Annual report pursuant to Section 13 and 15(d)

Transactions with Related Parties

v3.20.4
Transactions with Related Parties
12 Months Ended
Dec. 31, 2020
Related Party Transactions [Abstract]  
Transactions with Related Parties

25. TRANSACTIONS WITH RELATED PARTIES

During the year ended December 31, 2020 and 2019, related party transactions, other than compensation and similar arrangements in the ordinary course of business, were as follows:

 

i.

Unsecured convertible promissory notes, received by Esse Effe and Maya at the closing of the Business Combination, pursuant to the terms of the Stock Purchase Agreement. Maya is affiliated with Dario Calogero and the shares are beneficially owned by a shareholder, Mr. Calogero who is the Chief Executive Officer and a director of Kaleyra. Esse Effe is affiliated with Dr. Emilio Hirsch, and its shares are beneficially owned by Dr. Hirsch, a shareholder and a director of the Company. The outstanding amount due by the Company was $7.5 million plus $241,000 of accrued interest as of December 31, 2020 ($7.5 million plus $22,000 of accrued interest as of December 31, 2019). In addition, the previously outstanding unsecured non-convertible promissory note held by Maya was repaid on June 30, 2020, with a total of $1.5 million in principal and $26,000 in accrued interest being paid to Maya. The principal amount of $6 million plus $105,000 in accrued interest of the unsecured non-convertible promissory note held by Esse Effe was repaid in full on July 2, 2020 ($7.5 million plus $22,000 of accrued interest as of December 31, 2019). See Note 11 – Notes Payable for additional information;

 

ii.

Unsecured promissory notes issued by the Company to the Sponsor and GigFounders, LLC. This was repaid on June 30, 2020 in the amount of $1.9 million plus $33,000 of accrued interest ($1.9 million including $5,000 of accrued interest as of December 31, 2019). See Note 11 – Notes Payable for additional information;

 

iii.

Legal services rendered by a partner of Studio Legale Chiomenti, who is a family member of a key manager of the Company. Costs incurred by the Company for the above services were $363,000 and $694,000 in the years ended December 31, 2020 and 2019, respectively;

 

iv.

Prior to the Business Combination, Kaleyra S.p.A. granted a loan to one of the Company’s directors and executive officers. In November 2019, prior to the Business Combination, the loan was reimbursed in full for a total amount of $36,000. The Company earned interest income on such loan of $600 for the year ended December 31, 2019;

 

v.

Alessandra Levy, the spouse of Kaleyra’s Chief Executive Officer, Dario Calogero, is an employee within the marketing team of Kaleyra S.p.A.. Ms. Levy received salary and benefits in the amount of $237,000 and $239,000 for the years ended December 31, 2020, and 2019, respectively;

 

vi.

Pietro Calogero, the son of Kaleyra’s Chief Executive Officer, Dario Calogero, is an employee within the research and development team of Kaleyra S.p.A.. Mr. Pietro Calogero received salary and benefits in the amount of $35,000 and zero for the years ended December 31, 2020, and 2019, respectively; and

 

vii.

As of December 31, 2020 and 2019, the outstanding obligation for preference shares due to executive managers was zero and $1.8 million, respectively. As mentioned in Note 14, in the three months ended March 31, 2020, as a result of a modification of the 2018 Solutions Infini Purchase Agreement, a significant portion of the liability for preference shares was replaced with bonus compensation of $3.5 million. During fiscal year 2020, the previously outstanding bonus compensation payable to executive managers was paid in two different installments of $1.4 million on August 31, 2020, and of $883,000 on November 30, 2020. As of December 31, 2020, the outstanding performance bonus obligation payable to the executive managers amounted to $1.2 million. See Note 14 – Preference Shares Liabilities – for further details.

The following table presents the expenses for related parties reported in the consolidated statements of operations (in thousands):

 

 

 

Year Ended December 31,

 

 

 

2020

 

 

2019

 

Research and development

 

$

35

 

 

$

180

 

Sales and marketing

 

 

237

 

 

 

239

 

General and administrative

 

 

363

 

 

 

874

 

Financial expense, net

 

 

355

 

 

 

48