Quarterly report pursuant to Section 13 or 15(d)

Transactions with Related Parties

v3.20.2
Transactions with Related Parties
6 Months Ended
Jun. 30, 2020
Related Party Transactions [Abstract]  
Transactions with Related Parties

17. TRANSACTIONS WITH RELATED PARTIES

During the three and six months ended June 30, 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, who is the Chief Executive Officer and a director of Kaleyra. Esse Effe is affiliated with Dr. Emilio Hirsch, a director of the Company. The outstanding amount due by the Company was $7.5 million plus $131,000 of accrued interest as of June 30, 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 remained outstanding as of June 30, 2020. See Note 9 – Notes Payable – for additional information;

 

ii.

Unsecured promissory notes issued by the Company to the Sponsor and GigFounders, LLC. On June 30, 2020, the Company repaid previously outstanding unsecured promissory notes held by the Sponsor and GigFounders, LLC, in the amount of $1.9 million and accrued interest on these promissory notes in the amount of $33,000. As of December 31, 2019, the outstanding amount of unsecured promissory notes was $1.9 million with $5,000 of accrued interest. See Note 9 – Notes Payable – for additional information;

 

iii.

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 $86,000 and $142,000 in the three and six months ended June 30, 2020 (zero in the three and six months ended June 30, 2019); and

 

iv.

As of June 30, 2020 and December 31, 2019, the outstanding obligation for preference shares due to executive managers was $1,000 and $1.8 million, respectively. As mentioned above, 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 reversed to the statement of operations. See Note 10 – Preference Shares Liabilities – 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 June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Research and development

 

$

 

 

$

50

 

 

$

 

 

$

144

 

General and administrative

 

 

86

 

 

 

50

 

 

 

142

 

 

 

144

 

Financial expense, net

 

 

122

 

 

 

 

 

 

244