VEEA INC. Goodwill & Intangibles Disclosure
6 - GOODWILL AND INTANGIBLE ASSETS
Goodwill
The following is a summary of activity in goodwill:
| December
31, 2024 | ||||
| Balance at December 31, 2022 | $ | 4,576,572 | ||
| Foreign exchange transaction | 220,506 | |||
| Balance at December 31, 2023 | 4,797,078 | |||
| Foreign exchange transactions | (17,453 | ) | ||
| Balance at December 31, 2024 | $ | 4,779,625 | ||
Intangibles
Intangible assets consist of the following:
| As of December 31, 2024 | |||||||||||||||||||||||||||||||
| Amortization Period | Costs
as of January 1, 2024 | Additions | Disposals | Ending Costs | Accumulated Amortization | Accumulated Impairment | Net
Book Value | ||||||||||||||||||||||||
| Patents | 5-15 years | $ | 7,332,227 | $ | 219,241 | $ | $ | 7,506,485 | $ | (6,765,407 | ) | $ | $ | 786,061 | |||||||||||||||||
| IPR&D | 5 years | 5,015,694 | 5,015,694 | (3,554,784 | ) | (1,460,910 | ) | ||||||||||||||||||||||||
| Other intellectual assets | 5 years | 969,278 | 969,278 | (969,278 | ) | ||||||||||||||||||||||||||
| Intangible assets, net | $ | 13,317,199 | $ | 219,241 | $ | $ | 13,536,440 | $ | (11,289,469 | ) | $ | (1,460,910 | ) | $ | 786,061 | ||||||||||||||||
| As of December 31, 2023 | ||||||||||||||||||||||||||||||
| Amortization | Costs as of January 1, | Ending | Accumulated | Accumulated | Net Book | |||||||||||||||||||||||||
| Period | 2023 | Additions | Disposals | Costs | Amortization | Impairment | Value | |||||||||||||||||||||||
| Patents | 5-15 years | $ | 7,220,776 | $ | 111,451 | $ | $ | 7,332,227 | $ | (6,703,750 | ) | $ | $ | 628,477 | ||||||||||||||||
| IPR&D | 5 years | 5,015,694 | 5,015,694 | (3,554,784 | ) | (1,460,910 | ) | |||||||||||||||||||||||
| Other intellectual assets | 5 years | 969,278 | 969,278 | (969,278 | ) | |||||||||||||||||||||||||
| Intangible assets, net | $ | 13,205,748 | $ | 111,451 | $ | $ | 13,317,199 | $ | (11,227,812 | ) | $ | (1,460,910 | ) | $ | 628,477 | |||||||||||||||
Intangible assets primarily consist of 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. Management reviews intangible assets for impairment when events and circumstances warrant. December 31, 2024 and 2023, no events have occurred that required additional impairment of intangible assets.
Intangible asset amortization expense, for the years ended December 31, 2024 and 2023 totaled approximately $62,000 and $534,000, respectively.
Future estimated amortization expense for the Company’s intangible assets is approximately as follows:
| Future estimated amortization as of December 31, 2024 | ||||
| 2025 | 55,444 | |||
| 2026 | 55,444 | |||
| 2027 | 55,444 | |||
| 2028 | 55,444 | |||
| 2029 | 55,444 | |||
| Thereafter | 508,841 | |||
| $ | 786,061 | |||
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.