8-K: Veea Secures $2.5M Convertible Note Financing, Extends ELOC

Veea Inc. announced a new financing agreement with White Lion Capital, LLC, including up to $2.5 million in convertible notes and warrants, alongside an extension of its existing equity line of credit.

Summary

• Veea Inc. entered into a Note Purchase Agreement with White Lion Capital, LLC for up to $2,500,000 in unsecured convertible promissory notes and common stock warrants.
• The first closing on January 14, 2026, involved the issuance of a Convertible Note with a face amount of $555,556 and Warrants to purchase 990,099 shares of Common Stock.
• Veea received $475,000 in cash proceeds from the first closing, net of an original issuance discount and transaction expenses.
• The Convertible Notes mature in 12 months, accrue interest at 5% per annum, and are convertible at the lesser of $0.75 per share or 90% of the lowest 10-day VWAP.
• Warrants expire five years from issuance and have an initial exercise price of $0.505 per share.
• The Company also amended its existing equity line of credit (ELOC Agreement) with White Lion Capital, extending the commitment period to June 30, 2027.
• Additional shares will be issued to White Lion Capital as commitment fees under the ELOC Amendment, totaling up to $100,000 if certain sales thresholds are not met.
• Veea is required to file a registration statement within 60 days of the first closing to cover the resale of conversion and warrant shares.

Sentiment

Score: 3

Explanation: While the company secured needed capital, the highly dilutive terms of the convertible notes and warrants, coupled with the significant discount on the initial note and additional share issuances for commitment fees, are substantially unfavorable for existing shareholders and indicate a challenging financing environment for the company.

Positives

• Secured up to $2,500,000 in new financing through convertible notes and warrants, providing capital for general corporate purposes.
• Received immediate cash proceeds of $475,000 from the first closing of the Note Purchase Agreement.
• Extended the commitment period for the existing equity line of credit (ELOC Agreement) with White Lion Capital, LLC, from December 2, 2026, to June 30, 2027, enhancing future liquidity options.
• The financing structure allows for multiple closings, providing flexibility in capital deployment.

Negatives

• Significant potential for dilution of existing shareholders due to the conversion of up to $2,500,000 in convertible notes and the exercise of accompanying warrants.
• The first Convertible Note had an original issuance discount, resulting in $475,000 cash proceeds for a $555,556 face value note.
• The conversion price for the notes is set at the lesser of $0.75 per share or 90% of the lowest 10-day VWAP, which is significantly below the $3.00 threshold required for the company to force warrant exercise, indicating unfavorable terms for existing shareholders.
• Additional shares will be issued to White Lion Capital as commitment fees under the ELOC Amendment, further contributing to dilution.
• The Company is obligated to pay liquidated damages of $500 per day if it fails to timely deliver Warrant Shares upon exercise.
• Stockholder approval is required for share issuances exceeding the Exchange Cap, necessitating a meeting within 180 days of the First Closing Date.

Risks

• Dilution Risk: Significant potential for dilution of existing shareholders upon conversion of the Convertible Notes and exercise of the Warrants.
• Market Price Volatility: The conversion price is tied to the lowest 10-day VWAP, which could lead to more shares being issued if the stock price declines, exacerbating dilution.
• Regulatory Compliance: Failure to file the required registration statement within 60 days or maintain its effectiveness could result in damages payable to the investor.
• Liquidity Risk: The company's need for this type of financing suggests potential ongoing liquidity challenges.
• Delisting Risk: Failure to maintain NASDAQ listing standards (e.g., minimum bid price) could trigger events of default under the notes.
• Operational Risk: Failure to maintain material intellectual property rights, personal, real property, or other assets necessary for business operations could constitute an event of default.
• Financial Reporting Risk: Restatement of financial statements that materially adversely affects the Holder's rights could trigger an event of default.
• Transfer Agent Issues: Loss of DWAC/FAST electronic transfer capability or DTC eligibility, or failure to maintain the Reserved Amount of shares, could lead to events of default.
• Cross-Default: Default under any other agreement with White Lion Capital (including the ELOC Agreement) could trigger a default under these notes.

Future Outlook

Veea Inc. plans to use the proceeds from this financing for general corporate purposes. The company is committed to filing a registration statement within 60 days to enable the resale of the newly issued shares and warrants, and will seek stockholder approval for share issuances exceeding regulatory caps within 180 days. The extension of the ELOC Agreement provides a longer-term avenue for potential future capital raises.

Management Comments

• Veea Inc. has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated. By: Janice K. Smith, Title: Executive Vice President & Chief Operating Officer.
• 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 hereunto duly authorized. Veea Inc. Date: January 20, 2026 By: /s/ Allen Salmasi Name: Allen Salmasi Title: Chief Executive Officer.

Industry Context

This financing arrangement, characterized by convertible notes with potentially low conversion prices and warrants, is typical for companies seeking capital in challenging market conditions or those with high growth potential but limited access to traditional, less dilutive funding sources. The extension of the equity line of credit suggests a continued reliance on flexible, albeit dilutive, financing mechanisms to support ongoing operations and strategic initiatives. Such terms often reflect the company's current financial position and perceived risk by investors.

Corporate Governance

Related Party Transactions

• The entire Note Purchase Agreement and the associated Warrants are with White Lion Capital, LLC.
• The amendment to the existing Common Stock Purchase Agreement (ELOC Agreement) is also with White Lion Capital, LLC.

Stakeholder Impact

• Shareholders: Face significant potential dilution from the conversion of notes and exercise of warrants, as well as from additional share issuances under the ELOC Amendment. The low conversion price and discount on the note are unfavorable.
• Company: Gains access to up to $2.5 million in capital for general corporate purposes and extends its equity line of credit, providing necessary liquidity and operational runway.
• White Lion Capital, LLC: Benefits from favorable conversion terms, warrants, and commitment fees, positioning them to acquire a potentially significant stake at a discount.
• Creditors: The Convertible Notes are unsecured, but the capital raise provides some financial stability to the company, which could indirectly benefit other creditors.

Next Steps

• Veea Inc. must file a Registration Statement with the SEC within 60 days following January 14, 2026, to cover the resale of Conversion Shares and Warrant Shares.
• The company is obligated to use commercially reasonable efforts to ensure the Registration Statement becomes effective as soon as practicable.
• Veea Inc. must hold an annual or special meeting of stockholders within 180 days from January 14, 2026, to obtain approval for the issuance of shares exceeding the Exchange Cap.
• Further closings for the remaining portions of the $2,500,000 convertible notes and warrants are anticipated, subject to certain conditions.
• Veea Inc. will continue to operate under the extended ELOC Agreement, potentially drawing additional capital through equity sales to White Lion Capital until June 30, 2027.

Key Dates

Recommendation

The financing terms are highly dilutive for existing shareholders, with convertible notes convertible at a significant discount to current market prices and additional shares issued as commitment fees. This structure suggests the company is raising capital under duress, which typically leads to substantial downward pressure on the stock price and erosion of shareholder value. The long-term outlook for existing equity holders appears challenging given these unfavorable terms.

Keywords

Veea Inc., White Lion Capital, Convertible Notes, Warrants, Equity Line of Credit, ELOC Agreement, SEC Filing, 8-K, Financing, Dilution, Capital Raise, Corporate Governance, Registration Rights, Unsecured Debt, Stock Warrants, VWAP, NASDAQ