Annual report pursuant to Section 13 and 15(d)

Transactions with Related Parties

v3.20.1
Transactions with Related Parties
12 Months Ended
Dec. 31, 2019
Related Party Transactions [Abstract]  
Transactions with Related Parties

25. TRANSACTIONS WITH RELATED PARTIES

During the year ended December 31, 2019 and 2018, related party transactions, other than compensation and similar arrangements in the ordinary course of business, were as follows:

 

i.

Unsecured convertible promissory notes and unsecured non-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 Mr. Calogero who is the Chief Executive Officer and a director of Kaleyra. The outstanding amount due by the Company was $15.0 million plus $43,000 of accrued interest as of December 31, 2019 (zero as of December 31, 2018). See Note 11 – Notes Payable for additional information;

 

ii.

Unsecured promissory notes issued by the Company to the Sponsor and GigFounders, LLC. The outstanding amount due by the Company was $1.9 million including $5,000 of accrued interest as of December 31, 2019 (zero as of December 31, 2018). See Note 11 – Notes Payable for additional information;

 

iii.

Certain consulting services on business strategy, rendered by Esse Effe, a company incorporated in Italy in which a director of the Company holds an interest. Costs incurred by the Company for the above consulting services were zero and $118,000 in the years ended December 31, 2019 and 2018, respectively. The outstanding amount due by the Company to Esse Effe was zero and $35,000 as of December 31, 2019 and 2018; respectively;

 

iv.

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 $694,000 and $204,000 in the years ended December 31, 2019 and 2018, respectively; and

 

v.

Loans granted to Company’s directors and executive managers (at the reporting date, also Company’s stockholders) whose outstanding amount was $22,000 and $67,000 as of December 31, 2019 and 2018, respectively. In November 2019, one of the two existing loans granted to the Company’s directors and executive managers was reimbursed in full for a total amount of $36,000. The Company earned interest income on such loans of $600 and $700 for the years ended December 31, 2019 and 2018, respectively.

 

vi.

As of December 31, 2019, the outstanding obligation for preference shares due to executive managers was $1.8 million. In addition, during the year ended December 31, 2019, the Company incurred $360,000 of compensation expense for executive managers, relating to preference shares compensation.

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

 

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

Research and development

 

$

180

 

 

$

200

 

General and administrative

 

$

874

 

 

$

1,112

 

 

vii.

In 2016, Alessandra Levy, the spouse of the Company’s Chief Executive Officer, Dario Calogero, joined Kaleyra S.p.A. as an employee. Kaleyra S.p.A. was awarded certain contracts for services previously provided by Ms. Levy while employed by a prior company. These contracts had a cumulative value of $481,000 through 2018.  Ms. Levy received no remuneration from Kaleyra S.p.A. or any third parties for her role in assisting Kaleyra S.p.A. in obtaining the contracts. In 2018, these contracts were completed and Ms. Levy transitioned to a new role within the marketing team of Kaleyra S.p.A. From 2016 to 2018, Ms. Levy was paid salary and benefits in the total amount of $638,000. Ms. Levy received salary and benefits in the amount of $239,000 for the year ended December 31, 2019.