - 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 December 31, 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.

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 unaudited condensed consolidated statement of operations and comprehensive income (loss) at each reporting period until they are exercised. As of December 31, 2025, the SPAC Private Placement Warrants are presented within warrant liabilities on the unaudited condensed consolidated balance sheet.

Private Veea Warrants

Upon the Closing of the Business Combination, the Related Party Common Stock Warrants were exercised in whole, on a net basis, for 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 (the “Assumed Warrants”) 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 Assumed Warrants are exercisable at the option of the holder until September 28, 2028, for an exercise price of $10.19 per share. As of December 31, 2025, there are 159,307 Assumed 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.

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 unaudited condensed consolidated statement of operations and comprehensive loss at each reporting period until they are exercised. As of December 31, 2025, the 2025 Investor Warrants are presented within warrant liability on the unaudited condensed consolidated balance sheet.

11 - 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 December 31, 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, 2026. Rent for the office space is accrued and not paid in cash. The Company recognized rent expense of approximately $0.1 million for each of the three month periods ended March 31, 2026 and 2025, which was classified as general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss). Accrued and unpaid rent expense included in the Company’s unaudited condensed consolidated balance sheets was $1,958,400 as of December 31, 2025. On March 30, 2026 the outstanding accrued rent through such date in the total amount of $2,000,000, was converted into shares of the Company’s newly designated Series A Convertible Preferred Stock, par value $0.0001 per share. See Note 18 for further information regarding the Preferred Stock issuance.

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 March 31, 2026, the Salmasi 2004 Trust held approximately 6% 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, 2026. Rent for the office space is accrued and not paid in cash. The Company recognized rent expense of approximately $0.1 million for each of the three month periods ended March 31, 2026 and 2025, which is classified as general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations and comprehensive income (loss). Accrued and unpaid rent expense included in the Company’s unaudited condensed consolidated balance sheets was $2,232,000 as of December 31, 2025. On March 30, 2026 the outstanding accrued rent through such date in the total amount of $2,323,600, was converted into shares of Series A Convertible Preferred stock.

Related Party Debt

At the Closing of the Business Combination, outstanding promissory notes evidencing loans made by NLabs to 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.

During the year ended December 31, 2025, NLabs made loans to the Company in the aggregate principal amount of $5,511,000. 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 a portion of the outstanding NLabs 2025 Notes, plus accrued interest, totaling an 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.

From October 2025 through March 2026, NLabs made additional loans to the Company in the aggregate principal amount of $18,185,000 (collectively, the “NLabs Notes”) evidenced by certain promissory notes. Interest on the 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. On March 30, 2026, $16,876,400 of the outstanding NLabs Notes, together with accrued interest of $406,056.94, were converted into 168,764 shares of the Company’s newly designated Series A Preferred Stock. In connection with the conversion transaction, the remaining outstanding NLabs Note were amended to adjust the face amount of each such note to give effect to an additional discount of 13.04% and (ii) provide for the issuance of warrants to purchase 33,551,486 shares of Common Stock at an exercise price of $0.503 per share.

Further, on March 30, 2026, the Company entered into separate conversion agreements with each of NLabs and 83^rd Street pursuant to which $2,000,000 of the accrued rent owed to it in respect of the 164 East 83rd Street office lease into 20,000 shares of Series A Preferred and 83^rd Street agreed to convert $2,323,600 of the accrued rent owed to it in respect of the 166 East 83rd Street office lease into 23,236 shares of Series A Under the terms of the conversion agreements, NLabs and 83^rd Street are each entitled to certain registration rights with respect to the shares of Common Stock issuable upon conversion of the Series A Preferred Stock.

12 - COMMITMENTS AND CONTINGENCIES

Purchase Commitments with Contract Manufacturers and Suppliers

As of December 31, 2025, the Company had no unconditional purchase obligations for the purchase of goods or services from suppliers and contract manufacturers. Unconditional purchase obligations are obligations that are enforceable and legally binding on the Company and specify all significant terms, including quantities to be purchased, fixed, minimum or variable price provisions and the approximate timing of the transaction. Unconditional purchase obligations exclude agreements that are cancelable without penalty.

Leases

The Company leases office space in the U.S., including office space from related parties as disclosed in Note 11. 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 both March 31, 2026 and December 31, 2025, the amount of the deferred fees totaled approximately $2.3 million, recorded in deferred payables, current in the unaudited condensed consolidated balance sheet.

13 - FAIR VALUE MEASUREMENTS

Recurring Fair Value Measurements

The following table presents fair value information as of March 31, 2026 and December 31, 2025 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 three months ended March 31, 2026 and 2025, there were no transfers amongst level 1, 2, and 3.

March 31, 2026	Total		Level 1		Level 2		Level 3
SPAC Private Placement Warrant liability	$	497,958		-	$	497,958	$	-
2025 Investor Warrant liability		2,653,600		-		-		2,653,600
Convertible note option liability		-		-		-		-
Earn-out share liability		1,985,000		-		-		1,985,000
Total	$	5,136,558		-	$	497,958	$	4,638,600

December 31, 2025	Total		Level 1		Level 2		Level 3
SPAC Private Placement Warrant liability	$	419,446		-	$	419,446	$
2025 Investor Warrant liability		3,191,215		-		-		3,191,215
Convertible note option liability		-		-		-		-
Earn-out share liability		2,543,600		-		-		2,543,600
Total	$	6,154,261		-	$	419,446	$	5,734,815

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 December 31, 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 March 31, 2026 and December 31, 2025:

	March 31, 2026			December 31, 2025
Stock Price	$	0.53		$	0.64
Expected term (years)		4.4			4.6
Volatility		88.7	%		81.9	%
Risk-Free Rate		3.89	%		3.70	%

The following table presents the changes in fair value of the 2025 Investor Warrant liability for the three months ended March 31, 2026:

Balance, beginning of period, December 31, 2025	$	3,191,215
Change in fair value		(537,615	)
Balance, end of period, March 31, 2026	$	2,653,600

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 key inputs for the Earn-out Share Liability were as follows:

	March 31,			December 31,
	2025			2025
Stock Price	$	0.53		$	0.64
Expected term (years)		8.50			8.80
Volatility		83.73	%		81.67	%
Risk-Free Rate		4.21	%		4.08	%

The following table presents the changes in fair value of the Earn-Out Share Liability for the three months ended March 31, 2026:

Balance, beginning of period, December 31, 2025	$	2,543,600
Change in fair value		(558,600	)
Balance, end of period, March 31, 2026	$	1,985,000

14 - EARNINGS PER SHARE

The computation of basic and dilutive net loss per share attributable to common stockholders for the three months ended March 31, 2026 and 2025, are as follows:

	Three Months Ended March 31,
	2026			2025
Basic:
Numerator:
Net income (loss) attributable to common shareholders	$	(4,673,046	)	$	4,299,052
Denominator:
Weighted-average common shares outstanding		50,467,421			36,369,224
Net income (loss) per share – basic:	$	(0.09	)	$	0.12
Diluted:
Numerator:
Net income (loss) attributable to common and common equivalent shareholders		(4,673,046	)		4,299,052
Denominator:
Weighted-average common stock outstanding		50,467,421			36,369,224
Stock options, warrants, Earn-Out Liability, and convertible notes outstanding to purchase shares of common stock		-			214,441
Total common and common equivalent shares outstanding		50,467,421			36,583,665
Net income (loss) per share – diluted:	$	(0.09	)	$	0.12

The weighted average potential shares of common stock that were excluded from the calculation of net loss per share-diluted for the periods presented because including them would have been anti-dilutive consisted of the following:

	Three Months Ended March 31,
	2026		2025
Stock options outstanding to purchase shares of common stock and RSUs		6,749,261		4,145,706
Public Warrants		6,384,326		6,384,326
SPAC Private Placement Warrants		5,256,218		5,256,218
Private Veea Warrants		159,307		159,307
2025 Investor Warrants		9,189,096		-
Convertible Notes		1,280,503		-
White Lion Warrants		836,084		-
NLabs Warrants		745,589		-

The weighted average potential shares of common stock that were excluded from the calculation of net loss per share-diluted because the performance or market conditions associated with these awards were not met are as follows for the periods presented:

	Three Months Ended March 31,
	2026		2025
Earn-Out Liability		4,500,000		4,500,000

15 - 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 three months ended March 31, 2026 and 2025, totaled approximately $36,178 and $109,714, respectively. A total of approximately $309,991 and $270,781 is reflected in accrued expenses in the accompanying unaudited condensed consolidated balance sheet as of March 31, 2026 and December 31, 2025, respectively, for matching contributions accrued but not yet paid.

16 - SUBSEQUENT EVENTS

The Company evaluated subsequent events from March 31, 2026, the date of these unaudited condensed consolidated financial statements, through the date on which the financial statements were issued (the “Issuance Date”), for events requiring recording or disclosure in the unaudited condensed consolidated financial statements. The Company concluded that no events have occurred that would require recognition or disclosure in the financial statements, except those already described in the notes to the unaudited condensed consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of Veea Inc. (the “Company” or “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 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 of Veea Inc. and its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on 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;

●

market acceptance of its platform and products;

●

the length and unpredictable nature of its sales cycles;

●

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

●

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

●

the ability to maintain the listing of our Common Stock and the warrants on Nasdaq, and the potential liquidity and trading of such securities;

●

our public securities’ potential liquidity and trading;

●

macroeconomic conditions; and

●

each of the other factors detailed under the section entitled “Risk Factors.”

Forward-looking statements are provided for illustrative purposes only and are not guarantees of performance. You should not put undue reliance on these statements which speak only as of the date hereof. You should understand that the factors discussed under the heading “Risk Factors” and elsewhere in this Quarterly Report and as disclosed on the 2025 10-K, could affect the future results of the Company, and could cause those results or other outcomes to differ materially from those expressed or implied in the forward-looking statements in this Quarterly Report.

In addition, the risks described under the heading “Risk Factors” in this Quarterly Report are not exhaustive. Other sections of this Quarterly Report describe additional factors that could adversely affect the businesses, financial conditions, or results of operations of the Company. New risk factors emerge from time to time and it is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on the business of the Company, or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. All forward-looking statements attributable to the Company or persons acting on their behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

In addition, this Quarterly Report contains statements of belief and similar statements that reflect the beliefs and opinions of the Company on the relevant subject. These statements are based upon information available to the Company as of the date of this Quarterly Report, and while the Company believes such information forms a reasonable basis for such statements, such information may be limited or incomplete, and statements should not be read to indicate that the Company has conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

Company Overview

We are dedicated to simplifying the journey towards creating a world in which virtually everyone and everything is intelligently connected, while bringing applications and AI to the edge of the network. Most service providers, equipment suppliers, system integrators and even hyperscalers have adopted or advocated for similar solutions to various degrees either independently or in collaboration with the Company. However, to our knowledge, we are 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 (AP) with a mesh router, a firewall, an IoT gateway, NVMe data storage and 4G/5G modules, referred to as the “VeeaHub” product. With an extensive patent portfolio of 123 granted patents and 32 pending patent applications that cover 26 patent families, our end-to-end Hybrid Edge-Cloud Computing platform represents a new product category that has the potential for wide scale customer adoption in large segments of consumer and enterprise markets.

VeeaONE platform’s products, applications, and services with a distributed computing architecture, offered as a Platform-as-a-Service capability, empower companies to capitalize on the transformative potential of Edge AI, where most of the data from smartphones, tablets, laptops, cameras, sensors, and other devices is generated, with data privacy and sovereignty, reliability, low latency for real-time decisions, bandwidth efficiency, scalability, and reduced costs compared to alternatives.

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 a complement, and in some cases an alternative, to cloud computing by enabling the formation of highly secure, but easily accessible, private clouds and networks across one or multiple user(s) or enterprise location(s) across the globe. Benefits of the VeeaONE platform include optimal latency, lower data transport costs, data privacy, security and ownership, Edge AI, as well as “always-on” availability for mission critical applications, and contextual awareness for people, devices and things connected to the Internet.

Recent Developments

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. Nasdaq’s determination to grant the additional 180-day compliance period was in part based on, among other things, the Company meeting the continued listing requirements of The Nasdaq Capital Market with the exception of the Minimum Bid Price Requirement, and the Company having provided written notice of its intention to cure the deficiency during the additional compliance period, including by effecting a reverse stock split if necessary. Following Nasdaq’s approval of the extended compliance period, the Company intends to continue to actively monitor the Minimum Bid Price Requirement and, as appropriate, will consider available options to resolve any deficiencies and regain compliance, including by effecting a reverse stock split if necessary.

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 Agreement”). 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. Ms. Smith is entitled certain equity awards and cash bonus.

Components of Results of Operations

Revenue, net

The Company recognizes revenue based on the satisfaction of distinct obligations to transfer goods and services to customers. The Company generates revenue from hardware sales and the sale of licenses and subscriptions. The Company applies a five-step approach as defined in ASC 606, Revenue from Contracts with Customers, in determining the amount and timing of revenue to be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when a corresponding performance obligation is satisfied. Most contracts with customers are to provide distinct products or services within a single contract. However, if a contract is separated into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based on the estimated relative standalone selling price.

For licenses of technology, recognition of revenue is dependent upon whether the Company has delivered rights to the technology, and whether there are future performance obligations under the contract. Revenue from non-refundable upfront payments is recognized when the license is transferred to the customer and the Company has no other performance obligations. Revenue for licenses delivered under a subscription model having terms between one and twelve-months are recognized over-time. Subscription revenue is generated through sales of monthly subscriptions. Customers pay in advance for the licenses and subscriptions. Revenue is initially deferred and is recognized using the straight-line method over the term of the applicable subscription period.

Cost of Goods Sold

Cost of goods sold consists primarily of the cost of finished goods, components purchased for manufacturing and freight. Cost of goods sold also includes third-party vendor costs related to cloud hosting fees.

Operating Expenses

We classify our operating expenses into the following categories:

●

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

●

Sales and marketing expenses. Sales and marketing expenses consist of compensation and other employee-related costs for personnel engaged in selling, marketing and sales support functions. Selling expenses also include marketing and the costs associated with customer evaluations. The Company does not currently incur advertising costs.

●

General and administrative expenses. General and administrative expenses consist of compensation expense (including stock-based compensation expense) for employees and executive management, and expenses associated with finance, tax, and human resources. General and administrative expenses also includes transaction costs, expenses associated with facilities, information technology, external professional services, legal costs and settlement of legal claims and other administrative expenses.

●

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

Results of Operations

The following tables set forth the results of our operations for the periods presented, as well as the changes between periods. The period-to-period comparison of financial results is not necessarily indicative of future results.

For the three months ended March 31, 2026 compared to three months ended March 31, 2025

The following table sets 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,
	2026			2025			Variance $			Variance %
Sales, net	$	180,417		$	14,262		$	166,155			1165	%
Cost of goods sold		22,667			12,330			10,338			84	%
Gross profit		157,750			1,932

Operating Expenses:
Product development		148,600			215,575			(66,975	)		-31	%
Sales and marketing		42,115			349,251			(307,137	)		-88	%
General and administrative, net		4,792,284			5,109,473			(317,189	)		-6	%
Transaction costs		-			35,000			(35,000	)		-100	%
Depreciation and amortization		204,992			60,116			144,876			241	%
Total operating expenses		5,187,991			5,769,415
Loss from operations		(5,030,241	)		(5,767,483	)

Other income (expense):
Other income, net		240,345			772			239,573			31033	%
Change in fair value of convertible note option liability		-			59,000			(59,000	)		-100	%
Change in fair value of warrant liabilities		459,103			420,497			38,606			9	%
Change in fair value of Earn-out Share Liability		558,600			10,530,000			(9,971,400	)		-95	%
Other expense		(90,177	)		2,750			(92,927	)		-3379	%
Interest expense		(810,676	)		(946,484	)		135,808			-14	%
Total other income (expense)		357,195			10,066,534

Net income (loss)	$	(4,673,046	)	$	4,299,052		$	(8,972,098	)		-209	%

Revenue, net

The Company generated revenue of approximately $0.2 million and approximately $14,000 for the three months ended March 31, 2026 and 2025, respectively. Revenue has been principally earned from paid pilots for our VeeaHub^® devices.

Our focus over the past several years has been on field testing and refining our product to meet customer needs as well as market developments. As a result of these efforts, we expect revenue to grow over the next several quarters through the sales of our hardware, licenses and subscriptions. We are especially focused in four principal market opportunities: 1) Digital Equity and Inclusion, 2) Energy and Sustainability solutions for Smart Buildings and Climate Smart Agriculture, 3) Convergence of Fixed, Wireless, and 5G Networks, and 4) Smart Retail and Smart Warehouses.

Cost of Goods Sold

Cost of goods sold 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 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 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.

General and Administrative Expense

General and administrative 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 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, Inc. in May 2025.

Other income, net

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

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 stock price.

Other expense

Other expenses relate to immaterial non-operating expenses incurred during the period. These amounts were immaterial for the three months ended March 31, 2026 and 2025.

Interest expense

Interest expense decreased 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 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 31, 2026. 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. De C.V. (“Telcel”), a Mexican wireless telecommunications company owned by América Móvil, effective August 7, 2025, and using proceeds from its existing financing arrangements under the ELOC Purchase Agreement, its new secured term loan facility pursuant to a Loan Agreement that Private Veea entered into with Pasadena Private Lending, Inc. on 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. The primary use of capital continues to be to invest for the long-term growth of the business. We regularly evaluate our cash and capital structure, including the size, pace, and form of capital return to stockholders.

The following table presents cash flows for the three months ended March 31, 2026 and 2025, respectively:

	For the Three Months Ended March 31,
	2026			2025
Net cash used in operating activities	$	(5,191,022	)	$	(3,698,741	)
Net cash used in investing activities		(269,520	)		(131,973	)
Net cash provided by financing activities		6,924,250			2,389,437

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use Adjusted EBITDA, as described below, to understand and evaluate our core operating performance. These non-GAAP financial measures, which may differ from similarly titled measures used by other companies, is presented to enhance investors’ overall understanding of our financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Adjusted EBITDA

The primary financial measure we use is Adjusted EBITDA. EBITDA is defined as net (loss) income, before interest, taxes, depreciation, and amortization. We define Adjusted EBITDA as net (loss) income excluding income tax provision, interest expense, net of interest income from related party loans, depreciation and amortization, stock-based compensation expense and non-core expenses/losses (gains), including transaction-related costs, litigation-related costs, management fees, 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 March 31,
	2026			2025
ADJUSTED EBITDA
Net income (loss)	$	(4,673,046	)	$	4,299,052
Adjustments:
Interest expense		810,676			946,484
Depreciation and amortization		204,992			60,116
EBITDA		(3,657,378	)		5,305,651
Other income, net		(240,345	)		-
Other expense		90,177			-
Change in fair value of conversion note liability		-			(59,000	)
Change in fair value of warrant liabilities		(459,103	)		(420,497	)
Change in fair value of earn out share liability		(558,600	)		(10,530,000	)
Transaction costs		-			35,000
Share-based compensation		294,935			50,000
ADJUSTED EBITDA		(4,530,314	)	$	(5,618,846	)

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not Applicable. As a smaller reporting company, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Acting Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended March 31, 2026, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in actions, claims, suits and other legal proceedings arising in the ordinary course of our business. We are not currently a party to any actions, claims, suits or other legal proceedings, the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition and results of operations.

Item 1A. Risk Factors

We are a smaller reporting company and accordingly we are not required to provide information required by this Item. Risk factors that may affect our business and financial results are discussed within Item 1A “Risk Factors” of our annual report on the 2025 10-K. There have been no material changes to the disclosures relating to this item from those set forth in our 2025 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(c) Insider Trading Arrangements

Trading Plans

None.

Item 6. Exhibits

Exhibit No.		Description
31.1*		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**		Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*		Inline XBRL Instance Document.
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

*	Filed herewith.
**	Furnished, not filed

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

VEEA INC.

By:	/s/ Allen Salmasi
	Allen Salmasi
	Chief Executive Officer and Chairman
	(Principal Executive Officer)

Date: May 14, 2026

By:	/s/ Randal V. Stephenson
	Randal V. Stephenson
	Chief Financial Officer
	(Principal Financial Officer and
	Principal Accounting Officer)

Date: May 14, 2026

SEC Form 10-Q filed by Veea Inc.