Quarterly report pursuant to Section 13 or 15(d)

Transactions with Related Parties

v3.21.1
Transactions with Related Parties
3 Months Ended
Mar. 31, 2021
Related Party Transactions [Abstract]  
Transactions with Related Parties

19. TRANSACTIONS WITH RELATED PARTIES

During the three months ended March 31, 2021 and 2020, 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 $3.75 million plus $65,000 of accrued interest as of March 31, 2021 ($7.5 million plus $241,000 of accrued interest as of December 31, 2020).  See Note 9 – Notes Payable – for additional information;

 

ii.

Legal services rendered by a partner of Studio Legale Chiomenti, that is a family member of a key manager of the Company. Costs incurred by the Company for the above services were $80,000 and $56,000 in the three months ended March 31, 2021 and 2020;

 

iii.

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 $60,000 and $57,000 for the three months ended March 31, 2021, and 2020, respectively;

 

iv.

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 $12,000 and $5,000 for the three months ended March 31, 2021, and 2020, respectively; and

 

v.

As mentioned in Note 11, in the three months ended March 31, 2020, as a result of a modification of the Solutions Infini 2018 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. During the three months ended March 31, 2021 the outstanding bonus compensation of $826,000 was paid on February 15, 2021. As of March 31, 2021, the outstanding performance bonus obligation payable to the executive managers amounted to $340,000. See Note 11 – Preference Shares Liabilities and Note 21 Subsequent Events – for further details.

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

 

 

 

Three Months Ended March 31,

 

 

 

2021

 

 

2020

 

Research and development

 

$

12

 

 

$

5

 

Sales and marketing

 

 

60

 

 

 

57

 

General and administrative

 

 

80

 

 

 

56

 

Financial expense, net

 

 

44

 

 

 

122