10-Q

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 June 30, 2023

☐ 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: 001-38320

KALEYRA, INC.

(Exact name of registrant as specified in its charter)


Delaware		82-3027430
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)


85 Broad Street, New York, NY		10004
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: +1 917 508 9185

(Former name or former address, if changed since last report): N/A

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


Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	KLR	New York Stock Exchange
Warrants, at an exercise price of $40.25 per share of Common Stock	KLR WS	NYSE American 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 checkmark 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, or a smaller reporting company, or an emerging growth company. See 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 August 4, 2023, there were 13,325,920 shares of the Company’s common stock issued and outstanding.

KALEYRA, INC.

Quarterly Report on Form 10-Q

Table of Contents


PART I – FINANCIAL INFORMATION		Page

Item 1.	Condensed Consolidated Financial Statements (unaudited):	1

	Condensed Consolidated Balance Sheets	1

	Condensed Consolidated Statements of Operations	2

	Condensed Consolidated Statements of Comprehensive Loss	3

	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	4

	Condensed Consolidated Statements of Cash Flows	6

	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44

Item 4.	Controls and Procedures	45

PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	46

Item 1A.	Risk Factors	47

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	48

Item 3.	Defaults Upon Senior Securities	48

Item 4.	Mine Safety Disclosures	48

Item 5.	Other Information	48

Item 6.	Exhibits	49

Signatures		50

Item 1 – Financial Statements

KALEYRA, INC.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands, except share and per share data)


	June 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	63,866		$	77,500
Restricted cash		488			480
Short-term investments		630			587
Trade receivables, net		73,653			86,783
Deferred cost		354			319
Prepaid expenses		3,451			3,989
Other current assets		4,748			3,387
Total current assets		147,190			173,045
Property and equipment, net		23,535			23,826
Operating right-of-use assets		2,599			2,931
Intangible assets, net		52,678			57,400
Goodwill		111,905			111,526
Other long-term assets		2,219			1,445
Total Assets	$	340,126		$	370,173
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	73,038		$	82,258
Lines of credit		3,468			3,955
Current portion of notes payable		—			405
Current portion of bank and other borrowings		9,389			11,419
Deferred revenue		2,443			3,528
Payroll and payroll related accrued liabilities		6,855			5,993
Other current liabilities		10,644			9,431
Total current liabilities		105,837			116,989
Long-term portion of bank and other borrowings		9,494			13,459
Long-term portion of notes payable		192,844			191,777
Long-term portion of employee benefit obligation		2,380			2,373
Other long-term liabilities		3,193			3,362
Total Liabilities		313,748			327,960
Commitments and contingencies (Note 14)
Stockholders’ equity:
Preferred stock, par value of $0.0001 per share; 1,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock, par value of $0.0001 per share; 100,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 14,125,366 shares issued and 13,325,920 shares outstanding as of June 30, 2023 and 13,858,440 shares issued and 13,058,994 shares outstanding as of December 31, 2022		1			1
Additional paid-in capital		282,459			278,473
Treasury stock, at cost; 799,446 shares as of June 30, 2023 and December 31, 2022		(30,431	)		(30,431	)
Accumulated other comprehensive loss		(4,710	)		(5,212	)
Accumulated deficit		(220,941	)		(200,618	)
Total stockholders’ equity		26,378			42,213
Total liabilities and stockholders’ equity	$	340,126		$	370,173

__________________

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

KALEYRA, INC.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except share and per share data)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Revenue	$	86,752		$	81,109		$	170,370		$	161,590
Cost of revenue		64,981			62,459			127,499			125,202
Gross profit		21,771			18,650			42,871			36,388
Operating expenses:
Research and development		5,314			6,265			10,716			11,155
Sales and marketing		5,459			7,226			11,473			14,326
General and administrative		15,192			16,594			29,228			31,974
Intangible asset impairment		321			—			321			—
Total operating expenses		26,286			30,085			51,738			57,455
Loss from operations		(4,515	)		(11,435	)		(8,867	)		(21,067	)
Other income (expense), net		(200	)		37			(185	)		83
Financial expense, net		(3,821	)		(3,417	)		(7,455	)		(6,569	)
Foreign currency loss		(156	)		(1,117	)		(1,125	)		(860	)
Loss before income tax expense		(8,692	)		(15,932	)		(17,632	)		(28,413	)
Income tax expense (benefit)		397			(95	)		1,421			596
Net loss	$	(9,089	)	$	(15,837	)	$	(19,053	)	$	(29,009	)
Net loss per common share, basic and diluted	$	(0.69	)	$	(1.28	)	$	(1.45	)	$	(2.37	)
Weighted-average shares used in computing net loss per common share, basic and diluted		13,256,071			12,403,102			13,150,321			12,236,911

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

KALEYRA, INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited, in thousands)


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss	$	(9,089	)	$	(15,837	)	$	(19,053	)	$	(29,009	)
Other comprehensive income (loss):
Foreign currency translation adjustments		(134	)		(1,900	)		486			(2,534	)
Net change in unrealized gain on marketable securities, net of tax		8			4			16			9
Total other comprehensive income (loss)		(126	)		(1,896	)		502			(2,525	)
Total comprehensive loss	$	(9,215	)	$	(17,733	)	$	(18,551	)	$	(31,534	)

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

KALEYRA, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited, in thousands, except share data)


	Three Months Ended June 30, 2023
	Common Stock				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Shares		Amount			Loss			Deficit			Equity
Balance as of March 31, 2023 (1)		13,998,241	$	1	$	280,486		799,446	$	(30,431	)	$	(4,584	)	$	(211,852	)	$	33,620
Stock-based compensation (RSUs)		127,125		—		1,973		—		—			—			—			1,973
Net loss		—		—		—		—		—			—			(9,089	)		(9,089	)
Other comprehensive income		—		—		—		—		—			(126	)		—			(126	)
Balance as of June 30, 2023		14,125,366	$	1	$	282,459		799,446	$	(30,431	)	$	(4,710	)	$	(220,941	)	$	26,378


	Three Months Ended June 30, 2022
	Common Stock				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Shares		Amount			Loss			Deficit			Equity
Balance as of March 31, 2022 (1)		13,002,097	$	1	$	258,421		799,446	$	(30,431	)	$	(2,639	)	$	(114,972	)	$	110,380
Stock-based compensation (RSUs)		566,437		—		12,255		—		—			—			—			12,255
Net loss		—		—		—		—		—			—			(15,837	)		(15,837	)
Other comprehensive loss		—		—		—		—		—			(1,896	)		—			(1,896	)
Balance as of June 30, 2022 (1)		13,568,534	$	1	$	270,676		799,446	$	(30,431	)	$	(4,535	)	$	(130,809	)	$	104,902


	Six Months Ended June 30, 2023
	Common Stock				Additional Paid-in		Treasury Stock					Accumulated Other Comprehensive			Accumulated			Total Stockholders'
	Shares		Amount		Capital		Shares		Amount			Loss			Deficit			Equity
Balance as of December 31, 2022 (1)		13,858,440	$	1	$	278,473		799,446	$	(30,431	)	$	(5,212	)	$	(200,618	)	$	42,213
Adoption of ASC 326								—		—			—			(1,270	)		(1,270	)
Stock-based compensation (RSUs)		266,926		—		3,986		—		—			—			—			3,986
Net loss		—		—		—		—		—			—			(19,053	)		(19,053	)
Other comprehensive loss		—		—		—		—		—			502			—			502
Balance as of June 30, 2023		14,125,366	$	1	$	282,459		799,446	$	(30,431	)	$	(4,710	)	$	(220,941