S-1

As filed with the U.S. Securities and Exchange Commission on June 8, 2020

Registration No. 333-                

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

KALEYRA, INC.

(Exact name of registrant as specified in our charter)

Delaware	7374	82-3027430
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

Via Marco D’Aviano, 2

Milano MI, Italy 20131

+39 02 288 5841

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Dario Calogero

Chief Executive Officer and President

Kaleyra, Inc.

Via Marco D’Aviano, 2

Milano MI, Italy 20131

+39 02 288 5841

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Jeffrey C. Selman, Esq. Benjamin G. Griebe, Esq. DLA Piper LLP (US) 555 Mission Street, Suite 2400 San Francisco, CA 94105 (415) 615-6095 Per B. Chilstrom, Esq. Clifford Chance US LLP 31 West 52nd Street New York, NY 10019 (212) 878-3079

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the 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 7(a)(2)(B) of the Securities Act.  ☐

Calculation of Registration Fee

Title of Each Class of Securities to be Registered	Proposed Maximum Aggregate Offering Price (1)	Amount of Registration Fee (1)
Common stock $0.0001 par value per share	$40,250,000	$5,224.45

(1) Estimated solely for the purpose of computing the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. Includes the aggregate offering price of shares that the underwriters have the option to purchase to cover over-allotments, if any.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 8, 2020

PRELIMINARY PROSPECTUS

             Shares of Common Stock

We are offering                  shares of our common stock, par value $0.0001 per share.

Our common stock is listed on the NYSE American LLC (the “NYSE American”) under the symbol “KLR.” On June 5, 2020, the last reported sales price of our common stock was $6.39 per share. The actual offering price will be as determined between us and the underwriters at the time of pricing, and may be at a discount to the current market price. Accordingly, the recent market price used throughout this prospectus may not be indicative of the actual public offering price.

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and are subject to reduced public company reporting requirements. This prospectus complies with the requirements that apply to an issuer that is an emerging growth company. See “Prospectus Summary – Implications of Being an Emerging Growth Company.”

Investing in our common stock involves a high degree of risk. You should review carefully the risks and uncertainties described under the heading “Risk Factors” beginning on page 6 of this prospectus, and under similar headings in any amendment or supplements to this prospectus.

	Price to Public	Underwriting Discounts (1)	Proceeds to Us
Per Share	$	$	$
Total	$	$	$

(1) We have also agreed to reimburse the underwriters for certain of their expenses in connection with this offering. See “Underwriting.”

We have granted the underwriters an option to purchase up to an additional              shares of common stock from us at the public offering price, less underwriting discounts, within 30 days of the date of this prospectus.

The shares of common stock are expected to be ready for delivery on or about                , 2020.

Joint Book-Running Managers

Oppenheimer & Co. Nomura

Lead Manager

Northland Capital Markets

Co-Manager

National Securities Corporation

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

                 , 2020

TABLE OF CONTENTS

	Page
Special Note Regarding Forward-Looking Statements		ii
Frequently Used Terms		iv
Prospectus Summary		1
Risk Factors		6
Industry and Market Data		41
Use of Proceeds		42
Market Price of Our Common Stock		44
Dividend Policy		45
Capitalization		46
Dilution		48
Selected Consolidated Financial and Other Data		50
Management’s Discussion and Analysis of Financial Condition and Results of Operations		52
Business		77
Management		88
Certain Relationships and Related Person Transactions		95
Executive Compensation		101
Principal Stockholders		107
Description of Securities		109
Material United States Federal Income Tax Considerations		117
Underwriting		121
Legal Matters		127
Experts		127
Where You Can Find More Information		127
Index to Consolidated Financial Statements		F-1

You should rely only on the information contained in this prospectus, any supplement to this prospectus or in any free writing prospectus, filed with the Securities and Exchange Commission. We have not, and the underwriters have not, authorized anyone to provide you with additional information or information different from that contained in this prospectus filed with the Securities and Exchange Commission. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We are offering to sell, and seeking offers to buy, our securities only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of our securities. Our business, financial condition, results of operations and prospects may have changed since that date.

For investors outside the United States: We have not, and the underwriters have not, done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our securities and the distribution of this prospectus outside the United States.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. The words “anticipates,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predicts,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this prospectus include, but are not limited to, statements about our:

• ability to grow and retain our client base;

• ability to provide effective client support and induce our clients to renew and upgrade the technology offerings and services we provide for them;

• ability to expand our sales organization to address effectively existing and new markets that we intend to target;

• ability to forecast and maintain an adequate rate of revenue growth and appropriately plan our expenses;

• expectations regarding future expenditures;

• future mix of revenue and effect on gross margins;

• attraction and retention of qualified employees and key personnel;

• ability to compete effectively in a competitive industry;

• ability to protect and enhance our corporate reputation and brand;

• expectations concerning our relationships and actions with our technology partners and other third parties;

• market conditions and global and economic factors beyond our control, including the potential adverse effects of the ongoing global coronavirus (COVID-19) pandemic;

• impact from future regulatory, judicial, and legislative changes in our industry;

• ability to locate and acquire complementary technologies or services and integrate those into our business; and

• future arrangements with, or investments in, other entities or associations.

These forward-looking statements are based on information available as of the date of this prospectus, and current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

In addition, statements that we “believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to such party as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and these statements should not be read to indicate that we have conducted an exhaustive inquiry

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into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

You should not place undue reliance on these forward-looking statements. As a result of a number of known and unknown risks and uncertainties, our actual results or performance may be materially different from those expressed or implied by these forward-looking statements.

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FREQUENTLY USED TERMS

“Business Combination” means the business combination between Kaleyra, Inc. (“Kaleyra”) (f/k/a GigCapital, Inc. (“GigCapital”)) and Kaleyra S.p.A., consummated on November 25, 2019.

“Convertible Notes” means the convertible notes issued to Cowen Investments II LLC (“Cowen Investments II”) and Chardan Capital Markets, LLC (“Chardan”) as partial consideration for financial advisor services provided by an affiliate of Cowen Investments II, Cowen and Company (“Cowen”), and Chardan to Kaleyra in connection with the Business Combination.

“Earnout Shares” means 3,527,272 shares of common stock, of which 1,763,633 have been issued to the former holders of capital stock of Kaleyra S.p.A. upon the achievement of certain financial milestones for the 2019 fiscal year, and 1,763,639 of which the former holders of capital stock of Kaleyra S.p.A. have the contingent right to receive upon the achievement of certain financial milestones for the 2020 fiscal year.

“Founders” means Sponsor, GigFounders, LLC, Cowen Investments LLC (“Cowen Investments”), Cowen Investments II, Irwin Silverberg and Jeffrey Bernstein.

“Founder Shares” means the 4,027,006 shares of common stock issued in a private placement to the Founders in connection with the IPO (as defined below).

“IPO” means Kaleyra’s (f/k/a GigCapital) initial public offering consummated on December 12, 2017.

“Nomura Shares” means 1,623,000 shares of common stock that Nomura Global Financial Products, Inc. (“NGFP”), which is an affiliate of one of the underwriters, Nomura Securities International, Inc., held at the closing of the Business Combination and that are subject to an agreement for an OTC Equity Prepaid Forward Transaction (the “Forward Transaction”).

“Notes Shares” means the 356,672 shares of common stock issuable upon conversion of the Convertible Notes.

“Stock Purchase Agreement” means that certain Stock Purchase Agreement, dated as of February 22, 2019, as amended, by and among Kaleyra (f/k/a GigCapital), Kaleyra S.p.A., the shareholders of Kaleyra S.p.A.

“Placement Warrants” means the 373,691 warrants to purchase shares of common stock issued in a private placement to the Founders in connection with the IPO.

“Public Warrants” means the warrants to purchase 10,781,247 shares of common stock originally issued as part of the units sold in our IPO.

“Sponsor” means GigAcquisitions, LLC.

“warrants” means the “Placement Warrants” and the “Public Warrants”.

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PROSPECTUS SUMMARY

The following summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes included in this prospectus and the information set forth under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The “Company,” “Kaleyra” “we,” “our,” “us” or similar terms mean Kaleyra, Inc. (f/k/a GigCapital, Inc.) and our consolidated subsidiaries.

General

We are a communication platform as a service (“CPaaS”) company that provides our customers with a trusted cloud communications platform (the “Platform”) that seamlessly integrates software services and applications for business-to-consumer communications between our customers and their end-user customers and partners on a global basis. The demand for cloud communications is increasingly driven by the growing, and often mandated, need for enterprises to undertake a digital transformation that includes omni-channel, mobile first interactive end-user customer communications. This complements new workflows that our customers have developed which are driven by software and artificial intelligence to automate certain end-user customer-facing processes before, during and after transactions. These communications are increasingly managed through mobile network operators as the gateway to reach end-user consumers’ mobile devices. Our Platform enables these communications by integrating mobile alert notifications and interactive capabilities to reach and engage end user customers.

Our vision is to be the CPaaS provider which best aligns with its customers’ communication requirements, or the most trusted provider, in the world. This requires a combination of security, compliance and integration capabilities that protects the integrity and privacy of our customers’ transactions and includes other key features such as ease of provisioning, reliable network connectivity, high availability for scaling, redundancy, embedded regulatory compliance, configurable monitoring and reporting. We believe the percentage of CPaaS customers that will require high levels of security, compliance and ease of integration will represent an increasingly larger portion of the market, better enabling us to set ourselves apart from our competition.

Kaleyra is a result of the expansion of the former Ubiquity, which was founded in Milan, Italy in 1999. Ubiquity secured a leading market position in mobile messaging on behalf of the Italian financial services industry and then sought to expand its products and geographic offerings. Ubiquity acquired Solutions Infini of Bangalore, India beginning in 2017 and Buc Mobile of Vienna, Virginia in 2018. It was rebranded as Kaleyra S.p.A. in February 2018. On November 25, 2019, GigCapital, Inc. acquired ownership of all of the securities of Kaleyra S.p.A. and renamed the combined company Kaleyra, Inc. Following the integration of the acquired entities, the combined company is collectively engaged in the operation of the Platform on behalf of Kaleyra’s customers.

Kaleyra has more than 3,000 customers and business partners worldwide across industry verticals such as financial services, ecommerce and transportation, with no single customer representing more than 15% of revenues. Kaleyra’s customers are located in regions throughout the world including in Europe, Asia Pacific and North America. Kaleyra’s revenue by country for the fiscal quarter ended March 31, 2020, is as follows: Italy (43.4%), India (26.4%) and the United States (12.8%). The remainder of revenue is primarily generated in Europe and Asia in countries other than Italy and India (17.4%).

For the fiscal quarter ended March 31, 2020, 85.3% of revenues came from customers of Kaleyra which have been on the Platform for at least one year. Although Kaleyra continues to expand by introducing new customers to the Platform, the breadth and stability of its existing customers provide it with a solid base of revenue upon which it can continue to innovate and make investment to strengthen its product portfolio, expand its global

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presence, and in particular into the Americas and Asia-Pacific markets following the acquisitions of Buc Mobile and Solutions Infini, recruit world-class talent and target accretive acquisitions to capitalize on its growing market penetration opportunities and value creation.

The CPaaS market is evolving and is expanding in several directions as enterprise adoption of cloud-based communications occurs. The need for enterprises to provide enhanced end-user customer experiences is driving adoption by enterprises of embedded, real-time messaging communications for enhanced end-user customer- interfacing interactions. According to 451 Research, in 2019 the total CPaaS market was approximately $2.2 billion and forecasted to increase to approximately $6.2 billion by the end of 2022.¹ Furthermore, according to GSMA, the SMS business messaging revenue market was approximately $60.0 billion in 2018 and will increase to approximately $90.0 billion by the end of 2022.² Kaleyra’s products and services available through the Platform address both of these markets.

During the year ended December 31, 2019, Kaleyra processed nearly 27 billion billable messages and 3 billion voice calls, and during the three months ended March 31, 2020, Kaleyra processed nearly 7 billion billable messages and 0.9 billion voice calls. Kaleyra organizes its efforts in four principal offices in New York, New York, Vienna, Virginia, Milan, Italy and Bangalore, India with an employee base of almost 267 employees.

1 Source: 451 Research, Communications PaaS: Turning Business Communications Inside Out (December 2018).

2 Source: GSMA, RCS Overview, Future Networks Programme (October 2018).

Implications of Being an Emerging Growth Company

We are an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act (the “JOBS Act”) in April 2012. As an emerging growth company, we have taken advantage of exemptions from various public reporting requirements, including (i) the requirement that our internal control over financial reporting be audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, (ii) requirements related to compliance with new or revised accounting standards, (iii) requirements related to the disclosure of executive compensation in this prospectus and in our periodic reports and proxy statements, (iv) the requirement that we hold a nonbinding advisory vote on executive compensation and any golden parachute payments, (v) if adopted by the Public Company Accounting Oversight Board (United States), mandatory audit firm rotation requirements and (vi) requirements to supplement the auditor’s report with additional information about the audit and our financial statements. We intend to take advantage of these exemptions until we are no longer an emerging growth company.

We will remain an emerging growth company until the earliest to occur of (i) the end of the fiscal year following the fifth anniversary of the IPO; (ii) the first fiscal year after our annual gross revenue is $1.07 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

For risks related to our status as an emerging growth company, see the disclosure elsewhere in this prospectus under the caption “Risk Factors” below.

Corporate Information

We were incorporated in Delaware on October 9, 2017 as a blank check company under the name GigCapital, Inc. Our principal executive offices are located at Via Marco D’Aviano, 2, Milano MI, Italy 20131, and our telephone number is +39 02 288 5841. Our corporate website address is www.kaleyra.com. Information contained on or accessible through our website is not a part of this prospectus, and the inclusion of our website address in this prospectus is an inactive textual reference only.

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On November 25, 2019, GigCapital and Kaleyra S.p.A. consummated the transactions contemplated by the Stock Purchase Agreement, as amended, following the approval at the special meeting of the stockholders of GigCapital held on November 22, 2019. In connection with the closing of the Business Combination, we changed our name from GigCapital, Inc. to Kaleyra, Inc.

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The Offering

Common stock offered by us                     shares (or                     shares if the underwriters exercise their option to purchase                     additional shares).

Public offering price $             per share.

Over-allotment option                     shares of our common stock.

Common stock outstanding immediately prior to this offering⁽¹⁾                     shares.

Common stock outstanding after this offering ⁽¹⁾⁽²⁾                     shares (or                 shares if the underwriters exercise their option to purchase                 additional shares).

Dividend policy We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Please read “Dividend Policy.”

Use of proceeds We estimate that the net proceeds to us from this offering after deducting underwriting discounts and estimated offering expenses will be approximately $             . We intend to use approximately $11.5 million of the net proceeds from this offering to repay debt, consisting of (a) our outstanding promissory note in the amount of $400,000 issued to Northland Securities, Inc., one of the underwriters in this offering, (b) our outstanding promissory notes issued to the Founders and certain of their affiliates in the aggregate amount of $3,578,362, and (c) our outstanding promissory notes issued to two of the former holders of capital stock of Kaleyra S.p.A., Maya Investments Limited and Esse Effe S.p.A., in the amounts of $1.5 million and $6.0 million, respectively.

We currently anticipate that we will use the remaining net proceeds from this offering for (i) the payment of up to approximately $7.7 million for any purchase of shares of our common stock in the event that parties to certain forward share purchase agreements exercise their rights to have us purchase such shares and (ii) working capital and other general corporate purposes.

We may also use a portion of the net proceeds to opportunistically acquire, license and invest in complementary products, technologies or businesses. However, we currently have no agreements or commitments to complete any such transaction. Please read “Use of Proceeds.”

NYSE American ticker symbol Our common stock is listed on the NYSE American under the symbol “KLR.”

Risk factors You should carefully read and consider the information set forth under the heading “Risk Factors” and all other information set forth in this prospectus before deciding to invest in our common stock.

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(1) The number of shares of our common stock to be outstanding after this offering is based on 20,221,935 shares of common stock outstanding as of May 31, 2020, assuming the sale and issuance by us of shares of common stock in this offering, and excludes:

• 3,605,318 shares of common stock issuable upon the vesting of outstanding restricted stock units;

• 1,249,492 shares of common stock reserved for future grant under our 2019 Equity Incentive Plan (the “EIP”);

• 11,154,938 shares of common stock issuable upon exercise of the outstanding warrants at an exercise price of $11.50 per share;

• 1,763,639 Earnout Shares issuable to the former holders of capital stock of Kaleyra S.p.A., who have the contingent right to receive such shares upon the achievement of certain financial milestones for the 2020 fiscal year;

• 356,672 Notes Shares issuable upon the conversion of the Convertible Notes; and

• any forfeiture of Founder Shares in the event that the achievement of certain financial milestones for the 2020 fiscal year are not achieved.

(2) Unless otherwise indicated, all information contained in this prospectus assumes no exercise by the underwriters of their option to purchase                additional shares.

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should consider carefully all of the risks described below, together with the other information contained in this prospectus, before making a decision to invest in our common stock. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment.

Risks Related to Our Business and Industry

The market in which Kaleyra participates is highly competitive, and if Kaleyra does not compete effectively, its business, results of operations and financial condition could be harmed.

The market for cloud communications is rapidly evolving, significantly fragmented and highly competitive, with relatively low barriers to entry in some segments. The principal competitive factors in Kaleyra’s market include completeness of offering, credibility with developers, global reach, ease of integration and programmability, product features, platform scalability, reliability, security and performance, brand awareness and reputation, the strength of sales and marketing efforts, customer support, as well as the cost of deploying and using Kaleyra’s services. Kaleyra’s competitors fall into two primary categories:

• CPaaS companies that offer a narrower set of software Application Programming Interfaces (“APIs”), less robust customer support and fewer other features while relying on third-party networks and physical infrastructure; and

• Network service providers that offer limited developer functionality on top of their own networks and physical infrastructure.

Some of Kaleyra’s competitors and potential competitors are larger and have greater name recognition, longer operating histories, more established customer relationships, a larger global reach, larger budgets and significantly greater resources than Kaleyra. In addition, they have the operating flexibility to bundle competing products and services at little or no incremental cost, including offering them at a lower price as part of a larger sales transaction. As a result, Kaleyra’s competitors may be able to respond more quickly and effectively than Kaleyra can to new or changing opportunities, technologies, standards or customer requirements. In addition, some competitors may offer services that address one or a limited number of functions at lower prices, with greater depth than Kaleyra’s services or in different geographies. Kaleyra’s current and potential competitors may develop and market new services with comparable functionality to Kaleyra’s services, and this could lead to Kaleyra having to decrease prices in order to remain competitive. In addition, some of Kaleyra’s competitors have lower list prices than us, which may be attractive to certain customers even if those services have different or lesser functionality. If Kaleyra is unable to maintain Kaleyra’s current pricing due to the competitive pressures, its margins will be reduced and Kaleyra’s business, results of operations and financial condition would be adversely affected. Customers utilize Kaleyra’s services in many ways and use varying levels of functionality that Kaleyra’s services offer or are capable of supporting or enabling within their applications.

Customers that use many of the features of Kaleyra’s services or use Kaleyra’s services to support or enable core functionality for their applications may have difficulty or find it impractical to replace Kaleyra’s services with a competitor’s services, while customers that use only limited functionality may be able to more easily replace Kaleyra’s services with competitive offerings.

With the introduction of new services and new market entrants, Kaleyra expects competition to intensify in the future. In addition, some of Kaleyra’s customers choose to use Kaleyra’s services and Kaleyra’s competitors’ services at the same time. Moreover, as Kaleyra expands the scope of Kaleyra’s services, Kaleyra may face additional competition. Further, customers and consumers may choose to adopt other forms of electronic communications or alternative communication platforms, including developing necessary networks and

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platforms in-house. Furthermore, if Kaleyra’s competitors were to merge such that the combined entity would be able to compete fully with Kaleyra’s service offering, then Kaleyra’s business, results of operations and financial condition may be adversely affected. If one or more of Kaleyra’s competitors were to merge or partner with another of Kaleyra’s competitors, the change in the competitive landscape could also adversely affect Kaleyra’s ability to compete effectively. In addition, pricing pressures and increased competition generally could result in reduced revenue, reduced margins, increased losses or the failure of Kaleyra’s services to achieve or maintain widespread market acceptance.

Kaleyra’s current and potential competitors have developed and may develop in the future product solutions that are available internationally. To the extent that customers seek product solutions that include support and scaling internationally, they may choose to use other service providers to fill their communication service needs. Each of these factors could harm Kaleyra’s business by leading to reduced revenues, slower growth and lower brand name recognition than Kaleyra’s competitors.

If Kaleyra is unable to expand or renew sales to existing clients, or attract new customers, Kaleyra’s growth could be slower than it expects and its business may be harmed.

Kaleyra’s future growth depends upon expanding sales of Kaleyra’s technology offerings and services with existing customers and with new customers. Kaleyra’s customers may not purchase Kaleyra’s technology offerings and services, or Kaleyra’s customers may reduce their purchasing volumes, if Kaleyra does not demonstrate the value proposition for their investment, and Kaleyra may not be able to replace existing customers with new customers. In addition, Kaleyra’s customers may not renew their contracts with Kaleyra on the same terms, or at all, because of dissatisfaction with Kaleyra’s service. If Kaleyra’s customers do not renew their contracts, Kaleyra’s revenue may grow more slowly than expected, may not grow at all, or may decline. Additionally, increasing incremental sales to Kaleyra’s current client base may require increasingly sophisticated and costly sales efforts that are targeted at senior management. Kaleyra plans to continue expanding its sales efforts but it may be unable to hire qualified sales personnel, may be unable to successfully train those sales personnel that Kaleyra is able to hire, and sales personnel may not become fully productive on the timelines that it has projected, or at all. Additionally, although Kaleyra dedicates significant resources to sales and marketing programs, these sales and marketing programs may not have the desired effect and may not expand sales. Kaleyra cannot assure you that its efforts will increase sales to existing customers or additional revenue. If Kaleyra’s efforts to upsell to its customers are not successful, its future growth may be limited.

Kaleyra’s ability to achieve significant growth in revenue in the future will also depend upon its ability to attract new customers. This may be particularly challenging where an organization has already invested substantial personnel and financial resources to integrate competing technology offerings and services into its business, as such organization may be reluctant or unwilling to invest in new technology offerings and services. If Kaleyra fails to attract new customers and maintain and expand those client relationships, its revenue may grow more slowly than expected and its business may be harmed.

Kaleyra currently generates significant revenue from its largest customers, and the loss or decline in revenue from any of these customers could limit Kaleyra’s revenue and results of operations.

In the three months ended March 31, 2020 and the years ended December 31, 2019 and 2018, Kaleyra’s 10 largest customers generated an aggregate of 49.1%, 50.2% and 65.5% of its revenue, respectively. In the event that Kaleyra’s large customers do not continue to use its products, use fewer of its products, or use its products in a more limited capacity, or not at all, Kaleyra’s revenue could be limited and Kaleyra’s business could be harmed.

Kaleyra must increase the network traffic and resulting revenue from the services that it offers to realize its targets for anticipated revenue growth, cash flow and operating performance.

Kaleyra must increase the network traffic and resulting revenue from its inbound and outbound voice calling, text messaging, telephone numbers and related services at acceptable margins to realize Kaleyra’s targets for

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anticipated revenue growth, cash flow and operating performance. If Kaleyra does not maintain or improve its current relationships with existing key customers; is not able to expand the available capacity on its network to meet its customers’ demands in a timely manner; does not develop new large enterprise customers; or its customers determine to obtain these services from either their own network or from one of Kaleyra’s competitors, then Kaleyra may be unable to increase or maintain its revenue at acceptable margins.

Kaleyra’s business depends on customers increasing their use of Kaleyra’s services and any loss of customers or decline in their use of Kaleyra’s services could reduce Kaleyra’s profitability.

Kaleyra’s ability to grow and generate incremental revenue depends, in part, on Kaleyra’s ability to maintain and grow its relationships with existing customers and to have them increase their usage of Kaleyra’s Platform. If Kaleyra’s customers do not increase their use of Kaleyra’s services, then Kaleyra’s revenue may decline and Kaleyra’s results of operations may be harmed. Customers generally are charged based on the usage of Kaleyra’s services. Many of Kaleyra’s customers do not have long-term contractual financial commitments to Kaleyra and, therefore, many of Kaleyra’s customers may reduce or cease their use of Kaleyra’s services at any time without penalty or termination charges. Kaleyra cannot accurately predict customers’ usage levels and the loss of customers or reductions in their usage levels of Kaleyra’s services may each have a negative impact on Kaleyra’s business, results of operations and financial condition and may cause Kaleyra’s dollar-based net retention rate to decline in the future if Kaleyra’s customers are not satisfied with Kaleyra’s services. If a significant number of customers cease using, or reduce their usage of, Kaleyra’s services, then Kaleyra may be required to spend significantly more on sales and marketing than Kaleyra’s currently plan to spend in order to maintain or increase revenue from customers. Such additional sales and marketing expenditures could reduce Kaleyra’s profitability and harm its business.

Demand for Kaleyra’s technology offerings and services could be adversely affected by volatile, negative, or uncertain economic conditions and the effects of these conditions on Kaleyra’s customers’ businesses.

Kaleyra’s revenue and profitability depend on the demand for its technology offerings and services, which could be negatively affected by numerous factors, many of which are beyond Kaleyra’s control. Volatile, negative, or uncertain economic conditions affect Kaleyra’s customers’ businesses and the markets Kaleyra serves. Such economic conditions in Kaleyra’s markets have undermined, and could in the future undermine, business confidence in Kaleyra’s markets and cause Kaleyra’s customers to reduce or defer their spending on new technology offerings and services, or may result in customers reducing, delaying or eliminating spending under existing contracts with Kaleyra, which would negatively affect Kaleyra’s business. Growth in the markets Kaleyra serves could be at a slow rate, or could stagnate or contract, in each case for an extended period of time. Ongoing economic volatility and uncertainty and changing demand patterns affect Kaleyra’s business in a number of other ways, including making it more difficult to accurately forecast client demand and effectively build Kaleyra’s revenue and resource plans.

Economic volatility and uncertainty is particularly challenging because it may take some time for the effects and changes in demand patterns resulting from these and other factors to manifest themselves in Kaleyra’s business and results of operations. Changing demand patterns from economic volatility and uncertainty could harm Kaleyra’s business and results of operations.

Kaleyra has limited experience with respect to determining the optimal prices for its products.

Kaleyra charges its customers based on their use of its products. Kaleyra expects that it may need to change its pricing from time to time. In the past Kaleyra has sometimes reduced their prices either for individual customers in connection with long-term agreements or for a particular product. One of the challenges to Kaleyra’s pricing is that the fees that they pay to network service providers over whose networks Kaleyra transmits communications can vary daily or weekly and are affected by volume and other factors that may be outside of Kaleyra’s control and difficult to predict. This can result in Kaleyra incurring increased costs that Kaleyra may be unable or

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unwilling to pass through to its customers, which could harm Kaleyra’s business. Further, as competitors introduce new products or services that compete with ours or reduce their prices, Kaleyra may be unable to attract new customers or retain existing customers based on Kaleyra’s historical pricing. As Kaleyra expands internationally, Kaleyra also must determine the appropriate price to enable Kaleyra to compete effectively internationally. Moreover, enterprises, which are a primary focus for Kaleyra’s direct sales efforts, may demand substantial price concessions. In addition, if the mix of products sold changes, including for a shift to Internet protocol (“IP”) based products, then Kaleyra may need to, or choose to, revise its pricing. As a result, in the future Kaleyra may be required or choose to reduce its prices or change its pricing model, which could harm Kaleyra’s business.

Breaches of Kaleyra’s networks or systems, or those of Amazon Web Services (“AWS”) or Kaleyra’s other service providers, could compromise the integrity of its products, Platform and data, result in significant data losses and otherwise harm its business.

Kaleyra depends upon its information technology (“IT”) systems to conduct virtually all of its business operations, ranging from Kaleyra’s internal operations and research and development activities to its marketing and sales efforts and communications with Kaleyra’s customers and business partners. Individuals or entities may attempt to penetrate Kaleyra’s network security, or that of its Platform, and to cause harm to Kaleyra’s business operations, including by misappropriating its proprietary information or that of its customers, employees and business partners or to cause interruptions of Kaleyra’s products and Platform. In particular, cyberattacks and other malicious Internet-based activity continue to increase in frequency and in magnitude generally, and cloud-based companies have been targeted in the past. In addition to threats from traditional computer hackers, malicious code (such as malware, viruses, worms, and ransomware), employee theft or misuse, password spraying, phishing, credential stuffing, and denial-of-service attacks, Kaleyra also faces threats from sophisticated organized crime, nation-state, and nation-state supported actors who engage in attacks (including advanced persistent threat intrusions) that add to the risk to Kaleyra’s systems (including those hosted on AWS or other cloud services), internal networks, its customers’ systems and the information that they store and process. While Kaleyra devotes significant financial and personnel resources to implement and maintain security measures, because the techniques used by such individuals or entities to access, disrupt or sabotage devices, systems and networks change frequently and may not be recognized until launched against a target, Kaleyra may be required to make further investments over time to protect data and infrastructure as cybersecurity threats develop, evolve and grow more complex over time. Kaleyra may also be unable to anticipate these techniques, and Kaleyra may not become aware in a timely manner of such a security breach, which could exacerbate any damage Kaleyra experiences. Additionally, Kaleyra depends upon its employees and contractors to appropriately handle confidential and sensitive data, including customer data, and to deploy Kaleyra’s IT resources in a safe and secure manner that does not expose Kaleyra’s network systems to security breaches or the loss of data. Any data security incidents, including internal malfeasance by its employees or a third party’s fraudulent inducement of Kaleyra’s employees to disclose information, unauthorized access or usage, virus or similar breach or disruption of Kaleyra’s or its service providers, such as AWS or service providers, could result in loss of confidential information, damage to Kaleyra’s reputation, erosion of customer trust, loss of customers, litigation, regulatory investigations, fines, penalties and other liabilities. Accordingly, if Kaleyra’s cybersecurity measures or those of AWS or Kaleyra’s service providers, fail to protect against unauthorized access, attacks (which may include sophisticated cyberattacks), compromise or the mishandling of data by Kaleyra’s employees and contractors, then Kaleyra’s reputation, customer trust, business, results of operations and financial condition could be adversely affected. While Kaleyra maintains errors, omissions, and cyber liability insurance policies covering certain security and privacy damages, Kaleyra cannot be certain that its existing insurance coverage will continue to be available on acceptable terms or will be available in sufficient amounts to cover the potentially significant losses that may result from a security incident or breach or that the insurer will not deny coverage as to any future claim.

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To deliver Kaleyra’s products, Kaleyra relies on network service providers and Internet service providers for its network service and connectivity.

Kaleyra currently interconnects with network service providers around the world to enable the use by Kaleyra’s customers of its products over their networks. Kaleyra expects that it will continue to rely heavily on network service providers for these services going forward. Kaleyra’s reliance on network service providers has reduced Kaleyra’s operating flexibility, ability to make timely service changes and control quality of service. In addition, the fees that Kaleyra is charged by network service providers may change daily or weekly, while Kaleyra does not typically change its customers’ pricing as rapidly.

At times, some network service providers have instituted additional fees due to regulatory, competitive or other industry related changes that increase Kaleyra network costs. For example, in 2018, Kaleyra was subject to a pricing increase of more than 10% from certain mobile network service providers for delivered messages. While Kaleyra has historically responded to these types of fee increases through a combination of further negotiating efforts with Kaleyra’s network service providers, absorbing the increased costs or changing Kaleyra’s prices to customers, here Kaleyra identified a unique strategy that allowed it to change its customers prices without effecting Kaleyra’s business. There is no guarantee that Kaleyra will continue to be able to use the same strategy in the future without a material negative impact to Kaleyra business. Additionally, Kaleyra’s ability to respond to any new fees may be constrained if all network service providers in a particular market impose equivalent fee structures, if the magnitude of the fees is disproportionately large when compared to the underlying prices paid by Kaleyra customers, or if the market conditions limit Kaleyra ability to increase the price Kaleyra charges its customers.

Furthermore, some of these network service providers do not have long-term committed contracts with Kaleyra and may terminate their agreements with Kaleyra without notice or restriction. If a significant portion of Kaleyra’s network service providers stop providing Kaleyra with access to their infrastructure, fail to provide these services to Kaleyra on a cost-effective basis, cease operations, or otherwise terminate these services, the delay caused by qualifying and switching to other network service providers could be time consuming and costly and could adversely affect Kaleyra’s business, results of operations and financial condition. Further, if problems occur with Kaleyra’s network service providers, it may cause errors or poor-quality communications with Kaleyra’s products, and it could encounter difficulty identifying the source of the problem. The occurrence of errors or poor-quality communications on Kaleyra’s products, whether caused by Kaleyra’s Platform or a network service provider, may result in the loss of Kaleyra’s existing customers or the delay of adoption of Kaleyra’s products by potential customers and may adversely affect its business, results of operations and financial condition.

Kaleyra also interconnects with Internet service providers around the world to enable the use of Kaleyra’s communication products by its customers, and Kaleyra expects that it will continue to rely heavily on Internet service providers for network connectivity going forward. Kaleyra’s reliance on Internet service providers reduces Kaleyra’s control over quality of service and exposes Kaleyra to potential service outages and rate fluctuations. If a significant portion of Kaleyra’s Internet service providers stop providing Kaleyra with access to their network infrastructure, fail to provide access on a cost-effective basis, cease operations, or otherwise terminate access, the delay caused by qualifying and switching to other Internet service providers could be time consuming and costly and could harm Kaleyra’s business and operations.

If Kaleyra is unable to expand its relationships with existing technology partner customers and add new technology partner customers, Kaleyra’s business could be harmed.

Kaleyra believes that the continued growth of its business depends in part upon developing and expanding strategic relationships with technology partner customers. Technology partner customers embed Kaleyra software products in their solutions, such as software applications for contact centers and sales force and marketing automation, and then sell such solutions to other businesses. When potential customers do not have the

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available developer resources to build their own applications, Kaleyra refers them to either its technology partners who embed Kaleyra’s products in the solutions that they sell to other businesses or Kaleyra’s consulting partners who provide consulting and development services for organizations that have limited software development expertise to build Kaleyra’s Platform into their software applications.

As part of Kaleyra’s growth strategy, it intends to expand Kaleyra’s relationships with existing technology partner customers and add new technology partner customers. If Kaleyra fails to expand its relationships with existing technology partner customers or establish relationships with new technology partner customers in a timely and cost-effective manner, or at all, then Kaleyra’s business, results of operations and financial condition could be adversely affected. Additionally, even if Kaleyra is successful at building these relationships but there are problems or issues with integrating Kaleyra’s products into the solutions of these customers, Kaleyra’s reputation and ability to grow its business may be harmed.

Kaleyra’s investments in new services and technologies may not be successful.

Kaleyra continues to invest in new services and technologies. The complexity of these solutions, Kaleyra’s learning curve in developing and supporting them, and significant competition in the markets for these solutions could make it difficult for Kaleyra to market and implement these solutions successfully. Additionally, there is a risk that Kaleyra’s customers may not adopt these solutions widely, which would prevent Kaleyra from realizing expected returns on these investments. Even if these solutions are successful in the market, they still rely on third-party hardware and software and Kaleyra’s ability to meet stringent service levels. If Kaleyra is unable to deploy these solutions successfully or profitably, it could adversely impact its business.

If Kaleyra fails to adapt and respond effectively to rapidly changing technology, evolving industry standards, changing regulations, and changing customer needs, requirements or preferences, Kaleyra’s products may become less competitive.

The market for communications in general, and cloud communications in particular, is subject to rapid technological change, evolving industry standards, changing regulations, as well as changing customer needs, requirements and preferences. The success of Kaleyra’s business will depend, in part, on Kaleyra’s ability to adapt and respond effectively to these changes on a timely basis. If Kaleyra is unable to develop new products that satisfy Kaleyra customers and provide enhancements and new features for Kaleyra’s existing products that keep pace with rapid technological and industry change, Kaleyra’s business, results of operations and financial condition could be adversely affected. If new technologies emerge that are able to deliver competitive products and services at lower prices, more efficiently, more conveniently or more securely, such technologies could adversely impact Kaleyra’s ability to compete effectively.

If Kaleyra loses any of its key personnel or is unable to attract and retain the talent required for its business, Kaleyra’s business could be disrupted and its financial performance could suffer.

Kaleyra’s success is heavily dependent upon its ability to attract, develop, engage, and retain key personnel to manage and grow its business, including Kaleyra’s key executive, management, sales, services, and technical personnel. Kaleyra’s future success will depend to a significant extent on the efforts of Kaleyra’s executive team including the leadership of Kaleyra’s Chief Executive Officer, Dario Calogero, as well as the continued service and support of other key employees. Kaleyra’s future success also will depend on its ability to attract and retain highly skilled technology specialists, engineers, and consultants, for whom the market is extremely competitive. All of Kaleyra’s officers and key employees are at-will employees, meaning that they can terminate their employment with Kaleyra at any time. Kaleyra’s inability to attract, develop, and retain key personnel could have an adverse effect on its relationships with its technology partners and customers and adversely affect Kaleyra’s ability to expand its offerings of technology offerings and services. Moreover, Kaleyra’s inability to train its sales, services, and technical personnel effectively to meet the rapidly changing technology needs of its customers could cause a decrease in the overall quality and efficiency of such personnel. Such consequences could harm Kaleyra’s business.

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Kaleyra’s ability to attract and retain business and personnel may depend on its reputation in the marketplace.

Kaleyra believes its brand name and its reputation in the marketplace are important corporate assets that help distinguish Kaleyra’s technology offerings and services from those of competitors and also contribute to Kaleyra’s ability to recruit and retain talented personnel, in particular its engineers and consulting professionals. However, Kaleyra’s corporate reputation is potentially susceptible to material damage by events such as disputes with customers, cybersecurity breaches, service outages, internal control deficiencies, delivery failures, or compliance violations. Similarly, Kaleyra’s reputation could be damaged by actions or statements of current or former customers, directors, employees, competitors, vendors, partners, Kaleyra’s joint ventures or joint venture partners, adversaries in legal proceedings, legislators, or government regulators, as well as members of the investment community or the media. There is a risk that negative information about Kaleyra, even if based on rumor or misunderstanding, could adversely affect its business. Damage to Kaleyra’s reputation could be difficult, expensive and time-consuming to repair, could make potential or existing customers reluctant to select Kaleyra for new engagements, resulting in a loss of business, and could adversely affect Kaleyra’s recruitment and retention efforts. Damage to Kaleyra’s reputation could also reduce the value and effectiveness of Kaleyra’s brand name and could reduce investor confidence in Kaleyra, adversely affecting its share price.

Kaleyra has experienced rapid internal growth as well as growth through acquisitions in recent periods. If Kaleyra fails to manage its growth effectively, or its business does not grow as expected, Kaleyra’s operating results may suffer.

Kaleyra’s headcount and operations have grown substantially. Kaleyra had 261 employees as of March 31, 2020, as compared with 233 employees as of March 31, 2019. This growth has placed, and will continue to place, a significant strain on Kaleyra’s operational, financial, and management infrastructure. Kaleyra anticipates further increases in headcount will be required to support increases in its technology offerings and continued expansion. To manage this growth effectively, Kaleyra must continue to improve its operational, financial, and management systems and controls by, among other things:

• effectively attracting, training, and integrating a large number of new employees, particularly technical personnel and members of Kaleyra’s management and sales teams;

• further improving Kaleyra’s key business systems, processes, and information technology infrastructure to support Kaleyra’s business needs;

• enhancing Kaleyra’s information and communication systems to ensure that Kaleyra’s employees are well-coordinated and can effectively communicate with each other and Kaleyra’s customers; and

• improving Kaleyra’s internal control over financial reporting and disclosure controls and procedures to ensure timely and accurate reporting of Kaleyra’s operational and financial results.

If Kaleyra fails to manage its expansion or implement Kaleyra’s new systems, or if Kaleyra fails to implement improvements or maintain effective internal controls and procedures, Kaleyra’s costs and expenses may increase more than expected and Kaleyra may not expand its client base, increase existing customer volumes and renewal rates, enhance its existing applications, develop new applications, satisfy its customers, respond to competitive pressures, or otherwise execute its business plan. If Kaleyra is unable to manage its growth, Kaleyra’s operating results likely will be harmed.

Future acquisitions could disrupt Kaleyra’s business and may divert management’s attention, and if unsuccessful, harm Kaleyra’s business.

Kaleyra may choose to expand by making additional acquisitions that could be material to its business. Acquisitions involve many risks, including the following:

• an acquisition may negatively affect Kaleyra’s results of operations and financial condition because it may require Kaleyra to incur charges or assume substantial debt or other liabilities, may cause adverse

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tax consequences or unfavorable accounting treatment, may expose Kaleyra to claims and disputes by third parties, including intellectual property claims and disputes, or may not generate sufficient financial return to offset additional costs and expenses related to the Business Combination;

• Kaleyra may encounter difficulties or unforeseen expenditures in integrating the business, technologies, products, personnel, or operations of any company that it acquires, particularly if key personnel of the acquired company decide not to work for Kaleyra;

• an acquisition may disrupt its ongoing business, divert resources, increase Kaleyra’s expenses, or distract its management;

• an acquisition may result in a delay or reduction of client purchases for both Kaleyra and the company it acquired due to client uncertainty about continuity and effectiveness of service from either company;

• Kaleyra may encounter difficulties in, or may be unable to, successfully sell any acquired technology offerings or services;

• an acquisition may involve the entry into geographic or business markets in which Kaleyra has little or no prior experience or where competitors have stronger market positions;

• the challenges inherent in effectively managing an increased number of employees in diverse locations;

• the potential strain on its financial and managerial controls and reporting systems and procedures;

• the potential known and unknown liabilities associated with an acquired company;

• Kaleyra’s use of cash to pay for acquisitions would limit other potential uses for its cash;

• if Kaleyra incurs additional debt to fund such acquisitions, such debt may subject Kaleyra to additional material restrictions on its ability to conduct its business as well as additional financial maintenance covenants;

• the risk of impairment charges related to potential write-downs of acquired assets or goodwill in future acquisitions;

• to the extent that Kaleyra issues a significant amount of equity or equity-linked securities in connection with future acquisitions, existing stockholders may be diluted and earnings per share may decrease; and

• managing the varying intellectual property protection strategies and other activities of an acquired company.

Kaleyra may not succeed in addressing these or other risks or any other problems encountered in connection with the integration of any acquired business. The inability to integrate successfully the business, technologies, products, personnel, or operations of any acquired business, or any significant delay in achieving integration, could harm its business and results of operations.

Kaleyra may experience quarterly fluctuations in its operating results due to a number of factors, which makes its future results difficult to predict and could cause its operating results to fall below expectations.

Kaleyra’s quarterly operating results have fluctuated in the past and Kaleyra expects them to fluctuate in the future due to a variety of factors, many of which are outside of Kaleyra’s control. As a result, Kaleyra’s past results may not be indicative of its future performance and comparing Kaleyra’s operating results on a period-to-period basis may not be meaningful. In addition to the other risks described in this prospectus, factors that may affect Kaleyra’s quarterly operating results include:

• changes in spending on collaboration and technology offerings and services by Kaleyra’s current or prospective customers;

• pricing Kaleyra’s technology offerings and services effectively so that Kaleyra is able to attract and retain customers without compromising its operating results;

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• attracting new customers and increasing Kaleyra’s existing customers’ use of Kaleyra’s technology offerings and services;

• the mix between wholesale and retail maintenance new contracts and renewals;

• client renewal rates and the amounts for which agreements are renewed;

• seasonality and its effect on client demand;

• awareness of Kaleyra’s brand;

• changes in the competitive dynamics of Kaleyra’s market, including consolidation among competitors or customers and the introduction of new technologies and technology enhancements;

• changes to the commission plans, quotas, and other compensation-related metrics for Kaleyra’s sales representatives;

• the amount and timing of payment for operating expenses, particularly sales and marketing expense;

• Kaleyra’s ability to manage its existing business and future growth, domestically and internationally;

• unforeseen costs and expenses related to the expansion of Kaleyra’s business, operations, and infrastructure, including disruptions in Kaleyra’s hosting network infrastructure and privacy and data security; and

• general economic and political conditions in Kaleyra’s domestic and international markets.

Kaleyra may not be able to accurately forecast the amount and mix of future technology offerings and services, size or duration of contracts, revenue, and expenses and, as a result, Kaleyra’s operating results may fall below its estimates. Risks related to confidentiality and security provisions or privacy laws will increase as Kaleyra continues to grow its cloud-based offerings and services and store and process increasingly large amounts of Kaleyra’s customers’ confidential information and data and host or manage parts of Kaleyra’s customers’ businesses, especially in industries involving particularly sensitive data such as the financial services industry and the healthcare industry. The loss or unauthorized disclosure of sensitive or confidential client or employee data, including personal data, whether through breach of computer systems, systems failure, employee negligence, fraud or misappropriation, or otherwise, could damage Kaleyra’s reputation and cause it to lose customers. Similarly, unauthorized access to or through Kaleyra’s information systems and networks or those Kaleyra develops or manages for its customers, whether by Kaleyra’s employees or third parties, could result in negative publicity, legal liability, and damage to Kaleyra’s reputation, which could in turn harm Kaleyra’s business and results of operations.

If Kaleyra causes disruptions in its customers’ businesses or provides inadequate service, Kaleyra’s customers may have claims for substantial damages against Kaleyra, which could cause Kaleyra to lose customers, have a negative effect on Kaleyra’s reputation, and adversely affect its results of operations.

If Kaleyra makes errors in the course of delivering services for its customers or business partners, or fails to consistently meet its service level obligations or other service requirements of Kaleyra’s customers, these errors or failures could disrupt Kaleyra’s client’s business, which could result in a reduction in its revenue or a claim for substantial damages against Kaleyra. In addition, a failure or inability by Kaleyra to meet a contractual requirement could subject Kaleyra to penalties, cause Kaleyra to lose customers or damage Kaleyra’s brand or corporate reputation, and limit Kaleyra’s ability to attract new business.

The services Kaleyra provides are often critical to Kaleyra’s customers’ businesses. Certain of Kaleyra’s client contracts require Kaleyra to comply with security obligations including maintaining network security and backup data, ensuring Kaleyra’s network is virus-free, maintaining business continuity planning procedures, and verifying the integrity of employees that work with Kaleyra’s customers by conducting background checks. Any failure in a client’s system, failure of Kaleyra’s data center, cloud or other offerings, or breach of security

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relating to the services Kaleyra provides to the client could damage Kaleyra’s reputation or result in a claim for substantial damages against Kaleyra. Any significant failure of Kaleyra’s equipment or systems, or any major disruption to basic infrastructure in the locations in which Kaleyra operates, such as power and telecommunications, could impede Kaleyra’s ability to provide services to Kaleyra’s customers, have a negative impact on Kaleyra’s reputation, cause Kaleyra to lose customers, and adversely affect its results of operations.

Under Kaleyra’s client contracts, Kaleyra’s liability for breach of its obligations is in some cases limited pursuant to the terms of the contract. Such limitations may be unenforceable or otherwise may not protect it from liability for damages. In addition, certain liabilities, such as claims of third parties for which Kaleyra may be required to indemnify its customers, are generally not limited under Kaleyra’s contracts. The successful assertion of one or more large claims against Kaleyra in amounts greater than those covered by Kaleyra’s current insurance policies could harm Kaleyra’s financial condition. Even if such assertions against it are unsuccessful, Kaleyra may incur reputational harm and substantial legal fees.

The length and unpredictability of the sales cycle for Kaleyra’s technology offerings and services could delay new sales and cause Kaleyra’s revenue and cash flows for any given quarter to fail to meet Kaleyra’s projections or market expectations.

The sales cycle between Kaleyra’s initial contact with a potential client and the signing of a contract to provide technology offerings and services varies. As a result of the variability and length of the sales cycle, Kaleyra has a limited ability to forecast the timing of sales. A delay in or failure to complete transactions could harm Kaleyra’s business and financial results, and could cause Kaleyra’s financial results to vary significantly from quarter to quarter. Kaleyra’s sales cycle varies widely, reflecting differences in Kaleyra’s potential customers’ decision-making processes, procurement requirements, and budget cycles, and is subject to significant risks over which Kaleyra has little or no control, including:

• Kaleyra’s customers’ budgetary constraints and priorities;

• the timing of Kaleyra’s customers’ budget cycles; and

• the length and timing of customers’ approval processes.

Kaleyra’s technology offerings and services could infringe upon the intellectual property rights of others or Kaleyra might lose its ability to utilize the intellectual property of others.

Kaleyra cannot be sure that its brand, technology offerings, and services, including, for example, the software solutions of others that Kaleyra offers to its customers, do not infringe on the intellectual property rights of third parties, and these third parties could claim that Kaleyra or its customers are infringing upon their intellectual property rights. These claims could harm Kaleyra’s reputation, cause Kaleyra to incur substantial costs or prevent Kaleyra from offering some services or solutions in the future or require Kaleyra to rebrand. Any related proceedings could require Kaleyra to expend significant resources over an extended period of time. In most of Kaleyra’s contracts, Kaleyra agrees to indemnify its customers for expenses and liabilities resulting from claimed infringements of the intellectual property rights of third parties. Any claims or litigation in this area, regardless of merit, could be time-consuming and costly, damage Kaleyra’s reputation, and/or require Kaleyra to incur additional costs to obtain the right to continue to offer a service or solution to its customers. If Kaleyra cannot secure this right at all or on reasonable terms, or, alternatively, substitute a non-infringing technology, Kaleyra’s business, results of operations, or financial condition could be harmed. Similarly, if Kaleyra is unsuccessful in defending a trademark claim, Kaleyra could be forced to re-brand, which could harm its business, results of operations, or financial condition. Additionally, in recent years, individuals and firms have purchased intellectual property assets where their sole or primary purpose is to assert claims of infringement against technology providers and customers that use such technology. Any such action naming Kaleyra or its customers could be costly to defend or lead to an expensive settlement or judgment against Kaleyra Moreover, such an action could result in an injunction being ordered against Kaleyra’s client or Kaleyra’s own services or operations, causing further damages.

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If Kaleyra is unable to protect its intellectual property rights from unauthorized use or infringement by third parties, its business could be adversely affected.

Kaleyra’s success depends, in part, upon its ability to protect its proprietary methodologies and other intellectual property. Existing laws offer only limited protection of Kaleyra’s intellectual property rights, and the protection in some countries in which Kaleyra operates or may operate in the future may be very limited. Kaleyra relies upon a combination of confidentiality policies, nondisclosure and other contractual arrangements, and trade secret, copyright, and trademark laws to protect its intellectual property rights. These laws are subject to change at any time and could further limit its ability to protect its intellectual property. There is uncertainty concerning the scope of available intellectual property protection for software and business methods, which are fields in which Kaleyra relies on intellectual property laws to protect its rights. The validity and enforceability of any intellectual property right Kaleyra obtains may be challenged by others and, to the extent it has enforceable intellectual property rights, those intellectual property rights may not prevent competitors from reverse engineering its proprietary information or independently developing technology offerings and services similar to or duplicative of Kaleyra. Further, the steps Kaleyra takes in this regard might not be adequate to prevent or deter infringement or other misappropriation of its intellectual property by competitors, former employees or other third parties, and Kaleyra might not be able to detect unauthorized use of, or take appropriate and timely steps to enforce, its intellectual property rights. Enforcing Kaleyra’s rights might also require considerable time, money, and oversight, and Kaleyra may not be successful in enforcing its rights.

Kaleyra’s use of open source software could negatively affect its ability to sell Kaleyra’s products and subject Kaleyra to possible litigation.

Kaleyra’s products and Platform incorporate open source software, and Kaleyra expects to continue to incorporate open source software in its products and Platform in the future. Few of the licenses applicable to open source software have been interpreted by courts, and there is a risk that these licenses could be construed in a manner that could impose unanticipated conditions or restrictions on Kaleyra’s ability to commercialize its products and Platform. Moreover, although Kaleyra has implemented policies to regulate the use and incorporation of open source software into Kaleyra’s products and Platform, Kaleyra cannot be certain that it has not incorporated open source software in Kaleyra products or Platform in a manner that is inconsistent with such policies. If Kaleyra fails to comply with open source licenses, Kaleyra may be subject to certain requirements, including requirements that it offer Kaleyra’s products that incorporate the open source software for no cost, that Kaleyra make available source code for modifications or derivative works Kaleyra creates based upon, incorporating or using the open source software and that it license such modifications or derivative works under the terms of applicable open source licenses. If an author or other third party that distributes such open source software were to allege that Kaleyra has not complied with the conditions of one or more of these licenses, Kaleyra could be required to incur significant legal expenses defending against such allegations and could be subject to significant damages, enjoined from generating revenue from customers using products that contained the open source software and required to comply with onerous conditions or restrictions on these products. In any of these events, Kaleyra and its customers could be required to seek licenses from third parties in order to continue offering Kaleyra’s products and Platform and to re-engineer Kaleyra’s products or Platform or discontinue offering its products to customers in the event re-engineering cannot be accomplished on a timely basis. Any of the foregoing could require Kaleyra to devote additional research and development resources to re-engineer Kaleyra’s products or Platform, which could result in customer dissatisfaction and could harm Kaleyra’s business.

If Kaleyra is unable to collect its receivables from, or bill its unbilled services to its customers, its business and results of operations could be adversely affected.

Kaleyra’s business depends on its ability to successfully obtain payment from its customers of the amounts they owe Kaleyra for technology offerings sold or services performed. Kaleyra typically evaluates the financial condition of its customers and usually bills and collects on relatively short cycles. Kaleyra maintains allowances

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against receivables and unbilled services. Actual losses on client balances could differ from those that Kaleyra currently anticipate and, as a result, Kaleyra might need to adjust its allowances. There is no guarantee that Kaleyra will accurately assess the creditworthiness of its customers. Macroeconomic conditions could also result in financial difficulties for Kaleyra’s customers, including limited access to the credit markets, insolvency, or bankruptcy, and, as a result, could cause customers to delay payments to Kaleyra, request modifications to their payment arrangements that could increase Kaleyra’s receivables balance, or default on their payment obligations to Kaleyra. Timely collection of client balances also depends on Kaleyra’s ability to complete its contractual commitments and bill and collect its contracted revenue. If Kaleyra is unable to meet its contractual requirements, it might experience delays in collection of and/or be unable to collect its client balances. In addition, if Kaleyra experiences an increase in the time to bill and to collect for its services, Kaleyra’s cash flows could be negatively impacted.

The market for Kaleyra’s products and Platform is new and unproven, may decline or experience limited growth and is dependent in part on developers continuing to adopt its Platform and use its products.

Kaleyra S.p.A. was founded in 1999. Kaleyra and its subsidiaries have been developing and providing its Platform to enable developers and organizations to integrate voice, messaging and other communications capabilities into their software applications. This market is relatively new and unproven and is subject to a number of risks and uncertainties. Kaleyra believes that its revenue currently constitutes a significant portion of the total revenue in this market, and therefore, Kaleyra believes that its future success will depend in large part on the growth, if any, of this market. The utilization of APIs by developers and organizations to build communications functionality into their applications is still relatively new, and developers and organizations may not recognize the need for, or benefits of, Kaleyra products and Platform. Moreover, if they do not recognize the need for and benefits of Kaleyra products and Platform, they may decide to adopt alternative products and services to satisfy some portion of their business needs. In order to grow Kaleyra’s business and extend Kaleyra market position, Kaleyra intend to focus on educating developers and other potential customers about the benefits of Kaleyra products and Platform, expanding the functionality of Kaleyra products and bringing new technologies to market to increase market acceptance and use of Kaleyra’s Platform. Kaleyra’s ability to expand the market that Kaleyra products and Platform address depends upon a number of factors, including the cost, performance and perceived value associated with such products and Platform. The market for Kaleyra’s products and Platform could fail to grow significantly or there could be a reduction in demand for Kaleyra products as a result of a lack of developer acceptance, technological challenges, competing products and services, decreases in spending by current and prospective customers, weakening economic conditions and other causes. If Kaleyra’s market does not experience significant growth or demand for Kaleyra products decreases, then Kaleyra’s business and operations could be harmed.

Kaleyra’s Platform must integrate with a variety of network, hardware, mobile and software platforms and technologies, and its need to continuously modify and enhance Kaleyra’s products and Platform to adapt to changes and innovation in these technologies. For example, Apple, Google and other cell-phone operating system providers or inbox service providers may develop new applications or functions intended to filter spam and unwanted phone calls, messages or other communications. Similarly, Kaleyra’s network service providers may adopt new filtering technologies in an effort to combat spam or robocalling. Such technologies may inadvertently filter desired messages or calls to or from Kaleyra’s customers. If cell-phone operating system providers, network service providers, Kaleyra’s customers or their end users adopt new software platforms or infrastructure, Kaleyra may be required to develop new versions of its products to work with those new platforms or infrastructure. This development effort may require significant resources, which would adversely affect Kaleyra’s business, results of operations and financial condition. Any failure of Kaleyra’s products and Platform to operate effectively with evolving or new platforms and technologies could reduce the demand for Kaleyra’s products. If Kaleyra is unable to respond to market changes in a cost-effective manner, Kaleyra’s products may become less marketable and less competitive or obsolete.

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Kaleyra’s future success depends in part on its ability to drive the adoption of its products by international customers.

In the three months ended March 31, 2020 and the years ended December 31, 2019 and 2018, Kaleyra derived 69.9%, 73.6% and 88.9% of its revenue, respectively, from customer accounts located in Italy and India. Revenue derived from customer accounts located in the United States increased from 2.9% in 2018 to 7.3% in 2019, while revenue derived from customer accounts located in the European countries other than Italy increased from 6.3% in 2018 to 12.1% in 2019. This is in line with the expansion strategy out of Italy and India identified by Kaleyra. The future success of Kaleyra’s business will depend, in part, on Kaleyra ability to expand its customer base worldwide in new geographies. If Kaleyra is unable to increase the revenue that it derives from international customers, Kaleyra’s business and results of operations could be harmed.

Unfavorable global economic conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets. Furthermore, the most recent global financial crisis caused extreme volatility and disruptions in the capital and credit markets. A severe or prolonged economic downturn, including due to the impact of the COVID-19 pandemic, could result in a variety of risks to our business, including a reduced ability to raise additional capital when needed on acceptable terms, or at all. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Kaleyra’s global operations are subject to complex risks, some of which might be beyond its control.

Kaleyra is headquartered in Milan, Italy, has a sizable presence in India, and operates in other countries throughout the world. In addition, Kaleyra’s customers have operations throughout the world, and Kaleyra derives a substantial part of its revenue internationally. As a result, Kaleyra may be subject to risks inherently associated with international operations, including risks associated with foreign currency exchange rate fluctuations, difficulties in enforcing intellectual property and/or contractual rights, the burdens of complying with a wide variety of foreign laws and regulations, potentially adverse tax consequences, tariffs, quotas, and other barriers, potential difficulties in collecting trade receivables, international hostilities, terrorism, and natural disasters. Expansion of international operations also increases the likelihood of potential or actual violations of domestic and international anticorruption laws, such as the U.S. Foreign Corrupt Practices Act, or of U.S. and international export control and sanctions regulations. Kaleyra may also face difficulties integrating any new facilities in different countries into its existing operations, as well as integrating employees that it hires in different countries into its existing corporate culture. If Kaleyra is unable to manage the risks of its global operations, its business could be harmed.

Kaleyra is in the process of expanding its international operations, which exposes Kaleyra to significant risks.

Kaleyra is continuing to expand its international operations to increase its revenue from customers outside of Italy, India and the United States as part of Kaleyra’s growth strategy. Between 2017 and 2019, Kaleyra’s international headcount grew from 60 employees to 267 employees. Kaleyra expects to open additional international offices and hire employees to work at these offices in order to reach new customers and gain access to additional technical talent. Operating in international markets requires significant resources and management attention and will subject Kaleyra to regulatory, economic and political risks in addition to those Kaleyra already faces in Italy, India and the United States. Because of Kaleyra’s limited experience with international operations or with developing and managing sales in additional international markets beyond Italy and India, Kaleyra’s international expansion efforts may not be successful.

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In addition, Kaleyra will face risks in doing business internationally that could adversely affect its business, including:

• exposure to political developments in the United Kingdom (“U.K.”), including the planned departure of the U.K. from the European Union (the “EU”) in 2019, which has created an uncertain political and economic environment, instability for businesses and volatility in global financial markets;

• the difficulty of managing and staffing international operations and the increased operations, travel, infrastructure and legal compliance costs associated with servicing international customers and operating numerous international locations;

• Kaleyra’s ability to effectively price its products in competitive international markets;

• new and different sources of competition;

• Kaleyra’s ability to comply with the EU General Data Protection Regulation (“GDPR”), which went into effect on May 25, 2018;

• potentially greater difficulty collecting accounts receivable and longer payment cycles;

• higher or more variable network service provider fees outside of the United States;

• the need to adapt and localize Kaleyra’s products for specific countries;

• the need to offer customer support in various languages;

• difficulties in understanding and complying with local laws, regulations and customs in non-U.S. jurisdictions;

• understanding and reconciling different technical standards, data privacy and telecommunications regulations, registration and certification requirements outside the United States, which could prevent customers from deploying Kaleyra’s products or limit their usage;

• export controls and economic sanctions administered by the U.S. Department of Commerce Bureau of Industry and Security and the U.S. Treasury Department’s Office of Foreign Assets Control;

• compliance with various anti-bribery and anti-corruption laws such as the U.S. Foreign Corrupt Practices Act and United Kingdom Bribery Act of 2010;

• tariffs and other non-tariff barriers, such as quotas and local content rules;

• more limited protection for intellectual property rights in some countries;

• adverse tax consequences;

• fluctuations in currency exchange rates, which could increase the price of Kaleyra’s products outside of the United States, increase the expenses of Kaleyra’s international operations and expose Kaleyra to foreign currency exchange rate risk;

• currency control regulations, which might restrict or prohibit Kaleyra’s conversion of other currencies into U.S. dollars;

• restrictions on the transfer of funds;

• deterioration of political relations between the United States and other countries; and

• political or social unrest or economic instability in a specific country or region in which Kaleyra operates, which could have an adverse impact on Kaleyra’s operations in that location.

Also, due to costs from Kaleyra’s international expansion efforts and network service provider fees outside of the United States, which generally are higher than domestic rates, Kaleyra’s gross margin for international customers is typically lower than its gross margin for domestic customers. As a result, Kaleyra’s gross margin may be impacted and fluctuate as Kaleyra expands its operations and customer base worldwide.

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Kaleyra’s failure to manage any of these risks successfully could harm Kaleyra’s business and international operations.

Kaleyra’s operations are subject to regulation and require Kaleyra to obtain and maintain several governmental licenses and permits. If Kaleyra violates those regulatory requirements or fail to obtain and maintain those licenses and permits, including payment of related fees, if any, Kaleyra may not be able to conduct its business. Moreover, those regulatory requirements could change in a manner that significantly increases Kaleyra’s costs or otherwise adversely affects Kaleyra’s operations.

In the ordinary course of operating Kaleyra’s network and providing its services, Kaleyra must obtain and maintain a variety of telecommunications and other licenses and authorizations. Kaleyra also must comply with a variety of regulatory obligations. There can be no assurance Kaleyra can maintain its licenses or that they will be renewed upon their expiration. Kaleyra’s failure to obtain or maintain necessary licenses, authorizations or to comply with the obligations imposed upon license holders, including the payment of fees, may cause sanctions or additional costs, including the revocation of authority to provide services.

Kaleyra’s operations are subject to regulation at the national level and, often, at the state and local levels. Kaleyra’s operations will become subject to additional regulation by other countries as Kaleyra expands to international markets. Changes to existing regulations or rules, or the failure to regulate going forward in areas historically regulated on matters such as network neutrality, licensing fees, environmental, health and safety, privacy, intercarrier compensation, emergency 911 services interconnection and other areas, in general or particular to Kaleyra’s industry, may increase costs, restrict operations or decrease revenue. As Kaleyra expands internationally, Kaleyra will also become subject to telecommunications laws and regulations in the foreign countries where Kaleyra offers its products. Kaleyra’s international operations are subject to country-specific governmental regulation that may increase its costs or impact its products and Platform or prevent Kaleyra from offering or providing Kaleyra’s products in certain countries. Kaleyra’s inability or failure to comply with telecommunications and other laws and regulations could cause the temporary or permanent suspension of Kaleyra’s operations, and if Kaleyra cannot provide emergency calling functionality through its Platform to meet any new federal or state requirements, or any applicable requirements from other countries, the competitive advantages that Kaleyra currently has may not persist, adversely affecting Kaleyra ability to obtain and to retain enterprise customers which could have an adverse impact on Kaleyra’s business.

Kaleyra’s products and Platform and its business are subject to a variety of U.S. and international laws and regulations, including those regarding data protection and information security, and Kaleyra customers may be subject to regulations related to the handling and transfer of certain types of sensitive and confidential information. Any failure of Kaleyra’s products to comply with or enable its customers and channel partners to comply with applicable laws and regulations could harm Kaleyra’s business.

Kaleyra and its customers that use Kaleyra’s products may be subject to data protection-related laws and regulations that impose obligations in connection with the collection, processing and use of personal data, financial data, health or other similar data. The U.S. federal and various state and foreign governments have adopted or proposed limitations on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiable information of individuals. The U.S. Federal Trade Commission and numerous state attorneys general are applying federal and state consumer protection laws to impose standards on the online collection, use and dissemination of data, and to the security measures applied to such data.

Similarly, many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and use of personally identifiable information obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often more restrictive than those in the U.S. laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of personally identifiable information that identifies or may be used to identify an individual, such as names, telephone numbers, message addresses and, in some jurisdictions, IP addresses and other online identifiers.

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For example, in April 2016 the EU adopted the GDPR, which took full effect on May 25, 2018. GDPR enhances data protection obligations for businesses and requires service providers (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measures and keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annual revenues. Given the breadth and depth of changes in data protection obligations, preparing to meet the requirements of GDPR has required significant time and resources, including a review of Kaleyra’s technology and systems currently in use against the requirements of GDPR. There are also additional EU laws and regulations (and member states’ implementations thereof) which govern the protection of consumers and of electronic communications. If Kaleyra’s efforts to comply with GDPR or other applicable EU laws and regulations are not successful, Kaleyra may be subject to penalties and fines that would adversely impact Kaleyra’s business and results of operations, and Kaleyra’s ability to conduct business in the EU could be significantly impaired.

Furthermore, outside of the EU, Kaleyra continues to see increased regulation of data privacy and security, including the adoption of more stringent subject matter specific state laws in the United States. For example, on June 28, 2018, California enacted the California Consumer Privacy Act (“CCPA”), which took effect on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase Kaleyra’s compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the United States, which could increase Kaleyra’s potential liability and adversely affect its business.

Kaleyra continues to see jurisdictions imposing data localization laws, which require personal information, or certain subcategories of personal information to be stored in the jurisdiction of origin. These regulations may inhibit Kaleyra’s ability to expand into those markets or prohibit Kaleyra from continuing to offer services in those markets without significant additional costs. The uncertainty and changes in the requirements of multiple jurisdictions may increase the cost of compliance, delay or reduce demand for Kaleyra’s services, restrict Kaleyra’s ability to offer services in certain locations, impact Kaleyra’s customers’ ability to deploy its solutions in certain jurisdictions, or subject Kaleyra to sanctions, by national data protection regulators.

Additionally, although Kaleyra endeavors to have its products and Platform comply with applicable laws and regulations, these and other obligations may be modified, they may be interpreted and applied in an inconsistent manner from one jurisdiction to another, and they may conflict with one another, other regulatory requirements, contractual commitments or Kaleyra’s internal practices

Kaleyra also may be bound by contractual obligations relating to its collection, use and disclosure of personal, financial and other data or may find it necessary or desirable to join industry or other self-regulatory bodies or other privacy- or data protection-related organizations that require compliance with their rules pertaining to privacy and data protection.

Kaleyra expects that there will continue to be new proposed laws, rules of self-regulatory bodies, regulations and industry standards concerning privacy, data protection and information security in the United States, the EU and other jurisdictions, and Kaleyra cannot yet determine the impact such future laws, rules, regulations and standards may have on Kaleyra’s business. Moreover, existing U.S. federal and various state and foreign privacy-and data protection-related laws and regulations are evolving and subject to potentially differing interpretations, and various legislative and regulatory bodies may expand current or enact new laws and regulations regarding privacy- and data protection-related matters. Because global laws, regulations and industry standards concerning privacy and data security have continued to develop and evolve rapidly, it is possible that Kaleyra or its products or Platform may not be, or may not have been, compliant with each such applicable law, regulation and industry standard and compliance with such new laws or to changes to existing laws may impact Kaleyra’s business and

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practices, requires Kaleyra to expend significant resources to adapt to these changes, or to stop offering Kaleyra’s products in certain countries. These developments could harm Kaleyra’s business.

Any failure or perceived failure by Kaleyra, its products or its Platform to comply with new or existing U.S., EU or other foreign privacy or data security laws, regulations, policies, industry standards or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, release or transfer of, personally identifiable information or other customer data may result in governmental investigations, inquiries, enforcement actions and prosecutions, private litigation, fines and penalties, adverse publicity or potential loss of business.

Kaleyra is subject to privacy and data security obligations in the United States. Any failure to comply with applicable laws, regulations or contractual obligations may harm Kaleyra’s business. The Federal Communications Commission (“FCC”), other federal agencies or state attorneys general could fine or subject Kaleyra to other adverse actions that may negatively impact Kaleyra’s business reputation. If Kaleyra is subject to an investigation or suffers a breach, Kaleyra may incur costs or be subject to forfeitures and penalties that could reduce Kaleyra’s profitability.

Kaleyra is subject to privacy and data security laws and regulations that impose obligations in connection with the collection, processing and use of personal data. Federal and state laws or proposed laws impose limits on, or requirements regarding, the collection, distribution, use, security and storage of personally identifiable information (“PII”) of individuals. Kaleyra sees increased regulation of data privacy and security, including the adoption of more stringent subject matter specific state laws in the United States. For example, in 2018, California enacted the CCPA, which became effective on January 1, 2020. As discussed in the above Risk Factor, the CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. The CCPA may increase Kaleyra’s compliance costs and potential liability. Some observers have noted that the CCPA could mark the beginning of a trend toward more stringent state privacy legislation in the United States, which could increase Kaleyra’s potential liability and adversely affect its business.

Kaleyra also may be bound by contractual obligations relating to Kaleyra’s collection, use and disclosure of personal data or may find it necessary or desirable to join industry or other self-regulatory bodies or other privacy or security related organizations that require compliance with their rules pertaining to privacy and data protection.

Kaleyra is subject to individual or joint jurisdiction of the FCC, the Federal Trade Commission, and state attorneys general with respect to privacy and data security obligations. If Kaleyra was to suffer or if one of Kaleyra’s customers were to suffer a breach, Kaleyra may be subject to the jurisdiction of a variety of federal agencies’ jurisdictions as well as state attorneys general. Kaleyra may have to comply with a variety of data breach laws at the federal and state levels, comply with any resulting investigations, as well as offer mitigation to customers and potential end users of certain customers to which Kaleyra provides services. Kaleyra could also be subject to fines, forfeitures and other penalties that may adversely impact Kaleyra’s business.

Any failure or perceived failure by Kaleyra, its products or its Platform to comply with new or existing U.S. privacy or data security laws, regulations, policies, industry standards or contractual or legal obligations, or any security incident that results in the unauthorized access to, or acquisition, release or transfer of, PII or other customer data may result in governmental investigations, inquiries, enforcement actions and prosecutions, private litigation, fines and penalties, adverse publicity or potential loss of business.

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The storage, processing and use of personal information and related data subjects Kaleyra to evolving governmental laws and regulation, commercial standards, contractual obligations and other legal obligations related to consumer and data privacy, which may have a material impact on Kaleyra’s costs, use of Kaleyra’s services, or expose Kaleyra to increased liability.

U.S. federal, state, local and foreign laws and regulations, commercial obligations and industry standards, each provide for obligations and restrictions with respect to data privacy and security, as well as the collection, storage, retention, protection, use, processing, transmission, sharing, disclosure and protection of personal information and other customer data, including customer proprietary network information under applicable federal law. The evolving nature of these obligations and restrictions subjects Kaleyra to the risk of differing interpretations, inconsistency or conflicts among countries or rules, and creates uncertainty regarding their application to Kaleyra’s business.

These obligations and restrictions may limit Kaleyra’s ability to collect, store, process, use, transmit and share data with Kaleyra’s customers, employees and third-party providers and to allow Kaleyra’s customers to collect, store, retain, protect, use, process, transmit, share and disclose data with others through Kaleyra’s services. Compliance with, and other burdens imposed by, such obligations and restrictions could increase the cost of Kaleyra’s operations and impact its ability to market its services through effective segmentation.

Failure to comply with obligations and restrictions related to applicable data protection laws, regulations, standards, and codes of conduct, as well as Kaleyra’s own posted privacy policies and contractual commitments could subject Kaleyra to lawsuits, fines, criminal penalties, statutory damages, consent decrees, injunctions, adverse publicity, loss of user confidence in Kaleyra’s services, and loss of users, which could materially harm Kaleyra’s business. Because these obligations and restrictions have continued to develop and evolve rapidly, it is possible that Kaleyra may not be, or may not have been, compliant with each such obligation and restriction. Additionally, third-party contractors may have access to customer or employee data. If these or other third-party vendors violate obligations and restrictions related to applicable data protection laws or Kaleyra’s policies, such violations may also put Kaleyra’s customers’ or employees’ information at risk and could in turn harm Kaleyra’s business.

United States federal legislation and international laws impose certain obligations on the senders of commercial communications, which could minimize the effectiveness of Kaleyra’s Platform, and establish financial penalties for non-compliance, which could increase the costs of Kaleyra’s business.

The Federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM Act”) establishes certain requirements for commercial messages and transactional messages and specifies penalties for the transmission of messages that are intended to deceive the recipient as to source or content. Among other things, the CAN-SPAM Act, obligates the sender of commercial messages to provide recipients with the ability to ”opt-out” of receiving future commercial communications from the sender. In addition, some U.S. states have passed laws regulating commercial communication practices that are significantly more restrictive and difficult to comply with than the CAN-SPAM Act. For example, Utah and Michigan prohibit the sending of communication messages that advertise products or services that minors are prohibited by law from purchasing (e.g., alcoholic beverages, tobacco products, illegal drugs) or that contain content harmful to minors (e.g., pornography) to message addresses listed on specified child protection registries. Some portions of these state laws may not be preempted by the CAN-SPAM Act. In addition, certain non-U.S. jurisdictions, such as Australia, Canada, and the EU, have enacted laws that regulate sending messages, and some of these laws are more restrictive than U.S. laws. For example, some foreign laws prohibit sending broad categories of messages unless the recipient has provided the sender advance consent to receipt of such messages, or in other words has “opted-in” to receiving such communications. If Kaleyra were found to be in violation of the CAN-SPAM Act, applicable state laws governing messages not preempted by the CAN-SPAM Act or foreign laws regulating the distribution of messages, whether as a result of violations by Kaleyra’s customers or its own acts or omissions, Kaleyra could be required to pay large penalties, which would adversely affect its financial condition,

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significantly harm Kaleyra’s business, injure Kaleyra’s reputation and erode customer trust. The terms of any injunctions, judgments, consent decrees or settlement agreements entered into in connection with enforcement actions or investigations against Kaleyra in connection with any of the foregoing laws may also require Kaleyra to change one or more aspects of the way Kaleyra operates its business, which could impair Kaleyra’s ability to attract and retain customers or could increase its operating costs.

Changes in laws and regulations related to the Internet or changes in the Internet infrastructure itself may diminish the demand for Kaleyra’s products.

The future success of Kaleyra’s business depends upon the continued use of the Internet as a primary medium for commerce, communications and business applications. U.S. federal, state or foreign government bodies or agencies have in the past adopted, and may in the future adopt, laws or regulations affecting the use of the Internet as a commercial medium. Changes in these laws or regulations could require Kaleyra to modify its products and Platform in order to comply with these changes. In addition, government agencies or private organizations have imposed and may impose additional taxes, fees or other charges for accessing the Internet or commerce conducted via the Internet. These laws or charges could limit the growth of Internet-related commerce or communications generally or result in reductions in the demand for Internet-based products and services such as Kaleyra’s products and Platform. In addition, the use of the Internet as a business tool could be adversely affected due to delays in the development or adoption of new standards and protocols to handle increased demands of Internet activity, security, reliability, cost, ease-of-use, accessibility and quality of service. The performance of the Internet and its acceptance as a business tool has been adversely affected by “viruses”, “worms”, and similar malicious programs. If the use of the Internet is reduced as a result of these or other issues, then demand for Kaleyra’s products could decline, which could impair Kaleyra’s business and reduce its financial results.

Certain of Kaleyra’s products are subject to telecommunications-related regulations, and future legislative or regulatory actions could harm Kaleyra’s business.

As Kaleyra continues to expand internationally, Kaleyra has become subject to telecommunications laws and regulations in the foreign countries where Kaleyra offers its products. For example, in Italy, Kaleyra holds a license to be a fixed line operator and is subject to (1) the Electronic Communications Code, or the ECC, which has been enacted with Legislative Decree no. 259/2003, as amended, which transposed a package of European Directives adopted in 2002 and amended in 2009; (2) the National Numbering Plan, issued with AGCom’s resolution no. 8/15/CIR as amended, which governs the usage of national numbers for the provision of electronic communications services as a whole; (3) resolutions on the use of alphanumeric indications for the identification of the calling subject in SMS (so-called Alias), that are periodically issued by AGCom, starting from AGCom’s resolution no. 42/13/CIR; and (4) GDPR.

Kaleyra’s international operations are subject to country-specific governmental regulation and related actions that have increased and may continue to increase Kaleyra’s costs or impact its products and Platform or prevent Kaleyra from offering or providing Kaleyra’s products in certain countries. Certain of Kaleyra’s products may be used by customers located in countries where voice and other forms of IP communications may be illegal or require special licensing or in countries on a U.S. embargo list. Even where Kaleyra’s products are reportedly illegal or become illegal or where users are located in an embargoed country, users in those countries may be able to continue to use Kaleyra’s products in those countries notwithstanding the illegality or embargo. Kaleyra may be subject to penalties or governmental action if consumers continue to use its products in countries where it is illegal to do so, and any such penalties or governmental action may be costly and may harm Kaleyra’s business and damage its brand and reputation. Kaleyra may be required to incur additional expenses to meet applicable international regulatory requirements or be required to discontinue those services if required by law or if Kaleyra cannot or will not meet those requirements. Any of the foregoing could harm Kaleyra’s business.

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If Kaleyra is unable to effectively process local number and toll-free number portability provisioning in a timely manner or to obtain or retain direct inward dialing numbers and local or toll-free numbers, Kaleyra’s business and results of operations may be adversely affected.

Kaleyra’s future success depends in part on its ability to procure large quantities of local and toll-free direct inward dialing numbers (“DIDs”), in the United States and in foreign countries at a reasonable cost and without restrictions. Kaleyra’s ability to procure, distribute and retain DIDs depends on factors outside of Kaleyra’s control, such as applicable local jurisdiction specific regulations, the practices of network service providers that provide DIDs, such as offering DIDs with conditional minimum volume call level requirements, the cost of these DIDs and the level of overall competitive demand for new DIDs.

In addition, in order to procure, distribute and retain telephone numbers from the EU or certain other regions, Kaleyra may be required to register with the local telecommunications regulatory authorities, some of which have been increasingly monitoring and regulating the categories of phone numbers that are eligible for provisioning to Kaleyra’s customers. Kaleyra has registered and is in the process of registering in various countries in which Kaleyra does business, but in some countries, the regulatory regime around provisioning of phone numbers is unclear, subject to change over time, and sometimes may conflict from jurisdiction to jurisdiction. Furthermore, these regulations and governments’ approaches to their enforcement, as well as Kaleyra’s products and services, are still evolving and Kaleyra may be unable to maintain compliance with applicable regulations, or enforce compliance by Kaleyra’s customers, on a timely basis or without significant cost. Also, compliance with these types of regulation may require changes in products or business practices that result in reduced revenue. If Kaleyra or its customers use phone numbers in these countries in a manner that violates applicable rules and regulations, Kaleyra may also be subject to significant penalties or governmental action, including government-initiated audits and, in extreme cases, may be precluded from doing business in that particular country. In the event of such non-compliance, Kaleyra may be forced to reclaim phone numbers from Kaleyra’s customers, which could result in loss of customers, breach of contract claims, loss of revenue, reputational harm, and erosion of customer trust, all of which could harm Kaleyra’s business and reputation.

Due to their limited availability, there are certain popular area code prefixes that Kaleyra generally cannot obtain. Kaleyra’s inability to acquire or retain DIDs for its operations would make Kaleyra’s voice and messaging products less attractive to potential customers in the affected local geographic areas. In addition, future growth in Kaleyra’s customer base, together with growth in the customer bases of other providers of cloud communications, has increased, which increases Kaleyra’s dependence on sufficiently large quantities of DIDs. It may become increasingly difficult to source larger quantities of DIDs as Kaleyra’s scale and its need to pay higher costs for DIDs, and DIDs may become subject to more stringent regulation or conditions of usage such as the registration and on-going compliance requirements discussed above could harm Kaleyra’s business.

Kaleyra customers’ and other users’ violation of Kaleyra’s policies or other misuse of Kaleyra’s Platform to transmit unauthorized, offensive or illegal messages, spam, phishing scams, and website links to harmful applications or for other fraudulent or illegal activity could damage Kaleyra’s reputation, and Kaleyra may face a risk of litigation and liability for unauthorized, inaccurate, or fraudulent information distributed via Kaleyra’s Platform.

The actual or perceived improper sending of text messages may subject Kaleyra to potential risks, including liabilities or claims relating to consumer protection laws. For example, the Telephone Consumer Protection Act (“TCPA”) restricts telemarketing and the use of automatic text messages without proper consent. The scope and interpretation of the laws that are or may be applicable to the delivery of text messages are continuously evolving and developing. If Kaleyra does not comply with these laws or regulations or if Kaleyra becomes liable under these laws or regulations due to the failure of Kaleyra’s customers to comply with these laws by obtaining proper consent, Kaleyra could face direct liability.

Moreover, despite Kaleyra’s ongoing and substantial efforts to limit such use, certain customers may use Kaleyra’s Platform to transmit unauthorized, offensive or illegal messages, spam, phishing scams, and website

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links to harmful applications, reproduce and distribute copyrighted material or the trademarks of others without permission, and report inaccurate or fraudulent data or information. These issues also arise with respect to a portion of those users who use Kaleyra’s Platform on a free trial basis. These actions are in violation of Kaleyra’s policies. However, Kaleyra’s efforts to defeat spamming attacks and other fraudulent activity will not prevent all such attacks and activity, such use of Kaleyra’s Platform could damage Kaleyra’s reputation and it could face claims for damages, copyright or trademark infringement, defamation, negligence, or fraud. Moreover, Kaleyra customers’ and other users’ promotion of their products and services through Kaleyra’s Platform might not comply with U.S. federal, state, and foreign laws. Kaleyra relies on contractual representations made to Kaleyra by its customers that their use of Kaleyra’s Platform will comply with Kaleyra’s policies and applicable law, including, without limitation, Kaleyra’s message communication policy. Although Kaleyra will retain the right to verify that customers and other users are abiding by certain contractual terms, Kaleyra’s Authorized Use Policy and Kaleyra’s message communication policy and, in certain circumstances, to review their distribution lists, Kaleyra’s customers and other users are ultimately responsible for compliance with Kaleyra’s policies, and it does not systematically audit Kaleyra’s customers or other users to confirm compliance with Kaleyra’s policies. Kaleyra cannot predict whether Kaleyra’s role in facilitating its customers’ or other users’ activities would expose Kaleyra to liability under applicable law. Even if claims asserted against Kaleyra do not result in liability, Kaleyra may incur substantial costs in investigating and defending such claims. If Kaleyra is found liable for its customers’ or other users’ activities, Kaleyra could be required to pay fines or penalties, redesign business methods or otherwise expend resources to remedy any damages caused by such actions and to avoid future liability.

Kaleyra may be subject to governmental export controls and economic sanctions regulations that could impair Kaleyra’s ability to compete in international markets due to licensing requirements and could subject Kaleyra to liability if Kaleyra is not in compliance with applicable laws.

Certain of Kaleyra’s products and services may be subject to export control and economic sanctions regulations, including the U.S. Export Administration regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of Kaleyra’s products and the provision of Kaleyra’s services must be made in compliance with these laws and regulations. Although Kaleyra takes precautions to prevent its products from being provided in violation of such laws, Kaleyra is aware of previous exports of certain of Kaleyra’s products to a small number of persons and organizations that are the subject of U.S. sanctions or located in countries or regions subject to U.S. sanctions. If Kaleyra fails to comply with these laws and regulations, Kaleyra and certain of its employees could be subject to substantial civil or criminal penalties, including: the possible loss of export privileges; fines, which may be imposed on Kaleyra and responsible employees or managers; and, in extreme cases, the incarceration of responsible employees or managers. Obtaining the necessary authorizations, including any required license, for a particular deployment may be time-consuming, is not guaranteed and may result in the delay or loss of sales opportunities. In addition, changes in Kaleyra’s products or services, or changes in applicable export or economic sanctions regulations may create delays in the introduction and deployment of Kaleyra’s products and services in international markets, or, in some cases, prevent the export of Kaleyra’s products or provision of Kaleyra’s services to certain countries or end users. Any change in export or economic sanctions regulations, shift in the enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could also result in decreased use of Kaleyra’s products and services, or in its decreased ability to export Kaleyra’s products or provide Kaleyra’s services to existing or prospective customers with international operations. Any decreased use of Kaleyra’s products and services or limitation on Kaleyra’s ability to export its products and provide its services could harm Kaleyra’s business.

Further, Kaleyra incorporates encryption technology into certain of its products. Various countries regulate the import of certain encryption technology, including through import permitting and licensing requirements, and have enacted laws that could limit Kaleyra’s customers’ ability to import its products into those countries. Encryption products and the underlying technology may also be subject to export control restrictions. Governmental regulation of encryption technology and regulation of exports of encryption products, or Kaleyra’s

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failure to obtain required approval for Kaleyra’s products, when applicable, could harm Kaleyra’s international sales and adversely affect Kaleyra’s revenue. Compliance with applicable regulatory requirements regarding the export of Kaleyra’s products and provision of Kaleyra’s services, including with respect to new releases of Kaleyra’s products and services, may create delays in the introduction of Kaleyra’s products and services in international markets, prevent Kaleyra’s customers with international operations from deploying its products and using Kaleyra’s services throughout their globally-distributed systems or, in some cases, prevent the export of Kaleyra’s products or provision of Kaleyra’s services to some countries altogether.

Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect Kaleyra’s business, investments and results of operations.

Kaleyra is subject to laws, regulations and rules enacted by national, regional and local governments. In particular, Kaleyra is required to comply with certain SEC, NYSE American and other legal or regulatory requirements. Compliance with, and monitoring of, applicable laws, regulations and rules may be difficult, time consuming and costly. Those laws, regulations and rules and their interpretation and application may also change from time to time and those changes could have a material adverse effect on Kaleyra’s business, investments and results of operations. In addition, a failure to comply with applicable laws, regulations and rules, as interpreted and applied, could have a material adverse effect on Kaleyra’s business and results of operations.

Kaleyra faces a risk of litigation resulting from customer misuse of Kaleyra’s services and software to make or send unauthorized calls and/or text messages in violation of the Telephone Consumer Protection Act.

Calls and/or text messages originated by Kaleyra’s customers may subject Kaleyra to potential risks. For example, the TCPA restricts telemarketing and the use of technologies that enable automatic calling and/or text messages without proper consent. This may result in civil claims against Kaleyra and requests for information through third-party subpoenas or regulatory investigations. The scope and interpretation of the laws that are or may be applicable to the making and/or delivery of calls and/or text messages are continuously evolving and developing. If Kaleyra does not comply with these laws or regulations or if Kaleyra becomes liable under these laws or regulations due to the failure of Kaleyra’s customers to comply with these laws by obtaining proper consent, Kaleyra could become subject to lawsuits, fines, civil penalties, potentially significant statutory damages, consent decrees, injunctions, adverse publicity, loss of user confidence in Kaleyra services, loss of users and other adverse consequences, which could harm Kaleyra’s business.

The effects of increased regulation of IP-based service providers are unknown.

While the FCC has to date generally subjected IP-based service providers to less stringent regulatory oversight than traditional common carriers, the FCC has imposed certain regulatory obligations on providers of voice-over-internet protocol (“VoIP”) services, including the obligations to contribute to the Universal Service Fund, to provide 911 services and/or to comply with the Communications Assistance for Law Enforcement Act. Some U.S. states have imposed taxes, fees and/or surcharges on VoIP telephony services. The imposition of additional regulations could have a material adverse effect on Kaleyra’s business.

If Kaleyra experiences excessive credit card or fraudulent activity, Kaleyra could incur substantial costs.

Kaleyra’s customers may choose to authorize Kaleyra to bill their credit card accounts directly for service fees that Kaleyra charges. If people pay for Kaleyra’s services with stolen credit cards, Kaleyra could incur substantial third-party vendor costs for which Kaleyra may not be reimbursed. Further, Kaleyra’s customers provide it with credit card billing information online, and Kaleyra does not review the physical credit cards used in these transactions, which increases Kaleyra’s risk of exposure to fraudulent activity. Kaleyra also incur charges, which Kaleyra refers to as chargebacks, from the credit card companies from claims that the customer did not authorize the credit card transaction to purchase Kaleyra’s services. If the number of unauthorized credit card transactions becomes excessive, Kaleyra could be assessed substantial fines for excess chargebacks, and Kaleyra could lose the right to accept credit cards for payment.

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Kaleyra’s products may also be subject to fraudulent usage, including but not limited to revenue share fraud, domestic traffic pumping, subscription fraud, premium text message scams and other fraudulent schemes. Although Kaleyra’s customers are required to set passwords or personal identification numbers to protect their accounts, third parties have in the past been, and may in the future be, able to access and use their accounts through fraudulent means. Furthermore, spammers attempt to use Kaleyra’s products to send targeted and untargeted spam messages. Kaleyra cannot be certain that its efforts to defeat spamming attacks will be successful in eliminating all spam messages from being sent using Kaleyra’s Platform. In addition, a cybersecurity breach of Kaleyra’s customers’ systems could result in exposure of their authentication credentials, unauthorized access to their accounts or fraudulent calls on their accounts, any of which could harm Kaleyra’s reputation with its customers and result in the incurrence of substantial costs for Kaleyra.

Unfavorable conditions in Kaleyra’s industry or the global economy or reductions in spending on information technology and communications could lower Kaleyra’s revenue and harm its business.

Kaleyra’s results of operations may vary based on the impact of changes in Kaleyra’s industry or the global economy on Kaleyra’s customers. Kaleyra’s results of operations depend in part on demand for information technology and cloud communications. In addition, Kaleyra’s revenue is dependent on the usage of Kaleyra’s products, which in turn is influenced by the scale of business that Kaleyra’s customers are conducting. To the extent that weak economic conditions result in a reduced volume of business for, and communications by, Kaleyra’s customers and prospective customers, demand for, and use of, Kaleyra’s products may decline. Furthermore, weak economic conditions may make it more difficult to collect on outstanding trade receivables. Kaleyra has generated a portion of its revenue from small and medium-sized businesses, and Kaleyra expects this to continue to increase in the foreseeable future. Small and medium-sized business may be affected by economic downturns to a greater extent than enterprises, and typically have more limited financial resources, including capital borrowing capacity, than enterprises. If Kaleyra’s customers reduce their use of Kaleyra’s products, or prospective customers delay adoption or elect not to adopt Kaleyra products, as a result of a weak economy, this could lower Kaleyra’s revenue and harm its business.

Following the completion of this offering, Kaleyra may require additional capital to support Kaleyra’s business, and this capital might not be available on acceptable terms, if at all.

Kaleyra intends to continue to make investments to support Kaleyra’s business and may require additional funds. In particular, Kaleyra may seek additional funds to develop new products and enhance Kaleyra’s Platform and existing products, expand Kaleyra’s operations, including Kaleyra’s sales and marketing organizations and Kaleyra’s presence outside of the United States, improve Kaleyra’s infrastructure or acquire complementary businesses, technologies, services, products and other assets. In addition, Kaleyra may use a portion of its cash to satisfy tax withholding and remittance obligations related to outstanding restricted stock units. Accordingly, following the completion of this offering, Kaleyra may need to engage in equity or debt financings to secure additional funds. If Kaleyra raises additional funds through future issuances of equity or convertible debt securities, Kaleyra’s stockholders could suffer significant dilution, and any new equity securities Kaleyra issues could have rights, preferences and privileges superior to those of holders of Kaleyra’s common stock. Any debt financing that Kaleyra may secure in the future could involve restrictive covenants relating to Kaleyra’s capital raising activities and other financial and operational matters, which may make it more difficult for Kaleyra to obtain additional capital and to pursue business opportunities. Kaleyra may not be able to obtain additional financing on terms favorable to Kaleyra, if at all. If Kaleyra is unable to obtain adequate financing or financing on terms satisfactory to Kaleyra when Kaleyra requires it, Kaleyra’s ability to continue to support its business growth, scale its infrastructure, develop product enhancements and to respond to business challenges could be significantly impaired and could harm Kaleyra’s business.

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Kaleyra’s business is subject to the risks of earthquakes, fire, floods and other natural catastrophic events, and to interruption by man-made problems such as power disruptions, computer viruses, data security breaches or terrorism.

A significant natural disaster, such as an earthquake, fire or flood, occurring at Kaleyra’s headquarters, at one of Kaleyra’s other facilities or where a business partner is located could adversely affect Kaleyra’s business, results of operations and financial condition. Further, if a natural disaster or man-made problem were to affect Kaleyra’s service providers, this could adversely affect the ability of Kaleyra’s customers to use its products and Platform. In addition, natural disasters and acts of terrorism could cause disruptions in Kaleyra’s or its customers’ businesses, national economies or the world economy as a whole. Kaleyra also rely on its network and third-party infrastructure and enterprise applications and internal technology systems for Kaleyra’s engineering, sales and marketing, and operations activities. Although Kaleyra maintains incident management and disaster response plans, in the event of a major disruption caused by a natural disaster or man-made problem, Kaleyra may be unable to continue its operations and may endure system interruptions, reputational harm, delays in Kaleyra’s development activities, lengthy interruptions in service, breaches of data security and the loss of critical data.

In addition, computer malware, viruses and computer hacking, fraudulent use attempts and phishing attacks have become more prevalent in Kaleyra’s industry, have occurred on Kaleyra’s Platform in the past and may occur on Kaleyra’s Platform in the future. Though it is difficult to determine what, if any, harm may directly result from any specific interruption or attack, any failure to maintain performance, reliability, security, integrity and availability of Kaleyra’s products and technical infrastructure to the satisfaction of Kaleyra’s users may harm Kaleyra’s reputation and Kaleyra’s ability to retain existing users and attract new users.

Kaleyra is unable to predict the extent to which the global COVID-19 pandemic may adversely impact our business operations, financial performance, results of operations and stock price.

The COVID-19 pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations. We also have our headquarters in Milan, Italy, which has been severely affected by COVID-19 and the resulting government lockdowns to attempt to contain the spread of COVID-19. The magnitude and duration of the resulting decline in business activity cannot currently be estimated with any degree of certainty and threatens to (1) negatively impact the demand for our products and services, especially in those locations subject to “shelter in place” restrictions or similar government orders, (2) restrict our sales operations and marketing efforts, and (3) disrupt other important business activities in our various locations, some of which are also in areas affected by COVID-19. For example, in response to the COVID-19 pandemic, certain industry events that we sponsor or at which we present and certain customer events have been canceled, postponed or moved to virtual-only experiences; we are encouraging all of our employees to work remotely; and we may deem it advisable to similarly alter, postpone or cancel entirely additional customer, employee or industry events in the future. Additionally, we may see our services carrying less revenue-generating traffic in areas subject to “shelter in place” restrictions or related government orders as the population of those areas refrain from traveling and normal commerce activities. Accordingly, we expect the COVID-19 pandemic to potentially have a negative impact on our sales and our results of operations in those areas adversely affected by COVID-19, the size and duration of which we are currently unable to predict. In addition, our implementation of business continuity plans in a fast-moving public health emergency could have an adverse effect on our internal controls (potentially giving rise to significant discrepancies or material weaknesses) and increase our vulnerability to information technology and other systems discrepancies. Furthermore, concerns over the economic impact of COVID-19 have caused extreme volatility in financial and other capital markets which has and may continue to adversely impact our stock price and our ability to access capital.

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If Kaleyra’s goodwill or intangible assets become impaired, Kaleyra may be required to record a significant charge to earnings.

Kaleyra reviews its intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill is required to be tested for impairment at least annually. As of March 31, 2020, Kaleyra carried $25.0 million of goodwill and intangible assets, net. An adverse change in market conditions, particularly if such change has the effect of changing one of Kaleyra’s critical assumptions or estimates, could result in a change to the estimation of fair value that could result in an impairment charge to Kaleyra’s goodwill or intangible assets. Any such charges may adversely affect Kaleyra’s results of operations.

Kaleyra has identified material weaknesses in its internal control over financial reporting. If Kaleyra’s remediation of these material weaknesses is not effective or if Kaleyra experiences additional material weaknesses in the future or otherwise fails to maintain an effective system of internal control over financial reporting in the future, Kaleyra may not be able to produce timely and accurate consolidated financial statements and comply with applicable regulations, which may adversely affect investor confidence and the value of our common stock.

Prior to the Business Combination, Kaleyra S.p.A. had been a private company with limited accounting personnel to adequately execute its accounting process and other supervisory resources with which to address its internal control over financial reporting. In connection with the audit of Kaleyra’s consolidated financial statements for the year ended December 31, 2019, Kaleyra identified material weaknesses in its internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our consolidated financial statements will not be prevented or detected on a timely basis.

The identified material weaknesses included the following:

• Lack of review and approval process over journal entries; and

• Lack of timeliness, quality and existence of account reconciliations and review controls.

Kaleyra cannot assure that the measures it has taken to date, and is continuing to implement, will be sufficient to remediate the material weaknesses it has identified or avoid potential future material weaknesses. If the steps Kaleyra takes do not correct the material weaknesses in a timely manner, Kaleyra will be unable to conclude that its internal control over financial reporting is effective. Accordingly, there could continue to be a reasonable possibility that a material misstatement of Kaleyra’s consolidated financial statements would not be prevented or detected on a timely basis.

If Kaleyra fails to remediate its existing material weaknesses or identifies new material weaknesses in its internal control over financial reporting, if Kaleyra is unable to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, if Kaleyra is unable to conclude that its internal control over financial reporting is effective, or if its independent registered public accounting firm is unable to express an opinion as to the effectiveness of its internal control over financial reporting when Kaleyra is no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of Kaleyra’s consolidated financial reports and the market price of Kaleyra’s common stock could be negatively affected. As a result of such failures, Kaleyra could also become subject to investigations by the NYSE American, the SEC, or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm its reputation and financial condition or divert financial and management resources from Kaleyra’s regular business activities.

Changes in the international and U.S. taxation business activities or the adoption of other tax reform policies could materially impact Kaleyra’s business, results of operations and financial condition.

Changes to tax laws in jurisdictions where Kaleyra currently does business may be enacted in the future and could impact the tax treatment of Kaleyra’s earnings. Due to the expansion of Kaleyra’s business activities into

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new geographic regions, any changes in the taxation of such activities may increase Kaleyra’s worldwide effective tax rate. An increase in overall tax rate could reduce Kaleyra’s cash flow and lower Kaleyra’s overall profitability.

Our ability to utilize our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2019, we had federal, state and foreign net operating loss (“NOL”) carryforwards totaling $11.6 million, $11.7 million and $1.6 million, respectively. However, our ability to utilize these NOLs to offset taxable income may be limited in the future. A corporation that undergoes an “ownership change” is typically subject to limitations on its ability to utilize its pre-ownership change NOLs to offset future taxable income. In general, under the U.S. Internal Revenue Code of 1986, as amended (the “Code”), an ownership change occurs if the aggregate stock ownership of certain stockholders (generally 5% stockholders, applying certain look-through and aggregation rules) increases by more than 50 percentage points over such stockholders’ lowest percentage ownership during the testing period (generally three years). Purchases or sales of our common stock in amounts greater than specified levels could create a limitation on our ability to utilize our NOLs for tax purposes in the future. Limitations imposed on our ability to utilize NOLs could cause U.S. federal and state income taxes to be paid earlier than would be paid if such limitations were not in effect.

Furthermore, we may not be able to generate sufficient taxable income to utilize our NOLs before they expire. In addition, NOLs incurred in one state generally are not available to offset income earned in a different state and there may be periods during which the use of NOLs is suspended or otherwise limited for state tax purposes, which could accelerate or permanently increase state taxes owed.

Kaleyra’s global operations and structure subject Kaleyra to potentially adverse tax consequences.

Kaleyra generally conducts Kaleyra global operations through subsidiaries and report Kaleyra’s taxable income in various jurisdictions worldwide based upon Kaleyra’s business operations in those jurisdictions. In particular, Kaleyra’s intercompany relationships are subject to complex transfer pricing regulations administered by taxing authorities in various jurisdictions. Also, Kaleyra’s tax expense could be affected depending on the applicability of withholding and other taxes (including withholding and indirect taxes on software licenses and related intercompany transactions) under the tax laws of certain jurisdictions in which Kaleyra has business operations. The relevant revenue and taxing authorities may disagree with positions Kaleyra has taken generally, or Kaleyra’s determinations as to the value of assets sold or acquired or income and expenses attributable to specific jurisdictions. If such a disagreement were to occur, and Kaleyra’s position were not sustained, Kaleyra could be required to pay additional taxes, interest and penalties, which could result in one-time tax charges, higher effective tax rates, reduced cash flows and lower overall profitability of Kaleyra’s operations.

Certain government agencies in jurisdictions where Kaleyra and its affiliates do business have had an extended focus on issues related to the taxation of multinational companies. In addition, the Organization for Economic Co-operation and Development is conducting a project focused on base erosion and profit shifting in international structures, which seeks to establish certain international standards for taxing the worldwide income of multinational companies. As a result of these developments, the tax laws of certain countries in which Kaleyra and its affiliates do business could change on a prospective or retroactive basis, and any such changes could increase Kaleyra’s liabilities for taxes, interest and penalties, and therefore could harm Kaleyra’s business, cash flows, results of operations and financial position.

Kaleyra’s structure may be inefficient from a tax perspective.

Kaleyra S.p.A. is a controlled foreign corporation of Kaleyra for U.S. federal income tax purposes. This means that a substantial part of the net income, if any, of Kaleyra S.p.A. and its non-U.S. subsidiaries will be taxable to Kaleyra without regard to whether a dividend is paid to Kaleyra, subject to available foreign tax credits and a

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special deduction. Moreover, because Kaleyra S.p.A. has a U.S. subsidiary, the resulting structure (sometimes referred to as a “sandwich structure”) would be subject to multiple levels of tax. Generally speaking, it is difficult to simplify a sandwich structure without incurring taxes in one or more jurisdictions.

Kaleyra must continue to develop effective business support systems to implement customer orders and to provide and bill for services.

Kaleyra depends on its ability to continue to develop effective business support systems. This complicated undertaking requires significant resources and expertise and support from third-party vendors. Following the development of the business support systems, the data migration must be completed for the full benefit of the systems to be realized. Business support systems are needed for:

• quoting, accepting and inputting customer orders for services;

• provisioning, installing and delivering services;

• providing customers with direct access to the information systems included in Kaleyra’s Platform so that they can manage the services they purchase from Kaleyra, generally through web-based customer portals; and

• billing for services.

Because Kaleyra’s business provides for continued rapid growth in the number of customers that Kaleyra serves, the volume of services offered, as well as the integration of any acquired companies’ business support systems, if any, Kaleyra must continue to develop its business support systems on a schedule sufficient to meet proposed milestone dates. If Kaleyra fails to develop effective business support systems or complete the data migration into these systems, it could materially adversely affect Kaleyra’s ability to implement its business plans, realize anticipated benefits from Kaleyra’s acquisitions, if any, and meet Kaleyra’s financial goals and objectives.

If Kaleyra is not able to maintain and enhance Kaleyra’s brand and increase market awareness of Kaleyra and its services, then Kaleyra’s business could be harmed.

Kaleyra believes that maintaining and enhancing Kaleyra’s brand identity and increasing market awareness of Kaleyra and its services are critical to achieving widespread acceptance of Kaleyra and its Platform, as well as to strengthen Kaleyra’s relationships with its existing customers and to Kaleyra’s ability to attract new customers. The successful promotion of Kaleyra’s brand will depend largely on Kaleyra’s continued marketing efforts, Kaleyra’s ability to continue to offer high quality services and Kaleyra’s ability to successfully differentiate Kaleyra’s services from competing products and services. Kaleyra’s brand promotion activities may not be successful or yield increased revenue. In addition, independent industry analysts often provide reviews of Kaleyra’s services and competing products and services, which may significantly influence the perception of Kaleyra’s services in the marketplace. If these reviews are negative or not as strong as reviews of Kaleyra’s competitors’ services, then Kaleyra’s brand may be harmed.

From time to time, Kaleyra’s customers have complained about Kaleyra’s services, such as complaints about Kaleyra’s pricing and customer support. If Kaleyra does not handle customer complaints effectively, then Kaleyra’s brand and reputation may suffer, Kaleyra’s customers may lose confidence in Kaleyra and they may reduce or cease their use of Kaleyra’s services. In addition, many of Kaleyra’s customers post and discuss on social media about products and services, including Kaleyra’s products and its Platform. Kaleyra’s success depends, in part, on Kaleyra’s ability to generate positive customer feedback and minimize negative feedback on social media channels where existing and potential customers seek and share information. If actions Kaleyra takes or changes it makes to its services or Platform upset these customers, then their online commentary could negatively affect Kaleyra’s brand and reputation. Complaints or negative publicity about Kaleyra, its services or Platform could harm Kaleyra’s ability to attract and retain customers.

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The promotion of Kaleyra’s brand also requires Kaleyra to make substantial expenditures, and Kaleyra anticipates that these expenditures will increase as Kaleyra’s market becomes more competitive and as Kaleyra expands into new markets. To the extent that these activities increase revenue, this revenue still may not be enough to offset the increased expenses Kaleyra incurs. If Kaleyra does not successfully maintain and enhance its brand, then Kaleyra’s business may not grow, Kaleyra may see its pricing power reduced relative to competitors and Kaleyra may lose customers, all of which could lower Kaleyra’s revenue and harm its business.

Any failure to deliver and maintain high-quality customer support may adversely affect Kaleyra’s relationships with its customers and prospective customers and could adversely affect Kaleyra’s reputation, business, results of operations and financial condition.

Many of Kaleyra’s customers depend on Kaleyra’s customer support team to assist them in deploying or using Kaleyra’s services effectively, to help them resolve post-deployment issues quickly and to provide ongoing support. If Kaleyra does not devote sufficient resources or are otherwise unsuccessful in assisting Kaleyra’s customers effectively, it could adversely affect Kaleyra’s ability to retain existing customers and could prevent prospective customers from adopting Kaleyra’s services. Kaleyra may be unable to respond quickly enough to accommodate short-term increases in demand for customer support. Kaleyra also may be unable to modify the nature, scope and delivery of its customer support to compete with changes in the support services provided by Kaleyra’s competitors. Increased demand for customer support, without corresponding revenue, could increase Kaleyra’s costs and harm its business and operations. Kaleyra’s sales are highly dependent on Kaleyra’s business reputation and on positive recommendations from existing customers. Any failure to deliver and maintain high-quality customer support, or a market perception that Kaleyra does not maintain high-quality customer support, could harm Kaleyra’s reputation and business.

Indemnity provisions in various agreements potentially expose Kaleyra to substantial liability for intellectual property infringement and other losses.

Kaleyra’s agreements with customers and other third parties typically include indemnification or other provisions under which Kaleyra agrees to indemnify or otherwise be liable to them for losses suffered or incurred as a result of claims of intellectual property infringement, damages caused by Kaleyra to property or persons or other liabilities relating to or arising from Kaleyra’s services or Platform or other acts or omissions. The term of these contractual provisions often survives termination or expiration of the applicable agreement. Large indemnity payments or damage claims from a contractual breach could harm Kaleyra’s business. Although Kaleyra normally contractually limit its liability with respect to such obligations, Kaleyra may still incur substantial liability related to them. Any dispute with a customer with respect to such obligations could harm Kaleyra’s relationship with that customer and other current and prospective customers and reduce demand for its services.

Kaleyra is subject to litigation in the ordinary course of business, and uninsured judgments or a rise in insurance premiums may adversely affect Kaleyra’s results of operations.

In the ordinary course of business, Kaleyra is subject to various claims and litigation. Any such claims, regardless of merit, could be time-consuming and expensive to defend and could divert management’s attention and resources. In accordance with customary practice, Kaleyra maintains insurance against some, but not all, of these potential claims. Kaleyra may elect not to obtain insurance if Kaleyra believes that the cost of available insurance is excessive relative to the risks presented. The levels of insurance Kaleyra maintains may not be adequate to fully cover any and all losses or liabilities. Further, Kaleyra may not be able to maintain insurance at commercially acceptable premium levels or at all. If any significant judgment, claim (or a series of claims) or other event is not fully insured or indemnified against, it could have a material adverse impact on Kaleyra’s business, financial condition and results of operations. There can be no assurance as to the actual amount of these liabilities or the timing thereof. Kaleyra cannot be certain that the outcome of current or future litigation will not harm its business and results of operations.

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Kaleyra may be liable for the information that content owners or distributors distribute over Kaleyra’s network.

The law relating to the liability of private network operators for information carried on or disseminated through their networks remains unsettled. While Kaleyra disclaims any liability for third-party content in Kaleyra’s services agreements, Kaleyra may become subject to legal claims relating to the content disseminated on Kaleyra’s network, even though such content is owned or distributed by Kaleyra customers or a customer of Kaleyra customers. For example, lawsuits may be brought against Kaleyra claiming that material distributed using Kaleyra’s network was inaccurate, offensive or violated the law or the rights of others. Claims could also involve matters such as defamation, invasion of privacy and copyright infringement. In addition, the law remains unclear over whether content may be distributed from one jurisdiction, where the content is legal, into another jurisdiction, where it is not. Companies operating private networks have been sued in the past, sometimes successfully, based on the nature of material distributed, even if the content is not owned by the network operator and the network operator has no knowledge of the content or its legality. It is not practical for Kaleyra to monitor all of the content distributed using Kaleyra’s network. Kaleyra may need to take costly measures to reduce Kaleyra’s exposure to these risks or to defend itself against such claims, which could increase Kaleyra’s costs and harm its results of operations.

Defects or errors in Kaleyra’s services could diminish demand for Kaleyra’s services, harm Kaleyra’s business and subject Kaleyra to liability.

Kaleyra’s customers use its services for important aspects of their businesses, and any errors, defects or disruptions to Kaleyra’s services and any other performance problems with Kaleyra’s services could damage its customers’ businesses and, in turn, hurt Kaleyra’s brand and reputation. Kaleyra provides regular updates to Kaleyra’s services, which have in the past contained, and may in the future contain, undetected errors, failures, vulnerabilities and bugs when first introduced or released. Real or perceived errors, failures or bugs in Kaleyra’s services could result in negative publicity, loss of or delay in market acceptance of Kaleyra’s Platform, loss of competitive position, lower customer retention or claims by customers for losses sustained by them. In such an event, Kaleyra may be required, or may choose, for customer relations or other reasons, to expend additional resources in order to help correct the problem. In addition, Kaleyra may not carry insurance sufficient to compensate Kaleyra for any losses that may result from claims arising from defects or disruptions in Kaleyra’s services. As a result, Kaleyra’s brand and reputation could be harmed.

Stockholders of Kaleyra may not be able to enforce judgments entered by U.S. courts against certain of its officers and directors.

Kaleyra is incorporated in the State of Delaware. However, some of our directors and executive officers reside outside of the United States. As a result, stockholders of Kaleyra may not be able to effect service of process upon those persons within the United States or enforce against those persons judgments obtained in U.S. courts.

If Kaleyra fails to introduce or acquire new products or services that achieve broad market acceptance on a timely basis, or if its products or services are not adopted as expected, Kaleyra will not be able to compete effectively.

Kaleyra operates in a highly competitive, quickly changing environment, and Kaleyra’s future success depends on its ability to develop or acquire, and introduce new products and services that achieve broad market acceptance. Kaleyra’s ability to successfully introduce and market new products is unproven. Because Kaleyra has a limited operating history and the market for its products, including newly acquired or developed products, is rapidly evolving, it is difficult to predict Kaleyra’s operating results, particularly with respect to any new products that it may introduce. Kaleyra’s future success will depend in large part upon its ability to identify demand trends in the market in which it will operate and quickly develop or acquire, and design, manufacture and sell, products and services that satisfy these demands in a cost-effective manner.

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In order to differentiate Kaleyra’s products and services from competitors’ products, Kaleyra will need to increase focus and capital investment in research and development, including software development. If any products currently sold by, and services offered by, Kaleyra do not continue, or if Kaleyra’s new products or services fail to achieve widespread market acceptance, or if Kaleyra is unsuccessful in capitalizing on opportunities in the market in which Kaleyra operates, our future growth may be slowed and its business, results of operations and financial condition could be materially adversely affected. Successfully predicting demand trends is difficult, and it is very difficult to predict the effect that introducing a new product or service will have on existing product or service sales. It is possible that Kaleyra may not be successful with its new products and services, and as a result Kaleyra’s future growth may be slowed and our business, results of operations and financial condition could be materially adversely affected. Also, Kaleyra may not be able to respond effectively to new product or service announcements by competitors by quickly introducing competitive products and services.

In addition, Kaleyra may acquire companies and technologies in the future. In these circumstances, Kaleyra may not be able to successfully manage integration of the new product and service lines with our existing suite of products and services. If Kaleyra is unable to effectively and successfully further develop these new product and service lines, Kaleyra may not be able to increase or maintain sales (as compared to sales of Kaleyra on a standalone basis), and our gross margin (as compared to sales of Kaleyra on a standalone basis) may be adversely affected.

Furthermore, the success of Kaleyra’s new products will depend on several factors, including, but not limited to, market demand costs, timely completion and introduction of these products, prompt resolution of any defects or bugs in these products, Kaleyra’s ability to support these products, differentiation of new products from those of Kaleyra’s competitors, market acceptance of these products, delays and quality issues in releasing new products and services. The occurrence of one or more of the foregoing factors may result in lower quarterly revenue than expected, and Kaleyra may in the future experience product or service introductions that fall short of its projected rates of market adoption.

If Kaleyra’s products fail to achieve and sustain sufficient market acceptance, Kaleyra’s revenue will be adversely affected.

Kaleyra’s success will depend on its ability to develop and market products that are recognized and accepted as reliable, enabling and cost-effective. Some potential customers of Kaleyra may already use products similar to what Kaleyra currently offers and similar to what Kaleyra may offer in the future and may be reluctant to replace those products with what Kaleyra currently offers or which Kaleyra may offer in the future. Market acceptance of Kaleyra’s products and technology will depend on many factors, including Kaleyra’s ability to convince potential customers that Kaleyra’s products and technology are an attractive alternative to existing products and technology. Prior to adopting Kaleyra’s products and technology, some potential customers may need to devote time and effort to testing and validating Kaleyra’s systems. Any failure of Kaleyra’s systems to meet these customer benchmarks could result in potential customers choosing to retain their existing systems or to purchase systems other Kaleyra’s.

We may be required to purchase up to 2,366,930 shares of common stock pursuant to forward share purchase agreements, thereby reducing cash available to us for other purposes.

Kaleyra prior to the consummation of the Business Combination entered into Forward Share Purchase Agreements with each of Greenhaven Road Capital Fund 1, LP, a Delaware limited partnership (“Greenhaven Fund 1”), and Greenhaven Road Capital Fund 2, LP, a Delaware limited partnership (“Greenhaven Fund 2” and together with Greenhaven Fund 1, “Greenhaven”), and Yakira Capital Management, Inc. (“Yakira”), as well as an agreement (the “Confirmation”) with NGFP for the Forward Transaction.

The Forward Share Purchase Agreement with Greenhaven, which has been amended, pertains to shares issued to Greenhaven upon the conversion of the rights Greenhaven held prior to the closing of the Business Combination

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and provides that Kaleyra may be obligated to purchase the shares if Greenhaven exercises an option to sell such shares to us. If Greenhaven exercises its option, we will have to expend funds to purchase those shares, which will reduce the cash available to us for other purposes. Greenhaven has already exercised such option with respect to 235,169 shares, and currently holds 700,000 shares, which Greenhaven has the right to put to Kaleyra at $11.70 per share on August 30, 2020.

The Forward Share Purchase Agreement with Yakira, as amended, similarly pertains to shares issued to Yakira upon the conversion of the rights it held prior to the closing of the Business Combination and provides that Kaleyra may be obligated to purchase the shares if Yakira exercises an option to sell such shares to us. The number of shares held by Yakira covered by such Forward Share Purchase Agreement is 43,930 shares. If Yakira exercises its respective option, we will have to expend funds to purchase those shares, which will reduce the cash available to us for other purposes. The price at which Kaleyra would have to purchase such shares is $10.93 per share. Yakira has the right to put to Kaleyra its shares as soon as practicable on or after (but no later than the fifth business day after) December 31, 2020.

Kaleyra has also entered into the Confirmation with NGFP with regard to the Nomura Shares, which shares NGFP held at the closing of the Business Combination. The Confirmation confirms the terms and conditions of the Forward Transaction entered into between Kaleyra and NGFP. Pursuant to the terms of the Confirmation, as amended, NGFP agreed to waive any redemption right that would have required the redemption of the Nomura Shares at the closing of the Business Combination at a price of $10.5019 per share. Rather, NGFP, at its sole discretion, may either sell such shares in one or more transactions, publicly or privately, at a market price of at least $10.50 per share, or hold such shares through November 25, 2021, at which time we will be required to purchase from NGFP, and NGFP will be required to sell to the us, any such shares not otherwise previously sold by NGFP. The Confirmation provided that Kaleyra transfer an amount of cash equal to (a) the aggregate number of shares held by NGFP multiplied by (b) $10.5019. As a result, these amounts transferred to NGFP will not be available to us unless and until NGFP sell such shares in the market. Furthermore, if NGFP sells shares to us, NGFP will keep that portion of the cash transferred to it following the closing of the Business Combination attributable to such shares sold to us, plus an accrual amount equal to 3.50% per annum, on November 25, 2021. If NGFP sells shares to us, we will have to expend funds to purchase shares from NGFP, which will reduce the cash available to us for other purposes.

Anti-takeover provisions contained in our second amended and restated certificate of incorporation, as well as provisions of Delaware law, could impair a takeover attempt.

Kaleyra’s second amended and restated certificate of incorporation contains provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. Kaleyra is also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control. Together these provisions may make more difficult the removal of management and may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for Kaleyra’s securities. See “Description of Securities” for more information.

Risks Related to Kaleyra’s Common Stock and this Offering

If Kaleyra’s performance does not meet the expectations of investors, stockholders or financial analysts, the market price of its common stock may decline.

If Kaleyra’s performance does not meet the expectations of investors or securities analysts, the market price of its common stock may decline. In addition, fluctuations in the price of Kaleyra’s common stock could contribute to the loss of all or part of your investment. The trading price of Kaleyra’s common stock could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond Kaleyra’s control. Any of the factors listed below could have a material adverse effect on your investment in Kaleyra’s common stock and

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the common stock may trade at prices significantly below the price you paid for it. In such circumstances, the trading price of Kaleyra’s common stock may not recover and may experience a further decline.

Factors affecting the trading price of Kaleyra’s common stock may include:

• actual or anticipated fluctuations in Kaleyra’s quarterly financial results or the quarterly financial results of companies perceived to be similar to Kaleyra;

• changes in the market’s expectations about Kaleyra’s operating results;

• success of competitors;

• Kaleyra’s operating results failing to meet the expectation of securities analysts or investors in a particular period;

• changes in financial estimates and recommendations by securities analysts concerning Kaleyra or the market in general;

• operating and stock price performance of other companies that investors deem comparable to Kaleyra’s;

• Kaleyra’s ability to market new and enhanced services and products on a timely basis;

• changes in laws and regulations affecting Kaleyra’s business;

• commencement of, or involvement in, litigation involving Kaleyra;

• changes in Kaleyra’s capital structure, such as future issuances of securities or the incurrence of additional debt;

• the volume of shares of Kaleyra’s common stock available for public sale;

• any major change in the Board of Directors or management;

• sales of substantial amounts of common stock by Kaleyra’s directors, executive officers or significant stockholders or the perception that such sales could occur;

• the potential adverse effects of the ongoing global coronavirus (COVID-19) pandemic; and

• general economic and political conditions such as recessions, interest rates, fuel prices, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of Kaleyra’s common stock irrespective of its operating performance. The stock market in general and the NYSE American have experienced price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of Kaleyra’s common stock, may not be predictable. A loss of investor confidence in the market for retail stocks or the stocks of other companies which investors perceive to be similar to Kaleyra could depress its stock price regardless of its business, prospects, financial condition or results of operations. A decline in the market price of Kaleyra’s common stock also could adversely affect its ability to issue additional securities and its ability to obtain additional financing in the future.

Kaleyra has broad discretion in the use of the net proceeds from this offering and may not use them effectively.

After the repayment of certain of Kaleyra’s debt obligations, as defined in “Use of Proceeds”, Kaleyra’s management will have broad discretion in the application of the remaining net proceeds from this offering and could spend the proceeds in ways with which its stockholders may not agree. Accordingly, purchasers of shares of common stock in this offering will be relying on the judgment of Kaleyra’s management with regard to the use

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of these net proceeds, and such purchasers will not have the opportunity, as part of their investment decision, to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested or otherwise used in a way that does not yield a favorable, or any, return for Kaleyra.

Purchasers in this offering will experience immediate and substantial dilution in the book value of their investment.

The public offering price of our common stock is substantially higher than the net tangible book value per share of our common stock before giving effect to this offering. Accordingly, if you purchase our common stock in this offering, you will incur immediate substantial dilution of approximately $         per share, representing the difference between the public offering price and our as adjusted net tangible book value as of March 31, 2020. Furthermore, if outstanding warrants are exercised, you could experience further dilution. See the information included under the heading “Dilution.”

A substantial number of shares of common stock may be sold in the market following this offering, which may depress the market price for our common stock.

Sales of a substantial number of shares of our common stock in the public market following this offering could cause the market price of our common stock to decline. A substantial number of the outstanding shares of our common stock are, and the shares of common stock sold in this offering upon issuance will be, freely tradable without restriction or further registration under the Securities Act of 1933, as amended.

Upon the completion of this offering, approximately 14,426,379 shares of our outstanding common stock beneficially owned by our executive officers, directors and certain of our other existing stockholders will be subject to lock-up agreements with the underwriters of this offering that restrict the sale of shares of our common stock by those parties for a period of 90 days after the date of this prospectus. However, all of the shares sold in this offering and the remaining shares of our common stock outstanding prior to this offering will not be subject to lock-up agreements with the underwriters and, except to the extent such shares are held by our affiliates, will be freely tradable without restriction under the Securities Act. In addition, prior to the Business Combination, the Founders and Kaleyra’s management team agreed not to transfer their Founder Shares and certain of their other securities until November 25, 2020. See “Certain Relationships and Related Party Transactions.” The market price of our common stock could decline as a result of sales by our stockholders in the market following completion of this offering or the perception that these sales could occur.

If securities or industry analysts cease publishing research or reports about Kaleyra, its business, or its market, or if they change their recommendations regarding its common stock adversely, the price and trading volume of its common stock could decline.

The trading market for Kaleyra’s common stock will be influenced by the research and reports that industry or securities analysts may publish about Kaleyra, its business, its market, or its competitors. If any of the analysts who currently or in the future may cover Kaleyra, change their recommendation regarding its stock adversely, or provide more favorable relative recommendations about Kaleyra’s competitors, the price of its common stock would likely decline. If any analyst who may cover Kaleyra were to cease coverage of Kaleyra or fail to regularly publish reports on it, Kaleyra could lose visibility in the financial markets, which could cause its stock price or trading volume to decline.

Warrants are exercisable for Kaleyra’s common stock, and upon any exercise would increase the number of shares eligible for future resale in the public market and result in dilution to Kaleyra’s stockholders.

Kaleyra has issued warrants to purchase a total of 11,154,938 shares of common stock. Each whole warrant is exercisable to purchase one share of common stock at $11.50 per share. To the extent such warrants are exercised, additional shares of common stock will be issued, which will result in dilution to the then existing

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holders of the common stock and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of the common stock.

There may be a limited public market for the shares of common stock of Kaleyra, and the ability of the stockholders of Kaleyra to dispose of their common stock may be limited.

Kaleyra’s common stock is traded on the NYSE American. Kaleyra cannot foresee the degree of liquidity that will be associated with its common stock. A holder of the common stockmay not be able to liquidate his, her or its investment in a short time period or at the market prices that currently exist at the time the holder decides to sell. The market price for the common stock may fluctuate in the future, and such volatility may bear no relation to Kaleyra’s performance.

There can be no assurance that Kaleyra will be able to comply with the continued listing standards of the NYSE American.

Kaleyra’s common stock is currently listed on the NYSE American. If the NYSE American delists Kaleyra’s common stock from trading on its exchange for failure to meet the listing standards, Kaleyra and its stockholders could face significant material adverse consequences including:

• a limited availability of market quotations for Kaleyra’s common stock;

• a determination that the common stock is a “penny stock” which will require brokers trading in its common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for the common stock;

• a limited amount of analyst coverage; and

• a decreased ability to issue additional securities or obtain additional financing in the future.

A market for Kaleyra’s common stock may not continue, which would adversely affect the liquidity and price of its shares.

An active trading market for Kaleyra’s common stock may not be sustained. In addition, the price of Kaleyra’s common stock may fluctuate significantly due to general economic conditions and forecasts, Kaleyra’s general business condition and the release of its financial reports. Additionally, if Kaleyra’s common stock becomes delisted from the NYSE American for any reason, and are quoted on the OTC Bulletin Board, an inter-dealer automated quotation system for equity securities that is not a national securities exchange, the liquidity and price of Kaleyra’s common stock may be more limited than if its shares were quoted or listed on the NYSE American or another national securities exchange. You may be unable to sell your shares unless a market can be established or sustained.

Kaleyra may be a “controlled company” within the meaning of the applicable rules of the NYSE American and, as a result, may qualify for exemptions from certain corporate governance requirements. If Kaleyra relies on these exemptions, its stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.

The former shareholders of Kaleyra S.p.A. control a majority of the voting power of Kaleyra’s outstanding common stock, and Kaleyra may then be a “controlled company” within the meaning of applicable rules of the NYSE American.

Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements:

• that a majority of the Board of Directors consists of independent directors;

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• for an annual performance evaluation of the nominating and corporate governance and compensation committees;

• that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and

• that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility.

If available, Kaleyra may use these exemptions now or in the future. As a result, Kaleyra’s stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the NYSE American corporate governance requirements. As of the date of this prospectus, Kaleyra is not relying on these exemptions.

Kaleyra has never paid dividends on its common stock, and does not anticipate paying any cash dividends on its common stock in the foreseeable future.

Kaleyra has never declared or paid cash dividends on its common stock. Kaleyra does not anticipate paying any cash dividends on its common stock in the foreseeable future. Kaleyra currently intends to retain all available funds and any future earnings to fund the development and growth of its business. As a result, capital appreciation, if any, of Kaleyra’s common stock will be stockholders’ sole source of gain for the foreseeable future.

We qualify as an emerging growth company, and our decision to comply with reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an “emerging growth company,” and, for as long as we continue to be an emerging growth company, we currently intend to take advantage of exemptions from various reporting requirements applicable to other public companies but not to “emerging growth companies,” including, but not limited to, not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our registration statements, periodic reports and proxy statements (including the registration statement of which this prospectus forms a part) and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the IPO; (ii) the first fiscal year after our annual gross revenue is $1.07 billion or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700 million as of the end of the second quarter of that fiscal year.

We cannot predict whether investors will find our common stock less attractive if we choose to rely on these exemptions while we are an emerging growth company. If some investors find our common stock less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have availed ourselves of this exemption from new or revised accounting standards and, therefore, we may not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

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INDUSTRY AND MARKET DATA

Unless otherwise indicated, information contained in this prospectus concerning Kaleyra’s industry and the markets in which it operates, including its general expectations and market position, market opportunity and market size is based on management estimates and information from various sources including independent industry publications, market research studies and security analysts’ reports. In addition, these publications, studies and reports were published before the global COVID-19 pandemic and therefore do not reflect any impact of COVID-19 on any specific market or globally. While Kaleyra believes its business projections are sound, they are subject to its management’s assumptions and other limitations and may prove inaccurate.

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USE OF PROCEEDS

We expect to receive approximately $                 million (or approximately $                 million if the underwriters’ option to purchase additional shares is exercised in full) of net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses.

We intend to use approximately $11.5 million of the net proceeds from this offering to repay debt, consisting of (a) our outstanding promissory note in the amount of $400,000 issued to Northland Securities, Inc., one of the underwriters in this offering (the “Northland Note”), (b) our outstanding promissory notes issued to the Founders and certain of their affiliates in the aggregate amount of $3,578,362 (the “Amended Extension Notes” and the “Amended Working Capital Notes”), and (c) our outstanding promissory notes issued to two of the former holders of capital stock of Kaleyra S.p.A., Maya Investments Limited and Esse Effe S.p.A., in the amounts of $1.5 million and $6.0 million, respectively (the “Seller Notes”).

The Northland Note was issued as consideration for financial advisory services provided by Northland Securities, Inc. to Kaleyra S.p.A. in connection with the Business Combination. The Northland Note accrues interest at the rate of 8% per annum and continues until the Northland Note is fully paid. On the closing date of any transaction or series of transactions in which we raise any capital through debt or equity financing(s) while the Northland Note is outstanding, with total proceeds to us of at least $15,000,000, the entire outstanding principal of the Northland Note and all accrued interest thereon will be due and payable by us. In the event that the Northland Note is prepaid in full on or after April 30, 2020 and prior to December 31, 2020, the interest thereon will be recalculated at the time of prepayment at the rate of 4% per annum.

The Amended Extension Notes and Amended Working Capital Notes were issued respectively to extend the time for us to consummate the Business Combination pursuant to the terms of our amended and restated certificate of incorporation and to provide us with additional working capital during the extended period of time for us to consummate the Business Combination. The Seller Notes were issued by us in lieu of cash consideration due to the holders of these notes pursuant to the terms of the Stock Purchase Agreement for the acquisition by us of Kaleyra S.p.A. The Seller Notes, Amended Extension Notes and Amended Working Capital Notes each accrue interest at the rate of 1.09%, plus a margin of one percent (1%) per annum and continue until the Seller Notes, Amended Extension Notes and Amended Working Capital Notes are fully paid, and are due when we raise debt or equity financing with cash proceeds in an amount not less than $11,500,000. Esse Effe S.p.A. is affiliated with one of our directors, Emilio Hirsch. Maya Investments Limited is affiliated with our Chief Executive Officer and one of our directors, Dario Calogero. Our Sponsor and one of its affiliates, GigFounders, LLC, are affiliated with our Chairman of the Board, Dr. Avi Katz. Each of Drs. Hirsch and Katz, and Mr. Calogero expect to benefit from the payment of proceeds from the repayment to Maya Investments Limited, Esse Effe S.p.A., the Sponsor and GigFounders LLC, of the Seller Notes, Amended Extension Notes and Amended Working Capital Notes.

We currently anticipate that we will use the remaining net proceeds from this offering for (i) the payment of up to approximately $7.7 million for any purchase of shares of our common stock in the event that parties to certain forward share purchase agreements exercise their rights to have us purchase such shares and (ii) working capital and other general corporate purposes.

We may also use a portion of the net proceeds to opportunistically acquire, license and invest in complementary products, technologies or businesses. However, we currently have no agreements or commitments to complete any such transaction.

In addition to the net proceeds anticipated from this offering, Kaleyra S.p.A. may seek to borrow additional funds between $15 and $20 million under new or expanded medium term lines of credit with certain Italian financial institutions. Kaleyra S.p.A.’s and Kaleyra, Inc.’s future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section of this prospectus captioned “Risk Factors.” Kaleyra S.p.A. may not be able to secure additional financing on acceptable terms, or at all.

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Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. As of the date of this prospectus, other than in connection with the repayment of our debt obligations, we cannot currently allocate specific percentages of the net proceeds that we may use for the purposes specified above, and we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering, or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual use of the net proceeds will vary depending on numerous factors, including the amount of cash generated by our operations and our cash needs. We may find it necessary or advisable to use the net proceeds for other purposes, and our management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds from this offering.

Pending the use of the net proceeds of this offering, we intend to invest the net proceeds in high-quality, short-term interest-bearing obligations, investment-grade instruments, certificates of deposit or direct or guaranteed obligations of the U.S. government.

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MARKET PRICE OF OUR COMMON STOCK

Our common stock was previously listed on the New York Stock Exchange under the symbols “GIG.” Following our IPO, our common stock commenced separate public trading on January 17, 2018. Since November 26, 2019, our common stock has been listed on the NYSE American under the symbol “KLR.”

The following table includes the high and low sales prices for our common stock for the periods presented.

	Common Stock (KLR f/k/a GIG)
	High		Low
Year ended December 31, 2018:
Quarter ended March 31, 2018 (1)	$	10.22	$	9.60
Quarter ended June 30, 2018	$	9.99	$	9.70
Quarter ended September 30, 2018	$	10.08	$	9.76
Quarter ended December 31, 2018	$	10.15	$	9.95
Year ended December 31, 2019:
Quarter ended March 31, 2019	$	10.24	$	10.05
Quarter ended June 30, 2019	$	10.41	$	10.15
Quarter ended September 30, 2019	$	10.90	$	10.32
Quarter ended December 31, 2019	$	11.35	$	6.70
Year ended December 31, 2020:
Quarter ended March 31, 2020	$	8.75	$	5.90
Quarter ended June 30, 2020 (through June 5, 2020)	$	8.08	$	5.57

(1) Commencing on January 17, 2018.

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DIVIDEND POLICY

We have not paid any cash dividends on our common stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our Board of Directors at such time. Our Board of Directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2020:

• on an actual basis;

• on an as adjusted basis to give effect to the following transactions: (i) 50,000 shares of common stock sold by Kepos Alpha Fund L.P. and repurchased by the Company on April 7, 2020, at $10.92 per share, pursuant to its Forward Share Purchase Agreement with the Company; (ii) 1,763,633 Earnout Shares issued to the former holders of capital stock of Kaleyra S.p.A. on April 29, 2020, pursuant to the Stock Purchase Agreement; (iii) 22,000 shares of common stock that vested on May 1, 2020 in favor of certain members of the Company’s board of directors and advisory board pursuant to the terms of restricted stock units issued to such individuals under the terms of the Company’s 2019 Equity Incentive Plan; (iv) 374,506 shares of common stock issued to Cowen and Company, LLC on May 1, 2020, pursuant to its Settlement Agreement and Release with the Company; (v) 66,089 shares of common stock issued to Chardan Capital Markets, LLC on May 1, 2020, pursuant to its Settlement Agreement and Release with the Company; (vi) 1,084,150 shares of common stock sold by Yakira Capital Management, Inc. and repurchased by the Company on May 15, 2020, at $10.6819 per share, pursuant to its Forward Share Purchase Agreement with the Company; (vii) 864,093 shares of common stock sold by Glazer Capital, LLC and repurchased by the Company on May 19, 2020, at $10.6819 per share, pursuant to its Forward Share Purchase Agreement with the Company; and (viii) 25,098 shares of common stock sold by Kepos Alpha Fund L.P. and repurchased by the Company on May 20, 2020, at $10.92 per share, pursuant to its Forward Share Purchase Agreement, as amended, with the Company; and

• on an as further adjusted basis to give effect to the adjustments discussed above and to give effect to the sale of common stock in this offering (using the public offering price of $             per share and assuming no exercise of the underwriters’ option to purchase                additional shares) and the application of the net proceeds from this offering as set forth under “Use of Proceeds.”

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This table should be read in conjunction with, and is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the accompanying notes appearing elsewhere in this prospectus.

	As of March 31, 2020
	Actual			As Adjusted			As Further Adjusted
(in thousands, except share and per share data)	(unaudited)
Cash and cash equivalents	$	16,237		$	16,237		$
Long-term portion of bank and other borrowings		20,621			20,621
Long-term portion of notes payable due to related parties		3,750			3,750
Long-term portion of employee benefit obligation		1,341			1,341
Deferred tax liabilities		1,638			1,638
Other long-term liabilities		4,599			4,599
Stockholders’ Equity (Deficit):
Preferred stock, $0.0001 par value, 1,000,000 shares authorized, no shares issued or outstanding		—			—			—
Common stock, $0.0001 par value; 100,000,000 shares authorized; 20,254,217 shares issued and 20,019,048 shares outstanding, actual; 22,480,445 shares issued and 20,221,935 shares outstanding, as adjusted;              shares issued and              shares outstanding, as further adjusted		2			2
Additional paid-in capital		11,190			35,521
Treasury stock, at cost; 235,169 shares actual, 2,258,510 as-adjusted and              shares as further adjusted		(2,587	)		(24,218	)
Accumulated other comprehensive income (loss)		(424	)		(424	)
Accumulated deficit		(49,816	)		(50,011	)
Total stockholders’ equity (deficit)		(41,635	)		(39,130	)
Total capitalization		(9,686	)		(7,181	)

The number of shares of our common stock to be outstanding after this offering is based on 20,221,935 shares of common stock outstanding as of May 31, 2020, assuming the sale and issuance by us of                shares of common stock in this offering, and excludes:

• 3,605,318 shares of common stock issuable upon the vesting of outstanding restricted stock units;

• 1,249,492 shares of common stock reserved for future grant under our 2019 Equity Incentive Plan (the “EIP”);

• 11,154,938 shares of common stock issuable upon exercise of the outstanding warrants at an exercise price of $11.50 per share;

• 1,763,639 Earnout Shares issuable to the former holders of capital stock of Kaleyra S.p.A., who have the contingent right to receive such shares upon the achievement of certain financial milestones for the 2020 fiscal year;

• 356,672 Notes Shares issuable upon the conversion of the Convertible Notes; and

• any forfeiture of Founder Shares in the event that the achievement of certain financial milestones for the 2020 fiscal year are not achieved.

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DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock after this offering. Our historical net tangible book value (deficit) as of March 31, 2020 was $(66.7) million or $(3.33) per share of common stock. Our net tangible book value (deficit) per share represents total tangible assets less total liabilities, divided by the number of shares of common stock outstanding as of March 31, 2020.

After giving effect to our sale of             shares of our common stock in this offering at a public offering price of $             per share, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 31, 2020 would have been approximately $             million, or approximately $             per share (excluding proceeds from the exercise of options in connection with this offering). This represents an immediate increase in net tangible book value of $             per share to our existing stockholders and an immediate dilution of $             per share to new investors purchasing shares of common stock in this offering. The following table illustrates this dilution on a per share basis:

Public offering price per share				$
Historical net tangible book value (deficit) per share as of March 31, 2020	$	(3.33	)
Increase in net tangible book value per share attributable to new investors purchasing shares in this offering
As adjusted net tangible book value per share after giving effect to this offering
Dilution in net tangible book value per share to new investors in this offering				$

The total number of shares of our common stock reflected in the discussion and table above excludes:

• 3,605,318 shares of common stock issuable upon the vesting of outstanding restricted stock units;

• 1,249,492 shares of common stock reserved for future grant under our EIP;

• the exercise for cash of warrants to purchase 11,154,938 shares of common stock for $11.50 per share;

• the issuance of the 1,763,639 Earnout Shares which the former holders of capital stock of Kaleyra S.p.A. have the contingent right to receive upon the achievement of certain financial milestones for the 2020 fiscal year;

• the issuance of 356,672 Notes Shares upon the conversion of the Convertible Notes;

• any forfeiture of Founder Shares in the event that the achievement of certain financial milestones for the 2020 fiscal year are not achieved;

• 50,000 shares of common stock sold by Kepos Alpha Fund L.P. and repurchased by the Company on April 7, 2020, at $10.92 per share, pursuant to its Forward Share Purchase Agreement with the Company;

• 1,763,633 Earnout Shares issued to the former holders of capital stock of Kaleyra S.p.A. on April 29, 2020, pursuant to the Stock Purchase Agreement;

• 22,000 shares of common stock that vested on May 1, 2020 in favor of certain members of the Company’s board of directors and advisory board pursuant to the terms of restricted stock units issued to such individuals under the terms of the Company’s 2019 Equity Incentive Plan;

• 374,506 shares of common stock issued to Cowen and Company, LLC on May 1, 2020, pursuant to its Settlement Agreement and Release with the Company;

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• 66,089 shares of common stock issued to Chardan Capital Markets, LLC on May 1, 2020, pursuant to its Settlement Agreement and Release with the Company;

• 1,084,150 shares of common stock sold by Yakira Capital Management, Inc. and repurchased by the Company on May 15, 2020, at $10.6819 per share, pursuant to its Forward Share Purchase Agreement with the Company;

• 864,093 shares of common stock sold by Glazer Capital, LLC and repurchased by the Company on May 19, 2020, at $10.6819 per share, pursuant to its Forward Share Purchase Agreement with the Company; and

• 25,098 shares of common stock sold by Kepos Alpha Fund L.P. and repurchased by the Company on May 20, 2020, at $10.92 per share, pursuant to its Forward Share Purchase Agreement, as amended, with the Company.

Unless expressly indicated or the context otherwise requires, all information in this prospectus assumes no exercise by the underwriters of their right to purchase up to an additional              shares of common stock from us.

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL AND OTHER DATA OF KALEYRA, INC.

The following table sets forth summary historical financial information for Kaleyra, and for the period reflected prior to the completion of the Business Combination, Kaleyra S.p.A., as of and for the three months ended March 31, 2020 and 2019, and the years ended December 31, 2019 and 2018. Such information for the three months ended March 31, 2020 and 2019 have been derived from the unaudited condensed consolidated financial statements of Kaleyra and Kaleyra S.p.A. Such information for the years ended December 31, 2019 and 2018 have been derived from the audited consolidated financial statements of Kaleyra and Kaleyra S.p.A. Kaleyra’s historical results are not necessarily indicative of the results to be expected in any future period. The information below is only a summary and should be read in conjunction with the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Kaleyra’s consolidated financial statements and the related notes, included elsewhere in this prospectus.

Consolidated Statement of Operations Data:

	Three Months Ended March 31,						Year Ended December 31,
	2020			2019			2019			2018
	(unaudited)
(in thousands, except share and per share data)
Revenue	$	33,633		$	27,725		$	129,558		$	77,845
Cost of revenue		28,902			22,476			103,205			62,425
Gross profit		4,731			5,249			26,353			15,420
Operating expenses:
Research and development		2,810			1,196			5,310			3,368
Sales and marketing		3,743			1,472			6,031			6,313
General and administrative		7,759			3,779			17,431			11,359
Loss on equity investments		—			—			—			(95	)
Total operating expenses		14,312			6,447			28,772			20,945
Loss from operations		(9,581	)		(1,198	)		(2,419	)		(5,525	)
Other income, net		42			82			136			297
Financial expense, net		(41	)		70			(439	)		(416	)
Foreign currency loss		168			(254	)		(517	)		(32	)
Loss before income tax expense		(9,412	)		(1,300	)		(3,239	)		(5,676	)
Income tax expense		(589	)		79			2,273			1,424
Net loss	$	(8,823	)	$	(1,329	)	$	(5,512	)	$	(7,100	)
Net loss per share attributable to common stockholders, basic and diluted (1)	$	(0.44	)	$	(0.13	)	$	(0.48	)	$	(0.72	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (1)		19,979,589			10,687,106			11,603,381			9,828,411

(1) Amounts for the year ended December 31, 2018, and the three months ended March 31, 2019, differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share attributable to common stockholders, basic and diluted were adjusted accordingly.

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Consolidated Balance Sheet Data:

	As of March 31,			As of December 31,
	2020			2019			2018
(in thousands)	(unaudited)
Cash and cash equivalents	$	16,237		$	16,103		$	8,207
Restricted cash		20,810			20,894			—
Total assets		111,441			117,404			77,133
Debt for forward share purchase agreements		31,530			34,013			—
Bank and other borrowings, current and noncurrent portion		31,824			27,325			13,811
Notes payable, current and noncurrent portion		18,978			18,578			—
Total liabilities		153,076			156,178			72,207
Total stockholders’ equity (deficit)		(41,635	)		(38,774	)		4,926

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

You should read the following management’s discussion and analysis in conjunction with (i) the audited consolidated financial statements of Kaleyra as of December 31, 2019 and 2018 and the years then- ended, (ii) the unaudited consolidated financial statements of Kaleyra as of March 31, 2020 and 2019 and the three months then ended, and (iii) the related notes to Kaleyra’s audited and unaudited financial statements. The discussion below includes forward-looking statements about Kaleyra’s business, operations and industry that are based on current expectations that are subject to uncertainties and unknown or changed circumstances. Kaleyra’s actual results may differ materially from these expectations as a result of many factors, including those risks and uncertainties described in the sections entitled “Risk Factors” and “Special Note Regarding Forward Looking Statements.”

OVERVIEW

On November 25, 2019, the Company (f/k/a GigCapital, Inc.) completed the Business Combination and acquired Kaleyra S.p.A., pursuant to the terms of the Stock Purchase Agreement. In connection with the closing of the Business Combination, the Company changed its name from GigCapital, Inc. to Kaleyra, Inc. GigCapital Inc. was incorporated in Delaware on October 9, 2017 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. Kaleyra S.p.A. is a cloud communications software provider delivering secure Application Protocol Interfaces (“APIs”) and connectivity solutions in the API/Communication Platform as a Service or “CPaaS” market, headquartered in Milan, Italy and with operations in Italy, India, Dubai and the United States.

Kaleyra S.p.A. is a result of the expansion of the former Ubiquity, which was founded in Milan, Italy in 1999.

After securing a leading market position in mobile messaging in the Italian financial services industry, Kaleyra S.p.A. sought to expand its products and geographic offerings. Ubiquity acquired Solutions Infini in Bangalore, India beginning in 2017 and Buc Mobile in Vienna, Virginia in 2018. It was rebranded Kaleyra S.p.A. in February 2018.

Kaleyra provides its customers and business partners with a trusted cloud communications platform (the “Platform”) that seamlessly integrates software services and applications for business-to-consumer communications between Kaleyra’s customers and their end-user customers and partners on a global basis. These communications are increasingly managed through mobile network operators as the gateway to reach end-user consumers’ mobile devices. Kaleyra’s Platform enables these communications by integrating mobile alert notifications and interactive capabilities to reach and engage end user customers. It does so, coupled with a “software as a service” (“SaaS”) business model, creating what is generally referred to as a “cloud communications platform as a service,” or simply CPaaS. Kaleyra’s solutions include identity authentication, mobile and voice notifications on transactions, and banking services authorizations, most notably via different integrated mobile channels through its Platform.

Kaleyra’s vision is to be the CPaaS provider which best aligns with its customers’ communication requirements, or most trusted provider, in the world. This requires a combination of security, compliance and integration capabilities that protects the integrity and privacy of Kaleyra’s customers’ and business partners’ transactions and includes other key features such as ease of provisioning, reliable network connectivity, high availability for scaling, redundancy, embedded regulatory compliance, configurable monitoring and reporting. Kaleyra believes the percentage of CPaaS customers that will require security, compliance and integration will represent an increasingly larger portion of the market, particularly with the expected exponential growth of transactional-by-nature cloud communications applications, better enabling Kaleyra to set itself apart from its competition.

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During the year ended December 31, 2019, Kaleyra processed nearly 27 billion billable messages and 3 billion voice calls, and during the three months ended March 31, 2020, Kaleyra processed nearly 7 billion billable messages and 0.9 billion voice calls. Kaleyra organizes its efforts in four principal offices in New York, New York, Vienna, Virginia, Milan, Italy and Bangalore, India with an employee base of almost 267 employees.

Kaleyra has more than 3,000 customers and business partners worldwide across industry verticals such as financial services, ecommerce and transportation, with no single customer representing more than 15% of revenues. In 2018, Kaleyra had three customers, in 2019 had one customer, Telecom Italia S.p.A, and no customers during the three months ended March 31, 2020, which accounted for more than 10% of Kaleyra’s revenues. Kaleyra has multiple, large European commercial banks as business partners, with one of these partners, Intesa Sanpaolo S.p.A., accounting for more than 10% of Kaleyra’s business volume in 2019 and 2018, and the three months ended March 31, 2020.

For the fiscal year ended December 31, 2019 and the three months ended March 31, 2020, 86.4% and 85.3%, respectively of revenues came from customers which have been on the Platform for at least one year. Although Kaleyra continues to expand by introducing new customers to the Platform, the breadth and stability of its existing customers provide it with a solid base of revenue upon which it can continue to innovate and make investment to strengthen its product portfolio, expand its global presence, and in particular into the North America and Asia-Pacific markets with the acquired Solutions Infini and Buc Mobile businesses, recruit world-class talent and target accretive acquisitions to capitalize on its growing market penetration opportunities and value creation.

Kaleyra’s underlying technology used in the Platform is the same across all of its communication services which can generally be described as “omni-channel mobile first interactive notifications via a public or private cloud implementation.” These services include programmable voice/Interactive Voice Response (IVR) configurations, inbound/outbound short message service capabilities, hosted telephone numbers, and other types of IP communications services such as e-mail and WhatsApp^®.

Kaleyra’s customers are enterprises which use digital, mobile communications in the conduct of their business. Kaleyra’s Platform enables these communications by integrating mobile alert notifications and interactive capabilities to reach and engage end user customers. Kaleyra enables its customers and business partners to connect enterprise software and applications to mobile network operators by providing a single simple interface by which Kaleyra can undertake as necessary to make upgrades in its service offerings to account for new end-user consumer behavior changes and progress (such as adding WhatsApp integration).

Kaleyra services a broad base of customers throughout the world operating in diverse businesses and regions. Kaleyra’s business is generated by providing data to the telecommunications provider and transmitting message data from its customers or business partners. Kaleyra has a concentration of business within the financial services industry that serves their major European banking end-user customers. With each relationship Kaleyra is the link between the financial institutions and their unique, end-user customers. In linking these two parties, Kaleyra’s Platform leverages the telecommunications provider to transmit critical message data to these end-user customers.

For the years 2019 and 2018, and the three months ended March 31, 2020, all of Kaleyra’s revenue was derived from its messaging products in the CPaaS market. The acquisitions of Solutions Infini and Buc Mobile, completed in June and July 2018, respectively, significantly affected comparability of Kaleyra’s results of operations and metrics in both the years 2019 and 2018. Please see the section below titled “Factors Affecting Comparability of Results” for further information regarding these acquisitions.

Kaleyra’s revenue is primarily driven by the number of messages delivered to its customers and business partners. Kaleyra’s fees vary depending on the contract. In 2019, the number of messages delivered to customers increased by 17%, compared to the prior year. Such increase was mainly driven by the consolidation of Solutions Infini and Buc Mobile but also by new services delivered to existing customers and business partners as well as

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to a volume delivered to a new customer. In the three months ended March 31, 2020, the number of messages delivered to customers increased by 6%, compared to the three months ended March 31, 2019.

Kaleyra’s business partners in Italy mainly consist of banks and other credit card issuers that connect to their customers (end-user customers) sending highly secured and reliable messages through Kaleyra’s Platform.

Volume increase has been driven by the increased number of digital payments transactions made by the end-user customers (such as credit card transactions and other digital payments) and by the increasing penetration rate of digital payments in the underlying payments markets. Kaleyra is exposed to fluctuations of the currencies in which its transactions are denominated. Specifically, a material portion of Kaleyra’s revenues and purchases are denominated in Euro and Indian Rupees.

FACTORS AFFECTING COMPARABILITY OF RESULTS

The Business Combination

The Business Combination is accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Under this method of accounting, Kaleyra, Inc. will be treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the business combination is treated as the equivalent of Kaleyra S.p.A. issuing stock for the net assets of Kaleyra, Inc., accompanied by a recapitalization.

The net assets of Kaleyra, Inc. are stated at historical cost, with no goodwill or other intangible assets recorded. Reported amounts from operations included herein prior to the Business Combination are those of Kaleyra S.p.A. The shares and earnings per share available to holders of Kaleyra’s common stock, prior to the Business Combination, have been retrospectively adjusted reflecting the exchange ratio established in the Business Combination.

As consideration for the Business Combination, on November 25, 2019 (the “Business Combination Date”), Kaleyra issued, in the aggregate, 10,687,106 shares of common stock to the Sellers.

In addition, as consideration for the Business Combination, on November 25, 2019 Kaleyra issued unsecured convertible promissory notes to each of Esse Effe S.p.A (“Esse Effe”) and Maya Investments Limited (“Maya”) in the amount of $6.0 million and $1.5 million, respectively, and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts. See “Liquidity and Capital Resources” below.

In connection with the Business Combination, Kaleyra incurred direct and incremental costs of approximately $7.7 million, consisting of legal and professional fees, which are included in general and administrative expenses in the consolidated statement of operations in 2019.

Acquisition of Solutions Infini

In June 2018, Kaleyra S.p.A. completed the business combination of Solutions Infini, a technology developer and platform provider for bulk messaging services, headquartered in Bangalore, India (the “Solutions Infini Acquisition”). Before control was achieved in June 2018, the investment in Solutions Infini was accounted for as a joint venture. The acquisition of Solutions Infini added significant value to Kaleyra from a technology, talent and product perspective.

The base purchase price payable as consideration for all of the shares of Solutions Infini was equal to Indian Rupee 1.0 billion, subject to variations if Solutions Infini reached targeted levels of EBITDA and net Financial Position for the years ended March 31, 2018 and a target level of EBITDA for the year ended March 31, 2019. According to the purchase agreement, Kaleyra was entitled to acquire all the shares of Solutions Infini in

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different stages and with multiples payments. In particular, based on the terms of the purchase agreement, in 2017 Kaleyra, Inc. paid $8.1 million, in July 2018 paid $6.6 million and in July 2019 paid $5.1 million (including $770,000 originally due in July 2020).

In 2018, costs incurred related to this acquisition of $216,000 were reported as an element of expense in general and administrative expenses.

Acquisition of Buc Mobile

On July 31, 2018, Kaleyra S.p.A. acquired 100% of the outstanding shares of Buc Mobile, a company headquartered in Vienna, Virginia in the United States and incorporated under the laws of the State of Delaware, operating in the Application to Person (A2P) transactional and promotional messaging business (the “Buc Mobile Acquisition”). The acquisition of Buc Mobile provided an opportunity for Kaleyra S.p.A. to acquire a technology platform designed for high-volume transactions and an experienced U.S. based management team.

The purchase price for the Buc Mobile Acquisition was an aggregate sum of $6.3 million payable as consideration for all of the shares of Buc Mobile to be paid in cash in three different installments, specifically: $2.3 million was paid on July 31, 2018, $2.0 million was paid on July 31, 2019, and $2.0 million, originally due in July 2020, was paid in advance on July 31, 2019. In addition, Kaleyra, Inc. agreed to issue 3,543 new shares of common stock to the former stockholders of Buc Mobile which were provided to them as additional consideration for the transaction at the date of the business combination. Additionally, as established by the Buc Mobile purchase agreement, a price adjustment of $159,000 determined on the basis of Buc Mobile’s net working capital measured at closing was paid in December 2018.

In 2018, costs related to this acquisition of $870,000 were reported as an element of expense in general and administrative expenses.

COVID-19

The current COVID-19 pandemic has affected and will continue to affect economies and business around the world. To date, various governmental authorities and private enterprises have implemented numerous measures to contain the pandemic, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns, which have led to severe disruptions to the global economies that may continue for a prolonged duration and trigger a recession or a period of economic slowdown. Kaleyra does not yet know the full extent of potential impacts on its revenues, business operations or overall financial condition. The extent and duration of the pandemic is highly uncertain and difficult to predict. Kaleyra is actively monitoring and managing our response and assessing actual and potential impacts to its operating results and financial condition, which could also impact trends and expectations.

Restricted Stock Units (“RSUs”)

In December 2019, RSUs were granted to certain employees, directors and advisory board members of Kaleyra for a total of 3,336,095 RSUs shares with an aggregate grant date fair value of $27.5 million, based on a per share grant date fair value of $8.25. In particular:

• The Board of Directors adopted a form of Restricted Stock Unit award Agreement and agreed to grant to certain employees of Kaleyra or its subsidiaries (i) 931,243 restricted stock units that would vest in one year from the grant date, (ii) 124,723 restricted stock units that would vest upon the final determination, if any, that the Stock Purchase Agreement’s definition of 2019 targeted adjusted EBITDA is achieved, and (iii) 124,718 restricted stock units that would vest upon the final determination, if any, that the Stock Purchase Agreement’s definition of 2020 targeted adjusted EBITDA is achieved.

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• The Board of Directors of Kaleyra agreed to grant to certain employees, directors and advisory board members of Kaleyra a total of 2,020,411 RSUs. These RSUs have no performance conditions and vest as follows: (i) 25% of the shares vests February 1, 2021 and (ii) the remaining 75% vests in equal quarterly installments over a three-year period starting from February 1, 2021.

• The Board of Directors of Kaleyra and certain advisory board members were granted a total of 135,000 RSUs. These RSUs have no performance conditions and vest 40% on February 1, 2020 with the remaining RSUs vesting ratably over the subsequent three quarters.

RSUs compensation expense for the year ended December 31, 2019 was $996,000 of which $299,000 is recorded in research and development, $115,000 in sales and marketing, and $582,000 in general and administrative.

In March 2020, the Board’s Compensation Committee approved the grant of 113,506 RSUs to a new manager of the Company.

RSUs compensation expense for the three months ended March 31, 2020 was $6.2 million of which $1.3 million is recorded in research and development, $1.1 million in sales and marketing, and $3.8 million in general and administrative.

As of March 31, 2020, there was $19.2 million of unrecognized compensation cost related to non-vested RSUs.

Stock-Based Compensation

In January 2018, Kaleyra S.p.A. adopted a stock-based compensation plan with an original vesting period of three years. In November 2018, the Kaleyra S.p.A. Board of Directors resolved to amend the original terms of this plan, substantially accelerating the vesting of the awarded stock options and granting to the plan’s beneficiaries the right to exercise all of the stock options awarded and not previously exercised, either vested or unvested, regardless of the fulfilment of any performance conditions, provided, in any case, that the beneficiary was employed by Kaleyra or any of its subsidiaries as of the exercise date. As of December 31, 2018, all of the stock options awarded were exercised. The entire stock-based compensation expense associated with this plan amounting to $7.4 million was recognized in the year ended December 31, 2018. The incremental portion of such compensation cost expense resulting from the plan’s modification and subsequent termination was equal to $5.7 million. In November 2019, Kaleyra adopted the EIP. The EIP provides for the award of stock-based compensation, as noted in the Restricted Stock Units section above.

Preference Shares Liabilities and Accrued Performance Bonuses

Preference shares liabilities amounting to $2,000 and $2.5 million as of March 31, 2020 and December 31, 2019, respectively, represent Kaleyra’s obligation to purchase in 2020 Solutions Infini preference shares from certain employees of Solutions Infini as a part of the Solutions Infini purchase agreement.

On March 9, 2020, Kaleyra signed a modification of the purchase agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per each preference share. As a result of this modification, effective on January 30, 2020, the total preference shares obligation was reduced to Indian Rupee 132,000 ($2,000 at the March 31, 2020 exchange rate).

On January 31, 2020, Kaleyra agreed to pay, to the eligible employees of the preference shares, performance bonuses for a total amount of $3.5 million (at the March 31, 2020 exchange rate), to be paid in 2020, as a replacement of the preference shares obligation.

On March 24, 2020, given the prevailing situation of the COVID-19 pandemic both globally and in India, the Company agreed with two of the eligible employees to delay payment of their performance bonuses, for a total amount of $1.4 million (at the March 31, 2020 exchange rate), and evaluate the timeline for payment thereof at a later date.

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As a result of the modification and agreements described above, $2.5 million of preference shares obligation was reversed to the statement of operations for the three months ended March 31, 2020 and $3.7 million of performance bonuses were recorded in the same period resulting in a $1.2 million net impact to the condensed consolidated statement of operations (before tax).

For the three months ended March 31, 2020 and 2019, the net impact of the preference shares amendment and the performance bonus agreements, on loss before income tax expense (benefit) was as follows (in thousands):

	Three Months Ended March 31,
	2020			2019
Research and development	$	524		$	—
Sales and marketing		1,093			—
General and administrative		(30	)		—
Financial income (expense), net		(417	)		—
Total	$	1,170		$	—

In addition, the accrual of the performance bonuses mentioned above resulted in a $920,000 tax deduction for the three months ended March 31, 2020, as, unlike preference shares costs, performance bonus expenses are deductible for tax purposes.

Key Business Metrics

Revenue

Kaleyra’s revenue is generated primarily from usage-based fees earned from the sale of communication services offered through software solutions to large enterprises, as well as small and medium-sized customers. Revenue can be billed in advance or in arrears depending on the terms of the agreement; for the majority of customers, revenue is invoiced on a monthly basis in arrears.

Cost of Revenue and Gross Profit

Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes the cost of Kaleyra’s cloud infrastructure and technology platform, amortization of capitalized internal-use software development costs related to the platform applications and amortization of developed technology acquired in the business combinations.

Gross profit is equal to the revenue less cost of revenue associated with delivering the communication services to Kaleyra’s customers.

Operating Expenses

Kaleyra’s operating expenses include research and development expense, sales and marketing expense, general and administrative expense, transactions costs and depreciation and amortization, excluding the depreciation and amortization expense related to the technology platform.

Research and Development Expense

Research and development expense consists primarily of personnel costs, the costs of the technology platform used for staging and development, outsourced engineering services, amortization of capitalized internal-use software development costs (other than those related to the technology platform) and an allocation of general overhead expenses. Kaleyra capitalizes the portion of its software development costs that meet the criteria for capitalization.

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Sales and Marketing Expense

Sales and marketing expense is comprised of compensation, variable incentive compensation, benefits related to Kaleyra’s sales personnel, along with travel expenses, other employee related costs including stock- based compensation, and expenses related to advertising, marketing programs and events.

General and Administrative Expense

General and administrative expense is comprised of compensation and benefits of administrative personnel, including variable incentive pay and stock-based compensation, and other administrative costs such as facilities expenses, professional fees, and travel expenses.

RESULTS OF OPERATIONS

Comparison of the three months ended March 31, 2020 and 2019 is as follows (in thousands):

	Three Months Ended March 31,
	2020			2019			$ Change			% Change
Revenue	$	33,633		$	27,725		$	5,908			21	%
Cost of revenue (1)		28,902			22,476			6,426			29	%
Gross profit		4,731			5,249			(518	)		(10	%)
Operating expenses:
Research and development (2)		2,810			1,196			1,614			135	%
Sales and marketing (1)(2)		3,743			1,472			2,271			154	%
General and administrative (2)		7,759			3,779			3,980			105	%
Total operating expenses		14,312			6,447			7,865			122	%
Loss from operations		(9,581	)		(1,198	)		8,383			NM
Other income, net		42			82			(40	)		(49	%)
Financial income (expense), net		(41	)		70			(111	)		(159	%)
Foreign currency income (loss)		168			(254	)		422			(166	%)
Loss before income tax expense (benefit)		(9,412	)		(1,300	)		8,112			NM
Income tax expense (benefit)		(589	)		79			(668	)		NM
Net loss	$	(8,823	)	$	(1,379	)	$	7,444			NM

NM = Not meaningful

(1) For the three months ended March 31, 2020 and 2019, the expense includes amortization of intangible assets acquired in a business combination as noted in the table below (in thousands):

	Three Months Ended March 31,
	2020		2019
Cost of revenue	$	160	$	163
Sales and marketing		257		281
Total	$	417	$	444

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(2) For the three months ended March 31, 2020 and 2019, operating expenses include stock-based compensation related to RSUs as noted in the table below (in thousands):

	Three Months Ended March 31,
	2020		2019
Research and development	$	1,312	$	—
Sales and marketing		1,053		—
General and administrative		3,839		—
Total	$	6,204	$	—

Revenue

In the three months ended March 31, 2020, revenue increased by $5.9 million, or 21%, compared to the three months ended March 31, 2019. This increase was primarily attributable to an increase in message activity volume, partially offset by a change in the business mix with a shift towards services with lower prices.

Cost of Revenue and Gross Profit

In the three months ended March 31, 2020, cost of revenue increased by $6.4 million, or 29%, compared to the three months ended March 31, 2019. The increase in cost of revenue was primarily attributable to the increase in message activities and to the increase of average connectivity costs. In the three months ended March 31, 2020, gross profit decreased by 10% compared to the three months ended March 31, 2019, mainly as a result of the effects of higher connectivity costs temporarily incurred during the initial delivery phase of new customer accounts that generated significant transaction volumes in the three months ended March 31, 2020.

Operating Expenses

In the three months ended March 31, 2020, research and development expenses increased by $1.6 million, compared to the three months ended March 31, 2019. Research and development expenses included $1.3 million of stock-based compensation and a net impact of $524,000 for the Solutions Infini performance bonuses and preference shares amendment in the three months ended March 31, 2020, compared to zero for both items, in the three months ended March 31, 2019. Excluding such costs, research and development expenses would have decreased by $222,000 mainly due to a $731,000 increase in capitalized software development costs in the three months ended March 31, 2020, partially offset by an increase in the headcount compared to same period last year.

In the three months ended March 31, 2020, sales and marketing expenses increased by $2.3 million, compared to the three months ended March 31, 2019. Sales and marketing expenses included $1.1 million of stock-based compensation and a net impact of $1.1 million for the Solutions Infini performance bonuses and preference shares amendment in the three months ended March 31, 2020, compared to zero for both items, in the three months ended March 31, 2019. Excluding such costs, sales and marketing expense would have increased by $125,000. Such increase was primarily attributable to higher consulting costs and marketing expenses, partially offset by a decrease in headcount compared to same period last year.

In the three months ended March 31, 2020, general and administrative expenses increased by $4.0 million, compared to the three months ended March 31, 2019. General and administrative expenses included (i) $3.8 million of stock-based compensation in the three months ended March 31, 2020, compared to zero in the three months ended March 31, 2019; and (ii) $773,000 and $581,000 transaction costs and costs pertaining to initial public company compliance in the three months ended March 31, 2020 and 2019, respectively. Excluding such costs, general and administrative expenses would have been substantially in line compared to the same period last year.

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Other Income, Net

In the three-month period ended March 31, 2020, other income, net decreased by $40,000, compared to three months ended March 31, 2019. Such decrease is mainly attributable to the fact that in the three months ended March 31, 2019 this item included certain government incentives received by Kaleyra in connection with research and development activities which were not received in the three-month period ended March 31, 2020.

Financial Income (Expense), Net

In the three months ended March 31, 2020, financial income (expense), net decreased by $111,000, compared to the same period last year, from a financial income of $70,000 to a financial expense of $41,000. Such decrease is attributable to the combined effects of (i) a decrease in financial income in the three months ended March 31, 2020 compared to same period last year, mainly as a result of lower gains on derivatives recorded in the three months ended March 31, 2020; and (ii) an increase in interest expense in the three months ended March 31, 2020 compared to same period last year, due to more bank and other borrowings compared to the same period last year. The increase in interest expense on bank and other borrowings, was partially offset by the reversal of interest expense previously accrued on the preference share obligations related to the amendment signed in January 2020. Excluding such non-recurring preference share interest reversal, amounting to $417,000, financial expense, net would have increased by $376,000 in the three months ended March 31, 2020 compared to the same period last year.

Foreign Currency Income (Loss)

In the three months ended March 31, 2020, foreign currency income (loss) increased by $422,000, compared to three months ended March 31, 2019. Such change was mainly attributable to the effects of the fluctuation of the Indian Rupee and Euro against the U.S. dollar.

Income Tax Expense

In the three months ended March 31, 2020, income tax expense decreased by $668,000, from an income tax expense of $79,000 to an income tax benefit of $589,000 mainly due to deferred tax assets recognized on Solution Infini performance bonuses.

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Comparison of the years ended December 31, 2019 and 2018 is as follows ($ in thousands):

	Year Ended December 31,
	2019			2018			$ Change			% Change
Revenue	$	129,558		$	77,845		$	51,713			66	%
Cost of revenue (1)		103,205			62,425			40,780			65	%
Gross profit		26,353			15,420			10,933			71	%
Operating expenses:
Research and development (2)		5,310			3,368			1,942			58	%
Sales and marketing (1)(2)		6,031			6,313			(282	)		(4	%)
General and administrative (2)		17,431			11,359			6,072			53	%
Loss on equity investments (3)		—			(95	)		95			NM
Total operating expenses		28,772			20,945			7,827			37	%
Loss from operations		(2,419	)		(5,525	)		(3,106	)		(56	%)
Other income, net		136			297			(161	)		(54	%)
Financial expense, net		(439	)		(416	)		(23	)		(6	%)
Foreign currency loss		(517	)		(32	)		(485	)		NM
Loss before income tax expense		(3,239	)		(5,676	)		(2,437	)		(43	%)
Income tax expense		2,273			1,424			849			60	%
Net loss	$	(5,512	)	$	(7,100	)	$	(1,588	)		(22	%)

NM = Not meaningful

(1) For the year ended December 31, 2019 and 2018, the expense includes amortization of acquired intangibles as noted in the table below. For the year ended December 31, 2018, amortization of acquired intangibles is from June 2018 and July 2018 subsequent to the business combinations of Solutions Infini and Buc Mobile, respectively (in thousands).

	Year Ended December 31,
	2019		2018
Cost of revenue	$	653	$	305
Sales and marketing		1,098		546
Total	$	1,751	$	851

(2) Operating expenses include stock-based payments. The expense for 2019 related to RSUs and the expense for 2018 related to stock options are as follows (in thousands).

	Year Ended December 31,
	2019		2018
Research and development	$	299	$	717
Sales and marketing		115		2,333
General and administrative		582		4,309
Total	$	996	$	7,359

(3) For the year ended December 31, 2018, the loss relates to the joint venture in Solutions Infini. In June 2018, following a change in the governance, Kaleyra S.p.A. achieved control over Solutions Infini and began fully consolidating Solutions Infini’s results of operations.

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Revenue

In 2019, revenue increased by $51.7 million, or 66%, compared to 2018. This increase was primarily attributable to the consolidations of Solutions Infini occurring in June 2018 and Buc Mobile occurring in July 2018. The increase was also due to an increase in message activity volume, partially offset by a change in the business mix with a shift towards services with lower prices.

Cost of Revenue and Gross Profit

In 2019, cost of revenue increased by $40.8 million, or 65%, compared to 2018. The increase in cost of revenue was primarily attributable to the effects of the consolidation of Solutions Infini and Buc Mobile and to the increase in message activity volume mentioned above. In 2019, gross profit increased by 71% compared to 2018 mainly as a result of the introduction of new voice products with higher profitability.

Operating Expenses

In 2019, research and development expenses increased by $1.9 million, or 58%, compared to 2018. The increase was primarily attributable to the effects of the consolidation of Solutions Infini and Buc Mobile. The increase was also due to an increase in payroll expense related to an increase in headcount in 2019. Research and development expenses included $299,000 and $717,000 for the stock-based compensation in 2019 and 2018, respectively. Excluding such costs, research and development expenses would have increased by $2.4 million or 89%.

In 2019, sales and marketing expenses decreased by $282,000, or 4%, compared to 2018. Sales and marketing expenses included $115,000 and $2.3 million for the share-based compensation in 2019 and 2018, respectively. Excluding such costs, sales and marketing expenses expense would have increased by $1.9 million or 49%. Such increase was primarily attributable to the effects of the consolidation of Solutions Infini and Buc Mobile.

In 2019, general and administrative expenses increased by $6.1 million, or 53%, compared to 2018. General and administrative expenses included: (i) $582,000 and $4.3 million for the stock-based compensation in 2019 and 2018, respectively and (ii) $7.7 million of business transaction expenses in 2019 and $1.1 million of transaction costs in 2018. Excluding such costs general and administrative expenses would have increased by $3.2 million or 53% primarily as a result of the effects of the consolidation of Solutions Infini and Buc Mobile and, from November 25, 2019, the consolidation of Kaleyra, Inc.

Other Income, Net

In 2019, other income, net decreased by $161,000, or 54%, compared to 2018. Such decrease is mainly attributable to the fact that in 2018 this item included certain government incentives received by Kaleyra in connection with research and development activities which were not received in 2019.

Financial Expense, Net

In 2019, financial expense, net increased by $23,000, or 6%, compared to 2018. Such increase is attributable to an increase in financial expenses in 2019 compared to 2018, partially offset by an increase in financial income. Financial expenses increased by $525,000 or 90% in 2019 compared to 2018, mainly due to Kaleyra’s higher average borrowings and higher interest expense accrued on the preference share obligations, compared to prior year. Financial income increased by $502,000 in 2019 compared to 2018, primarily due to higher gains on derivatives and higher income on marketable securities recorded in 2019.

Foreign Currency Loss

In 2019, foreign currency loss increased by $485,000, compared to 2018. Such change was mainly attributable to the effects of the fluctuation of the Indian Rupee and Euro against the U.S. dollar.

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Income Tax Expense

In 2019, income tax expense increased by $849,000, or 60%, compared to 2018. As a percentage of loss before income taxes in 2019, income tax expense increased by 45 percentage points, principally due to higher costs not deductible for tax purposes in 2018 due mainly to stock-based compensation expense being not deductible under Italian Tax Regulation.

LIQUIDITY AND CAPITAL RESOURCES

As of March 31, 2020, Kaleyra had $16.2 million of cash and cash equivalents, $20.8 million of restricted cash and $3.1 million of short-term investments with maturity terms between 4 and 12 months held in India. As of December 31, 2019, Kaleyra had $16.1 million of cash and cash equivalents, $20.9 million of restricted cash and $5.1 million of short-term investments. Restricted cash was held in the United States and consisted of cash deposited into savings or escrow accounts with two financial institutions as collateral for Kaleyra’s respective obligations under each of the Forward Share Purchase Agreements with Glazer Capital, LLC (“Glazer Capital”) and Yakira. As of May 19, 2020, Kaleyra’s obligations under the Forward Share Purchase Agreement with Glazer Capital, and except as described below, Kaleyra’s obligations under the Forward Share Purchase Agreement with Yakira, had been satisfied. As a result, as of May 19, 2020, there was no longer any restricted cash.

Management currently plans to retain the cash in the jurisdictions where its funds are currently held. Kaleyra believes its cash, cash flows from operations and availability of borrowings will be sufficient to support its planned operations for at least the next 12 months.

Prior to the offering, Kaleyra has financed its operations through a combination of cash generated from operations and from borrowings under Kaleyra bank facilities primarily with banks located in Italy. Kaleyra’s long-term cash needs primarily include meeting debt service requirements, working capital requirements and capital expenditures.

Kaleyra may also pursue strategic acquisition opportunities that may impact its future cash requirements. There are a number of factors that may negatively impact its available sources of funds in the future including the ability to generate cash from operations, obtain additional financing or refinance existing short-term debt obligations, including those related to acquisitions completed in prior periods and including the obligation related to the forward share purchase agreements in case the third-parties involved exercise their put options. The amount of cash generated from operations is dependent upon factors such as the successful execution of Kaleyra’s business strategies and worldwide economic conditions. The amount of debt available under future financings is dependent on Kaleyra’s ability to maintain adequate cash flow for debt service and sufficient collateral, and general financial conditions in Kaleyra’s market.

Kaleyra may opportunistically raise debt capital, subject to market and other conditions, to refinance its existing capital structure at a lower cost of capital and extend the maturity period of certain debt. Following the completion of this offering and the repayment of certain of its outstanding debt obligations, as described in “Use of Proceeds,” Kaleyra believes such refinancing opportunities may be attractive, subject to the prevailing market conditions. Additionally, Kaleyra may also raise debt capital for strategic opportunities which then may include acquisitions of additional companies, and general corporate purposes. If additional financing is required from outside sources, Kaleyra may not be able to raise it on terms acceptable to it or at all. If Kaleyra is unable to raise additional capital when desired, Kaleyra’s business, operating results and financial condition may be adversely affected.

Kaleyra has a number of long-standing business and banking relationships with major Italian commercial banks where it maintains both cash accounts and a credit relationship. Historically, Kaleyra has used cash generated from operations to fund its growth and investment opportunities. As Kaleyra’s management made the decision to

63

expand its operations outside of Italy and acquired additional companies, it took on certain additional financing in order to fund cash payments due on the acquisitions. As of March 31, 2020, Kaleyra’s total bank and other borrowings, including amounts drawn under the revolving credit line facilities was $31.8 million ($27.3 million as of December 31, 2019).

Kaleyra has credit line facilities of $6.6 million as of March 31, 2020, of which $5.3 million has been used. As of December 31, 2019, Kaleyra had credit line facilities of $5.6 million, of which $3.6 million had been used. Amounts drawn under the credit line facilities are collateralized by specific customer trade receivables and funds available under the line are limited based on eligible receivables.

Kaleyra S.p.A. may seek to borrow additional funds between $15 and $20 million under new or expanded medium term lines of credit with certain Italian financial institutions. Kaleyra S.p.A.’s and Kaleyra’s future capital requirements and the adequacy of available funds will depend on many factors, including those described in the section of this prospectus captioned “Risk Factors.” Kaleyra S.p.A. may not be able to secure additional financing on acceptable terms, or at all.

Promissory Note Payable to Financial Advisor

On March 6, 2020, the Company issued to Northland Securities, Inc. (“Northland”), one of the underwriters in this offering, a promissory note for the principal amount of $400,000 as a partial settlement of the amounts owned to Northland for financial advisory services provided by Northland to Kaleyra S.p.A. in connection with the previously consummated Business Combination. Kaleyra expects to repay this promissory note with the net proceeds from this offering.

Notes Payable to the Sellers

As mentioned above, at the closing of the Business Combination, Kaleyra issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Notes payable to the Sellers”). Interest on the Notes Payable to the Sellers will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the date of the Business Combination, plus a margin of one percent (1%) per annum. Kaleyra expects to repay these promissory notes with the net proceeds from this offering.

Notes Payable to the Founders and certain of their affiliates

Prior to the closing of the Business Combination, the Company had issued to Founders and certain of their affiliates various promissory notes that were due to be paid in full upon the closing of the Business Combination (such notes referred to collectively as either the “Extension Notes” or the “Working Capital Notes”). In conjunction with the completion of the Business Combination, the Company and each of GigAcquisitions, LLC and an affiliate of the Sponsor, GigFounders, LLC, agreed to amend and restate the Extension Notes and Working Capital Notes held by each of them to provide that in lieu of repaying such promissory notes in full upon the closing of the Business Combination, the outstanding principal balance of such amended and restated notes (the “Amended Extension Notes” and the “Amended Working Capital Notes”), plus all accrued and unpaid interest (as described below) and fees due under the Amended Extension Notes and Amended Working Capital Notes, shall, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), be due and payable no later than ten business days after the Company receives the Financing Proceeds. Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

64

None of the Amended Extension Notes or Amended Working Capital Notes will be convertible into securities of the Company. As of March 31, 2020, all of the holders of Extension Notes and Working Capital Notes had similarly agreed to amend and restate these notes to exchange them into Amended Extension Notes and Amended Working Capital Notes. As of March 31, 2020, the outstanding amount for these notes amounted to $3.6 million of which $1.9 million is due to related parties. Kaleyra expects to repay these promissory notes with the net proceeds from this offering.

Forward Share Purchase Agreements obligations

In 2019, Kaleyra entered into certain Forward Share Purchase Agreements or similar arrangements with third parties including: Greenhaven, Yakira, Kepos Alpha Fund L.P, (“KAF”), Glazer Capital and NGFP. In connection with such Forward Share Purchase Agreements or similar arrangements, Kaleyra assumed the obligations to repurchase its own shares at a fixed price subject to certain condition described in the agreements. See Note 9 of the condensed consolidated financial statements for the three months ended March 31, 2020 for a description of the Forward Share Purchase Agreements.

As of March 31, 2020, Kaleyra’s debt for Forward Share Purchase Agreements amounted to $31.5 million. As mentioned above, as of March 31, 2020 Kaleyra had restricted cash as collateral for its obligations under the Forward Share Purchase Agreements with Glazer Capital and Yakira of $20.8 million. Pursuant to the terms of the Confirmation, as amended, Kaleyra had also prepaid $17.0 million for its potential forward repurchase of the Nomura Shares from NGFP, but would owe, in the event of a forward repurchase, an amount equal to the product of (x) $10.5019, (y) the Accrual Percentage (as defined below), and (z) the number of shares being repurchased from NGFP. The “Accrual Percentage” is 3.50% per annum, ending on November 25, 2021.

On January 23, 2020, Kaleyra entered into Amendment No. 3 to the Greenhaven Forward Share Purchase Agreement (the “Greenhaven Amendment”). The Greenhaven Amendment provides that Greenhaven has the right to put its subject shares to Kaleyra on the following dates and at the following purchase prices: (i) $11.00 per share for up to 248,963 shares to be sold to the Company on February 21, 2020; and (ii) $11.70 per share for the next 700,000 shares to be sold to Kaleyra on August 30, 2020. Greenhaven may continue to sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $8.50 per share. On February 20, 2020, Kaleyra repurchased an aggregate of 235,169 shares of its common stock for $2.6 million. In addition, Kaleyra paid Greenhaven $152,000 for the 60,996 shares that Greenhaven sold on the open market representing the amount at which the $11.00 exceeded the selling price. On August 30, 2020, Kaleyra shall pay Greenhaven an amount equal to (1) the number of shares (including any additional shares) sold by Greenhaven in the open market between February 21, 2020 and August 30, 2020 multiplied by (2) the amount by which $11.70 exceeds the sale price per share.

On January 23, 2020, Kaleyra entered into Amendment No. 3 to the KAF Forward Share Purchase Agreement and on April 7, 2020, Kaleyra entered into Amendment No. 4 (the “KAF Amendments”). On April 9, 2020, KAF sold 50,000 shares to Kaleyra at the price of $10.92 per share. According to the last amendment, KAF had the right to put its subject shares to Kaleyra on May 7, 2020 at a purchase price of: (i) $10.92 per share for the first 46,137 shares sold to Kaleyra; and (ii) $10.82 per share for the next 93,676 shares sold to Kaleyra (collectively, the “KAF Share Purchase Price”). In the event the closing occurred after May 7, 2020, the KAF Share Purchase Price would increase for the 93,676 shares sold to Kaleyra by 1% per full month until the closing date. KAF had the right to elect, in its sole and absolute discretion, to extend the date on which it exercised its put right to a date that was provided upon 10 calendar days’ written notice. The KAF Amendments further provided that KAF had the right to sell its subject shares in the open market, at its sole discretion, as long as the sales price was above $7.00 per share. In the event that KAF sold any shares at a sale price of less than $10.92 per share for the first 46,137 shares and $10.82 per share for the next 93,676 shares, Kaleyra was to pay KAF an amount equal to (A) the number of shares sold multiplied by (B) the amount by which $10.92 or $10.82, as applicable, exceeded the sale price per share. If Kaleyra failed to make this payment, Kaleyra would, without prejudice or limitation to any other remedies available to KAF in law or equity, pay a penalty on such amount due at the rate of 18% per annum from the due date until the date of payment in full.

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On May 18, 2020, KAF informed Kaleyra that it sold in the open market at a price above $7.00 per share all shares that it had held that were subject to the KAF Forward Share Purchase Agreement other than 25,098 shares, and it provided notice that it was exercising its option under the KAF Forward Share Purchase Agreement to have these remaining 25,098 shares of common stock repurchased by Kaleyra on May 20, 2020 at $10.92 per share, for an aggregate purchase price of $274,070.16. The May 18, 2020 notice also informed Kaleyra that the amount due to KAF for the sales that it had made in the open market above $7.00 per share was $431,936.40, which represented the difference in price between the amount for which these shares were sold by KAF in the open market and the KAF Share Purchase Price, as set forth above, for a total aggregate payment to be made by Kaleyra to KAF of $706,006.56. Following the closing of the repurchase, the Forward Share Purchase Agreement with KAF terminated pursuant to its terms, and as a result Kaleyra has no further obligations under the KAF Forward Share Purchase Agreement.

On February 7, 2020, the Yakira Forward Share Purchase Agreement was amended (the “First Yakira Amendment”). The First Yakira Amendment provides that Kaleyra may be obligated to purchase some or all of 43,930 shares that resulted from the conversion of rights if Yakira exercises an option to sell such shares to the Company at a purchase price of $10.93 per share (which is an increase from $10.50 per share) as soon as practicable on or after the six-month anniversary of the Business Combination Date. On May 9, 2020, the Company entered into a second amendment to the forward share purchase agreement with Yakira (the “Second Yakira Amendment”). The Second Yakira Amendment provides that Kaleyra will purchase from Yakira these 43,930 shares as soon as practicable on or after (but no later than the fifth business day after) December 31, 2020.

In addition, on May 11, 2020, Yakira issued notice under the Yakira Forward Share Purchase Agreement for Kaleyra to repurchase 1,084,150 shares of common stock at $10.6819 per share, for an aggregate purchase price of $11,580,782, with such payment to be made with restricted cash previously placed in an escrow account with an escrow agent pursuant to the terms of the Yakira Forward Share Purchase Agreement. These shares were repurchased by Kaleyra on May 18, 2020 and are unrelated to the 43,930 shares discussed above. As a result of this repurchase, no cash remains in the escrow account in accordance with the terms of the Yakira Forward Share Purchase Agreement.

On May 15, 2020, Glazer Capital provided notice that it was exercising its option under the Glazer Capital Forward Share Purchase Agreement to have its remaining 864,093 shares of common stock repurchased by Kaleyra on May 19, 2020 at $10.6819 per share, for an aggregate purchase price of $9,230,155.01. Following the repurchase, both the Forward Share Purchase Agreement with Glazer Capital and a Letter of Credit and Reimbursement Agreement with EagleBank that guaranteed Kaleyra’s obligations to Glazer Capital under the Glazer Capital Forward Share Purchase Agreement were terminated pursuant to their respective terms, and as a result Kaleyra has no further obligations under either respective agreement.

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Long-term financial obligations

Long-term financial obligations, excluding Debt for Forward Share Purchase Agreements and similar arrangement obligations, the Notes Payable to the Sellers, the Notes Payable to the Founders and certain of their affiliates, and credit line facilities, consisted of the following (in thousands):

								Interest Nominal Rate
	As of March 31, 2020		As of December 31, 2019		Maturity		Interest Contractual Rate	As of March 31, 2020			As of December 31, 2019
UniCredit S.p.A. (Line A Tranche (1))	$	3,219	$	3,609		January 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche (2))		151		167		May 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line B)		2,941		3,229		November 2023	Euribor 3 months + 2.90%		2.60	%		2.60	%
UniCredit S.p.A. (Line C)		2,497		2,787		February 2023	Euribor 3 months + 3.90%		3.53	%		3.53	%
Intesa Sanpaolo S.p.A. (Line 1)		834		988		October 2021	Euribor 3 months + 1.80%		1.88	%		1.88	%
Intesa Sanpaolo S.p.A. (Line 2)		3,841		4,183		October 2023	Euribor 3 months + 2.60%		2.60	%		2.60	%
UBI Banca S.p.A. (Line 1)		257		332		February 2021	1.25%		1.25	%		1.25	%
UBI Banca S.p.A. (Line 2)		1,198		1,499		April 2021	Euribor 3 months +1.95%		1.55	%		1.55	%
Monte dei Paschi di Siena S.p.A. (Line 1)		457		521		April 2022	0.95%		0.95	%		0.95	%
Monte dei Paschi di Siena S.p.A. (Line 2)		2,190		—		June 2023	1.50%		1.50	%		—
Banco Popolare di Milano S.p.A. (Line 1)		1,312		1,336		June 2023	Euribor 3 months + 2.00%		2.00	%		2.00	%
Banco Popolare di Milano S.p.A. (Line 2)		—		3,893		September 2022	Euribor 3 months + 2.00%		—			2.00	%
Banco Popolare di Milano S.p.A. (Line 3)		6,517		—		March 2024	Euribor 3 months + 3.00%		2.16	%		—
Simest 1		275		280		December 2022	0.50%		0.50	%		0.50	%
Simest 2		273		279		December 2022	0.50%		0.50	%		0.50	%
Simest 3		503		512		December 2022	0.50%		0.50	%		0.50	%
Finlombarda S.p.A.		81		83		December 2020	0.50%		0.50	%		0.50	%
Total bank and other borrowings		26,546		23,698
Less: current portion		5,925		7,564
Total long-term portion	$	20,621	$	16,134

All financial liabilities are unsecured borrowings of Kaleyra.

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Liquidity

Prior to the offering, Kaleyra has funded its short- and long-term liquidity needs through a combination of cash on hand, cash flows generated from operations, and borrowings under credit facilities. Kaleyra’s management regularly monitors certain liquidity measures to monitor performance.

The condensed consolidated balance sheet as of March 31, 2020 includes total current assets of $80.4 million and total current liabilities of $121.1 million, resulting in net liabilities due within the next 12 months of $40.7 million.

The Business Combination generated significant obligations including (i) $13.1 million of liabilities related to non-recurring Business Combination transaction related costs; (ii) $15.0 million of deferred consideration to sellers in the Business Combination transaction (iii) $13.2 million of net obligations under certain Shares Purchase Forward Agreements entered into by GigCapital Inc. prior to the Business Combination; and (iv) $3.6 million of notes payable acquired as a result of the Business Combination. Management, concerned about the Company’s ability to fulfill these obligations, made the decision to evaluate opportunities to refinance or renegotiate some of its current obligations and, during the first four months of 2020 put in place several actions aimed to achieve such goal, including, among others:

• the entry into a new loan agreement with a bank that is currently a lender to the Company;

• signing of two new line of credit facilities;

• refinancing a loan that extended payment terms and provided additional funds;

• amendments of the repayment schedules of certain existing long-term financing agreements to postpone the amounts due in the next three to nine months of 2020; and

• the renegotiation of the payment terms of a payable related to costs incurred in the Business Combination.

Considering the effects of these actions and the typical financial cycle of Kaleyra, Kaleyra’s management believes that the Company’s cash, cash flows from operations, financings and amendments to agreements described above, and availability of borrowings, as described above, will be sufficient to support its planned operations for at least the next 12 months from the date the condensed consolidated financial statements for the three months ended March 31, 2020 were issued.

Cash Flows

Comparison of the Three Months Ended March 31, 2020 and 2019

The following table summarizes cash flows for the periods indicated (in thousands):

	Three Months Ended March 31,
	2020			2019
Net cash used in operating activities	$	(2,852	)	$	(3,631	)
Net cash provided by investing activities		1,052			1,082
Net cash provided by financing activities		2,304			671
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(454	)		(47	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	50		$	(1,925	)

In the three months ended March 31, 2020, cash used in operating activities was $2.9 million, primarily consisting of net loss of $8.8 million and a $2.5 million settlement on the preference share liability partially offset by non-cash items, mainly $6.3 million of stock-based compensation, and $638,000 of depreciation and amortization expense and $1.6 million of net changes in operating assets and liabilities.

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In the three months ended March 31, 2019, cash used in operating activities was $3.6 million, primarily consisting of net loss of $1.4 million and $3.1 million of net changes in operating assets and liabilities partially offset by non-cash items, mainly $650,000 of depreciation and amortization expense, $315,000 of non-cash compensation for preference shares, and $103,000 of non-cash interest expense.

In the three months ended March 31, 2020, cash provided by investing activities was $1.1 million, primarily consisting of $5.0 million of proceeds from sale short-term investments, partially offset by $3.2 million of purchases of short-term investments and $731,000 to fund the cost of internally developed software.

In the three months ended March 31, 2019, cash provided by investing activities, was $1.1 million, primarily consisting of $2.1 million of proceeds from sale of short-term investments, partially offset by $684,000 of purchases of short-term investments and $291,000 of purchases of property and equipment.

In the three months ended March 31, 2020, cash provided by financing activities was $2.3 million, primarily consisting of $8.8 million in proceeds from borrowings on term loans and net drawings of $1.7 million on the available lines of credit, partially offset by $5.5 million of repayments on term loans, $2.6 million of repurchases of common stock related to forward share purchase agreements and $167,000 of other required payments related to forward shares purchase agreements.

In the three months ended March 31, 2019, cash provided by financing activities was $671,000, primarily consisting of $696,000 in proceeds from borrowings on term loans and net drawings of $528,000 on the available lines of credit. These amounts were partially offset by $553,000 of repayments on term loans.

Comparison of the Years Ended December 31, 2019 and 2018

The following table summarizes cash flows for the periods indicated (in thousands):

	Year Ended December 31,
	2019			2018
Net cash provided by operating activities	$	6,453		$	3,601
Net cash provided by (used in) investing activities		17,687			(11,710	)
Net cash provided by financing activities		4,702			6,405
Effect of exchange rate changes on cash and cash equivalents		(52	)		(634	)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	28,790		$	(2,338	)

In the year ended December 31, 2019, cash provided by operating activities was $6.5 million, primarily consisting of net loss of $5.5 million adjusted for non-cash items, mainly including $2.6 million of depreciation and amortization expense, $2.1 million of non-cash compensation expense for stock-based compensation and preference shares, $716,000 of allowance for doubtful accounts, $657,000 of non-cash interest expense and $5.6 million of net cumulative changes in operating assets and liabilities.

In the year ended December 31, 2018, cash provided by operating activities consisted primarily of net loss of $7.1 million adjusted for non-cash items, mainly including $8.0 million of stock-based compensation expense, $1.5 million of depreciation and amortization expense, and $717,000 of cumulative changes in operating assets and liabilities.

In the year ended December 31, 2019, cash provided by investing activities was $17.7 million, primarily consisting of $21.7 million of cash, cash equivalents and restricted cash acquired in the reverse merger and $3.9 million of proceeds from sale of marketable securities, partially offset by $5.9 million of purchases of marketable securities, $1.4 million of purchases of property and equipment and $602,000 to fund the cost of internally developed software.

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In the year ended December 31, 2018, cash used in investing activities, was $11.7 million, primarily consisting of $3.9 million of purchases of marketable securities, $7.9 million of cash paid to acquire other businesses and $657,000 to fund the cost of internally developed software. These amounts were partially offset by $995,000 of proceeds from the sale of marketable securities.

In the year ended December 31, 2019, cash provided by financing activities was $4.7 million, primarily consisting of $16.7 million in proceeds from borrowing on term loans and net drawings of $2.0 million on the available lines of credit, partially offset by $9.1 million of payment of deferred consideration for the Solutions Infini and Buc Mobile acquisitions and by $4.8 million of payments on term loans.

In year ended December 31, 2018, cash provided by financing activities was $6.4 million, primarily consisting of $5.6 million in net proceeds from borrowing on term loans, net drawings of $1.7 million on the available lines of credit and $8,000 in proceeds from stock options exercised by employees. These amounts were partially offset by $913,000 of repayments on term loans.

Contractual Obligations and Other Commitments

The following table summarizes the obligations as of March 31, 2020, as derived from the audited consolidated financial statements of Kaleyra as of that date. The table should be read in connection with the footnotes below describing certain events occurring after March 31, 2020 (in thousands).

	Payment due by period
	Total		2020 (remaining nine months)		2021-2023		2024-2025		Thereafter
Bank and other borrowings (1)	$	26,546	$	3,784	$	22,306	$	456	$	—
Line of credit		5,278		5,278		—		—		—
Capital lease obligations		225		84		124		17		—
Operating lease obligations (2)		2,704		541		1,435		606		122
Preference shares obligations		2		2		—		—		—
Notes payable to the Founders and certain of their affiliates		3,578		3,578		—		—		—
Non-convertible notes payable to the Sellers (3)		7,500		7,500		—		—		—
Convertible notes payable to the Sellers (4)		7,500		3,750		3,750		—		—
Other notes payable (5)		400		400
Debt for forward share purchase agreements (6)		31,530		31,530		—		—		—
Long-term payable (7)		2,700		—		2,700		—		—
Total	$	87,963	$	56,447	$	30,315	$	1,079	$	122

(1) Subsequent to March 31, 2020, Kaleyra S.p.A. received the approval from UniCredit, UBI Banca S.p.A. and Simest S.p.A. to postpone the payment of the amounts due under the existing loans for the next 6 to 9 months. See Note 19 – Subsequent Events – to the condensed consolidated financial statements for the three months ended March 31, 2020 for further details.

(2) The Company has an option to extend its Milan office lease in 2026 for a period of 6 years under the same terms and conditions of the existing contract.

(3) Notes become due and payable no later than ten business days after Kaleyra receives, whether in a debt or equity financing event (which may include the receipt of cash from third parties with which Kaleyra has entered into Forward Share Purchase Agreements), cash proceeds in an amount not less than $11.5 million. The Company expects to repay these notes with the net proceeds of this offering.

(4) Fifty percent (50%) of the outstanding principal balance of the notes will be due and payable on the fifteen-month anniversary of the Business Combination Date. The remaining outstanding principal balance of the notes plus all accrued and unpaid interest and fees due under the notes will be due and payable in full on the

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twenty-four-month anniversary of the Business Combination Date. In the event that Kaleyra receives, at any time while principal on the notes remains outstanding, cash proceeds of an equity financing (the “Financing”) in an amount not less than $50.0 million (the “Financing Proceeds”), fifty percent (50%) of the outstanding principal balance of the notes will be due and payable no later than ten business days after Kaleyra receives such Financing Proceeds. In the event of a Financing where at any time Kaleyra receives cash proceeds of such Financing in an amount not less than $75.0 million (the “Payoff Financing Proceeds”), one hundred percent of the remaining outstanding principal balance of the notes, plus all accrued and unpaid interest and fees due under the notes will be due and payable no later than ten business days after Kaleyra receives such Payoff Financing Proceeds. The date which is the earlier of (a) the twenty-four-month anniversary of the Business Combination Date, or (b) the date payment is received from Payoff Financing Proceeds, is the “Maturity Date.”

(5) In March 2020, the Company issued to Northland, an underwriter in this offering, a promissory note for the principal amount of $400,000 due within the next 12 months. The Company expects to repay this note with the net proceeds of this offering.

(6) Debts for forward share purchase agreements have been determined as the present value to be paid at settlement if the counterparties exercise their put option. As of March 31, 2020, the Company had restricted cash as collateral for obligations under the Forward Share Purchase Agreements with Glazer Capital and Yakira of $20.8 million. As discussed above, such obligations to Glazer Capital and Yakira have subsequent to March 31, 2020 been satisfied and there is no longer any restricted cash. In addition, as discussed above, the Company has subsequent to March 31, 2020 also satisfied obligations to KAF under a Forward Share Purchase Agreement with KAF.

(7) On April 16, 2020, in connection with our previously consummated Business Combination, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with its financial advisory service firms, Cowen and Chardan (collectively the “Service Firms”), pursuant to which it agreed to pay an affiliate of Cowen, Cowen Investments II, and Chardan, in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate as follows: (i) $2.7 million in the aggregate in common stock of the Company (the “Settlement Shares”) to be issued the business day prior to the filing of a resale registration statement for such Settlement Shares (the “Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum (but with lower interest rates if the notes are repaid earlier than one year or two years after issuance) and with interest paid in arrears to the payee on March 15, June 15, September 15 and December 15 of each year, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of the Company by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares will be substituted for by warrants with an exercise price of $0.01 per share issued pursuant to a Warrant Agreement (the “Warrant Agreement” and, the common stock underlying the Warrant Agreement, the “Warrant Shares”). The “Beneficial Ownership Limitation” shall initially be 4.99% of the number of shares of the common stock outstanding of the Company immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares shall be calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of the Company on the NYSE American LLC stock exchange (the “VWAP”) on the business day immediately prior to the date on which the Company files the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of the Company to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

On May 1, 2020, in connection with the Settlement Agreement, the Company issued: (i) an aggregate of 440,595 Settlement Shares to Cowen Investments and Chardan, consisting of 374,506 Settlement Shares issued to Cowen

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Investments, and 66,089 Settlement Shares issued to Chardan; and (ii) convertible promissory notes in the aggregate principal amount $2,700,000 to Cowen Investments and Chardan, consisting of a convertible promissory note in the principal amount of $2,295,000 issued to Cowen Investments (the “Cowen Note”) and a convertible promissory note in the principal amount of $405,000 issued to Chardan (the “Chardan Note,” which together with the Cowen Note, constitute the Convertible Notes), respectively. The unpaid principal of the Cowen Note is convertible at the option of Cowen Investments into 303,171 shares of common stock of the Company, if there has been no principal reduction, and the unpaid principal of the Chardan Note is convertible at the option of Chardan into 53,501 shares of common stock of the Company, if there has been no principal reduction. As the Beneficial Ownership Limitation was not triggered by the issuance of the Settlement Shares, no Warrant Agreement was necessary and no warrants were issued.

Off-Balance Sheet Arrangements

During the years ended December 31, 2019 and 2018, and the three months ended March 31, 2020, Kaleyra did not have any relationships with any entities or financial partnerships, such as structured finance or special purposes entities established for the purpose of facilitating off-balance sheet arrangements or for other purposes.

Seasonality

Kaleyra’s results are affected by the business cycles of its customer base, which generally results in stronger revenue in the fourth quarter of the financial year. Kaleyra believes this variability is largely due to the market’s demand for its customers’ and/or business partners’ services due to higher levels of purchasing activity in the holiday season. As a result of its historically higher portion of sales in the fourth quarter of each year, its cost of revenue increases during such period relative to any increase in revenue. The increase in cost of revenue and other impacts of seasonality may affect profitability in a given quarter.

Taxes

Kaleyra files income tax returns in the United States and in foreign jurisdictions including Italy, India, and Switzerland. As of March 31, 2020, the tax years 2007 through the current period remain open to examination in each of the major jurisdictions in which the Company is subject to tax.

For the years ended December 31, 2019 and 2018, Kaleyra’s consolidated effective tax rate was negative 70% and 25%, respectively. The change in the effective tax rate is primarily due to the decrease of costs non-deductible for tax purposes recorded in 2019 compared to 2018 and to the increase in valuation allowance and in taxes on undistributed earnings from foreign subsidiaries in 2019 compared to 2018. As of March 31, 2020, the Company had $2.1 million of undistributed earnings and profits generated by a foreign subsidiary (Solutions Infini) for which no deferred tax liabilities have been recorded, since the Company intends to indefinitely reinvest such earnings in the subsidiary to fund the international operations and certain obligations of the subsidiary. Should the above undistributed earnings be distributed in the form of dividends or otherwise, the distributions would result in $321,000 of tax expense.

As of December 31, 2019, the Company has U.S. federal, state and foreign net operating loss carryforwards totaling $11.6 million, $11.7 million and $1.6 million, respectively. If not utilized, federal net operating losses of $5.4 million will expire at various dates from 2026 through 2037, and $6.2 million have an indefinite life. State net operating losses of $10.1 million will expire at various dates from 2037 through 2039, and $1.6 million have an indefinite life. Foreign net operating losses originated in Switzerland and will expire at various dates from 2023 through 2026.

Impact of the CARES Act

On March 18, 2020 and March 27, 2020, the “Families First Coronavirus Response Act” (“FFCRA”) and the “Coronavirus Aid, Relief, and Economic Security Act” (“CARES Act,” and together with the FFCRA, the

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“COVID-19 Acts”), were signed into law in the United States. The COVID-19 Acts include several significant business tax provisions that, among other things, (i) eliminate the taxable income limit for certain NOLs and allow businesses to carry back NOLs arising in tax years beginning in 2018, 2019, and 2020 to the five prior tax years, (ii) permit businesses to carry back NOLs generated in fiscal tax year 2018 to the two prior tax years pursuant to a technical amendment of Section 172 of the Code, (iii) relax the business interest expense limitation under Section 163(j) of the Code from 30 percent to 50 percent of adjusted taxable income, (iv) accelerate refunds of previously generated corporate alternative minimum tax credits, and (v) provide payroll tax relief to employers by allowing the deferral of payment of a certain portion of the employer’s share of Social Security tax over the next two years and granting a refundable payroll tax credit to eligible employers whose business operations have been disrupted by COVID-19. In addition, other countries around the world, where we operate, have enacted legislation to provide tax relief to businesses dealing with the COVID-19 crisis. The U.S. Treasury and foreign tax authorities continue to issue guidance on the application of these recently enacted legislation, and accordingly, our analysis of the impact of these provisions on us is not final. We are continuing to assess the effects of these provisions.

Critical Accounting Policies and Estimates

The consolidated financial statements are prepared in accordance with US GAAP applicable for an “emerging growth company” as defined in the JOBS Act. The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these consolidated financial statements, Kaleyra availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Preparation of these financial statements requires Kaleyra to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, costs and expenses and related disclosures. Kaleyra bases the estimates on historical experience and on various other assumptions that it believes to be reasonable. In many instances, Kaleyra could have reasonably used different accounting estimates and in other instances changes in the accounting estimates are reasonably likely to occur from period to period. Actual results could differ significantly from the estimates. To the extent that there are material differences between these estimates and actual results, the future financial statement presentation, financial condition, results of operations and cash flows will be affected. Kaleyra believes that the accounting policies discussed below are critical to understanding the historical and future performance, as these policies relate to the more significant areas involving judgments and estimates.

Revenue Recognition

Kaleyra derives the revenue primarily from usage-based fees earned from the sale of communications services offered through software solutions to large enterprises, as well as small and medium-sized customers. Revenue can be billed in advance or in arrears depending on the term of the agreement; for the majority of customers revenue is invoiced on a monthly basis in arrears.

Adoption of Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”

Effective January 1, 2019, Kaleyra adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” which replaced the existing revenue recognition guidance, ASC 605, and outlines a single set of comprehensive principles for recognizing revenue under US GAAP. Among other things, ASC 606 requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an

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amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services.

Kaleyra did not record any adjustment to the beginning retained earnings as of January 1, 2019 in connection with the adoption of the new standard.

Prior to the adoption of ASC 606, Kaleyra recognized the majority of its revenue according to the usage by its customers in the period in which that usage occurred. ASC 606 continues to support the recognition of revenue over time, and on a usage basis, for the majority of Kaleyra’s contracts due to continuous transfer of control to the customer.

Revenue Recognition Policy

Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration Kaleyra expects to receive in exchange for those products or services. Kaleyra enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers, which are subsequently remitted to governmental authorities.

Kaleyra determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

Kaleyra’s revenue is primarily derived from usage-based fees earned from the sale of communications services offered through software solutions to large enterprises, as well as small and medium-sized customers.

Platform access is considered a monthly series comprising of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. Revenue from usage-based fees represented 98% of total revenue, in both the years ended December 31, 2019 and 2018.

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support. Term-based contracts revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 2% of total revenue, in both the years ended December 31, 2019 and 2018.

No significant judgments are required in determining whether products and services are considered distinct performance obligations and should be accounted for separately versus together, or to determine the stand-alone selling price.

Kaleyra’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

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Restricted Stock Units

Kaleyra measures and recognizes the compensation expense for restricted stock units (RSUs) granted to employees and directors, based on the fair value of the award on the grant date.

RSUs give an employee an interest in company stock but they have no tangible value until vesting is complete. RSUs are equity classified and measured at the fair market value of the underlying stock at the grant date and recognized as expense over the related service or performance period. Kaleyra elected to account for forfeitures as they occur. The fair value of stock awards is based on the quoted price of our common stock on the grant date. Compensation cost for RSUs is recognized using the straight-line method over the requisite service period.

Stock-Based Compensation

As mentioned above, in January 2018, Kaleyra S.p.A. adopted a stock-based compensation plan with an original vesting period of three years. In November 2018, the Kaleyra S.p.A. Board of Directors resolved to amend the original terms of this plan, substantially accelerating the vesting of the awarded stock options and granting to the plan’s beneficiaries the right to exercise all of the stock options awarded and not previously exercised, either vested or unvested, regardless of the fulfilment of any performance conditions, provided, in any case, that the beneficiary was employed by Kaleyra S.p.A. or any of its subsidiaries as of the exercise date. As of December 31, 2018, all of the stock options awarded were exercised. Stock-based compensation expense for the year ended December 31, 2018 was $7.4 million. The incremental compensation cost expense resulting from the plan’s modification was equal to $5.7 million.

Kaleyra accounts for stock-based compensation in accordance with the authoritative guidance on stock compensation. Under the fair value recognition provisions of this guidance, stock-based compensation is measured at the grant date based on the fair value of the award and is recognized as expense, over the requisite service period, which is generally the vesting period of the respective award.

As mentioned above, in November 2019, Kaleyra adopted its EIP. The EIP provides for the award of stock-based compensation. In December 2019, Kaleyra granted RSUs to certain employees, directors and advisory board members of the Company for a total of 3,336,095 RSUs shares with an aggregate grant date fair value of $27.5 million, based on a per share grant date fair value of $8.25.

Internal-Use Software Development Costs

Certain costs of the technology platform and other software applications developed for internal use are capitalized. Kaleyra capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed, and (ii) it is probable that the software will be completed and used for its intended purpose. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all-significant testing. Costs related to specific upgrades and enhancements are also capitalized when it is probable the expenditures will result in additional functionality. Any costs incurred for maintenance and minor upgrades and enhancements are expensed. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

Capitalized costs of the platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software on a straight-line basis over four years.

Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could affect the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in research and development expenses.

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Kaleyra exercises judgment in determining the point at which various projects may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized. To the extent that there is a change in the manner in which Kaleyra develops and tests new features and functionalities related to the Platform, assesses the ongoing value of capitalized assets or determines the estimated useful lives over which the costs are amortized, the amount of internal-use software development costs capitalized and amortized could change in future periods.

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Kaleyra has selected December 31 as the date to perform its annual impairment test. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from Kaleyra’s business. If these estimates or their related assumptions change in the future, Kaleyra may be required to record an impairment for these assets. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to which goodwill is allocated to its net book value, including goodwill. If the net book value exceeds its fair value, then Kaleyra would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its net book value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. No goodwill impairment charges have been recorded for any period presented.

Impairment of Long-Lived Assets

Kaleyra evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. There was no impairment during the years ended December 31, 2019 and 2018.

Recent Accounting Pronouncements

See Note 2 to the annual consolidated financial statements included elsewhere in this document for a discussion of recent accounting pronouncements not yet adopted.

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BUSINESS

Business Overview

Our Vision

Kaleyra provides its customers and business partners with a trusted cloud communications Platform that seamlessly integrates software services and applications for business-to-consumer communications between Kaleyra’s customers and their end-user customers and partners on a global basis. The demand for cloud communications is increasingly driven by the growing, and often mandated, need for enterprises to undertake a digital transformation that includes omni-channel, mobile first interactive end-user customer communications. This complements new workflows that Kaleyra’s customers have developed which are driven by software and artificial intelligence to automate certain end-user customer-facing processes before, during and after transactions. These communications are increasingly managed through mobile network operators as the gateway to reach end-user consumers’ mobile devices. Kaleyra’s Platform enables these communications by integrating mobile alert notifications and interactive capabilities to reach and engage end user customers. Kaleyra’s Platform couples a “Software as a Service” or SaaS business model, creating what is generally referred to as a “cloud communications platform as a service,” or simply CPaaS.

Kaleyra’s vision is to be the CPaaS provider which best aligns with its customers’ and business partners’ communication requirements, or the most trusted provider, in the world. This requires a combination of security, compliance and integration capabilities that protects the integrity and privacy of Kaleyra’s customers’ transactions and includes other key features such as ease of provisioning, reliable network connectivity, high availability for scaling, redundancy, embedded regulatory compliance, configurable monitoring and reporting. Kaleyra believes the percentage of CPaaS customers that will require security, compliance and integration will represent an increasingly larger portion of the market, particularly with expected exponential growth of transactional-by-nature cloud communications applications, better enabling Kaleyra to set itself apart from its competition.

Kaleyra Today

Kaleyra is a result of the expansion of the former Ubiquity, which was founded in Milan, Italy in 1999. Ubiquity secured a leading market position in mobile messaging on behalf of the Italian financial services industry and then sought to expand its products and geographic offerings. Ubiquity acquired Solutions Infini of Bangalore, India beginning in 2017 and Buc Mobile of Vienna, Virginia in 2018. It was rebranded as Kaleyra S.p.A. in February 2018. On November 25, 2019, GigCapital, Inc. acquired ownership of all of the securities of Kaleyra S.p.A. and renamed the combined company Kaleyra, Inc. Following the integration of the acquired entities, the combined company is collectively engaged in the operation of the Platform on behalf of Kaleyra’s customers.

Kaleyra has more than 3,000 customers and business partners worldwide across industry verticals such as financial services, ecommerce and transportation, with no single customer representing more than 15% of revenues. Kaleyra’s customers are located in regions throughout the world including in Europe, Asia Pacific and North America. Kaleyra’s revenue by country for the fiscal quarter ended March 31, 2020, is as follows: Italy (43.4%), India (26.4%) and the United States (12.8%). The remainder of revenue is primarily generated in Europe and Asia in countries other than Italy and India (17.4%).

For the fiscal quarter ended March 31, 2020, 85.3% of revenues came from customers of Kaleyra which have been on the Platform for at least one year. Although Kaleyra continues to expand by introducing new customers to the Platform, the breadth and stability of its existing customers provide it with a solid base of revenue upon which it can continue to innovate and make investment to strengthen its product portfolio, expand its global presence, and in particular into the Americas and Asia-Pacific markets following the acquisitions of Buc Mobile and Solutions Infini, recruit world-class talent and target accretive acquisitions to capitalize on its growing market penetration opportunities and value creation.

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Kaleyra’s underlying technology used in the Platform is the same across all of its communication services which can generally be described as “omni-channel mobile first interactive notifications via a public or private cloud implementation.” These services include programmable voice/Interactive Voice Response (IVR) configurations, inbound/outbound short message service (SMS) capabilities, hosted telephone numbers, and other types of IP communications services such as e-mail and WhatsApp^®.

Customers

Kaleyra’s customers are enterprises which use digital mobile communications in the conduct of their business. Kaleyra’s Platform enables these communications by integrating mobile alert notifications and interactive capabilities to reach and engage end user customers. Kaleyra enables its customers and business partners to connect enterprise software and applications to mobile network operators by providing a single simple interface by which Kaleyra can undertake as necessary to make upgrades in its service offerings to account for new end-user consumer behavior changes and progress (such as adding WhatsApp integration). In most cases, Kaleyra provides multiple levels of customer support 24x7 to ensure service levels and network reliability to meet the expectations and requirements of Kaleyra’s customers. Customers and business partners which use the Platform value the Platform’s network reliability, and Kaleyra’s responsive customer support, competitive pricing, and collaborative approach.

Kaleyra services a broad base of customers and business partners throughout the world operating in diverse businesses and regions. Kaleyra’s business is generated by providing data to the telecommunications provider and transmitting message data from its customers and business partners. Kaleyra has a concentration of business within the financial services industry that serve their major European banking end-user customers. With each relationship Kaleyra is the link between the financial institutions and their unique, end-user customers. In linking these two parties, Kaleyra’s Platform leverages the end-user telecommunications provider to transmit critical message data to these end-user customers.

For example, banks and financial institutions deploy Kaleyra’s services that include omni-channel mobile first password reset, account access, two-factor authentications (2FA), transaction notification, and anti-fraud alerts, among other services, via a cloud implementation that meets their strict requirements for security and compliance. Kaleyra’s Platform has facilitated compliant communications for its existing financial institution customer base in Europe. European Central Bank (ECB) regulations have begun to mandate additional customer protection regulations, such as those requiring strong customer authentications for all payment transactions over 30 euros, causing both traditional banks and new entrants to undergo a digital transformation. In the financial sector, security and compliance are generally top of mind and the sales processes rely on a dedicated local sales team focused on strong integration capabilities with the full suite of services needed to satisfy customer requirements.

Other enterprise customers of Kaleyra use Kaleyra’s cloud communications services as packaged offerings that are easy to configure and manage around key end-user customer touchpoints. Although these enterprise customers require a lesser level of system integration than do financial institution customers, they still demand a sufficiently flexible system such as that which a cloud solution can provide in order to facilitate rapid communications system modification to accommodate changes in end-user customer behaviors. Furthermore, there are other enterprise customers for which connectivity to their end user customers is their primary requirement, and these customers are using the Platform to gain access to mobile network operators worldwide. This additional volume, which is expected to continue to grow as the transformation from e-mail-based communications to messaging-based communications is being enhanced, allows Kaleyra to leverage relationships to sell and resell network connectivity on a more cost-effective basis.

In 2018, Kaleyra had three customers, in 2019 had one customer, Telecom Italia S.p.A, and no customers during the three months ended March 31, 2020, which accounted for more than 10% of Kaleyra’s revenues. Kaleyra has multiple, large European commercial banks as business partners, with one of these partners, Intesa Sanpaolo S.p.A., accounting for more than 10% of Kaleyra’s business volume in 2019 and 2018, and the three months ended March 31, 2020.

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Seasonality

Historically, Kaleyra has experienced clear seasonality in its revenue generation, with slower traction in the first calendar quarter, and increasing revenues as the year progresses toward the higher revenues in messaging and notification services during the fourth calendar quarter. This patterned revenue generation behavior takes place due to Kaleyra’s customers sending more messages to their end-user customers who are engaged in consumer transactions at the end of the calendar year, resulting in an increase in notifications of electronic payments, credit card transactions and e-commerce.

The Market for Kaleyra’s Products

The CPaaS market is evolving and is expanding in several directions as enterprise adoption of cloud-based communications occurs. The need for enterprises to provide enhanced end-user customer experiences is driving adoption by enterprises of embedded, real-time messaging communications for enhanced end-user customer- interfacing interactions. According to 451 Research, in 2019 the total CPaaS market was approximately $2.2 billion and forecasted to increase to approximately $6.2 billion by the end of 2022.¹ Furthermore, according to GSMA, the SMS business messaging revenue market was approximately $60.0 billion in 2018 and will increase to approximately $90.0 billion by the end of 2022.² Kaleyra’s products and services available through the Platform address both of these markets.

Kaleyra’s Key Products

The Platform

Kaleyra operates its core technology, the Platform, in the public cloud and as private clouds, and in hybrid situations. The Platform has a high-volume infrastructure that has been designed to easily scale and support large volumes of data. The Platform consists of two separate types of interfaces; one for connectivity to mobile network operators and the other, a set of APIs that provide convenient and user-friendly tools that enable Kaleyra’s customers to engage in communications with their end-user customers. The Platform’s underlying software code base contains communication protocols that allow connectivity with mobile network operators around the globe.

In addition, the Platform’s APIs, which sit on top of the underlying connectivity stack, enable the creation of specific applications (messaging or voice-over-IP calls) or workflows (2FA or password resets). These applications can be designed by Kaleyra, Kaleyra’s customers’ information technologies personnel or third party developers. The open Platform’s architecture enables Kaleyra’s customers and business partners to accomplish all of their communication needs from one simple interface that connects into a broad range of their systems. The relationship with Kaleyra’s customers is strengthened by providing its customers with a broad and flexible platform. Retention of Kaleyra’s customers is also enhanced as a result of the switching costs that Kaleyra’s customers would incur to transition to alternate platforms.

1 Source: 451 Research, Communications PaaS: Turning Business Communications Inside Out (December 2018).

2 Source: GSMA, RCS Overview, Future Networks Programme (October 2018).

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Communications Services

The following graphic summarizes the capabilities of Kaleyra’s suite of communications services:

This suite of services is further described below. During the year ended December 31, 2019, Kaleyra processed nearly 27 billion billable messages and 3 billion voice calls, and during the three months ended March 31, 2020, Kaleyra processed nearly 7 billion billable messages and 0.9 billion voice calls. For the year ended December 31, 2020, this is expected to exceed 30 billion billable SMS messages and 4 billion voice calls.

Messaging

The Platform’s APIs include software and infrastructure that process and manage SMS, Multimedia Messaging Service (MMS) and Rich Communications Service (RCS), with network connectivity to mobile network operators around the world. The Platform is currently designed to process five thousand messages per second, with the capability to increase the throughput with additional server power and speed. The Platform supports 87 languages and is capable of stitching together concatenated messages of up to 4,000 characters. The Platform is also designed to manage automated opt-in and opt-out procedures per mobile network operator requirements and best practices. As noted above, in 2019, the Platform processed nearly 27 billion SMS messages.

Voice

The Platform’s APIs include software and infrastructure that process and manage voice calls, including IVR and conferencing bridge capabilities. The Platform offers features such as call masking, visual configurations of call routing, click to call, and allows Nature Language Processing (NLP) integrations. In 2019, the Platform processed nearly 3 billion voice calls.

FinTech

The Platform’s APIs also include software and infrastructure to process and manage financial transactions that has been enabled by the open banking initiative and was regulated in September 2019. However, the European Banking Authority has granted a 15-month extension to banks to adopt the new law, until December 2020. The driving force behind open banking is the second Payment Services Directive (PSD2), was an EU directive designed to expand end-user consumer choice of products in banking, credit cards, and payment services. The Platform includes features and capabilities to perform PSD2 compliant banking or payment transactions.

Numbers

Finally, the Platform’s APIs include software and infrastructure that process and manage telephone numbers and short code services. Short codes are often used to send or receive a large volume of broadcast or bulk SMS

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messages. The Platform currently supports provisioning and configuration of telephone numbers or short codes in 50 countries. Other Numbers services include telephone number lookup query and local number portability.

Operations

Kaleyra generates revenue from usage-based fees earned from the sale of communications services utilizing the Platform. These services are offered through software solutions to large enterprises, as well as small and medium-sized customers. Revenue can be billed in advance or in arrears depending on the term of the agreement; for the majority of customers, revenue is invoiced on a monthly basis in arrears.

Kaleyra’s CPaaS contracts do not provide customers and business partners with the right to take possession of the software supporting the applications.

As a part of the arrangement with its customers, Kaleyra offers customer advanced support services, to guarantee the continuity and promptly delivery of the services. Revenue for these services is recognized ratably over the term of the service period.

Kaleyra utilizes a cloud infrastructure and its Platform to deliver its communication services. The services are also provided using a private cloud as required by the customers and business partners. The costs of the Platform and communication services purchased from mobile network operators is considered to be a cost of revenue.

Products in Development

Kaleyra has a number of new communications services in its organic development pipeline. For example, Kaleyra is developing a visual ”drag-and-drop” builder user interface for use by both developers and non-developers that reduces the complexity of implementing cloud communications services. Kaleyra has a growing team of software developers in Bangalore, India engaged in research and development of additional product features based on customer feedback and market research. In addition, Kaleyra is looking at possible acquisitions that can enhance its product portfolio.

Research and Development

As of March 31, 2020, 143 employees serve in Kaleyra’s research and development and engineering departments representing about 55% of its workforce, focused on maintaining and enhancing the Platform and the communications service offerings, as well as developing new communications services and engaging with Kaleyra’s customers in this development.

Sales and Marketing

As of March 31, 2020, Kaleyra has multiple methods for engaging with its customers, depending upon the specific service offerings that a customer uses on the Platform, 23% of Kaleyra’s employee base are dedicated to sales of communications services to Kaleyra’s customers or business partners. The go-to-market strategy utilizes a mixture of direct sales and channel development such as using third party developers which are developing communications solutions for multiple customers. Kaleyra also actively participates in trade shows and other general industry marketing efforts on a global basis for the purpose of lead generation and building of brand awareness.

Competitive Strengths

Over Kaleyra’s 20 year history, Kaleyra has developed a powerful CPaaS solution that it believes represents a unique, high growth opportunity in the CPaaS market. The Platform is accessible everywhere in the world, has a high-volume infrastructure that has been designed to be easily scalable, and allows for communications services that have been designed having security, compliance and integration capabilities that can meet the needs of

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Kaleyra’s customers and their customers and regulators. Furthermore, Kaleyra continues to develop organically and strategically new communications services to meet the evolving needs of its customers and business partners. In addition, Kaleyra has identified the following competitive strengths:

Experienced Management Team

Kaleyra has a proven management team with many decades of combined experience at industry relevant companies. Along with the existing management team, it is anticipated that additional senior management personnel will be added to supplement the current management team.

Existing Customers and Relationships

Kaleyra believes its deep customer relationships provide it with the opportunity to expand deployment of the Platform and the opportunity to quickly deploy new communications service offerings.

Growth Strategy

Kaleyra’s organic growth focuses on three core areas:

• Exploiting cross-sale opportunities among Kaleyra’s recent acquisitions—in this area, Kaleyra focuses on growing existing product teams, accelerating joint product management and growing key technology integrations with industry leading independent software vendors;

• Product evolution—in this area, Kaleyra works to enhance and expand features such as RCS and PSD2; and

• Geographic expansion—in this area, Kaleyra focuses on entering new markets such as South East Asia and Latin America.

Furthermore, mergers and acquisitions remain a key component of Kaleyra’s growth strategy. As it has in the past with its acquisitions of Solutions Infini and Buc Mobile, Kaleyra has continuously explored the global market with the intention to evaluate and acquire additional companies that are adding significant value from technology and product perspectives, and are accretive in terms of revenue, net income and capitalization. Kaleyra intends to execute acquisitions in the least dilutive and most cost-effective manner, using cash from its balance sheet or other sources, equity or a combination of both.

Competition

The CPaaS market is highly competitive and characterized by continuous technological change. The principal competitive factors in this market include: completeness of offering, credibility with developers, global reach, ease of integration, product features, platform scalability, brand reputation and awareness, customer support, and the cost of deployment of product offerings. Kaleyra believes that it competes favorably within each of these categories.

Kaleyra competes with several vendors across its various product lines, including:

• Legacy on-premises vendors, such as Avaya Holdings Corp., Cisco Systems, Inc., and SAP SE;

• Direct competitors, such as CLX Communications AB (d/b/a Sinch), Twilio Inc., and Vonage Holdings Corp.;

• Smaller software companies that compete with certain portions of Kaleyra’s communications services offerings; and

• SaaS companies that offer prepackaged applications for a narrow set of use cases.

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Some competitors have greater financial, technical and other resources, greater name and brand recognition, larger sales and marketing efforts and larger portfolios of intellectual property. As a result, certain competitors may be able to respond more quickly to new or changing technologies, opportunities, standards or customer needs and requests. With the introduction of new products and services and new market entrants, Kaleyra expects competition to intensify in the future. Furthermore, as Kaleyra continues to expand the scope of its Platform, it may face additional competition. Kaleyra is also addressing enterprises that have developed over the years ”in-house” products for which Kaleyra can offer a more cost-effective, robust and richer set of products to enhance the total cost of ownership and return on investment for such customers.

Employees

As of March 31, 2020, Kaleyra has 261 employees, of which 143 were in research and development, 59 were in sales, marketing and business development, and 59 were in general and administrative. None of Kaleyra’s employees are currently covered under any collective bargaining agreements. Kaleyra believes its relations with its employees are good and it has never experienced a material work stoppage.

Facilities

Kaleyra leases 14 properties, with its headquarters in Milan, Italy. Kaleyra maintains a global footprint with additional leased facilities located in Vienna, Virginia; New York, New York; Palo Alto, California; Bengaluru, India; Chennai, India; Cochin, India; Delhi, India; Hyderabad, India; Kolkata, India; Mumbai India; Singapore; Dubai, United Arab Emirates; and Manno, Switzerland. Kaleyra believes that its current facilities are adequate to meet its ongoing needs and that, if it requires adjusted or additional space, it will be able to obtain additional facilities on commercially reasonable terms, or further consolidate facilities. Going forward, Kaleyra will continue to assess its facilities requirements and make appropriate adjustments as needed and dictated by the business.

Kaleyra operates 31 data centers, including cloud platforms operated by Amazon Web Services, and Kaleyra maintains private clouds on behalf of its customers. The Kaleyra private cloud devices are custom-built hardware running on Kaleyra’s Platform and, thus, can be deployed virtually anywhere. Kaleyra currently runs these private cloud devices out of its headquarters in Milan, Italy.

Intellectual Property

Kaleyra relies on a combination of patent, copyright, trademark and trade secret laws in the U. S. and other jurisdictions, as well as license agreements and other contractual protections, to protect Kaleyra’s proprietary technology. In addition, Kaleyra protects intellectual property rights by implementing a policy that requires its employees and independent contractors involved in development of intellectual property on its behalf to enter into agreements acknowledging that all works or other intellectual property generated or conceived by them on its behalf are Kaleyra’s property, and assigning to Kaleyra any rights, including intellectual property rights, that they may claim or otherwise have in those works or property, to the extent allowable under applicable law.

• Kaleyra, as of April 30, 2020, has been issued 2 patents in the United States.

• Kaleyra’s trademark and certain variations thereof are registered or are the subject of pending trademark applications in the United States. In addition to the Kaleyra trademark, Kaleyra has 18 additional trademark registrations or pending registrations in three different classes with the following authorities/countries: EU, India, South Africa, Switzerland, United Arab Emirates, and the International Bureau (WIPO) China, Indonesia, Mexico, Philippines, Singapore.

• Kaleyra owns an Internet domain registration for kaleyra.com and certain other domains.

• Kaleyra generally controls access and the use of its proprietary software and other confidential information through internal and external controls including contractual protections with employees,

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contractors, customers and partners. Unauthorized parties may, nonetheless, still copy or otherwise obtain and use Kaleyra’s software and technology despite Kaleyra’s efforts to protect its trade secrets and proprietary rights through intellectual property rights, licenses and confidentiality agreements.

Regulatory

Kaleyra is subject to a number of U.S. federal and state and foreign laws and regulations that involve matters central to its business. These laws and regulations may involve privacy, data protection, intellectual property, competition, consumer protection, export taxation or other subjects. Many of the laws and regulations to which Kaleyra is subject are still evolving and being tested in courts and could be interpreted in ways that could harm its business. In addition, the application and interpretation of these laws and regulations often are uncertain, particularly in the new and rapidly evolving industry in which Kaleyra operates. Because global laws and regulations have continued to develop and evolve rapidly, it is possible that it or its communications services or the Platform may not be, or may not have been, compliant with each such applicable law or regulation.

In addition, as Kaleyra expands internationally, it will be subject to laws and regulations in the countries in which it offers services. Many foreign countries and governmental bodies, including the EU member states, have laws and regulations concerning the collection and use of PII obtained from individuals located in the EU or by businesses operating within their jurisdiction, which are often more restrictive than those in the U.S. Laws and regulations in these jurisdictions apply broadly to the collection, use, storage, disclosure and security of PII that identifies or may be used to identify an individual, such as names, telephone numbers, message addresses and, in some jurisdictions, IP addresses and other online identifiers.

For example, in April 2016 the EU adopted GDPR, which took full effect on May 25, 2018. GDPR enhances data protection obligations for businesses and requires service providers (data processors) processing personal data on behalf of customers to cooperate with European data protection authorities, implement security measures and keep records of personal data processing activities. Noncompliance with the GDPR can trigger fines equal to or greater of €20 million or 4% of global annual revenues. Given the breadth and depth of changes in data protection obligations, preparing to meet the requirements of GDPR has required significant time and resources, including a review of Kaleyra’s technology and systems currently in use against the requirements of GDPR. There are also additional EU laws and regulations (and member states’ implementations thereof) which govern the protection of consumers and of electronic communications.

Furthermore, outside of the EU, Kaleyra continues to see increased regulation of data privacy and security, including the adoption of more stringent subject matter specific state laws in the United States. For example, on June 28, 2018, California enacted the CCPA, which took effect on January 1, 2020. The CCPA gives California residents expanded rights to access and delete their personal information, opt out of certain personal information sharing, and receive detailed information about how their personal information is used. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation.

Kaleyra is subject to individual or joint jurisdiction of the FCC, the Federal Trade Commission, and state attorneys general with respect to privacy and data security obligations. If Kaleyra was to suffer or if one of Kaleyra’s customers were to suffer a breach, Kaleyra may be subject to the jurisdiction of a variety of federal agencies’ jurisdictions as well as state attorneys general. Kaleyra may have to comply with a variety of data breach laws at the federal and state levels, comply with any resulting investigations, as well as offer mitigation to customers and potential end users of certain customers to which Kaleyra provides services. Kaleyra could also be subject to fines, forfeitures and other penalties that may adversely impact Kaleyra’s business.

As Kaleyra continues to expand internationally, Kaleyra has become subject to telecommunications laws and regulations in the foreign countries where Kaleyra offers its products. Kaleyra’s international operations are subject to country-specific governmental regulation and related actions that have increased and may continue to

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increase Kaleyra’s costs or impact its products and Platform or prevent Kaleyra from offering or providing Kaleyra’s products in certain countries.

For example, in Italy, Kaleyra holds a license to be a fixed line operator and is subject to the Electronic Communications Code, or the ECC, which has been enacted with Legislative Decree no. 259/2003, as amended, which transposed a package of European Directives adopted in 2002 and amended in 2009; the National Numbering Plan, issued with AGCom’s resolution no. 8/15/CIR as amended, which governs the usage of national numbers for the provision of electronic communications services as a whole; resolutions on the use of alphanumeric indications for the identification of the calling subject in SMS (so-called Alias), that are periodically issued by AGCom, starting from AGCom’s resolution no. 42/13/CIR; and the GDPR (UE Decree 2016/679).

In addition, the TCPA restricts telemarketing and the use of automatic text messages without proper consent. The scope and interpretation of the laws that are or may be applicable to the delivery of text messages are continuously evolving and developing. If Kaleyra does not comply with these laws, or regulations or if Kaleyra becomes liable under these laws or regulations due to the failure of its customers to comply with these laws by obtaining proper consent, Kaleyra could face direct liability.

The Federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (CAN-SPAM Act) establishes certain requirements for commercial messages and transactional messages and specifies penalties for the transmission of messages that are intended to deceive the recipient as to source or content. Among other things, the CAN-SPAM Act, obligates the sender of commercial messages to provide recipients with the ability to ”opt-out” of receiving future commercial communications from the sender. In addition, some U.S. states have passed laws regulating commercial communication practices that are significantly more restrictive and difficult to comply with than the CAN-SPAM Act. For example, Utah and Michigan prohibit the sending of communication messages that advertise products or services that minors are prohibited by law from purchasing (e.g., alcoholic beverages, tobacco products, illegal drugs) or that contain content harmful to minors (e.g., pornography) to message addresses listed on specified child protection registries. Some portions of these state laws may not be preempted by the CAN-SPAM Act. In addition, certain non-U.S. jurisdictions, such as Australia, Canada, and the EU, have enacted laws that regulate sending messages, and some of these laws are more restrictive than U.S. laws. For example, some foreign laws prohibit sending broad categories of messages unless the recipient has provided the sender advance consent to receipt of such messages, or in other words has “opted-in” to receiving such communication. If Kaleyra were found to be in violation of the CAN-SPAM Act, applicable state laws governing messages not preempted by the CAN-SPAM Act or foreign laws regulating the distribution of messages, whether as a result of violations by Kaleyra’s customers or its own acts or omissions, Kaleyra could be required to pay large penalties, which would adversely affect its financial condition, significantly harm Kaleyra’s business, injure Kaleyra’s reputation and erode customer trust. The terms of any injunctions, judgments, consent decrees or settlement agreements entered into in connection with enforcement actions or investigations against Kaleyra in connection with any of the foregoing laws may also require Kaleyra to change one or more aspects of the way Kaleyra operates its business, which could impair Kaleyra’s ability to attract and retain customers or could increase its operating costs.

In addition, in order to procure, distribute and retain telephone numbers from the EU or certain other regions, Kaleyra may be required to register with the local telecommunications regulatory authorities, some of which have been increasingly monitoring and regulating the categories of phone numbers that are eligible for provisioning to Kaleyra’s customers. Kaleyra has registered and is in the process of registering in various countries in which Kaleyra does business, but in some countries, the regulatory regime around provisioning of phone numbers is unclear, subject to change over time, and sometimes may conflict from jurisdiction to jurisdiction. Furthermore, these regulations and governments’ approach to their enforcement, as well as Kaleyra’s products and services, are still evolving and Kaleyra may be unable to maintain compliance with applicable regulations, or enforce compliance by Kaleyra’s customers, on a timely basis or without significant cost. Also, compliance with these types of regulation may require changes in products or business practices that

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result in reduced revenue. Additionally, certain of Kaleyra’s products and services may be subject to export control and economic sanctions regulations, including the U.S. Export Administration regulations, U.S. Customs regulations and various economic and trade sanctions regulations administered by the U.S. Treasury Department’s Office of Foreign Assets Controls. Exports of Kaleyra’s products and the provision of Kaleyra’s services must be made in compliance with these laws and regulations.

Legal Proceedings

From time to time Kaleyra may be involved in litigation relating to claims arising out of its operations in the normal course of business. Kaleyra is not currently involved in any material legal proceedings as a defendant.

On October 17, 2018, Kaleyra filed a claim against Vodafone Italia S.p.A. (“Vodafone”) before the Court of Milan seeking compensation in the amount of 6.1 million euro for all the damages suffered as a consequence of the illicit and anticompetitive conduct of Vodafone, as previously determined by the Italian Antitrust Authority (namely, Autorità Garante della Concorrenza e del Mercato or AGCM) in their decisions issued on December 13, 2017; Vodafone has appealed that sanctioning resolution before the Italian Regional Administrative Court.

The deadline for filing a counterclaim by Vodafone has passed and according to Italian Law, Vodafone is no longer entitled to file a counterclaim against Kaleyra in these proceedings.

The case has now been submitted to a panel of judges for review to determine if the claim can proceed in the Court of Milan or a suspension must be declared until the administrative proceeding is decided.

The claim is under review and both Kaleyra and Vodafone have filed their final pleadings on October 1, 2019 and October 21, 2019. There is no certainty that the claim will be approved to proceed in the Court of Milan, rather than suspended, and the outcome of such action cannot be determined at this time. Therefore no recognition of these actions has been made in the consolidated financial statements.

On April 16, 2019, Kaleyra filed a claim against Telecom Italia S.p.A and Telecom Italia Sparkle S.p.A. before the Court of Milan seeking compensation in the amount of 8.3 million euro for damages suffered after the illicit conduct of both counterparts, determined by the Italian Antitrust Authority in the decision issued on December 13, 2017.

At the first hearing before the Court of Milan held for the appearance of the parties on December 11, 2019, the judge reserved the decision on the possible suspension of the civil case in consideration of the appeal brought by Telecom Italia S.p.A and Telecom Italia Sparkle S.p.A. against the Italian Antitrust Authority’s decision of December 13, 2017 before the Administrative Court of Latium (namely, Tribunale Amministrativo Regionale del Lazio), which is currently pending.

By order issued on December 14, 2019, the judge released his reserve and referred the issue concerning the relation between the assessment of the pending administrative case and the one to be carried out in the civil case to a panel composed of three judges.

The case was therefore adjourned for a hearing on April 29, 2020 where the parties will have to file their final pleadings.

There is no certainty that the claim will be approved to proceed in the Court of Milan, rather than suspended, and the outcome of such civil action cannot be determined at this time. Therefore no recognition of these actions has been made in the consolidated financial statements.

In addition to the above, Kaleyra has appealed the resolutions issued by the Italian Communications Authority (namely, Autorità per le Garanzie nelle Comunicazioni or AGCom) concerning the request for the annual

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contribution to AGCom for years 2016, 2017, 2018 and 2019. The first instance proceeding against AGCom’s resolutions for the 2016 contribution was successful for Kaleyra and the Regional Administrative Court annulled the resolutions Kaleyra had appealed (judgement no. 2161/2019). However, AGCom filed its second instance appeal before the Council of State seeking the overruling of the Court’s decision. The hearing on AGCom’s appeal will take place in the last quarter of 2020.

All the other proceedings are currently pending before the Regional Administrative Court and no hearing has been scheduled yet.

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MANAGEMENT

Management and Board of Directors

The following persons are our executive officers and directors as of May 31, 2020.

Name	Age		Position
Dario Calogero		57	Chief Executive Officer and Director
Giacomo Dall’Aglio		48	Executive Vice President, Chief Financial Officer and Principal Accounting Officer
Dr. Avi S. Katz		62	Chairman of the Board of Directors
Dr. Emilio Hirsch		54	Director
Matteo Lodrini		53	Director
John Mikulsky		74	Director
Neil Miotto		74	Director

Information about Executive Officers and Directors

Upon the closing of the Business Combination, we increased the size of our Board of Directors from five directors to seven directors. Of these, there is one vacancy and our Board of Directors will act with regard to filling this vacancy when a candidate is identified.

Dario Calogero. Dario Calogero has served as the Chief Executive Officer of Kaleyra S.p.A and a member of Kaleyra S.p.A.’s Board of Directors since the company was founded in 1999. He became a director and executive officer of Kaleyra upon the closing of the Business Combination. As a serial entrepreneur, he bootstrapped Kaleyra from its inception, quickly positioning the company in the mobile banking space, and leading Kaleyra as it expanded its product offerings and completed several acquisitions. Prior to founding Kaleyra, Mr. Calogero held executive positions with Oracle, Fiat Chrysler Automobiles and management consulting companies including PricewaterhouseCoopers. Mr. Calogero holds a master’s degree in economics from Bocconi University in Milan. Kaleyra believes that Mr. Calogero is qualified to serve on the Board of Directors based on his historic knowledge of Kaleyra and his leadership and managerial experience.

Giacomo Dall’Aglio. Giacomo Dall’Aglio’s experience is focused on corporate acquisitions and finance. He joined Kaleyra S.p.A. in 2016 as Chief Corporate Development Officer to lead Kaleyra’s growth strategy and was appointed Executive Vice President upon the closing of the Business Combination and Chief Financial Officer on December 16, 2019. Mr. Dall’Aglio is responsible for Kaleyra’s corporate development process. From 2009 to 2016 Mr. Dall’Aglio was with Eidos as a senior consultant responsible for managing mergers and acquisitions and corporate finance projects for a portfolio of the firm’s corporate clients. Prior to joining Eidos, Mr. Dall’Aglio held senior positions with KPMG, Mittel, and La Centrale Finanziaria. Mr. Dall’Aglio holds a master’s degree in Economics from the University of Parma.

Dr. Avi S. Katz. Dr. Avi S. Katz served as GigCapital Inc.’s Founder, Executive Chairman of the Board of Directors, Chief Executive Officer, President and Secretary since October 2017 and upon the closing of the Business Combination with Kaleyra, Dr. Katz transitioned to be the Chairman of the Board of Directors of Kaleyra. Dr. Katz has spent nearly 32 years in international executive positions within the TMT industry working for privately held start-ups, middle-cap companies and large enterprises. In these roles, Dr. Katz has been instrumental in launching and accelerating entities, building teams, large scale fund-raising, developing key alliances and technology partnerships, M&A activities, business development, financial management, global operations and sales and marketing. Dr. Katz is the Founder and Sole Manager of the GigCapital Group (GigCG) and its affiliated entities, including GigAcquisitions, LLC GigAcquisitions2, LLC and GigAcquisitions3, LLC. GigCG is an inceptor and managing group of Private-to-Public Equity (PPE) entities, also known as a blank check company or special purpose acquisition company (SPAC) vehicles. He is the Founder and Executive

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Chairman of the Board of GigCapital2, Inc. (NYSE: GIX), since its incorporation in March 2019 in Delaware, and was its Chief Executive Officer from March 2019 until August 2019. He is also the Founder, Executive Chairman of the Board and Chief Executive Officer of GigCapital3, Inc. (NYSE: GIK), since its incorporation in February 2020 in Delaware. Dr. Katz is also the Co-Founder and Executive Chairman of Cognizer, Inc., an artificial intelligence company with a natural language understanding platform based on deep learning formed in December 2018. Previously, Dr. Katz dedicated 10 years to developing and managing GigPeak (NYSE American: formerly GIG), originally known as GigOptix, Inc. From its inception in April 2007 until its sale in April 2017, GigPeak provided semiconductor integrated circuits (ICs) and software solutions for high-speed connectivity and video compression. While Dr. Katz was at GigPeak’s helm, the company completed 10 M&A deals. GigPeak was sold to Integrated Device Technology, Inc. (Nasdaq: IDTI) for $250 million in cash in April 2017. From 2003 to 2005, Dr. Katz was the chief executive officer, president, and member of the Board of Directors of Intransa, Inc., which at the time provided full-featured, enterprise-class IP-based Storage Area Networks (SAN). From 2000 to 2003, Dr. Katz was the Chief Executive Officer of Equator Technologies. Equator Technologies sought to commercialize leading edge programmable media processing platform technology for the rapid design and deployment of digital media and imaging products. Equator Technologies was sold to Pixelworks, Inc. for $110 million in 2005. Dr. Katz has held several leadership positions over the span of his 30+ year career within the technology industry and has made numerous angel investments in high-tech companies around the world. In addition, Dr. Katz is a graduate of the Israeli Naval Academy and holds a B.Sc. and Ph.D. in Semiconductors Materials from the Technion (Israel Institute of Technology). He is a serial entrepreneur and long-time angel investor in the TMT sector, holds more than 70 U.S. and international patents, has published approximately 300 technical papers and is the editor of a number of technical books. Kaleyra believes Dr. Katz is qualified to serve on the Board of Directors based on his leadership, industry and managerial experience.

Dr. Emilio Hirsch. Emilio Hirsch joined the Board of Directors on February 10, 2020 upon the resignation of Mr. Fubini. Dr. Hirsch has been since 2005 a Full Professor of Experimental Biology at the Medical School of the University of Torino, Italy. Dr. Hirsch is an affiliate and director of Esse Effe, which is the Company’s largest stockholder. Dr. Hirsch oversees Esse Effe’s holdings, particularly its real estate holdings. Dr. Hirsch is also an entrepreneur and the author of over two hundred and fifty publications. He graduated from the University of Torino in 1988, and also received his Ph.D. from the University of Torino in 1994. The Company believes that Dr. Hirsch is qualified to serve on the Board of Directors based upon his entrepreneurial background, and as he has been attending board meetings of Kaleyra S.p.A., Kaleyra’s wholly owned operating subsidiary, for the last four years and has great familiarity with the Company as a result, his historic knowledge of Kaleyra.

Matteo Lodrini. Matteo Lodrini joined Kaleyra S.p.A.’s Board of Directors in 2017 and became a director of Kaleyra upon the closing of the Business Combination. Since 2007, Mr. Lodrini has served as the Chief Financial Officer of De Nora Group, a high-growth, global water treatment sector company. He is responsible for all financial operations including leading the company’s acquisition strategy. Mr. Lodrini is a finance executive with significant experience in all phases of cross border corporate transactions, global business development, corporate finance and capital markets, and has an in-depth knowledge of financial operations and controls and internal audit processes. Mr. Lodrini holds a master’s degree in Economics from Brescia University and a masters in Corporate Finance from SDA Bocconi in Milan. Kaleyra believes that Mr. Lodrini is qualified to serve on the Board of Directors based on his financial and managerial experience.

John J. Mikulsky. John J. Mikulsky joined the Board of Directors as an independent director in December of 2017. He joined the Board of Directors of GigCapital2, Inc. and the Board of Directors of Cognizer, Inc. in March 2019, and the Board of Directors of GigCapital3, Inc. in February 2020. Mr. Mikulsky served as the Chief Executive Officer of Traycer Diagnostic Systems, Inc. from August 2016 to December 2017, and as a director, from October 2014 to December 2017. He previously served as President and Chief Executive Officer of Endwave Corporation (Nasdaq: ENWV) from December 2009 until June 2011, when Endwave Corporation was acquired by GigPeak; subsequent to such acquisition, he served on the Board of Directors of GigPeak from June 2011 until its sale IDT in April 2017. From May 1996 until November 2009, Mr. Mikulsky served Endwave in a

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multitude of capacities including Vice President of Product Development, Vice President of Marketing and Business Development and Chief Operating Officer. Prior to Endwave, Mr. Mikulsky worked as a Technology Manager for Balazs Analytical Laboratory, from 1993 until 1996, a provider of analytical services to the semiconductor and disk drive industries. Prior to 1993, Mr. Mikulsky worked at Raychem Corporation, most recently as a Division Manager for its Electronic Systems Division. Mr. Mikulsky holds a B.S. in electrical engineering from Marquette University, an M.S. in electrical engineering from Stanford University and an S.M. in Management from the Sloan School at the Massachusetts Institute of Technology. Kaleyra believes that Mr. Mikulsky is qualified to serve on the Board of Directors based on his leadership and industry experience.

Neil Miotto. Neil Miotto joined Kaleyra’s Board of Directors in October 2017. Mr. Miotto also serves as a director of GigCapital2, Inc. since March 2019, GigCapital3, Inc. since February 2020, and Cognizer, Inc. since March 2019. In addition, Mr. Miotto served on the Board of Directors of Micrel, Inc. prior to its sale to Microchip Technology Inc. in May 2015, and on the Board of Directors of GigPeak from 2008 until its sale to IDT in April 2017. Mr. Miotto is a financial consultant and a retired assurance partner of KPMG LLP, where he was a partner for twenty-seven years until his retirement in September 2006. Since his retirement from KPMG LLP, Mr. Miotto has provided high-level financial consulting services to companies in need of timely accounting assistance and in serving on the boards of public companies. He is deemed to be a “audit committee financial expert” under SEC rules. While at KPMG LLP, Mr. Miotto focused on serving large public companies, primarily semiconductor companies. Mr. Miotto also served as an SEC reviewing partner while at KPMG LLP. He is a member of the American Institute of Certified Public Accountants. He holds a Bachelor of Business Administration degree from Baruch College, of The City University of New York. He served on the Board of Directors of Micrel, Inc. prior to its acquisition in 2015, and on the Board of Directors of GigPeak from 2008 until its sale in April 2017. Kaleyra believes that Mr. Miotto is qualified to serve on the Board of Directors based on his financial and managerial experience, and his experience serving on the boards of public companies.

Classified Board of Directors

Our Board of Directors believes it is in the best interests of Kaleyra for the Board of Directors to be classified into three classes, each comprising as nearly as possible one-third of the directors to serve three-year terms. Each Class I director, consisting of Dr. Hirsch and Mr. Mikulsky, has a term that expires at our annual meeting of stockholders in 2020, each Class II director, consisting of Messrs. Miotto and Lodrini, has a term that expires at our annual meeting of stockholders in 2021 and each Class III director, consisting of Dr. Katz and Mr. Calogero, has a term that expires at our annual meeting of stockholders in 2022, or in each case until their respective successors are duly elected and qualified, or until their earlier resignation, removal or death.

Committees of the Board of Directors

The standing committees of our Board of Directors currently consist of an audit committee, a compensation committee and a nominating and corporate governance committee. Each of the committees reports to the Board of Directors as they deem appropriate and as the Board of Directors may request. The composition, duties and responsibilities of these committees are set forth below. We have previously filed copies of the charter for each of our committees. You can review those documents, as well as our other publicly filed documents, by accessing our public filings at the SEC’s web site at www.sec.gov. The Board of Directors may also convene additional committees as necessary and in accordance with the organizational documents of Kaleyra.

Audit Committee

The audit committee is responsible for, among other matters:

• assisting the Board of Directors in the oversight of (i) the accounting and financial reporting processes of Kaleyra and the audits of the consolidated financial statements of Company, (ii) the preparation and integrity of the consolidated financial statements of Kaleyra, (iii) the compliance by Kaleyra with

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financial statement and regulatory requirements, (iv) the performance of Kaleyra’s internal finance and accounting personnel and its independent registered public accounting firm, and (v) the qualifications and independence of Kaleyra’s independent registered public accounting firm;

• reviewing with each of the internal auditor and independent registered public accounting firm the overall scope and plans for audits, including authority and organizational reporting lines and adequacy of staffing and compensation;

• reviewing and discussing with management and internal auditors Kaleyra’s system of internal control and discussing with the independent registered public accounting firm any significant matters regarding internal controls over financial reporting that have come to its attention during the conduct of its audit;

• reviewing and discussing with management, internal auditors and the independent registered public accounting firm Kaleyra’s financial and critical accounting practices, and policies relating to risk assessment and management;

• receiving and reviewing reports of the independent registered public accounting firm discussing (i) all critical accounting policies and practices to be used in the firm’s audit of Kaleyra’s consolidated financial statements, (ii) all alternative treatments of financial information within U.S. GAAP that have been discussed with management, ramifications of the use of such alternative disclosures and treatments, and the treatment preferred by the independent registered public accounting firm, and (iii) other material written communications between the independent registered public accounting firm and management, such as any management letter or schedule of unadjusted differences;

• reviewing and discussing with management and the independent registered public accounting firm the annual and quarterly consolidated financial statements and section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Kaleyra prior to the filing of its Annual Report on Form 10-K and Quarterly Reports on Form 10-Q;

• reviewing, or establishing, standards for the type of information and the type of presentation of such information to be included in, earnings press releases and earnings guidance provided to analysts and rating agencies;

• discussing with management and the independent registered public accounting firm any changes in the Company’s critical accounting principles and the effects of alternative U.S. GAAP methods, off-balance sheet structures and regulatory and accounting initiatives;

• reviewing material pending legal proceedings involving Kaleyra and other contingent liabilities;

• meeting periodically with the Chief Executive Officer, Chief Financial Officer, the senior internal auditing executive and the independent registered public accounting firm in separate executive sessions to discuss results of examinations;

• reviewing and approving all transactions between Kaleyra and related parties or affiliates of the officers of Kaleyra requiring disclosure under Item 404 of Regulation S-K prior to Kaleyra entering into such transactions;

• establishing procedures for the receipt, retention and treatment of complaints received by Kaleyra regarding accounting, internal accounting controls or auditing matters, and the confidential, anonymous submissions by employees or contractors of concerns regarding questionable accounting or accounting matters;

• reviewing periodically with Kaleyra’s management, the independent registered public accounting firm and outside legal counsel (i) legal and regulatory matters which may have a material effect on the consolidated financial statements, and (ii) corporate compliance policies or codes of conduct, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding Kaleyra’s consolidated financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities; and

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• establishing policies for the hiring of employees and former employees of the independent registered public accounting firm.

Our audit committee consists of Messrs. Miotto, Mikulsky and Lodrini, each of whom qualifies as an independent director according to the rules and regulations of the SEC and NYSE American with respect to audit committee membership. Mr. Miotto serves as chairman of the audit committee. Each member of the audit committee is financially literate and our Board of Directors has determined that Mr. Miotto qualifies as an “audit committee financial expert” as defined in applicable SEC rules. Our Board of Directors has adopted a written charter for the audit committee, which is available on our corporate website at https://investors.kaleyra.com. The information on our website is not part of this prospectus.

Compensation Committee

The compensation committee is responsible for, among other matters:

• reviewing the performance of the Chief Executive Officer and executive management;

• assisting the Board of Directors in developing and evaluating potential candidates for executive positions (including Chief Executive Officer);

• reviewing and approving goals and objectives relevant to the Chief Executive Officer and other executive officer compensation, evaluating the Chief Executive Officer’s and other executive officers’ performance in light of these corporate goals and objectives, and setting Chief Executive Officer and other executive officer compensation levels consistent with its evaluation and Kaleyra’s philosophy;

• approving the salaries, bonus and other compensation for all executive officers;

• reviewing and approving compensation packages for new corporate officers and termination packages for corporate officers as requested by management;

• reviewing and discussing with the Board of Directors and senior officers plans for officer development and corporate succession plans for the Chief Executive Officer and other senior officers;

• reviewing and making recommendations concerning executive compensation policies and plans;

• reviewing and recommending to the Board of Directors the adoption of or changes to the compensation of Kaleyra’s directors;

• reviewing and approving the awards made under any executive officer bonus plan, and providing an appropriate report to the Board of Directors;

• reviewing and making recommendations concerning long-term incentive compensation plans, including the use of stock options and other equity-based plans, and, except as otherwise delegated by the Board of Directors, acting as the “Plan Administrator” for equity-based and employee benefit plans;

• approving all special perquisites, special cash payments and other special compensation and benefit arrangements for Kaleyra’s executive officers and employees;

• reviewing periodic reports from management on matters relating to Kaleyra’s personnel appointments and practices;

• assisting management in complying with Kaleyra’s proxy statement and annual report disclosure requirements;

• issuing an annual Report of the Compensation Committee on Executive Compensation for Kaleyra’s annual proxy statement in compliance with applicable SEC rules and regulations;

• annually evaluating the Committee’s performance and the committee’s charter and recommending to the Board of Directors any proposed changes to the charter or the committee; and

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• undertaking all further actions and discharging all further responsibilities imposed upon the committee from time to time by the Board of Directors, the federal securities laws or the rules and regulations of the SEC.

Our compensation committee consists of Messrs. Mikulsky, Lodrini and Miotto, each of whom qualifies as an independent director according to the rules and regulations of NYSE American with respect to compensation committee membership. Mr. Mikulsky serves as chairman of the compensation committee. Our Board of Directors has adopted a written charter for the compensation committee, which is available on our corporate website at https://investors.kaleyra.com. The information on our website is not part of this prospectus.

Nominating and Governance Committee

The compensation committee is responsible for, among other matters:

• developing and recommending to the Board of Directors the criteria for appointment as a director;

• identifying, considering, recruiting and recommending candidates to fill new positions on the Board of Directors;

• reviewing candidates recommended by stockholders;

• conducting the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates; and

• recommending director nominees for approval by the Board of Directors and election by the stockholders at the next annual meeting.

The nominating and governance committee has not established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, the Board of Directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our stockholders.

Our nominating and governance committee consists of Dr. Hirsch and Messrs. Lodrini and Mikulsky, each of whom qualifies as an independent director according to the rules and regulations of the SEC and NYSE American with respect to nominating and governance committee membership. Mr. Mikulsky serves as chairman of the nominating and governance committee. Our Board of Directors has adopted a written charter for the nominating and governance committee, which is available on our corporate website at https://investors.kaleyra.com. The information on our website is not part of this prospectus.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics applicable to our management team and employees in accordance with applicable federal securities laws. A copy of the Code of Business Conduct and Ethics will be provided without charge upon request from us, or may be accessed on our website at https://investors.kaleyra.com/. The information on our website is not part of this prospectus. We intend to disclose any amendments to or waivers of certain provisions of our Code of Business Conduct and Ethics in a Current Report on Form 8-K. See “Where You Can Find Additional Information.”

Communications with the Board of Directors

Following the completion of the Business Combination, interested parties wishing to communicate with the Board of Directors or with an individual member or members of the Board of Directors may do so by writing to the Board of Directors or to the particular member or members of the Board of Directors, and mailing the

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correspondence to Kaleyra, Inc., c/o Jim Fanucchi, Managing Director, Darrow Associates, 3616 Far West Boulevard, Suite 117, Austin, TX 78731. Each communication should set forth (i) the name and address of the stockholder as it appears in our register, and if the shares of our common stock are held by a nominee, the name and address of the beneficial owner of such shares, and (ii) the number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner.

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Related Party Transactions

Notes Payable to Sellers in Business Combination

Pursuant to the terms of an amendment to the Stock Purchase Agreement dated November 23, 2019, we recognized the aggregate closing consideration to be paid to two of the sellers at the closing of the Business Combination (the “Aggregate Closing Consideration”) in the form of unsecured convertible promissory notes (the “Notes”) for a specified principal amount (the “Note Principal Amount”). Of these Notes, two of them were issued at the closing of the Business Combination as unsecured promissory notes to each of Esse Effe and Maya, two companies incorporated in Italy and the U.K., respectively, that are affiliated with members of our Board of Directors, in the amounts of $6.0 million and $1.5 million respectively, (the “Cash Consideration Notes”). Interest on the Cash Consideration Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the Closing Date, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. The outstanding principal balance of the Cash Consideration Notes, plus all accrued and unpaid interest and fees due under the Cash Consideration Notes, shall, upon the receipt by Kaleyra, whether in a debt or equity financing event Kaleyra (which may include the receipt of cash from third parties with which Kaleyra has entered into forward share purchase agreements), of cash proceeds in an amount not less than the Financing Proceeds, be due and payable no later than ten business days after the buyer receives the Financing Proceeds. Please refer to note 9 to our condensed consolidated financial statements for the three months ended March 31, 2020 for further details. The outstanding amount due by Kaleyra for all of the Notes was $15.0 million plus $152,000 of accrued interest as of March 31, 2020. We intend to repay these Notes with the net proceeds of this offering.

Notes Payable to Certain of the Founders of Kaleyra and their Affiliates

On November 23, 2019, Kaleyra and each of the Sponsor and one of the holders of the Sixth Extension Notes and Fourth Working Capital Notes discussed below, GigFounders, LLC, agreed to amend and restate the Initial Extension Note, Second Extension Note, Working Capital Note, Sixth Extension Note and Fourth Working Capital Note (each as discussed below) held by them to provide that in lieu of repaying such promissory notes in full upon the closing of the Business Combination, the outstanding principal balance of such amended and restated notes (for the Initial Extension Note, the Second Extension Note and the Sixth Extension Note), Kaleyra entered into the Amended Extension Notes, and for the Second Working Capital Note and Fourth Working Capital Note, Kaleyra entered into the Amended Working Capital Notes, plus all accrued and unpaid interest (as described below) and fees due under the Amended Extension Notes and Amended Working Capital Notes, shall, upon the receipt by Kaleyra, whether in a debt or equity financing event by Kaleyra (which may include the receipt of cash from third parties with which Kaleyra has subsequent to year end entered into forward share purchase agreements), of cash proceeds in an amount not less than the Financing Proceeds, be due and payable no later than ten business days after Kaleyra receives the Financing Proceeds. Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. None of the Amended Extension Notes or Amended Working Capital Notes will be convertible into securities of Kaleyra. On November 23, 2019, Kaleyra issued the Amended Extension Notes and Amended Working Capital Notes to the Sponsor and GigFounders, LLC, as appropriate, for each of the Initial Extension Note, Second Extension Note, Working Capital Note, Sixth Extension Note and Fourth Working Capital Note. Please refer to our consolidated financial statements for further details.

The outstanding amount due by Kaleyra to related parties was $1.9 million plus $19,000 of accrued interest as of March 31, 2020. We intend to repay the Amended Extension Notes and Amended Working Capital Notes with the net proceeds of this offering.

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Consulting Agreement

On January 9, 2017, Kaleyra S.p.A. entered into a consulting services agreement with Esse Effe. The agreement with Esse Effe was terminated on December 31, 2018. Costs incurred by Kaleyra for the above consulting services were zero and $118,000 in the years ended December 31, 2019 and 2018, respectively, and zero for the three months ended March 31, 2020. The outstanding amount due by Kaleyra to Esse Effe was zero and $35,000 as of December 31, 2019 and 2018, respectively, and zero for the three months ended March 31, 2020.

Legal Services

During the years ended December 31, 2019 and 2018, Kaleyra S.p.A. purchased legal services by a partner of Studio Legale Chiomenti who is a family member of a key manager of Kaleyra S.p.A. Costs incurred by Kaleyra S.p.A. for the above legal services were $694,000 and $204,000 in the years ended December 31, 2019 and 2018, respectively, and $56,000 for the three months ended March 31, 2020.

Loans

During 2018 and 2019 Kaleyra S.p.A. granted personal loans to certain directors and executive managers. In November 2019, one of the two existing loans granted to Company’s directors and executive managers was reimbursed in full for a total amount of $36,000. The outstanding amount of these loans was $22,000 and $67,000 as of December 31, 2019 and 2018, respectively, and $21,000 for the three months ended March 31, 2020. The loan outstanding as of March 31, 2020 is not a loan to any executive officer or director of the Company which would violate Section 402 of the Sarbanes - Oxley Act.

Employee Relationships

In 2016, Alessandra Levy, the spouse of Kaleyra’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, and $60,000 for the three months ended March 31, 2020.

Solutions Infini Preference Shares

As a part of the Solutions Infini purchase agreement, Kaleyra assumed the obligation to purchase Solutions Infini preference shares from certain executive managers of Solutions Infini in 2020 at a variable price determined based upon the target EBITDA of Solutions Infini expected for the year ending March 31, 2020. From an accounting perspective, these preference shares represent compensation for future services for the eligible employees. 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, Kaleyra incurred $360,000 of compensation expense for executive managers, relating to preference shares compensation.

Pre-Business Combination Related Party Transactions of the Company

During October 2017, the Founders of the Company purchased 4,267,500 Founder Shares for $25,000, or approximately $0.005858 per share. In November and December 2017, the Company canceled 738,750 Founder Shares for no consideration. Additionally, on December 7, 2017, the Company issued an aggregate of 65,000 shares of its common stock solely in consideration of then-future services to each of its independent directors and to Mr. Barrett Daniels, the Company’s former Vice President and Chief Financial Officer (the “Insider Shares”). As a result, each of Messrs. Mikulsky, Wang and Porter have received 20,000 Insider Shares, and Mr. Daniels received 5,000 Insider Shares, which were cancelled upon Mr. Daniels’s resignation in July 2018.

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The Founders purchased from the Company an aggregate of 489,500 units at a price of $10.00 per unit in a private placement that occurred simultaneously with the completion of the initial closing of the IPO. The Founders also purchased from the Company an aggregate of 8,756 private placement units in a private placement that occurred simultaneously with the completion of the second closing of the IPO in connection with the exercise of the over-allotment option. Each private placement unit consists of one share of the Company’s common stock, $0.0001 par value, three-fourths of a warrant, and one right to receive one-tenth of a share of common stock upon the consummation of the initial business combination. Public Warrants and Placement Warrants are only exercisable for whole shares at $11.50 per share. Unlike the Public Warrants, if held by the original holder or its permitted transferees, the Placement Warrants are not redeemable by the Company and subject to certain limited exceptions, are subject to transfer restrictions until November 25, 2020 (one year following the consummation of the Business Combination). If the Placement Warrants are held by holders other than the initial holders or their permitted transferees, the Placement Warrants will be redeemable by the Company and exercisable by holders on the same basis as the Public Warrants. Upon the consummation of the Business Combination, the 498,256 private placement units purchased by the Founders resulted in the issuance of 498,256 shares of common stock and the conversion of the rights that constituted a part of the private placement units into 49,827 shares of common stock.

Subject to certain limited exceptions, the Founders and management team have agreed not to transfer, assign or sell any of their Founder Shares, Insider Shares, shares issued upon the conversion of the rights that constituted a part of the private placement units, the placement warrants or the shares underlying the placement warrants, until November 25, 2020 (one year after the date of the consummation of the Business Combination). Notwithstanding the foregoing, (1) if the last sale price of the Company’s common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Business Combination, or (2) if the Company consummates a liquidation, merger, stock exchange or other similar transaction after the Business Combination which results in all of the Company’s stockholders having the right to exchange their shares of common stock for cash, securities or other property, then the aforenamed securities will be released from the lock-up. Permitted transferees would be subject to the same restrictions and other agreements of the Founders and management team with respect to any such securities.

The Company’s IPO prospectus and amended and restated certificate of incorporation provided that Company initially had until March 12, 2019 (the date which was 15 months after the consummation of the IPO) to complete a business combination. The Company’s IPO prospectus and amended and restated certificate of incorporation also provided that the Company could extend such 15 months period an additional three months if the Founders deposited into the Company’s trust account established following the IPO an amount equal to the aggregate total of $0.10 per public share sold in the IPO, for a total deposit of $1.4 million.

On March 6, 2019, the Company issued four unsecured promissory notes in the aggregate principal amount of $1.4 million, representing $0.10 per public share. These notes were issued to the Sponsor and three other investors. The aggregate funds were deposited into the Company’s trust account, and as a result, the period of time the Company had to consummate a business combination and the date for cessation of operations of the Company if the Company had not completed a business combination was extended from March 12, 2019 to June 12, 2019 (“Initial Extension”). The terms of the trust agreement did not require an amendment of the amended and restated certificate of incorporation in order to accomplish the Initial Extension.

In conjunction with the approval of an amendment to the amended and restated certificate of incorporation to further extend the time to consummate a business combination to December 12, 2019, the (“Second Extension”), the Founders and certain of their affiliates agreed to contribute to the Company as a loan $240,000 for each calendar month, or portion thereof, that was needed by the Company to complete the Business Combination with Kaleyra S.p.A. (each, a “Contribution”). The Contributions were conditional upon the implementation of the

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Second Extension. The Contributions did not bear interest and were repayable by the Company upon consummation of the Business Combination with Kaleyra S.p.A. The Sponsor had the sole discretion to determine whether to continue extending for additional months until the Extended Date, and if the Sponsor determined not to continue extending for additional months, the obligation of the Founders to make additional Contributions would have terminated and the Company would have dissolved and liquidated in accordance with its amended and restated certificate of incorporation.

On June 10, 2019, the Company issued four non-convertible unsecured promissory notes (each, a “Second Extension Note” and collectively the “Second Extension Notes”) in the aggregate principal amount of $240,000 to the Founders. The Company deposited the funds into the trust account.

On June 10, 2019, the Company issued an additional four convertible unsecured promissory notes as the Working Capital Notes in the aggregate principal amount of $91,667 to the Founders. The Working Capital Notes were issued to provide the Company with additional working capital during the Second Extension and were not deposited into the trust account. the Company issued the Working Capital Notes in consideration for loans from the payees to fund the Company’s working capital requirements. The convertible notes are convertible at the payee’s election upon the consummation of the Business Combination. Upon such election, the convertible notes would convert, at a price of $10.00 per unit, into units identical to the private placement units issued in connection with the Company’s IPO, except that the Placement Warrants issued to the non-Sponsor Founders, so long as they are held by the non-Sponsor Founders, or any of their related persons under FINRA rules, will expire five years from December 7, 2017 (the effective date of the Company’s registration statement related to the IPO).

On July 10, 2019, in connection with the second monthly Contribution, certain of the Founders and their affiliates deposited an additional aggregate $240,000 into the trust account, the Company cancelled the Second Extension Notes dated June 10, 2019, in the amount of $240,000 in the aggregate, and reissued each of the Third Extension Notes to include the aggregate of both the first and second monthly Contribution amounts for each payee, totaling $480,000.

On July 10, 2019, in connection with the second monthly Contribution, an additional aggregate $64,932 of working capital was loaned to the Company by certain of the Founders and their affiliates, and as a result the Company cancelled the original Working Capital Notes dated June 10, 2019 in the amount of $91,667 and reissued the Second Working Capital Notes to include the aggregate of both the first and second working capital loans to the Company for each payee in the total amount of $156,599. The Second Extension Notes and Second Working Capital Notes bore no interest and were repayable in full upon the consummation of the Business Combination.

On August 12, 2019, in connection with the third and fourth monthly Contribution, certain of the Founders and affiliates thereof deposited an additional aggregate $480,000 into the trust account, and the Company cancelled certain of the Third Extension Notes dated July 10, 2019, in the amount of $204,302 in the aggregate, and reissued each of the Fourth Extension Notes to include the aggregate of the first through the fourth monthly Contribution amounts for the payees, totaling $684,302.

On August 12, 2019, in connection with the third and fourth monthly Contribution, an additional aggregate $252,568 of working capital was loaned to the Company by the certain of the Founders and affiliates thereof, and as a result the Company cancelled certain of the Second Working Capital Notes dated July 10, 2019 in the amount of $66,653 and reissued the Third Working Capital Notes to include the aggregate of the first through the fourth working capital loans to the Company for the payees in the total amount of $319,221. The Fourth Extension Notes and Third Working Capital Notes also bore no interest and were repayable in full upon the consummation of the Business Combination.

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From September 24, 2019 through September 27, 2019, in conjunction with the fifth monthly Contribution, an additional aggregate of $110,029 for deposit into the trust account was loaned to the Company by certain of the Founders and affiliates thereof.

From September 24, 2019 through September 27, 2019, in conjunction with the fifth monthly Contribution, an additional aggregate of $133,728 of working capital was loaned to the Company by certain of the Founders and affiliates thereof.

On October 2, 2019 and October 11, 2019, in conjunction with the fifth monthly Contribution, an additional aggregate of $129,971 for deposit into the trust account, was loaned to the Company by certain of the Founders and affiliates thereof, for a total aggregate of $240,000 loaned for deposit in the trust account in conjunction with the fifth monthly Contribution. Effective October 11, 2019, the Company cancelled the Fourth Extension Notes dated August 12, 2019 in the amount of $684,302 and reissued each of the Fifth Extension Notes to include the aggregate of the first through the fourth monthly Contribution amounts for the payees, totaling $924,302.

On October 2, 2019 and October 11, 2019, in conjunction with the fifth monthly Contribution, an additional aggregate of $157,966 of working capital was loaned to the Company by certain of the Founders and affiliates thereof, for a total aggregate of $291,694 working capital loaned in conjunction with the fifth monthly Contribution. Effective October 11, 2019, the Company cancelled the Third Working Capital Notes dated August 12, 2019 in the amount of $319,221 and reissued the Fourth Working Capital Notes to include the aggregate of the first through the fourth working capital loans to the Company for the payees in the total amount of $610,915. The Fifth Extension Notes and Fourth Working Capital Notes also bore no interest and were repayable in full upon the consummation of the Kaleyra S.p.A. Business Combination.

On November 12, 2019, in conjunction with the sixth monthly Contribution, an additional aggregate of $240,000, for deposit into the trust account, was loaned to the Company by certain of the Founders and affiliates. Effective November 12, 2019, the Company cancelled the Fifth Extension Notes dated October 11, 2019 in the amount of $924,302 and reissued each of the Sixth Extension Notes to include the aggregate of the first through the fifth monthly Contribution amounts for the payees, totaling $1,164,302.

The Sponsor agreed, commencing on December 7, 2017, through the consummation of the Business Combination, to make available to the Company certain general and administrative services, including office space, utilities and administrative support, as the Company required from time to time. The Company agreed to pay the Sponsor an aggregate of $20,000 per month for these services. Dr. Avi S. Katz, the Executive Chairman of the Board of Directors, is the manager of the Sponsor. In addition, he and Mr. Miotto, one of the Company’s independent directors, have formed a partnership, of which 90% is owned by Dr. Katz and the remaining 10% is owned by Mr. Miotto, and that partnership, which is also managed by Dr. Katz, has a financial and voting interest in the Sponsor that entitles this partnership to participate in any economic return that the Sponsor receives for its investment in the Company in accordance with terms negotiated with the other holders of financial and voting interests in our Sponsor.

Policies and Procedures for Related Party Transactions

Kaleyra’s Code of Business Conduct and Ethics requires Kaleyra to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the Board of Directors (or the audit committee). Related-party transactions are defined as transactions in which (1) the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive officer, director or nominee for election as a director, (b) greater than 5% beneficial owner of our shares of common stock, or (c) immediate family member, of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her

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work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent we enter into such transactions. The audit committee will consider all relevant factors when determining whether to approve a related party transaction, including whether the related party transaction is on terms no less favorable to us than terms generally available from an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. No director may participate in the approval of any transaction in which he is a related party, but that director is required to provide the audit committee with all material information concerning the transaction. Kaleyra also requires each of our directors and executive officers to complete a directors’ and officers’ questionnaire that elicits information about related party transactions.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

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EXECUTIVE COMPENSATION

Summary Compensation Table

The table below sets forth the annual compensation levels of the principal executive officer who serves as Chief Executive of Kaleyra and the next most highly compensated executive officer. Kaleyra does not currently have a third named executive officer following the departure of Julia Pulzone as set forth below. The compensation totals and individual amounts reflect the compensation of such officers by Kaleyra as of December 31, 2019. In fiscal year 2020, such totals and amounts may change based, on among other things, changes to the terms of the employment of such persons.

Name and Principal Position (1)	Year		Base Salary ($) (1)		Bonus ($) (2)		Option Awards ($) (3)		RSUs ($) (4)		All Other Compensation ($)			Total ($)
Dario Calogero		2019	$	447,779	$	—	$	—	$	3,745,706	$	418,126	(5)	$	4,611,611
President and Chief Executive Officer		2018		314,356		157,650		—		—		440,527	(5)		912,533
Giacomo Dall’Aglio (6)		2019		279,862		—		—		1,872,857		124,610	(7)		2,277,329
EVP and Chief Financial Officer		2018		138,003		67,851		1,440,582		—		293,117	(7)		1,939,553
Julia Pulzone (8)		2019		184,932		—		—		—		—			184,932
Former EVP and Chief Financial Officer		2018		—		—		—		—		—			—
Luca Giardina Papa (9)		2019		156,714		—		—		655,496		85,391	(10)		897,601
Former Chief Financial Officer		2018		136,798		40,710		1,440,582		—		79,506	(10)		1,697,596

(1) All employees paid in local currency; amounts in table are converted to U.S.$ to the extent paid in euros. For fiscal year 2018, the salaries were paid in euros and converted to U.S.$ for purpose of presentation in this table. An exchange rate of 1.180014 was used for 2018 and is based on the average exchange rate as of December 31, 2018. An exchange rate of 1.119446 was used for 2019 and is based on the average exchange rate as of December 31, 2019.

(2) No bonuses were paid for fiscal year 2019. For fiscal year 2018, all amounts represent annual bonuses that were paid in that fiscal year. All bonuses were paid in euros and have been converted to $U.S. for purposes of presentation in this table. An exchange rate of 1.180014 was used and is based on the average exchange rate as of December 31, 2018. The amount for Mr. Calogero includes an annual bonus received in November 2018 and June 2019 of $157,650 (133,600 euros).

(3) All amounts represent the value of vested shares awarded to Mr. Dall’Aglio and Mr. Papa. Mr. Dall’Aglio and Mr. Papa each received a stock option grant of 1,377 shares in fiscal year 2018 under the Kaleyra S.p.A. Stock Option Plan. Such shares were to vest over a three year period. In December 2018 the Kaleyra S.p.A. Board of Directors terminated the Kaleyra S.p.A. Stock Option Plan and all options issued under this plan fully vested. Kaleyra S.p.A. issued these shares to Mr. Dall’Aglio and Mr. Papa. The shares were valued in euros and have been converted to $U. S. for purposes of presentation in this table. An exchange rate of 1.180014 was used for 2018 and is based on the average exchange rate as of year ended December 31, 2018.

(4) The amounts in this column represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718.

(5) Other Compensation for Mr. Calogero includes $391,806 for 2019 and $413,005 for 2018 as an annual relocation bonus for his temporary relocation to New York, New York from Milan, Italy through July 2021, paid in equal monthly installments in 2019 and, for 2018, in a single installment paid in November 2018, respectively. Mr. Calogero also received benefits in the amount of $26,320 for 2019 and $27,523 for 2018 for company-paid contributions to the pension plan (23,511 euros and 23,324 euros, respectively). These amounts were paid in euros and have been converted to $U.S. for purposes of presentation in this table. An exchange rate of 1.119446 was used for 2019 and is based on the average exchange rate as of year ended December 31, 2019. In addition, an exchange rate of 1.180014 was used for 2018 and is based on the average exchange rate as of year ended December 31, 2018.

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(6) Mr. Dall’Aglio was appointed Chief Financial Officer effective December 16, 2019, the base salary reported is that one recognizes from that date. Prior to that time, he was the Company’s EVP and Chief Corporate Development Officer.

(7) Other Compensation for 2019 for Mr. Dall’Aglio includes $82,279 (73,500 euros) as a relocation bonus for his temporary relocation to New York, New York from Milan, Italy through July 2021. Mr. Dall’Aglio also received benefits in the amount of $4,133 (3,692 euros) for health care insurance, $5,597 (5,000 euros) for life insurance benefits provided to managers within the Company. Kaleyra S.p.A. also contributed $ 22,987 (20,534 euros) on behalf of Mr. Dall’Aglio to the National Social Welfare Institution Pension Plan. This contribution is a mandatory contribution by Kaleyra S.p.A. on behalf of Mr. Dall’Aglio, and $9,613 (8,588 euros) for a private pension plan (Fondo di Previdenza Mario Negri). These amounts were paid in euros and have been converted to $U.S. for purposes of presentation in this table. An exchange rate of 1.119446 was used for 2019 and is based on the average exchange rate as of year ended December 31, 2019. Other Compensation for 2018 for Mr. Dall’Aglio includes $236,003 (200,000 euros) as a relocation bonus for his temporary relocation to New York, New York from Milan, Italy through July 2021. Mr. Dall’Aglio also received benefits in the amount of $4,418 (3,744 euros) for a company provided car net of reimbursement for personal usage percentage, $4,369 (3,703 euros) for health care insurance, $5,900 (5,000 euros) for life insurance benefits provided to managers within the Company. Kaleyra S.p.A. also contributed $32,321 (27,390 euros) on behalf of Mr. Dall’Aglio to the National Social Welfare Institution Pension Plan. This contribution is a mandatory contribution by Kaleyra S.p.A. on behalf of Mr. Dall’Aglio, and $10,106 (8,564 euros) for a private pension plan (Fondo di Previdenza Mario Negri). These amounts were paid in euros and have been converted to $U. S. for purposes of presentation in this table. An exchange rate of 1.180014 was used for 2018 and is based on the average exchange rate as of year ended December 31, 2018.

(8) Ms. Pulzone became the Chief Financial Officer of Kaleyra S.p.A. on March 18, 2019, and ceased being the Company’s EVP and Chief Financial Officer effective December 12, 2019.

(9) Mr. Papa served as the Chief Financial Officer of Kaleyra S.p.A. prior to March 18, 2019.

(10) Other Compensation for 2019 for Mr. Papa includes benefits in the amount of $8,092 (7,229 euros) for a company provided car net of reimbursement for personal usage percentage, $4,145 (3,703 euros) for health care insurance, $5,585 (4,989 euros) for life insurance benefits provided to managers within the Company. Kaleyra S.p.A. also contributed $57,981 (51,794 euros) on behalf of Mr. Papa to the National Social Welfare Institution Pension Plan. This represents a mandatory contribution by Kaleyra S.p.A. on behalf of Mr. Papa, and $9,587 (8,564 euros) for a private pension plan (Fondo di Previdenza Mario Negri). These amounts were paid in euros and have been converted to $U.S. for purposes of presentation in this table. An exchange rate of 1.119446 was used for 2019 and is based on the average exchange rate as of year ended December 31, 2019. Other Compensation for 2018 for Mr. Papa includes benefits in the amount of $8,530 (7,229 euros) for a company provided car net of reimbursement for personal usage percentage, $4,369 (3,703 euros) for health care insurance, $5,888 (4,989 euros) for life insurance benefits provided to managers within the Company. Kaleyra S.p.A. also contributed $50,613 (42,892 euros) on behalf of Mr. Papa to the National Social Welfare Institution Pension Plan. This represents a mandatory contribution by Kaleyra S.p.A. on behalf of Mr. Papa, and $10,106 (8,564 euros) for a private pension plan (Fondo di Previdenza Mario Negri). These amounts were paid in euros and have been converted to $U.S. for purposes of presentation in this table. An exchange rate of 1.180014 was used for 2018 and is based on the average exchange rate as of year ended December 31, 2018.

Name	Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)			Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
Dario Calogero		454,025	(1)	$	3,745,706
Giacomo Dall’Aglio		227,013	(2)		1,872,857
Luca Giardina Papa		79,454	(3)		655,496

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(1) 454,025 RSUs which vest as follows: 25% of the RSUs will vest on February 1, 2021, and the remaining 75% vest in twelve quarterly installments thereafter, beginning on May 1, 2021 and ending on February 1, 2024. The Company will withhold shares of stock subject to the RSUs at the time of vesting for the purposes of satisfying any tax withholding obligations which arise in connection with the vesting of such RSUs issued to Mr. Calogero.

(2) 227,013 RSUs which vest as follows: 25% of the RSUs will vest on February 1, 2021, and the remaining 75% vest in twelve quarterly installments thereafter, beginning on May 1, 2021 and ending on February 1, 2024. The Company will withhold shares of stock subject to the RSUs at the time of vesting for the purposes of satisfying any tax withholding obligations which arise in connection with the vesting of such RSUs issued to Mr. Dall’Aglio.

(3) 79,454 RSUs which vest as follows: 25% of the RSUs will vest on February 1, 2021, and the remaining 75% vest in twelve quarterly installments thereafter, beginning on May 1, 2021 and ending on February 1, 2024. The Company will withhold shares of stock subject to the RSUs at the time of vesting for the purposes of satisfying any tax withholding obligations which arise in connection with the vesting of such RSUs issued to Mr. Papa.

Employment Arrangements with Named Executive Officers

On March 13, 2020, Kaleyra entered into an employment agreement with its Chief Executive Officer, Mr. Dario Calogero (the “Calogero Employment Agreement”). The Calogero Employment Agreement is for a three-year period commencing on November 26, 2019. It provides that Mr. Calogero shall serve as the Chief Executive Officer of Kaleyra and its subsidiaries, with services to be provided both in New York, New York and in Milan, Italy. The Calogero Employment Agreement provides that Mr. Calogero will receive a base salary at an annual rate of $450,000, subject to increase from time to time as determined by the Board of Directors or its compensation committee, as well as that he shall be eligible to receive an annual bonus and long-term equity-based awards. The target bonus opportunity for Mr. Calogero is 100% of his base salary (the “Annual Target Bonus”), and at the discretion of the Board of Directors, he may also be granted a special achievement bonus in recognition of a special event or achievement that has significantly improved the performance, strength or nature of Kaleyra and its business. Payment of a bonus based upon the Annual Target Bonus shall be done after the compensation committee has determined in its sole and absolute discretion whether Mr. Calogero’s performance has achieved the OKR, or other performance objectives established for purposes of bonuses. Beginning in 2021, Mr. Calogero is also eligible to receive grants of long-term awards in the form of cash and/or equity awards under the EIP. The Calogero Employment Agreement also provides that Mr. Calogero is eligible to participate in the all employee benefit and insurance plans that Kaleyra maintains for similarly situated executives, and that he will receive a relocation allowance covering the period of time that Mr. Calogero is based in New York (which is expected to end in July 2021) of $400,000 per year.

In the event that Mr. Calogero’s employment is terminated for “cause” by Kaleyra or because he resigns without “good reason” (as such terms are defined in the Calogero Employment Agreement), then he will be paid his base salary for the period prior to the effective date of termination and any accrued but unused vacation time, unreimbursed expenses and other payments and benefits prior to such termination. If Kaleyra terminates his employment without cause or he terminates his employment for good reason, then he will receive additional payments from Kaleyra. If such termination is not within the two-year period following a Change in Control (as such term is defined in the Calogero Employment Agreement), then Mr. Calogero will receive in addition to that which he would receive if his employment is terminated for cause, as a severance an amount equal to two times the sum of (1) his base salary, plus (2) an amount equal to his Annual Target Bonus, plus a bonus for the year of termination, as well as immediate vesting of any service-based vesting conditions applicable to long-term awards previously granted, provided that any performance-vesting conditions shall still apply. Mr. Calogero will also receive insurance coverage for two years. If such termination is within the two-year period following a Change in Control, then the severance amount shall be for three times, rather than two times, the sum of (1) his base salary, plus (2) an amount equal to his Annual Target Bonus. In addition, if Mr. Calogero’s employment terminates because he becomes disabled or he dies, then there shall be immediate vesting of any outstanding, unvested long-term awards, including any performance-based awards.

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Also on March 13, 2020, Kaleyra entered into an amendment of awards with its Chief Financial Officer, Mr. Giacomo Dall’Aglio (the “Dall’Aglio Amendment of Awards”). The Dall’Aglio Amendment of Awards provides that if Mr. Dall’Aglio’s employment is terminated for “cause” by Kaleyra or because he resigns without “good reason” (as such terms are defined in the Dall’Aglio Amendment of Awards) within the twelve months following a Covered Transaction (as such term is defined in the EIP), then one hundred percent of the remaining unvested long-term awards issued to Mr. Dall’Aglio in accordance with the terms of the EIP, shall become vested and immediately exercisable if the award requires exercise, and one hundred percent of the remaining undelivered shares shall be delivered for such awards that are restricted stock units.

Compensation Philosophy and Objectives

Kaleyra has developed an executive compensation program that is consistent with Kaleyra’s existing compensation policies and philosophies, which are designed to align compensation with its business objectives and the creation of stockholder value, while enabling Kaleyra to attract, motivate and retain individuals who contribute to its long-term success. Decisions on the executive compensation program are made by the compensation committee of the Board of Directors.

Decisions regarding executive compensation reflect a belief that the executive compensation program must be competitive in order to attract and retain our executive officers. The compensation committee seeks to implement the compensation policies and philosophies by linking a significant portion of Kaleyra’s executive officers’ cash compensation to performance objectives and by providing a portion of their compensation as long-term incentive compensation in the form of equity awards.

Compensation for Kaleyra’s executive officers has three primary components: base salary, an annual cash incentive bonus and long-term equity-based incentive compensation.

Employment Agreements

As discussed above under the caption “Employment Arrangements with Named Executive Officers,” on March 13, 2020, Kaleyra entered into the Calogero Employment Agreement with its Chief Executive Officer, Mr. Dario Calogero. That employment agreement provides that Mr. Calogero will receive a base salary at an annual rate of $450,000, subject to increase from time to time as determined by the Board of Directors or its compensation committee, as well as that he shall be eligible to receive an annual bonus and long-term equity-based awards. However, the base salary for Mr. Calogero as stated in the employment agreement is established based on the scope of his responsibilities, taking into account market compensation paid by comparable companies for equivalent positions. Similarly, although there is not an employment agreement between Kaleyra’s EVP and Chief Financial Officer, Mr. Giacomo Dall’Aglio, his base salary has been determined in a similar manner. Furthermore, base salaries will be reviewed annually by the compensation committee to the extent recommended upon advice and counsel of its advisors, and any increases are expected to be similar in scope to Kaleyra’s overall corporate salary increase, if any. For comparison purposes, Kaleyra has utilized compensation survey data from Compensia and the peer company proxy filings. Kaleyra’s philosophy is to target the named executive officer base salaries to be in the range between the median up to the 75th percentile of salaries for executives in equivalent positions at comparable companies. Kaleyra believes targeting the named executive officer salaries to be in the range between the median up to the 75th percentile of salaries relative to comparable companies reflects Kaleyra’s best efforts to ensure it is neither overpaying nor underpaying its named executive officers.

Annual Bonuses

Kaleyra uses annual cash incentive bonuses for the named executive officers to tie a portion of their compensation to financial and operational objectives and key results achievable within the applicable fiscal year.

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Near the beginning of each year, the compensation committee selects the performance targets, or Objectives and Key Results (“OKR”) or other bonus performance objectives of Kaleyra, target amounts, target award opportunities and other term and conditions of annual cash bonuses for the named executive officers. Following the end of each year, the compensation committee will determine the extent to which the OKR or other performance objectives were achieved and the amount of the award that is payable to the named executive officers. In addition, on occasion, and at the sole discretion of the Board of Directors or the compensation committee, Kaleyra may grant special achievement bonuses to the named executive officers in recognition of a special event or achievement that has significantly improved the performance, strength or nature of Kaleyra and its business.

Equity-Based Awards

Under the EIP, Kaleyra uses equity-based awards to reward long-term performance of the named executive officers. Kaleyra believes that providing a meaningful portion of the total compensation package in the form of equity-based awards aligns the incentives of its named executive officers with the interests of its stockholders and serves to motivate and retain the individual named executive officers. Any awards would be made in accordance with the executive compensation program discussed above. Kaleyra is currently using RSUs to encourage long term performance.

Other Compensation

Kaleyra maintains various employee benefit plans, including medical, dental, life insurance and defined benefit plans, granted to Italian and Indian employees, and 401(k) plans, in which the named executive officers will participate. It also provides certain perquisites to its named executive officers, subject to the compensation committee’s ongoing review.

Deductibility of Executive Compensation

Section 162(m) of U.S. Internal Revenue Code of 1986, as amended (the “Code”) denies a federal income tax deduction for certain compensation in excess of $1.0 million per year paid to the chief executive officer, the chief financial officer, the three other most highly paid executive officers of a publicly traded corporation, and anyone previously subject to Section 162(m) for any taxable year beginning after December 31, 2016. It is the policy of Kaleyra to consider the tax impact of its compensation arrangements as one factor, among others, in evaluating and determining the structure, implementation, and amount of awards paid to its executive officers. However, to retain highly skilled executives and remain competitive with other employers, the compensation committee may authorize compensation that would not be deductible under Section 162(m) or otherwise if it determines that such compensation is in the best interests of the post-combination company and its stockholders, and maintaining tax deductibility will not be the sole consideration taken into account in determining what compensation arrangements are in our and our stockholders’ best interests. The right to grant compensation that is not deductible is expressly reserved, and Kaleyra may do so.

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DIRECTOR COMPENSATION

The following table sets forth the compensation earned for services performed for us as a director by each member of our Board of Directors, other than any directors who are also our named executive officers, during the fiscal year ended December 31, 2019.

Name	Fees earned or paid in cash (1)		Stock Awards ($)		RSU Awards ($) (2)		Total
Dr. Avi S. Katz, Chairman of the Board	$	31,250	$	—	$	2,079,107	$	2,110,357
Neil Miotto, Independent Director and Chairman of the Audit Committee		20,000		—		1,142,675		1,162,675
John Mikulsky, Independent Director and Chairman of the Compensation Committee		20,000		—		1,142,675		1,162,675
Simone Fubini, Independent Director and Chairman of the Nominating and Corporate Governance Committee (3)		12,500		—		768,108		780,608
Matteo Lodrini, Independent Director		15,000		—		768,108		783,108

(1) All fees earned were paid out in December 2019.

(2) The RSU awards amounts are based on the number of shares granted times the grant date fair value per share of $8.25. None of the RSUs granted in 2019 had vested as of December 31, 2019.

(3) Mr. Fubini resigned as a director on February 10, 2020, and he passed away on March 27, 2020.

As of December 31, 2019, each current director, other than directors who are also our named executive officers, held the following outstanding restricted stock unit awards:

Name	Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)			Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($) (4)
Avi Katz		252,013	(1)	$	2,079,107
Neil Miotto		138,506	(2)		1,142,675
John Mikulsky		138,506	(2)		1,142,675
Simone Fubini (5)		93,104	(3)		768,108
Matteo Lodrini		93,104	(3)		768,108

(1) 252,013 RSUs, of which (i) 227,013 of such RSUs vest as follows: 25% of the RSUs will vest on February 1, 2021, and the remaining 75% vest in twelve quarterly installments thereafter, beginning on May 1, 2021 and ending on February 1, 2024, (ii) 20,000 of such RSUs vest in four quarterly installments, beginning on February 1, 2020 and subsequently on May 1, 2020, August 1, 2020, and November 1, 2020, and (iii) 5,000 of such RSUs vest on February 1, 2020.

(2) 138,506 RSUs, of which (i) 113,506 of such RSUs vest as follows: 25% of the RSUs will vest on February 1, 2021, and the remaining 75% vest in twelve quarterly installments thereafter, beginning on May 1, 2021 and ending on February 1, 2024, (ii) 20,000 of such RSUs vest in four quarterly installments, beginning on February 1, 2020 and subsequently on May 1, 2020, August 1, 2020, and November 1, 2020, and (iii) 5,000 of such RSUs vest on February 1, 2020.

(3) 93,104 RSUs, of which (i) 68,104 of such RSUs vest as follows: 25% of the RSUs will vest on February 1, 2021, and the remaining 75% vest in twelve quarterly installments thereafter, beginning on May 1, 2021 and ending on February 1, 2024, (ii) 20,000 of such RSUs vest in four quarterly installments, beginning on February 1, 2020 and subsequently on May 1, 2020, August 1, 2020, and November 1, 2020, and (iii) 5,000 of such RSUs vest on February 1, 2020.

(4) Amounts are based on number of shares not vested times the grant date fair value per share of $8.25.

(5) Mr. Fubini resigned as a director on February 10, 2020, and he passed away on March 27, 2020.

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PRINCIPAL STOCKHOLDERS

The following table sets forth information regarding the beneficial ownership of shares of common stock of Kaleyra by:

• each person known to be the beneficial owner of more than 5% of the common stock of Kaleyra;

• each of Kaleyra’s officers and directors; and

• all executive officers and directors of Kaleyra as a group.

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days, or restricted stock units that will vest within 60 days. As of May 31, 2020 there were 20,221,935 shares of our common stock issued and outstanding.

Unless otherwise indicated, Kaleyra believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock of Kaleyra beneficially owned by them.

	Share Beneficial Owned						Share Beneficial Owned After this Offering
Name and Address of Beneficial Owner (1)	Number of Shares			% of Class			Number of Shares		% of Class
GigAcquisitions, LLC (2)		2,584,291	(3)		12.6	%		2,584,291			%
Esse Effe S.p.A. (4)		5,581,336	(6)		27.6	%		5,581,336			%
Effe Pi S.s.(5)		5,674,440	(6)		28.1	%		5,674,440			%
Maya Investments Limited (7)		5,483,581	(8)		27.1	%		5,483,581			%
GigFounders, LLC (9)		715,698			3.5	%		715,698			%
Dr. Avi S. Katz (2)(9)		3,314,989	(3)		16.2	%		3,314,989			%
Neil Miotto		15,000				*		15,000			*
John Mikulsky		35,000				*		35,000			*
Dario Calogero (7)		5,483,581	(8)		27.1	%		5,483,581			%
Giacomo Dall’Aglio		180,145				*		180,145			*
Matteo Lodrini		15,000				*		15,000			*
Emilio Hirsch (5)		5,674,440	(6)		28.1	%		5,674,440		—
All directors and executive officers (7 individuals) as a group		14,698,155			71.7	%		14,698,155			%
Geode Capital Management LP		2,170,776	(10)		10.7	%		2,170,776			%
AQR Capital Management LLC		1,125,000	(11)		5.6	%		1,125,000			%
Lighthouse Investment Partners, LLC		1,043,416	(12)		5.2	%		1,043,416			%
Nomura Global Financial Products, Inc.		1,623,000	(13)		8.0	%		1,623,000			%

* Less than 1%.

(1) Unless otherwise indicated, the business address of GigAcquisitions, LLC, GigFounders, LLC and each of Dr. Avi S. Katz, Neil Miotto and John Mikulsky is 1731 Embarcadero Road, Suite 200, Palo Alto, CA 94303. The address for Esse Effe S.p.A. and Effe Pi S.s. is 41, Via Valeggio, Torino, Italy, 10129, Maya Investments Limited is Corso De Porta Nuova 16, Milan, Italy, 20121 and the other individuals is c/o Kaleyra, S.p.A., Via Marco D’Aviano, 2, Milano MI, Italy, 20131.

(2) Represents shares held by the Sponsor. The shares held by the sponsor are beneficially owned by Dr. Avi S. Katz, the Chairman of the Board of Kaleyra, and the manager of Sponsor, who has sole voting and dispositive power over the shares held by our sponsor.

(3) Includes 271,776 shares of Kaleyra common stock underlying warrants that are exercisable within 60 days.

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(4) Esse Effe S.p.A is affiliated with Effe Pi S.s. and Emilio Hirsch, and the shares are beneficially owned by Effe Pi S.s. and Mr. Hirsch, who is one of the directors of Kaleyra.

(5) A former director of Kaleyra, Mr. Simone Fubini, resigned on February 10, 2020, and passed away on March 27, 2020. Prior to his passing, he owned 93,104 shares of Kaleyra common stock. Following his passing, these shares were transferred pursuant to the will of Mr. Fubini to Effe Pi S.s. Effe Pi S.s. is affiliated with Mr. Hirsch, and the shares are beneficially owned by Mr. Hirsch.

(6) Does not include Esse Effe S.p.A’s contingent right to receive up to 950,211 Earnout Shares in accordance with terms of the Stock Purchase Agreement.

(7) Maya Investments Limited 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.

(8) Does not include Maya Investments Limited’s contingent right to receive up to 667,643 Earnout Shares in accordance with terms of the Stock Purchase Agreement.

(9) Represents shares held by one of the members of GigAcquisitions, LLC which it received from GigAcquisitions, LLC. The shares held by GigFounders, LLC are beneficially owned by Dr. Avi S. Katz, and the Managing Member of GigFounders, who has sole voting and dispositive power over the shares held by GigFounders, LLC.

(10) Based on the Schedule 13G filed by Geode Capital Management, LP as filed with the SEC on February 13, 2020. Includes 2,170,776 shares underlying warrants that are exercisable within 60 days. The business address reported is 100 Summer Street 12th Floor, Boston, MA 02110.

(11) Based on the Schedule 13G filed by AQR Capital Management LLC as filed with the SEC on February 14, 2020. Includes 1,125,000 shares underlying warrants that are exercisable within 60 days. The business address reported is Two Greenwich Plaza, Greenwich, CT 06830.

(12) Based on the Schedule 13G filed by Lighthouse Investment Partners, LLC as filed with the SEC on February 6, 2020. Includes 1,043,416 shares underlying warrants that are exercisable within 60 days. The business address reported is 801 PGA Boulevard, Suite 500, Palm Beach Gardens, FL 33410.

(13) Based on the Schedule 13G filed by Nomura Holdings Inc., for NGFP, as filed with the SEC on February 14, 2020. The business address reported is 1-9-1 Nihonbashi, Chuo-ku, Tokyo 103-8645, Japan. NGFP is an affiliate of Nomura Securities International, Inc., one of the underwriters in this offering.

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DESCRIPTION OF SECURITIES

General

Pursuant to our second amended and restated charter, we are authorized to issue 100,000,000 shares of common stock, par value $0.0001 per share and 1,000,000 shares of preferred stock, par value $0.0001 per share. As the date of this prospectus, 20,221,935 shares of common stock are outstanding. No shares of preferred stock are currently outstanding.

Common Stock

Common stockholders of record are entitled to one vote for each share held on all matters to be voted on by stockholders. Unless specified in our second amended and restated charter, or as required by applicable provisions of the Delaware General Corporation Law (“DGCL”) or applicable stock exchange rules, the affirmative vote of a majority of our shares of common stock that are voted is required to approve any such matter voted on by our stockholders. Our stockholders are entitled to receive ratable dividends when, as and if declared by the Board of Directors out of funds legally available therefor.

Our Board of Directors is divided into three classes, each of which will generally serve for a term of three years with only one class of directors being elected in each year. There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares eligible to vote for the election of directors can elect all of the directors.

In accordance with NYSE American corporate governance requirements, we are not required to hold an annual meeting until one year after our first fiscal year end following our listing on the NYSE American. Under Section 211(b) of the DGCL, we are, however, required to hold an annual meeting of stockholders for the purposes of electing directors in accordance with the second amended and restated charter unless such election is made by written consent in lieu of such a meeting.

In the event of a liquidation, dissolution or winding up of Kaleyra, our stockholders are entitled to share ratably in all assets remaining available for distribution to them after payment of liabilities and after provision is made for each class of stock, if any, having preference over the common stock. Our stockholders have no preemptive or other subscription rights. There are no sinking fund provisions applicable to the common stock.

Our stockholders have no conversion, preemptive or other subscription rights.

Preferred Stock

There are no shares of preferred stock outstanding. Our second amended and restated certificate of incorporation authorizes the issuance of 1,000,000 shares of preferred stock with such designation, rights and preferences as may be determined from time to time by our Board of Directors. Our Board of Directors is empowered, without stockholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of common stock. In addition, the preferred stock could be utilized as a method of discouraging, delaying or preventing a change in control of us. Although Kaleyra does not currently intend to issue any shares of preferred stock, Kaleyra cannot assure you that Kaleyra will not do so in the future.

Warrants

There are 11,154,938 warrants outstanding, of which 10,781,247 are Public Warrants and 373,691 are Placement Warrants. Each whole Public Warrant and Placement Warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment as discussed below. Only whole warrants

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are exercisable. The Public Warrants will expire at 5:00 p.m., New York City time, on November 25, 2024, which is the fifth anniversary of our completion of the Business Combination, or earlier upon redemption. No Public Warrants will be exercisable for cash unless Kaleyra has an effective and current registration statement covering the warrant shares issuable upon exercise of such warrants and a current prospectus relating to such warrant shares.

Notwithstanding the foregoing, if a registration statement covering the issuance of the warrant shares issuable upon exercise of the Public Warrants is not effective within 90 days from the closing of the Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when Kaleyra shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their warrants on a cashless basis.

The Placement Warrants are identical to the Public Warrants except that such Placement Warrants will be exercisable for cash (even if a registration statement covering the issuance of the warrant shares issuable upon exercise of such warrants is not effective) or on a cashless basis, at the holder’s option, and will not be redeemable by us, in each case so long as they are still held by the Founders or their affiliates (and as a result, do not expire upon redemption). In addition, any Placement Warrants held by Cowen, Mr. Silverberg and Mr. Bernstein shall not be exercisable more than five years from the effective date of Kaleyra’s IPO, or December 7, 2022.

Once the Public Warrants and Placement Warrants become exercisable, Kaleyra may redeem the outstanding warrants (excluding the Placement Warrants so long as they are still held by the Founders or their affiliates):

• in whole and not in part;

• at a price of $0.01 per warrant;

• upon a minimum of 30 days’ prior written notice of redemption, which Kaleyra refers to as the 30-day redemption period; and

• if, and only if, the last reported sale price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30 trading day period ending on the third trading day prior to the date on which Kaleyra sends the notice of redemption to the warrant holders.

Kaleyra will not redeem the Public Warrants and the Placement Warrants unless a registration statement under the Securities Act covering the issuance of the warrant shares underlying such warrants to be so redeemed is then effective and a current prospectus relating to those warrant shares is available throughout the 30-day redemption period, except if the warrants may be exercised on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the Public Warrants and the Placement Warrants become redeemable by Kaleyra, it may exercise our redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If the foregoing conditions are satisfied and Kaleyra issues a notice of redemption, each warrant holder may exercise his, her or its Public Warrants or Placement Warrants prior to the scheduled redemption date. However, the price of the shares of common stock may fall below the $18.00 trigger price (as adjusted) as well as the $11.50 exercise price (as adjusted) after the redemption notice is issued.

The redemption criteria for our Public Warrants and Placement Warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.

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If Kaleyra calls the Public Warrants and the Placement Warrants for redemption as described above, our management will have the option to require all holders that wish to exercise such warrants to do so on a “cashless basis.” In making such determination, our management will consider, among other factors, our cash position, the number of such warrants that are outstanding and the dilutive effect on our stockholders of issuing the maximum number of warrant shares issuable upon exercise of such outstanding warrants. In such event, the holder would pay the exercise price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product of the number of warrant shares underlying such warrants to be so exercised, and the difference between the exercise price of the warrants and the fair market value by (y) the fair market value.

A holder of a Public Warrant or Placement Warrant may notify Kaleyra in writing in the event it elects to be subject to a requirement that such holder will not have the right to exercise such warrant, to the extent that after giving effect to such exercise, such person (together with such person’s affiliates), to the warrant agent’s actual knowledge, would beneficially own in excess of 4.9% or 9.8% (or such other amount as a holder may specify) of the shares of common stock outstanding immediately after giving effect to such exercise.

If the number of outstanding shares of common stock is increased by a stock dividend payable in shares of common stock, or by a split-up of shares of common stock or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of common stock issuable on exercise of each Public Warrant and Placement Warrant will be increased in proportion to such increase in the outstanding shares of common stock. A rights offering to holders of common stock entitling holders to purchase shares of common stock at a price less than the fair market value will be deemed a stock dividend of a number of shares of common stock equal to the product of (i) the number of shares of common stock actually sold in such rights offering (or issuable under any other equity securities sold in such rights offering that are convertible into or exercisable for common stock) multiplied by (ii) one (1) minus the quotient of (x) the price per share of common stock paid in such rights offering divided by (y) the fair market value. For these purposes (i) if the rights offering is for securities convertible into or exercisable for common stock, in determining the price payable for common stock, there will be taken into account any consideration received for such rights, as well as any additional amount payable upon exercise or conversion and (ii) fair market value means the volume weighted average price of common stock as reported during the 10 trading day period ending on the trading day prior to the first date on which the shares of common stock trade on the applicable exchange or in the applicable market, regular way, without the right to receive such rights.

In addition, if Kaleyra, at any time while the Public Warrants and Placement Warrants are outstanding and unexpired, pays a dividend or make a distribution in cash, securities or other assets to the holders of common stock on account of such shares of common stock (or other shares of our capital stock into which such warrants are convertible), other than (a) as described above or (b) certain ordinary cash dividends, then the warrant exercise price will be decreased, effective immediately after the effective date of such event, by the amount of cash and/or the fair market value of any securities or other assets paid on each share of common stock in respect of such event.

If the number of outstanding shares of common stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of common stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of common stock issuable on exercise of each Public Warrant and Placement Warrant will be decreased in proportion to such decrease in outstanding shares of common stock.

Whenever the number of shares of common stock purchasable upon the exercise of the Public Warrants and Placement Warrants is adjusted, as described above, the warrant exercise price will be adjusted by multiplying the warrant exercise price immediately prior to such adjustment by a fraction (x) the numerator of which will be the number of shares of common stock purchasable upon the exercise of such warrants immediately prior to such adjustment, and (y) the denominator of which will be the number of shares of common stock so purchasable

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immediately thereafter. In case of any reclassification or reorganization of the outstanding shares of common stock (other than those described above or that solely affects the par value of such shares of common stock), or in the case of any merger or consolidation of us with or into another corporation (other than a consolidation or merger in which Kaleyra is the continuing corporation and that does not result in any reclassification or reorganization of our outstanding shares of common stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of us as an entirety or substantially as an entirety in connection with which Kaleyra is dissolved, the holders of the Public Warrants and the Placement Warrants will thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in such warrants and in lieu of the shares of common stock immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the holder of such warrants would have received if such holder had exercised their warrants immediately prior to such event. However, if such holders were entitled to exercise a right of election as to the kind or amount of securities, cash or other assets receivable upon such consolidation or merger, then the kind and amount of securities, cash or other assets for which each warrant will become exercisable will be deemed to be the weighted average of the kind and amount received per share by such holders in such consolidation or merger that affirmatively make such election, and if a tender, exchange or redemption offer has been made to and accepted by such holders under circumstances in which, upon completion of such tender or exchange offer, the maker thereof, together with members of any group (within the meaning of Rule 13d-5(b)(1) under the Exchange Act) of which such maker is a part, and together with any affiliate or associate of such maker (within the meaning of Rule 12b-2 under the Exchange Act) and any members of any such group of which any such affiliate or associate is a part, own beneficially (within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the outstanding shares of common stock, the holder of a warrant will be entitled to receive the highest amount of cash, securities or other property to which such holder would actually have been entitled as a stockholder if such warrant holder had exercised the warrant prior to the expiration of such tender or exchange offer, accepted such offer and all of the common stock held by such holder had been purchased pursuant to such tender or exchange offer, subject to adjustments (from and after the consummation of such tender or exchange offer) as nearly equivalent as possible to the adjustments provided for in the warrant agreement. Additionally, if less than 70% of the consideration receivable by the holders of common stock in such a transaction is payable in the form of common stock in the successor entity that is listed for trading on a national securities exchange or is quoted in an established over-the-counter market, or is to be so listed for trading or quoted immediately following such event, and if the registered holder of the warrant properly exercises the warrant within 30 days following public disclosure of such transaction, the warrant exercise price will be reduced as specified in the warrant agreement based on the per share consideration minus Black-Scholes Warrant Value (as defined in the warrant agreement) of the warrant in order to determine and realize the option value component of the warrant. This formula is to compensate the warrant holder for the loss of the option value portion of the warrant due to the requirement that the warrant holder exercise the warrant within 30 days of the event. The Black-Scholes model is an accepted pricing model for estimating fair market value where no quoted market price for an instrument is available.

The Public Warrants and Placement Warrants were issued in registered form under a warrant agreement between Continental Stock Transfer & Trust Company, as warrant agent, and us. The warrant agreement provides that the terms of the Public Warrants and Placement Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval by the holders of at least 65% of the then outstanding Public Warrants to make any change that adversely affects the interests of the registered holders of Public Warrants.

Dividends

We have not paid any cash dividends on our common stock to date. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends will be within the discretion of our Board of Directors at such time. In

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addition, our Board of Directors is not currently contemplating and does not anticipate declaring any stock dividends in the foreseeable future. Further, if we incur any indebtedness, our ability to declare dividends may be limited by restrictive covenants we may agree to in connection therewith.

Our Transfer Agent and Warrant Agent

The transfer agent for our common stock and warrant agent for our warrants is Continental Stock Transfer & Trust Company. We have agreed to indemnify Continental Stock Transfer & Trust Company in its roles as transfer agent and warrant agent, its agents and each of its stockholders, directors, officers and employees against all liabilities, including judgments, costs and reasonable counsel fees that may arise out of acts performed or omitted for its activities in that capacity, except for any liability due to any gross negligence, willful misconduct or bad faith of the indemnified person or entity.

Certain Anti-Takeover Provisions of Delaware Law, Kaleyra’s Charter and Bylaws

Our second amended and restate charter provides that the Board of Directors is classified into three classes of directors of approximately equal size. As a result, in most circumstances, a person can gain control of the Board of Directors only by successfully engaging in a proxy contest at three or more annual meetings. Furthermore, because the Board of Directors will be classified, directors may be removed only with cause by a majority of our outstanding shares.

In addition, our second amended and restated charter does not provide for cumulative voting in the election of directors. Our authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.

Special Meeting of Stockholders

Our second amended and restated charter provides that special meetings of our stockholders may be called only by the Chairman of the Board, our Chief Executive Officer or the Board of Directors pursuant to a resolution adopted by a majority of the Board of Directors. Stockholders of Kaleyra are not eligible and have no right to call a special meeting.

Advance Notice Requirements for Stockholder Proposals and Director Nominations

Our Bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely, a stockholder’s notice will need to be received by Kaleyra’s Secretary at our principal executive offices not later than the close of business on the 90th day nor earlier than the open of business on the 120th day prior to the anniversary date of the immediately preceding annual meeting of stockholders. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking inclusion in our annual proxy statement must comply with the notice periods contained in the annual proxy statement. Our second amended and restated charter specifies certain requirements as to the form and content of a stockholders’ meeting. These provisions may preclude our stockholders from bringing matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders. Our Bylaws also specify certain requirements as to the form and content of a stockholder’s notice for an annual meeting. Specifically, a stockholder’s notice must include: (i) a brief description of the business desired to be brought before the annual meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and in the event such business includes a proposal to amend the bylaws, the language of the proposed amendment)

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and the reasons for conducting such business at the annual meeting, (ii) the name and record address of such stockholder and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (iii) the class or series and number of shares of our capital stock that are owned beneficially and of record by such stockholder and by the beneficial owner, if any, on whose behalf the proposal is made, (iv) a description of all arrangements or understandings between such stockholder and the beneficial owner, if any, on whose behalf the proposal is made and any other person or persons (including their names) in connection with the proposal of such business by such stockholder, (v) any material interest of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made in such business and (vi) a representation that such stockholder (or a qualified representative of such stockholder) intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. These notice requirements will be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified Kaleyra of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Exchange Act, and such stockholder has complied with the requirements of such rule for inclusion of such proposal in a proxy statement prepared by us to solicit proxies for such annual meeting. The foregoing provisions may limit our stockholders’ ability to bring matters before our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.

Securities Eligible for Future Sale

Kaleyra has 20,221,935 shares of common stock outstanding as of the date hereof. Of these shares, the 3,634,363 public shares are freely tradable without restriction or further registration under the Securities Act, except for any shares purchased by one of our affiliates within the meaning of Rule 144 under the Securities Act (“Rule 144”). All of the remaining outstanding shares, and any shares of common stock issued to the sellers in connection with the Business Combination, are restricted securities under Rule 144, in that they were issued in private transactions not involving a public offering.

Rule 144

Pursuant to Rule 144, a person who has beneficially owned restricted shares of our common stock or warrants for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) Kaleyra is subject to the Exchange Act periodic reporting requirements for at least three months before the sale and have filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as Kaleyra was required to file reports) preceding the sale.

Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

• 1% of the total number of shares of common stock then outstanding; or

• the average weekly reported trading volume of the common stock during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

• the issuer of the securities that was formerly a shell company has ceased to be a shell company;

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• the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;

• the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials), other than Form 8-K reports; and

• at least one year has elapsed from the time that the issuer filed current Form 10 type information with the SEC reflecting its status as an entity that is not a shell company.

As a result, our Founders will be able to sell their Founder Shares, shares issued upon the conversion of rights that were a constituent part of the private placement units and Placement Warrants and the sellers of Kaleyra S.p.A. will be able to sell the common stock received as consideration in the Business Combination, as applicable, pursuant to Rule 144 without registration on November 25, 2020 (one year after Kaleyra completed the Business Combination).

Lock-up Agreements

In connection with this offering, our executive officers, directors and certain of our other existing stockholders have each entered into a lock-up agreement with the underwriters of this offering that restricts the sale of shares of our common stock by those parties for a period of 90 days after the date of this prospectus. Oppenheimer & Co. Inc., on behalf of the underwriters, may, in its sole discretion, choose to release any or all of the shares of our common stock subject to these lock-up agreements at any time prior to the expiration of the lock-up period without notice. For more information, see “Underwriting.”

In addition, prior to the Business Combination, the Founders and Kaleyra’s management team agreed not to transfer their Founder Shares and certain of their other securities until November 25, 2020 (one year after the completion of the Business Combination). See “Certain Relationships and Related Party Transactions.”

Registration Rights

Pursuant to an amended and restated registration agreement, we have granted certain registration rights in respect of approximately 30,443,416 shares of our common stock to certain of our stockholders and to certain holders of our convertible notes and warrants. The holders of these securities (which include our Founders, directors and executive officers) are entitled to certain demand and piggy back registration rights pursuant to this agreement. We have filed a registration statement registering the resale of these shares by these security holders, which was declared effective on May 8, 2020, and, as a result, these shares are freely tradeable under the Securities Act, but may be subject to restrictions as described in the paragraph above under “—Lock-up Agreements.”

Section 203 of the DGCL

Kaleyra is subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. This statute prevents certain Delaware corporations, under certain circumstances, from engaging in a “business combination” with:

• a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”);

• an affiliate of an interested stockholder; or

• an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.

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A “business combination” includes a merger or sale of more than 10% of our assets. However, the above provisions of Section 203 do not apply if:

• our Board of Directors approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction;

• after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock; or

• on or subsequent to the date of the transaction, the business combination is approved by our Board of Directors and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Listing of Securities

Kaleyra’s common stock and warrants are listed on the NYSE American under the symbols “KLR” and “KLR WS”, respectively.

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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following is a discussion of the material U.S. federal income tax considerations generally applicable to the acquisition, ownership and disposition of our common stock. This discussion is limited to certain U.S. federal income tax considerations to beneficial owners of our common stock who hold the common stock as a capital asset within the meaning of Section 1221 of the Code. This discussion does not describe all of the tax consequences that may be relevant to you in light of your particular circumstances, including the alternative minimum tax, the Medicare contribution tax on certain investment income and the different consequences that may apply if you are subject to special rules that apply to certain types of investors, such as:

• financial institutions or financial services entities;

• broker-dealers;

• insurance companies;

• governments or agencies or instrumentalities thereof;

• regulated investment companies;

• real estate investment trusts;

• expatriates or former long-term residents of the United States;

• persons that actually or constructively own five percent or more of our voting shares;

• persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;

• dealers or traders subject to a mark to market method of accounting with respect to the common stock;

• persons holding the common stock as part of a “straddle,” hedge, constructive sale, conversion or other integrated or similar transaction;

• U.S. holders (as defined below) whose functional currency is not the U.S. dollar;

• partnerships or other pass through entities for U.S. federal income tax purposes; and

• tax exempt entities.

If you are a partnership for U.S. federal income tax purposes, the U.S. federal income tax treatment of your partners will generally depend on the status of the partners and your activities.

This discussion is based on the Code and administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations as of the date hereof, changes to any of which subsequent to the date of this prospectus may affect the tax consequences described herein. This discussion does not address any aspect of state, local or non-U.S. taxation, or any U.S. tax law other than the U.S. federal income tax (such as gift, estate or Medicare contribution taxes) or except as discussed below, any tax reporting obligations of a holder of our common stock. This discussion also assumes that any distribution made (or deemed made) on our common stock and any consideration received (or deemed received) by a holder from the sale or other disposition of our common stock will be in U.S. dollars.

We have not sought, and will not seek, a ruling from the Internal Revenue Service (the “IRS”) as to any U.S. federal income tax consequence described herein. The IRS may disagree with the discussion herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.

THIS DISCUSSION IS ONLY A SUMMARY OF THE U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON

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STOCK. EACH PROSPECTIVE INVESTOR IN OUR COMMON STOCK IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX TREATIES.

U.S. Holders

This section applies to you if you are a “U.S. holder.” A U.S. holder is a beneficial owner of our common stock who or that is, for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized in or under the laws of the United States, any state thereof or the District of Columbia;

• an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or

• a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) it has in effect a valid election to be treated as a U.S. person.

Taxation of Distributions. If we pay cash distributions to U.S. holders of shares of our common stock, such distributions generally will be treated as a dividend for U.S. federal income tax purposes to the extent the distribution is paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of current and accumulated earnings and profits will constitute a return of capital that will be applied against and reduce (but not below zero) the U.S. holder’s adjusted tax basis in our common stock. Any remaining excess will be treated as gain realized on the sale or other disposition of the common stock and will be treated as described under “U.S. holders—Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Our Common Stock” below.

Dividends we pay to a U.S. holder that is a taxable corporation generally will qualify for the dividends received deduction if the requisite holding period is satisfied. With certain exceptions (including, but not limited to, dividends treated as investment income for purposes of investment interest deduction limitations), and provided certain holding period requirements are met, dividends we pay to a non-corporate U.S. holder generally will constitute “qualified dividends” that will be subject to tax at the maximum tax rate accorded to long-term capital gains.

Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Our Common Stock. Upon a sale or other taxable disposition of our common stock which, in general, would include a redemption of common stock, a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. holder’s adjusted tax basis in such common stock. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. holder’s holding period for the common stock so disposed of exceeds one year. Long-term capital gains recognized by non-corporate U.S. holders will be eligible to be taxed at reduced rates. The deductibility of capital losses is subject to various limitations that are not described herein because a discussion of such limitations depends on each U.S. holder’s particular facts and circumstances.

Generally, the amount of gain or loss recognized by a U.S. holder is an amount equal to the difference between (i) the sum of the amount of cash and the fair market value of any property received in such disposition and (ii) the U.S. holder’s adjusted tax basis in its common stock so disposed of. A U.S. holder’s adjusted tax basis in its common stock generally will equal the U.S. holder’s acquisition cost less, in the case of a share of common stock, any prior distributions treated as a return of capital.

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Information Reporting and Backup Withholding. In general, information reporting requirements may apply to dividends paid to a U.S. holder and to the proceeds of the sale or other disposition of our common stock, unless the U.S. holder is an exempt recipient. Backup withholding may apply to such payments if the U.S. holder fails to provide a taxpayer identification number, a certification of exempt status or has been notified by the IRS that it is subject to backup withholding (and such notification has not been withdrawn).

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a U.S. holder’s U.S. federal income tax liability provided the required information is timely furnished to the IRS.

Non-U.S. Holders

This section applies to you if you are a “Non-U.S. holder.” A Non-U.S. holder is a beneficial owner of our common stock who or that is, for U.S. federal income tax purposes:

• a nonresident alien individual, other than certain former citizens and residents of the United States subject to U.S. tax as expatriates;

• a foreign corporation; or

• an estate or trust that is not a U.S. holder;

but does not include an individual who is present in the United States for 183 days or more in the taxable year of disposition. If you are such an individual, you should consult your tax advisor regarding the U.S. federal income tax consequences of the sale or other disposition of a security.

Taxation of Distributions. In general, any distributions we make to a Non-U.S. holder of shares of our common stock, to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles), will constitute dividends for U.S. federal income tax purposes and, provided such dividends are not effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States, we will be required to withhold tax from the gross amount of the dividend at a rate of 30%, unless such Non-U.S. holder is eligible for a reduced rate of withholding tax under an applicable income tax treaty and provides proper certification of its eligibility for such reduced rate (usually on an IRS Form W-8BEN or W-8BEN-E). Any distribution not constituting a dividend will be treated first as reducing (but not below zero) the Non-U.S. holder’s adjusted tax basis in its shares of our common stock and, to the extent such distribution exceeds the Non-U.S. holder’s adjusted tax basis, as gain realized from the sale or other disposition of the common stock, which will be treated as described under “Non-U.S. holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Our Common Stock” below. In addition, if we determine that we are classified as a “United States real property holding corporation” (see “Non-U.S. holders—Gain on Sale, Taxable Exchange or Other Taxable Disposition of Our Common Stock” below), we will withhold 15% of any distribution that exceeds our current and accumulated earnings and profits.

The withholding tax does not apply to dividends paid to a Non-U.S. holder who provides a Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States. Instead, the effectively connected dividends will be subject to regular U.S. federal income tax as if the Non-U.S. holder were a U.S. resident, subject to an applicable income tax treaty providing otherwise. A Non-U.S. corporation receiving effectively connected dividends may also be subject to an additional “branch profits tax” imposed at a rate of 30% (or a lower treaty rate).

Gain on Sale, Taxable Exchange or Other Taxable Disposition of Our Common Stock. A Non-U.S. holder generally will not be subject to U.S. federal income or withholding tax in respect of gain recognized on a sale, taxable exchange or other taxable disposition of our common stock unless:

• the gain is effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, under certain income tax treaties, is attributable to a United States permanent establishment or fixed base maintained by the Non-U.S. holder); or

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• we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the Non-U.S. holder held our common stock, and, in the case where shares of our common stock are regularly traded on an established common stock market, the Non-U.S. holder has owned, directly or constructively, more than 5% of our common stock at any time within the shorter of the five-year period preceding the disposition or such Non-U.S. holder’s holding period for the shares of our common stock. There can be no assurance that our common stock will be treated as regularly traded on an established securities market for this purpose.

Unless an applicable treaty provides otherwise, gain described in the first bullet point above will be subject to tax at generally applicable U.S. federal income tax rates as if the Non-U.S. holder were a U.S. resident. Any gains described in the first bullet point above of a Non-U.S. holder that is a foreign corporation may also be subject to an additional “branch profits tax” at a 30% rate (or lower treaty rate).

If the second bullet point above applies to a Non-U.S. holder, gain recognized by such holder on the sale, exchange or other disposition of our common stock will be subject to tax at generally applicable U.S. federal income tax rates. In addition, a buyer of our common stock from such holder may be required to withhold U.S. federal income tax at a rate of 15% of the amount realized upon such disposition. We will be classified as a U.S. real property holding corporation if the fair market value of our “U.S. real property interests” equals or exceeds 50% of the sum of the fair market value of our worldwide real property interests plus our other assets used or held for use in a trade or business, as determined for U.S. federal income tax purposes.

Information Reporting and Backup Withholding. Information returns will be filed with the IRS in connection with payments of dividends and the proceeds from a sale or other disposition of our common stock. A Non-U.S. holder may have to comply with certification procedures to establish that it is not a United States person in order to avoid information reporting and backup withholding requirements. The certification procedures required to claim a reduced rate of withholding under a treaty will satisfy the certification requirements necessary to avoid the backup withholding as well. The amount of any backup withholding from a payment to a Non-U.S. holder will be allowed as a credit against such holder’s U.S. federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

FATCA Withholding Taxes. Provisions commonly referred to as “FATCA” impose withholding of 30% on payments of dividends (including constructive dividends) on our common stock, and, beginning January 1, 2019, sales or other disposition proceeds from our common stock to “foreign financial institutions” (which is broadly defined for this purpose and in general includes investment vehicles) and certain other Non-U.S. entities unless various U.S. information reporting and due diligence requirements (generally relating to ownership by U.S. persons of interests in or accounts with those entities) have been satisfied, or an exemption applies (typically certified as to by the delivery of a properly completed IRS Form W-8BEN-E). Pursuant to proposed Treasury Regulations, the U.S. Treasury Department has indicated its intent to eliminate the requirements under FATCA of withholding on gross proceeds from the sale, exchange, maturity or other disposition of relevant financial instruments. The U.S. Treasury Department has indicated that taxpayers may rely on these proposed Treasury Regulations pending their finalization. If FATCA withholding is imposed, a beneficial owner of the payment that is not a foreign financial institution (or that is a foreign financial institution entitled to a reduced rate of withholding tax with respect to such payment under an income tax treaty) generally may be entitled to a refund or credit of any amounts withheld by filing a U.S. federal income tax return and providing certain other information to the IRS (which may entail significant administrative burden). Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States governing FATCA may be subject to different rules. Prospective investors should consult their tax advisers regarding the effects of FATCA on their investment in our common stock.

We will not pay any additional amounts to holders in respect of any amounts withheld, including pursuant to FATCA. Prospective investors are encouraged to consult with their own tax advisors regarding the possible implications of this legislation on their investment in our common stock.

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UNDERWRITING

We entered into an underwriting agreement with the underwriters named below on                 , 2020. Oppenheimer & Co. Inc. and Nomura Securities International, Inc. are acting as the representatives of the underwriters.

The underwriting agreement provides for the purchase of a specific number of shares of common stock by each of the underwriters. The underwriters’ obligations are several, which means that each underwriter is required to purchase a specified number of shares of common stock, but is not responsible for the commitment of any other underwriter to purchase shares of common stock. Subject to the terms and conditions of the underwriting agreement, each underwriter has severally agreed to purchase the number of shares of common stock set forth opposite its name below:

Underwriter	Number of Shares of Common Stock
Oppenheimer & Co. Inc.
Nomura Securities International, Inc.
Northland Securities, Inc.
National Securities Corporation
Total

The underwriters have agreed to purchase all of the shares of common stock offered by this prospectus (other than those covered by the over-allotment option described below), if any are purchased.

The shares of common stock offered hereby are expected to be ready for delivery on or about                 , 2020, against payment in immediately available funds.

The underwriters are offering the shares of common stock subject to various conditions and may reject all or part of any order. The representatives of the underwriters have advised us that the underwriters propose initially to offer the shares of common stock to the public at the public offering price set forth on the cover page of this prospectus and to dealers at a price less a concession not in excess of $             per share of common stock to brokers and dealers. After the shares of common stock are released for sale to the public, the representatives may change the offering price, the concession, and other selling terms at various times.

We have granted the underwriters an over-allotment option. This option, which is exercisable for up to 30 days after the date of this prospectus, permits the underwriters to purchase a maximum of                 additional shares of common stock from us to cover over-allotments, if any. If the underwriters exercise all or part of this option, they will purchase shares of common stock covered by the option at the public offering price that appears on the cover page of this prospectus, less the underwriting discounts and commissions. If this option is exercised in full, the total price to public will be $            , the total proceeds to us, before expenses, will be $            million.

The shares of common stock are listed on the NYSE American under the symbol “KLR.”

The following table provides information regarding the amount of the discounts and commissions to be paid to the underwriters by us, before expenses:

	Per Share of Common Stock	Total Without Exercise of Over- Allotment Option	Total With Full Exercise of Over- Allotment Option
Public offering price	$	$	$
Underwriting discounts and commissions to be paid by us
Proceeds, before expenses, to us	$	$	$

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We estimate that our total expenses of the offering, excluding the estimated underwriting discounts and commissions, will be approximately $             million, which includes the fees and expenses for which we have agreed to reimburse the representatives, provided that any such fees and expenses in excess of an aggregate of $150,000 will be subject to our prior written approval.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.

Certain of the underwriters may offer and sell the shares through one or more of their respective affiliates or selling agents.

We and the holders of substantially all of our common stock outstanding on the date of this prospectus, including each of our executive officers and directors, have agreed to a 90-day “lock-up” with respect to our shares of common stock and other of our securities that they beneficially own, including securities that are convertible into shares of common stock and securities that are exchangeable or exercisable for shares of common stock. This means that, subject to certain exceptions, for a period of 90 days following the date of this prospectus, we and such persons may not offer, sell, pledge or otherwise dispose of these securities without the prior written consent of Oppenheimer & Co. Inc. The restrictions described above do not apply to the sales of shares of common stock by us to the underwriters in this offering.

Rules of the SEC may limit the ability of the underwriters to bid for or purchase shares of common stock before the distribution is completed. However, the underwriters may engage in the following activities in accordance with the rules:

• Stabilizing transactions—The representatives may make bids or purchases for the purpose of pegging, fixing or maintaining the price of the common stock, so long as stabilizing bids do not exceed a specified maximum.

• Over-allotments and syndicate covering transactions—The underwriters may sell more shares of common stock in connection with this offering than the number of shares of common stock that they have committed to purchase. This over-allotment creates a short position for the underwriters. This short sales position may involve either “covered” short sales or “naked” short sales. Covered short sales are short sales made in an amount not greater than the underwriters’ over-allotment option to purchase additional shares of common stock in this offering described above. The underwriters may close out any covered short position either by exercising its over-allotment option or by purchasing shares of common stock in the open market. To determine how they will close the covered short position, the underwriters will consider, among other things, the price per share of common stock available for purchase in the open market, as compared to the price at which they may purchase shares of common stock through the over-allotment option. Naked short sales are short sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares of common stock in the open market. A naked short position is more likely to be created if the underwriters are concerned that, in the open market after pricing, there may be downward pressure on the price per share of common stock that could adversely affect investors who purchase shares of common stock in this offering.

• Penalty bids—If the representatives purchase shares of common stock in the open market in a stabilizing transaction or syndicate covering transaction, it may reclaim a selling concession from the underwriters and selling group members who sold those shares of common stock as part of this offering.

• Passive market making—Market makers in the common stock who are underwriters or prospective underwriters may make bids for or purchases of shares of common stock, subject to limitations, until the time, if ever, at which a stabilizing bid is made.

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• Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales or to stabilize the market price of our common stock may have the effect of raising or maintaining the market price of our common stock or preventing or mitigating a decline in the market price of our common stock. As a result, the price of our common stock may be higher than the price that might otherwise exist in the open market. The imposition of a penalty bid might also have an effect on the price of the common stock if it discourages resales of our shares of common stock.

Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of our common stock. These transactions may occur on the NYSE American LLC or otherwise. If such transactions are commenced, they may be discontinued without notice at any time.

Other Relationships

Certain of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business, including entering into derivative transactions, with us or our affiliates for which they have received and may continue to receive customary fees and commissions.

On October 31, 2019, we entered into the Confirmation with NGFP, an affiliate of Nomura Securities International, Inc., one of the underwriters in this offering, for an OTC Equity Prepaid Forward Transaction (the “Forward Transaction”). Pursuant to the terms of the Confirmation, as amended on June 4, 2020, NGFP agreed to waive any redemption right that would have required the redemption of the Nomura Shares at the closing of the Business Combination at a price of $10.5019 per share. Rather, NGFP, at its sole discretion, may either sell such shares in one or more transactions, publicly or privately, at a market price of at least $10.50 per share, or hold such shares through November 25, 2021, at which time we will be required to purchase from NGFP, and NGFP will be required to sell to the us, any such shares not otherwise previously sold by NGFP. Confirmation provided that Kaleyra transfer an amount of cash equal to (a) the aggregate number of shares held by NGFP multiplied by (b) $10.5019. As a result, these amounts transferred to NGFP will not be available to us unless and until NGFP sell such shares in the market. Furthermore, if NGFP sells shares to us, NGFP will keep that portion of the cash transferred to it following the closing of the Business Combination attributable to such shares sold to us, plus an accrual amount equal to the per share redemption amount multiplied by 3.50% per annum, on November 25, 2021. If NGFP sells shares to us, we will have to expend funds to purchase shares from NGFP, which will reduce the cash available to us for other purposes.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

On March 6, 2020, the Company issued to Northland Securities, Inc. (“Northland”), one of the underwriters in this offering, a promissory note for the principal amount of $400,000 as a partial settlement of the amounts owned to Northland for financial advisory services provided by Northland to Kaleyra S.p.A. in connection with the previously consummated Business Combination. Kaleyra expects to repay this promissory note with the net proceeds from this offering.

Electronic Delivery of Prospectus

A prospectus in electronic format may be delivered to potential investors by one or more of the underwriters participating in this offering. The prospectus in electronic format will be identical to the paper version of such

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prospectus. Other than the prospectus in electronic format, the information on any underwriter’s website and any information contained in any other website maintained by an underwriter is not part of this prospectus or the registration statement of which this prospectus forms a part.

Notice to Non-U.S. Investors

European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a Relevant Member State), an offer to the public of our common shares may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of our common shares may be made at any time under the following exemptions under the Prospectus Directive:

• To any legal entity which is a qualified investor as defined in the Prospectus Directive;

• To fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), subject to obtaining the prior consent of the representatives for any such offer; or

• In any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer or shares of our common stock shall result in a requirement for the publication by us or any placement agent of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to public” in relation to our common shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and our common shares to be offered so as to enable an investor to decide to purchase our common shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (as amended), including by Directive 2010/73/EU and includes any relevant implementing measure in the Relevant Member State.

This European Economic Area selling restriction is in addition to any other selling restrictions set out below.

United Kingdom

In the United Kingdom, this prospectus is only addressed to and directed as qualified investors who are (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (Order); or (ii) high net worth entities and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). Any investment or investment activity to which this prospectus relates is available only to relevant persons and will only be engaged with relevant persons. Any person who is not a relevant person should not act or relay on this prospectus or any of its contents.

Canada

This document constitutes an “exempt offering document” as defined in and for the purposes of applicable Canadian securities laws. No prospectus has been filed with any securities commission or similar regulatory authority in Canada in connection with the offer and sale of the securities described herein, or the Securities. No securities commission or similar regulatory authority in Canada has reviewed or in any way passed upon this document or on the merits of the Securities and any representation to the contrary is an offence.

Canadian investors are advised that this document has been prepared in reliance on section 3A.3 of National Instrument 33-105 Underwriting Conflicts, or NI 33-105. Pursuant to section 3A.3 of NI 33-105, this document is exempt from the requirement to provide investors with certain conflicts of interest disclosure pertaining to “connected issuer” and/or “related issuer” relationships as would otherwise be required pursuant to subsection 2.1(1) of NI 33-105.

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Resale Restrictions. The offer and sale of the securities in Canada is being made on a private placement basis only and is exempt from the requirement to prepare and file a prospectus under applicable Canadian securities laws. Any resale of Securities acquired by a Canadian investor in this offering must be made in accordance with applicable Canadian securities laws, which may vary depending on the relevant jurisdiction, and which may require resales to be made in accordance with Canadian prospectus requirements, a statutory exemption from the prospectus requirements, in a transaction exempt from the prospectus requirements or otherwise under a discretionary exemption from the prospectus requirements granted by the applicable local Canadian securities regulatory authority. These resale restrictions may under certain circumstances apply to resales of the securities outside of Canada.

Representations of Purchasers. Each Canadian investor who purchases the securities will be deemed to have represented to the issuer and to each dealer from whom a purchase confirmation is received, as applicable, that the investor (i) is purchasing as principal, or is deemed to be purchasing as principal in accordance with applicable Canadian securities laws, for investment only and not with a view to resale or redistribution; (ii) is an “accredited investor” as such term is defined in section 1.1 of National Instrument 45-106 Prospectus Exemptions, or NI 45-106, or, in Ontario, as such term is defined in section 73.3(1) of the Securities Act (Ontario); and (iii) is a “permitted client” as such term is defined in section 1.1 of National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.

Taxation and Eligibility for Investment. Any discussion of taxation and related matters contained in this document does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a Canadian investor when deciding to purchase the securities and, in particular, does not address any Canadian tax considerations. No representation or warranty is hereby made as to the tax consequences to a resident, or deemed resident, of Canada of an investment in the securities or with respect to the eligibility of the securities for investment by such investor under relevant Canadian federal and provincial legislation and regulations.

Rights of Action for Damages or Rescission. Securities legislation in certain of the Canadian jurisdictions provides certain purchasers of securities pursuant to an offering memorandum, including where the distribution involves an “eligible foreign security” as such term is defined in Ontario Securities Commission Rule 45-501 Ontario Prospectus and Registration Exemptions and in Multilateral Instrument 45-107 Listing Representation and Statutory Rights of Action Disclosure Exemptions, as applicable, with a remedy for damages or rescission, or both, in addition to any other rights they may have at law, where the offering memorandum, or other offering document that constitutes an offering memorandum, and any amendment thereto, contains a “misrepresentation” as defined under applicable Canadian securities laws. These remedies, or notice with respect to these remedies, must be exercised or delivered, as the case may be, by the purchaser within the time limits prescribed under, and are subject to limitations and defences under, applicable Canadian securities legislation. In addition, these remedies are in addition to and without derogation from any other right or remedy available at law to the investor.

Language of Documents. Upon receipt of this document, each Canadian investor hereby confirms that it has expressly requested that all documents evidencing or relating in any way to the sale of the securities described herein (including for greater certainty any purchase confirmation or any notice) be drawn up in the English language only. Par la réception de ce document, chaque investisseur canadien confirme par les présentes qu’il a expressément exigé que tous les documents faisant foi ou se rapportant de quelque manière que ce soit à la vente des valeurs mobilières décrites aux présentes (incluant, pour plus de certitude, toute confirmation d’achat ou tout avis) soient rédigés en anglais seulement.

Israel

This prospectus does not constitute a prospectus under the Israeli Securities Law, 5728-1968, or the Securities Law, and has not been filed with or approved by the Israel Securities Authority. In the State of Israel, this document is being distributed only to, and is directed only at, and any offer of the common stock is directed only

125

at, investors listed in the first addendum to the Israeli Securities Law, or the Addendum, consisting primarily of joint investment in trust funds, provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals”, each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors (in each case purchasing for their own account or, where permitted under the Addendum, for the accounts of their clients who are investors listed in the Addendum). Qualified investors will be required to submit written confirmation that they fall within the scope of the Addendum, are aware of the meaning of same and agree to it.

Switzerland

The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (SIX) or on any other stock exchange or regulated trading facility in Switzerland. This prospectus has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the shares or the offering may be publicly distributed or otherwise made publicly available in Switzerland. Neither this prospectus nor any other offering or marketing material relating to the offering, us, or the shares have been or will be filed with or approved by any Swiss regulatory authority. In particular, this prospectus will not be filed with, and the offer of shares will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA and the offer of shares has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (CISA). The investor protection afforded to acquirers of interests in collective investment schemes under the CISA does not extend to acquirers of shares.

126

LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us by DLA Piper LLP (US), San Francisco, California. Certain legal matters related to the offering will be passed upon for the underwriters by Clifford Chance US LLP, New York, New York.

EXPERTS

The consolidated financial statements of Kaleyra, Inc. as of and for the year ended December 31, 2019 included in this prospectus have been so included in reliance on the report of BPM LLP, an independent registered public accounting firm, given on the authority of such firm as experts in auditing and accounting.

The consolidated financial statements of Kaleyra S.p.A. as of December 31, 2018, and for the year then ended have been included herein and include the effects of the adjustments to retrospectively apply the accounting for the Business Combination described in Notes 1, 5 and 24. KPMG S.p.A., an independent registered public accounting firm, audited the consolidated financial statements as of December 31, 2018, and for the year then ended, before the effects of the retrospective adjustments, which financial statements are not included herein. BPM LLP audited the retrospective adjustments. The consolidated financial statements of Kaleyra S.p.A. as of December 31, 2018, and for the year then ended have been included herein in reliance upon the reports of KPMG S.p.A., solely with respect to the financial statements before the effects of the retrospective adjustments, and BPM LLP, solely with respect to the retrospective adjustments, included herein, and upon the authority of said firms as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of common stock offered by this prospectus. This prospectus does not contain all of the information included in the registration statement. For further information pertaining to us and our common stock you should refer to the registration statement and our exhibits. Statements contained in this prospectus concerning any of our contracts, agreements or other documents are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, we refer you to the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit.

We are subject to the informational requirements of the Exchange Act and file annual, quarterly and current reports and other information with the SEC. Our filings with the SEC are available to the public on the SEC’s website at http://www.sec.gov. Those filings are also available to the public on, or accessible through, our website under the heading “Investors” at www.kaleyra.com. The information we file with the SEC or contained on or accessible through our corporate website or any other website that we may maintain is not part of this prospectus or the registration statement of which this prospectus is a part.

127

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

KALEYRA, INC.

For the Years Ended December 31, 2019 and 2018

Reports of Independent Registered Public Accounting Firms	F-2
Consolidated Balance Sheets	F-4
Consolidated Statements of Operations	F-5
Consolidated Statements of Comprehensive Loss	F-6
Consolidated Statements of Stockholders’ Equity (Deficit)	F-7
Consolidated Statements of Cash Flows	F-8
Notes to the Consolidated Financial Statements	F-9

For the Three Months Ended March 31, 2020 and 2019:

Condensed Consolidated Financial Statements (unaudited)	F-58
Condensed Consolidated Balance Sheets	F-58
Condensed Consolidated Statements of Operations	F-59
Condensed Consolidated Statements of Comprehensive Loss	F-60
Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	F-61
Condensed Consolidated Statements of Cash Flows	F-62
Notes to Condensed Consolidated Financial Statements	F-63

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Kaleyra, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Kaleyra, Inc. (a Delaware corporation) (the “Company”) as of December 31, 2019, and the related consolidated statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019, and the results of its operations and its cash flows for the year ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

We also have audited the adjustments to the 2018 consolidated financial statements to retrospectively apply the effect of the Business Combination, as described in Notes 1, 5 and 24. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2018 consolidated financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2018 consolidated financial statements taken as a whole.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ BPM LLP

We have served as the Company’s auditor since 2019.

San Jose, California

April 21, 2020

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors

Kaleyra S.p.A.

Opinion on the Consolidated Financial Statements

We have audited, before the effects of the adjustments to retrospectively apply the accounting for the Business Combination described in Notes 1, 5 and 24, the accompanying consolidated balance sheet of Kaleyra S.p.A. and subsidiaries (the Company) as of December 31, 2018, the related consolidated statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for the year ended December 31, 2018, and the related notes (collectively, the consolidated financial statements). The 2018 consolidated financial statements before the effects of the adjustments described in Notes 1, 5 and 24 are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the accounting for the Business Combination described in Notes 1, 5 and 24, present fairly, in all material respects, the financial position of the Company as of December 31, 2018, and the results of its operations and its cash flows for the year ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the accounting for the Business Combination described in Notes 1, 5 and 24 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ KPMG S.p.A.

We served as the Company’s auditors from 2017 to 2019.

Milan, Italy

July 31, 2019

F-3

KALEYRA, INC.

Consolidated Balance Sheets

(in thousands, except share and per share data)

	December 31,
	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	16,103		$	8,207
Restricted cash		20,894			—
Short-term marketable securities		5,124			3,151
Trade receivables, net		39,509			30,222
Prepaid expenses		648			462
Other current assets		4,224			2,544
Total current assets		86,502			44,586
Property and equipment, net		3,393			2,341
Intangible assets, net		9,353			11,276
Goodwill		16,953			17,276
Deferred tax assets		—			357
Other long-term assets		1,203			1,297
Total Assets	$	117,404		$	77,133
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	63,320		$	40,166
Debt for forward share purchase agreements		34,059			—
Notes payable		1,716			—
Notes payable due to related parties		9,414			—
Deferred consideration for the acquisition		—			3,005
Deferred consideration for the acquisition due to related parties		—			3,245
Current portion of bank and other borrowings		11,243			4,686
Deferred revenue		1,397			1,500
Preference shares		683			—
Preference shares due to related parties		1,847			—
Payroll and payroll related accrued liabilities		1,038			1,020
Other current liabilities		1,229			1,009
Total current liabilities		125,946			54,631
Long-term portion of bank and other borrowings		16,134			9,125
Long-term portion of notes payable due to related parties		7,500			—
Long-term portion of employee benefit obligation		1,398			1,147
Long-term portion of preference shares		—			495
Long-term portion of preference shares due to related parties		—			1,339
Deferred consideration for the acquisitions		—			1,553
Deferred consideration for the acquisitions due to related parties		—			1,150
Deferred tax liabilities		2,045			2,476
Other long-term liabilities		3,155			291
Total Liabilities		156,178			72,207
Commitments and contingencies (Note 20)
Stockholders’ equity (deficit):
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 and 11,644,561 shares authorized as of December 31, 2019 and 2018, respectively; 19,977,113 and 10,687,106 shares issued and outstanding as of December 31, 2019 and 2018, respectively (1)		2			1
Additional paid-in capital (1)		2,143			10,186
Accumulated other comprehensive income		74			31
Accumulated deficit		(40,993	)		(5,292	)
Total stockholders’ equity (deficit)		(38,774	)		4,926
Total liabilities and stockholders’ equity (deficit)	$	117,404		$	77,133

(1) Amounts as of December 31, 2018 differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and additional paid-in capital were adjusted accordingly.

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

F-4

KALEYRA, INC.

Consolidated Statements of Operations

(in thousands, except share and per share data)

	Year Ended December 31,
	2019			2018
Revenue	$	129,558		$	77,845
Cost of revenue		103,205			62,425
Gross profit		26,353			15,420
Operating expenses:
Research and development		5,310			3,368
Sales and marketing		6,031			6,313
General and administrative		17,431			11,359
Loss on equity investments		—			(95	)
Total operating expenses		28,772			20,945
Loss from operations		(2,419	)		(5,525	)
Other income, net		136			297
Financial expense, net		(439	)		(416	)
Foreign currency loss		(517	)		(32	)
Loss before income tax expense		(3,239	)		(5,676	)
Income tax expense		2,273			1,424
Net loss	$	(5,512	)	$	(7,100	)
Net loss attributable to non-controlling interests		—			(2	)
Net loss attributable to the owners of the parent		(5,512	)		(7,098	)
Net loss attributable to common stockholders	$	(5,512	)	$	(7,100	)
Net loss per share attributable to common stockholders, basic and diluted (1)	$	(0.48	)	$	(0.72	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted (1)		11,603,381			9,828,411

(1) Amounts for the year ended December 31, 2018 differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share attributable to common stockholders, basic and diluted were adjusted accordingly.

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

F-5

KALEYRA, INC.

Consolidated Statements of Comprehensive Loss

(in thousands)

	Year Ended December 31,
	2019			2018
Net loss	$	(5,512	)	$	(7,100	)
Other comprehensive income (loss):
Foreign currency translation adjustments		25			(175	)
Net unrealized gain (loss) on marketable securities, net of tax (1)		18			(22	)
Other comprehensive income related to joint venture		—			156
Total other comprehensive income (loss)		43			(41	)
Total comprehensive loss	$	(5,469	)	$	(7,141	)

(1) The Company recorded $6 thousand of tax expense and $7 thousand of tax benefits on marketable securities for the years ended December 31, 2019 and 2018, respectively.

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

F-6

KALEYRA, INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

(in thousands, except share and per share data)

	Common Stock (1)				Additional Paid-in Capital (1)			Accumulated Other Comprehensive Income			Retained Earnings (Accumulated Deficit)			Total Stockholders’ Equity (Deficit)			Non- controlling Interests			Total Equity (Deficit)
	Shares		Amount
Balance as of December 31, 2017		—	$	1	$	81		$	72		$	1,833		$	1,987		$	—		$	1,987
Change in the legal status of the Company and creation of 100,000 shares with no par value		9,663,456		—		27			—			(27	)		—			—			—
Consolidation of Solutions Infini		342,376		—		—			—			—			—			2			2
Issuance of common stock in connection with Buc Mobile acquisition		—		—		2,711			—			—			2,711			—			2,711
Issuance of common stock upon exercise of stock options		681,274		—		8			—			—			8			—			8
Stock-based compensation		—		—		7,359			—			—			7,359			—			7,359
Net loss		—		—		—			—			(7,098	)		(7,098	)		(2	)		(7,100	)
Other comprehensive loss		—		—		—			(41	)		—			(41	)		—			(41	)
Balance as of December 31, 2018 (1)		10,687,106		1		10,186			31			(5,292	)		4,926			—			4,926
Business Combination (2)		9,290,007		1		(10,186	)		—			(30,189	)		(40,374	)		—			(40,374	)
Forward share purchase agreements		—		—		567			—			—			567			—			567
Stock-based compensation		—		—		1,576			—			—			1,576			—			1,576
Net loss		—		—		—			—			(5,512	)		(5,512	)		—			(5,512	)
Other comprehensive loss		—		—		—			43			—			43			—			43
Balance as of December 31, 2019		19,977,113	$	2	$	2,143		$	74		$	(40,993	)	$	(38,774	)	$	—		$	(38,774	)

(1) Amounts as of December 31, 2018 and before that date differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and additional paid-in capital were adjusted accordingly.

(2) Refer to “Note 5” for further details.

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

F-7

KALEYRA, INC.

Consolidated Statements of Cash Flows

(in thousands)

	Year Ended December 31,
	2019			2018
Cash flows from Operating Activities:
Net loss	$	(5,512	)	$	(7,100	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2,648			1,530
Stock-based compensation and preference shares		2,070			7,998
Loss on equity investments		—			(95	)
Allowance for doubtful accounts		716			111
Employee benefit obligation		315			139
Non-cash interest expense		657			229
Deferred taxes		(14	)		72
Change in operating assets and liabilities:
Trade receivables		(10,427	)		(5,075	)
Other current assets		(2,039	)		(184	)
Other long-term assets		47			185
Accounts payable		15,145			6,072
Other current liabilities		251			23
Deferred revenue		(64	)		(182	)
Long-term liabilities		2,660			(122	)
Net cash provided by operating activities		6,453			3,601
Cash flows from Investing Activities:
Purchases of marketable securities		(5,868	)		(3,873	)
Sales of marketable securities		3,882			995
Purchases of property and equipment		(1,413	)		(248	)
Sales of property and equipment		38			9
Capitalized software development costs		(602	)		(657	)
Purchases of intangible assets		(16	)		(47	)
Cash, cash equivalents and restricted cash acquired in the reverse merger		21,666			—
Acquisition of Buc Mobile, net of cash acquired		—			(2,407	)
Acquisition of Solutions Infini, net of cash acquired		—			(5,482	)
Net cash provided by (used in) investing activities		17,687			(11,710	)
Cash flows from Financing Activities:
Payment of deferred consideration in relation to the acquisition of Buc Mobile		(4,000	)		—
Payment of deferred consideration in relation to the acquisition of Solutions Infini		(5,097	)		—
Change in line of credit		1,973			1,699
Borrowings on term loan		16,670			5,611
Repayments on term loan		(4,844	)		(913	)
Proceeds from exercise of stock options		—			8
Net cash provided by financing activities		4,702			6,405
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(52	)		(634	)
Net increase (decrease) in cash, cash equivalents and restricted cash		28,790			(2,338	)
Cash, cash equivalents and restricted cash at beginning of year		8,207			10,545
Cash, cash equivalents and restricted cash at end of year (1)	$	36,997		$	8,207
Supplemental disclosures of other cash flow information:
Cash paid for interest	$	478		$	264
Cash paid for income taxes	$	688		$	368

(1) As of December 31, 2019 includes $16.1 million of cash and cash equivalents and $20.9 million of restricted cash; as of December 31, 2018, includes $8.2 million of cash and cash equivalents and zero of restricted cash.

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

F-8

KALEYRA, INC.

Notes to Consolidated Financial Statements

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Kaleyra, Inc., formerly GigCapital, Inc., (hereinafter “Kaleyra” or the “Company”) was incorporated in Delaware on October 9, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On December 12, 2017, the Company completed the initial closing of its initial public offering (the “Offering”) whereby the Company sold 12,500,000 Units at a price of $10.00 per Unit. On January 9, 2018, the Company completed the second closing of the Offering with the exercise of the over-allotment option with the consummation of the sale of an additional 1,875,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of the Company’s common stock, $0.0001 par value, three-fourths (3/4) of one warrant to purchase one share of common stock (the “Warrants”), and one right to receive one-tenth (1/10) of one share of common stock upon consummation of a business combination (the “Rights”). Warrants will only be exercisable for whole shares at $11.50 per share. On January 16, 2018, the Company announced that the holders of the Company’s Units may elect to separately trade the securities underlying such Units which commenced on January 17, 2018. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Any Units not separated, prior to the consummation of a business combination, will continue to trade on the New York Stock Exchange under the symbol “GIG.U.” Any underlying shares of common stock, warrants and rights that were separated, prior to the consummation of a business combination, will trade on the New York Stock Exchange under the symbols “GIG,” “GIG.WS” and “GIGr,” respectively.

On February 22, 2019, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, Kaleyra S.p.A., Shareholder Representative Services LLC, (the “Seller Representative”) as representative for the holders of the ordinary shares of Kaleyra S.p.A. immediately prior to the closing of the Business Combination, and all of the stockholders of all of the Kaleyra S.p.A. stock (collectively, such Kaleyra S.p.A. stockholders, the “Sellers”), for the purpose of the Company acquiring all of the shares of Kaleyra S.p.A.

Kaleyra S.p.A. is a cloud communications software provider delivering secure Application Protocol Interfaces (“APIs”) and connectivity solutions in the API/Communication Platform as a Service or CPaaS market, headquartered in Milan, Italy and with operations in Italy, India, Dubai and the United States. Kaleyra S.p.A.’s solutions include identity authentication, mobile and voice notifications on transactions, and banking services authorizations, most notably via different integrated mobile channels through its platform.

On November 25, 2019, the Business Combination with Kaleyra S.p.A. (the “Business Combination”) was completed. See Note 5—Business Combination for a description of the Business Combination.

Effective as of the closing of the Business Combination, the Company changed its name to Kaleyra, Inc. Upon the consummation of the Business Combination, the Company also changed its fiscal year end to December 31st from its previous fiscal year ending September 30th, such change first being effective for its fiscal year ended December 31, 2019. For accounting purposes, Kaleyra S.p.A. was deemed the acquiror in the Business Combination.

Upon the closing of the Business Combination, the Company’s rights and units ceased trading, and the Company’s common stock began trading on the NYSE American stock exchange under the symbol “KLR.” Furthermore, on December 2, 2019, Kaleyra’s warrants began trading on the NYSE American stock exchange as “KLR WS.”

F-9

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (‘‘US GAAP’’) applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

In connection with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company evaluated its ability to continue as a going concern. While the Company has positive cash flows from operating activities, its current liabilities exceed its current assets as of December 31, 2019. The consolidated balance sheet as of December 31, 2019 includes total current assets of $86.5 million and total current liabilities of $125.9 million, resulting in net liabilities due within the next 12 months of $39.4 million.

The Company’s business operations continued to grow in line with expectations showing positive operating margins (excluding non-recurring costs). However, the Business Combination generated significant obligations including (i) $13.1 million of liabilities related to non-recurring Business Combination transaction related costs; (ii) $15.0 million of deferred consideration to sellers in the Business Combination transaction (iii) $13.2 million of net obligations under certain Shares Purchase Forward Agreements entered into by GigCapital Inc. prior to the Business Combination; and (iv) $3.6 million of notes payable acquired as a result of the Business Combination.

Management, concerned about the Company’s ability to fulfil these obligations, made the decision to evaluate opportunities to refinance or renegotiate some of its current obligations and, during the first four months of 2020 put in place several actions aimed to achieve such goal. Such actions, described in more details in Note 27—Subsequent Events, include, among others:

• the subscription of a new loan agreement with a bank that is currently a lender to the Company;

• signing of two new line of credit facilities;

• a refinanced loan that extended payment terms and provided additional funds;

• the amendments of the repayment schedules of certain existing long-term financing agreements to postpone the amounts due in the next three to six months of 2020; and

• the renegotiation of the payment terms of a payable related to costs incurred in the Business Combination.

Considering the effects of these actions and the typical financial cycle of Kaleyra, Kaleyra’s management believes that the Company’s cash, cash flows from operations, financings and amendments to agreements subsequent to December 31, 2019, and availability of borrowings, as described above, will be sufficient to support its planned operations for at least the next 12 months from the date these consolidated financial statements were issued.

Principles of Consolidation

The consolidated financial statements include the Company and its wholly-owned subsidiaries, including Kaleyra S.p.A., Solutions Infini and Buc Mobile, which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

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Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade receivables. The Company maintains cash and cash equivalents and marketable securities with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In the years ended December 31, 2019 and 2018, there were one and three customers, respectively, that individually accounted for more than 10% of the Company’s consolidated total revenue. In particular in 2019, revenue generated by the first, second and third major customer of the Company accounted for $13.4 million, $10.9 million and $9.2 million; respectively, while in 2018, revenue generated by the first, second and third major customer of the Company accounted for $13.6 million, $8.1 million and $8.8 million, respectively. As of December 31, 2019 and 2018, no individual customer accounted for more than 10% of the Company’s consolidated total trade receivables.

Revenue Recognition

Adoption of Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”

Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”), which replaced the existing revenue recognition guidance, ASC 605, and outlines a single set of comprehensive principles for recognizing revenue under US GAAP. Among other things, ASC 606 requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services.

The Company did not record any adjustment to the beginning retained earnings as of January 1, 2019 in connection with the adoption of the new standard.

Prior to the adoption of ASC 606, the Company recognized the majority of its revenue according to the usage by its customers in the period in which that usage occurred. ASC 606 continues to support the recognition of revenue over time, and on a usage basis, for the majority of the Company’s contracts due to continuous transfer of control to the customer.

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Revenue Recognition Policy

The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers. Taxes collected are subsequently remitted to governmental authorities.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

The Company’s revenue is primarily derived from usage-based fees earned from the sale of communications services offered through software solutions to large enterprises, as well as small and medium-sized customers.

The Company’s revenue is recognized upon the sending of a SMS message or by the authentication of a financial transaction of an end user of the Company’s customer using the Company’s platform in an amount that reflects the consideration the Company expects to receive in exchange for those services which is generally based upon agreed fixed prices per unit.

Platform access is considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. After usage occurs, there are no remaining obligations that would preclude revenue recognition. Revenue from usage-based fees represented 98% of total revenue, both in the years ended December 31, 2019 and 2018.

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support, which is generally one year. Term-based contract revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 2% of total revenue, both in the years ended December 31, 2019 and 2018.

The Company’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

Contract Balances

The Company receives payments from customers based on a billing schedule as established in its contracts. Contract assets are recorded when the Company has a conditional right to consideration for its completed performance under the contracts. Trade receivables are recorded when the right to this consideration becomes unconditional, which is as usage occurs. The Company did not have any contract assets as of December 31, 2019.

Deferred revenue is recorded when cash payments are received in advance of future usage on non-cancellable contracts. As of December 31, 2019 and 2018, the Company recorded $1.4 million and $1.5 million, respectively, as deferred revenue on its consolidated balance sheets. The deferred revenue balance as of December 31, 2018 was entirely recognized as revenue in the year ended December 31, 2019.

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Disaggregated Revenue

In general, revenue disaggregated by geography is aligned according to the nature and economic characteristics of the Company’s business and provides meaningful disaggregation of the Company’s results of operations. Refer to Note 17—Geographic Information for details of revenue by geographic area.

Cost of Revenue

Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes the cost of the Company’s cloud infrastructure and technology platform, amortization of capitalized internal-use software development costs related to the platform applications and amortization of developed technology acquired in the business combinations.

Research and Development Expenses

Research and development expenses consist primarily of personnel costs, the costs of the technology platform used for staging and development, outsourced engineering services, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meet the criteria for capitalization.

Internal-use Software Development Costs

Certain costs of the technology platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed, and (ii) it is probable that the software will be completed and used for its intended purpose. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all-significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software of four years on a straight-line basis. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could affect the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in research and development expenses.

Advertising Costs

Advertising costs are expensed as incurred and were $956,000 and $578,000 in the years ended December 31, 2019 and 2018, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statement of operations.

Marketable Securities

Investments in marketable securities are carried at fair value and classified as available-for-sale securities. Realized gains and losses on available-for-sale securities are included in financial expense, net in the consolidated statements of operations. Unrealized gains and losses, net of deferred taxes, on available-for-sale securities are included in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). In the event the fair value of an investment declines below its cost basis, management is required

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to determine if the decline in fair value is other than temporary. If management determines the decline is other than temporary, an impairment charge is recorded. As of December 31, 2019 and 2018, the Company had marketable securities of $5.1 million and $3.2 million; respectively relating to mutual funds with no stated maturity.

Stock-Based Compensation

The Company measures and recognizes the compensation expense for restricted stock units (“RSUs”) granted to employees and directors, based on the fair value of the award on the grant date.

RSUs give an employee an interest in Company stock but they have no tangible value until vesting is complete. RSUs are equity classified and measured at the fair market value of the underlying stock at the grant date and recognized as expense over the related service or performance period. The Company elected to account for forfeitures as they occur. The fair value of stock awards is based on the quoted price of our common stock on the grant date. Compensation cost for RSUs is recognized using the straight-line method over the requisite service period.

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.” The aim of the update is to simplify several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based payment equity awards are measured at the grant date fair value of the equity instruments, similar to employee share-based payment equity awards.

The Company adopted ASU 2018-07 in 2019, following the adoption of Topic 606. At the transition date, there were no nonemployee share-based compensation awards.

Employee Benefit Plans

The Company has defined benefit plans, granted to Italian and Indian employees and regulated by Italian and Indian laws, respectively. The defined benefit plans are calculated based on the employee compensation and the duration of the employment relationship and are paid to the employee upon termination of the employment relationship. The costs of the defined benefit plans reported in the Company’s consolidated statement of operations is determined by actuarial calculation performed on an annual basis. The actuarial valuation is performed using the “Projected Unit Credit Method” based on the employees’ expected date of separation or retirement.

As a part of the purchase agreement relating to the 2018 acquisition of Solutions Infini by Kaleyra, the Company assumed the obligation to purchase a number of preference shares from certain employees in 2020 at a price determined based on the EBITDA of Solutions Infini for its fiscal year ending March 31, 2020. These preference shares represent compensation for future services for the eligible employees. The Company accounts for the liability related to the preference shares over the relevant period from July 2017 to July 2020, charging the consolidated statements of operations on a straight-line basis over that period.

Income Taxes

The Company accounts for income taxes in accordance with the asset and liability approach method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to

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be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized.

The Company recognizes the effect of income tax positions only if those positions are more-likely-than-not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest and penalties related to an underpayment of income taxes in income tax expense in the consolidated statements of operations.

Foreign Currency Translation

The functional currency of the parent company is the US Dollar. The functional currency of Kaleyra S.p.A. is the Euro, the functional currency of Solutions Infini is the India Rupee and the functional currency of Buc Mobile is the US Dollar.

Each company remeasures monetary assets and liabilities denominated in currencies other that its functional currency at period-end exchange rates and non-monetary items are at historical rates. Remeasurement adjustments are recognized in the consolidated statements of operations as foreign currency (income) loss in the period of occurrence.

These consolidated financial statements are presented in US Dollars. For legal entities where the functional currency is a currency other than the US Dollar, adjustments resulting from translating the financial statements into US Dollars are recorded as a component of accumulated other comprehensive income in stockholders’ equity (deficit). Monetary assets and liabilities denominated in a currency that is other than the US Dollar are translated into US Dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates during the period. Equity transactions are translated using historical exchange rates.

Comprehensive Income (Loss)

Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under US GAAP, are recorded as an element of stockholders’ equity but are excluded from the calculation of net income (loss). See Note 13 – Accumulated Other Comprehensive Income (Loss).

Earnings (Loss) per Share

The equity structure in the consolidated financial statements following a reverse recapitalization reflects the equity structure of the legal acquiror (the accounting acquiree), including the equity interests issued by the legal acquiror to effect the business combination.

Basic earnings (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. In calculating the weighted-average number of common shares during the period in which the reverse merger occurs (fiscal year 2019):

a. The number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted-average number of common shares of the legal acquiree (accounting acquiror) outstanding during the period multiplied by the exchange ratio established in the merger agreement;

b. The number of common shares outstanding from the acquisition date to the end of that period shall be the actual number of common shares of the legal acquiror (the accounting acquiree) outstanding during that period.

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The basic EPS for each comparative period before the acquisition date presented in the consolidated financial statements following a reverse merger shall be calculated by dividing (i) by (ii):

i. The income of the legal acquiree attributable to common stockholders in each of those periods;

ii. The legal acquiree’s historical weighted average number of common shares outstanding multiplied by the exchange ratio established in the acquisition agreement.

Diluted net income (loss) per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income (loss) per share calculation, RSUs, options and warrants to purchase common stock are considered common stock equivalents.

Cash and Cash Equivalents

The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of funds deposited into saving accounts.

Restricted Cash

Restricted cash consists of cash deposited into a savings account with a financial institution as collateral for the Company’s obligations under the Forward Share Purchase Agreement with Glazer Capital and with Yakira Capital Management, Inc. See Note 10—Debt for Forward Share Purchase Agreements for a description of the contracts and Note 27 for amendments to the contracts made after year-end.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 830)—Restricted Cash” (“ASU 2016-18”). This standard provides guidance on the presentation of restricted cash and cash equivalents in the consolidated statements of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the consolidated statements of cash flows. The Company adopted ASU 2016-18 in the first quarter of 2019 and applied the guidance retrospectively in the prior period’s consolidated statements of cash flows.

Other than the revised consolidated statements of cash flows presentation of restricted cash, the adoption of ASU 2016-18 did not have an impact on the Company’s consolidated financial statements.

The restricted cash balances as of December 31, 2019 and December 31, 2018 were $20.9 million and zero, respectively.

Trade Receivables and Allowance for Doubtful Accounts

Trade receivables are recorded net of an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company’s assessment of its ability to collect on customer trade receivables. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of trade receivables balances and other known conditions that may affect a customer’s ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believes will be collected. The Company writes-off trade receivables against the allowance when a determination is made that the balance is uncollectible, and collection of the receivable is no longer being actively pursued.

The allowance for doubtful accounts was $873,000 and $157,000 as of December 31, 2019 and 2018, respectively.

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Property and Equipment, net

Property and equipment is stated at cost less accumulated depreciation or amortization.

Depreciation and amortization are computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are expensed as incurred.

The useful lives of property and equipment are as follows:

Internal-use software development costs	4 years
Servers	3 - 6 years
Office equipment	3 - 5 years
Leasehold improvements	5 years or remaining lease term (1)
Furniture and fixtures	4 - 8 years
Vehicles	8 - 10 years
Software	3 years
Other assets	4 years

(1) Including renewal options

Intangible Assets, net

Intangible assets recorded by the Company are costs directly associated with securing legal registration of patents and the fair value of identifiable intangible assets acquired in business combinations.

Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Intangible assets arising from business combinations, such as customer relationship and developed technology, were initially recorded at estimated fair value. Amortization is computed over the estimated useful life of each asset on a straight-line basis, except for customer relationships, which are amortized over the best estimate of their expected useful life using an accelerated method (“sum of years’ digits method”), in order to better approximate the pattern in which their economic benefit are expected to be consumed. The Company determines the useful lives of identifiable intangible assets after considering the facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The useful lives of the intangible assets are as follows:

Developed technology	3 - 6 years
Customer relationships (accelerated method)	15 - 17 years
Patent	3 - 7 years

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has selected December 31 as the date to perform its annual impairment test. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the

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Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment for these assets. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to which goodwill is allocated to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its net book value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. No goodwill impairment charges have been recorded for any period presented.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. There was no impairment during the years ended December 31, 2019 and 2018.

Deferred Revenue

Deferred revenue consists of advance payments from customers to be applied against future usage and customer billings in advance of revenues being recognized under the Company’s contracts. Deferred revenue is generally expected to be recognized during the succeeding 12-month period and is thus recorded as a current liability.

Segment Information

The Company’s Chief Executive Officer is the chief operating decision maker, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment.

Derivatives

The Company has not historically entered into hedging derivatives in the ordinary course of its business. In connection with the acquisition of Solutions Infini and Buc Mobile, the Company entered into certain derivative contracts to serve as an economic hedge for risk management purposes. These derivatives include exchange rate forwards on the purchase prices denominated in Indian Rupee for the acquisition of Solutions Infini and in US Dollars for the acquisition of Buc Mobile and interest rate swaps on the bank borrowings entered into by the Company to finance the acquisitions. These derivatives were not designated as hedging instruments under US GAAP. Because hedge accounting was not applied, those derivatives have been recorded at fair value on the consolidated balance sheets with changes in fair value recorded in financial expense, net in the consolidated statements of operations. In 2019, following the payments of the consideration for the acquisitions, the exchange rate forward contracts on the purchase prices were settled.

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Forward Shares Purchase Agreements

During 2019, the Company entered into certain third-party put option arrangements assuming the obligation to repurchase its common stock at a future date by transferring cash to the third-party under certain conditions described in more detail in Note 10 below. Such obligation has been recorded at fair value in the consolidated balance sheets with changes in fair value recorded in financial expense, net in the consolidated statements of operations.

Business Combinations

The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement.

The authoritative guidance allows a measurement period of the purchase price allocation that ends when the entity has obtained all relevant information about facts that existed at the acquisition date, and that cannot exceed one year from the date of acquisition. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded to the consolidated statements of operations.

Fair Value of Financial Instruments

The Company’s financial instruments, which include cash, cash equivalents, restricted cash, trade receivables and accounts payable are recorded at their carrying amounts, which approximate their fair value due to their short-term nature. All marketable securities are considered available-for-sale and recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive income (loss). In valuing these items, the Company uses inputs and assumptions that market participants would use to determine their fair value, utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Impairments are considered other than temporary if they are related to deterioration in credit risk or if it is likely that the security will be sold before the recovery of its cost basis. Realized gains and losses and declines in value deemed to be other than temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations.

The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2: Other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

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A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Net cash settlements on derivatives that do not qualify for hedge accounting are reported in financial income as part of financial expense, net in the consolidated statements of operations.

Recent Accounting Pronouncements

In January 2020, the FASB issued ASU 2020-01 “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)”, clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In November 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The objective of the simplification initiative is to identify, evaluate, and improve areas of US GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, “Collaborative Arrangements (Topic 808)”, clarifying the interaction between Topic 808 and Topic 606. A collaborative arrangement is a contractual arrangement under which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards that depend on the activity’s commercial success. Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Some entities apply revenue guidance directly or by analogy to all or part of their arrangements, and others apply a different accounting method as an accounting policy. Those accounting differences result in diversity in practice on how entities account for transactions on the basis of their view of the economics of the collaborative arrangement. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing

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Arrangement That is a Service Contract.” This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period, for all entities. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments under ASU 2018-13 remove, add, and modify certain disclosure requirements on fair value measurements in ASC 820. The amendments are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2019. An entity shall apply the ASU retrospectively to all periods presented. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements”, which does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB ASC areas based on comments and suggestions made by various stakeholders. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this ASU do not require transition guidance and will be effective upon issuance of this ASU. However, there are some conforming amendments in this ASU that have been made to recently issued guidance that is not yet effective that may require application of the transition and effective date guidance in the original ASU. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In December 2017, the FASB issued ASU 2017-15, “Codification Improvements—Elimination of Topic 995”, which supersede obsolete guidance in Topic 995 on unrecognized deferred taxes related to certain statutory reserve deposits. If an entity has unrecognized deferred income taxes related to statutory deposits made on or before December 15, 1992, the entity would be required to recognize the unrecognized income taxes in accordance with Topic 740. The amendments are effective for fiscal years and first interim periods beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. The Company adopted the amendments in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”, which affect a variety of Topics in the Codification. For entities that have not yet adopted the amendments in ASU 2016-13, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as the entity has adopted the amendments in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, “Compensation—Retirement Benefits (Topic 715)”, which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. This ASU is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual

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periods. For other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. The Company adopted the provisions of this ASU in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)”, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 for public business entities and for fiscal years ending after December 15, 2021 for all other entities. Early adoption is permitted for all entities. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective prospectively for public business entities for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2020 and for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2021 for other entities. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”, which amends the guidance of ASC Topic 805, “Business Combinations”, adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance is effective for public entities for annual periods beginning after December 15, 2017, including interim periods within those periods; for all other entities for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019 and early adoption is permitted under certain circumstances. The Company adopted this standard in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments”, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments— Credit Losses”, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments—Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These ASUs are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and for other entities for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief”, which provides a targeted transition relief and provides entities that have certain instruments, with an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. For entities that have not yet adopted the amendments in ASU 2016-13, the effective date and transition methodology for the amendments in this ASU are the same as in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

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In February 2016, the FASB issued ASU 2016-02, “Leases”, which was further clarified by ASU 2018-10, “Codification Improvements to Topic 842, Leases”, and ASU 2018-11, “Leases—Targeted Improvements”, both issued in July 2018. ASU 2016-02 affects all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendment affects narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new lease standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases”, including its disclosure requirements, in the comparative prior periods presented in the year they adopt the new lease standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The practical expedient provides lessors with an option to not separate the non-lease components from the associated lease components when certain criteria are met and requires them to account for the combined component in accordance with the revenue recognition standard in ASC 606 if the associated non-lease components are the predominant components. The new standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Earlier application is permitted. While the Company expects the adoption of these standards to result in a material increase to the reported assets and liabilities, the Company has not yet determined the full impact that the adoption of this standard will have on its consolidated financial statements.

In November 2019, the FASB issued ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates.” The amendments in this ASU amend certain effective dates for the following major ASUs (including amendments issued after the issuance of the original ASU). The effective dates for Leases after applying this ASU are as follows: Public business entities; not-for-profit entities that have issued or are conduit bond obligors for securities that are traded, listed, or quoted on an exchange or an over-the-counter market; and employee benefit plans that file or furnish financial statements with or to the SEC for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed.

ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates” amend certain effective dates for the following major updates (including amendments issued after the issuance of the original ASU):

a)    Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Credit Losses). The amendments in this ASU amend the mandatory effective dates for Credit Losses for all entities as follows: Public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

b)    Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Hedging). The effective dates for Hedging after applying

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this ASU are as follows: Public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers.” This new guidance will replace most existing US GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 was originally effective for public entities for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. The effective date for all other entities was for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. In August 2015, the FASB issued ASU 2015-14 which deferred, by one year, the effective date for the new revenue reporting standard for entities reporting under US GAAP. For Kaleyra, as an emerging growth company, ASU 2014-09 was effective for annual reporting periods beginning after December 15, 2018. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by another party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing”, clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients”, which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842).” These amendments provide additional clarification and implementation guidance on the previously issued ASUs. These amendments do not change the core principles of the guidance stated in ASU 2014-09, instead they are intended to clarify and improve operability of certain topics included within the revenue standard. In November 2017, the FASB issued ASU 2017-14, which includes amendments to certain SEC paragraphs within the FASB Accounting Standards Codification (Codification). ASU 2017-14 amends the Codification to incorporate SEC Staff Accounting Bulletin (SAB) No. 116 and SEC Interpretive Release on Vaccines for Federal Government Stockpiles (SEC Release No. 33-10403) that bring existing SEC staff guidance into conformity with the FASB’s adoption of and amendments to ASC Topic 606, Revenue from Contracts with Customers. The effective date and transition requirements for ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2017-13 and ASU 2017-14 are the same as the effective date and transition requirements for ASU 2015-14. The Company adopted the new accounting standard in fiscal year 2019, and, as mentioned above, the adoption did not have a material impact on its consolidated financial statements.

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3. FAIR VALUE MEASUREMENTS

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018 (in thousands):

	Fair Value Hierarchy as of December 31, 2019						Aggregate Fair Value
	Level 1		Level 2		Level 3
Marketable securities
Mutual funds (1)	$	5,124	$	—	$	—	$	5,124
Total Marketable Securities	$	5,124	$	—	$	—	$	5,124
Liabilities
Interest Rate Swap (2)	$	—	$	80	$	—	$	80
Preference shares (3)		—		—		2,530		2,530
Debt for forward share purchase agreements (4)		—		34,059		—		34,059
Total Liabilities	$	—	$	34,139	$	2,530	$	36,669

(1) Included in the consolidated balance sheet line item “Short-term marketable securities.”

(2) Included in the consolidated balance sheet line item “Other long-term liabilities.”

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ending March 31, 2020 will be materially below its expected level, this would result in a change of the preference shares liability.

(4) Based on the information available at the reporting date, debts for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option. The amount in the above table excludes accrued interest.

	Fair Value Hierarchy as of December 31, 2018							Aggregate Fair Value
	Level 1		Level 2			Level 3
Marketable securities
Mutual funds (1)	$	3,151	$	—		$	—	$	3,151
Total Marketable Securities	$	3,151	$	—		$	—	$	3,151
Liabilities
Interest Rate Swap (2)	$	—	$	97		$	—	$	97
Foreign Exchange Forward (2)		—		(56	)		—		(56	)
Preference shares (3)		—		—			1,834		1,834
Contingent consideration for Solutions Infini acquisition (4)		—		—			482		482
Total Liabilities	$	—	$	41		$	2,316	$	2,357

(1) Included in the consolidated balance sheet line item “Short-term marketable securities.”

(2) Included in the consolidated balance sheet line item “Other long-term liabilities.”

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the

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achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ending March 31, 2020 will be materially below its expected level, this would result in a change of the preference shares liability.

(4) Based on the information available at the reporting date, the contingent consideration for the Solutions Infini acquisition was estimated as the basis of the present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2019. Such cash flows were contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates, and is significantly above the targeted EBITDA. The amount presented in the table above represents the estimated portion of the total deferred consideration. No changes in fair value were recognized as initially estimated during the year. The actual EBITDA of Solutions Infini for the year ended March 31, 2019 became available in July 2019 and confirmed the initial amount estimated by management and used to determine the contingent consideration for the Solutions Infini acquisition at the reporting date.

Values of marketable securities as of December 31, 2019 and 2018 were as follows (in thousands):

	As of December 31,
	2019									2018
	Cost		Unrealized gains		Unrealized losses			Fair value		Cost		Unrealized gains		Unrealized losses			Fair value
Mutual funds	$	5,129	$	1	$	(6	)	$	5,124	$	3,180	$	—	$	(29	)	$	3,151

The following tables present changes during the years ended December 31, 2019 and 2018 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities in the consolidated balance sheets at December 31, 2019 and 2018 (in thousands):

	Fair Value Beginning of Year		Net Realized and Unrealized Gains (Losses) Included in Income			Other Comprehensive Income (Loss)			Settlements, Net			Change in scope of consolidation		Gross Transfers Out			Fair Value End of Year
December 31, 2018
Liabilities:
Preference shares	$	—	$	639		$	(6	)	$	—		$	1,201	$	—		$	1,834
Contingent consideration for Solutions Infini acquisition		2,232		(71	)		(72	)		(1,137	)		—		(470	)		482
December 31, 2019
Liabilities:
Preference shares		1,834		753			(57	)		—			—		—			2,530
Contingent consideration for Solutions Infini acquisition		482		(15	)		23			(490	)		—		—			—

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There were no transfers of liabilities into or out of Level 3 in the year ended December 31, 2019. The actual EBITDA of Solutions Infini for the twelve months ended March 31, 2018 became available in July 2018 and confirmed the initial amount estimated by management and used to determine the portion of the contingent consideration for the Solutions Infini acquisition related to the 2018 EBITDA for the year ended the December 31, 2018.

Net realized and unrealized gains and losses included in income related to Level 3 liabilities shown above are reported in the consolidated statements of operations as follows (in thousands):

	Research and development			Sales and marketing			General and administrative			Financial expense, net			Foreign currency loss		Total
December 31, 2018
Liabilities:
Preference shares	$	(249	)	$	(99	)	$	(200	)	$	(91	)	$	—	$	(639	)
Contingent consideration for Solutions Infini acquisition		—			—			—			(22	)		93		71
December 31, 2019
Liabilities:
Preference shares		(225	)		(89	)		(180	)		(259	)		—		(753	)
Contingent consideration for Solutions Infini acquisition		—			—			—			(3	)		18		15

4. DERIVATIVE FINANCIAL INSTRUMENTS

The gross notional amount of derivative contracts not designated as hedging instruments, outstanding as of December 31, 2019, was €6.3 million ($7.0 million) for interest rate swap, while the gross notional amount of our derivative contracts not designated as hedging instruments, outstanding as of December 31, 2018 was €7.9 million ($9.0 million) and $7.1 million for interest rate swap and foreign exchange forwards, respectively.

The amount and location of the gains (losses) in the consolidated statements of operations related to derivative contracts is as follows (in thousands):

Derivatives Not Designed As Hedging Instruments			Year Ended December 31,
	Line Items		2019		2018
Interest Rate Swap		Financial expense, net	$	16	$	(38	)
Foreign Exchange Forward		Financial expense, net		361		155
Total			$	377	$	117

The following table presents the fair value and the location of, derivative contracts reported in the consolidated balance sheets (in thousands):

Derivatives Not Designed As Hedging Instruments (1)			As of December 31,
	Line Items		2019			2018
Interest Rate Swap		Other long-term liabilities	$	(80	)	$	(97	)
Foreign Exchange Forward		Other current liabilities		—			(18	)
Foreign Exchange Forward		Other long-term liabilities		—			(9	)
Foreign Exchange Forward		Other long-term assets		—			42
Foreign Exchange Forward		Other current assets		—			41
Total			$	(80	)	$	(41	)

(1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 3.”

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5. BUSINESS COMBINATION

Description of the Business Combination

Following the approval at the special meeting of the stockholders of the Company held on November 22, 2019, and pursuant to and in accordance with the terms of the Stock Purchase Agreement, as amended, the shareholders of Kaleyra S.p.A. (the “Sellers”) on November 25, 2019 sold, transferred, assigned, conveyed and delivered to the Company all of the Kaleyra S.p.A. stock.

As consideration for the Business Combination, the Company issued on November 25, 2019 (the “Business Combination Date”), in the aggregate, 10,687,106 shares of common stock to the Sellers.

In addition, as consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe S.p.A. (“Esse Effe”) and Maya Investments Limited (“Maya”) in the amount of $6.0 million and $1.5 million, respectively, and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts.

Immediately after giving effect to the Business Combination (including as a result of the redemptions and the automatic conversion of rights into shares of common stock), there were 19,977,113 shares of the Company’s issued and outstanding common stock. As of the date of the Business Combination, the Company’s directors and executive officers and affiliated entities beneficially owned approximately 63.36% of the Company’s outstanding shares of common stock, and the former security holders of GigCapital Inc. beneficially owned approximately 46.50% of the Company’s outstanding shares of common stock.

The per share redemption price of $10.5019 for public holders of the Company’s shares of common stock electing redemption was paid out of the Company’s Trust Account, which after taking into account the redemptions, had a balance after paying for the redemptions and immediately prior to the closing of the Business Combination of approximately $40.8 million.

Accounting for the Business Combination

The Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under this method of accounting, Kaleyra, Inc. will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Kaleyra S.p.A.’s operations comprising substantially all of the ongoing operations of the post-combination company, Kaleyra S.p.A.’s senior management comprising substantially all of the senior management of the post-combination company and the existence of a majority voting interest in the post-combination company. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of Kaleyra S.p.A. issuing stock for the net assets of Kaleyra, Inc., accompanied by a recapitalization.

As a result of the accounting for the Business Combination, the number of common shares authorized and outstanding during periods prior to the Business Combination, have been retrospectively adjusted reflecting the exchange ratio established in the Business Combination. The common stock and additional paid-in capital have also been retrospectively adjusted, accordingly. Specifically, the number of common shares outstanding during periods prior to the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the Stock Purchase Agreement. Accordingly, weighted-average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted as shares reflecting the exchange ratio established in the Business Combination. See Note 24 – Loss per Share Attributable to Common Stockholders for further details.

The net assets of Kaleyra, Inc. are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are the historical operations of Kaleyra S.p.A.

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The following table summarizes the assets and liabilities of Kaleyra, Inc., stated at historical cost at the Business Combination closing date as follows (in thousands):

Cash and cash equivalents	$	231
Restricted cash		21,435
Other current assets		14
Total assets		21,680
Debt for forward share purchase agreements		34,580
Notes payable to Sellers		15,000
Notes payable to Founders, current		3,578
Account payables and other current liabilities		8,896
Total liabilities		62,054
Net liabilities	$	40,374

In connection with the Business Combination, the Company incurred direct and incremental costs of approximately $7.7 million, consisting of legal and professional fees, which are included in general and administrative expenses in the consolidated statement of operations in 2019.

For the business combinations related to the acquisitions of Buc Mobile and Solutions Infini, both completed in fiscal year 2018, reference is made to the Company’s consolidated financial statements for the year ended December 31, 2018.

6. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill as of December 31, 2019 and 2018 was as follows (in thousands):

Balance as of December 31, 2018	$	17,276
Effect of exchange rate		(323	)
Balance as of December 31, 2019	$	16,953

Intangible assets, net

Intangible assets consisted of the following (in thousands):

	As of December 31,
	2019						2018
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortizable Intangible Assets
Developed technology	$	2,775	$	952	$	1,823	$	2,810	$	310	$	2,500
Customer relationships		9,077		1,631		7,446		9,243		555		8,688
Patent		113		29		84		99		11		88
Total amortizable intangible assets	$	11,965	$	2,612	$	9,353	$	12,152	$	876	$	11,276

Amortization expense was $1.8 million and $860,000 for the years ended December 31, 2019 and 2018, respectively.

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Total estimated future amortization expense as of December 31, 2019 is as follows (in thousands):

	As of December 31, 2019
2020	$	1,689
2021		1,451
2022		1,169
2023		1,062
2024		854
2025 and thereafter		3,128
Total	$	9,353

7. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following (in thousands):

	As of December 31,
	2019		2018
Internal-use software development costs	$	1,470	$	1,440
Servers (1)		1,629		1,170
Office equipment		1,153		965
Leasehold improvements		616		222
Furniture and fixtures		388		189
Assets-in-progress (2)		665		108
Vehicles		23		49
Software		4		4
Other assets		91		103
Total property and equipment		6,039		4,250
Less: accumulated depreciation and amortization		2,646		1,909
Total property and equipment, net	$	3,393	$	2,341

(1) Including equipment under capital leases with gross amount of $288,000 and accumulated depreciation of $78,000 as of December 31, 2019 (gross amount of $94,000 and accumulated depreciation of $31,000 as of December 31, 2018).

(2) Assets-in progress amounting to $665,000 as of December 31, 2019 include: (i) internal-use software development costs in-progress for $546,000; and (ii) software in-progress for $119,000.

Depreciation and amortization expense was $879,000 and $670,000 for the years ended December 31, 2019 and 2018, respectively.

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The Company capitalized $602,000 and $657,000, in internal-use software development costs in the years ended December 31, 2019 and 2018, respectively. Of the $602,000 capitalized in 2019, $60,000 relate to internal-use software in-use and $542,000 to internal-use software development in-progress, recorded within assets-in-progress. No stock-based compensation expense was capitalized. Amortization of capitalized software development costs was $355,000 and $371,000, in the years ended December 31, 2019 and 2018, respectively. The amortization expense was allocated as follows (in thousands):

	Year Ended December 31,
	2019		2018
Cost of revenue	$	302	$	315
Research and development		53		56
Total	$	355	$	371

8. OTHER ASSETS

Other current assets consisted of the following (in thousands):

	As of December 31,
	2019		2018
VAT receivables	$	3,136	$	1,852
Income tax assets		270		65
Credit for tax other than income tax		358		273
Other receivables		460		354
Total other current assets	$	4,224	$	2,544

Other long-term assets consisted of the following (in thousands):

	As of December 31,
	2019		2018
Non-current income tax credit (advances and tax reduced at sources)	$	1,029	$	1,092
Miscellaneous		174		163
Derivative financial assets		—		42
Total other long-term assets	$	1,203	$	1,297

9. BANK AND OTHER BORROWINGS

As of December 31, 2019 and 2018, the current portion of bank and other borrowings amounts to $11.2 million and $4.7 million, respectively. As of December 31, 2019, this item is comprised of $7.5 million of the current portion of long-term bank and other borrowings and of $3.7 million of credit line facilities. As of December 31, 2018, this item was comprised of $3.0 million of the current portion of long-term bank and other borrowings and of $1.6 million of credit line facilities. Refer to Note 27 for description of amendments made to certain bank borrowings subsequent to year-end.

Credit line facilities

As of December 31, 2019, the Company had credit line facilities granted of $5.6 million, of which $3.7 million had been used. As of December 31, 2018, the Company had credit line facilities granted of $4.6 million, of which $1.6 million had been used.

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The above lines of credit may be drawn upon at variable interest rates in the following range: 0.6%-7.6%.

The weighted average interest rate on the credit line facilities outstanding as of December 31, 2019, was 1.35%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):

								Interest Nominal Rate
	As of December 31,							As of December 31,
	2019		2018		Maturity		Interest Contractual Rate	2019			2018
UniCredit S.p.A. (Line A Tranche (1)	$	3,609	$	5,038		January 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche (2)		167		228		May 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line B)		3,229		3,770		November 2023	Euribor 3 months + 2.90%		2.60	%		2.60	%
UniCredit S.p.A. (Line C)		2,787		—		February 2023	Euribor 3 months + 3.90%		3.53	%		—
Intesa Sanpaolo S.p.A. (Line 1)		988		1,572		October 2021	Euribor 3 months + 1.80%		1.88	%		1.51	%
Intesa Sanpaolo S.p.A. (Line 2)		4,183		—		October 2023	Euribor 3 months + 2.60%		2.60	%		—
UBI Banca S.p.A. (Line 1)		332		625		February 2021	1.25%		1.25	%		1.25	%
UBI Banca S.p.A. (Line 2)		1,499		—		April 2021	Euribor 3 months +1.95%		1.55	%		—
Monte dei Paschi di Siena S.p.A.		521		—		April 2022	0.95%		0.95	%		—
Banco Popolare di Milano S.p.A. (Line 1)		1,336		—		June 2023	Euribor 3 months + 2.00%		2.00	%		—
Banco Popolare di Milano S.p.A. (Line 2)		3,893		—		September 2022	Euribor 3 months + 2.00%		2.00	%		—
Simest 1		280		382		December 2022	0.50%		0.50	%		0.50	%
Simest 2		279		379		December 2022	0.50%		0.50	%		0.50	%
Simest 3		512		—		December 2022	0.50%		0.50	%		—
Finlombarda S.p.A.		83		169		December 2020	0.50%		0.50	%		0.50	%
Total bank and other borrowings		23,698		12,163
Less: current portion		7,564		3,038
Total long-term portion	$	16,134	$	9,125

On August 2, 2019, the Company entered into a medium-term financing agreement with UniCredit S.p.A. denominated in Euro for a total of €2.5 million ($2.8 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments starting from February, 2020. The financing will bear interest at a variable rate (Euribor 3 months plus 3.9% spread). The notional amount was fully drawn on the same date.

On July 25, 2019, the Company entered into a medium-term financing agreement with Intesa Sanpaolo S.p.A. denominated in Euro, for a total notional amount of €4.0 million ($4.5 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments starting from October 2019. The financing has a maturity of 48 months from the date of disbursement and bears interest at a variable rate (Euribor 3 months plus 2.6% spread). The total amount was drawn in full on the same date. Proceeds were used to settle the remaining deferred consideration due for the acquisition of Buc Mobile.

On July 23, 2019, the Company entered into a medium-term financing agreement with Banco Popolare di Milano S.p.A. denominated in Euro for a total of €4.0 million ($4.5 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments. The financing has a maturity of 24 months from the date of disbursement and bears interest at a variable rate (Euribor 3 months plus 2.0% spread). The total amount was drawn in full on the same date and proceeds were used to settle the total deferred consideration for the acquisition of Solutions Infini.

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On April 30, 2019, the Company entered into a new long-term financing with Banco Popolare di Milano S.p.A., denominated in Euro for a total amount of €1.2 million ($1.3 million at the December 31, 2019 exchange rate), to be repaid in quarterly installments with maturity in June 2023.

On April 10, 2019, the Company entered into a new medium-term financing with UBI Banca S.p.A. denominated in Euro for a total amount of €2.0 million ($2.2 million at December 31, 2019 exchange rate), to be repaid in monthly installments with maturity in April 2021.

On April 10, 2019, the Company entered into a new medium-term financing with Monte dei Paschi di Siena S.p.A., denominated in Euro for a total amount of €600,000 ($673,000 at December 31, 2019 exchange rate), to be repaid in monthly installments with maturity in April 2022.

On January 30, 2019, the Company entered into a new long-term financing with Simest denominated in Euro for a total of €608,000 ($682,000 at the December 31, 2019 exchange rate) to be repaid in quarterly installments with maturity in December 2022.

In connection with the above-mentioned financing agreements entered into in the year ended December 31, 2019, the Company incurred $169,000 of debt issuance costs that will be amortized over the maturity of the respective financing agreements.

On July 23, 2018, Kaleyra S.p.A. entered into a medium-term financing agreement with Intesa Sanpaolo S.p.A. denominated in Euro, for a total notional amount of €1.5 million ($1.7 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments. The financing had an original maturity date of July 31, 2021, which was revised subsequent to year-end to October 2021 (the “Intesa Sanpaolo Facility”). This principal was drawn in full on July 18, 2018 and the proceeds were used to partially finance the acquisition of Buc Mobile.

On July 27, 2017, Kaleyra S.p.A. entered into a long-term financing with UniCredit S.p.A. denominated in Euro to partially finance the various installments of the acquisition of Solutions Infini (the “UniCredit Facility”) for a total of €8.2 million ($9.6 million at the December 31, 2019 exchange rate ), divided into two facilities as follows:

• a credit facility for a maximum of €4.9 million ($5.7 million at the December 31, 2018 exchange rate) to be repaid in 16 quarterly installments, with maturity in 2022 (“Line A”). The principal of €4.7 million ($5.5 million at the December 31, 2018 exchange rate) was drawn on July 27, 2017 (“Tranche 1”) and on November 15, 2017 an additional €200,000 ($236,000 at the December 31, 2018 exchange rate) in principal was drawn (“Tranche 2”); and

• a credit facility for a maximum amount of €3.3 million ($3.9 million at the December 31, 2018 exchange rate) to be repaid in quarterly installments, with a maturity date on May 31, 2023, which was revised subsequent to year-end to November 2023 (“Line B”). This principal amount was drawn in full on May 31, 2018.

On February 15, 2017, Kaleyra S.p.A. entered into a medium-term financing agreement with UBI Banca S.p.A. denominated in Euro, for a total of €1.0 million ($1.1 million at the December 31, 2018 exchange rate) to be repaid in 12 quarterly installments with maturity on February 28, 2021 (the “UBI Banca Facility”). This financing was drawn in full on February 27, 2017.

As of December 31, 2019, all of the available long-term facilities were drawn in full.

The above facilities include a series of statements and disclosure obligations, in line with the standard practice for these types of financings, whose breach could result in termination, early repayment or enforcement of acceleration rights. In particular, the UniCredit Facility and the Intesa Sanpaolo Facility include, among other, change of control provisions that may cause the bank to request immediate repayment of the outstanding debt

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under the relevant facility as a result of such a change of control event. Upon the consummation of the Business Combination, Kaleyra S.p.A. formally agreed with UniCredit S.p.A. and Intesa Sanpaolo S.p.A. that the Business Combination does not represent a change of control event with respect to the respective outstanding borrowing.

In addition, the above facilities require compliance with certain financial covenants, based on the Kaleyra S.p.A.’s EBITDA, Net Financial Position and Equity. Failure to comply with those financial covenants would result in the immediate repayment of the outstanding debt under the relevant facility. As of December 31, 2019, the Company is in compliance with all the financial covenants.

Interest expense on bank and other borrowings was of $565,000 for the year ended December 31, 2019 and $322,000 for the year ended December 31, 2018.

As of December 31, 2019, the Company is obliged to make payments as follows (in thousands):

	As of December 31, 2019
2020	$	7,564
2021		8,031
2022		5,254
2023		2,849
Total	$	23,698

10. DEBT FOR FORWARD SHARE PURCHASE AGREEMENTS

As of December 31, 2019, the Company’s debt for forward share purchase agreements amounted to $34.1 million. Refer to Note 27—Subsequent Events for a description of amendments to forward share purchase agreements subsequent to year-end.

Greenhaven

On September 27, 2019, the Company and Greenhaven Road Capital Fund 1, LP, a Delaware limited partnership (“Greenhaven Fund 1”), and Greenhaven Road Capital Fund 2, LP, a Delaware limited partnership (“Greenhaven Fund 2” and together with Greenhaven Fund 1, “Greenhaven”) entered into a forward share purchase agreement (the “Greenhaven Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of its common stock into which Rights of the Company held by Greenhaven and any additional Rights that Greenhaven acquired, converted into shares upon the closing of the Business Combination as amended as of December 13, 2019 at the following prices: (1) $11.00 per share for the first 196,195 shares sold to the Company; (2) $10.70 per share for the next 250,000 shares sold to the Company; and (3) $10.50 per share for the next 550,000 shares sold to the Company. The Company agreed to purchase the shares on the later of the sixtieth day after the Closing of the Business Combination or January 1, 2020 (the “Greenhaven Purchase Closing Date”).

In exchange for Kaleyra, Inc.’s commitment to acquire the shares on the Greenhaven Purchase Closing Date, each of Greenhaven Fund 1 and Greenhaven Fund 2 agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of Kaleyra, Inc.’s securities), the Rights (including any additional Rights) held by Greenhaven, and any shares that such Rights (including any additional Rights) converted into, until the Greenhaven Purchase Closing Date, including not to tender the Rights (or any additional Rights) to Kaleyra, Inc. in response to any tender offer that Kaleyra, Inc. may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Greenhaven shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least 25,000 shares (the

F-34

“Minimum Block Size Condition”) in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, Greenhaven shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, Greenhaven shall have the right to sell such shares at any time provided that the price received by Greenhaven (not including any commissions due by Greenhaven for the sale) is at least $10.50 (or at least $8.50 if Greenhaven meets the Minimum Block Size Condition). In the event that Greenhaven sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that Greenhaven meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay Greenhaven in accordance with Greenhaven’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the Greenhaven Purchase Agreement shall prohibit Greenhaven from entering into a contract to purchase and/or sell warrants of Kaleyra, Inc.

As of December 31, 2019, the Company’s debt in connection with the Greenhaven Purchase Agreement amounted to $10.6 million.

Kepos Alpha Fund

On October 1, 2019, the Company and Kepos Alpha Fund L.P., a Cayman Islands limited partnership (“KAF”), entered into a forward share purchase agreement (“KAF Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of common stock of the Company into which the Rights of the Company held by KAF, including any additional Rights that KAF acquired, converted into upon the closing of the Business Combination. The KAF Purchase Agreement was amended the following day to provide that the total number of additional Rights that KAF may acquire is 3,750,000 Rights. As amended December 13, 2019, the KAF Purchase Agreement provides that the Company would purchase such shares at the following price: (1) $10.70 per share for the first 102,171 shares sold to the Company; and (2) $10.50 per share for the next 93,676 shares sold to the Company. The Company agreed to purchase the shares on the earlier of the sixtieth day after the Business Combination or February 15, 2020 (the “KAF Purchase Closing Date”).

In exchange for the Company’s commitment to acquire the shares on the KAF Purchase Closing Date, KAF agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of the Company’s securities), the Rights (including any additional Rights) held by KAF, and any shares that such Rights (including any additional Rights) converted into, until the KAF Purchase Closing Date, including not to tender the Rights (or any additional Rights) to the Company in response to any Tender Offer that the Company may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that KAF shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, KAF shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, KAF shall have the right to sell such hares at any time provided that the price received by KAF (not including any commissions due by KAF for the sale) is at least $10.50 (or at least $8.50 if KAF meets the Minimum Block Size Condition). In the event that KAF sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that KAF meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay KAF in accordance with KAF’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the KAF Purchase Agreement shall prohibit KAF from entering into a contract to purchase and/or sell warrants of the Company.

F-35

As of December 31, 2019, the Company’s debt in connection with the KAF Purchase Agreement amounted to $2.1 million.

Yakira Capital Management

On November 19, 2019, the Company and Yakira Capital Management, Inc. (“Yakira”) entered into a forward share purchase agreement (the “Yakira Purchase Agreement”) pursuant to which (i) Yakira may elect to sell and transfer to the Company, and the Company will purchase shares of common stock of the Company held by Yakira at the Business Combination Date (the “Yakira Shares”), and (ii) the Company will purchase the shares of common stock of the Company into which the Rights held by Yakira (the “Yakira Rights Shares”) were converted upon the Business Combination Date. At the Business Combination Date, Yakira held 439,299 rights and 1,083,750 Yakira Shares.

The Company agreed that it will purchase the Yakira Rights Shares from Yakira at $1.05 per Right (which reflects $10.50 per Yakira Rights Share) (the “Yakira Rights Share Purchase Price”) as soon as practicable on or after the later of the sixtieth day after the Business Combination Date or January 1, 2020 (the “Yakira Rights Shares Closing Date”). In exchange for the Company’s agreement to purchase the Yakira Rights Shares, Yakira agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge the Rights (including any transactions involving any derivative securities of Yakira and any Short Sales involving any of the Company’s securities), and any Yakira Rights Shares that the rights converted into, until the Yakira Rights Shares Closing Date, including not to tender the Rights to the Company in response to any Tender Offer that the Company may commence for the Rights.

Yakira has the right to terminate the agreement for the Company to purchase the Yakira Rights Shares, without penalty, commencing on the thirtieth day after the Business Combination Date and ending on the day prior to the Yakira Rights Shares Closing Date, by giving written notice to the Company, in which case it will not be restricted after such time with respect to its ability to dispose of the Yakira Rights Shares (subject to the restrictions against transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities).

Except as described below, Yakira also agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any short sales involving any of the Company’s securities) the Yakira Shares prior to the six month anniversary of the Business Combination Date. Yakira further agreed to not redeem any of the Yakira Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. Notwithstanding anything to the contrary herein, commencing on the day after the Business Combination Date, Yakira may sell the Yakira Shares in the open market as long as the sales price is above $10.50 per Yakira Share.

If Yakira still owns Yakira Shares as of the four-month anniversary of the Business Combination Date, Yakira may sell such Yakira Shares between the four-month anniversary and six month anniversary of Business Combination Date to the Company for a per share price (the “Yakira Shares Purchase Price”) equal to (a) $10.5019, plus (b) $0.03 per share for each month (prorated for a partial month) following the Business Combination Date that Yakira has held the Yakira Shares. The closing of the sale of the Yakira Shares to the Company shall occur on the business day following the Company’s receipt of the Yakira Shares exercise notice (the “Yakira Shares Closing Date”). On the Yakira Shares Closing Date, Yakira shall deliver the Yakira Shares to the Company against receipt of the aggregate Yakira Shares Purchase Price, which shall be paid by wire transfer of immediately available funds from the escrow account described below. Yakira may instruct the Escrow Agent to release to Yakira an amount equal to the Shares Purchase Price multiplied by the number of Yakira Shares delivered to the Company from the escrow account on Yakira the Shares Closing Date for Yakira’s use without restriction.

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Following the Business Combination Date, the Company deposited into an escrow account with the Escrow Agent, subject to an escrow agreement, with a nationally chartered bank the amount of $11,576,509 related to Yakira. The Company’s purchase of the Yakira Shares will be made with funds from the escrow account attributed to the Yakira Shares. In the event that Yakira sells any Yakira Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and the Company may promptly release from the escrow account for its use without restriction an amount equal to the pro rata portion of the escrow account attributed to the Yakira Shares which Yakira has sold. In the event that Yakira chooses not to sell to the Company any Yakira Shares that it owns as of the six-month anniversary of the Business Combination Closing Date, the Company may promptly release all remaining funds from the escrow account for its use without restriction. In the event that the Yakira Shares Purchase Price paid on the Yakira Shares Closing Date is less than $10.6819 per Yakira Share, following payment of the Yakira Shares Purchase Price to Yakira, the Company and Yakira shall deliver joint written instructions to the Escrow Agent to release to Kaleyra from the remaining funds in the escrow account an amount equal to the difference between the Yakira Shares Purchase Price and $10.6819 per share multiplied by the number of Yakira Shares delivered by Yakira, and the Escrow Agent shall promptly disburse such amount to the Company in accordance with the payment instructions. On February 7, 2020, the agreement with Yakira was amended (see Note 27—Subsequent Events).

Nothing in the Yakira Purchase Agreement prohibits or restricts Yakira with respect to the purchase or sale of the Company’s warrants.

As of December 31, 2019, the Company’s debt in connection with the Yakira Purchase Agreement amounted to $12.0 million.

Glazer Capital, LLC

On November 19, 2019, the Company and Glazer Capital, LLC (“Glazer”) entered into a forward share purchase agreement (the “Glazer Purchase Agreement”) pursuant to which Glazer may elect to sell and transfer to the Company, and the Company will purchase the shares of the common stock of the company held by Glazer (the “Glazer Shares”) at a price of $10.6819 per share (the “Glazer Shares Purchase Price”). Glazer shall notify the Company in writing five business days prior to the six month anniversary of the Business Combination Date if it is not exercising its right to sell the Glazer Shares to the Company; otherwise, absent written notification to the contrary, Glazer shall be deemed to have exercised its right to sell all of its Glazer Shares to the Company. The Company will purchase the Glazer Shares from Glazer on the six-month anniversary of the closing of the Business Combination (the “Glazer Shares Closing Date”). As of the Business Combination Date, Glazer held 922,933 shares of common stock.

In exchange for the Company’s commitment to purchase the Glazer Shares on the Glazer Shares Closing Date, Glazer agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities) the Glazer Shares prior to the six month anniversary of the Business Combination Date. Glazer further agreed that it will not redeem any of the Glazer Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Glazer shall, commencing on the day after the Business Combination Closing Date, have the right but not the obligation to sell its shares (including any Additional Shares) in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share prior to payment of any commissions due by Glazer for the sale, or, without meeting the Minimum Block Size Condition, Glazer shall have the right but not the obligation to sell any or all of its shares (including any Additional Shares) in the open market if the sale price exceeds $10.50 per share prior to payment of any commissions due by Glazer for such sale. Glazer shall give written notice to the Company of any sale of shares (including any Additional Shares) within three (3) Business Days following the date of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $10.50 per share (or greater than $8.50 per share

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provided that Glazer meets the Minimum Block Size Condition) prior to the payment of any commissions due by Glazer for the sale.

Simultaneously with the closing of the Business Combination, the Company deposited $9,858,678 which is the aggregate amount necessary to purchase the Glazer Shares, into an escrow account with Continental Stock Transfer and Trust Company (the “Escrow Agent”), subject to the terms of an escrow agreement. The Company’s purchase of the Glazer Shares will be made with funds from the escrow account attributed to the Glazer Shares. In the event that Glazer sells any Glazer Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and Glazer shall instruct the Escrow Agent to release from the escrow account for the Company’s use without restriction an amount equal to the pro rata portion of the escrow attributed to the Glazer Shares which Glazer has sold. In the event that Glazer chooses not to sell to the Company any Glazer Shares that it owns as of the six-month anniversary of the Business Combination Date, Glazer shall instruct the Escrow Agent to release all remaining funds from the escrow account for the Company’s use without restriction.

Notwithstanding the Company’s commitment to deposit funds into the escrow account for the purchase of the Glazer Shares, Kaleyra, Inc. shall use its best efforts to enter into a letter of credit agreement for the issuance of a standby letter of credit for the benefit of Glazer with a bank acceptable to Glazer (the “Issuing Bank”) as soon as possible to replace the escrow account. When the letter of credit agreement is entered into, Glazer will instruct the Escrow Agent to deposit the funds held in the escrow account into the collateral account with the Issuing Bank. Concurrently with the execution of the letter of credit agreement, the Issuing Bank shall issue the letter of credit for the benefit of Glazer in the amount of the escrow account. Glazer shall drawdown from the letter of credit to satisfy the payment due to Glazer by the Company for the purchase of the Glazer Shares. In the event that Glazer sells any Glazer Shares pursuant to the sales price restriction set forth above, it shall provide notice to the Company and the Issuing Bank within three business days of such sale, and the Issuing Bank shall release from the collateral account an amount equal to the number of Glazer Shares sold multiplied by $10.6819 to the Company for the Company’s use without restriction, with a corresponding reduction in the amount of the letter of credit. In the event that Glazer elects not to sell to the Company any Glazer Shares, the Issuing Bank shall release all funds in the collateral account to the Company for the Company’s use without restriction and terminate the letter of credit. On January 7, 2020 the Company entered into a Letter of Credit and Reimbursement agreement with EagleBank for the benefit of Glazer and $9.3 million of funds were transferred from the escrow account to a collateral account with EagleBank as collateral for the Letter of Credit and Reimbursement agreement.

Nothing in the Glazer Purchase Agreement prohibits or restricts Glazer with respect to the purchase or sale of the Company’s warrants.

From November 26, 2019 to December 31, 3019 Glazer sold 53,040 shares on the open market.

As of December 31, 2019, the Company’s debt in connection with the Glazer Purchase Agreement amounted to $9.3 million.

Nomura Global Financial Products

On October 31, 2019, the Company entered into an agreement (the “Confirmation”) with Nomura Global Financial Products, Inc. (“NGFP”) for an OTC Equity Prepaid Forward Transaction (the “Forward Transaction”). Pursuant to the terms of the Confirmation, NGFP agreed to waive any redemption right that would require the redemption of shares that it holds at the Business Combination Date in exchange for a pro rata amount of the funds held in the Trust Account provided that the Business Combination date occurred prior to December 12, 2019. Rather, NGFP, at its sole discretion, may either sell such shares in one or more transactions, publicly or privately, at a market price of at least $10.50 per share, or hold such shares for a period of time following the consummation of the Business Combination, at which time the Company will be required to purchase from

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NGFP, and NGFP will be required to sell to the Company, any such shares not otherwise previously sold by NGFP. The Confirmation provides that the Forward Transaction with NGFP is for up to 2,000,000 shares of common stock. The actual number of shares held by NGFP at the Business Combination Date was 1,623,000 shares of common stock (the “Subject Shares”).

The Confirmation provided that following the closing of the Business Combination, the Company transferred from the Trust Account an amount equal to (a) the aggregate number of the Subject Shares held by NGFP, multiplied by (b) the per share redemption price for shares of common stock out of the Trust Account (the “Forward Price”) (such actual aggregate cash amount, the “Prepayment Amount”), as a partial prepayment to NGFP of the amount to be paid to NGFP in settlement of the Forward Transaction upon the Valuation Date (as defined below) for the number of shares owned by NGFP at the closing of the Business Combination. The amount of the Prepayment Amount transferred to NGFP on November 25, 2019 was $17,044,584.

After the Business Combination Date, NGFP may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Original Valuation Date or Extended Valuation Date (each as defined below, and each a “Valuation Date”) at a price per Subject Share not less than the Forward Price. Any Subject Shares sold by NGFP during the term of the Transaction will cease to be Subject Shares. NGFP will give written notice to the Company of any sale of Subject Shares by NGFP within two business days of the date of such sale, such notice to include the date of the sale, the number of Subject Shares sold, and confirmation that the sale price per Subject Share was not less than the Forward Price.

After the Business Combination Date, NGFP may also buy and sell additional shares for its own account or on behalf of third parties, and the pricing limitation set forth in the prior paragraph will not apply to any shares purchased after the closing of the Business Combination.

On each quarterly anniversary of the Business Combination Date (any such date, a “Cash Settlement Date”), NGFP will terminate the transaction in whole or in part by reducing the number of Subject Shares for the Forward Transaction (the reduction being “Terminated Shares”). The number of Terminated Shares with respect to any Cash Settlement Date will equal the number of Subject Shares sold by NGFP since the prior Cash Settlement Date (or with respect to the first Cash Settlement Date, the closing of the Business Combination). NGFP will notify the Company of the expected number of Terminated Shares not less than ten days prior to the applicable Cash Settlement Date. On each Cash Settlement Date, NGFP will pay the Company an amount equal to the product of (A) the number of Terminated Shares and (B) the Forward Price. With effect from the Cash Settlement Date, the remaining number of Subject Shares for the Forward Transaction will be reduced by the Terminated Shares.

The “Original Valuation Date” for the Forward Transaction will be the first anniversary of the closing of the Business Combination, provided that NGFP and the Company may, not later than ten days prior to the Original Valuation Date, agree, each in their sole discretion, to extend the Valuation Date to the second anniversary of the Business Combination (the “Extended Valuation Date”). At the Original Valuation Date or Extended Valuation Date, the Forward Transaction will be settled by NGFP delivering the remaining Subject Shares to the Company, and the Company paying NGFP an amount equal to the product of (x) the Forward Price, (y) the applicable Accrual Percentage (as defined below), and (z) the number of remaining Subject Shares. The “Accrual Percentage” is the product of (a) with respect to any settlement occurring on or before the Original Valuation Date, 2.75% per annum, and with respect to any settlement occurring after the Original Valuation Date, 3.50% per annum, and (b) the number of actual days divided by the number of days in a year beginning on the date of the Business Combination and ending on the applicable day of the settlement.

For the year ended December 31, 2019, financial expense amounted to $46,000.

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11. NOTES PAYABLE

Notes payable to the Sellers

As mentioned above, as consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, (the “Convertible Notes”) and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Non-convertible Notes”).

Convertible Notes

As of December 31, 2019, debts for Convertible Notes amounted to $7.5 million, of which $21,500 was accrued interest.

Interest on the Convertible Notes will accrue at a fixed interest rate equal to the one-year US dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date, plus a margin of one percent (1%) per annum. Interest will be due and payable annually on each of (1) the date which is the twelve-month anniversary of the Business Combination Date and (2) on the date which is the twenty-four-month anniversary of the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

Fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable on the fifteen-month anniversary of the Business Combination Date. The remaining outstanding principal balance of these Convertible Notes plus all accrued and unpaid interest and fees due under these Notes will be due and payable in full on the twenty-four-month anniversary of the Business Combination Date.

In the event that the Company receives, at any time while principal on these Convertible Notes remains outstanding, cash proceeds of an equity financing (the “Financing”) in an amount not less than $50.0 million (the “Notes Financing Proceeds”), fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable no later than ten business days after the Company receives such Notes Financing Proceeds. In the event of a Financing where at any time the Company receives cash proceeds of such Financing in an amount not less than $75.0 million (the “Payoff Financing Proceeds”), one hundred percent of the remaining outstanding principal balance of these Convertible Notes, plus all accrued and unpaid interest and fees due under the Notes will be due and payable no later than ten business days after the Company receives such Payoff Financing Proceeds. The date which is the earlier of (a) the twenty-four-month anniversary of the Business Combination Date, or (b) the date payment is received from Payoff Financing Proceeds, is the “Maturity Date.”

In the event that these Convertible Notes are not paid in full on or before the applicable Maturity Date, then at any time after the sixtieth business day after the Maturity Date, assuming payment in full has not been made prior to such date, the outstanding principal amount of these Notes, together with all accrued but unpaid interest on these Convertible Notes, may be converted into shares of Company common stock, in part or in whole, at the option of the holder of these Convertible Notes by providing written notice at least three business days prior to the date of conversion. A conversion of any portion of these Convertible Note into shares of Company common stock will be effected at a conversion price equal to the Current Market Price as of the date of such conversion (the “Conversion Price”). The term “Current Market Price” means, generally, the average VWAP for the twenty consecutive trading days ending on the date that is five trading days prior to the date of conversion. The term “VWAP” means, for any trading day, the volume weighted average trading price of the Company common stock for such trading day on the NYSE (or if the Company common stock is no longer traded on the NYSE, on such other exchange as the Company common stock are then traded).

Non-convertible Notes

As of December 31, 2019, debts for Non-convertible Notes amounted to $7.5 million, of which $21,500 was accrued interest.

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Interest on the Non-convertible Notes shall accrue at a fixed interest rate equal to LIBOR plus a margin of one percent (1%) per annum, which interest rate as of the date hereof is one and ninety-one hundredths percent (1.91%). As used herein, “LIBOR” means the one-year US Dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

The outstanding principal balance of the Non-convertible Notes, plus all accrued and unpaid interest and fees due under these notes, shall be due and payable, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), no later than ten (10) business days after the Company receives the Financing Proceeds.

Notes payable—Other

Prior to the closing of the Business Combination, the Company had issued to several of its stockholders or their affiliates various promissory notes that were due to be paid in full upon the closing of the Business Combination (such notes referred to collectively as either the “Extension Notes” or the “Working Capital Notes”). In conjunction with the completion of the Business Combination, the Company and each of GigAcquisitions, LLC (the “Sponsor”) and an affiliate of the Sponsor, GigFounders, LLC, agreed to amend and restate the Extension Notes and Working Capital Notes held by them to provide that in lieu of repaying such promissory notes in full upon the closing of the Business Combination, the outstanding principal balance of such amended and restated notes (the “Amended Extension Notes” and the “Amended Working Capital Notes”), plus all accrued and unpaid interest (as described below) and fees due under the Amended Extension Notes and Amended Working Capital Notes, shall, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has subsequent to year end entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), be due and payable no later than ten business days after the Company receives the Financing Proceeds. Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. None of the Amended Extension Notes or Amended Working Capital Notes will be convertible into securities of the Company. On December 31, 2019, all of the other holders of Extension Notes and Working Capital Notes similarly agreed to amend and restate these notes to exchange them into Amended Extension Notes and Amended Working Capital Notes, although one holder did so after December 31, 2019. As of December 31, 2019, the outstanding amount of the notes payable for these notes amounted to $3.6 million of which $1.9 million was due to related parties.

12. EMPLOYEE BENEFIT OBLIGATION

The Company sponsors two defined benefit plans covering the majority of Italian employees and all of Solutions Infini’s employees. Total costs of the defined benefit plans for the years ended December 31, 2019 and 2018 was $287,000 and $185,000, respectively.

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Changes in obligations of the defined benefit plans is as follows (in thousands):

	As of December 31,
	2019			2018
Benefit obligation at the beginning of the period	$	1,173		$	947
Change in scope of consolidation		—			155
Service cost		165			152
Interest cost		33			22
Actuarial loss		89			11
Benefit paid		(13	)		(67	)
Foreign exchange translation reserve		(23	)		(47	)
Benefit obligation at the end of the period	$	1,424		$	1,173
Of which:
Current (1)	$	26		$	26
Long-term	$	1,398		$	1,147

(1) Included within “Payroll and payroll related accrued liabilities” in the accompanying consolidated balance sheets.

There are no plan assets servicing the defined benefits plans.

The assumptions used to determine benefit obligations at year-end are as follows:

	As of December 31,
	2019	2018
Discount rate for Kaleyra S.p.A. (1)	0.78%	1.74%
Discount rate for Solutions Infini (2)	7.25%	7.75%
Rate of compensation increase for Kaleyra S.p.A.	0.50% - 3.00%	0.50% - 3.00%
Rate of compensation increase for Solutions Infini	15.00%	15.00%

(1) The discount rate for Kaleyra S.p.A. is based on the Euro area composite yields AA with a duration equal to the estimated term of the obligations, examined as of December 31, 2019.

(2) The discount rate for Solutions Infini is based on the prevailing market yields of Indian government securities at the balance sheet date for the estimated term of the obligations.

The Company has also a 401(k) defined contribution plan covering substantially all U.S. domestic employees. The participation in this plan is voluntary. The Company matches plan participants’ contributions up to various limits. Participants’ contributions are limited based on their compensation and, for certain supplemental contributions which are not eligible for Company matching, based on their age. Expense for the 401 (k) plan was $54,000 and zero for the years ended December 31, 2019 and 2018, respectively.

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13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The accumulated balances related to each component of other comprehensive income (loss) are as follows (in thousands):

	Cumulative Foreign Currency Translation Adjustment			Cumulative net unrealized gain (loss) on marketable securities, net of tax			Cumulative other comprehensive income related to joint venture			Accumulated Other Comprehensive Income (Loss)
As of December 31, 2017	$	228		$	—		$	(156	)	$	72
Other comprehensive income (loss) before reclassifications		(175	)		(22	)		—			(197	)
Net amount reclassified from accumulated other comprehensive income (loss)		—			—			156			156
Net other comprehensive income (loss)		(175	)		(22	)		156			(41	)
As of December 31, 2018		53			(22	)		—			31
Other comprehensive income (loss) before reclassifications		25			38			—			63
Net amount reclassified from accumulated other comprehensive income (loss)		—			(20	)		—			(20	)
Net other comprehensive income (loss)		25			18			—			43
As of December 31, 2019	$	78		$	(4	)	$	—		$	74

14. PREFERENCE SHARES LIABILITIES

As mentioned above, preference shares liabilities amounting to $2.5 million and $1.8 million as of December 31, 2019 and 2018, respectively, represent the Company’s obligation to purchase in 2020 the preference shares from certain employees of Solutions Infini as a part of the Solutions Infini 2018 Purchase Agreement. The purchase will be made at a predetermined price based on the EBITDA of Solutions Infini for its year ending March 31, 2020 as stated in the purchase agreement and any amendments thereto.

On May 6, 2019, the Company signed a modification of the Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in 2020 for India Rupee 70.0 million ($987,000 at the December 31, 2019 exchange rate).

On March 9, 2020, the Company signed an additional modification of the Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per share. As a result of this modification, effective on January 30, 2020, the total preference shares obligation was reduced to Indian Rupee 140,000 ($2,000 at the January 31, 2020 exchange rate). See Note 27—Subsequent Events.

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15. OTHER CURRENT AND LONG-TERM LIABILITIES

Other current liabilities consisted of the following (in thousands):

	As of December 31,
	2019		2018
Liabilities for tax other than income tax	$	583	$	589
Social securities liabilities		256		180
Income tax liabilities		—		43
Derivative contract liabilities		—		18
Other liabilities		390		179
Total other current liabilities	$	1,229	$	1,009

Long-term liabilities consisted of the following (in thousands):

	As of December 31,
	2019		2018
Long-term trade payable (see Note 27)	$	2,700	$	—
Derivative contract liabilities		80		106
Other long-term liabilities		375		185
Total other long-term liabilities	$	3,155	$	291

16. SUPPLEMENTAL BALANCE SHEET INFORMATION

Allowance for doubtful accounts:

A roll-forward of the Company’s allowance for doubtful accounts for the years ended December 31, 2019 and 2018 is as follows (in thousands):

	Year Ended December 31,
	2019			2018
Balance, beginning of the period	$	157		$	60
Accruals		800			108
Utilization of provision		(84	)		—
Effect of foreign exchange rate		—			(11	)
Balance, end of the period	$	873		$	157

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17. GEOGRAPHIC INFORMATION

Revenue by geographic area is determined on the basis of the location of the customer. The Company generates its revenue primarily in Italy and India. The following table sets forth revenue by geographic area for the years ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019		2018
Italy	$	60,165	$	53,988
India		35,162		15,236
Europe (excluding Italy)		15,686		4,943
United States		9,418		2,247
Rest of the world		9,127		1,431
Total	$	129,558	$	77,845

	Year Ended December 31,
	2019			2018
Italy		46.4	%		69.4	%
India		27.1	%		19.6	%
Europe (excluding Italy)		12.1	%		6.3	%
United States		7.3	%		2.9	%
Rest of the world		7.1	%		1.8	%

As of December 31, 2019, the majority of the Company’s long-lived assets are located in Italy. The following table sets long-lived assets by geographic area as of December 31, 2019 and 2018 (in thousands):

	As of December 31,
	2019		2018
Italy	$	1,772	$	1,136
India		1,162		1,042
United States		437		126
Rest of the world		22		37
Total	$	3,393	$	2,341

	As of December 31,
	2019			2018
Italy		52.2	%		48.5	%
India		34.2	%		44.5	%
United States		12.9	%		5.4	%
Rest of the world		0.7	%		1.6	%

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18. PERSONNEL COSTS

Personnel costs amounting to $12.6 million for the year ended December 31, 2019 (of which $996,000 related to RSUs compensation expense) and $15.2 million for the year ended December 31, 2018 (of which $7.4 million related to stock-based compensation expense), were allocated as follows (in thousands):

	Year Ended December 31,
	2019		2018
Research and development	$	4,158	$	2,753
Sales and marketing		2,855		4,604
General and administrative		5,635		7,797
Total Personnel Costs	$	12,648	$	15,154

Approximately 30% of the Company employees are subject to a collective Italian national labor agreement expiring on December 31, 2023.

19. FINANCIAL EXPENSE, NET

Financial expense, net for the years ended December 31, 2019 and 2018, consisted of the following (in thousands):

	Year Ended December 31,
	2019			2018
Financial Income:
Interest income	$	160		$	31
Gain on derivatives		414			134
Dividends on marketable securities		97			4
Total Financial Income		671			169
Financial Expense:
Interest expense		(1,073	)		(585	)
Loss on derivatives		(37	)		—
Total Financial Expense		(1,110	)		(585	)
Financial expense, net	$	(439	)	$	(416	)

20. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company entered into various operating lease agreements that expire over various years in the next 7 years. The Company’s Milan office lease contains an option to renew the lease for 6 years under terms and conditions set forth in the lease agreement. Certain of the Company’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. Rent expense was $940,000 and $307,000 for the years ended December 31, 2019 and 2018, respectively.

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Future minimum lease payments under operating leases as of December 31, 2019 are as follows (in thousands):

	As of December 31, 2019
2020	$	636
2021		519
2022		506
2023		393
2024		314
2025 and thereafter		424
Total Minimum Lease Payments	$	2,792

Contingencies

As of December 31, 2019, the Company had contingent liabilities of $132,000, relating to a tax appeal of Solutions Infini for which no provision was recognized as its occurrence was deemed remote.

21. STOCKHOLDERS’ EQUITY (DEFICIT)

Common stock

The authorized common stock of the Company includes up to 100,000,000 shares. Holders of the Company’s common stock are entitled to one vote for each share of common stock. As of December 31, 2019, there were 19,977,113 shares of common stock issued and outstanding with a par value $0.0001 per share.

On November 25, 2019, the Company issued in the aggregate 10,687,106 shares of common stock to the Sellers as consideration for the Business Combination.

Immediately after giving effect to the Business Combination (including as a result of redemptions, and the automatic conversion of rights into 1,321,756 shares of common stock), there were 19,977,113 shares of the Company’s issued and outstanding common stock.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. As of December 31, 2019, there were no shares of preferred stock issued and outstanding.

Warrants

Warrants will only be exercisable for whole shares at $11.50 per share. As a result, at least four Units must be purchased in order for each holder to receive shares of common stock for all of the Warrants acquired upon their exercise. Under the terms of the Warrant agreement dated December 12, 2017, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act, following the completion of the Business Combination, for the registration of the shares of common stock issuable upon exercise of the Warrants included in the Units. No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number for the number of shares of common stock to be issued to the Warrant holder. Each Warrant became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of the Warrants

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during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the Warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.

As of December 31, 2019, there were 11,154,938 warrants outstanding.

22. RESTRICTED STOCK UNITS

In December 2019, RSUs were granted to certain employees, directors and advisory board members of the Company for a total of 3,336,095 RSUs shares with an aggregate grant date fair value of $27.5 million, based on a per share grant date fair value of $8.25. In particular:

• The Board of Directors adopted a form of Restricted Stock Unit award Agreement and granted to certain employees of the Company or its subsidiaries (i) 931,243 RSUs that vest in one year from the grant date, (ii) 124,723 RSUs that vest upon the final determination, if any, that the Business Combination’s definition of 2019 targeted adjusted EBITDA is achieved, and (iii) 124,718 RSUs that vest upon the final determination, if any, that the Business Combination’s definition of 2020 targeted adjusted EBITDA is achieved.

• The Board of Directors of the Company granted to certain employees, directors and advisory board members of the Company a total of 2,020,411 RSUs. These RSUs have no performance conditions and vest as follows: (i) 25% of the shares vest on February 1, 2021 and (ii) the remaining 75% vests in equal quarterly installments over a three-year period starting from February 1, 2021.

• The Board of Directors of the Company and certain advisory board members were granted a total of 135,000 RSUs. These RSUs have no performance conditions and vest 40% on February 1, 2020 with the remaining RSUs vesting ratably over the subsequent three quarters.

The following table sets forth the movements in the number of outstanding RSUs for the year ended December 31, 2019:

	Number of shares		Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2018		—	$	—
Granted		3,336,095		8.25
Non-vested as of December 31, 2019		3,336,095	$	8.25

RSUs compensation expense for the year ended December 31, 2019 was $996,000, which was recorded as follows (in thousands):

	Year Ended December 31, 2019
Research and development	$	299
Sales and marketing		115
General and administrative		582
Total	$	996

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As of December 31, 2019, there was $26.5 million of unrecognized compensation cost related to non-vested RSUs to be recognized over a weighted-average remaining period of 1.75 years.

23. INCOME TAXES

The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable.

The following table presents domestic and foreign components income (loss) before income tax expense for the years ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019			2018
Domestic	$	(7,857	)	$	(635	)
Foreign		4,618			(5,041	)
Loss before income tax expense	$	(3,239	)	$	(5,676	)

The provision for federal and state income taxes consists of the following (in thousands):

	Year Ended December 31,
	2019			2018
Current
Domestic:
US federal corporate income tax	$	—		$	—
US state corporate income tax		—			—
Foreign:
IRES (Italian corporate income tax)		66			248
IRAP (Italian regional tax on productive activities)		50			107
Foreign (India)		1,977			935
Other Italian taxes		194			62
Current		2,287			1,352
Deferred		(14	)		72
Income tax expense	$	2,273		$	1,424

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The differences between income taxes expected by applying the U.S. federal statutory tax rate of 21% and the amount of income taxes provided for are as follows (in thousands):

	Year Ended December 31,
	2019			2018
Loss before income taxes	$	(3,239	)	$	(5,676	)
Primary tax rate of the Company (1)		21.00	%		24.00	%
Tax benefit calculated according to the Company’s primary tax rate		(680	)		(1,363	)
State income tax, net of Federal		(483	)		—
Foreign tax rates differences (2)		319			77
Change in applicable tax rates (3)		(513	)		—
Change in valuation allowance		2,027			213
Non-taxable income		(196	)		—
Costs not deductible for tax purposes		541			2,103
Costs not deductible associated with investments		36			19
CFC (Controlled Foreign Corporation rules) (4)		288			93
IRAP (Italian Regional Tax on Productive Activities)		4			154
Taxes on undistributed profits		926			180
Other taxes		4			(52	)
Reported income tax expense	$	2,273		$	1,424

(1) For the year ended December 31, 2019, “primary tax rate of the Company” means the U.S. federal tax rate (21%); for the year ended December 31, 2018, “primary tax rate of the Company” means the applicable Italian Corporate Income Tax (IRES) rate (24%).

(2) For the year ended December 31, 2019, “foreign” relates to tax jurisdictions outside the United States; for the year ended December 31, 2018, “foreign” relates to tax jurisdictions outside Italy.

(3) During 2019, applicable tax rate for Solutions Infini was reduced from 29.12% to 25.17%, resulting in a tax benefit for the period.

(4) Recorded by the Company in relation with the Dubai subsidiary (FZE).

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands):

	As of December 31,
	2019			2018
Deferred tax assets:
Startup costs	$	2,755		$	—
Deferred compensation liabilities		398			128
Property and equipment		70			148
Goodwill		119			134
Net operating loss carryforward		3,370			1,736
Other		422			173
Total deferred tax assets		7,134			2,319
Less: valuation allowance		(5,591	)		(723	)
Total deferred tax assets, net		1,543			1,596
Deferred tax liabilities:
Intangible assets		2,351			3,389
Undistributed profits		1,093			180
Property and equipment		134			140
Other		10			6
Total deferred tax liabilities		3,588			3,715
Net deferred tax liabilities	$	(2,045	)	$	(2,119	)

As of December 31, 2019, the Company has federal, state and foreign net operating loss carryforwards totaling $11.6 million, $11.7 million and $1.6 million, respectfully. If not utilized, federal net operating losses of $5.4 million will expire at various dates from 2026 through 2037, and $6.2 million have an indefinite life. State net operating losses of $10.1 million will expire at various dates from 2037 through 2039, and $1.6 million have an indefinite life. Foreign net operating losses originated in Switzerland and will expire at various dates from 2023 through 2026.

The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses; the nature of the Company’s deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. The Company does not believe that it is more likely than not that all of the deferred tax assets will be realized; accordingly a valuation allowance has been established for the amount of the deferred tax assets on net operating loss carryforward, startup costs, and other deferred tax assets in excess of the deferred tax liabilities that will reverse prior to any net operating loss carryforward expiration date.

The following table sets forth movement in the valuation allowance for the year ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019		2018
Balance at the beginning of the period	$	723	$	206
Change in scope of consolidation		2,836		305
Increase during the period		2,027		213
Effect of exchange rate changes		5		(1	)
Balance at the end of the period	$	5,591	$	723

F-51

The Company recognizes interest and penalties, if any, related to an underpayment of income taxes in income tax expense. As of December 31, 2019, the Company has accumulated $91,000 in interest related to unrecognized tax benefits ($4,000 as of December 31, 2018).

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits as of December 31, 2019 and 2018 is as follows (in thousands):

	As of December 31,
	2019			2018
Gross unrecognized tax benefits, beginning of the year	$	190		$	91
Additions for tax positions of prior years		—			—
Additions for tax positions related to the current year		193			93
Change in scope of consolidation		—			—
Effect of exchange rate		(6	)		2
Subtotal		377			186
Interest and penalties		91			4
Total gross unrecognized tax benefits, end of the year	$	468		$	190

As of December 31, 2019, the Company had $5.0 million of undistributed earnings and profits generated by a foreign subsidiary (Solutions Infini) for which no deferred tax liabilities have been recorded, since the Company intends to indefinitely reinvest such earnings in the subsidiary to fund the international operations and certain obligations of the subsidiary. Should the above undistributed earnings be distributed in the form of dividends or otherwise, the distributions would result in $757,000 of tax expense.

The Company files income tax returns in the United States and in foreign jurisdictions including Italy, India, and Switzerland. As of December 31, 2019, the tax years 2007 through the current period remain open to examination in each of the major jurisdictions in which the Company is subject to tax.

24. LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

The Business Combination was accounted for as a reverse recapitalization in accordance with US GAAP (see Note 5—Business Combination). Accordingly, weighted-average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination.

The following table sets forth the calculation of basic and diluted loss per share attributable to common stockholders during the period presented (in thousands, except share and per share data):

	Year Ended December 31,
	2019			2018
Net loss attributable to common stockholders	$	(5,512	)	$	(7,100	)
Weighted-Average shares used to compute net loss per share attributable to common stockholders, basic and diluted		11,603,381			9,828,411
Net loss per share attributable to common stockholders, basic and diluted	$	(0.48	)	$	(0.72	)

The Company generated a net loss attributable to the Company’s common stockholders for each of the years ended December 31, 2019 and 2018. Accordingly, the effect of dilutive securities is not considered in the loss per share for such periods because their effect would be anti-dilutive on the net loss per share.

For the year ended December 31, 2019, the weighted-average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share attributable to

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common stockholders as their effect would be anti-dilutive, was 1,244,043 (580,580 for the year ended December 31, 2018).

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

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$638,000. Ms. Levy received salary and benefits in the amount of $239,000 for the year ended December 31, 2019.

26. LEGAL MATTERS

On October 17, 2018, Kaleyra S.p.A. filed a claim against Vodafone Italia S.p.A. before the Court of Milan seeking compensation in the amount of 6.1 million euro for all the damages suffered as a consequence of the illicit and anticompetitive conduct of Vodafone, as previously determined by the Italian Antitrust Authority (namely, Autorità Garante della Concorrenza e del Mercato or AGCM) in their decisions issued on December 13, 2017; Vodafone has appealed that sanctioning resolution before the Italian Regional Administrative Court.

The deadline for filing a counterclaim by Vodafone has passed and according to Italian Law, Vodafone is no longer entitled to file a counterclaim against the Company in these proceedings.

The case has now been submitted to a panel of judges for review to determine if the claim can proceed in the Court of Milan or a suspension must be declared until the administrative proceeding is decided.

The claim is under review and Kaleyra S.p.A. and Vodafone have filed their final pleadings on October 1, 2019 and October 21, 2019, respectively. There is no certainty that the claim will be approved to proceed in the Court of Milan, rather than suspended, and the outcome of such action cannot be determined at this time. Therefore no recognition of these actions has been made in the consolidated financial statements.

On April 16, 2019 Kaleyra S.p.A. filed a claim against Telecom Italia S.p.A and Telecom Italia Sparkle S.p.A. before the Court of Milan seeking compensation in the amount of 8.3 million euros for damages suffered after the illicit conduct of both counterparts, determined by the Italian Antitrust Authority in the decision issued on December 13, 2017.

At the first hearing before the Court of Milan held for the appearance of the parties on December 11, 2019, the judge reserved the decision on the possible suspension of the civil case in consideration of the appeal brought by Telecom Italia and Telecom Italia Sparkle S.p.A. against the Italian Antitrust Authority’s decision of December 13, 2017 before the Administrative Court of Latium (namely, Tribunale Amministrativo Regionale del Lazio), which is currently pending. By order issued on December 14, 2019, the judge released his reserve and referred the issue concerning the relation between the assessment of the pending administrative case and the one to be carried out in the civil case to a panel composed of three judges. The case was therefore adjourned for a hearing on April 29, 2020 where the parties will have to file their final pleadings.

There is no certainty that the claim will be approved to proceed in the Court of Milan, rather than suspended, and the outcome of such civil action cannot be determined at this time. Therefore no recognition of these actions has been made in the consolidated financial statements.

In addition to the above, the Company has appealed the resolutions issued by the Italian Communications Authority (namely, Autorità per le Garanzie nelle Comunicazioni or AGCom) concerning the request for the annual contribution to AGCom for years 2016, 2017, 2018 and 2019.

The first instance proceeding against AGCom’s resolutions for the 2016 contribution was successful for the Company and the Regional Administrative Court annulled the resolutions the Company had appealed (judgement no. 2161/2019). However, AGCom filed its second instance appeal before the Council of State seeking the overruling of the Court’s decision. The hearing on AGCom’s appeal will take place in the last quarter of 2020.

All the other proceedings are currently pending before the Regional Administrative Court and no hearing has been scheduled yet.

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The abovementioned proceedings concerning the contribution/fee to be paid to AGCom may all be suspended until the request for a preliminary ruling from the Council of State regarding an interpretation of the relevant EU law (case C-399/19) will be defined by the European Court of Justice.

27. SUBSEQUENT EVENTS

In January 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a public health emergency of international concern. The coronavirus COVID-19 pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations. The Company maintains its headquarters in Milan, Italy, which has been severely affected by COVID-19 and the resulting government lockdowns to attempt to contain the coronavirus. The magnitude and duration of the resulting decline in business activity cannot currently be estimated. The Company may see its services carrying less revenue-generating traffic in areas subject to “shelter in place” restrictions or related government orders as the population of those areas refrain from traveling and normal commerce activities. Accordingly, the Company expects the COVID-19 pandemic to potentially have a negative impact on its sales and its results of operations in those areas adversely affected by COVID-19, the size and duration of which the Company is currently unable to predict. Additionally, concerns over the economic impact of COVID-19 have caused extreme volatility in financial and other capital markets which may reduce the Company’s ability to access capital. The rapid development and fluidity of the situation presents uncertainty and risk with respect to the Company, its performance, and its financial results in the near future.

On January 23, 2020, the Company entered into Amendment No. 3 to the Greenhaven Forward Share Purchase Agreement (the “Greenhaven Amendment”). The Greenhaven Amendment provides that Greenhaven has the right to put its subject shares to the Company on the following dates and at the following purchase prices: (i) $11.00 per share for up to 248,963 shares to be sold to the Company on February 21, 2020; and (ii) $11.70 per share for the next 700,000 shares to be sold to the Company on August 30, 2020. Greenhaven may continue to sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $8.50 per share. On February 20, 2020, the Company repurchased an aggregate of 235,169 of its common stock for $2.6 million. In addition, the Company paid Greenhaven $152,000 for the 60,996 shares that Greenhaven sold on the open market representing the amount at which the $11.00 exceeded the selling price. On August 30, 2020, the Company shall pay Greenhaven an amount equal to (1) the number of shares (including any additional shares) sold by Greenhaven in the open market between February 21, 2020 and August 30, 2020 multiplied by (2) the amount by which $11.70 exceeds the sale price per share.

On January 23, 2020, the Company entered into Amendment No. 3 to the KAF Forward Share Purchase Agreement and on April 7, 2020, the Company entered into Amendment No. 4 (the “KAF Amendments”). On April 9, 2020, KAF sold 50,000 Shares to the Company at the price of $10.92 per share. According to the last amendment, KAF has the right to put its subject shares to the Company on May 7, 2020 at a purchase price of: (i) $10.92 per share for the first 46,137 shares sold to the Company; and (ii) $10.82 per share for the next 93,676 Shares sold to the Company (collectively, the “KAF Share Purchase Price”). In the event the closing occurs after May 7, 2020, the KAF Share Purchase Price shall increase for the 93,676 shares sold to Kaleyra by 1% per full month until the closing date. KAF may elect, in its sole and absolute discretion, to extend the date on which it exercises its put right to a date that is provided upon 10 calendar days’ written notice. The KAF Amendments further provide that KAF may sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $7.00 per share. In the event that KAF sells any shares (including any additional shares) at a sale price of less than $10.92 per share for the first 46,137 shares and $10.82 per share for the next 93,676 shares, the Company shall pay KAF an amount equal to (A) the number of shares (including any additional shares) sold multiplied by (B) the amount by which $10.92 or $10.82, as applicable, exceeds the sale price per share. Should the Company fail to make this payment, the Company shall, without prejudice or limitation to any other remedies available to KAF in law or equity, pay a penalty on such amount due at the rate of 18% per annum from the due date until the date of payment in full.

F-55

On January 23, 2020, Buc Mobile entered into a revolving line of credit facility with Intesa Sanpaolo S.p.A. for a total amount of up to $1.0 million to be used solely for the purpose of Buc Mobile general working capital needs. Applicable interest rate is to be agreed among the parties when the revolving facility is drawn.

On February 7, 2020, the forward share purchase agreement with Yakira was amended. The Amendment provides that the Company may be obligated to purchase some or all of the 43,930 shares if Yakira exercises an option to sell such shares to the Company at a purchase price of $10.93 per share (which is an increase from $10.50 per share) as soon as practicable on or after the six month anniversary of the Business Combination Date.

On March 6, 2020, in connection with the previously consummated Business Combination, the Company agreed to pay to Northland Securities, a financial advisory services company, in full satisfaction of all amounts owned to Northland as of December 31, 2019, the following amounts: (i) $100,000 in cash, (ii) a promissory note for the principal amount of $400,000, together with all accrued but unpaid interest thereon, and (iii) 140,000 shares of the Company’s common stock, par value $0.0001 per share.

On March 9, 2020, the Company signed an additional modification of the 2018 Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per preference share. As a result of this modification, effective on January 30, 2020, the total preference shares obligation was reduced to Indian Rupee 140,000 ($2,000 at the January 31, 2020 exchange rate). On January 31, 2020 Solutions Infini confirmed, to the eligible employees of the preference shares, performance bonuses for a total amount of $3.7 million (at the January 31, 2020 exchange rate), to be paid in 2020. On March 24, 2020, given the prevailing situation of the COVID-19 both globally and in India, the Company resolved to delay payment of the performance bonuses, for a total amount of $1.5 million (at the January 31, 2020 exchange rate), and evaluate the timeline for payment thereof.

On March 11, 2020, Kaleyra S.p.A. entered into a 36-month loan agreement with Monte dei Paschi di Siena for $2.2 million (€2.0 million). The total amount of this new facility was drawn in full the same date. This facility bears interest at a fixed rate equal to 1.75%.

On March 20, 2020, Kaleyra S.p.A. entered into a general unsecured loan agreement (the “BPM Loan Agreement”) with Banco BPM S.p.A. (formerly Banco Popolare di Milano S.p.A.) for a total of $6.5 million (€6.0 million). The BPM Loan Agreement includes a new financing of $2.7 million with the remaining balance used to pay off the original loan dated July 23, 2019, by and between Kaleyra S.p.A. and Banco BPM S.p.A. The BPM Loan Agreement has a maturity of 45 months from the date of disbursement and bears interest at a variable rate equal to the three-month Euribor plus a spread of 3.00%. The BPM Loan Agreement is to be repaid in 15 quarterly installments. The total amount of the BPM Loan Agreement, less amounts related to commissions, fees and expenses, was drawn in full the same date as the BPM Loan Agreement.

On March 31, 2020, Kaleyra S.p.A. received the approval by Intesa Sanpaolo S.p.A. to postpone the amounts due under the existing loan for the next 3 months. As a result of this approval the Company will postpone the payments of approximately $412,000 beyond the next 12 months.

On April 9, 2020, Kaleyra S.p.A. received the approval by UniCredit to postpone the amounts due under the existing loan for the next 6 months. As a result of this approval the Company will postpone the payments of approximately $1.6 million beyond the next 6 months.

On April 16, 2020, in connection with the previously consummated Business Combination, the Company entered into an agreement to pay its financial advisory service firms, Cowen and Company, LLC and Chardan Capital Markets, LLC, (together, the “Service Firms”), in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate, as follows: (i) $2.7 million in the aggregate in common stock of Kaleyra (the “Settlement Shares”) to be issued the business day prior to the filing of a resale

F-56

registration statement for such Settlement Shares (the “Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of Kaleyra by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares (the “Excess Amount”) will be substituted for by warrants with an exercise price of $0.01 (the common stock underlying the Warrant Agreement, the “Warrant Shares”). The Beneficial Ownership Limitation shall initially be 4.99% of the number of shares of the common stock outstanding of the Company immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares shall be calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of Kaleyra on the NYSE American stock exchange (the “VWAP”) on the business day immediately prior to the date on which Kaleyra files the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of Kaleyra to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

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KALEYRA, INC.

Condensed Consolidated Balance Sheets

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

	March 31, 2020			December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	16,237		$	16,103
Restricted cash		20,810			20,894
Short-term investments		3,079			5,124
Trade receivables, net		36,307			39,509
Prepaid expenses		1,246			648
Other current assets		2,757			4,224
Total current assets		80,436			86,502
Property and equipment, net		3,888			3,393
Intangible assets, net		8,665			9,353
Goodwill		16,370			16,953
Other long-term assets		2,082			1,203
Total Assets	$	111,441		$	117,404
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	56,674		$	63,320
Debt for forward share purchase agreements		31,530			34,013
Notes payable		2,113			1,667
Notes payable due to related parties		13,115			9,411
Lines of credit		5,278			3,627
Current portion of bank and other borrowings		5,925			7,564
Deferred revenue		1,538			1,397
Preference shares		1			683
Preference shares due to related parties		1			1,847
Payroll and payroll related accrued liabilities		2,929			1,038
Other current liabilities		2,023			1,379
Total current liabilities		121,127			125,946
Long-term portion of bank and other borrowings		20,621			16,134
Long-term portion of notes payable due to related parties		3,750			7,500
Long-term portion of employee benefit obligation		1,341			1,398
Deferred tax liabilities		1,638			2,045
Other long-term liabilities		4,599			3,155
Total Liabilities		153,076			156,178
Commitments and contingencies (Note 13)
Stockholders’ equity (deficit):
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 March 31, 2020 and December 31, 2019; 20,254,217 shares issued and 20,019,048 shares outstanding as of March 31, 2020 and 19,977,113 shares issued and outstanding as of December 31, 2019		2			2
Additional paid-in capital		11,190			2,143
Treasury stock, at cost; 235,169 and 0 shares as of March 31, 2020 and December 31, 2019, respectively		(2,587	)		—
Accumulated other comprehensive income (loss)		(424	)		74
Accumulated deficit		(49,816	)		(40,993	)
Total stockholders’ equity (deficit)		(41,635	)		(38,774	)
Total liabilities and stockholders’ equity (deficit)	$	111,441		$	117,404

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

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KALEYRA, INC.

Condensed Consolidated Statements of Operations

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

	Three Months Ended March 31,
	2020			2019
Revenue	$	33,633		$	27,725
Cost of revenue		28,902			22,476
Gross profit		4,731			5,249
Operating expenses:
Research and development		2,810			1,196
Sales and marketing		3,743			1,472
General and administrative		7,759			3,779
Total operating expenses		14,312			6,447
Loss from operations		(9,581	)		(1,198	)
Other income, net		42			82
Financial income (expense), net		(41	)		70
Foreign currency income (loss)		168			(254	)
Loss before income tax expense (benefit)		(9,412	)		(1,300	)
Income tax expense (benefit)		(589	)		79
Net loss	$	(8,823	)	$	(1,379	)
Net loss per common share, basic and diluted (1)	$	(0.44	)	$	(0.13	)
Weighted-average shares used in computing net loss per common share, basic and diluted (1)		19,979,589			10,687,106

(1) Amounts for the three months ended March 31, 2019 were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share, basic and diluted were retrospectively adjusted accordingly.

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

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KALEYRA, INC.

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited, in thousands)

	Three Months Ended March 31,
	2020			2019
Net loss	$	(8,823	)	$	(1,379	)
Other comprehensive income (loss):
Foreign currency translation adjustments		(502	)		561
Net unrealized gain on marketable securities, net of tax (1)		4			15
Total other comprehensive income (loss)		(498	)		576
Total comprehensive loss	$	(9,321	)	$	(803	)

(1) The Company recorded $1,000 and $5,000 of tax expense on unrealized gain on marketable securities for the three months ended March 31, 2020 and 2019, respectively.

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

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KALEYRA, INC.

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited, in thousands, except share data)

	Common Stock					Additional Paid-in Capital			Treasury Stock					Accumulated Other Comprehensive Income (Loss)			Accumulated Deficit			Total Stockholders’ Equity (Deficit)
	Shares			Amount					Shares		Amount
Balance as of December 31, 2019		19,977,113		$	2	$	2,143			—	$	—		$	74		$	(40,993	)	$	(38,774	)
Common stock repurchased in connection with forward share purchase agreements		(235,169	)		—		2,587			235,169		(2,587	)		—			—			—
Change in forward share purchase agreement liability		—			—		(271	)		—		—			—			—			(271	)
Stock-based compensation (RSUs)		137,104			—		6,204			—		—			—			—			6,204
Common stock issued to settle a payable (1)		140,000			—		527			—		—			—			—			527
Net loss		—			—		—			—		—			—			(8,823	)		(8,823	)
Other comprehensive loss		—			—		—			—		—			(498	)		—			(498	)
Balance as of March 31, 2020		20,019,048		$	2	$	11,190			235,169	$	(2,587	)	$	(424	)	$	(49,816	)	$	(41,635	)

	Common Stock				Additional Paid-in Capital (2)		Treasury Stock				Accumulated Other Comprehensive Income (Loss)		Retained Earnings (Accumulated Deficit)			Total Stockholders’ Equity (Deficit)
	Shares (2)		Amount				Shares		Amount
Balance as of December 31, 2018		10,687,106	$	1	$	10,186		—	$	—	$	31	$	(5,292	)	$	4,926
Net loss		—		—		—		—		—		—		(1,379	)		(1,379	)
Other comprehensive loss		—		—		—		—		—		576		—			576
Balance as of March 31, 2019		10,687,106	$	1	$	10,186		—	$	—	$	607	$	(6,671	)	$	4,123

(1) On March 6, 2020, the Company issued to Northland Securities Inc. (“Northland”), 140,000 shares of the Company’s common stock as a partial settlement of the amounts owned to Northland for financial advisory services provided by Northland to Kaleyra S.p.A. in connection with the previously consummated Business Combination.

(2) Amounts as of March 31, 2019 and before that date were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and additional paid-in capital were adjusted accordingly.

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

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KALEYRA, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

	Three Months Ended March 31,
	2020			2019
Cash Flows from Operating Activities:
Net loss	$	(8,823	)	$	(1,379	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		638			650
Stock-based compensation and preference share liability		6,308			315
Non-cash settlement of preference share liability		(2,486	)		—
Allowance for doubtful accounts		117			60
Employee benefit obligation		89			80
Non-cash interest expense		72			103
Deferred taxes		(323	)		(398	)
Change in operating assets and liabilities:
Trade receivables		1,710			534
Other current assets		1,111			(399	)
Other long-term assets		(808	)		(349	)
Accounts payable		(5,694	)		(3,690	)
Other current liabilities		3,526			402
Deferred revenue		206			6
Long-term liabilities		1,505			434
Net cash used in operating activities		(2,852	)		(3,631	)
Cash Flows from Investing Activities:
Purchase of short-term investments		(3,179	)		(684	)
Sale of short-term investments		5,041			2,062
Purchase of property and equipment		(89	)		(291	)
Sale of property and equipment		16			—
Capitalized software development costs		(731	)		—
Purchase of intangible assets		(6	)		(5	)
Net cash provided by investing activities		1,052			1,082
Cash Flows from Financing Activities:
Change in line of credit		1,721			528
Borrowings on term loans		8,800			696
Repayments on term loans		(5,463	)		(553	)
Repurchase of common stock in connection with forward share purchase agreements		(2,587	)		—
Payments related to forward share purchase agreements		(167	)		—
Net cash provided by financing activities		2,304			671
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(454	)		(47	)
Net increase (decrease) in cash, cash equivalents and restricted cash		50			(1,925	)
Cash, cash equivalents and restricted cash, beginning of period (1)		36,997			8,207
Cash, cash equivalents and restricted cash, end of period (1)	$	37,047		$	6,282
Supplemental disclosures of cash flow information:
Cash paid for interest	$	153		$	95
Cash paid for income taxes	$	—		$	85
Non-cash financing activities:
Change in value of forward share purchase agreements	$	271		$	—
Common stock issued to settle a payable	$	423		$	—
Note payable issued to settle a payable	$	400		$	—

(1) As of March 31, 2020, includes $16.2 million of cash and cash equivalents and $20.8 million of restricted cash; as of December 31, 2019, includes $16.1 million of cash and cash equivalents and $20.9 million of restricted cash.

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

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KALEYRA, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Kaleyra, Inc., formerly GigCapital, Inc., (“Kaleyra,” the “Company,” “we,” “us,” and “our” refer to Kaleyra, Inc. and all of its consolidated subsidiaries) was incorporated in Delaware on October 9, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On December 12, 2017, the Company completed the initial closing of its initial public offering (the “Offering”) whereby the Company sold 12,500,000 Units at a price of $10.00 per Unit. On January 9, 2018, the Company completed the second closing of the Offering with the exercise of the over-allotment option with the consummation of the sale of an additional 1,875,000 Units at a price of $10.00 per Unit. Each Unit consisted of one share of the Company’s common stock, $0.0001 par value, three-fourths (3/4) of one warrant to purchase one share of common stock (the “Warrants”), and one right to receive one-tenth (1/10) of one share of common stock upon consummation of a business combination (the “Rights”). Warrants will only be exercisable for whole shares at $11.50 per share. On January 16, 2018, the Company announced that the holders of the Company’s Units may elect to separately trade the securities underlying such Units which commenced on January 17, 2018. No fractional warrants were issued upon separation of the Units and only whole warrants will trade. Any Units that were not separated, prior to the consummation of the Company’s business combination, continued to trade on the New York Stock Exchange under the symbol “GIG.U.” Any underlying shares of common stock, warrants and rights that were separated, prior to the consummation of the Company’s business combination, traded on the New York Stock Exchange under the symbols “GIG,” “GIG.WS” and “GIGr,” respectively.

On February 22, 2019, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, Kaleyra S.p.A., Shareholder Representative Services LLC, (the “Seller Representative”) as representative for the holders of the ordinary shares of Kaleyra S.p.A. immediately prior to the closing of the Business Combination, and all of the stockholders of all of the Kaleyra S.p.A. stock (collectively, such Kaleyra S.p.A. stockholders, the “Sellers”), for the purpose of the Company acquiring all of the shares of Kaleyra S.p.A.

Kaleyra S.p.A. is a cloud communications software provider delivering secure Application Protocol Interfaces (“APIs”) and connectivity solutions in the API/Communication Platform as a Service or CPaaS market, headquartered in Milan, Italy and with operations in Italy, India, Dubai and the United States. Kaleyra S.p.A.’s solutions include identity authentication, mobile and voice notifications on transactions, and banking services authorizations, most notably via different integrated mobile channels through its platform.

On November 25, 2019, the Business Combination with Kaleyra S.p.A. (the “Business Combination”) was completed.

Effective as of the closing of the Business Combination, the Company changed its name to Kaleyra, Inc. Upon the consummation of the Business Combination, the Company also changed its fiscal year end to December 31st from its previous fiscal year ending September 30th, such change first being effective for its fiscal year ended December 31, 2019. For accounting purposes, Kaleyra S.p.A. was deemed the acquiror in the Business Combination.

The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Under this method of accounting, Kaleyra, Inc. has been treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of Kaleyra S.p.A. issuing stock for the net assets of Kaleyra, Inc., accompanied by a recapitalization.

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As a result of the accounting for the Business Combination, the number of common shares authorized and outstanding during periods prior to the Business Combination, have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination. The common stock and additional paid-in capital have also been retrospectively adjusted accordingly. Specifically, the number of common shares outstanding during periods prior to the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the Stock Purchase Agreement. Accordingly, weighted-average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination. See Note 16 – Net Loss Per Share – for further details.

Upon the closing of the Business Combination, the Company’s rights and Units ceased trading, and the Company’s common stock began trading on the NYSE American stock exchange under the symbol “KLR.” Furthermore, on December 2, 2019, Kaleyra’s warrants began trading on the NYSE American stock exchange as “KLR WS.”

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company are unaudited, and have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, this interim quarterly financial report does not include all disclosures required by US GAAP. In the opinion of our management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of Kaleyra and our consolidated subsidiaries for all periods presented. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with our consolidated financial statements and the notes thereto included in our 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 22, 2020.

These condensed consolidated financial statements have been prepared in conformity with US GAAP applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these condensed consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

In connection with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company evaluated its ability to continue as a going concern. The Company has negative cash flows from operating activities, and its current liabilities exceed its current assets as of March 31, 2020. The condensed consolidated balance sheet as of March 31, 2020 includes total current assets of $80.4 million and total current liabilities of $121.1 million, resulting in net liabilities due within the next 12 months of $40.7 million.

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The Business Combination generated significant obligations including (i) $13.1 million of liabilities related to non-recurring Business Combination transaction related costs; (ii) $15.0 million of deferred consideration to sellers in the Business Combination transaction (iii) $13.2 million of net obligations under certain Shares Purchase Forward Agreements entered into by GigCapital, Inc. prior to the Business Combination; and (iv) $3.6 million of notes payable acquired as a result of the Business Combination. Management, concerned about the Company’s ability to fulfill these obligations, made the decision to evaluate opportunities to refinance or renegotiate some of its current obligations and, during the first four months of 2020 put in place several actions aimed to achieve such goal, including, among others:

• the subscription of a new loan agreement with a bank that is currently a lender to the Company;

• signing of two new line of credit facilities;

• a refinanced loan that extended payment terms and provided additional funds;

• the amendments of the repayment schedules of certain existing long-term financing agreements to postpone the amounts due in the next three to nine months of 2020; and

• the renegotiation of the payment terms of a payable related to costs incurred in the Business Combination.

Considering the effects of these actions and the typical financial cycle of Kaleyra, Kaleyra’s management believes that the Company’s cash, cash flows from operations, financings and amendments to agreements described above, and availability of borrowings, as described above, will be sufficient to support its planned operations for at least the next 12 months from the date these condensed consolidated financial statements were issued.

Business seasonality

The Company’s results are affected by the business cycles of its customer base, which generally results in stronger revenue in the fourth quarter of the financial year. We believe this variability is largely due to the market demand for our customers’ and/or business partners’ services due to higher levels of purchasing activity in the holiday season. As a result of our historically higher portion of sales in the fourth quarter of each year, our cost of revenue increases during such period relative to any increase in revenue. The increase in cost of revenue and other impacts of seasonality may affect profitability in a given quarter.

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly owned subsidiaries, including Kaleyra S.p.A., Solutions Infini and Buc Mobile, which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively

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based upon such periodic evaluation. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the recent outbreak of a novel strain of the coronavirus (“COVID-19”).

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, restricted cash and cash equivalents, short-term investments and trade receivables. The Company maintains cash and cash equivalents and short-term investments with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In the three months ended March 31, 2020 and 2019, there were zero and one customer, respectively, that individually accounted for more than 10% of the Company’s consolidated total revenue. In the three months ended March 31, 2019, revenue generated by that one customer accounted for $3.1 million. As of March 31, 2020 and December 31, 2019, no individual customer accounted for more than 10% of the Company’s consolidated total trade receivables.

Reclassifications

Certain reclassifications have been made to the 2019 presentation to conform to the current period’s presentation, none of which had an effect on total assets, total liabilities, stockholders’ equity (deficit), or net loss.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply to contract modifications that replace a reference rate (e.g. LIBOR) affected by reference rate reform and contemporaneous modifications of other contract terms related to the replacement of the reference rate (including contract modifications to add or change fallback provisions). The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: (i) modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; (ii) modifications of contracts within the scope of Topics 840, Leases, and 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments. For other Topics or Industry Subtopics in the Codification, the amendments also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant Topic or Industry Subtopic. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company adopted the amendments, and the adoption did not have a material impact on its condensed consolidated financial statements.

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In March 2020, the FASB issued ASU 2020-03 “Codification Improvements to Financial Instruments”, which improves various financial instruments Topics in the Codification in order to increase stakeholder awareness of the amendments and to expedite the improvement process. The amendments in this ASU clarify or address stakeholders’ specific issues as described below:

i. Issue 1: Fair Value Option Disclosures: The amendments clarify that all entities are required to provide the fair value option disclosures in paragraphs 825-10-50-24 through 50-32.

ii. Issue 2: Applicability of Portfolio Exception in Topic 820 to Nonfinancial Items: Paragraphs 820-10-35-2A(g) and 820-10-35-18L are amended to include the phrase nonfinancial items accounted for as derivatives under Topic 815 to be consistent with the previous amendments to Section 820-10-35.

iii. Issue 3: Disclosures for Depository and Lending Institutions: The amendments clarify that the disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions.

iv. Issue 4: Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance in Subtopic 470-50: The amendments improve the understandability of the guidance.

v. Issue 5: Cross-Reference to Net Asset Value Practical Expedient in Subtopic 820-10: The amendments improve the understandability of the guidance.

vi. Issue 6: Interaction of Topic 842 and Topic 326: The amendments clarify that the contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit losses under Topic 326.

vii. Issue 7: Interaction of Topic 326 and Subtopic 860-20: The amendments to Subtopic 860- 20 clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.

For Issue 1, 2, 4 and 5, for public business entities, the amendments are effective upon issuance of this final ASU. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years beginning after December 15, 2020. Early application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

For Issue 3, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2019-04, for the guidance related to the amendments in ASU 2016-01. The effective date of ASU 2019-04 for the amendments to ASU 2016-01 is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the amendments in the three months period ended March 31, 2020, and the adoption did not have a material impact on its consolidated financial statements.

For Issue 6 and 7, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have not adopted the amendments in ASU 2016-13, the effective dates and the transition requirements for these amendments are the same as the effective date and transition requirements in ASU 2016-13 which for an emerging growth company is in 2023. Early adoption is permitted in any interim period as long as the entity has adopted the amendments in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In February 2020, the FASB issued ASU 2020-02 “Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842). This ASU applies to all registrants that are creditors in loan transactions that, individually or in the aggregate, have a material effect on the registrant’s financial condition. This ASU guidance is applicable upon

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a registrant’s adoption of Accounting Standards Codification (“ASC”) Topic 326. On November 15, 2019, the FASB delayed the effective date of ASC Topic 326 for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022 for U.S. Securities and Exchange Commission (“SEC”) filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

Moreover, the amendments in this ASU add a note to a SEC paragraph pursuant to the issuance of ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. The note added states that at the December 2019 AICPA National Conference on Current SEC and PCAOB Developments, the SEC staff announced that it would not object to a public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC adopting Topic 842 for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. This announcement is applicable only to public business entities that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC. This announcement is not applicable to other public business entities.

In January 2020, the FASB issued ASU 2020-01 “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)”, clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments under ASU 2018-13 remove, add, and modify certain disclosure requirements on fair value measurements in ASC 820. In particular, the following disclosure were added: (i) The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; (ii) The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted the amendments in the three months period ended March 31, 2020, and the adoption did not have a material impact on its condensed consolidated financial statements.

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3. FAIR VALUE MEASUREMENTS

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands):

	Fair Value Hierarchy as of March 31, 2020						Aggregate Fair Value
	Level 1		Level 2		Level 3
Assets:
Certificates of deposit (1)	$	—	$	3,079	$	—	$	3,079
Total Assets	$	—	$	3,079	$	—	$	3,079
Liabilities:
Interest Rate Swap (2)	$	—	$	73	$	—	$	73
Preference shares (3)		—		—		2		2
Debt for forward share purchase agreements (4)		—		31,530		—		31,530
Total Liabilities	$	—	$	31,603	$	2	$	31,605

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(2) Included in the condensed consolidated balance sheet line item “Other long-term liabilities.”

(3) The preference shares liability was previously estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ended March 31, 2020. On March 9, 2020, the Company signed a modification of the 2018 Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per each preference share.

(4) Based on the information available at the reporting date, debts for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option.

	Fair Value Hierarchy as of December 31, 2019						Aggregate Fair Value
	Level 1		Level 2		Level 3
Assets:
Mutual funds (1)	$	5,124	$	—	$	—	$	5,124
Total Assets	$	5,124	$	—	$	—	$	5,124
Liabilities
Interest Rate Swap (2)	$	—	$	80	$	—	$	80
Preference shares (3)		—		—		2,530		2,530
Debt for forward share purchase agreements (4)		—		34,013		—		34,013
Total Liabilities	$	—	$	34,093	$	2,530	$	36,623

(1) Included in the condensed consolidated balance sheet line item “Short-term investments.”

(2) Included in the condensed consolidated balance sheet line item “Other long-term liabilities.”

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ended March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during

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period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ended March 31, 2020 was materially below its expected level, this would have resulted in a change of the preference shares liability.

(4) Based on the information available at the reporting date, debt for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option.

The values of short-term investments as of March 31, 2020 and as of December 31, 2019 were as follows (in thousands):

	As of March 31,								As of December 31,
	2020								2019
	Cost		Unrealized gains		Unrealized losses		Fair value		Cost		Unrealized gains		Unrealized losses			Fair value
Mutual funds	$	—	$	—	$	—	$	—	$	5,129	$	1	$	(6	)	$	5,124
Certificates of deposit		3,079		—		—		3,079		—		—		—			—

The following table presents changes during the three months ended March 31, 2020 in Level 3 assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair Value Beginning of Period		Net Realized and Unrealized (Gains) Losses Included in Income			Other Comprehensive (Income) Loss			Purchases, Sales, Issuances and Settlements, Net		Change in scope of consolidation		Gross Transfers In		Fair Value End of Period
March 31, 2020
Liabilities:
Preference shares	$	2,530	$	(2,486	)	$	(42	)	$	—	$	—	$	—	$	2

There were no transfers of liabilities into or out of Level 2 or Level 3 for the three months ended March 31, 2020 and the year ended December 31, 2019.

Net realized and unrealized (gains) and losses included in income related to Level 3 liabilities shown above are reported in the condensed consolidated statements of operations as follows (in thousands):

	Research and development			Sales and marketing			General and administrative			Financial income (expense), net			Foreign currency Income (loss)		Total
Three months ended March 31, 2020
Liabilities:
Preference shares	$	(941	)	$	(372	)	$	(756	)	$	(417	)	$	—	$	(2,486	)
Three months ended March 31, 2019
Liabilities:
Preference shares		117			46			94			58			—		315

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4. DERIVATIVE FINANCIAL INSTRUMENTS

The gross notional amount of interest rate swap derivative contracts not designated as hedging instruments, outstanding as of March 31, 2020 and December 31, 2019, was €5.8 million ($6.3 million) and €6.3 million ($7.0 million), respectively.

The amount and location of the gains (losses) in the condensed consolidated statements of operations related to derivative contracts is as follows (in thousands):

Derivatives Not Designed As Hedging Instruments			Three Months Ended March 31,
	Line Items		2020		2019
Interest Rate Swap		Financial income (expense), net	$	7	$	(5	)
Foreign Exchange Forward		Financial income (expense), net		—		211
Total			$	7	$	206

The following table presents the fair value and the location of derivative contracts reported in the condensed consolidated balance sheets (in thousands):

Derivatives Not Designed As Hedging Instruments (1)	Line Items		As of March 31,         2020			As of December 31,         2019
Interest Rate Swap		Other long-term liabilities	$	(73	)	$	(80	)
Total			$	(73	)	$	(80	)

(1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 3.”

5. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill as of March 31, 2020 and December 31, 2019 was as follows (in thousands):

Balance as of December 31, 2019	$	16,953
Effect of exchange rate		(583	)
Balance as of March 31, 2020	$	16,370

Intangible assets, net

Intangible assets consisted of the following (in thousands):

	As of March 31, 2020						As of December 31, 2019
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortizable Intangible Assets:
Developed technology	$	2,711	$	1,080	$	1,631	$	2,775	$	952	$	1,823
Customer relationships		8,777		1,826		6,951		9,077		1,631		7,446
Patent		118		35		83		113		29		84
Total amortizable intangible assets	$	11,606	$	2,941	$	8,665	$	11,965	$	2,612	$	9,353

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Amortization expense was $422,000 and $449,000 for the three months ended March 31, 2020 and 2019, respectively.

Total estimated future amortization expense as of March 31, 2020 is as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	1,221
2021		1,409
2022		1,138
2023		1,035
2024		834
2025 and thereafter		3,028
Total	$	8,665

6. OTHER ASSETS

Other current assets consisted of the following (in thousands):

	As of March 31, 2020		As of December 31, 2019
VAT receivables	$	1,132	$	3,136
Receivables from suppliers		812		398
Credit for tax other than income tax		505		358
Income tax assets		254		270
Other receivables		54		62
Total other current assets	$	2,757	$	4,224

Other long-term assets consisted of the following (in thousands):

	As of March 31, 2020		As of December 31, 2019
Non-current income tax credit (advances and tax reduced at sources)	$	1,726	$	1,029
Miscellaneous		356		174
Total other long-term assets	$	2,082	$	1,203

7. BANK AND OTHER BORROWINGS

Credit line facilities

As of March 31, 2020, the Company had credit line facilities granted for a total amount of $6.6 million, of which $5.3 million had been used, including a credit revolving facility denominated in US Dollar for $1.0 million granted to Buc Mobile in January 2020. As of December 31, 2019, the Company had available credit line facilities denominated in Euro for $5.6 million, of which $3.6 million had been used.

The credit lines denominated in Euro may be drawn upon at variable interest rates in the following range: 0.6%—7.6%. The weighted average interest rate on the credit line facilities outstanding as of March 31, 2020, was 1.22%.

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As mentioned above, on January 23, 2020, Buc Mobile entered into a revolving credit facility with Intesa Sanpaolo S.p.A. for a total amount of $1 million to be used solely for the purpose of Buc Mobile general working capital needs. As of March 31, 2020, this revolving credit facility was drawn for $950,000. The average effective interest rate for the three months ended March 31, 2020 was 1.52%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):

								Interest Nominal Rate
	As of March 31, 2020		As of December 31, 2019		Maturity		Interest Contractual Rate	As of March 31, 2020			As of December 31, 2019
UniCredit S.p.A. (Line A Tranche (1)	$	3,219	$	3,609		January 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche (2)		151		167		May 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line B)		2,941		3,229		November 2023	Euribor 3 months + 2.90%		2.60	%		2.60	%
UniCredit S.p.A. (Line C)		2,497		2,787		February 2023	Euribor 3 months + 3.90%		3.53	%		3.53	%
Intesa Sanpaolo S.p.A. (Line 1)		834		988		October 2021	Euribor 3 months + 1.80%		1.88	%		1.88	%
Intesa Sanpaolo S.p.A. (Line 2)		3,841		4,183		October 2023	Euribor 3 months + 2.60%		2.60	%		2.60	%
UBI Banca S.p.A. (Line 1)		257		332		February 2021	1.25%		1.25	%		1.25	%
UBI Banca S.p.A. (Line 2)		1,198		1,499		April 2021	Euribor 3 months +1.95%		1.55	%		1.55	%
Monte dei Paschi di Siena S.p.A. (Line 1)		457		521		April 2022	0.95%		0.95	%		0.95	%
Monte dei Paschi di Siena S.p.A. (Line 2)		2,190		—		June 2023	1.50%		1.50	%		—
Banco Popolare di Milano S.p.A. (Line 1)		1,312		1,336		June 2023	Euribor 3 months + 2.00%		2.00	%		2.00	%
Banco Popolare di Milano S.p.A. (Line 2)		—		3,893		September 2022	Euribor 3 months + 2.00%		—			2.00	%
Banco Popolare di Milano S.p.A. (Line 3)		6,517		—		March 2024	Euribor 3 months + 3.00%		2.16	%		—
Simest 1		275		280		December 2022	0.50%		0.50	%		0.50	%
Simest 2		273		279		December 2022	0.50%		0.50	%		0.50	%
Simest 3		503		512		December 2022	0.50%		0.50	%		0.50	%
Finlombarda S.p.A.		81		83		December 2020	0.50%		0.50	%		0.50	%
Total bank and other borrowings		26,546		23,698
Less: current portion		5,925		7,564
Total long-term portion	$	20,621	$	16,134

On March 11, 2020, Kaleyra S.p.A. entered into a 36-month unsecured loan agreement with Monte dei Paschi di Siena S.p.A. for $2.2 million (€2.0 million). The total amount of this new facility was drawn in full the same date. This facility bears interest at a fixed rate equal to 1.5%.

On March 20, 2020, Kaleyra S.p.A. entered into a general unsecured loan agreement (the “BPM Loan Agreement”) with Banco BPM S.p.A. (formerly Banco Popolare di Milano S.p.A.) for a total of $6.5 million (€6.0 million). The BPM Loan Agreement includes a new financing of $2.7 million with the remaining balance used to pay off the original loan dated July 23, 2019, by and between Kaleyra S.p.A. and Banco BPM S.p.A. The BPM Loan Agreement has a maturity of 45 months from the date of disbursement and bears interest at a variable rate equal to the three-month Euribor plus a spread of 3.00%. The BPM Loan Agreement is to be repaid in 15

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quarterly installments. The total amount of the BPM Loan Agreement, less amounts related to commissions, fees and expenses, was drawn in full the same date as the BPM Loan Agreement.

On March 31, 2020, Kaleyra S.p.A. received the approval by Intesa Sanpaolo S.p.A. to postpone payment of the amounts due under the existing loans for the next 3 months. As a result of this approval the Company will postpone the payments of approximately $404,000 beyond December 31, 2020.

Subsequent to March 31, 2020, Kaleyra S.p.A. received the approval to postpone the payment of the amounts due under the existing loans for the next 6 to 9 months by UniCredit, UBI Banca S.p.A. and Simest S.p.A. See Note 19 – Subsequent Events – for further details.

As of March 31, 2020, all of the available long-term facilities were drawn in full.

Interest expense on bank and other borrowings was $218,000 for the three months ended March 31, 2020 and $90,000 for the three months ended March 31, 2019.

As of March 31, 2020, the Company is obliged to make payments as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	3,784
2021		9,330
2022		7,637
2023		5,339
2024		456
Total	$	26,546

8. DEBT FOR FORWARD SHARE PURCHASE AGREEMENTS

As of March 31, 2020, the Company’s debt for forward share purchase agreements amounted to $31.5 million and accrued interest amounted to $163,000.

Greenhaven

On September 27, 2019, the Company and Greenhaven Road Capital Fund 1, LP, a Delaware limited partnership (“Greenhaven Fund 1”), and Greenhaven Road Capital Fund 2, LP, a Delaware limited partnership (“Greenhaven Fund 2” and together with Greenhaven Fund 1, “Greenhaven”) entered into a forward share purchase agreement (the “Greenhaven Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of its common stock into which Rights of the Company held by Greenhaven and any additional Rights that Greenhaven acquired, converted into shares upon the closing of the Business Combination as amended as of December 13, 2019 at the following prices: (1) $11.00 per share for the first 196,195 shares sold to the Company; (2) $10.70 per share for the next 250,000 shares sold to the Company; and (3) $10.50 per share for the next 550,000 shares sold to the Company. The Company agreed to purchase the shares on the later of the sixtieth day after the Closing of the Business Combination or January 1, 2020 (the “Greenhaven Purchase Closing Date”).

In exchange for Kaleyra, Inc.’s commitment to acquire the shares on the Greenhaven Purchase Closing Date, each of Greenhaven Fund 1 and Greenhaven Fund 2 agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of Kaleyra, Inc.’s securities), the Rights (including any additional Rights) held by Greenhaven, and any shares that such Rights (including any additional Rights) converted into, until the Greenhaven Purchase Closing Date,

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including not to tender the Rights (or any additional Rights) to Kaleyra, Inc. in response to any tender offer that Kaleyra, Inc. may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Greenhaven shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least 25,000 shares (the “Minimum Block Size Condition”) in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, Greenhaven shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, Greenhaven shall have the right to sell such shares at any time provided that the price received by Greenhaven (not including any commissions due by Greenhaven for the sale) is at least $10.50 (or at least $8.50 if Greenhaven meets the Minimum Block Size Condition). In the event that Greenhaven sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that Greenhaven meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay Greenhaven in accordance with Greenhaven’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the Greenhaven Purchase Agreement shall prohibit Greenhaven from entering into a contract to purchase and/or sell warrants of Kaleyra, Inc.

On January 23, 2020, the Company entered into Amendment No. 3 to the Greenhaven Forward Share Purchase Agreement (the “Greenhaven Amendment”). The Greenhaven Amendment provides that Greenhaven has the right to put its subject shares to the Company on the following dates and at the following purchase prices: (i) $11.00 per share for up to 248,963 shares to be sold to the Company on February 21, 2020; and (ii) $11.70 per share for the next 700,000 shares to be sold to the Company on August 30, 2020. Greenhaven may continue to sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $8.50 per share. On February 20, 2020, the Company repurchased an aggregate of 235,169 of its common stock for $2.6 million. In addition, the Company paid Greenhaven $152,000 for the 60,996 shares that Greenhaven sold on the open market representing the amount at which the $11.00 exceeded the selling price. On August 30, 2020, the Company shall pay Greenhaven an amount equal to (1) the number of shares (including any Additional Shares) sold by Greenhaven in the open market between February 21, 2020 and August 30, 2020 multiplied by (2) the amount by which $11.70 exceeds the sale price per share.

As of March 31, 2020, the Company’s debt in connection with the Greenhaven Purchase Agreement amounted to $8.2 million.

Kepos Alpha Fund

On October 1, 2019, the Company and Kepos Alpha Fund L.P., a Cayman Islands limited partnership (“KAF”), entered into a forward share purchase agreement (“KAF Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of common stock of the Company into which the Rights of the Company held by KAF, including any additional Rights that KAF acquired, converted into upon the closing of the Business Combination. The KAF Purchase Agreement was amended the following day to provide that the total number of additional Rights that KAF may acquire is 3,750,000 Rights. As amended December 13, 2019, the KAF Purchase Agreement provides that the Company would purchase such shares at the following price: (1) $10.70 per share for the first 102,171 shares sold to the Company; and (2) $10.50 per share for the next 93,676 shares sold to the Company. The Company agreed to purchase the shares on the earlier of the sixtieth day after the Business Combination or February 15, 2020 (the “KAF Purchase Closing Date”).

In exchange for the Company’s commitment to acquire the shares on the KAF Purchase Closing Date, KAF agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of the Company’s securities), the Rights (including any additional

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Rights) held by KAF, and any shares that such Rights (including any additional Rights) converted into, until the KAF Purchase Closing Date, including not to tender the Rights (or any additional Rights) to the Company in response to any Tender Offer that the Company may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that KAF shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, KAF shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, KAF shall have the right to sell such shares at any time provided that the price received by KAF (not including any commissions due by KAF for the sale) is at least $10.50 (or at least $8.50 if KAF meets the Minimum Block Size Condition). In the event that KAF sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that KAF meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay KAF in accordance with KAF’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the KAF Purchase Agreement shall prohibit KAF from entering into a contract to purchase and/or sell warrants of the Company.

On January 23, 2020, the Company entered into Amendment No. 3 to the KAF Forward Share Purchase Agreement and on April 7, 2020, the Company entered into Amendment No. 4 (the “KAF Amendments”). According to the last amendment, KAF has the right to put its subject shares to the Company on May 7, 2020 at a purchase price of: (i) $10.92 per share for the first 46,137 shares sold to the Company; and (ii) $10.82 per share for the next 93,676 Shares sold to the Company (collectively, the “KAF Share Purchase Price”). In the event the closing occurs after May 7, 2020, the KAF Share Purchase Price shall increase for the 93,676 shares sold to Kaleyra by 1% per full month until the closing date. KAF may elect, in its sole and absolute discretion, to extend the date on which it exercises its put right to a date that is provided upon 10 calendar days’ written notice. The KAF Amendments further provide that KAF may sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $7.00 per share. In the event that KAF sells any shares (including any Additional Shares) at a sale price of less than $10.92 per share for the first 46,137 shares and $10.82 per share for the next 93,676 shares, the Company shall pay KAF an amount equal to (A) the number of shares (including any Additional Shares) sold multiplied by (B) the amount by which $10.92 or $10.82, as applicable, exceeds the sale price per share. Should the Company fail to make this payment, the Company shall, without prejudice or limitation to any other remedies available to KAF in law or equity, pay a penalty on such amount due at the rate of 18% per annum from the due date until the date of payment in full.

From January 1, 2020 to March 31, 2020, KAF sold 6,034 shares on the open market.

As of March 31, 2020, the Company’s debt in connection with the KAF Purchase Agreement amounted to $2.1 million.

Yakira Capital Management

On November 19, 2019, the Company and Yakira Capital Management, Inc. (“Yakira”) entered into a forward share purchase agreement (the “Yakira Purchase Agreement”) pursuant to which (i) Yakira may elect to sell and transfer to the Company, and the Company will purchase shares of common stock of the Company held by Yakira at the Business Combination Date (the “Yakira Shares”), and (ii) the Company will purchase the shares of common stock of the Company into which the Rights held by Yakira (the “Yakira Rights Shares”) were converted upon the Business Combination Date. At the Business Combination Date, Yakira held 439,299 rights, and 1,084,150 Yakira Shares.

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The Company agreed that it will purchase the Yakira Rights Shares from Yakira at $1.05 per Right (which reflects $10.50 per Yakira Rights Share) (the “Yakira Rights Share Purchase Price”) as soon as practicable on or after the later of the sixtieth day after the Business Combination Date or January 1, 2020 (the “Yakira Rights Shares Closing Date”). In exchange for the Company’s agreement to purchase the Yakira Rights Shares, Yakira agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge the Rights (including any transactions involving any derivative securities of Yakira and any Short Sales involving any of the Company’s securities), and any Yakira Rights Shares that the rights converted into, until the Yakira Rights Shares Closing Date, including not to tender the Rights to the Company in response to any Tender Offer that the Company may commence for the Rights.

Yakira has the right to terminate the agreement for the Company to purchase the Yakira Rights Shares, without penalty, commencing on the thirtieth day after the Business Combination Date and ending on the day prior to the Yakira Rights Shares Closing Date, by giving written notice to the Company, in which case it will not be restricted after such time with respect to its ability to dispose of the Yakira Rights Shares (subject to the restrictions against transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities).

Except as described below, Yakira also agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any short sales involving any of the Company’s securities) the Yakira Shares prior to the six month anniversary of the Business Combination Date. Yakira further agreed to not redeem any of the Yakira Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. Notwithstanding anything to the contrary herein, commencing on the day after the Business Combination Date, Yakira may sell the Yakira Shares in the open market as long as the sales price is above $10.50 per Yakira Share.

If Yakira still owns Yakira Shares as of the four-month anniversary of the Business Combination Date, Yakira may sell such Yakira Shares between the four-month anniversary and six month anniversary of the Business Combination Date to the Company for a per share price (the “Yakira Shares Purchase Price”) equal to (a) $10.5019, plus (b) $0.03 per share for each month (prorated for a partial month) following the Business Combination Date that Yakira has held the Yakira Shares. The closing of the sale of the Yakira Shares to the Company shall occur on the business day following the Company’s receipt of the Yakira Shares exercise notice (the “Yakira Shares Closing Date”). On the Yakira Shares Closing Date, Yakira shall deliver the Yakira Shares to the Company against receipt of the aggregate Yakira Shares Purchase Price, which shall be paid by wire transfer of immediately available funds from the escrow account described below. Yakira may instruct the Escrow Agent to release to Yakira an amount equal to the Shares Purchase Price multiplied by the number of Yakira Shares delivered to the Company from the escrow account on the Yakira Shares Closing Date for Yakira’s use without restriction.

Following the Business Combination Date, the Company deposited into an escrow account with the Escrow Agent, subject to an escrow agreement, with a nationally chartered bank the amount of $11,576,509 related to Yakira. The Company’s purchase of the Yakira Shares will be made with funds from the escrow account attributed to the Yakira Shares. In the event that Yakira sells any Yakira Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and the Company may promptly release from the escrow account for its use without restriction an amount equal to the pro rata portion of the escrow account attributed to the Yakira Shares which Yakira has sold. In the event that Yakira chooses not to sell to the Company any Yakira Shares that it owns as of the six-month anniversary of the Business Combination Closing Date, the Company may promptly release all remaining funds from the escrow account for its use without restriction. In the event that the Yakira Shares Purchase Price paid on the Yakira Shares Closing Date is less than $10.6819 per Yakira Share, following payment of the Yakira Shares Purchase Price to Yakira, the Company and Yakira shall deliver joint written instructions to the Escrow Agent to release to Kaleyra from the remaining funds in the escrow account an amount equal to the difference between the Yakira Shares Purchase Price and $10.6819

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per share multiplied by the number of Yakira Shares delivered by Yakira, and the Escrow Agent shall promptly disburse such amount to the Company in accordance with the payment instructions.

On February 7, 2020, the Yakira Purchase Agreement with Yakira was amended (the “First Yakira Amendment”). The First Yakira Amendment provides that the Company may be obligated to purchase some or all of the 43,930 Yakira Rights Shares if Yakira exercises an option to sell such shares to the Company at a purchase price of $10.93 per share (which is an increase from $10.50 per share) as soon as practicable on or after the six-month anniversary of the Business Combination Date.

On May 9, 2020, the Company entered into a second amendment to the Yakira Purchase Agreement (the “Second Amendment”). The Second Amendment provides that the Company will purchase from Yakira its 43,930 Rights Shares as soon as practicable on or after December 31, 2020.

Nothing in the Yakira Purchase Agreement prohibits or restricts Yakira with respect to the purchase or sale of the Company’s warrants.

As of March 31, 2020, the Company’s debt in connection with the Yakira Purchase Agreement amounted to $12.1 million. On May 12, 2020, Yakira gave notice to the Company that it was electing to sell and transfer to the Company all of the 1,084,150 Yakira Shares, and the purchase price for such sale and transfer is $11,580,782.

Glazer Capital, LLC

On November 19, 2019, the Company and Glazer Capital, LLC (“Glazer”) entered into a forward share purchase agreement (the “Glazer Purchase Agreement”) pursuant to which Glazer may elect to sell and transfer to the Company, and the Company will purchase the shares of the common stock of the company held by Glazer ( the “Glazer Shares”) at a price of $10.6819 per share (the “Glazer Shares Purchase Price”). Glazer shall notify the Company in writing five business days prior to the six month anniversary of the Business Combination Date if it is not exercising its right to sell the Glazer Shares to the Company; otherwise, absent written notification to the contrary, Glazer shall be deemed to have exercised its right to sell all of its Glazer Shares to the Company. The Company will purchase the Glazer Shares from Glazer on the six-month anniversary of the closing of the Business Combination (the “Glazer Shares Closing Date”). As of the Business Combination Date, Glazer held 922,933 shares of common stock.

In exchange for the Company’s commitment to purchase the Glazer Shares on the Glazer Shares Closing Date, Glazer agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities) the Glazer Shares prior to the six month anniversary of the Business Combination Date. Glazer further agreed that it will not redeem any of the Glazer Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Glazer shall, commencing on the day after the Business Combination Closing Date, have the right but not the obligation to sell its shares (including any Additional Shares) in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share prior to payment of any commissions due by Glazer for the sale, or, without meeting the Minimum Block Size Condition, Glazer shall have the right but not the obligation to sell any or all of its Shares (including any Additional Shares) in the open market if the sale price exceeds $10.50 per share prior to payment of any commissions due by Glazer for such sale. Glazer shall give written notice to the Company of any sale of shares (including any Additional Shares) within three (3) Business Days following the date of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $10.50 per share (or greater than $8.50 per Share provided that Glazer meets the Minimum Block Size Condition) prior to the payment of any commissions due by Glazer for the sale.

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Simultaneously with the closing of the Business Combination, the Company deposited $9,858,678 which is the aggregate amount necessary to purchase the Glazer Shares, into an escrow account with Continental Stock Transfer and Trust Company (the “Escrow Agent”), subject to the terms of an escrow agreement. The Company’s purchase of the Glazer Shares will be made with funds from the escrow account attributed to the Glazer Shares. In the event that Glazer sells any Glazer Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and Glazer shall instruct the Escrow Agent to release from the escrow account for the Company’s use without restriction an amount equal to the pro rata portion of the escrow attributed to the Glazer Shares which Glazer has sold. In the event that Glazer chooses not to sell to the Company any Glazer Shares that it owns as of the six-month anniversary of the Business Combination Date, Glazer shall instruct the Escrow Agent to release all remaining funds from the escrow account for the Company’s use without restriction.

Notwithstanding the Company’s commitment to deposit funds into the escrow account for the purchase of the Glazer Shares, Kaleyra, Inc. shall use its best efforts to enter into a letter of credit agreement for the issuance of a standby letter of credit for the benefit of Glazer with a bank acceptable to Glazer (the “Issuing Bank”) as soon as possible to replace the escrow account. When the letter of credit agreement is entered into, Glazer will instruct the Escrow Agent to deposit the funds held in the escrow account into the collateral account with the Issuing Bank. Concurrently with the execution of the letter of credit agreement, the Issuing Bank shall issue the letter of credit for the benefit of Glazer in the amount of the escrow account. Glazer shall drawdown from the letter of credit to satisfy the payment due to Glazer by the Company for the purchase of the Glazer Shares. In the event that Glazer sells any Glazer Shares pursuant to the sales price restriction set forth above, it shall provide notice to the Company and the Issuing Bank within three business days of such sale, and the Issuing Bank shall release from the collateral account an amount equal to the number of Glazer Shares sold multiplied by $10.6819 to the Company for the Company’s use without restriction, with a corresponding reduction in the amount of the letter of credit. In the event that Glazer elects not to sell to the Company any Glazer Shares, the Issuing Bank shall release all funds in the collateral account to the Company for the Company’s use without restriction and terminate the letter of credit. On January 7, 2020 the Company entered into a Letter of Credit and Reimbursement agreement with EagleBank for the benefit of Glazer and $9.3 million of funds were transferred from the escrow account to a collateral account with EagleBank as collateral for the Letter of Credit and Reimbursement agreement.

Nothing in the Glazer Purchase Agreement prohibits or restricts Glazer with respect to the purchase or sale of the Company’s warrants.

From January 1, 2020 to March 31, 2020, Glazer sold 5,800 shares on the open market and the Company paid Glazer $15,000 representing the amount at which $10.50 exceeded the selling price.

As of March 31, 2020, the Company’s debt in connection with the Glazer Purchase Agreement amounted to $9.2 million.

Nomura Global Financial Products

On October 31, 2019, the Company entered into an agreement (the “Confirmation”) with Nomura Global Financial Products, Inc. (“NGFP”) for an OTC Equity Prepaid Forward Transaction (the “Forward Transaction”). Pursuant to the terms of the Confirmation, NGFP agreed to waive any redemption right that would require the redemption of shares that it holds at the Business Combination Date in exchange for a pro rata amount of the funds held in the Trust Account provided that the Business Combination date occurred prior to December 12, 2019. Rather, NGFP, at its sole discretion, may either sell such shares in one or more transactions, publicly or privately, at a market price of at least $10.50 per share, or hold such shares for a period of time following the consummation of the Business Combination, at which time the Company will be required to purchase from NGFP, and NGFP will be required to sell to the Company, any such shares not otherwise previously sold by NGFP. The Confirmation provides that the Forward Transaction with NGFP is for up to 2,000,000 shares of

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common stock. The actual number of shares held by NGFP at the Business Combination Date was 1,623,000 shares of common stock (the “Subject Shares”).

The Confirmation provided that following the closing of the Business Combination, the Company transferred from the Trust Account an amount equal to (a) the aggregate number of the Subject Shares held by NGFP, multiplied by (b) the per share redemption price for shares of common stock out of the Trust Account (the “Forward Price”) (such actual aggregate cash amount, the “Prepayment Amount”), as a partial prepayment to NGFP of the amount to be paid to NGFP in settlement of the Forward Transaction upon the Valuation Date (as defined below) for the number of shares owned by NGFP at the closing of the Business Combination. The amount of the Prepayment Amount transferred to NGFP on November 25, 2019 was $17,044,584.

After the Business Combination Date, NGFP may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Original Valuation Date or Extended Valuation Date (each as defined below, and each a “Valuation Date”) at a price per Subject Share not less than the Forward Price. Any Subject Shares sold by NGFP during the term of the Transaction will cease to be Subject Shares. NGFP will give written notice to the Company of any sale of Subject Shares by NGFP within two business days of the date of such sale, such notice to include the date of the sale, the number of Subject Shares sold, and confirmation that the sale price per Subject Share was not less than the Forward Price.

After the Business Combination Date, NGFP may also buy and sell additional shares for its own account or on behalf of third parties, and the pricing limitation set forth in the prior paragraph will not apply to any shares purchased after the closing of the Business Combination.

On each quarterly anniversary of the Business Combination Date (any such date, a “Cash Settlement Date”), NGFP will terminate the transaction in whole or in part by reducing the number of Subject Shares for the Forward Transaction (the reduction being “Terminated Shares”). The number of Terminated Shares with respect to any Cash Settlement Date will equal the number of Subject Shares sold by NGFP since the prior Cash Settlement Date (or with respect to the first Cash Settlement Date, the closing of the Business Combination). NGFP will notify the Company of the expected number of Terminated Shares not less than ten days prior to the applicable Cash Settlement Date. On each Cash Settlement Date, NGFP will pay the Company an amount equal to the product of (A) the number of Terminated Shares and (B) the Forward Price. With effect from the Cash Settlement Date, the remaining number of Subject Shares for the Forward Transaction will be reduced by the Terminated Shares.

The “Original Valuation Date” for the Forward Transaction will be the first anniversary of the closing of the Business Combination, provided that NGFP and the Company may, not later than ten days prior to the Original Valuation Date, agree, each in their sole discretion, to extend the Valuation Date to the second anniversary of the Business Combination (the “Extended Valuation Date”). At the Original Valuation Date or Extended Valuation Date, the Forward Transaction will be settled by NGFP delivering the remaining Subject Shares to the Company, and the Company paying NGFP an amount equal to the product of (x) the Forward Price, (y) the applicable Accrual Percentage (as defined below), and (z) the number of remaining Subject Shares. The “Accrual Percentage” is the product of (a) with respect to any settlement occurring on or before the Original Valuation Date, 2.75% per annum, and with respect to any settlement occurring after the Original Valuation Date, 3.50% per annum, and (b) the number of actual days divided by the number of days in a year beginning on the date of the Business Combination and ending on the applicable day of the settlement.

For the three months ended March 31, 2020, financial expense amounted to $117,000.

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9. NOTES PAYABLE

Notes payable to the Sellers

As consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, (the “Convertible Notes”) and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Non-convertible Notes”).

Convertible Notes

As of March 31, 2020, the amount outstanding for Convertible Notes was $7.5 million and accrued interest on Convertible Notes was $76,000.

Interest on the Convertible Notes will accrue at a fixed interest rate equal to the one-year US dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date, plus a margin of one percent (1%) per annum. Interest will be due and payable annually on each of (1) the date which is the twelve-month anniversary of the Business Combination Date and (2) on the date which is the twenty-four-month anniversary of the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

Fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable on the fifteen-month anniversary of the Business Combination Date. The remaining outstanding principal balance of these Convertible Notes plus all accrued and unpaid interest and fees due under these Notes will be due and payable in full on the twenty-four-month anniversary of the Business Combination Date.

In the event that the Company receives, at any time while principal on these Convertible Notes remains outstanding, cash proceeds of an equity financing (the “Financing”) in an amount not less than $50.0 million (the “Notes Financing Proceeds”), fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable no later than ten business days after the Company receives such Notes Financing Proceeds. In the event of a Financing where at any time the Company receives cash proceeds of such Financing in an amount not less than $75.0 million (the “Payoff Financing Proceeds”), one hundred percent of the remaining outstanding principal balance of these Convertible Notes, plus all accrued and unpaid interest and fees due under the Notes will be due and payable no later than ten business days after the Company receives such Payoff Financing Proceeds. The date which is the earlier of (a) the twenty-four-month anniversary of the Business Combination Date, or (b) the date payment is received from Payoff Financing Proceeds, is the “Maturity Date.”

In the event that these Convertible Notes are not paid in full on or before the applicable Maturity Date, then at any time after the sixtieth business day after the Maturity Date, assuming payment in full has not been made prior to such date, the outstanding principal amount of these Notes, together with all accrued but unpaid interest on these Convertible Notes, may be converted into shares of Company common stock, in part or in whole, at the option of the holder of these Convertible Notes by providing written notice at least three business days prior to the date of conversion. A conversion of any portion of these Convertible Note into shares of Company common stock will be effected at a conversion price equal to the Current Market Price as of the date of such conversion (the “Conversion Price”). The term “Current Market Price” means, generally, the average VWAP for the twenty consecutive trading days ending on the date that is five trading days prior to the date of conversion. The term “VWAP” means, for any trading day, the volume weighted average trading price of the Company’s common stock for such trading day on the NYSE (or if the Company’s common stock is no longer traded on the NYSE, on such other exchange as the Company’s common stock is then traded).

Non-convertible Notes

As of March 31, 2020, the amount outstanding for Non-convertible Notes was $7.5 million and accrued interest on Non-convertible Notes was $76,000.

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Interest on the Non-convertible Notes shall accrue at a fixed interest rate equal to LIBOR plus a margin of one percent (1%) per annum, which interest rate as of the date hereof is one and ninety-one hundredths percent (1.91%). As used herein, “LIBOR” means the one-year US Dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

The outstanding principal balance of the Non-convertible Notes, plus all accrued and unpaid interest and fees due under these notes, shall be due and payable, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), no later than ten (10) business days after the Company receives the Financing Proceeds.

Notes payable—Other

Prior to the closing of the Business Combination, the Company had issued to several of its stockholders or their affiliates various promissory notes that were due to be paid in full upon the closing of the Business Combination (such notes referred to collectively as either the “Extension Notes” or the “Working Capital Notes”). In conjunction with the completion of the Business Combination, the Company and each of GigAcquisitions, LLC (the “Sponsor”) and an affiliate of the Sponsor, GigFounders, LLC, agreed to amend and restate the Extension Notes and Working Capital Notes held by them to provide that in lieu of repaying such promissory notes in full upon the closing of the Business Combination, the outstanding principal balance of such amended and restated notes (the “Amended Extension Notes” and the “Amended Working Capital Notes”), plus all accrued and unpaid interest (as described below) and fees due under the Amended Extension Notes and Amended Working Capital Notes, shall, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), be due and payable no later than ten business days after the Company receives the Financing Proceeds. Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. None of the Amended Extension Notes or Amended Working Capital Notes will be convertible into securities of the Company. On March 31, 2020, all of the other holders of Extension Notes and Working Capital Notes similarly agreed to amend and restate these notes to exchange them into Amended Extension Notes and Amended Working Capital Notes.

As of March 31, 2020, the outstanding amount of the notes payable for these notes was $3.6 million of which $1.9 million was due to related parties.

On March 6, 2020, the Company issued to Northland, a promissory note for the principal amount of $400,000 as a partial settlement of the amounts owned to Northland for financial advisory services provided by Northland to Kaleyra S.p.A. in connection with the previously consummated Business Combination. This note bears interest at the rate of 8.0% per annum and matures on December 31, 2020.

10. PREFERENCE SHARES LIABILITIES

Preference shares liabilities amounting to $2,000 and $2.5 million as of March 31, 2020 and December 31, 2019, respectively, represent the Company’s obligation to purchase in 2020 the preference shares from certain employees of Solutions Infini as a part of the Solutions Infini 2018 Purchase Agreement.

On March 9, 2020, the Company signed a modification of the 2018 Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July

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2020 to their face value, amounting to Indian Rupee 10.0 per each preference share. As a result of this modification, the total preference shares obligation was reduced to Indian Rupee 132,000 ($2,000 at the March 31, 2020 exchange rate).

On January 31, 2020, the Company agreed to pay to the eligible employees of the preference shares, performance bonuses for a total amount of $3.5 million (at the March 31, 2020 exchange rate), to be paid in 2020, as a replacement of the preference shares obligation.

On March 24, 2020, given the prevailing situation of the COVID-19 pandemic both globally and in India, the Company agreed with two of the eligible employees to delay payment of their performance bonuses, for a total amount of $1.4 million (at the March 31, 2020 exchange rate), and evaluate the timeline for payment thereof at a later date.

11. OTHER CURRENT AND LONG-TERM LIABILITIES

Other current liabilities consisted of the following (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Liabilities for tax other than income tax	$	1,038	$	583
Social securities liabilities		184		256
Accrued financial interest		413		149
Other liabilities		388		391
Total other current liabilities	$	2,023	$	1,379

Other long-term liabilities consisted of the following (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Payable to supplier (1)	$	2,700	$	2,700
Long-term performance bonuses		1,433		—
Derivative contract liabilities		73		80
Other long-term liabilities		393		375
Total other long-term liabilities	$	4,599	$	3,155

(1) This obligation was settled by issuance of a note payable on May 1, 2020, when the settlement agreement with the supplier was executed. Refer to Note 19 – Subsequent events – for further details.

12. GEOGRAPHIC INFORMATION

Revenue by geographic area is determined on the basis of the location of the customer. The Company generates its revenue primarily in Italy and India. The following table sets forth revenue by geographic area for the three months ended March 31, 2020 and 2019 (in thousands):

	Three Months Ended March 31,
	2020		2019
Italy	$	14,608	$	13,408
India		8,893		8,171
United States		4,289		1,692
Europe (excluding Italy)		2,573		3,598
Rest of the world		3,270		856
Total	$	33,633	$	27,725

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	Three Months Ended March 31,
	2020		2019
Italy		43.4%		48.4%
India		26.4%		29.5%
United States		12.8%		6.1%
Europe (excluding Italy)		7.7%		13.0%
Rest of the world		9.7%		3.0%

As of March 31, 2020, the majority of the Company’s long-lived assets are located in Italy. The following table sets forth long-lived assets by geographic area as of March 31, 2020 and December 31, 2019 (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Italy	$	1,965	$	1,772
India		1,115		1,162
United States		787		437
Rest of the world		21		22
Total	$	3,888	$	3,393

	As of March 31,		As of December 31,
	2020		2019
Italy		50.5%		52.2%
India		28.7%		34.2%
United States		20.3%		12.9%
Rest of the world		0.5%		0.7%

13. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company entered into various operating lease agreements that expire over various years in the next 7 years. The Company’s Milan office lease contains an option to renew the lease for 6 years under terms and conditions set forth in the lease agreement. Certain of the Company’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. Rent expense was $309,000 and $196,000 for the three months ended March 31, 2020 and 2019, respectively.

Future minimum lease payments under operating leases as of March 31, 2020 are as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	541
2021		527
2022		508
2023		400
2024		312
2025 and thereafter		416
Total Minimum Lease Payments	$	2,704

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Contingencies

As of March 31, 2020, the Company had contingent liabilities of $126,000, relating to a tax appeal of Solutions Infini for which no provision was recognized as its occurrence was deemed remote.

14. RESTRICTED STOCK UNITS (RSUs)

On March 24, 2020, the Board’s Compensation Committee approved the grant of 113,506 RSUs to a new manager of the Company. These RSUs have no performance conditions and vest as follows: (i) 25% of the shares vest on February 1, 2021 and (ii) the remaining 75% vests in equal quarterly installments over a three-year period starting from February 1, 2021.

The following table sets forth the activity related to the number of outstanding RSUs for the three months ended March 31, 2020:

	Number of shares			Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2019		3,336,095		$	8.25
Vested		(137,104	)		8.25
Granted		113,506			6.23
Cancelled		(132,897	)		8.25
Non-vested as of March 31, 2020		3,179,600		$	8.18

RSUs compensation expense for the three months ended March 31, 2020 was $6.2 million, which was recorded as follows (in thousands):

	Three Months Ended March 31,
	2020		2019
Research and development	$	1,312	$	—
Sales and marketing		1,053		—
General and administrative		3,839		—
Total	$	6,204	$	—

As of March 31, 2020, there was $19.2 million of unrecognized compensation cost related to non-vested RSUs to be recognized over a weighted-average remaining period of 1.55 years.

15. INCOME TAXES

The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable.

The Company recorded an income tax benefit of $589,000 and an income tax expense $79,000 for the three months ended March 31, 2020 and 2019, respectively.

As of March 31, 2020, the Company had $2.1 million of undistributed earnings and profits generated by a foreign subsidiary (Solutions Infini) for which no deferred tax liabilities have been recorded, since the Company intends to indefinitely reinvest such earnings in the subsidiary to fund the international operations and certain obligations of the subsidiary. Should the above undistributed earnings be distributed in the form of dividends or otherwise, the distributions would result in $321,000 of tax expense.

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The Company files income tax returns in the United States and in foreign jurisdictions including Italy, India, and Switzerland. As of March 31, 2020, the tax years 2007 through the current period remain open to examination in each of the major jurisdictions in which the Company is subject to tax.

16. NET LOSS PER SHARE

The Business Combination was accounted for as a reverse recapitalization in accordance with US GAAP. Accordingly, weighted average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination.

The following table sets forth the calculation of basic and diluted net loss per share during the period presented (in thousands, except share and per share data):

	Three Months Ended March 31,
	2020			2019
Net loss	$	(8,823	)	$	(1,379	)
Weighted-average shares used to compute net loss per common share, basic and diluted		19,979,589			10,687,106
Net loss per common share, basic and diluted	$	(0.44	)	$	(0.13	)

The Company generated a net loss for each of the three months ended March 31, 2020 and 2019. Accordingly, the effect of dilutive securities is not considered in the loss per share for such periods because their effect would be anti-dilutive on the net loss per share.

For the three months ended March 31, 2020, the weighted-average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share as their effect would be anti-dilutive, was 14,346,056 (zero for the three months ended March 31, 2019).

Warrants

Warrants will only be exercisable for whole shares at $11.50 per share. Under the terms of the Warrant agreement dated December 12, 2017, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act, following the completion of the Business Combination, for the registration of the shares of common stock issuable upon exercise of the Warrants there were included in the Units. That registration statement was filed by the Company on May 4, 2020 and declared effective by the SEC on May 8, 2020. No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number for the number of shares of common stock to be issued to the Warrant holder. Each Warrant became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of the Warrants during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the Warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.

As of March 31, 2020, there were 11,154,938 warrants outstanding.

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17. TRANSACTIONS WITH RELATED PARTIES

During the three months ended March 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 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. Esse Effe is affiliated with a former director of the Company and which holds an interest in the Company. The outstanding amount due by the Company was $15.0 million plus $152,000 of accrued interest as of March 31, 2020 ($15.0 million plus $43,000 of accrued interest as of December 31, 2019). See Note 9 – 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. Accrued interest on these promissory notes amounted to $19,000 as of March 31, 2020 ($1.9 million and $5,000 of accrued interest as of December 31, 2019). 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 $56,000 and zero in the three months ended March 31, 2020 and 2019;

iv. Loans granted to Company’s directors and executive managers (at the reporting date, also Company’s stockholders) whose outstanding amount was $21,000 and $22,000 as of March 31, 2020 and December 31, 2019, respectively; and

v. As of March 31, 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 March 31,
	2020		2019
Research and development	$	—	$	94
General and administrative		56		94
Financial income (expense), net		122		—

18. REVENUE

Revenue Recognition

The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers. Taxes collected are subsequently remitted to governmental authorities.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

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• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

The Company’s revenue is primarily derived from usage-based fees earned from the sale of communications services offered through software solutions to large enterprises, as well as small and medium-sized customers.

The Company’s revenue is recognized upon the sending of a SMS message or by the authentication of a financial transaction of an end user of the Company’s customer using the Company’s platform in an amount that reflects the consideration the Company expects to receive in exchange for those services which is generally based upon agreed fixed prices per unit.

Platform access is considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. After usage occurs, there are no remaining obligations that would preclude revenue recognition. Revenue from usage-based fees represented 98% and 99% of total revenue, for the three months ended March 31, 2020 and 2019, respectively.

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support, which is generally one year. Term-based contract revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 2% and 1% of total revenue for the three months ended March 31, 2020 and 2019, respectively.

The Company’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

Contract Balances

The Company receives payments from customers based on a billing schedule as established in its contracts. Contract assets are recorded when the Company has a conditional right to consideration for its completed performance under the contracts. Trade receivables are recorded when the right to this consideration becomes unconditional, which is as usage occurs. The Company did not have any contract assets as of March 31, 2020 and December 31, 2019.

Deferred revenue is recorded when cash payments are received in advance of future usage on non-cancellable contracts. As of March 31, 2020 and December 31, 2019, the Company recorded $1.5 million and $1.4 million, respectively, as deferred revenue in its condensed consolidated balance sheets. In the three months ended March 31, 2020, the Company recognized $647,000 of revenue that was included in the deferred revenue as of December 31, 2019.

Disaggregated Revenue

In general, revenue disaggregated by geography is aligned according to the nature and economic characteristics of the Company’s business and provides meaningful disaggregation of the Company’s results of operations. Refer to Note 12 – Geographic Information for details of revenue by geographic area.

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19. SUBSEQUENT EVENTS

On April 7, 2020, Kaleyra S.p.A. received the approval by UBI Banca S.p.A. to postpone the amounts due under the existing loans for the next 6 months. As a result of this approval, the Company will postpone the payments of approximately $694,000 beyond the next 6 months.

On April 9, 2020, Kaleyra S.p.A. received the approval by UniCredit to postpone the amounts due under the existing loans for the next 6 months. As a result of this approval, the Company will postpone the payments of approximately $1.6 million beyond the next 6 months.

On April 9, 2020, the Company repurchased 50,000 shares of its common stock from KAF in connection with the KAP Amendments for a total purchase price of approximately $0.5 million.

On April 16, 2020, in connection with the previously consummated Business Combination, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with its financial advisory service firms, Cowen and Company, LLC (“Cowen”) and Chardan Capital Markets, LLC, (“Chardan” and collectively the “Service Firms”), pursuant to which it agreed to pay an affiliate of Cowen, Cowen Investments II LLC (“Cowen Investments”), and Chardan, in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate, as follows: (i) $2.7 million in the aggregate in common stock of the Company (the “Settlement Shares”) to be issued the business day prior to the filing of a resale registration statement for such Settlement Shares (the “Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum (but with lower interest rates if the notes are repaid earlier than one year or two years after issuance) and with interest paid in arrears to the payee on March 15, June 15, September 15 and December 15 of each year, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of the Company by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares will be substituted for by warrants with an exercise price of $0.01 per share issued pursuant to a Warrant Agreement (the “Warrant Agreement”) and the common stock underlying the Warrant Agreement (the “Warrant Shares”). The Beneficial Ownership Limitation shall initially be 4.99% of the number of shares of the common stock outstanding of the Company immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares shall be calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of the Company on the NYSE American LLC stock exchange (the “VWAP”) on the business day immediately prior to the date on which Kaleyra files the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of the Company to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

On April 24, 2020, Kaleyra S.p.A. received the approval by Simest S.p.A. to postpone the amounts due under the existing loans in 2020. As a result of this approval, the Company will postpone the payments of approximately $350,000 beyond December 31, 2020.

On April 29, 2020, the Company issued 1,763,633 shares (the “2019 Earnout Shares”) of the Company’s common stock, par value $0.0001 per share, at a fair value of $7.00 per share.

On May 1, 2020, in connection with the Settlement Agreement, the Company issued: (i) an aggregate of 440,595 Settlement Shares to Cowen Investments and Chardan, consisting of 374,506 Settlement Shares issued to Cowen Investments, and 66,089 Settlement Shares issued to Chardan; and (ii) convertible promissory notes in

F-89

the aggregate principal amount of $2.7 million to Cowen Investments and Chardan, consisting of a convertible promissory note in the principal amount of $2.3 million issued to Cowen Investments (the “Cowen Note”) and a convertible promissory note in the principal amount of $405,000 issued to Chardan (the “Chardan Note”), respectively. The unpaid principal of the Cowen Note is convertible at the option of Cowen Investments into 303,171 shares of common stock of the Company, if there has been no principal reduction, and the unpaid principal of the Chardan Note is convertible at the option of Chardan into 53,501 shares of common stock of the Company, if there has been no principal reduction. As the Beneficial Ownership Limitation was not triggered by the issuance of the Settlement Shares, no Warrant Agreement was necessary and no warrants were issued.

F-90

             Shares

KALEYRA, INC.

Common Stock

PRELIMINARY PROSPECTUS

Joint Book-Running Managers

Oppenheimer & Co. Nomura

Lead Manager

Northland Capital Markets

Co-Manager

National Securities Corporation

Dated                , 2020

PART II—INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

The following table sets forth the costs and expenses payable by the registrant in connection with this offering, other than underwriting discounts and commissions. All of the amounts shown are estimates except the SEC registration fee.

SEC Registration Fee	$	5,224.45
FINRA Filing Fee	$	6,537.50
Printing and Engraving Expenses			*
NYSE American Listing Fee			*
Legal Fees and Expenses			*
Accounting Fees and Expenses			*
Transfer Agent and Registrar Fee			*
Other			*
Total	$		*

* The estimated expenses are presently undeterminable and will be set forth in an amendment to this Registration Statement.

Item 14. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers in terms sufficiently broad to permit such indemnification under certain circumstances for liabilities, including reimbursement for expenses incurred, arising under the Securities Act of 1933, as amended, or the Securities Act.

Our second amended and restated certificate of incorporation provides for indemnification of our directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law, and our bylaws provide for indemnification of our directors, officers, employees and other agents to the maximum extent permitted by the Delaware General Corporation Law.

In addition, we have entered into indemnification agreements with our directors, officers, and some employees containing provisions which are in some respects broader than the specific indemnification provisions contained in the Delaware General Corporation Law. The indemnification agreements will require us, among other things, to indemnify our directors against certain liabilities that may arise by reason of their status or service as directors and to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified.

Item 15. Recent Sales of Unregistered Securities.

In connection with the closing of the Business Combination, on November 25, 2019, Kaleyra issued 10,687,106 shares of common stock to the former holders of capital stock of Kaleyra S.p.A., and on April 29, 2020, Kaleyra issued an additional 1,763,633 shares of common stock to the former holders of capital stock of Kaleyra S.p.A. as part of the Earnout Shares to be issued to such holders.

On March 6, 2020, Kaleyra issued 140,000 shares of common stock to Northland as partial consideration for financial advisory services provided by Northland to Kaleyra S.p.A. in connection with the Business Combination.

On May 1, 2020, as partial consideration for financial advisory services provided by Cowen and Chardan to Kaleyra in connection with the Business Combination, Kaleyra issued (a) 374,506 shares of common stock to

II-1

Cowen Investments II and 66,089 shares of common stock to Chardan, and (b) convertible notes that convert into 303,171 shares of common stock to Cowen Investments II and 53,501 shares of common stock to Chardan.

Item 16. Exhibits and Financial Statement Schedules.

(a) See the Exhibit Index immediately preceding the signature page of this registration statement and which is incorporated by reference herein.

Item 17. Undertakings.

The registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act of 1933, as amended, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497 (h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective; and

(2) For purposes of determining any liability under the Securities Act of 1933, as amended, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-2

Exhibit Number	Description
1.1***	Underwriting Agreement
2.1*	Stock Purchase Agreement, dated as of February 22, 2019 (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K as filed with the SEC on February 26, 2019).
2.2	Amendment No. 1 to Stock Purchase Agreement, dated as of September  24, 2019 (Incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K as filed with the SEC on September 24, 2019).
2.3	Amendment No. 2 to Stock Purchase Agreement, dated November  23, 2019 (Incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K as filed with the SEC on November 25, 2019).
2.4	Stock Purchase Agreement, dated as of July  31, 2018, by and among Buc Mobile, Inc., Ipai Terry Hsiao, and the Sellers. (Incorporated by reference to Exhibit 2.4 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
2.5*	Share Purchase and Shareholders Agreement, dated October  15, 2016, as amended, by and among Ubiquity SRL, Solutions Infini Technologies (India) Private Limited and the Sellers. (Incorporated by reference to Exhibit 2.5 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
3.1	Second Amended and Restated Certificate of Incorporation of Kaleyra, Inc. (Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
3.2	Amended and Restated Bylaws of Kaleyra, Inc. (Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
4.1	Specimen Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
4.2	Specimen Warrant Certificate. (Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
5.1***	Opinion of DLA Piper LLP (US).
10.1	Amended and Restated Registration Rights Agreement, dated November  25, 2019. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.2	Warrant Agreement between Continental Stock Transfer  & Trust Company and GigCapital, Inc. (Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K as filed with the SEC on December 12, 2017).
10.3	Forward Share Purchase Agreement, dated September  27, 2019, by and among the Company, Greenhaven Road Capital Fund 1, LP, and Greenhaven Road Capital Fund 2, LP (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K  as filed with the SEC on September 27, 2019).
10.4	Forward Share Purchase Agreement, dated October  1, 2019, by and between the Company and Kepos Alpha Fund L.P. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on October 2, 2019).
10.5	Amendment to Forward Share Purchase Agreement, dated October  2, 2019, by and between the Company and Kepos Alpha Fund L.P. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on October 3, 2019).

II-3

Exhibit Number	Description
10.6	Forward Share Purchase Agreement, dated November  19, 2019, by and between GigCapital, Inc. and Glazer Capital, LLC (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on November 20, 2019).
10.7	Forward Share Purchase Agreement, dated November  19, 2019, by and between GigCapital, Inc. and Yakira Capital Management, Inc. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on November  20, 2019).
10.8	Form of Amended Extension Note, dated November 25, 2019 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on November 25, 2019).
10.9	Form of Amended Working Capital Note, dated November 25, 2019 (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on November 25, 2019).
10.10#	Kaleyra, Inc. 2019 Equity Incentive Plan. (Incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.11#	Kaleyra, Inc. 2019 Form of RSU award agreement. (Incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.12#	Kaleyra, Inc. 2019 Form of Incentive Stock Option award agreement. (Incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.13#	Kaleyra, Inc. 2019 Form of Nonstatutory Stock Option award agreement. (Incorporated by reference to Exhibit 10.13 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.14	Form of Notes, attached as an exhibit to the Stock Purchase Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 2.1 (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K as filed with the SEC on February 26, 2019).
10.15	Form of Cash Consideration Notes, attached as an exhibit to Amendment No.  2 to Stock Purchase Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 2.3 (Incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K as filed with the SEC on November 25, 2019).
10.16†	Loan Contract, dated as of July  23, 2018, by and between Kaleyra and Intesa Sanpaolo S.p.A. (Incorporated by reference to Exhibit 10.16 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.17	Loan Contract, dated as of April  10, 2019, by and between Kaleyra and Unione di Banche Italiane S.p.A. (Incorporated by reference to Exhibit 10.17 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.18†	Loan Contract, dated as of April  10, 2019, by and between Kaleyra and Banca Monte dei Paschi di Siena (Incorporated by reference to Exhibit 10.18 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.19	Loan Contract, dated as of April  30, 2019, by and between Kaleyra and Banco BPM S.p.A. (Incorporated by reference to Exhibit 10.19 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.20	Loan Contract, dated as of July  23, 2019, by and between Kaleyra and Banco BPM S.p.A. (Incorporated by reference to Exhibit 10.20 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.21	Loan Contract, dated as of July  25, 2019, by and between Kaleyra and Intesa Sanpaolo S.p.A. (Incorporated by reference to Exhibit 10.21 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)

II-4

Exhibit Number	Description
10.22	Deed of Renegotiation of an Unsecured Loan into a Current Loan, dated as of July  25, 2019, by and between Kaleyra and Intesa Sanpaolo S.p.A. (Incorporated by reference to Exhibit 10.22 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.23†	Loan Contract, dated as of August  2, 2019, by and between Kaleyra and UniCredit S.p.A. (Incorporated by reference to Exhibit 10.23 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.24	Addendum to Loan Contract, dated as of August  2, 2019, by and between Kaleyra and UniCredit S.p.A. (Incorporated by reference to Exhibit 10.24 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.25**†	Premium SMS Agreement, dated as of September  15, 2010, by and between Ubiquity S.r.l. (the predecessor to Kaleyra) and Telecom Italia S.p.A. (Incorporated by reference to Exhibit 10.25 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.26**	Amendment to Premium SMS Agreement, dated as of December  1, 2011, by and between by and between Ubiquity S.r.l. and Telecom Italia S.p.A. (Incorporated by reference to Exhibit 10.26 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.27**	Amendment to Premium SMS Agreement, dated as of August  1, 2012, by and between by and between Ubiquity S.r.l. and Telecom Italia S.p.A. (Incorporated by reference to Exhibit 10.27 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.28**	Amendment to Premium SMS Agreement, dated as of December  10, 2014, by and between by and between Ubiquity S.r.l. and Telecom Italia S.p.A. (Incorporated by reference to Exhibit 10.28 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.29**	Amendment to Premium SMS Agreement, dated as of May  20, 2016, by and between by and between Ubiquity S.r.l. and Telecom Italia S.p.A. (Incorporated by reference to Exhibit 10.29 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.30**	Amendment to Premium SMS Agreement, dated as of May  22, 2018, by and between by and between Kaleyra and Telecom Italia S.p.A. (Incorporated by reference to Exhibit 10.30 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.31†	Loan Contract, dated as of February  15, 2017, by and between Ubiquity S.r.l. and Unione di Banche Italiane S.p.A. (Incorporated by reference to Exhibit 10.31 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.32†	Loan Contract, dated as of May  29, 2015, by and between Ubiquity S.r.l. and Finlombarda S.pA. (Incorporated by reference to Exhibit 10.32 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.33**†	Loan Agreement, dated as of July  27, 2017, by and between Ubiquity S.r.l. and UniCredit S.p.A. (Incorporated by reference to Exhibit 10.33 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019.)
10.34**†	Loan Contract, dated as of September  28, 2016, by and between Ubiquity S.r.l. and Simest S.p.A. (Incorporated by reference to Exhibit 10.34 to the Current Report on Form 8-K as filed with the SEC on December 5, 2019.)
10.35	Amendment No. 2 to Forward Share Purchase Agreement, dated December  13, 2019, by and among Kaleyra, Inc., Greenhaven Road Capital Fund 1, LP, and Greenhaven Road Capital Fund 2, LP. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form  8-K as filed with the SEC on December 16, 2019.)

II-5

Exhibit Number	Description
10.36	Amendment No. 2 to Forward Share Purchase Agreement, dated December  13, 2019, by and between Kaleyra, Inc. and Kepos Alpha Fund L.P. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on December 16, 2019.)
10.37	Amendment No. 1 to Forward Share Purchase Agreement, dated December  13, 2019, by and between Kaleyra, Inc. and Glazer Capital, LLC. (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K as filed with the SEC on December 16, 2019.)
10.38	Letter of Credit and Reimbursement Agreement, dated January  7, 2020, by and between Kaleyra, Inc. and EagleBank. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on January 10, 2020.)
10.39	Amendment No. 3 to Forward Share Purchase agreement, dated January  23, 2020, by and among Kaleyra, Inc., Greenhaven Road Capital Fund 1, LP, and Greenhaven Road Capital Fund 2, LP. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on January 23, 2020.)
10.40	Amendment No. 3 to Forward Share Purchase Agreement, dated January  23, 2020, by and between Kaleyra, Inc. and Kepos Alpha Fund L.P. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on January 23, 2020.)
10.41	Amendment to Forward Share Purchase Agreement, dated February  7, 2020, by and between GigCapital, Inc. and Yakira Capital Management, Inc. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on February 12, 2020.)
10.42	Promissory Note, dated March  6, 2020, by and between Kaleyra, Inc. and Northland Securities, Inc. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on March 9, 2020.)
10.43	Securities Issuance Agreement, dated March  6, 2020, by and between Kaleyra, Inc. and Northland Securities, Inc. (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on March 9, 2020.)
10.44	Settlement Agreement and Release entered into as of April  16, 2020, by and between Kaleyra, Inc., Cowen and Company, LLC, and Chardan Capital Markets, LLC (Incorporated by reference to Exhibit  10.44 to the Annual Report on Form 10-K as filed with the SEC on April 22, 2020.)
10.45	Convertible Promissory Note, dated May  1, 2020, by and between Kaleyra, Inc. and Cowen Investments II LLC (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on May 4, 2020.)
10.46	Convertible Promissory Note, dated May  1, 2020, by and between Kaleyra, Inc. and Chardan Capital Markets, LLC (Incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K as filed with the SEC on May 4, 2020.)
10.47	Registration Rights Agreement, dated May 1, 2020, by and between Kaleyra, Inc., Cowen Investments  II, LLC and Chardan Capital Markets, LLC (Incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K as filed with the SEC on May 4, 2020.)
10.48	Amendment No. 2 to Forward Share Purchase Agreement, dated May  9, 2020, by and between Kaleyra, Inc. and Yakira Capital Management, Inc. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on May 14, 2020.)
10.49	OTC Equity Prepaid Forward Transaction Confirmation, dated October  31, 2019, by and among GigCapital, Nomura Global Financial Products, Inc., and Nomura Holdings, Inc. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on November 1, 2019.)

II-6

Exhibit Number	Description
10.50	Letter Agreement, dated June 4, 2020, by and between Kaleyra, Inc. and Nomura Global Financial Products, Inc. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K as filed with the SEC on June 5, 2020.)
16.1	Letter re Change in Certifying Accountant (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K as filed with the SEC on December 2, 2019)
21.1+	List of Subsidiaries.
23.1***	Consent of DLA Piper LLP (US) (included in Exhibit 5.1).
23.2+	Consent of BPM LLP, independent registered public accounting firm.
23.3+	Consent of KPMG S.p.A., independent registered public accounting firm.
101.INS	XBRL Instance Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Schedules and exhibits to this Exhibit omitted pursuant to Regulation S-K Item 601(b)(2). The Company agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request.

# Indicates a management contract or compensatory plan, contract or arrangement.

** Certain portions of this Exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of this Exhibit to the SEC upon request.

*** To be filed by amendment.

+ Filed herewith.

† Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to furnish supplementally a copy of such omitted materials to the SEC upon request.

II-7

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-1 and has duly caused this registration statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Milan, Italy, on this 8th day of June, 2020.

KALEYRA, INC.
By:	/s/ Dario Calogero
Name:	Dario Calogero
Title:	Chief Executive Officer and President

II-8

POWER OF ATTORNEY AND SIGNATURES

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Dario Calogero and Giacomo Dall’Aglio and each or any one of them, his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement on Form S-1, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the United States Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this registration statement on Form S-1 has been signed below by the following persons on behalf of Kaleyra in the capacities and on the dates indicated.

Name	Title	Date
/s/ Dario Calogero Dario Calogero	President, Chief Executive Officer, and Director (Principal Executive Officer)	June 8, 2020
/s/ Giacomo Dall’Aglio Giacomo Dall’Aglio	Chief Financial Officer (Principal Financial and Accounting Officer)	June 8, 2020
/s/ Avi S. Katz Dr. Avi S. Katz	Chairman of the Board of Directors	June 8, 2020
/s/ Neil Miotto Neil Miotto	Director	June 8, 2020
/s/ John Mikulsky John Mikulsky	Director	June 8, 2020
/s/ Emilio Hirsch Emilio Hirsch	Director	June 8, 2020
/s/ Matteo Lodrini Matteo Lodrini	Director	June 8, 2020

II-9

EX-21.1

Exhibit 21.1

Subsidiaries of the Registrant

Name	Jurisdiction of Incorporation
Kaleyra, S.p.A.	Italy
Buc Mobile, Inc.	Delaware
Solutions Infini Technologies (India) Private Limited	India
Campaign Registry, Inc.	Delaware
Solutions Infini FZE	Dubai International Financial Centre
Kaleyra PTE	Singapore
Kaleyra SA	Switzerland
Kaleyra Technologies Indonesia	Indonesia

EX-23.2

Exhibit 23.2

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the use in this Registration Statement on Form S-1 of our report dated April 21, 2020, relating to the consolidated financial statements of Kaleyra, Inc. as of and for the year ended December 31, 2019, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/ BPM LLP

San Jose, California

June 5, 2020

EX-23.3

Exhibit 23.3

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Kaleyra, Inc.

We consent to the inclusion in the Registration Statement on Form S-1 of Kaleyra Inc. of our report dated July 31, 2019, with respect to the consolidated balance sheet of Kaleyra S.p.A. as of December 31, 2018, the related consolidated statements of operations, comprehensive loss, stockholders’ equity (deficit), and cash flows for year ended December 31, 2018, and the related notes, before the effects of the adjustments to retrospectively apply the accounting for the Business Combination described in Notes 1, 5 and 24 included herein and to the reference to our firm under the heading “Experts” in the Registration Statement.

/s/ KPMG S.p.A.

Milan, Italy

June 7, 2020

XML

Accumulated Other Comprehensive Income (Loss)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

13. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The accumulated balances related to each component of other comprehensive income (loss) are as follows (in thousands):

	Cumulative Foreign Currency Translation Adjustment			Cumulative net unrealized gain (loss) on marketable securities, net of tax			Cumulative other comprehensive income related to joint venture			Accumulated Other Comprehensive Income (Loss)
As of December 31, 2017	$	228		$	—		$	(156	)	$	72
Other comprehensive income (loss) before reclassifications		(175	)		(22	)		—			(197	)
Net amount reclassified from accumulated other comprehensive income (loss)		—			—			156			156
Net other comprehensive income (loss)		(175	)		(22	)		156			(41	)
As of December 31, 2018		53			(22	)		—			31
Other comprehensive income (loss) before reclassifications		25			38			—			63
Net amount reclassified from accumulated other comprehensive income (loss)		—			(20	)		—			(20	)
Net other comprehensive income (loss)		25			18			—			43
As of December 31, 2019	$	78		$	(4	)	$	—		$	74

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Geographic Information

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Segment Reporting [Abstract]

Geographic Information

12. GEOGRAPHIC INFORMATION

Revenue by geographic area is determined on the basis of the location of the customer. The Company generates its revenue primarily in Italy and India. The following table sets forth revenue by geographic area for the three months ended March 31, 2020 and 2019 (in thousands):

	Three Months Ended March 31,
	2020		2019
Italy	$	14,608	$	13,408
India		8,893		8,171
United States		4,289		1,692
Europe (excluding Italy)		2,573		3,598
Rest of the world		3,270		856
Total	$	33,633	$	27,725

	Three Months Ended March 31,
	2020		2019
Italy		43.4%		48.4%
India		26.4%		29.5%
United States		12.8%		6.1%
Europe (excluding Italy)		7.7%		13.0%
Rest of the world		9.7%		3.0%

As of March 31, 2020, the majority of the Company’s long-lived assets are located in Italy. The following table sets forth long-lived assets by geographic area as of March 31, 2020 and December 31, 2019 (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Italy	$	1,965	$	1,772
India		1,115		1,162
United States		787		437
Rest of the world		21		22
Total	$	3,888	$	3,393

	As of March 31,		As of December 31,
	2020		2019
Italy		50.5%		52.2%
India		28.7%		34.2%
United States		20.3%		12.9%
Rest of the world		0.5%		0.7%

17. GEOGRAPHIC INFORMATION

Revenue by geographic area is determined on the basis of the location of the customer. The Company generates its revenue primarily in Italy and India. The following table sets forth revenue by geographic area for the years ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019		2018
Italy	$	60,165	$	53,988
India		35,162		15,236
Europe (excluding Italy)		15,686		4,943
United States		9,418		2,247
Rest of the world		9,127		1,431
Total	$	129,558	$	77,845

	Year Ended December 31,
	2019			2018
Italy		46.4	%		69.4	%
India		27.1	%		19.6	%
Europe (excluding Italy)		12.1	%		6.3	%
United States		7.3	%		2.9	%
Rest of the world		7.1	%		1.8	%

As of December 31, 2019, the majority of the Company’s long-lived assets are located in Italy. The following table sets long-lived assets by geographic area as of December 31, 2019 and 2018 (in thousands):

	As of December 31,
	2019		2018
Italy	$	1,772	$	1,136
India		1,162		1,042
United States		437		126
Rest of the world		22		37
Total	$	3,393	$	2,341

	As of December 31,
	2019			2018
Italy		52.2	%		48.5	%
India		34.2	%		44.5	%
United States		12.9	%		5.4	%
Rest of the world		0.7	%		1.6	%

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Other Assets (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Other Assets [Abstract]

Schedule of Other Current Assets

Other current assets consisted of the following (in thousands):

	As of March 31, 2020		As of December 31, 2019
VAT receivables	$	1,132	$	3,136
Receivables from suppliers		812		398
Credit for tax other than income tax		505		358
Income tax assets		254		270
Other receivables		54		62
Total other current assets	$	2,757	$	4,224

Other current assets consisted of the following (in thousands):

	As of December 31,
	2019		2018
VAT receivables	$	3,136	$	1,852
Income tax assets		270		65
Credit for tax other than income tax		358		273
Other receivables		460		354
Total other current assets	$	4,224	$	2,544

Schedule of Other Long-Term Assets

Other long-term assets consisted of the following (in thousands):

	As of March 31, 2020		As of December 31, 2019
Non-current income tax credit (advances and tax reduced at sources)	$	1,726	$	1,029
Miscellaneous		356		174
Total other long-term assets	$	2,082	$	1,203

Other long-term assets consisted of the following (in thousands):

	As of December 31,
	2019		2018
Non-current income tax credit (advances and tax reduced at sources)	$	1,029	$	1,092
Miscellaneous		174		163
Derivative financial assets		—		42
Total other long-term assets	$	1,203	$	1,297

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Derivative Financial Instruments (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Schedule of Gain (Losses) in the Condensed Consolidated Statement of Operations Related to Derivative Contracts

The amount and location of the gains (losses) in the condensed consolidated statements of operations related to derivative contracts is as follows (in thousands):

Derivatives Not Designed As Hedging Instruments			Three Months Ended March 31,
	Line Items		2020		2019
Interest Rate Swap		Financial income (expense), net	$	7	$	(5	)
Foreign Exchange Forward		Financial income (expense), net		—		211
Total			$	7	$	206

The amount and location of the gains (losses) in the consolidated statements of operations related to derivative contracts is as follows (in thousands):

Derivatives Not Designed As Hedging Instruments			Year Ended December 31,
	Line Items		2019		2018
Interest Rate Swap		Financial expense, net	$	16	$	(38	)
Foreign Exchange Forward		Financial expense, net		361		155
Total			$	377	$	117

Schedule of Fair Value Derivative Contracts Reported in Condensed Consolidated Balance Sheet

The following table presents the fair value and the location of derivative contracts reported in the condensed consolidated balance sheets (in thousands):

Derivatives Not Designed As Hedging Instruments (1)	Line Items		As of March 31,         2020			As of December 31,         2019
Interest Rate Swap		Other long-term liabilities	$	(73	)	$	(80	)
Total			$	(73	)	$	(80	)

(1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 3”.

The following table presents the fair value and the location of, derivative contracts reported in the consolidated balance sheets (in thousands):

Derivatives Not Designed As Hedging Instruments (1)			As of December 31,
	Line Items		2019			2018
Interest Rate Swap		Other long-term liabilities	$	(80	)	$	(97	)
Foreign Exchange Forward		Other current liabilities		—			(18	)
Foreign Exchange Forward		Other long-term liabilities		—			(9	)
Foreign Exchange Forward		Other long-term assets		—			42
Foreign Exchange Forward		Other current assets		—			41
Total			$	(80	)	$	(41	)

(1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 3”.

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Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Tax expense (benefits) on marketable securities	$ 1	$ 5	$ 6	$ (7)

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Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019		Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 16,237	$ 16,103		$ 8,207
Restricted cash	20,810	20,894
Short-term investments	3,079	5,124
Short-term marketable securities		5,124		3,151
Trade receivables, net	36,307	39,509		30,222
Prepaid expenses	1,246	648		462
Other current assets	2,757	4,224		2,544
Total current assets	80,436	86,502		44,586
Property and equipment, net	3,888	3,393		2,341
Intangible assets, net	8,665	9,353		11,276
Goodwill	16,370	16,953		17,276
Deferred tax assets				357
Other long-term assets	2,082	1,203		1,297
Total Assets	111,441	117,404		77,133
Current liabilities:
Accounts payable	56,674	63,320		40,166
Debt for forward share purchase agreements	31,530	34,013
Notes payable	2,113	1,667
Notes payable due to related parties	13,115	9,411
Lines of credit	5,278	3,627
Deferred consideration for the acquisition				3,005
Deferred consideration for the acquisition due to related parties				3,245
Current portion of bank and other borrowings	5,925	7,564		4,686
Deferred revenue	1,538	1,397		1,500
Preference shares	1	683
Preference shares due to related parties	1	1,847
Payroll and payroll related accrued liabilities	2,929	1,038		1,020
Other current liabilities	2,023	1,379		1,009
Total current liabilities	121,127	125,946		54,631
Long-term portion of bank and other borrowings	20,621	16,134		9,125
Long-term portion of notes payable due to related parties	3,750	7,500
Long-term portion of employee benefit obligation	1,341	1,398		1,147
Long-term portion of preference shares				495
Long-term portion of preference shares due to related parties				1,339
Deferred consideration for the acquisitions				1,553
Deferred consideration for the acquisitions due to related parties				1,150
Deferred tax liabilities	1,638	2,045		2,476
Other long-term liabilities	4,599	3,155		291
Total Liabilities	153,076	156,178		72,207
Commitments and contingencies
Stockholders’ equity (deficit):
Preferred stock, par value of $0.0001 per share; 1,000,000 shares authorized; no shares issued or outstanding
Common stock, value	2	2	[1]	1	[1]
Additional paid-in capital	11,190	2,143	[1]	10,186	[1]
Treasury stock, at cost; 235,169 and 0 shares as of March 31, 2020 and December 31, 2019, respectively	(2,587)
Accumulated other comprehensive income (loss)	(424)	74		31
Accumulated deficit	(49,816)	(40,993)		(5,292)
Total stockholders’ equity (deficit)	(41,635)	(38,774)		4,926
Total liabilities and stockholders’ equity (deficit)	$ 111,441	117,404		$ 77,133
Previously Reported
Current liabilities:
Debt for forward share purchase agreements		34,059
Notes payable		1,716
Notes payable due to related parties		9,414
Current portion of bank and other borrowings		11,243
Other current liabilities		$ 1,229

[1] Amounts as of December 31, 2018 differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and additional paid-in capital were adjusted accordingly.

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2020 USD ($) CreditFacility Customer	Mar. 31, 2019 USD ($) Customer	Dec. 31, 2019 USD ($) CreditFacility Customer	Dec. 31, 2018 USD ($) Customer	Dec. 31, 2017 USD ($)
Schedule Of Significant Accounting Policies [Line Items]
Total current assets	$ 80,436,000		$ 86,502,000	$ 44,586,000
Total current liabilities	121,127,000		125,946,000	54,631,000
Net liabilities current	40,700,000		39,400,000
Business combination transaction related costs	13,100,000		13,100,000
Business combination, deferred consideration	15,000,000		15,000,000
Obligations net under shares purchase forward agreements entered by former entity	13,200,000		13,200,000
Business combination, notes payable acquired	$ 3,600,000		$ 3,600,000
Number of new line of credit facilities | CreditFacility	2		2
Revenue	$ 33,633,000	$ 27,725,000	$ 129,558,000	77,845,000
Number of performance obligations			1
Subscription-based fee contractual period			1 year
Contract assets			$ 0
Deferred revenue	1,538,000		1,397,000	1,500,000
Deferred revenue, revenue recognized	647,000		1,500,000
Marketable securities			$ 5,100,000	3,200,000
Recognized income tax positions			greater than 50 percent
Restricted Cash	$ 20,800,000		$ 20,900,000	0
Allowance for doubtful accounts			873,000	157,000	$ 60,000
Goodwill impairment charges			0
Impairment charges			0	0
Sales and Marketing
Schedule Of Significant Accounting Policies [Line Items]
Advertising costs			$ 956,000	$ 578,000
Internal-use Software Development Costs
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life			4 years
Usage-Based Fees
Schedule Of Significant Accounting Policies [Line Items]
Performance obligation			98.00%	98.00%
Term-Based Fees
Schedule Of Significant Accounting Policies [Line Items]
Performance obligation			2.00%	2.00%
Customer Concentration Risk | Revenue
Schedule Of Significant Accounting Policies [Line Items]
Concentration risk percentage	10.00%	10.00%	10.00%	10.00%
Number of customers | Customer	0	1	1	3
Customer Concentration Risk | Trade Receivables
Schedule Of Significant Accounting Policies [Line Items]
Concentration risk percentage	10.00%		10.00%	10.00%
Number of customers | Customer	0		0	0
Customer 1 | Customer Concentration Risk
Schedule Of Significant Accounting Policies [Line Items]
Revenue		$ 3,100,000	$ 13,400,000	$ 13,600,000
Customer 2 | Customer Concentration Risk
Schedule Of Significant Accounting Policies [Line Items]
Revenue			10,900,000	8,100,000
Customer 3 | Customer Concentration Risk
Schedule Of Significant Accounting Policies [Line Items]
Revenue			$ 9,200,000	$ 8,800,000
Minimum
Schedule Of Significant Accounting Policies [Line Items]
Long-term financing agreements, repayment schedule extension period	3 months		3 months
Maximum
Schedule Of Significant Accounting Policies [Line Items]
Long-term financing agreements, repayment schedule extension period	9 months		6 months

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Personnel Costs - Schedule of Allocation of Personnel Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Schedule Of Personnel Cost Allocation [Line Items]
Total Personnel Costs	$ 12,648	$ 15,154
Research and Development
Schedule Of Personnel Cost Allocation [Line Items]
Total Personnel Costs	4,158	2,753
Sales and Marketing
Schedule Of Personnel Cost Allocation [Line Items]
Total Personnel Costs	2,855	4,604
General and Administrative
Schedule Of Personnel Cost Allocation [Line Items]
Total Personnel Costs	$ 5,635	$ 7,797

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Stockholders' Equity (Deficit) - Additional Information (Details) - USD ($)		3 Months Ended	12 Months Ended
	Nov. 25, 2019	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 12, 2017
Class Of Stock [Line Items]
Common stock, shares authorized		100,000,000	100,000,000	100,000
Common stock, voting rights per share			one
Common stock, shares issued	19,977,113	20,254,217	19,977,113
Common stock, shares outstanding	19,977,113	20,019,048	19,977,113
Common stock, par value		$ 0.0001	$ 0.0001		$ 0.0001
Conversion of stock, shares converted	1,321,756
Preferred stock, shares authorized		1,000,000	1,000,000	1,000,000
Preferred stock, shares issued		0	0	0
Preferred stock, shares outstanding		0	0	0
Common Stock | Stock Purchase Agreement
Class Of Stock [Line Items]
Closing of business combination share consideration	10,687,106
Warrants
Class Of Stock [Line Items]
Business combination, share price		$ 11.50	$ 11.50		$ 11.50
Number of shares of common stock each holder receive			4		0.75
Warrant agreement date		Dec. 12, 2017	Dec. 12, 2017
Number of fractional shares issued upon exercise of warrants		0	0
Period after business combination when warrants become exercisable		30 days	30 days
Warrants exercisable expiration period after completion of business combination		5 years	5 years
Net cash settlement value of warrants		$ 0	$ 0
Redemption price per warrant		$ 0.01	$ 0.01
Minimum period of prior written notice of redemption of warrants		30 days	30 days
Minimum price per share required for redemption of warrants		$ 18.00	$ 18.00
Warrants redemption covenant, threshold trading days		20 days	20 days
Warrants redemption covenant, threshold consecutive trading days		30 days	30 days
Warrants or rights outstanding		11,154,938	11,154,938

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Fair Value Measurements - Summary of Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis and Realized and Unrealized Gains (Losses) (Details) - Level 3 - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Preference Shares
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income	$ (2,486)	$ 315	$ (753)	$ (639)
Contingent Consideration for Solutions Infini Acquisition
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income			15	71
Recurring Basis | Preference Shares
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Value Beginning of Period	2,530	1,834	1,834
Net Realized and Unrealized (Gains) Losses Included in Income	(2,486)		753	639
Other Comprehensive Income (Loss)	(42)		(57)	(6)
Change in scope of consolidation				1,201
Fair Value End of Period	$ 2		2,530	1,834
Recurring Basis | Contingent Consideration for Solutions Infini Acquisition
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Fair Value Beginning of Period		$ 482	482	2,232
Net Realized and Unrealized (Gains) Losses Included in Income			(15)	(71)
Other Comprehensive Income (Loss)			23	(72)
Purchases, Sales, Issuances and Settlements, Net			$ (490)	(1,137)
Gross Transfers Out				(470)
Fair Value End of Period				$ 482

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Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Parenthetical) (Details)	3 Months Ended
	Mar. 31, 2020 $ / shares	Feb. 29, 2020 ₨ / shares	Dec. 31, 2019 $ / shares	Dec. 31, 2018 $ / shares
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Preferred stock, par value | $ / shares	$ 0.0001		$ 0.0001	$ 0.0001
Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Preferred stock, par value | ₨ / shares		₨ 10.0
Minimum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Short term investments maturity term	4 months
Maximum
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items]
Short term investments maturity term	12 months

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Derivative Financial Instruments - Schedule of Fair Value Derivative Contracts Reported in Consolidated Balance Sheet (Details) - Not Designated as Hedging Instruments - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Derivative Instruments Gain Loss [Line Items]
Derivative, total	$ (73)	$ (80)	$ (41)
Interest Rate Swap | Other Long-Term Liabilities
Derivative Instruments Gain Loss [Line Items]
Derivative on interest rate	$ (73)	$ (80)	(97)
Foreign Exchange Forward | Other Long-Term Liabilities
Derivative Instruments Gain Loss [Line Items]
Derivative on foreign exchange			(9)
Foreign Exchange Forward | Other Current Liabilities
Derivative Instruments Gain Loss [Line Items]
Derivative on foreign exchange			(18)
Foreign Exchange Forward | Other Long-Term Assets
Derivative Instruments Gain Loss [Line Items]
Derivative on foreign exchange			42
Foreign Exchange Forward | Other Current Assets
Derivative Instruments Gain Loss [Line Items]
Derivative on foreign exchange			$ 41

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Income Taxes - Schedule of Provision for Federal and State Income Taxes (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Income Taxes [Line Items]
Current			$ 2,287,000	$ 1,352,000
Deferred taxes	$ (323,000)	$ (398,000)	(14,000)	72,000
Income tax expense	$ (589,000)	$ 79,000	2,273,000	1,424,000
IRES
Income Taxes [Line Items]
Foreign			66,000	248,000
IRAP
Income Taxes [Line Items]
Foreign			50,000	107,000
India
Income Taxes [Line Items]
Foreign			1,977,000	935,000
Other Italian
Income Taxes [Line Items]
Foreign			$ 194,000	$ 62,000

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Bank and Other Borrowings - Summary of Long-term Bank and Other Borrowings (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 26,546	$ 23,698	$ 12,163
Less: current portion	5,925	7,564	3,038
Total long-term portion	$ 20,621	$ 16,134	9,125
Contractual Interest Rate, Percentage	1.00%	1.00%
Unicredit S.p.A. (Line A Tranche (1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 3,219	$ 3,609	$ 5,038
Maturity	2023-01	2023-01
Contractual Interest Rate	Euribor 3 months + 3.10%	Euribor 3 months + 3.10%
Contractual Interest Rate, Percentage	3.10%	3.10%
Interest Nominal Rate	2.80%	2.80%	2.80%
Unicredit S.p.A. (Line A Tranche (2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 151	$ 167	$ 228
Maturity	2023-05	2023-05
Contractual Interest Rate	Euribor 3 months + 3.10%	Euribor 3 months + 3.10%
Contractual Interest Rate, Percentage	3.10%	3.10%
Interest Nominal Rate	2.80%	2.80%	2.80%
Unicredit S.p.A. (Line B)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 2,941	$ 3,229	$ 3,770
Maturity	2023-11	2023-11
Contractual Interest Rate	Euribor 3 months + 2.90%	Euribor 3 months + 2.90%
Contractual Interest Rate, Percentage	2.90%	2.90%
Interest Nominal Rate	2.60%	2.60%	2.60%
Unicredit S.p.A. (Line C)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 2,497	$ 2,787
Maturity	2023-02	2023-02
Contractual Interest Rate	Euribor 3 months + 3.90%	Euribor 3 months + 3.90%
Contractual Interest Rate, Percentage	3.90%	3.90%
Interest Nominal Rate	3.53%	3.53%
Intesa San Paolo S.p.A. (Line 1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 834	$ 988	$ 1,572
Maturity	2021-10	2021-10
Contractual Interest Rate	Euribor 3 months + 1.80%	Euribor 3 months + 1.80%
Contractual Interest Rate, Percentage	1.80%	1.80%
Interest Nominal Rate	1.88%	1.88%	1.51%
Intesa San Paolo S.p.A. (Line 2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 3,841	$ 4,183
Maturity	2023-10	2023-10
Contractual Interest Rate	Euribor 3 months + 2.60%	Euribor 3 months + 2.60%
Contractual Interest Rate, Percentage	2.60%	2.60%
Interest Nominal Rate	2.60%	2.60%
UBI Banca S.p.A. (Line 1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 257	$ 332	$ 625
Maturity	2021-02	2021-02
Contractual Interest Rate, Percentage	1.25%	1.25%
Interest Nominal Rate	1.25%	1.25%	1.25%
UBI Banca S.p.A. (Line 2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 1,198	$ 1,499
Maturity	2021-04	2021-04
Contractual Interest Rate	Euribor 3 months +1.95%	Euribor 3 months +1.95%
Contractual Interest Rate, Percentage	1.95%	1.95%
Interest Nominal Rate	1.55%	1.55%
Monte dei Paschi di Siena S.p.A. (Line 1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 457	$ 521
Maturity	2022-04
Contractual Interest Rate, Percentage	0.95%
Interest Nominal Rate	0.95%	0.95%
Monte dei Paschi di Siena S.p.A. (Line 2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 2,190
Maturity	2023-06
Contractual Interest Rate, Percentage	1.50%
Interest Nominal Rate	1.50%
Banco Popolare di Milano S.p.A. (Line 2)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities		$ 3,893
Maturity	2022-09	2022-09
Contractual Interest Rate	Euribor 3 months + 2.00%	Euribor 3 months + 2.00%
Contractual Interest Rate, Percentage	2.00%	2.00%
Interest Nominal Rate		2.00%
Banco Popolare di Milano S.p.A. (Line 1)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 1,312	$ 1,336
Maturity	2023-06	2023-06
Contractual Interest Rate	Euribor 3 months + 2.00%	Euribor 3 months + 2.00%
Contractual Interest Rate, Percentage	2.00%	2.00%
Interest Nominal Rate	2.00%	2.00%
Banco Popolare di Milano S.p.A. (Line 3)
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 6,517
Maturity	2024-03
Contractual Interest Rate	Euribor 3 months + 3.00%
Contractual Interest Rate, Percentage	3.00%
Interest Nominal Rate	2.16%
Simest 1
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 275	$ 280	$ 382
Maturity	2022-12	2022-12
Contractual Interest Rate, Percentage	0.50%	0.50%
Interest Nominal Rate	0.50%	0.50%	0.50%
Simest 2
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 273	$ 279	$ 379
Maturity	2022-12	2022-12
Contractual Interest Rate, Percentage	0.50%	0.50%
Interest Nominal Rate	0.50%	0.50%	0.50%
Simest 3
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 503	$ 512
Maturity	2022-12	2022-12
Contractual Interest Rate, Percentage	0.50%	0.50%
Interest Nominal Rate	0.50%	0.50%
Finlombarda S.p.A.
Bank and Other Borrowings [Line Items]
Total Financial Liabilities	$ 81	$ 83	$ 169
Maturity	2020-12	2020-12
Contractual Interest Rate, Percentage	0.50%	0.50%
Interest Nominal Rate	0.50%	0.50%	0.50%
Monte dei Paschi di Siena S.p.A.
Bank and Other Borrowings [Line Items]
Total Financial Liabilities		$ 521
Maturity		2022-04
Contractual Interest Rate, Percentage		0.95%
Interest Nominal Rate		0.95%

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Preference Shares Liabilities - Additional Information (Details)			12 Months Ended
	Mar. 24, 2020 Employee	Mar. 09, 2020 INR (₨) ₨ / shares	Dec. 31, 2019 USD ($) $ / shares	Dec. 31, 2019 INR (₨)	Mar. 31, 2020 USD ($) $ / shares	Feb. 29, 2020 ₨ / shares	Jan. 31, 2020 USD ($)	Jan. 30, 2020 INR (₨)	Dec. 31, 2018 USD ($) $ / shares
Preference Shares Liabilities [Line Items]
Preferred stock, par value | $ / shares			$ 0.0001		$ 0.0001				$ 0.0001
Solutions Infini Purchase Agreement
Preference Shares Liabilities [Line Items]
Preference share liabilities			$ 2,500,000		$ 2,000				$ 1,800,000
Reduction by amount of price of preference shares to be purchased from eligible employees			$ 987,000	₨ 70,000,000
Modification of 2018 Solutions Infini Purchase Agreement | COVID-19 | Preferred Stock
Preference Shares Liabilities [Line Items]
Preference shares, performance bonuses							$ 1,400,000
Number of employees get delay payment of performance bonuses | Employee	2
Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini
Preference Shares Liabilities [Line Items]
Preferred stock, par value | ₨ / shares						₨ 10.0
Preferred share obligation		₨ 132,000			$ 2,000		2,000
Performance bonuses to be paid date, year		2020
Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini | COVID-19 | Preferred Stock
Preference Shares Liabilities [Line Items]
Preference shares, performance bonuses							3,500,000
Subsequent Event | Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini
Preference Shares Liabilities [Line Items]
Preferred stock, par value | ₨ / shares		₨ 10.0
Preferred share obligation							$ 2,000	₨ 140,000
Performance bonuses to be paid date, year		2020

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Net Loss Per Share - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 12, 2017
Class Of Stock [Line Items]
Weighted-average number of outstanding shares of common stock excluded from calculation of diluted net loss per share	14,346,056	0	1,244,043	580,580
Warrants to Receive One Share of Common Stock
Class Of Stock [Line Items]
Business combination, share price	$ 11.50		$ 11.50		$ 11.50
Warrant agreement date	Dec. 12, 2017		Dec. 12, 2017
Number of fractional shares issued upon exercise of warrants	0		0
Period after business combination when warrants become exercisable	30 days		30 days
Warrants exercisable expiration period after completion of business combination	5 years		5 years
Net cash settlement value of warrants	$ 0		$ 0
Redemption price per warrant	$ 0.01		$ 0.01
Minimum period of prior written notice of redemption of warrants	30 days		30 days
Minimum price per share required for redemption of warrants	$ 18.00		$ 18.00
Warrants redemption covenant, threshold trading days	20 days		20 days
Warrants redemption covenant, threshold consecutive trading days	30 days		30 days
Warrants or rights outstanding	11,154,938		11,154,938

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Personnel Costs (Tables)

12 Months Ended

Dec. 31, 2019

Compensation Related Costs [Abstract]

Schedule of Allocation of Personnel Cost

Personnel costs amounting to $12.6 million for the year ended December 31, 2019 (of which $996,000 related to RSUs compensation expense) and $15.2 million for the year ended December 31, 2018 (of which $7.4 million related to stock-based compensation expense), were allocated as follows (in thousands):

	Year Ended December 31,
	2019		2018
Research and development	$	4,158	$	2,753
Sales and marketing		2,855		4,604
General and administrative		5,635		7,797
Total Personnel Costs	$	12,648	$	15,154

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Domestic and Foreign Components of Income (Loss) Before Income Tax Expense

The following table presents domestic and foreign components income (loss) before income tax expense for the years ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019			2018
Domestic	$	(7,857	)	$	(635	)
Foreign		4,618			(5,041	)
Loss before income tax expense	$	(3,239	)	$	(5,676	)

Schedule of Provision for Federal and State Income Taxes

The provision for federal and state income taxes consists of the following (in thousands):

	Year Ended December 31,
	2019			2018
Current
Domestic:
US federal corporate income tax	$	—		$	—
US state corporate income tax		—			—
Foreign:
IRES (Italian corporate income tax)		66			248
IRAP (Italian regional tax on productive activities)		50			107
Foreign (India)		1,977			935
Other Italian taxes		194			62
Current		2,287			1,352
Deferred		(14	)		72
Income tax expense	$	2,273		$	1,424

Schedule of Reconciliation of the Statutory Effective Tax Rate

The differences between income taxes expected by applying the U.S. federal statutory tax rate of 21% and the amount of income taxes provided for are as follows (in thousands):

	Year Ended December 31,
	2019			2018
Loss before income taxes	$	(3,239	)	$	(5,676	)
Primary tax rate of the Company (1)		21.00	%		24.00	%
Tax benefit calculated according to the Company’s primary tax rate		(680	)		(1,363	)
State income tax, net of Federal		(483	)		—
Foreign tax rates differences (2)		319			77
Change in applicable tax rates (3)		(513	)		—
Change in valuation allowance		2,027			213
Non-taxable income		(196	)		—
Costs not deductible for tax purposes		541			2,103
Costs not deductible associated with investments		36			19
CFC (Controlled Foreign Corporation rules) (4)		288			93
IRAP (Italian Regional Tax on Productive Activities)		4			154
Taxes on undistributed profits		926			180
Other taxes		4			(52	)
Reported income tax expense	$	2,273		$	1,424

(1) For the year ended December 31, 2019, “primary tax rate of the Company” means the U.S. federal tax rate (21%); for the year ended December 31, 2018, “primary tax rate of the Company” means the applicable Italian Corporate Income Tax (IRES) rate (24%).

(2) For the year ended December 31, 2019, “foreign” relates to tax jurisdictions outside the United States; for the year ended December 31, 2018, “foreign” relates to tax jurisdictions outside Italy.

(3) During 2019, applicable tax rate for Solutions Infini was reduced from 29.12% to 25.17%, resulting in a tax benefit for the period.

(4) Recorded by the Company in relation with the Dubai subsidiary (FZE).

Components of Deferred Tax Assets and Liabilities

The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands):

	As of December 31,
	2019			2018
Deferred tax assets:
Startup costs	$	2,755		$	—
Deferred compensation liabilities		398			128
Property and equipment		70			148
Goodwill		119			134
Net operating loss carryforward		3,370			1,736
Other		422			173
Total deferred tax assets		7,134			2,319
Less: valuation allowance		(5,591	)		(723	)
Total deferred tax assets, net		1,543			1,596
Deferred tax liabilities:
Intangible assets		2,351			3,389
Undistributed profits		1,093			180
Property and equipment		134			140
Other		10			6
Total deferred tax liabilities		3,588			3,715
Net deferred tax liabilities	$	(2,045	)	$	(2,119	)

Summary of Valuation Allowance

The following table sets forth movement in the valuation allowance for the year ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019		2018
Balance at the beginning of the period	$	723	$	206
Change in scope of consolidation		2,836		305
Increase during the period		2,027		213
Effect of exchange rate changes		5		(1	)
Balance at the end of the period	$	5,591	$	723

Summary of Gross Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits as of December 31, 2019 and 2018 is as follows (in thousands):

	As of December 31,
	2019			2018
Gross unrecognized tax benefits, beginning of the year	$	190		$	91
Additions for tax positions of prior years		—			—
Additions for tax positions related to the current year		193			93
Change in scope of consolidation		—			—
Effect of exchange rate		(6	)		2
Subtotal		377			186
Interest and penalties		91			4
Total gross unrecognized tax benefits, end of the year	$	468		$	190

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Loss Per Share Attributable to Common Stockholders - Additional Information (Details) - shares	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Earnings Per Share [Abstract]
Weighted-average number of outstanding shares of common stock excluded from calculation of diluted net loss per share	14,346,056	0	1,244,043	580,580

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Geographic Information - Summary of Revenue by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Revenue	$ 33,633	$ 27,725	$ 129,558	$ 77,845
Italy
Segment Reporting Information [Line Items]
Revenue	$ 14,608	$ 13,408	$ 60,165	$ 53,988
Italy | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	43.40%	48.40%	46.40%	69.40%
India
Segment Reporting Information [Line Items]
Revenue	$ 8,893	$ 8,171	$ 35,162	$ 15,236
India | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	26.40%	29.50%	27.10%	19.60%
Europe (excluding Italy)
Segment Reporting Information [Line Items]
Revenue	$ 2,573	$ 3,598	$ 15,686	$ 4,943
Europe (excluding Italy) | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	7.70%	13.00%	12.10%	6.30%
United States
Segment Reporting Information [Line Items]
Revenue	$ 4,289	$ 1,692	$ 9,418	$ 2,247
United States | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	12.80%	6.10%	7.30%	2.90%
Rest of the World
Segment Reporting Information [Line Items]
Revenue	$ 3,270	$ 856	$ 9,127	$ 1,431
Rest of the World | Geographic Concentration Risk | Revenue
Segment Reporting Information [Line Items]
Concentration risk percentage	9.70%	3.00%	7.10%	1.80%

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Property and Equipment, Net - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Depreciation and amortization expense	$ 879,000	$ 670,000
Capitalized internal-use software development costs	602,000	657,000
Stock-based compensation expense capitalized	0	0
Amortization of capitalized software development costs	355,000	$ 371,000
Internal-use Software In-use
Property Plant And Equipment [Line Items]
Capitalized internal-use software development costs	60,000
Internal-use Software Development In-progress
Property Plant And Equipment [Line Items]
Capitalized internal-use software development costs	$ 542,000

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Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Startup costs	$ 2,755
Deferred compensation liabilities	398	$ 128
Property and equipment	70	148
Goodwill	119	134
Net operating loss carryforward	3,370	1,736
Other	422	173
Total deferred tax assets	7,134	2,319
Less: valuation allowance	(5,591)	(723)	$ (206)
Total deferred tax assets, net	1,543	1,596
Deferred tax liabilities:
Intangible assets	2,351	3,389
Undistributed profits	1,093	180
Property and equipment	134	140
Other	10	6
Total deferred tax liabilities	3,588	3,715
Net deferred tax liabilities	$ (2,045)	$ (2,119)

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Goodwill and Intangible Assets, Net - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization expense	$ 422,000	$ 449,000	$ 1,800,000	$ 860,000

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Employee Benefit - Schedule of Assumptions Used to Determine Pension Benefit Obligations (Details)	Dec. 31, 2019	Dec. 31, 2018
Minimum
Defined Benefit Plan Disclosure [Line Items]
Rate of compensation increase	0.50%	0.50%
Maximum
Defined Benefit Plan Disclosure [Line Items]
Rate of compensation increase	3.00%	3.00%
Kaleyra S.p.A
Defined Benefit Plan Disclosure [Line Items]
Discount rate	0.78%	1.74%
Solutions Infini
Defined Benefit Plan Disclosure [Line Items]
Discount rate	7.25%	7.75%
Rate of compensation increase	15.00%	15.00%

XML

Other Assets - Schedule of Other Long-Term Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Other Assets [Abstract]
Non-current income tax credit (advances and tax reduced at sources)	$ 1,726	$ 1,029	$ 1,092
Miscellaneous	356	174	163
Derivative financial assets			42
Total other long-term assets	$ 2,082	$ 1,203	$ 1,297

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Business Combination - Additional Information (Details) - USD ($)		3 Months Ended	12 Months Ended
	Nov. 25, 2019	Mar. 31, 2020	Dec. 31, 2019	Nov. 24, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Common stock, shares issued	19,977,113	20,254,217	19,977,113
Common stock, shares outstanding	19,977,113	20,019,048	19,977,113
Balance in trust account				$ 40,800,000
Goodwill		$ 16,370,000	$ 16,953,000		$ 17,276,000
Direct and incremental costs		$ 13,100,000	13,100,000
Former Securityholders of Gig Capital
Business Acquisition [Line Items]
Business acquisition ownership percentage	46.50%
Esse Effe S.p.A
Business Acquisition [Line Items]
Cash consideration	$ 6,000,000
Maya
Business Acquisition [Line Items]
Cash consideration	$ 1,500,000
Kaleyra, Inc
Business Acquisition [Line Items]
Business acquisition ownership percentage	63.36%
Goodwill	$ 0
Other intangible assets	0
Direct and incremental costs			$ 7,700,000
Stock Purchase Agreement | Esse Effe S.p.A
Business Acquisition [Line Items]
Cash consideration	6,000,000
Stock Purchase Agreement | Maya
Business Acquisition [Line Items]
Cash consideration	$ 1,500,000
Common Stock
Business Acquisition [Line Items]
Stock redemption price per share	$ 10.5019
Common Stock | Stock Purchase Agreement
Business Acquisition [Line Items]
Closing of business combination share consideration	10,687,106

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Description of Organization and Business Operations

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Description of Organization and Business Operations

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Kaleyra, Inc., formerly GigCapital, Inc., (“Kaleyra,” the “Company,” “we,” “us,” and “our” refer to Kaleyra, Inc. and all of its consolidated subsidiaries) was incorporated in Delaware on October 9, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On December 12, 2017, the Company completed the initial closing of its initial public offering (the “Offering”) whereby the Company sold 12,500,000 Units at a price of $10.00 per Unit. On January 9, 2018, the Company completed the second closing of the Offering with the exercise of the over-allotment option with the consummation of the sale of an additional 1,875,000 Units at a price of $10.00 per Unit. Each Unit consisted of one share of the Company’s common stock, $0.0001 par value, three-fourths (3/4) of one warrant to purchase one share of common stock (the “Warrants”), and one right to receive one-tenth (1/10) of one share of common stock upon consummation of a business combination (the “Rights”). Warrants will only be exercisable for whole shares at $11.50 per share. On January 16, 2018, the Company announced that the holders of the Company’s Units may elect to separately trade the securities underlying such Units which commenced on January 17, 2018. No fractional warrants were issued upon separation of the Units and only whole warrants will trade. Any Units that were not separated, prior to the consummation of the Company’s business combination, continued to trade on the New York Stock Exchange under the symbol “GIG.U”. Any underlying shares of common stock, warrants and rights that were separated, prior to the consummation of the Company’s business combination, traded on the New York Stock Exchange under the symbols “GIG,” “GIG.WS” and “GIGr,” respectively.

On February 22, 2019, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, Kaleyra S.p.A., Shareholder Representative Services LLC, (the “Seller Representative”) as representative for the holders of the ordinary shares of Kaleyra S.p.A. immediately prior to the closing of the Business Combination, and all of the stockholders of all of the Kaleyra S.p.A. stock (collectively, such Kaleyra S.p.A. stockholders, the “Sellers”), for the purpose of the Company acquiring all of the shares of Kaleyra S.p.A.

Kaleyra S.p.A. is a cloud communications software provider delivering secure Application Protocol Interfaces (“APIs”) and connectivity solutions in the API/Communication Platform as a Service or CPaaS market, headquartered in Milan, Italy and with operations in Italy, India, Dubai and the United States. Kaleyra S.p.A.’s solutions include identity authentication, mobile and voice notifications on transactions, and banking services authorizations, most notably via different integrated mobile channels through its platform.

On November 25, 2019, the Business Combination with Kaleyra S.p.A. (the “Business Combination”) was completed.

Effective as of the closing of the Business Combination, the Company changed its name to Kaleyra, Inc. Upon the consummation of the Business Combination, the Company also changed its fiscal year end to December 31st from its previous fiscal year ending September 30th, such change first being effective for its fiscal year ended December 31, 2019. For accounting purposes, Kaleyra S.p.A. was deemed the acquiror in the Business Combination.

The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Under this method of accounting, Kaleyra, Inc. has been treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of Kaleyra S.p.A. issuing stock for the net assets of Kaleyra, Inc., accompanied by a recapitalization.

As a result of the accounting for the Business Combination, the number of common shares authorized and outstanding during periods prior to the Business Combination, have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination. The common stock and additional paid-in capital have also been retrospectively adjusted accordingly. Specifically, the number of common shares outstanding during periods prior to the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the Stock Purchase Agreement. Accordingly, weighted-average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination. See Note 16 – Net Loss Per Share – for further details.

Upon the closing of the Business Combination, the Company’s rights and Units ceased trading, and the Company’s common stock began trading on the NYSE American stock exchange under the symbol “KLR”. Furthermore, on December 2, 2019, Kaleyra’s warrants began trading on the NYSE American stock exchange as “KLR WS”.

1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Kaleyra, Inc., formerly GigCapital, Inc., (hereinafter “Kaleyra” or the “Company”) was incorporated in Delaware on October 9, 2017. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On December 12, 2017, the Company completed the initial closing of its initial public offering (the “Offering”) whereby the Company sold 12,500,000 Units at a price of $10.00 per Unit. On January 9, 2018, the Company completed the second closing of the Offering with the exercise of the over-allotment option with the consummation of the sale of an additional 1,875,000 Units at a price of $10.00 per Unit. Each Unit consists of one share of the Company’s common stock, $0.0001 par value, three-fourths (3/4) of one warrant to purchase one share of common stock (the “Warrants”), and one right to receive one-tenth (1/10) of one share of common stock upon consummation of a business combination (the “Rights”). Warrants will only be exercisable for whole shares at $11.50 per share. On January 16, 2018, the Company announced that the holders of the Company’s Units may elect to separately trade the securities underlying such Units which commenced on January 17, 2018. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. Any Units not separated, prior to the consummation of a business combination, will continue to trade on the New York Stock Exchange under the symbol “GIG.U”. Any underlying shares of common stock, warrants and rights that were separated, prior to the consummation of a business combination, will trade on the New York Stock Exchange under the symbols “GIG,” “GIG.WS” and “GIGr,” respectively.

On February 22, 2019, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) by and among the Company, Kaleyra S.p.A., Shareholder Representative Services LLC, (the “Seller Representative”) as representative for the holders of the ordinary shares of Kaleyra S.p.A. immediately prior to the closing of the Business Combination, and all of the stockholders of all of the Kaleyra S.p.A. stock (collectively, such Kaleyra S.p.A. stockholders, the “Sellers”), for the purpose of the Company acquiring all of the shares of Kaleyra S.p.A.

Kaleyra S.p.A. is a cloud communications software provider delivering secure Application Protocol Interfaces (“APIs”) and connectivity solutions in the API/Communication Platform as a Service or CPaaS market, headquartered in Milan, Italy and with operations in Italy, India, Dubai and the United States. Kaleyra S.p.A.’s solutions include identity authentication, mobile and voice notifications on transactions, and banking services authorizations, most notably via different integrated mobile channels through its platform.

On November 25, 2019, the Business Combination with Kaleyra S.p.A. (the “Business Combination”) was completed. See Note 5—Business Combination for a description of the Business Combination.

Effective as of the closing of the Business Combination, the Company changed its name to Kaleyra, Inc. Upon the consummation of the Business Combination, the Company also changed its fiscal year end to December 31st from its previous fiscal year ending September 30th, such change first being effective for its fiscal year ended December 31, 2019. For accounting purposes, Kaleyra S.p.A. was deemed the acquiror in the Business Combination.

Upon the closing of the Business Combination, the Company’s rights and units ceased trading, and the Company’s common stock began trading on the NYSE American stock exchange under the symbol “KLR”. Furthermore, on December 2, 2019, Kaleyra’s warrants began trading on the NYSE American stock exchange as “KLR WS”.

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Business Combination

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Business Combination

5. BUSINESS COMBINATION

Description of the Business Combination

Following the approval at the special meeting of the stockholders of the Company held on November 22, 2019, and pursuant to and in accordance with the terms of the Stock Purchase Agreement, as amended, the shareholders of Kaleyra S.p.A. (the “Sellers”) on November 25, 2019 sold, transferred, assigned, conveyed and delivered to the Company all of the Kaleyra S.p.A. stock.

As consideration for the Business Combination, the Company issued on November 25, 2019 (the “Business Combination Date”), in the aggregate, 10,687,106 shares of common stock to the Sellers.

In addition, as consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe S.p.A. (“Esse Effe”) and Maya Investments Limited (“Maya”) in the amount of $6.0 million and $1.5 million, respectively, and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts.

Immediately after giving effect to the Business Combination (including as a result of the redemptions and the automatic conversion of rights into shares of common stock), there were 19,977,113 shares of the Company’s issued and outstanding common stock. As of the date of the Business Combination, the Company’s directors and executive officers and affiliated entities beneficially owned approximately 63.36% of the Company’s outstanding shares of common stock, and the former security holders of GigCapital Inc. beneficially owned approximately 46.50% of the Company’s outstanding shares of common stock.

The per share redemption price of $10.5019 for public holders of the Company’s shares of common stock electing redemption was paid out of the Company’s Trust Account, which after taking into account the redemptions, had a balance after paying for the redemptions and immediately prior to the closing of the Business Combination of approximately $40.8 million.

Accounting for the Business Combination

The Business Combination is accounted for as a reverse recapitalization in accordance with US GAAP. Under this method of accounting, Kaleyra, Inc. will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on Kaleyra S.p.A.’s operations comprising substantially all of the ongoing operations of the post-combination company, Kaleyra S.p.A.’s senior management comprising substantially all of the senior management of the post-combination company and the existence of a majority voting interest in the post-combination company. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of Kaleyra S.p.A. issuing stock for the net assets of Kaleyra, Inc., accompanied by a recapitalization.

As a result of the accounting for the Business Combination, the number of common shares authorized and outstanding during periods prior to the Business Combination, have been retrospectively adjusted reflecting the exchange ratio established in the Business Combination. The common stock and additional paid-in capital have also been retrospectively adjusted, accordingly. Specifically, the number of common shares outstanding during periods prior to the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the Stock Purchase Agreement. Accordingly, weighted-average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted as shares reflecting the exchange ratio established in the Business Combination. See Note 24 – Loss per Share Attributable to Common Stockholders for further details.

The net assets of Kaleyra, Inc. are stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are the historical operations of Kaleyra S.p.A.

The following table summarizes the assets and liabilities of Kaleyra, Inc., stated at historical cost at the Business Combination closing date as follows (in thousands):

Cash and cash equivalents	$	231
Restricted cash		21,435
Other current assets		14
Total assets		21,680
Debt for forward share purchase agreements		34,580
Notes payable to Sellers		15,000
Notes payable to Founders, current		3,578
Account payables and other current liabilities		8,896
Total liabilities		62,054
Net liabilities	$	40,374

In connection with the Business Combination, the Company incurred direct and incremental costs of approximately $7.7 million, consisting of legal and professional fees, which are included in general and administrative expenses in the consolidated statement of operations in 2019.

For the business combinations related to the acquisitions of Buc Mobile and Solutions Infini, both completed in fiscal year 2018, reference is made to the Company’s consolidated financial statements for the year ended December 31, 2018.

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Bank and Other Borrowings

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Bank And Other Borrowings [Abstract]

Bank and Other Borrowings

7. BANK AND OTHER BORROWINGS

Credit line facilities

As of March 31, 2020, the Company had credit line facilities granted for a total amount of $6.6 million, of which $5.3 million had been used, including a credit revolving facility denominated in US Dollar for $1.0 million granted to Buc Mobile in January 2020. As of December 31, 2019, the Company had available credit line facilities denominated in Euro for $5.6 million, of which $3.6 million had been used.

The credit lines denominated in Euro may be drawn upon at variable interest rates in the following range: 0.6%—7.6%. The weighted average interest rate on the credit line facilities outstanding as of March 31, 2020, was 1.22%.

As mentioned above, on January 23, 2020, Buc Mobile entered into a revolving credit facility with Intesa Sanpaolo S.p.A. for a total amount of $1 million to be used solely for the purpose of Buc Mobile general working capital needs. As of March 31, 2020, this revolving credit facility was drawn for $950,000. The average effective interest rate for the three months ended March 31, 2020 was 1.52%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):

								Interest Nominal Rate
	As of March 31, 2020		As of December 31, 2019		Maturity		Interest Contractual Rate	As of March 31, 2020			As of December 31, 2019
UniCredit S.p.A. (Line A Tranche (1)	$	3,219	$	3,609		January 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche (2)		151		167		May 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line B)		2,941		3,229		November 2023	Euribor 3 months + 2.90%		2.60	%		2.60	%
UniCredit S.p.A. (Line C)		2,497		2,787		February 2023	Euribor 3 months + 3.90%		3.53	%		3.53	%
Intesa Sanpaolo S.p.A. (Line 1)		834		988		October 2021	Euribor 3 months + 1.80%		1.88	%		1.88	%
Intesa Sanpaolo S.p.A. (Line 2)		3,841		4,183		October 2023	Euribor 3 months + 2.60%		2.60	%		2.60	%
UBI Banca S.p.A. (Line 1)		257		332		February 2021	1.25%		1.25	%		1.25	%
UBI Banca S.p.A. (Line 2)		1,198		1,499		April 2021	Euribor 3 months +1.95%		1.55	%		1.55	%
Monte dei Paschi di Siena S.p.A. (Line 1)		457		521		April 2022	0.95%		0.95	%		0.95	%
Monte dei Paschi di Siena S.p.A. (Line 2)		2,190		—		June 2023	1.50%		1.50	%		—
Banco Popolare di Milano S.p.A. (Line 1)		1,312		1,336		June 2023	Euribor 3 months + 2.00%		2.00	%		2.00	%
Banco Popolare di Milano S.p.A. (Line 2)		—		3,893		September 2022	Euribor 3 months + 2.00%		—			2.00	%
Banco Popolare di Milano S.p.A. (Line 3)		6,517		—		March 2024	Euribor 3 months + 3.00%		2.16	%		—
Simest 1		275		280		December 2022	0.50%		0.50	%		0.50	%
Simest 2		273		279		December 2022	0.50%		0.50	%		0.50	%
Simest 3		503		512		December 2022	0.50%		0.50	%		0.50	%
Finlombarda S.p.A.		81		83		December 2020	0.50%		0.50	%		0.50	%
Total bank and other borrowings		26,546		23,698
Less: current portion		5,925		7,564
Total long-term portion	$	20,621	$	16,134

On March 11, 2020, Kaleyra S.p.A. entered into a 36-month unsecured loan agreement with Monte dei Paschi di Siena S.p.A. for $2.2 million (€2.0 million). The total amount of this new facility was drawn in full the same date. This facility bears interest at a fixed rate equal to 1.5%.

On March 20, 2020, Kaleyra S.p.A. entered into a general unsecured loan agreement (the “BPM Loan Agreement”) with Banco BPM S.p.A. (formerly Banco Popolare di Milano S.p.A.) for a total of $6.5 million (€6.0 million). The BPM Loan Agreement includes a new financing of $2.7 million with the remaining balance used to pay off the original loan dated July 23, 2019, by and between Kaleyra S.p.A. and Banco BPM S.p.A. The BPM Loan Agreement has a maturity of 45 months from the date of disbursement and bears interest at a variable rate equal to the three-month Euribor plus a spread of 3.00%. The BPM Loan Agreement is to be repaid in 15 quarterly installments. The total amount of the BPM Loan Agreement, less amounts related to commissions, fees and expenses, was drawn in full the same date as the BPM Loan Agreement.

On March 31, 2020, Kaleyra S.p.A. received the approval by Intesa Sanpaolo S.p.A. to postpone payment of the amounts due under the existing loans for the next 3 months. As a result of this approval the Company will postpone the payments of approximately $404,000 beyond December 31, 2020.

Subsequent to March 31, 2020, Kaleyra S.p.A. received the approval to postpone the payment of the amounts due under the existing loans for the next 6 to 9 months by UniCredit, UBI Banca S.p.A. and Simest S.p.A. See Note 19 – Subsequent Events – for further details.

As of March 31, 2020, all of the available long-term facilities were drawn in full.

Interest expense on bank and other borrowings was $218,000 for the three months ended March 31, 2020 and $90,000 for the three months ended March 31, 2019.

As of March 31, 2020, the Company is obliged to make payments as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	3,784
2021		9,330
2022		7,637
2023		5,339
2024		456
Total	$	26,546

9. BANK AND OTHER BORROWINGS

As of December 31, 2019 and 2018, the current portion of bank and other borrowings amounts to $11.2 million and $4.7 million, respectively. As of December 31, 2019, this item is comprised of $7.5 million of the current portion of long-term bank and other borrowings and of $3.7 million of credit line facilities. As of December 31, 2018, this item was comprised of $3.0 million of the current portion of long-term bank and other borrowings and of $1.6 million of credit line facilities. Refer to Note 27 for description of amendments made to certain bank borrowings subsequent to year-end.

Credit line facilities

As of December 31, 2019, the Company had credit line facilities granted of $5.6 million, of which $3.7 million had been used. As of December 31, 2018, the Company had credit line facilities granted of $4.6 million, of which $1.6 million had been used.

The above lines of credit may be drawn upon at variable interest rates in the following range: 0.6%-7.6%.

The weighted average interest rate on the credit line facilities outstanding as of December 31, 2019, was 1.35%.

Long-term bank and other borrowings

Long-term bank and other borrowings consist of the following (in thousands):

								Interest Nominal Rate
	As of December 31,							As of December 31,
	2019		2018		Maturity		Interest Contractual Rate	2019			2018
UniCredit S.p.A. (Line A Tranche (1)	$	3,609	$	5,038		January 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche (2)		167		228		May 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line B)		3,229		3,770		November 2023	Euribor 3 months + 2.90%		2.60	%		2.60	%
UniCredit S.p.A. (Line C)		2,787		—		February 2023	Euribor 3 months + 3.90%		3.53	%		—
Intesa Sanpaolo S.p.A. (Line 1)		988		1,572		October 2021	Euribor 3 months + 1.80%		1.88	%		1.51	%
Intesa Sanpaolo S.p.A. (Line 2)		4,183		—		October 2023	Euribor 3 months + 2.60%		2.60	%		—
UBI Banca S.p.A. (Line 1)		332		625		February 2021	1.25%		1.25	%		1.25	%
UBI Banca S.p.A. (Line 2)		1,499		—		April 2021	Euribor 3 months +1.95%		1.55	%		—
Monte dei Paschi di Siena S.p.A.		521		—		April 2022	0.95%		0.95	%		—
Banco Popolare di Milano S.p.A. (Line 1)		1,336		—		June 2023	Euribor 3 months + 2.00%		2.00	%		—
Banco Popolare di Milano S.p.A. (Line 2)		3,893		—		September 2022	Euribor 3 months + 2.00%		2.00	%		—
Simest 1		280		382		December 2022	0.50%		0.50	%		0.50	%
Simest 2		279		379		December 2022	0.50%		0.50	%		0.50	%
Simest 3		512		—		December 2022	0.50%		0.50	%		—
Finlombarda S.p.A.		83		169		December 2020	0.50%		0.50	%		0.50	%
Total bank and other borrowings		23,698		12,163
Less: current portion		7,564		3,038
Total long-term portion	$	16,134	$	9,125

On August 2, 2019, the Company entered into a medium-term financing agreement with UniCredit S.p.A. denominated in Euro for a total of €2.5 million ($2.8 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments starting from February, 2020. The financing will bear interest at a variable rate (Euribor 3 months plus 3.9% spread). The notional amount was fully drawn on the same date.

On July 25, 2019, the Company entered into a medium-term financing agreement with Intesa Sanpaolo S.p.A. denominated in Euro, for a total notional amount of €4.0 million ($4.5 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments starting from October 2019. The financing has a maturity of 48 months from the date of disbursement and bears interest at a variable rate (Euribor 3 months plus 2.6% spread). The total amount was drawn in full on the same date. Proceeds were used to settle the remaining deferred consideration due for the acquisition of Buc Mobile.

On July 23, 2019, the Company entered into a medium-term financing agreement with Banco Popolare di Milano S.p.A. denominated in Euro for a total of €4.0 million ($4.5 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments. The financing has a maturity of 24 months from the date of disbursement and bears interest at a variable rate (Euribor 3 months plus 2.0% spread). The total amount was drawn in full on the same date and proceeds were used to settle the total deferred consideration for the acquisition of Solutions Infini.

On April 30, 2019, the Company entered into a new long-term financing with Banco Popolare di Milano S.p.A., denominated in Euro for a total amount of €1.2 million ($1.3 million at the December 31, 2019 exchange rate), to be repaid in quarterly installments with maturity in June 2023.

On April 10, 2019, the Company entered into a new medium-term financing with UBI Banca S.p.A. denominated in Euro for a total amount of €2.0 million ($2.2 million at December 31, 2019 exchange rate), to be repaid in monthly installments with maturity in April 2021.

On April 10, 2019, the Company entered into a new medium-term financing with Monte dei Paschi di Siena S.p.A., denominated in Euro for a total amount of €600,000 ($673,000 at December 31, 2019 exchange rate), to be repaid in monthly installments with maturity in April 2022.

On January 30, 2019, the Company entered into a new long-term financing with Simest denominated in Euro for a total of €608,000 ($682,000 at the December 31, 2019 exchange rate) to be repaid in quarterly installments with maturity in December 2022.

In connection with the above-mentioned financing agreements entered into in the year ended December 31, 2019, the Company incurred $169,000 of debt issuance costs that will be amortized over the maturity of the respective financing agreements.

On July 23, 2018, Kaleyra S.p.A. entered into a medium-term financing agreement with Intesa Sanpaolo S.p.A. denominated in Euro, for a total notional amount of €1.5 million ($1.7 million at the December 31, 2019 exchange rate) to be repaid in quarterly installments. The financing had an original maturity date of July 31, 2021, which was revised subsequent to year-end to October 2021 (the “Intesa Sanpaolo Facility”). This principal was drawn in full on July 18, 2018 and the proceeds were used to partially finance the acquisition of Buc Mobile.

On July 27, 2017, Kaleyra S.p.A. entered into a long-term financing with UniCredit S.p.A. denominated in Euro to partially finance the various installments of the acquisition of Solutions Infini (the “UniCredit Facility”) for a total of €8.2 million ($9.6 million at the December 31, 2019 exchange rate ), divided into two facilities as follows:

• a credit facility for a maximum of €4.9 million ($5.7 million at the December 31, 2018 exchange rate) to be repaid in 16 quarterly installments, with maturity in 2022 (“Line A”). The principal of €4.7 million ($5.5 million at the December 31, 2018 exchange rate) was drawn on July 27, 2017 (“Tranche 1”) and on November 15, 2017 an additional €200,000 ($236,000 at the December 31, 2018 exchange rate) in principal was drawn (“Tranche 2”); and

• a credit facility for a maximum amount of €3.3 million ($3.9 million at the December 31, 2018 exchange rate) to be repaid in quarterly installments, with a maturity date on May 31, 2023, which was revised subsequent to year-end to November 2023 (“Line B”). This principal amount was drawn in full on May 31, 2018.

On February 15, 2017, Kaleyra S.p.A. entered into a medium-term financing agreement with UBI Banca S.p.A. denominated in Euro, for a total of €1.0 million ($1.1 million at the December 31, 2018 exchange rate) to be repaid in 12 quarterly installments with maturity on February 28, 2021 (the “UBI Banca Facility”). This financing was drawn in full on February 27, 2017.

As of December 31, 2019, all of the available long-term facilities were drawn in full.

The above facilities include a series of statements and disclosure obligations, in line with the standard practice for these types of financings, whose breach could result in termination, early repayment or enforcement of acceleration rights. In particular, the UniCredit Facility and the Intesa Sanpaolo Facility include, among other, change of control provisions that may cause the bank to request immediate repayment of the outstanding debt under the relevant facility as a result of such a change of control event. Upon the consummation of the Business Combination, Kaleyra S.p.A. formally agreed with UniCredit S.p.A. and Intesa Sanpaolo S.p.A. that the Business Combination does not represent a change of control event with respect to the respective outstanding borrowing.

In addition, the above facilities require compliance with certain financial covenants, based on the Kaleyra S.p.A.’s EBITDA, Net Financial Position and Equity. Failure to comply with those financial covenants would result in the immediate repayment of the outstanding debt under the relevant facility. As of December 31, 2019, the Company is in compliance with all the financial covenants.

Interest expense on bank and other borrowings was of $565,000 for the year ended December 31, 2019 and $322,000 for the year ended December 31, 2018.

As of December 31, 2019, the Company is obliged to make payments as follows (in thousands):

	As of December 31, 2019
2020	$	7,564
2021		8,031
2022		5,254
2023		2,849
Total	$	23,698

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Legal Matters

12 Months Ended

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Legal Matters

26. LEGAL MATTERS

On October 17, 2018, Kaleyra S.p.A. filed a claim against Vodafone Italia S.p.A. before the Court of Milan seeking compensation in the amount of 6.1 million euro for all the damages suffered as a consequence of the illicit and anticompetitive conduct of Vodafone, as previously determined by the Italian Antitrust Authority (namely, Autorità Garante della Concorrenza e del Mercato or AGCM) in their decisions issued on December 13, 2017; Vodafone has appealed that sanctioning resolution before the Italian Regional Administrative Court.

The deadline for filing a counterclaim by Vodafone has passed and according to Italian Law, Vodafone is no longer entitled to file a counterclaim against the Company in these proceedings.

The case has now been submitted to a panel of judges for review to determine if the claim can proceed in the Court of Milan or a suspension must be declared until the administrative proceeding is decided.

The claim is under review and Kaleyra S.p.A. and Vodafone have filed their final pleadings on October 1, 2019 and October 21, 2019, respectively. There is no certainty that the claim will be approved to proceed in the Court of Milan, rather than suspended, and the outcome of such action cannot be determined at this time. Therefore no recognition of these actions has been made in the consolidated financial statements.

On April 16, 2019 Kaleyra S.p.A. filed a claim against Telecom Italia S.p.A and Telecom Italia Sparkle S.p.A. before the Court of Milan seeking compensation in the amount of 8.3 million euros for damages suffered after the illicit conduct of both counterparts, determined by the Italian Antitrust Authority in the decision issued on December 13, 2017.

At the first hearing before the Court of Milan held for the appearance of the parties on December 11, 2019, the judge reserved the decision on the possible suspension of the civil case in consideration of the appeal brought by Telecom Italia and Telecom Italia Sparkle S.p.A. against the Italian Antitrust Authority’s decision of December 13, 2017 before the Administrative Court of Latium (namely, Tribunale Amministrativo Regionale del Lazio), which is currently pending. By order issued on December 14, 2019, the judge released his reserve and referred the issue concerning the relation between the assessment of the pending administrative case and the one to be carried out in the civil case to a panel composed of three judges. The case was therefore adjourned for a hearing on April 29, 2020 where the parties will have to file their final pleadings.

There is no certainty that the claim will be approved to proceed in the Court of Milan, rather than suspended, and the outcome of such civil action cannot be determined at this time. Therefore no recognition of these actions has been made in the consolidated financial statements.

In addition to the above, the Company has appealed the resolutions issued by the Italian Communications Authority (namely, Autorità per le Garanzie nelle Comunicazioni or AGCom) concerning the request for the annual contribution to AGCom for years 2016, 2017, 2018 and 2019.

The first instance proceeding against AGCom’s resolutions for the 2016 contribution was successful for the Company and the Regional Administrative Court annulled the resolutions the Company had appealed (judgement no. 2161/2019). However, AGCom filed its second instance appeal before the Council of State seeking the overruling of the Court’s decision. The hearing on AGCom’s appeal will take place in the last quarter of 2020.

All the other proceedings are currently pending before the Regional Administrative Court and no hearing has been scheduled yet.

The abovementioned proceedings concerning the contribution/fee to be paid to AGCom may all be suspended until the request for a preliminary ruling from the Council of State regarding an interpretation of the relevant EU law (case C-399/19) will be defined by the European Court of Justice.

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Restricted Stock Units

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Restricted Stock Units

14. RESTRICTED STOCK UNITS (RSUs)

On March 24, 2020, the Board’s Compensation Committee approved the grant of 113,506 RSUs to a new manager of the Company. These RSUs have no performance conditions and vest as follows: (i) 25% of the shares vest on February 1, 2021 and (ii) the remaining 75% vests in equal quarterly installments over a three-year period starting from February 1, 2021.

The following table sets forth the activity related to the number of outstanding RSUs for the three months ended March 31, 2020:

	Number of shares			Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2019		3,336,095		$	8.25
Vested		(137,104	)		8.25
Granted		113,506			6.23
Cancelled		(132,897	)		8.25
Non-vested as of March 31, 2020		3,179,600		$	8.18

RSUs compensation expense for the three months ended March 31, 2020 was $6.2 million, which was recorded as follows (in thousands):

	Three Months Ended March 31,
	2020		2019
Research and development	$	1,312	$	—
Sales and marketing		1,053		—
General and administrative		3,839		—
Total	$	6,204	$	—

As of March 31, 2020, there was $19.2 million of unrecognized compensation cost related to non-vested RSUs to be recognized over a weighted-average remaining period of 1.55 years.

22. RESTRICTED STOCK UNITS

In December 2019, RSUs were granted to certain employees, directors and advisory board members of the Company for a total of 3,336,095 RSUs shares with an aggregate grant date fair value of $27.5 million, based on a per share grant date fair value of $8.25. In particular:

• The Board of Directors adopted a form of Restricted Stock Unit award Agreement and granted to certain employees of the Company or its subsidiaries (i) 931,243 RSUs that vest in one year from the grant date, (ii) 124,723 RSUs that vest upon the final determination, if any, that the Business Combination’s definition of 2019 targeted adjusted EBITDA is achieved, and (iii) 124,718 RSUs that vest upon the final determination, if any, that the Business Combination’s definition of 2020 targeted adjusted EBITDA is achieved.

• The Board of Directors of the Company granted to certain employees, directors and advisory board members of the Company a total of 2,020,411 RSUs. These RSUs have no performance conditions and vest as follows: (i) 25% of the shares vest on February 1, 2021 and (ii) the remaining 75% vests in equal quarterly installments over a three-year period starting from February 1, 2021.

• The Board of Directors of the Company and certain advisory board members were granted a total of 135,000 RSUs. These RSUs have no performance conditions and vest 40% on February 1, 2020 with the remaining RSUs vesting ratably over the subsequent three quarters.

The following table sets forth the movements in the number of outstanding RSUs for the year ended December 31, 2019:

	Number of shares		Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2018		—	$	—
Granted		3,336,095		8.25
Non-vested as of December 31, 2019		3,336,095	$	8.25

RSUs compensation expense for the year ended December 31, 2019 was $996,000, which was recorded as follows (in thousands):

	Year Ended December 31, 2019
Research and development	$	299
Sales and marketing		115
General and administrative		582
Total	$	996

As of December 31, 2019, there was $26.5 million of unrecognized compensation cost related to non-vested RSUs to be recognized over a weighted-average remaining period of 1.75 years.

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Geographic Information (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Segment Reporting [Abstract]

Summary of Revenue by Geographic Area

The following table sets forth revenue by geographic area for the three months ended March 31, 2020 and 2019 (in thousands):

	Three Months Ended March 31,
	2020		2019
Italy	$	14,608	$	13,408
India		8,893		8,171
United States		4,289		1,692
Europe (excluding Italy)		2,573		3,598
Rest of the world		3,270		856
Total	$	33,633	$	27,725

	Three Months Ended March 31,
	2020		2019
Italy		43.4%		48.4%
India		26.4%		29.5%
United States		12.8%		6.1%
Europe (excluding Italy)		7.7%		13.0%
Rest of the world		9.7%		3.0%

The following table sets forth revenue by geographic area for the years ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019		2018
Italy	$	60,165	$	53,988
India		35,162		15,236
Europe (excluding Italy)		15,686		4,943
United States		9,418		2,247
Rest of the world		9,127		1,431
Total	$	129,558	$	77,845

	Year Ended December 31,
	2019			2018
Italy		46.4	%		69.4	%
India		27.1	%		19.6	%
Europe (excluding Italy)		12.1	%		6.3	%
United States		7.3	%		2.9	%
Rest of the world		7.1	%		1.8	%

Summary of Long-lived Assets by Geographic Area

The following table sets forth long-lived assets by geographic area as of March 31, 2020 and December 31, 2019 (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Italy	$	1,965	$	1,772
India		1,115		1,162
United States		787		437
Rest of the world		21		22
Total	$	3,888	$	3,393

	As of March 31,		As of December 31,
	2020		2019
Italy		50.5%		52.2%
India		28.7%		34.2%
United States		20.3%		12.9%
Rest of the world		0.5%		0.7%

The following table sets long-lived assets by geographic area as of December 31, 2019 and 2018 (in thousands):

	As of December 31,
	2019		2018
Italy	$	1,772	$	1,136
India		1,162		1,042
United States		437		126
Rest of the world		22		37
Total	$	3,393	$	2,341

	As of December 31,
	2019			2018
Italy		52.2	%		48.5	%
India		34.2	%		44.5	%
United States		12.9	%		5.4	%
Rest of the world		0.7	%		1.6	%

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Restricted Stock Units (Tables) - Restricted Stock Units (RSUs)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Summary of Outstanding RSUs

The following table sets forth the activity related to the number of outstanding RSUs for the three months ended March 31, 2020:

	Number of shares			Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2019		3,336,095		$	8.25
Vested		(137,104	)		8.25
Granted		113,506			6.23
Cancelled		(132,897	)		8.25
Non-vested as of March 31, 2020		3,179,600		$	8.18

The following table sets forth the movements in the number of outstanding RSUs for the year ended December 31, 2019:

	Number of shares		Weighted- average grant date fair value (per share)
Non-vested as of December 31, 2018		—	$	—
Granted		3,336,095		8.25
Non-vested as of December 31, 2019		3,336,095	$	8.25

Summary of RSUs Compensation Expense

RSUs compensation expense for the three months ended March 31, 2020 was $6.2 million, which was recorded as follows (in thousands):

	Three Months Ended March 31,
	2020		2019
Research and development	$	1,312	$	—
Sales and marketing		1,053		—
General and administrative		3,839		—
Total	$	6,204	$	—

RSUs compensation expense for the year ended December 31, 2019 was $996,000, which was recorded as follows (in thousands):

	Year Ended December 31, 2019
Research and development	$	299
Sales and marketing		115
General and administrative		582
Total	$	996

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Other Current and Long-Term Liabilities - Other Long-Term Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Other Liabilities Noncurrent [Abstract]
Payable to supplier	$ 2,700	$ 2,700
Long-term performance bonuses	1,433
Derivative contract liabilities	73	80	$ 106
Other long-term liabilities	393	375	185
Total other long-term liabilities	$ 4,599	$ 3,155	$ 291

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Transactions with Related Parties - Schedule of Expenses for Related Parties (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Research and Development
Related Party Transaction [Line Items]
Expenses for related parties		$ 94	$ 180	$ 200
General and Administrative
Related Party Transaction [Line Items]
Expenses for related parties	$ 56	$ 94	$ 874	$ 1,112
Financial Income (Expense), Net
Related Party Transaction [Line Items]
Expenses for related parties	$ 122

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Goodwill and Intangible Assets, Net - Summary of Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
2020		$ 1,689
2020 (remaining nine months)	$ 1,221
2021	1,409	1,451
2022	1,138	1,169
2023	1,035	1,062
2024	834	854
2025 and thereafter	3,028	3,128
Net	$ 8,665	$ 9,353	$ 11,276

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Accumulated Other Comprehensive Income (Loss) - Schedule of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ 4,926	$ 1,987
Other comprehensive income (loss) before reclassifications	63	(197)
Net amount reclassified from accumulated other comprehensive income (loss)	20	(156)
Net other comprehensive income (loss)	43	(41)
Ending balance	(38,774)	4,926
Cumulative Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	53	228
Other comprehensive income (loss) before reclassifications	25	(175)
Net other comprehensive income (loss)	25	(175)
Ending balance	78	53
Cumulative Net Unrealized Gain (Loss) on Marketable Securities, Net of Tax
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(22)
Other comprehensive income (loss) before reclassifications	38	(22)
Net amount reclassified from accumulated other comprehensive income (loss)	20
Net other comprehensive income (loss)	18	(22)
Ending balance	(4)	(22)
Cumulative Other Comprehensive Income Related to Joint Venture
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance		(156)
Net amount reclassified from accumulated other comprehensive income (loss)		(156)
Net other comprehensive income (loss)		156
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	31	72
Ending balance	$ 74	$ 31

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Bank and Other Borrowings - Additional Information (Details)													3 Months Ended		12 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 20, 2020 USD ($)	Mar. 11, 2020 USD ($)	Aug. 02, 2019 EUR (€)	Jul. 25, 2019 EUR (€)	Jul. 23, 2019 EUR (€)	Apr. 30, 2019 EUR (€)	Apr. 10, 2019 EUR (€)	Jan. 30, 2019 EUR (€)	Jul. 23, 2018 EUR (€)	Jul. 27, 2017 EUR (€) Facility Repayment	Feb. 15, 2017 EUR (€) Repayment	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Mar. 20, 2020 EUR (€)	Mar. 11, 2020 EUR (€)	Jan. 23, 2020 USD ($)	Nov. 15, 2017 EUR (€)
Bank and Other Borrowings [Line Items]
Current portion of bank and other borrowings	$ 5,925,000												$ 5,925,000		$ 7,564,000	$ 4,686,000
Long-term bank and other borrowings, current															7,500,000	3,000,000
Credit line facilities															3,700,000	1,600,000
Line of credit facility, maximum borrowing capacity	6,600,000												6,600,000		5,600,000	4,600,000
Line of credit facility, used	$ 5,300,000												$ 5,300,000		$ 3,600,000	1,600,000
Interest variable rate													1.00%		1.00%
Weighted average interest rate	1.22%												1.22%		1.35%
Debt issuance costs															$ 169,000
Interest expense													$ 218,000	$ 90,000	565,000	322,000
Previously Reported
Bank and Other Borrowings [Line Items]
Current portion of bank and other borrowings															11,243,000
Line of credit facility, used															3,700,000
Unicredit S.p.A. | Medium Term Financing Agreement
Bank and Other Borrowings [Line Items]
Interest variable rate				3.90%
Debt instrument face amount				€ 2,500,000											$ 2,800,000
Frequency of periodic repayment															quarterly
Description of variable rate															Euribor 3 months plus 3.9% spread
Unicredit S.p.A. | Long Term Financing Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount											€ 8,200,000				$ 9,600,000
Number of facilities | Facility											2
Unicredit S.p.A. | Long Term Financing Agreement | Line A
Bank and Other Borrowings [Line Items]
Line of credit facility, maximum borrowing capacity											€ 4,900,000					5,700,000
Frequency of periodic repayment															quarterly
Number of frequency repayment | Repayment											16
Debt instrument, maturity year											2022
Unicredit S.p.A. | Long Term Financing Agreement | Tranche 1
Bank and Other Borrowings [Line Items]
Debt instrument face amount											€ 4,700,000					5,500,000
Unicredit S.p.A. | Long Term Financing Agreement | Tranche 2
Bank and Other Borrowings [Line Items]
Debt instrument additional face amount																236,000				€ 200,000
Unicredit S.p.A. | Long Term Financing Agreement | Line B
Bank and Other Borrowings [Line Items]
Line of credit facility, maximum borrowing capacity											€ 3,300,000					3,900,000
Frequency of periodic repayment															quarterly
Maturity, month and year											2023-05
Intesa SanPaolo S.p.A. | Revolving Credit Facility
Bank and Other Borrowings [Line Items]
Line of credit facility, used	$ 950,000												$ 950,000
Weighted average interest rate	1.52%												1.52%
Intesa SanPaolo S.p.A. | Medium Term Financing Agreement
Bank and Other Borrowings [Line Items]
Interest variable rate					2.60%
Debt instrument face amount					€ 4,000,000										$ 4,500,000
Frequency of periodic repayment															quarterly
Description of variable rate															Euribor 3 months plus 2.6% spread
Debt instrument maturity period					48 months
Intesa SanPaolo S.p.A. | 2018 Medium-term Financing Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount										€ 1,500,000					$ 1,700,000
Frequency of periodic repayment															quarterly
Maturity, month and year										2021-07
Banco Popolare di Milano S.p.A. | Medium Term Financing Agreement
Bank and Other Borrowings [Line Items]
Interest variable rate						2.00%
Debt instrument face amount						€ 4,000,000									$ 4,500,000
Frequency of periodic repayment															quarterly
Description of variable rate															Euribor 3 months plus 2.0% spread
Debt instrument maturity period						24 months
Banco Popolare di Milano S.p.A. | Long Term Financing Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount							€ 1,200,000								$ 1,300,000
Frequency of periodic repayment															quarterly
Maturity, month and year							2023-06
UBI Banca S.p.A | Medium Term Financing Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount												€ 1,000,000				$ 1,100,000
Frequency of periodic repayment															quarterly
Maturity, month and year												2021-02
Number of frequency repayment | Repayment												12
UBI Banca S.p.A | Long Term Financing Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount								€ 2,000,000							$ 2,200,000
Frequency of periodic repayment															monthly
Maturity, month and year								2021-04
Monte dei Paschi di Siena S.p.A.
Bank and Other Borrowings [Line Items]
Interest variable rate															0.95%
Maturity, month and year															2022-04
Interest rate															0.95%
Monte dei Paschi di Siena S.p.A. | Long Term Financing Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount								€ 600,000							$ 673,000
Frequency of periodic repayment															monthly
Maturity, month and year								2022-04
Simest | Long Term Financing Agreement
Bank and Other Borrowings [Line Items]
Debt instrument face amount									€ 608,000						$ 682,000
Frequency of periodic repayment															quarterly
Maturity, month and year									2022-12
Minimum
Bank and Other Borrowings [Line Items]
Interest variable rate													0.60%		0.60%
Maximum
Bank and Other Borrowings [Line Items]
Interest variable rate													7.60%		7.60%
Buc Mobile | Revolving Credit Facility
Bank and Other Borrowings [Line Items]
Line of credit facility, maximum borrowing capacity	$ 1,000,000.0												$ 1,000,000.0
Buc Mobile | Intesa SanPaolo S.p.A. | Revolving Credit Facility
Bank and Other Borrowings [Line Items]
Line of credit facility, maximum borrowing capacity																			$ 1,000,000
Kaleyra S.p.A | Intesa SanPaolo S.p.A.
Bank and Other Borrowings [Line Items]
Deferment of debt repayments beyond December 31, 2020	$ 404,000
Kaleyra S.p.A | Unsecured Loan Agreement | Monte dei Paschi di Siena S.p.A.
Bank and Other Borrowings [Line Items]
Debt instrument face amount			$ 2,200,000															€ 2,000,000.0
Debt instrument, term			36 months
Interest rate			1.50%															1.50%
Kaleyra S.p.A | BPM Loan Agreement | Banco Popolare di Milano S.p.A.
Bank and Other Borrowings [Line Items]
Interest variable rate		3.00%
Debt instrument face amount		$ 6,500,000															€ 6,000,000.0
Frequency of periodic repayment		15 quarterly installments
Description of variable rate		three-month Euribor plus a spread of 3.00%.
Debt instrument, term		45 months
Kaleyra S.p.A | BPM Loan Agreement | Banco Popolare di Milano S.p.A. | New Financing
Bank and Other Borrowings [Line Items]
Debt instrument face amount		$ 2,700,000

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Business Combination - Summary of Assets and Liabilities (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Nov. 25, 2019
Business Acquisition [Line Items]
Debt for forward share purchase agreements	$ 3,600,000	$ 3,600,000
Kaleyra, Inc
Business Acquisition [Line Items]
Cash and cash equivalents			$ 231
Restricted cash			21,435
Other current assets			14
Total assets			21,680
Debt for forward share purchase agreements			34,580
Notes payable to Sellers			15,000
Notes payable to Founders, current			3,578
Account payables and other current liabilities			8,896
Total liabilities			62,054
Net liabilities			$ 40,374

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Loss Per Share Attributable to Common Stockholders - Schedule of Calculation of Basic and Diluted Loss Per Share Attributable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				12 Months Ended
	Mar. 31, 2020	[1]	Mar. 31, 2019	[1]	Dec. 31, 2019		Dec. 31, 2018
Earnings Per Share [Abstract]
Net loss attributable to common stockholders					$ (5,512)		$ (7,100)
Weighted-Average shares used to compute net loss per share attributable to common stockholders, basic and diluted	19,979,589		10,687,106		11,603,381	[2]	9,828,411	[2]
Net loss per share attributable to common stockholders, basic and diluted	$ (0.44)		$ (0.13)		$ (0.48)	[2]	$ (0.72)	[2]

[1] Amounts for the three months ended March 31, 2019 were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share, basic and diluted were retrospectively adjusted accordingly.

[2] Amounts for the year ended December 31, 2018 differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share attributable to common stockholders, basic and diluted were adjusted accordingly

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Geographic Information - Summary of Long-lived Assets by Geographic Area (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Segment Reporting Information [Line Items]
Long-lived assets	$ 3,888	$ 3,393	$ 2,341
Italy
Segment Reporting Information [Line Items]
Long-lived assets	$ 1,965	$ 1,772	$ 1,136
Italy | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	50.50%	52.20%	48.50%
India
Segment Reporting Information [Line Items]
Long-lived assets	$ 1,115	$ 1,162	$ 1,042
India | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	28.70%	34.20%	44.50%
United States
Segment Reporting Information [Line Items]
Long-lived assets	$ 787	$ 437	$ 126
United States | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	20.30%	12.90%	5.40%
Rest of the World
Segment Reporting Information [Line Items]
Long-lived assets	$ 21	$ 22	$ 37
Rest of the World | Geographic Concentration Risk | Long-Lived Assets
Segment Reporting Information [Line Items]
Long-lived assets, Percentage	0.50%	0.70%	1.60%

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Property and Equipment, Net - Summary of Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Total	$ 355	$ 371
Cost of Revenue
Property Plant And Equipment [Line Items]
Total	302	315
Research and Development
Property Plant And Equipment [Line Items]
Total	$ 53	$ 56

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Income Taxes - Schedule of Reconciliation of the Statutory Effective Tax Rate (Parenthetical) (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Primary tax rate of the Company	21.00%	24.00%
Effective income tax rate reconciliation, reduced in applicable tax rate	25.17%	29.12%

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Other Assets

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Other Assets [Abstract]

Other Assets

6. OTHER ASSETS

Other current assets consisted of the following (in thousands):

	As of March 31, 2020		As of December 31, 2019
VAT receivables	$	1,132	$	3,136
Receivables from suppliers		812		398
Credit for tax other than income tax		505		358
Income tax assets		254		270
Other receivables		54		62
Total other current assets	$	2,757	$	4,224

Other long-term assets consisted of the following (in thousands):

	As of March 31, 2020		As of December 31, 2019
Non-current income tax credit (advances and tax reduced at sources)	$	1,726	$	1,029
Miscellaneous		356		174
Total other long-term assets	$	2,082	$	1,203

8. OTHER ASSETS

Other current assets consisted of the following (in thousands):

	As of December 31,
	2019		2018
VAT receivables	$	3,136	$	1,852
Income tax assets		270		65
Credit for tax other than income tax		358		273
Other receivables		460		354
Total other current assets	$	4,224	$	2,544

Other long-term assets consisted of the following (in thousands):

	As of December 31,
	2019		2018
Non-current income tax credit (advances and tax reduced at sources)	$	1,029	$	1,092
Miscellaneous		174		163
Derivative financial assets		—		42
Total other long-term assets	$	1,203	$	1,297

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Consolidated Statements of Cash Flows (Parenthetical) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Statement Of Cash Flows [Abstract]
Cash and cash equivalents	$ 16,237,000	$ 16,103,000	$ 8,207,000
Restricted Cash	$ 20,800,000	$ 20,900,000	$ 0

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Derivative Financial Instrument

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

4. DERIVATIVE FINANCIAL INSTRUMENTS

The gross notional amount of interest rate swap derivative contracts not designated as hedging instruments, outstanding as of March 31, 2020 and December 31, 2019, was €5.8 million ($6.3 million) and €6.3 million ($7.0 million), respectively.

The amount and location of the gains (losses) in the condensed consolidated statements of operations related to derivative contracts is as follows (in thousands):

Derivatives Not Designed As Hedging Instruments			Three Months Ended March 31,
	Line Items		2020		2019
Interest Rate Swap		Financial income (expense), net	$	7	$	(5	)
Foreign Exchange Forward		Financial income (expense), net		—		211
Total			$	7	$	206

The following table presents the fair value and the location of derivative contracts reported in the condensed consolidated balance sheets (in thousands):

Derivatives Not Designed As Hedging Instruments (1)	Line Items		As of March 31,         2020			As of December 31,         2019
Interest Rate Swap		Other long-term liabilities	$	(73	)	$	(80	)
Total			$	(73	)	$	(80	)

(1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 3”.

4. DERIVATIVE FINANCIAL INSTRUMENTS

The gross notional amount of derivative contracts not designated as hedging instruments, outstanding as of December 31, 2019, was €6.3 million ($7.0 million) for interest rate swap, while the gross notional amount of our derivative contracts not designated as hedging instruments, outstanding as of December 31, 2018 was €7.9 million ($9.0 million) and $7.1 million for interest rate swap and foreign exchange forwards, respectively.

The amount and location of the gains (losses) in the consolidated statements of operations related to derivative contracts is as follows (in thousands):

Derivatives Not Designed As Hedging Instruments			Year Ended December 31,
	Line Items		2019		2018
Interest Rate Swap		Financial expense, net	$	16	$	(38	)
Foreign Exchange Forward		Financial expense, net		361		155
Total			$	377	$	117

The following table presents the fair value and the location of, derivative contracts reported in the consolidated balance sheets (in thousands):

Derivatives Not Designed As Hedging Instruments (1)			As of December 31,
	Line Items		2019			2018
Interest Rate Swap		Other long-term liabilities	$	(80	)	$	(97	)
Foreign Exchange Forward		Other current liabilities		—			(18	)
Foreign Exchange Forward		Other long-term liabilities		—			(9	)
Foreign Exchange Forward		Other long-term assets		—			42
Foreign Exchange Forward		Other current assets		—			41
Total			$	(80	)	$	(41	)

(1) For the classification of inputs used to evaluate the fair value of our derivatives, refer to “Note 3”.

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Subsequent Events

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

19. SUBSEQUENT EVENTS

On April 7, 2020, Kaleyra S.p.A. received the approval by UBI Banca S.p.A. to postpone the amounts due under the existing loans for the next 6 months. As a result of this approval, the Company will postpone the payments of approximately $694,000 beyond the next 6 months.

On April 9, 2020, Kaleyra S.p.A. received the approval by UniCredit to postpone the amounts due under the existing loans for the next 6 months. As a result of this approval, the Company will postpone the payments of approximately $1.6 million beyond the next 6 months.

On April 9, 2020, the Company repurchased 50,000 shares of its common stock from KAF in connection with the KAP Amendments for a total purchase price of approximately $0.5 million.

On April 16, 2020, in connection with the previously consummated Business Combination, the Company entered into a Settlement Agreement and Release (the “Settlement Agreement”) with its financial advisory service firms, Cowen and Company, LLC (“Cowen”) and Chardan Capital Markets, LLC, (“Chardan” and collectively the “Service Firms”), pursuant to which it agreed to pay an affiliate of Cowen, Cowen Investments II LLC (“Cowen Investments”), and Chardan, in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate, as follows: (i) $2.7 million in the aggregate in common stock of the Company (the “Settlement Shares”) to be issued the business day prior to the filing of a resale registration statement for such Settlement Shares (the “Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum (but with lower interest rates if the notes are repaid earlier than one year or two years after issuance) and with interest paid in arrears to the payee on March 15, June 15, September 15 and December 15 of each year, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of the Company by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares will be substituted for by warrants with an exercise price of $0.01 per share issued pursuant to a Warrant Agreement (the “Warrant Agreement”) and the common stock underlying the Warrant Agreement (the “Warrant Shares”). The Beneficial Ownership Limitation shall initially be 4.99% of the number of shares of the common stock outstanding of the Company immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares shall be calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of the Company on the NYSE American LLC stock exchange (the “VWAP”) on the business day immediately prior to the date on which Kaleyra files the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of the Company to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

On April 24, 2020, Kaleyra S.p.A. received the approval by Simest S.p.A. to postpone the amounts due under the existing loans in 2020. As a result of this approval, the Company will postpone the payments of approximately $350,000 beyond December 31, 2020.

On April 29, 2020, the Company issued 1,763,633 shares (the “2019 Earnout Shares”) of the Company’s common stock, par value $0.0001 per share, at a fair value of $7.00 per share.

On May 1, 2020, in connection with the Settlement Agreement, the Company issued: (i) an aggregate of 440,595 Settlement Shares to Cowen Investments and Chardan, consisting of 374,506 Settlement Shares issued to Cowen Investments, and 66,089 Settlement Shares issued to Chardan; and (ii) convertible promissory notes in the aggregate principal amount of $2.7 million to Cowen Investments and Chardan, consisting of a convertible promissory note in the principal amount of $2.3 million issued to Cowen Investments (the “Cowen Note”) and a convertible promissory note in the principal amount of $405,000 issued to Chardan (the “Chardan Note”), respectively. The unpaid principal of the Cowen Note is convertible at the option of Cowen Investments into 303,171 shares of common stock of the Company, if there has been no principal reduction, and the unpaid principal of the Chardan Note is convertible at the option of Chardan into 53,501 shares of common stock of the Company, if there has been no principal reduction. As the Beneficial Ownership Limitation was not triggered by the issuance of the Settlement Shares, no Warrant Agreement was necessary and no warrants were issued.

27. SUBSEQUENT EVENTS

In January 2020, the World Health Organization declared the outbreak of a novel coronavirus (“COVID-19”) as a public health emergency of international concern. The coronavirus COVID-19 pandemic and efforts to control its spread have significantly curtailed the movement of people, goods and services worldwide, including in most or all of the regions in which we sell our products and services and conduct our business operations. The Company maintains its headquarters in Milan, Italy, which has been severely affected by COVID-19 and the resulting government lockdowns to attempt to contain the coronavirus. The magnitude and duration of the resulting decline in business activity cannot currently be estimated. The Company may see its services carrying less revenue-generating traffic in areas subject to “shelter in place” restrictions or related government orders as the population of those areas refrain from traveling and normal commerce activities. Accordingly, the Company expects the COVID-19 pandemic to potentially have a negative impact on its sales and its results of operations in those areas adversely affected by COVID-19, the size and duration of which the Company is currently unable to predict. Additionally, concerns over the economic impact of COVID-19 have caused extreme volatility in financial and other capital markets which may reduce the Company’s ability to access capital. The rapid development and fluidity of the situation presents uncertainty and risk with respect to the Company, its performance, and its financial results in the near future.

On January 23, 2020, the Company entered into Amendment No. 3 to the Greenhaven Forward Share Purchase Agreement (the “Greenhaven Amendment”). The Greenhaven Amendment provides that Greenhaven has the right to put its subject shares to the Company on the following dates and at the following purchase prices: (i) $11.00 per share for up to 248,963 shares to be sold to the Company on February 21, 2020; and (ii) $11.70 per share for the next 700,000 shares to be sold to the Company on August 30, 2020. Greenhaven may continue to sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $8.50 per share. On February 20, 2020, the Company repurchased an aggregate of 235,169 of its common stock for $2.6 million. In addition, the Company paid Greenhaven $152,000 for the 60,996 shares that Greenhaven sold on the open market representing the amount at which the $11.00 exceeded the selling price. On August 30, 2020, the Company shall pay Greenhaven an amount equal to (1) the number of shares (including any additional shares) sold by Greenhaven in the open market between February 21, 2020 and August 30, 2020 multiplied by (2) the amount by which $11.70 exceeds the sale price per share.

On January 23, 2020, the Company entered into Amendment No. 3 to the KAF Forward Share Purchase Agreement and on April 7, 2020, the Company entered into Amendment No. 4 (the “KAF Amendments”). On April 9, 2020, KAF sold 50,000 Shares to the Company at the price of $10.92 per share. According to the last amendment, KAF has the right to put its subject shares to the Company on May 7, 2020 at a purchase price of: (i) $10.92 per share for the first 46,137 shares sold to the Company; and (ii) $10.82 per share for the next 93,676 Shares sold to the Company (collectively, the “KAF Share Purchase Price”). In the event the closing occurs after May 7, 2020, the KAF Share Purchase Price shall increase for the 93,676 shares sold to Kaleyra by 1% per full month until the closing date. KAF may elect, in its sole and absolute discretion, to extend the date on which it exercises its put right to a date that is provided upon 10 calendar days’ written notice. The KAF Amendments further provide that KAF may sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $7.00 per share. In the event that KAF sells any shares (including any additional shares) at a sale price of less than $10.92 per share for the first 46,137 shares and $10.82 per share for the next 93,676 shares, the Company shall pay KAF an amount equal to (A) the number of shares (including any additional shares) sold multiplied by (B) the amount by which $10.92 or $10.82, as applicable, exceeds the sale price per share. Should the Company fail to make this payment, the Company shall, without prejudice or limitation to any other remedies available to KAF in law or equity, pay a penalty on such amount due at the rate of 18% per annum from the due date until the date of payment in full.

On January 23, 2020, Buc Mobile entered into a revolving line of credit facility with Intesa Sanpaolo S.p.A. for a total amount of up to $1.0 million to be used solely for the purpose of Buc Mobile general working capital needs. Applicable interest rate is to be agreed among the parties when the revolving facility is drawn.

On February 7, 2020, the forward share purchase agreement with Yakira was amended. The Amendment provides that the Company may be obligated to purchase some or all of the 43,930 shares if Yakira exercises an option to sell such shares to the Company at a purchase price of $10.93 per share (which is an increase from $10.50 per share) as soon as practicable on or after the six month anniversary of the Business Combination Date.

On March 6, 2020, in connection with the previously consummated Business Combination, the Company agreed to pay to Northland Securities, a financial advisory services company, in full satisfaction of all amounts owned to Northland as of December 31, 2019, the following amounts: (i) $100,000 in cash, (ii) a promissory note for the principal amount of $400,000, together with all accrued but unpaid interest thereon, and (iii) 140,000 shares of the Company’s common stock, par value $0.0001 per share.

On March 9, 2020, the Company signed an additional modification of the 2018 Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per preference share. As a result of this modification, effective on January 30, 2020, the total preference shares obligation was reduced to Indian Rupee 140,000 ($2,000 at the January 31, 2020 exchange rate). On January 31, 2020 Solutions Infini confirmed, to the eligible employees of the preference shares, performance bonuses for a total amount of $3.7 million (at the January 31, 2020 exchange rate), to be paid in 2020. On March 24, 2020, given the prevailing situation of the COVID-19 both globally and in India, the Company resolved to delay payment of the performance bonuses, for a total amount of $1.5 million (at the January 31, 2020 exchange rate), and evaluate the timeline for payment thereof.

On March 11, 2020, Kaleyra S.p.A. entered into a 36-month loan agreement with Monte dei Paschi di Siena for $2.2 million (€2.0 million). The total amount of this new facility was drawn in full the same date. This facility bears interest at a fixed rate equal to 1.75%.

On March 20, 2020, Kaleyra S.p.A. entered into a general unsecured loan agreement (the “BPM Loan Agreement”) with Banco BPM S.p.A. (formerly Banco Popolare di Milano S.p.A.) for a total of $6.5 million (€6.0 million). The BPM Loan Agreement includes a new financing of $2.7 million with the remaining balance used to pay off the original loan dated July 23, 2019, by and between Kaleyra S.p.A. and Banco BPM S.p.A. The BPM Loan Agreement has a maturity of 45 months from the date of disbursement and bears interest at a variable rate equal to the three-month Euribor plus a spread of 3.00%. The BPM Loan Agreement is to be repaid in 15 quarterly installments. The total amount of the BPM Loan Agreement, less amounts related to commissions, fees and expenses, was drawn in full the same date as the BPM Loan Agreement.

On March 31, 2020, Kaleyra S.p.A. received the approval by Intesa Sanpaolo S.p.A. to postpone the amounts due under the existing loan for the next 3 months. As a result of this approval the Company will postpone the payments of approximately $412,000 beyond the next 12 months.

On April 9, 2020, Kaleyra S.p.A. received the approval by UniCredit to postpone the amounts due under the existing loan for the next 6 months. As a result of this approval the Company will postpone the payments of approximately $1.6 million beyond the next 6 months.

On April 16, 2020, in connection with the previously consummated Business Combination, the Company entered into an agreement to pay its financial advisory service firms, Cowen and Company, LLC and Chardan Capital Markets, LLC, (together, the “Service Firms”), in full satisfaction of all amounts owed to the Service Firms as of December 31, 2019, $5.4 million in the aggregate, as follows: (i) $2.7 million in the aggregate in common stock of Kaleyra (the “Settlement Shares”) to be issued the business day prior to the filing of a resale registration statement for such Settlement Shares (the “Resale Registration Statement”), (ii) convertible notes totaling $2.7 million in the aggregate with a maturity date three years after issuance and bearing interest at five percent (5%) per annum, with such convertible notes to also be issued the business day prior to the filing of the Resale Registration Statement and (iii) in the event that the Beneficial Ownership Limitation (as defined below) would otherwise be exceeded upon delivery of the Settlement Shares above, a warrant agreement also to be entered into with and issued to the Services Firms the business day prior to the filing of the Resale Registration Statement, whereby the amount of common stock of Kaleyra by which the Beneficial Ownership Limitation would otherwise have been exceeded upon delivery of the Settlement Shares (the “Excess Amount”) will be substituted for by warrants with an exercise price of $0.01 (the common stock underlying the Warrant Agreement, the “Warrant Shares”). The Beneficial Ownership Limitation shall initially be 4.99% of the number of shares of the common stock outstanding of the Company immediately after giving effect to the issuance of these shares of common stock. The number of Settlement Shares shall be calculated using as the price per Settlement Share an amount equal to a fifteen percent (15%) discount to the ten-day (10-day) trailing dollar volume-weighted average price for the common stock of Kaleyra on the NYSE American stock exchange (the “VWAP”) on the business day immediately prior to the date on which Kaleyra files the Resale Registration Statement. In addition, the price per share for determining the number of shares of common stock of Kaleyra to be issued upon the conversion of the convertible notes shall be a five percent (5%) premium to the ten-day (10-day) trailing VWAP as of the date immediately prior to the issuance date of the convertible notes, rounded down to the nearest whole number.

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Income Taxes

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

15. INCOME TAXES

The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable.

The Company recorded an income tax benefit of $589,000 and an income tax expense $79,000 for the three months ended March 31, 2020 and 2019, respectively.

As of March 31, 2020, the Company had $2.1 million of undistributed earnings and profits generated by a foreign subsidiary (Solutions Infini) for which no deferred tax liabilities have been recorded, since the Company intends to indefinitely reinvest such earnings in the subsidiary to fund the international operations and certain obligations of the subsidiary. Should the above undistributed earnings be distributed in the form of dividends or otherwise, the distributions would result in $321,000 of tax expense.

The Company files income tax returns in the United States and in foreign jurisdictions including Italy, India, and Switzerland. As of March 31, 2020, the tax years 2007 through the current period remain open to examination in each of the major jurisdictions in which the Company is subject to tax.

23. INCOME TAXES

The Company provides for income taxes using an asset and liability approach under which deferred income taxes are provided for based upon enacted tax laws and rates applicable to periods in which the taxes become payable.

The following table presents domestic and foreign components income (loss) before income tax expense for the years ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019			2018
Domestic	$	(7,857	)	$	(635	)
Foreign		4,618			(5,041	)
Loss before income tax expense	$	(3,239	)	$	(5,676	)

The provision for federal and state income taxes consists of the following (in thousands):

	Year Ended December 31,
	2019			2018
Current
Domestic:
US federal corporate income tax	$	—		$	—
US state corporate income tax		—			—
Foreign:
IRES (Italian corporate income tax)		66			248
IRAP (Italian regional tax on productive activities)		50			107
Foreign (India)		1,977			935
Other Italian taxes		194			62
Current		2,287			1,352
Deferred		(14	)		72
Income tax expense	$	2,273		$	1,424

The differences between income taxes expected by applying the U.S. federal statutory tax rate of 21% and the amount of income taxes provided for are as follows (in thousands):

	Year Ended December 31,
	2019			2018
Loss before income taxes	$	(3,239	)	$	(5,676	)
Primary tax rate of the Company (1)		21.00	%		24.00	%
Tax benefit calculated according to the Company’s primary tax rate		(680	)		(1,363	)
State income tax, net of Federal		(483	)		—
Foreign tax rates differences (2)		319			77
Change in applicable tax rates (3)		(513	)		—
Change in valuation allowance		2,027			213
Non-taxable income		(196	)		—
Costs not deductible for tax purposes		541			2,103
Costs not deductible associated with investments		36			19
CFC (Controlled Foreign Corporation rules) (4)		288			93
IRAP (Italian Regional Tax on Productive Activities)		4			154
Taxes on undistributed profits		926			180
Other taxes		4			(52	)
Reported income tax expense	$	2,273		$	1,424

(1) For the year ended December 31, 2019, “primary tax rate of the Company” means the U.S. federal tax rate (21%); for the year ended December 31, 2018, “primary tax rate of the Company” means the applicable Italian Corporate Income Tax (IRES) rate (24%).

(2) For the year ended December 31, 2019, “foreign” relates to tax jurisdictions outside the United States; for the year ended December 31, 2018, “foreign” relates to tax jurisdictions outside Italy.

(3) During 2019, applicable tax rate for Solutions Infini was reduced from 29.12% to 25.17%, resulting in a tax benefit for the period.

(4) Recorded by the Company in relation with the Dubai subsidiary (FZE).

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

The following table presents the significant components of the Company’s deferred tax assets and liabilities (in thousands):

	As of December 31,
	2019			2018
Deferred tax assets:
Startup costs	$	2,755		$	—
Deferred compensation liabilities		398			128
Property and equipment		70			148
Goodwill		119			134
Net operating loss carryforward		3,370			1,736
Other		422			173
Total deferred tax assets		7,134			2,319
Less: valuation allowance		(5,591	)		(723	)
Total deferred tax assets, net		1,543			1,596
Deferred tax liabilities:
Intangible assets		2,351			3,389
Undistributed profits		1,093			180
Property and equipment		134			140
Other		10			6
Total deferred tax liabilities		3,588			3,715
Net deferred tax liabilities	$	(2,045	)	$	(2,119	)

As of December 31, 2019, the Company has federal, state and foreign net operating loss carryforwards totaling $11.6 million, $11.7 million and $1.6 million, respectfully. If not utilized, federal net operating losses of $5.4 million will expire at various dates from 2026 through 2037, and $6.2 million have an indefinite life. State net operating losses of $10.1 million will expire at various dates from 2037 through 2039, and $1.6 million have an indefinite life. Foreign net operating losses originated in Switzerland and will expire at various dates from 2023 through 2026.

The Company’s accounting for deferred taxes involves the evaluation of a number of factors concerning the realizability of its net deferred tax assets. The Company primarily considered such factors as its history of operating losses; the nature of the Company’s deferred tax assets, and the timing, likelihood and amount, if any, of future taxable income during the periods in which those temporary differences and carryforwards become deductible. The Company does not believe that it is more likely than not that all of the deferred tax assets will be realized; accordingly a valuation allowance has been established for the amount of the deferred tax assets on net operating loss carryforward, startup costs, and other deferred tax assets in excess of the deferred tax liabilities that will reverse prior to any net operating loss carryforward expiration date.

The following table sets forth movement in the valuation allowance for the year ended December 31, 2019 and 2018 (in thousands):

	Year Ended December 31,
	2019		2018
Balance at the beginning of the period	$	723	$	206
Change in scope of consolidation		2,836		305
Increase during the period		2,027		213
Effect of exchange rate changes		5		(1	)
Balance at the end of the period	$	5,591	$	723

The Company recognizes interest and penalties, if any, related to an underpayment of income taxes in income tax expense. As of December 31, 2019, the Company has accumulated $91,000 in interest related to unrecognized tax benefits ($4,000 as of December 31, 2018).

A reconciliation of the beginning and ending amounts of gross unrecognized tax benefits as of December 31, 2019 and 2018 is as follows (in thousands):

	As of December 31,
	2019			2018
Gross unrecognized tax benefits, beginning of the year	$	190		$	91
Additions for tax positions of prior years		—			—
Additions for tax positions related to the current year		193			93
Change in scope of consolidation		—			—
Effect of exchange rate		(6	)		2
Subtotal		377			186
Interest and penalties		91			4
Total gross unrecognized tax benefits, end of the year	$	468		$	190

As of December 31, 2019, the Company had $5.0 million of undistributed earnings and profits generated by a foreign subsidiary (Solutions Infini) for which no deferred tax liabilities have been recorded, since the Company intends to indefinitely reinvest such earnings in the subsidiary to fund the international operations and certain obligations of the subsidiary. Should the above undistributed earnings be distributed in the form of dividends or otherwise, the distributions would result in $757,000 of tax expense.

The Company files income tax returns in the United States and in foreign jurisdictions including Italy, India, and Switzerland. As of December 31, 2019, the tax years 2007 through the current period remain open to examination in each of the major jurisdictions in which the Company is subject to tax.

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Employee Benefit

12 Months Ended

Dec. 31, 2019

Compensation And Retirement Disclosure [Abstract]

Employee Benefit

12. EMPLOYEE BENEFIT OBLIGATION

The Company sponsors two defined benefit plans covering the majority of Italian employees and all of Solutions Infini’s employees. Total costs of the defined benefit plans for the years ended December 31, 2019 and 2018 was $287,000 and $185,000, respectively.

Changes in obligations of the defined benefit plans is as follows (in thousands):

	As of December 31,
	2019			2018
Benefit obligation at the beginning of the period	$	1,173		$	947
Change in scope of consolidation		—			155
Service cost		165			152
Interest cost		33			22
Actuarial loss		89			11
Benefit paid		(13	)		(67	)
Foreign exchange translation reserve		(23	)		(47	)
Benefit obligation at the end of the period	$	1,424		$	1,173
Of which:
Current (1)	$	26		$	26
Long-term	$	1,398		$	1,147

(1) Included within “Payroll and payroll related accrued liabilities” in the accompanying consolidated balance sheets.

There are no plan assets servicing the defined benefits plans.

The assumptions used to determine benefit obligations at year-end are as follows:

	As of December 31,
	2019	2018
Discount rate for Kaleyra S.p.A. (1)	0.78%	1.74%
Discount rate for Solutions Infini (2)	7.25%	7.75%
Rate of compensation increase for Kaleyra S.p.A.	0.50% - 3.00%	0.50% - 3.00%
Rate of compensation increase for Solutions Infini	15.00%	15.00%

(1) The discount rate for Kaleyra S.p.A. is based on the Euro area composite yields AA with a duration equal to the estimated term of the obligations, examined as of December 31, 2019.

(2) The discount rate for Solutions Infini is based on the prevailing market yields of Indian government securities at the balance sheet date for the estimated term of the obligations.

The Company has also a 401(k) defined contribution plan covering substantially all U.S. domestic employees. The participation in this plan is voluntary. The Company matches plan participants’ contributions up to various limits. Participants’ contributions are limited based on their compensation and, for certain supplemental contributions which are not eligible for Company matching, based on their age. Expense for the 401 (k) plan was $54,000 and zero for the years ended December 31, 2019 and 2018, respectively.

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Supplemental Balance Sheet Information

12 Months Ended

Dec. 31, 2019

Balance Sheet Related Disclosures [Abstract]

Supplemental Balance Sheet Information

16. SUPPLEMENTAL BALANCE SHEET INFORMATION

Allowance for doubtful accounts:

A roll-forward of the Company’s allowance for doubtful accounts for the years ended December 31, 2019 and 2018 is as follows (in thousands):

	Year Ended December 31,
	2019			2018
Balance, beginning of the period	$	157		$	60
Accruals		800			108
Utilization of provision		(84	)		—
Effect of foreign exchange rate		—			(11	)
Balance, end of the period	$	873		$	157

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Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands		Total	Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income	Retained Earnings / (Accumulated Deficit)	Total 'Stockholders' Equity (Deficit)	Non-controlling Interests	Treasury Stock
Beginning balance at Dec. 31, 2017		$ 1,987	$ 1	[1]	$ 81	[1]	$ 72	$ 1,833	$ 1,987
Change in the legal status of the Company and creation of 100,000 shares with no par value					27	[1]		(27)
Change in the legal status of the Company and creation of 100,000 shares with no par value, shares	[1]		9,663,456
Consolidation of Solutions Infini		2								$ 2
Consolidation of Solutions Infini, shares	[1]		342,376
Issuance of common stock in connection with Buc Mobile acquisition		2,711			2,711	[1]			2,711
Issuance of common stock upon exercise of stock options		8			8	[1]			8
Issuance of common stock upon exercise of stock options, shares	[1]		681,274
Stock-based compensation		7,359			7,359	[1]			7,359
Net loss		(7,100)						(7,098)	(7,098)	$ (2)
Other comprehensive loss		(41)					(41)		(41)
Ending balance at Dec. 31, 2018		4,926	$ 1	[1]	10,186	[1]	31	(5,292)	4,926
Ending balance at Dec. 31, 2018		4,926	$ 1		10,186	[2]	31	(5,292)
Ending balance, shares at Dec. 31, 2018	[1],[2]		10,687,106
Net loss		(1,379)						(1,379)
Other comprehensive loss		576					576
Ending balance at Mar. 31, 2019		4,123	$ 1		10,186	[2]	607	(6,671)
Ending balance, shares at Mar. 31, 2019	[2]		10,687,106
Beginning balance at Dec. 31, 2018		4,926	$ 1	[1]	10,186	[1]	31	(5,292)	4,926
Beginning balance, shares at Dec. 31, 2018	[1],[2]		10,687,106
Business Combination	[3]	(40,374)	$ 1	[1]	(10,186)	[1]		(30,189)	(40,374)
Business Combination, shares	[1],[3]		9,290,007
Change in forward share purchase agreement liability		567			567	[1]			567
Stock-based compensation		1,576			1,576	[1]			1,576
Net loss		(5,512)						(5,512)	(5,512)
Other comprehensive loss		43					43		43
Ending balance at Dec. 31, 2019		(38,774)	$ 2	[1]	2,143	[1]	74	(40,993)	$ (38,774)
Beginning balance at Dec. 31, 2018		4,926	1		10,186	[2]	31	(5,292)
Ending balance at Dec. 31, 2019		(38,774)	$ 2		2,143		74	(40,993)
Ending balance, shares at Dec. 31, 2019	[1]		19,977,113
Change in forward share purchase agreement liability		(271)			(271)
Net loss		(8,823)						(8,823)
Other comprehensive loss		(498)					(498)
Common stock repurchased in connection with forward share purchase agreements					2,587						$ (2,587)
Common stock repurchased in connection with forward share purchase agreements, shares			(235,169)								235,169
Stock-based compensation (RSUs)		6,204			6,204
Stock-based compensation (RSUs), shares			137,104
Common stock issued to settle a payable	[4]	527			527
Common stock issued to settle a payable, shares	[4]		140,000
Ending balance at Mar. 31, 2020		$ (41,635)	$ 2		$ 11,190		$ (424)	$ (49,816)			$ (2,587)
Ending balance, shares at Mar. 31, 2020			20,019,048								235,169

[1] Amounts as of December 31, 2018 and before that date differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and additional paid-in capital were adjusted accordingly.

[2] Amounts as of March 31, 2019 and before that date were retrospectively adjusted as a result of the accounting for the Business Combination (as defined in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and additional paid-in capital were adjusted accordingly.

[3] Refer to “Note 5” for further details.

[4] On March 6, 2020, the Company issued to Northland Securities Inc. (“Northland”), 140,000 shares of the Company’s common stock as a partial settlement of the amounts owned to Northland for financial advisory services provided by Northland to Kaleyra S.p.A. in connection with the previously consummated Business Combination.

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	20,254,217	19,977,113
Common stock, shares outstanding	20,019,048	19,977,113
Treasury stock, shares	235,169	0

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Bank and Other Borrowings (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Bank And Other Borrowings [Abstract]

Summary of Long-term Bank and Other Borrowings

Long-term bank and other borrowings consist of the following (in thousands):

								Interest Nominal Rate
	As of March 31, 2020		As of December 31, 2019		Maturity		Interest Contractual Rate	As of March 31, 2020			As of December 31, 2019
UniCredit S.p.A. (Line A Tranche (1)	$	3,219	$	3,609		January 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche (2)		151		167		May 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line B)		2,941		3,229		November 2023	Euribor 3 months + 2.90%		2.60	%		2.60	%
UniCredit S.p.A. (Line C)		2,497		2,787		February 2023	Euribor 3 months + 3.90%		3.53	%		3.53	%
Intesa Sanpaolo S.p.A. (Line 1)		834		988		October 2021	Euribor 3 months + 1.80%		1.88	%		1.88	%
Intesa Sanpaolo S.p.A. (Line 2)		3,841		4,183		October 2023	Euribor 3 months + 2.60%		2.60	%		2.60	%
UBI Banca S.p.A. (Line 1)		257		332		February 2021	1.25%		1.25	%		1.25	%
UBI Banca S.p.A. (Line 2)		1,198		1,499		April 2021	Euribor 3 months +1.95%		1.55	%		1.55	%
Monte dei Paschi di Siena S.p.A. (Line 1)		457		521		April 2022	0.95%		0.95	%		0.95	%
Monte dei Paschi di Siena S.p.A. (Line 2)		2,190		—		June 2023	1.50%		1.50	%		—
Banco Popolare di Milano S.p.A. (Line 1)		1,312		1,336		June 2023	Euribor 3 months + 2.00%		2.00	%		2.00	%
Banco Popolare di Milano S.p.A. (Line 2)		—		3,893		September 2022	Euribor 3 months + 2.00%		—			2.00	%
Banco Popolare di Milano S.p.A. (Line 3)		6,517		—		March 2024	Euribor 3 months + 3.00%		2.16	%		—
Simest 1		275		280		December 2022	0.50%		0.50	%		0.50	%
Simest 2		273		279		December 2022	0.50%		0.50	%		0.50	%
Simest 3		503		512		December 2022	0.50%		0.50	%		0.50	%
Finlombarda S.p.A.		81		83		December 2020	0.50%		0.50	%		0.50	%
Total bank and other borrowings		26,546		23,698
Less: current portion		5,925		7,564
Total long-term portion	$	20,621	$	16,134

Long-term bank and other borrowings consist of the following (in thousands):

								Interest Nominal Rate
	As of December 31,							As of December 31,
	2019		2018		Maturity		Interest Contractual Rate	2019			2018
UniCredit S.p.A. (Line A Tranche (1)	$	3,609	$	5,038		January 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line A Tranche (2)		167		228		May 2023	Euribor 3 months + 3.10%		2.80	%		2.80	%
UniCredit S.p.A. (Line B)		3,229		3,770		November 2023	Euribor 3 months + 2.90%		2.60	%		2.60	%
UniCredit S.p.A. (Line C)		2,787		—		February 2023	Euribor 3 months + 3.90%		3.53	%		—
Intesa Sanpaolo S.p.A. (Line 1)		988		1,572		October 2021	Euribor 3 months + 1.80%		1.88	%		1.51	%
Intesa Sanpaolo S.p.A. (Line 2)		4,183		—		October 2023	Euribor 3 months + 2.60%		2.60	%		—
UBI Banca S.p.A. (Line 1)		332		625		February 2021	1.25%		1.25	%		1.25	%
UBI Banca S.p.A. (Line 2)		1,499		—		April 2021	Euribor 3 months +1.95%		1.55	%		—
Monte dei Paschi di Siena S.p.A.		521		—		April 2022	0.95%		0.95	%		—
Banco Popolare di Milano S.p.A. (Line 1)		1,336		—		June 2023	Euribor 3 months + 2.00%		2.00	%		—
Banco Popolare di Milano S.p.A. (Line 2)		3,893		—		September 2022	Euribor 3 months + 2.00%		2.00	%		—
Simest 1		280		382		December 2022	0.50%		0.50	%		0.50	%
Simest 2		279		379		December 2022	0.50%		0.50	%		0.50	%
Simest 3		512		—		December 2022	0.50%		0.50	%		—
Finlombarda S.p.A.		83		169		December 2020	0.50%		0.50	%		0.50	%
Total bank and other borrowings		23,698		12,163
Less: current portion		7,564		3,038
Total long-term portion	$	16,134	$	9,125

Summary of Payments Obliged

As of March 31, 2020, the Company is obliged to make payments as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	3,784
2021		9,330
2022		7,637
2023		5,339
2024		456
Total	$	26,546

As of December 31, 2019, the Company is obliged to make payments as follows (in thousands):

	As of December 31, 2019
2020	$	7,564
2021		8,031
2022		5,254
2023		2,849
Total	$	23,698

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Business Combination (Tables)

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Summary of Assets and Liabilities

The following table summarizes the assets and liabilities of Kaleyra, Inc., stated at historical cost at the Business Combination closing date as follows (in thousands):

Cash and cash equivalents	$	231
Restricted cash		21,435
Other current assets		14
Total assets		21,680
Debt for forward share purchase agreements		34,580
Notes payable to Sellers		15,000
Notes payable to Founders, current		3,578
Account payables and other current liabilities		8,896
Total liabilities		62,054
Net liabilities	$	40,374

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Fair Value Measurements - Summary of Values of Short-term Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Mutual Fund
Schedule Of Available For Sale Securities [Line Items]
Short-term investments, Cost		$ 5,129	$ 3,180
Short-term investments, Unrealized gains		1
Short-term investments, Unrealized losses		(6)	(29)
Short-term investments, Fair value		$ 5,124	$ 3,151
Certificates of Deposit
Schedule Of Available For Sale Securities [Line Items]
Short-term investments, Cost	$ 3,079
Short-term investments, Fair value	$ 3,079

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Derivative Financial Instruments - Schedule of Gain (Losses) in Consolidated Statement of Operations Related to Derivative Contracts (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Derivative Instruments Gain Loss [Line Items]
Total	$ 7	$ 206	$ 377	$ 117
Interest Rate Swap | Financial Expense, Net
Derivative Instruments Gain Loss [Line Items]
Gain loss on interest rate derivative instruments			16	(38)
Interest Rate Swap | Financial Income (Expense), Net
Derivative Instruments Gain Loss [Line Items]
Gain loss on interest rate derivative instruments	$ 7	(5)
Foreign Exchange Forward | Financial Expense, Net
Derivative Instruments Gain Loss [Line Items]
Gain loss on Foreign exchange forward derivative instruments			$ 361	$ 155
Foreign Exchange Forward | Financial Income (Expense), Net
Derivative Instruments Gain Loss [Line Items]
Gain loss on Foreign exchange forward derivative instruments		$ 211

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Income Taxes - Schedule of Domestic and Foreign Components of Income (Loss) Before Income Tax Expense (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Domestic			$ (7,857)	$ (635)
Foreign			4,618	(5,041)
Loss before income tax expense (benefit)	$ (9,412)	$ (1,300)	$ (3,239)	$ (5,676)

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Bank and Other Borrowings - Summary of Payments Obliged (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Bank And Other Borrowings [Abstract]
2020 (remaining nine months)	$ 3,784
2020		$ 7,564
2021	9,330	8,031
2022	7,637	5,254
2023	5,339	2,849
2024	456
Total	$ 26,546	$ 23,698

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Description of Organization and Business Operations - Additional Information (Details) - $ / shares	Jan. 18, 2018	Dec. 12, 2017	Mar. 31, 2020	Dec. 31, 2019
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Number of shares of common stock per unit		1
Common stock, par value		$ 0.0001	$ 0.0001	$ 0.0001
Initial Public Offering
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Units sold in offering		12,500,000
Sale of stock price per unit		$ 10.00
Second Closing of Offering
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Sale of stock price per unit	$ 10.00
Units sold in offering	1,875,000
Rights
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Number of shares of common stock each holder receive		0.10
Percentage of receive/purchase one share of common stock		10.00%
Warrants
Organization Consolidation And Presentation Of Financial Statements Disclosure [Line Items]
Number of shares of common stock each holder receive		0.75		4
Business combination, share price		$ 11.50	$ 11.50	$ 11.50
Percentage of receive/purchase one share of common stock		75.00%

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Personnel Costs - Additional Information (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Schedule Of Personnel Cost Allocation [Line Items]
Personnel costs	$ 12,648,000	$ 15,154,000
Collective Italian National Labor Agreement
Schedule Of Personnel Cost Allocation [Line Items]
Percentage of employees subject to agreement	30.00%
Agreement expiration date	Dec. 31, 2023
Restricted Stock Units (RSUs)
Schedule Of Personnel Cost Allocation [Line Items]
Personnel costs	$ 996,000
Stock-Based Compensation
Schedule Of Personnel Cost Allocation [Line Items]
Personnel costs		$ 7,400,000

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Commitments and Contingencies - Schedule of Future Minimum Lease Payments under Operating Leases (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Operating Lease Liabilities Payments Due [Abstract]
2020		$ 636
2020 (remaining nine months)	$ 541
2021	527	519
2022	508	506
2023	400	393
2024	312	314
2025 and thereafter	416	424
Total Minimum Lease Payments	$ 2,704	$ 2,792

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Fair Value Measurements - Summary of Values of Marketable Securities (Details) - Mutual Fund - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Schedule Of Available For Sale Securities [Line Items]
Short-term investments, Cost	$ 5,129	$ 3,180
Short-term investments, Unrealized gains	1
Short-term investments, Unrealized losses	(6)	(29)
Short-term investments, Fair value	$ 5,124	$ 3,151

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Property and Equipment, Net - Summary of Property and Equipment (Parenthetical) (Details) - USD ($)	Dec. 31, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Total property and equipment	$ 6,039,000	$ 4,250,000
Servers
Property Plant And Equipment [Line Items]
Equipment under capital leases, gross	288,000	94,000
Accumulated depreciation	78,000	31,000
Total property and equipment	1,629,000	1,170,000
Assets-in-Progress
Property Plant And Equipment [Line Items]
Total property and equipment	665,000	$ 108,000
Internal-use Software Development In-progress
Property Plant And Equipment [Line Items]
Total property and equipment	546,000
Software in-Progress
Property Plant And Equipment [Line Items]
Total property and equipment	$ 119,000

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Transactions with Related Parties - Additional Information (Details)	3 Months Ended		12 Months Ended		36 Months Ended
	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Nov. 30, 2019 USD ($) Loan
Related Party Transaction [Line Items]
Notes payable outstanding amount due	$ 13,115,000		$ 9,411,000
Outstanding obligation for preference shares				$ 1,339,000	$ 1,339,000
Esse Effe | Consulting Services
Related Party Transaction [Line Items]
Cost incurred for related party services			0	118,000
Outstanding amount due			0	35,000	35,000
Studio Legale Chiomenti | Legal Services
Related Party Transaction [Line Items]
Cost incurred for related party services	56,000	$ 0	694,000	204,000
Directors and Executive Managers
Related Party Transaction [Line Items]
Outstanding amount of loans granted	21,000		22,000	67,000	67,000
Number of loans granted | Loan						2
Number of loans reimbursed | Loan						1
Loan reimbursement						$ 36,000
Interest income earned			600	700
Executive Managers
Related Party Transaction [Line Items]
Outstanding obligation for preference shares	1,000		1,800,000
Executive Managers, Relating to Preference Shares
Related Party Transaction [Line Items]
Compensation expense for related party			360,000
Esse Effe and Maya
Related Party Transaction [Line Items]
Notes payable outstanding amount due	15,000,000		15,000,000
Sponsor and Gig Founders, LLC
Related Party Transaction [Line Items]
Notes payable outstanding amount due	1,900,000		1,900,000
Alessandra Levy | Kaleyra S.p.A
Related Party Transaction [Line Items]
Cost incurred for related party services			239,000		638,000
Cumulative value for service contracts				481,000
Remuneration paid for obtaining service contracts			0
Accrued Interest | Esse Effe and Maya
Related Party Transaction [Line Items]
Notes payable outstanding amount due	152,000		43,000	0	0
Accrued Interest | Sponsor and Gig Founders, LLC
Related Party Transaction [Line Items]
Notes payable outstanding amount due	$ 19,000		$ 5,000	$ 0	$ 0

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Supplemental Balance Sheet Information - Schedule of Allowance for Doubtful Accounts (Details) - USD ($)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Balance Sheet Related Disclosures [Abstract]
Balance, beginning of the period	$ 157,000	$ 60,000
Accruals	800,000	108,000
Utilization of provision	(84,000)
Effect of foreign exchange rate		(11,000)
Balance, end of the period	$ 873,000	$ 157,000

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Employee Benefit - Schedule of Changes in Obligations of Defined Benefit Plans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Mar. 31, 2020
Changes in obligations of defined benefit plans
Benefit obligation at the beginning of the period	$ 1,173	$ 947
Change in scope of consolidation		155
Service cost	165	152
Interest cost	33	22
Actuarial loss	89	11
Benefit paid	(13)	(67)
Foreign exchange translation reserve	(23)	(47)
Benefit obligation at the end of the period	1,424	1,173
Current (1)	26	26
Long-term portion of employee benefit obligation	$ 1,398	$ 1,147	$ 1,341

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Goodwill and Intangible Assets, Net- Summary of Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Acquired Finite Lived Intangible Assets [Line Items]
Gross	$ 11,606	$ 11,965	$ 12,152
Accumulated amortization	2,941	2,612	876
Net	8,665	9,353	11,276
Developed Technology
Acquired Finite Lived Intangible Assets [Line Items]
Gross	2,711	2,775	2,810
Accumulated amortization	1,080	952	310
Net	1,631	1,823	2,500
Customer Relationships
Acquired Finite Lived Intangible Assets [Line Items]
Gross	8,777	9,077	9,243
Accumulated amortization	1,826	1,631	555
Net	6,951	7,446	8,688
Patent
Acquired Finite Lived Intangible Assets [Line Items]
Gross	118	113	99
Accumulated amortization	35	29	11
Net	$ 83	$ 84	$ 88

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Income Taxes - Summary of Valuation Allowance (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Balance at the beginning of the period	$ 723	$ 206
Change in scope of consolidation	2,836	305
Increase during the period	2,027	213
Effect of exchange rate changes	5	(1)
Balance at the end of the period	$ 5,591	$ 723

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Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Income Taxes [Line Items]
U.S. federal statutory tax rate			21.00%	24.00%
Accumulated interest related to unrecognized tax benefits			$ 91,000	$ 4,000
Undistributed profits			$ 1,093,000	180,000
Open tax year	2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020		2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Income tax expense (benefit)	$ (589,000)	$ 79,000	$ 2,273,000	$ 1,424,000
Solutions Infini
Income Taxes [Line Items]
Undistributed earnings and profits by foreign subsidiary	2,100,000		5,000,000
Undistributed profits	0		0
Expected tax expense due to undistributed earnings	$ 321,000		757,000
United States | Federal
Income Taxes [Line Items]
Net operating loss carryforwards			11,600,000
Net operating loss carryforwards, subjects to expiration			5,400,000
Net operating loss carryforwards, indefinite life			$ 6,200,000
United States | Federal | Minimum
Income Taxes [Line Items]
Net operating loss carryforwards expiration year			2026
United States | Federal | Maximum
Income Taxes [Line Items]
Net operating loss carryforwards expiration year			2037
United States | State
Income Taxes [Line Items]
Net operating loss carryforwards			$ 11,700,000
Net operating loss carryforwards, subjects to expiration			10,100,000
Net operating loss carryforwards, indefinite life			$ 1,600,000
United States | State | Minimum
Income Taxes [Line Items]
Net operating loss carryforwards expiration year			2037
United States | State | Maximum
Income Taxes [Line Items]
Net operating loss carryforwards expiration year			2039
Switzerland
Income Taxes [Line Items]
Net operating loss carryforwards			$ 1,600,000
Switzerland | Minimum
Income Taxes [Line Items]
Net operating loss carryforwards expiration year			2023
Switzerland | Maximum
Income Taxes [Line Items]
Net operating loss carryforwards expiration year			2026

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Other Current and Long-Term Liabilities (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Other Liabilities Disclosure [Abstract]

Schedule of Other Current Liabilities

Other current liabilities consisted of the following (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Liabilities for tax other than income tax	$	1,038	$	583
Social securities liabilities		184		256
Accrued financial interest		413		149
Other liabilities		388		391
Total other current liabilities	$	2,023	$	1,379

Other current liabilities consisted of the following (in thousands):

	As of December 31,
	2019		2018
Liabilities for tax other than income tax	$	583	$	589
Social securities liabilities		256		180
Income tax liabilities		—		43
Derivative contract liabilities		—		18
Other liabilities		390		179
Total other current liabilities	$	1,229	$	1,009

Schedule of Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Payable to supplier (1)	$	2,700	$	2,700
Long-term performance bonuses		1,433		—
Derivative contract liabilities		73		80
Other long-term liabilities		393		375
Total other long-term liabilities	$	4,599	$	3,155

(1) This obligation was settled by issuance of a note payable on May 1, 2020, when the settlement agreement with the supplier was executed. Refer to Note 19 – Subsequent events – for further details.

Long-term liabilities consisted of the following (in thousands):

	As of December 31,
	2019		2018
Long-term trade payable (see Note 27)	$	2,700	$	—
Derivative contract liabilities		80		106
Other long-term liabilities		375		185
Total other long-term liabilities	$	3,155	$	291

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Financial Expense, Net (Tables)

12 Months Ended

Dec. 31, 2019

Financial Expenses Net [Abstract]

Schedule of Financial Expense, Net

Financial expense, net for the years ended December 31, 2019 and 2018, consisted of the following (in thousands):

	Year Ended December 31,
	2019			2018
Financial Income:
Interest income	$	160		$	31
Gain on derivatives		414			134
Dividends on marketable securities		97			4
Total Financial Income		671			169
Financial Expense:
Interest expense		(1,073	)		(585	)
Loss on derivatives		(37	)		—
Total Financial Expense		(1,110	)		(585	)
Financial expense, net	$	(439	)	$	(416	)

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Net Loss Per Share - Schedule of Calculation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended				12 Months Ended
	Mar. 31, 2020		Mar. 31, 2019		Dec. 31, 2019		Dec. 31, 2018
Earnings Per Share [Abstract]
Net loss	$ (8,823)		$ (1,379)		$ (5,512)		$ (7,098)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	19,979,589	[1]	10,687,106	[1]	11,603,381	[2]	9,828,411	[2]
Net loss per share attributable to common stockholders, basic and diluted	$ (0.44)	[1]	$ (0.13)	[1]	$ (0.48)	[2]	$ (0.72)	[2]

[1] Amounts for the three months ended March 31, 2019 were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share, basic and diluted were retrospectively adjusted accordingly.

[2] Amounts for the year ended December 31, 2018 differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share attributable to common stockholders, basic and diluted were adjusted accordingly

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Loss Per Share Attributable to Common Stockholders (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Earnings Per Share [Abstract]

Schedule of Calculation of Basic and Diluted Loss Per Share Attributable to Common Stockholders

The following table sets forth the calculation of basic and diluted net loss per share during the period presented (in thousands, except share and per share data):

	Three Months Ended March 31,
	2020			2019
Net loss	$	(8,823	)	$	(1,379	)
Weighted-average shares used to compute net loss per common share, basic and diluted		19,979,589			10,687,106
Net loss per common share, basic and diluted	$	(0.44	)	$	(0.13	)

The following table sets forth the calculation of basic and diluted loss per share attributable to common stockholders during the period presented (in thousands, except share and per share data):

	Year Ended December 31,
	2019			2018
Net loss attributable to common stockholders	$	(5,512	)	$	(7,100	)
Weighted-Average shares used to compute net loss per share attributable to common stockholders, basic and diluted		11,603,381			9,828,411
Net loss per share attributable to common stockholders, basic and diluted	$	(0.48	)	$	(0.72	)

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company are unaudited, and have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, this interim quarterly financial report does not include all disclosures required by US GAAP. In the opinion of our management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of Kaleyra and our consolidated subsidiaries for all periods presented. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with our consolidated financial statements and the notes thereto included in our 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 22, 2020.

These condensed consolidated financial statements have been prepared in conformity with US GAAP applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these condensed consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Basis of Presentation

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (‘‘US GAAP’’) applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

Liquidity

In connection with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company evaluated its ability to continue as a going concern. The Company has negative cash flows from operating activities, and its current liabilities exceed its current assets as of March 31, 2020. The condensed consolidated balance sheet as of March 31, 2020 includes total current assets of $80.4 million and total current liabilities of $121.1 million, resulting in net liabilities due within the next 12 months of $40.7 million.

The Business Combination generated significant obligations including (i) $13.1 million of liabilities related to non-recurring Business Combination transaction related costs; (ii) $15.0 million of deferred consideration to sellers in the Business Combination transaction (iii) $13.2 million of net obligations under certain Shares Purchase Forward Agreements entered into by GigCapital, Inc. prior to the Business Combination; and (iv) $3.6 million of notes payable acquired as a result of the Business Combination. Management, concerned about the Company’s ability to fulfill these obligations, made the decision to evaluate opportunities to refinance or renegotiate some of its current obligations and, during the first four months of 2020 put in place several actions aimed to achieve such goal, including, among others:

• the subscription of a new loan agreement with a bank that is currently a lender to the Company;

• signing of two new line of credit facilities;

• a refinanced loan that extended payment terms and provided additional funds;

• the amendments of the repayment schedules of certain existing long-term financing agreements to postpone the amounts due in the next three to nine months of 2020; and

• the renegotiation of the payment terms of a payable related to costs incurred in the Business Combination.

Considering the effects of these actions and the typical financial cycle of Kaleyra, Kaleyra’s management believes that the Company’s cash, cash flows from operations, financings and amendments to agreements described above, and availability of borrowings, as described above, will be sufficient to support its planned operations for at least the next 12 months from the date these condensed consolidated financial statements were issued.

Liquidity

In connection with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company evaluated its ability to continue as a going concern. While the Company has positive cash flows from operating activities, its current liabilities exceed its current assets as of December 31, 2019. The consolidated balance sheet as of December 31, 2019 includes total current assets of $86.5 million and total current liabilities of $125.9 million, resulting in net liabilities due within the next 12 months of $39.4 million.

The Company’s business operations continued to grow in line with expectations showing positive operating margins (excluding non-recurring costs). However, the Business Combination generated significant obligations including (i) $13.1 million of liabilities related to non-recurring Business Combination transaction related costs; (ii) $15.0 million of deferred consideration to sellers in the Business Combination transaction (iii) $13.2 million of net obligations under certain Shares Purchase Forward Agreements entered into by GigCapital Inc. prior to the Business Combination; and (iv) $3.6 million of notes payable acquired as a result of the Business Combination.

Management, concerned about the Company’s ability to fulfil these obligations, made the decision to evaluate opportunities to refinance or renegotiate some of its current obligations and, during the first four months of 2020 put in place several actions aimed to achieve such goal. Such actions, described in more details in Note 27—Subsequent Events, include, among others:

• the subscription of a new loan agreement with a bank that is currently a lender to the Company;

• signing of two new line of credit facilities;

• a refinanced loan that extended payment terms and provided additional funds;

• the amendments of the repayment schedules of certain existing long-term financing agreements to postpone the amounts due in the next three to six months of 2020; and

• the renegotiation of the payment terms of a payable related to costs incurred in the Business Combination.

Considering the effects of these actions and the typical financial cycle of Kaleyra, Kaleyra’s management believes that the Company’s cash, cash flows from operations, financings and amendments to agreements subsequent to December 31, 2019, and availability of borrowings, as described above, will be sufficient to support its planned operations for at least the next 12 months from the date these consolidated financial statements were issued.

Principles of Consolidation

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly owned subsidiaries, including Kaleyra S.p.A., Solutions Infini and Buc Mobile, which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Principles of Consolidation

The consolidated financial statements include the Company and its wholly-owned subsidiaries, including Kaleyra S.p.A., Solutions Infini and Buc Mobile, which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the recent outbreak of a novel strain of the coronavirus (“COVID-19”).

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, restricted cash and cash equivalents, short-term investments and trade receivables. The Company maintains cash and cash equivalents and short-term investments with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In the three months ended March 31, 2020 and 2019, there were zero and one customer, respectively, that individually accounted for more than 10% of the Company’s consolidated total revenue. In the three months ended March 31, 2019, revenue generated by that one customer accounted for $3.1 million. As of March 31, 2020 and December 31, 2019, no individual customer accounted for more than 10% of the Company’s consolidated total trade receivables.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade receivables. The Company maintains cash and cash equivalents and marketable securities with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In the years ended December 31, 2019 and 2018, there were one and three customers, respectively, that individually accounted for more than 10% of the Company’s consolidated total revenue. In particular in 2019, revenue generated by the first, second and third major customer of the Company accounted for $13.4 million, $10.9 million and $9.2 million; respectively, while in 2018, revenue generated by the first, second and third major customer of the Company accounted for $13.6 million, $8.1 million and $8.8 million, respectively. As of December 31, 2019 and 2018, no individual customer accounted for more than 10% of the Company’s consolidated total trade receivables.

Revenue Recognition

Revenue Recognition

Adoption of Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”

Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”), which replaced the existing revenue recognition guidance, ASC 605, and outlines a single set of comprehensive principles for recognizing revenue under US GAAP. Among other things, ASC 606 requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services.

The Company did not record any adjustment to the beginning retained earnings as of January 1, 2019 in connection with the adoption of the new standard.

Prior to the adoption of ASC 606, the Company recognized the majority of its revenue according to the usage by its customers in the period in which that usage occurred. ASC 606 continues to support the recognition of revenue over time, and on a usage basis, for the majority of the Company’s contracts due to continuous transfer of control to the customer.

Revenue Recognition Policy

The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers. Taxes collected are subsequently remitted to governmental authorities.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

The Company’s revenue is primarily derived from usage-based fees earned from the sale of communications services offered through software solutions to large enterprises, as well as small and medium-sized customers.

The Company’s revenue is recognized upon the sending of a SMS message or by the authentication of a financial transaction of an end user of the Company’s customer using the Company’s platform in an amount that reflects the consideration the Company expects to receive in exchange for those services which is generally based upon agreed fixed prices per unit.

Platform access is considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. After usage occurs, there are no remaining obligations that would preclude revenue recognition. Revenue from usage-based fees represented 98% of total revenue, both in the years ended December 31, 2019 and 2018.

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support, which is generally one year. Term-based contract revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 2% of total revenue, both in the years ended December 31, 2019 and 2018.

The Company’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

Contract Balances

The Company receives payments from customers based on a billing schedule as established in its contracts. Contract assets are recorded when the Company has a conditional right to consideration for its completed performance under the contracts. Trade receivables are recorded when the right to this consideration becomes unconditional, which is as usage occurs. The Company did not have any contract assets as of December 31, 2019.

Deferred revenue is recorded when cash payments are received in advance of future usage on non-cancellable contracts. As of December 31, 2019 and 2018, the Company recorded $1.4 million and $1.5 million, respectively, as deferred revenue on its consolidated balance sheets. The deferred revenue balance as of December 31, 2018 was entirely recognized as revenue in the year ended December 31, 2019.

Disaggregated Revenue

In general, revenue disaggregated by geography is aligned according to the nature and economic characteristics of the Company’s business and provides meaningful disaggregation of the Company’s results of operations. Refer to Note 17—Geographic Information for details of revenue by geographic area.

Cost of Revenue

Cost of Revenue

Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes the cost of the Company’s cloud infrastructure and technology platform, amortization of capitalized internal-use software development costs related to the platform applications and amortization of developed technology acquired in the business combinations.

Research and Development Expenses

Research and Development Expenses

Research and development expenses consist primarily of personnel costs, the costs of the technology platform used for staging and development, outsourced engineering services, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meet the criteria for capitalization.

Internal-use Software Development Costs

Internal-use Software Development Costs

Certain costs of the technology platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed, and (ii) it is probable that the software will be completed and used for its intended purpose. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all-significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software of four years on a straight-line basis. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could affect the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in research and development expenses.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and were $956,000 and $578,000 in the years ended December 31, 2019 and 2018, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statement of operations.

Marketable Securities

Marketable Securities

Investments in marketable securities are carried at fair value and classified as available-for-sale securities. Realized gains and losses on available-for-sale securities are included in financial expense, net in the consolidated statements of operations. Unrealized gains and losses, net of deferred taxes, on available-for-sale securities are included in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). In the event the fair value of an investment declines below its cost basis, management is required to determine if the decline in fair value is other than temporary. If management determines the decline is other than temporary, an impairment charge is recorded. As of December 31, 2019 and 2018, the Company had marketable securities of $5.1 million and $3.2 million; respectively relating to mutual funds with no stated maturity.

Stock-Based Compensation

Stock-Based Compensation

The Company measures and recognizes the compensation expense for restricted stock units (“RSUs”) granted to employees and directors, based on the fair value of the award on the grant date.

RSUs give an employee an interest in Company stock but they have no tangible value until vesting is complete. RSUs are equity classified and measured at the fair market value of the underlying stock at the grant date and recognized as expense over the related service or performance period. The Company elected to account for forfeitures as they occur. The fair value of stock awards is based on the quoted price of our common stock on the grant date. Compensation cost for RSUs is recognized using the straight-line method over the requisite service period.

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”. The aim of the update is to simplify several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based payment equity awards are measured at the grant date fair value of the equity instruments, similar to employee share-based payment equity awards.

The Company adopted ASU 2018-07 in 2019, following the adoption of Topic 606. At the transition date, there were no nonemployee share-based compensation awards.

Employee Benefit Plans

Employee Benefit Plans

The Company has defined benefit plans, granted to Italian and Indian employees and regulated by Italian and Indian laws, respectively. The defined benefit plans are calculated based on the employee compensation and the duration of the employment relationship and are paid to the employee upon termination of the employment relationship. The costs of the defined benefit plans reported in the Company’s consolidated statement of operations is determined by actuarial calculation performed on an annual basis. The actuarial valuation is performed using the “Projected Unit Credit Method” based on the employees’ expected date of separation or retirement.

As a part of the purchase agreement relating to the 2018 acquisition of Solutions Infini by Kaleyra, the Company assumed the obligation to purchase a number of preference shares from certain employees in 2020 at a price determined based on the EBITDA of Solutions Infini for its fiscal year ending March 31, 2020. These preference shares represent compensation for future services for the eligible employees. The Company accounts for the liability related to the preference shares over the relevant period from July 2017 to July 2020, charging the consolidated statements of operations on a straight-line basis over that period.

Income Taxes

Income Taxes

The Company accounts for income taxes in accordance with the asset and liability approach method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized.

The Company recognizes the effect of income tax positions only if those positions are more-likely-than-not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest and penalties related to an underpayment of income taxes in income tax expense in the consolidated statements of operations.

Foreign Currency Translation

Foreign Currency Translation

The functional currency of the parent company is the US Dollar. The functional currency of Kaleyra S.p.A. is the Euro, the functional currency of Solutions Infini is the India Rupee and the functional currency of Buc Mobile is the US Dollar.

Each company remeasures monetary assets and liabilities denominated in currencies other that its functional currency at period-end exchange rates and non-monetary items are at historical rates. Remeasurement adjustments are recognized in the consolidated statements of operations as foreign currency (income) loss in the period of occurrence.

These consolidated financial statements are presented in US Dollars. For legal entities where the functional currency is a currency other than the US Dollar, adjustments resulting from translating the financial statements into US Dollars are recorded as a component of accumulated other comprehensive income in stockholders’ equity (deficit). Monetary assets and liabilities denominated in a currency that is other than the US Dollar are translated into US Dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates during the period. Equity transactions are translated using historical exchange rates.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under US GAAP, are recorded as an element of stockholders’ equity but are excluded from the calculation of net income (loss). See Note 13 – Accumulated Other Comprehensive Income (Loss).

Earnings (Loss) per Share

Earnings (Loss) per Share

The equity structure in the consolidated financial statements following a reverse recapitalization reflects the equity structure of the legal acquiror (the accounting acquiree), including the equity interests issued by the legal acquiror to effect the business combination.

Basic earnings (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. In calculating the weighted-average number of common shares during the period in which the reverse merger occurs (fiscal year 2019):

a. The number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted-average number of common shares of the legal acquiree (accounting acquiror) outstanding during the period multiplied by the exchange ratio established in the merger agreement;

b. The number of common shares outstanding from the acquisition date to the end of that period shall be the actual number of common shares of the legal acquiror (the accounting acquiree) outstanding during that period.

The basic EPS for each comparative period before the acquisition date presented in the consolidated financial statements following a reverse merger shall be calculated by dividing (i) by (ii):

i. The income of the legal acquiree attributable to common stockholders in each of those periods;

ii. The legal acquiree’s historical weighted average number of common shares outstanding multiplied by the exchange ratio established in the acquisition agreement.

Diluted net income (loss) per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income (loss) per share calculation, RSUs, options and warrants to purchase common stock are considered common stock equivalents.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of funds deposited into saving accounts.

Restricted Cash

Restricted Cash

Restricted cash consists of cash deposited into a savings account with a financial institution as collateral for the Company’s obligations under the Forward Share Purchase Agreement with Glazer Capital and with Yakira Capital Management, Inc. See Note 10—Debt for Forward Share Purchase Agreements for a description of the contracts and Note 27 for amendments to the contracts made after year-end.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 830)—Restricted Cash” (“ASU 2016-18”). This standard provides guidance on the presentation of restricted cash and cash equivalents in the consolidated statements of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the consolidated statements of cash flows. The Company adopted ASU 2016-18 in the first quarter of 2019 and applied the guidance retrospectively in the prior period’s consolidated statements of cash flows.

Other than the revised consolidated statements of cash flows presentation of restricted cash, the adoption of ASU 2016-18 did not have an impact on the Company’s consolidated financial statements.

The restricted cash balances as of December 31, 2019 and December 31, 2018 were $20.9 million and zero, respectively.

Trade Receivables and Allowance for Doubtful Accounts

Trade Receivables and Allowance for Doubtful Accounts

Trade receivables are recorded net of an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company’s assessment of its ability to collect on customer trade receivables. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of trade receivables balances and other known conditions that may affect a customer’s ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believes will be collected. The Company writes-off trade receivables against the allowance when a determination is made that the balance is uncollectible, and collection of the receivable is no longer being actively pursued.

The allowance for doubtful accounts was $873,000 and $157,000 as of December 31, 2019 and 2018, respectively.

Property and Equipment, net

Property and Equipment, net

Property and equipment is stated at cost less accumulated depreciation or amortization.

Depreciation and amortization are computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are expensed as incurred.

The useful lives of property and equipment are as follows:

Internal-use software development costs	4 years
Servers	3 - 6 years
Office equipment	3 - 5 years
Leasehold improvements	5 years or remaining lease term (1)
Furniture and fixtures	4 - 8 years
Vehicles	8 - 10 years
Software	3 years
Other assets	4 years

(1) Including renewal options

Intangible Assets, net

Intangible Assets, net

Intangible assets recorded by the Company are costs directly associated with securing legal registration of patents and the fair value of identifiable intangible assets acquired in business combinations.

Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Intangible assets arising from business combinations, such as customer relationship and developed technology, were initially recorded at estimated fair value. Amortization is computed over the estimated useful life of each asset on a straight-line basis, except for customer relationships, which are amortized over the best estimate of their expected useful life using an accelerated method (“sum of years’ digits method”), in order to better approximate the pattern in which their economic benefit are expected to be consumed. The Company determines the useful lives of identifiable intangible assets after considering the facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The useful lives of the intangible assets are as follows:

Developed technology	3 - 6 years
Customer relationships (accelerated method)	15 - 17 years
Patent	3 - 7 years

Goodwill

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has selected December 31 as the date to perform its annual impairment test. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment for these assets. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to which goodwill is allocated to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its net book value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. No goodwill impairment charges have been recorded for any period presented.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. There was no impairment during the years ended December 31, 2019 and 2018.

Deferred Revenue

Deferred Revenue

Deferred revenue consists of advance payments from customers to be applied against future usage and customer billings in advance of revenues being recognized under the Company’s contracts. Deferred revenue is generally expected to be recognized during the succeeding 12-month period and is thus recorded as a current liability.

Segment Information

Segment Information

The Company’s Chief Executive Officer is the chief operating decision maker, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment.

Derivatives

Derivatives

The Company has not historically entered into hedging derivatives in the ordinary course of its business. In connection with the acquisition of Solutions Infini and Buc Mobile, the Company entered into certain derivative contracts to serve as an economic hedge for risk management purposes. These derivatives include exchange rate forwards on the purchase prices denominated in Indian Rupee for the acquisition of Solutions Infini and in US Dollars for the acquisition of Buc Mobile and interest rate swaps on the bank borrowings entered into by the Company to finance the acquisitions. These derivatives were not designated as hedging instruments under US GAAP. Because hedge accounting was not applied, those derivatives have been recorded at fair value on the consolidated balance sheets with changes in fair value recorded in financial expense, net in the consolidated statements of operations. In 2019, following the payments of the consideration for the acquisitions, the exchange rate forward contracts on the purchase prices were settled.

Forward Shares Purchase Agreements

Forward Shares Purchase Agreements

During 2019, the Company entered into certain third-party put option arrangements assuming the obligation to repurchase its common stock at a future date by transferring cash to the third-party under certain conditions described in more detail in Note 10 below. Such obligation has been recorded at fair value in the consolidated balance sheets with changes in fair value recorded in financial expense, net in the consolidated statements of operations.

Business Combinations

Business Combinations

The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement.

The authoritative guidance allows a measurement period of the purchase price allocation that ends when the entity has obtained all relevant information about facts that existed at the acquisition date, and that cannot exceed one year from the date of acquisition. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded to the consolidated statements of operations.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company’s financial instruments, which include cash, cash equivalents, restricted cash, trade receivables and accounts payable are recorded at their carrying amounts, which approximate their fair value due to their short-term nature. All marketable securities are considered available-for-sale and recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive income (loss). In valuing these items, the Company uses inputs and assumptions that market participants would use to determine their fair value, utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Impairments are considered other than temporary if they are related to deterioration in credit risk or if it is likely that the security will be sold before the recovery of its cost basis. Realized gains and losses and declines in value deemed to be other than temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations.

The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2: Other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Net cash settlements on derivatives that do not qualify for hedge accounting are reported in financial income as part of financial expense, net in the consolidated statements of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply to contract modifications that replace a reference rate (e.g. LIBOR) affected by reference rate reform and contemporaneous modifications of other contract terms related to the replacement of the reference rate (including contract modifications to add or change fallback provisions). The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: (i) modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; (ii) modifications of contracts within the scope of Topics 840, Leases, and 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments. For other Topics or Industry Subtopics in the Codification, the amendments also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant Topic or Industry Subtopic. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company adopted the amendments, and the adoption did not have a material impact on its condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03 “Codification Improvements to Financial Instruments”, which improves various financial instruments Topics in the Codification in order to increase stakeholder awareness of the amendments and to expedite the improvement process. The amendments in this ASU clarify or address stakeholders’ specific issues as described below:

i. Issue 1: Fair Value Option Disclosures: The amendments clarify that all entities are required to provide the fair value option disclosures in paragraphs 825-10-50-24 through 50-32.

ii. Issue 2: Applicability of Portfolio Exception in Topic 820 to Nonfinancial Items: Paragraphs 820-10-35-2A(g) and 820-10-35-18L are amended to include the phrase nonfinancial items accounted for as derivatives under Topic 815 to be consistent with the previous amendments to Section 820-10-35.

iii. Issue 3: Disclosures for Depository and Lending Institutions: The amendments clarify that the disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions.

iv. Issue 4: Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance in Subtopic 470-50: The amendments improve the understandability of the guidance.

v. Issue 5: Cross-Reference to Net Asset Value Practical Expedient in Subtopic 820-10: The amendments improve the understandability of the guidance.

vi. Issue 6: Interaction of Topic 842 and Topic 326: The amendments clarify that the contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit losses under Topic 326.

vii. Issue 7: Interaction of Topic 326 and Subtopic 860-20: The amendments to Subtopic 860- 20 clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.

For Issue 1, 2, 4 and 5, for public business entities, the amendments are effective upon issuance of this final ASU. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years beginning after December 15, 2020. Early application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

For Issue 3, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2019-04, for the guidance related to the amendments in ASU 2016-01. The effective date of ASU 2019-04 for the amendments to ASU 2016-01 is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the amendments in the three months period ended March 31, 2020, and the adoption did not have a material impact on its consolidated financial statements.

For Issue 6 and 7, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have not adopted the amendments in ASU 2016-13, the effective dates and the transition requirements for these amendments are the same as the effective date and transition requirements in ASU 2016-13 which for an emerging growth company is in 2023. Early adoption is permitted in any interim period as long as the entity has adopted the amendments in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In February 2020, the FASB issued ASU 2020-02 “Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842). This ASU applies to all registrants that are creditors in loan transactions that, individually or in the aggregate, have a material effect on the registrant’s financial condition. This ASU guidance is applicable upon a registrant’s adoption of Accounting Standards Codification (“ASC”) Topic 326. On November 15, 2019, the FASB delayed the effective date of ASC Topic 326 for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022 for U.S. Securities and Exchange Commission (“SEC”) filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

Moreover, the amendments in this ASU add a note to a SEC paragraph pursuant to the issuance of ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. The note added states that at the December 2019 AICPA National Conference on Current SEC and PCAOB Developments, the SEC staff announced that it would not object to a public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC adopting Topic 842 for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. This announcement is applicable only to public business entities that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC. This announcement is not applicable to other public business entities.

In January 2020, the FASB issued ASU 2020-01 “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)”, clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments under ASU 2018-13 remove, add, and modify certain disclosure requirements on fair value measurements in ASC 820. In particular, the following disclosure were added: (i) The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; (ii) The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted the amendments in the three months period ended March 31, 2020, and the adoption did not have a material impact on its condensed consolidated financial statements.

Recent Accounting Pronouncements

In January 2020, the FASB issued ASU 2020-01 “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)”, clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In November 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The objective of the simplification initiative is to identify, evaluate, and improve areas of US GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, “Collaborative Arrangements (Topic 808)”, clarifying the interaction between Topic 808 and Topic 606. A collaborative arrangement is a contractual arrangement under which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards that depend on the activity’s commercial success. Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Some entities apply revenue guidance directly or by analogy to all or part of their arrangements, and others apply a different accounting method as an accounting policy. Those accounting differences result in diversity in practice on how entities account for transactions on the basis of their view of the economics of the collaborative arrangement. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract”. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period, for all entities. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments under ASU 2018-13 remove, add, and modify certain disclosure requirements on fair value measurements in ASC 820. The amendments are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2019. An entity shall apply the ASU retrospectively to all periods presented. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements”, which does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB ASC areas based on comments and suggestions made by various stakeholders. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this ASU do not require transition guidance and will be effective upon issuance of this ASU. However, there are some conforming amendments in this ASU that have been made to recently issued guidance that is not yet effective that may require application of the transition and effective date guidance in the original ASU. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In December 2017, the FASB issued ASU 2017-15, “Codification Improvements—Elimination of Topic 995”, which supersede obsolete guidance in Topic 995 on unrecognized deferred taxes related to certain statutory reserve deposits. If an entity has unrecognized deferred income taxes related to statutory deposits made on or before December 15, 1992, the entity would be required to recognize the unrecognized income taxes in accordance with Topic 740. The amendments are effective for fiscal years and first interim periods beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. The Company adopted the amendments in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”, which affect a variety of Topics in the Codification. For entities that have not yet adopted the amendments in ASU 2016-13, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as the entity has adopted the amendments in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, “Compensation—Retirement Benefits (Topic 715)”, which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. This ASU is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. The Company adopted the provisions of this ASU in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)”, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 for public business entities and for fiscal years ending after December 15, 2021 for all other entities. Early adoption is permitted for all entities. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective prospectively for public business entities for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2020 and for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2021 for other entities. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”, which amends the guidance of ASC Topic 805, “Business Combinations”, adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance is effective for public entities for annual periods beginning after December 15, 2017, including interim periods within those periods; for all other entities for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019 and early adoption is permitted under certain circumstances. The Company adopted this standard in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments”, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments— Credit Losses”, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments—Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These ASUs are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and for other entities for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief”, which provides a targeted transition relief and provides entities that have certain instruments, with an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. For entities that have not yet adopted the amendments in ASU 2016-13, the effective date and transition methodology for the amendments in this ASU are the same as in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases”, which was further clarified by ASU 2018-10, “Codification Improvements to Topic 842, Leases”, and ASU 2018-11, “Leases—Targeted Improvements”, both issued in July 2018. ASU 2016-02 affects all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendment affects narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new lease standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases”, including its disclosure requirements, in the comparative prior periods presented in the year they adopt the new lease standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The practical expedient provides lessors with an option to not separate the non-lease components from the associated lease components when certain criteria are met and requires them to account for the combined component in accordance with the revenue recognition standard in ASC 606 if the associated non-lease components are the predominant components. The new standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Earlier application is permitted. While the Company expects the adoption of these standards to result in a material increase to the reported assets and liabilities, the Company has not yet determined the full impact that the adoption of this standard will have on its consolidated financial statements.

In November 2019, the FASB issued ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates”. The amendments in this ASU amend certain effective dates for the following major ASUs (including amendments issued after the issuance of the original ASU). The effective dates for Leases after applying this ASU are as follows: Public business entities; not-for-profit entities that have issued or are conduit bond obligors for securities that are traded, listed, or quoted on an exchange or an over-the-counter market; and employee benefit plans that file or furnish financial statements with or to the SEC for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed.

ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates” amend certain effective dates for the following major updates (including amendments issued after the issuance of the original ASU):

a)    Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Credit Losses). The amendments in this ASU amend the mandatory effective dates for Credit Losses for all entities as follows: Public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

b)    Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Hedging). The effective dates for Hedging after applying this ASU are as follows: Public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. This new guidance will replace most existing US GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 was originally effective for public entities for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. The effective date for all other entities was for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. In August 2015, the FASB issued ASU 2015-14 which deferred, by one year, the effective date for the new revenue reporting standard for entities reporting under US GAAP. For Kaleyra, as an emerging growth company, ASU 2014-09 was effective for annual reporting periods beginning after December 15, 2018. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by another party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing”, clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients”, which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)”. These amendments provide additional clarification and implementation guidance on the previously issued ASUs. These amendments do not change the core principles of the guidance stated in ASU 2014-09, instead they are intended to clarify and improve operability of certain topics included within the revenue standard. In November 2017, the FASB issued ASU 2017-14, which includes amendments to certain SEC paragraphs within the FASB Accounting Standards Codification (Codification). ASU 2017-14 amends the Codification to incorporate SEC Staff Accounting Bulletin (SAB) No. 116 and SEC Interpretive Release on Vaccines for Federal Government Stockpiles (SEC Release No. 33-10403) that bring existing SEC staff guidance into conformity with the FASB’s adoption of and amendments to ASC Topic 606, Revenue from Contracts with Customers. The effective date and transition requirements for ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2017-13 and ASU 2017-14 are the same as the effective date and transition requirements for ASU 2015-14. The Company adopted the new accounting standard in fiscal year 2019, and, as mentioned above, the adoption did not have a material impact on its consolidated financial statements.

Business seasonality

Business seasonality

The Company’s results are affected by the business cycles of its customer base, which generally results in stronger revenue in the fourth quarter of the financial year. We believe this variability is largely due to the market demand for our customers’ and/or business partners’ services due to higher levels of purchasing activity in the holiday season. As a result of our historically higher portion of sales in the fourth quarter of each year, our cost of revenue increases during such period relative to any increase in revenue. The increase in cost of revenue and other impacts of seasonality may affect profitability in a given quarter.

Reclassifications

Reclassifications

Certain reclassifications have been made to the 2019 presentation to conform to the current period’s presentation, none of which had an effect on total assets, total liabilities, stockholders’ equity (deficit), or net loss.

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Transactions with Related Parties

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Related Party Transactions [Abstract]

Transactions with Related Parties

17. TRANSACTIONS WITH RELATED PARTIES

During the three months ended March 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 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. Esse Effe is affiliated with a former director of the Company and which holds an interest in the Company. The outstanding amount due by the Company was $15.0 million plus $152,000 of accrued interest as of March 31, 2020 ($15.0 million plus $43,000 of accrued interest as of December 31, 2019). See Note 9 – 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. Accrued interest on these promissory notes amounted to $19,000 as of March 31, 2020 ($1.9 million and $5,000 of accrued interest as of December 31, 2019). 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 $56,000 and zero in the three months ended March 31, 2020 and 2019;

iv. Loans granted to Company’s directors and executive managers (at the reporting date, also Company’s stockholders) whose outstanding amount was $21,000 and $22,000 as of March 31, 2020 and December 31, 2019, respectively; and

v. As of March 31, 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 March 31,
	2020		2019
Research and development	$	—	$	94
General and administrative		56		94
Financial income (expense), net		122		—

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.

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Stockholders' Equity (Deficit)

12 Months Ended

Dec. 31, 2019

Stockholders Equity Note [Abstract]

Stockholders' Equity (Deficit)

21. STOCKHOLDERS’ EQUITY (DEFICIT)

Common stock

The authorized common stock of the Company includes up to 100,000,000 shares. Holders of the Company’s common stock are entitled to one vote for each share of common stock. As of December 31, 2019, there were 19,977,113 shares of common stock issued and outstanding with a par value $0.0001 per share.

On November 25, 2019, the Company issued in the aggregate 10,687,106 shares of common stock to the Sellers as consideration for the Business Combination.

Immediately after giving effect to the Business Combination (including as a result of redemptions, and the automatic conversion of rights into 1,321,756 shares of common stock), there were 19,977,113 shares of the Company’s issued and outstanding common stock.

Preferred Stock

The Company is authorized to issue 1,000,000 shares of preferred stock with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. As of December 31, 2019, there were no shares of preferred stock issued and outstanding.

Warrants

Warrants will only be exercisable for whole shares at $11.50 per share. As a result, at least four Units must be purchased in order for each holder to receive shares of common stock for all of the Warrants acquired upon their exercise. Under the terms of the Warrant agreement dated December 12, 2017, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act, following the completion of the Business Combination, for the registration of the shares of common stock issuable upon exercise of the Warrants included in the Units. No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number for the number of shares of common stock to be issued to the Warrant holder. Each Warrant became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of the Warrants during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the Warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.

As of December 31, 2019, there were 11,154,938 warrants outstanding.

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Summary of Significant Accounting Policies

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company are unaudited, and have been prepared in accordance with US GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, this interim quarterly financial report does not include all disclosures required by US GAAP. In the opinion of our management, the unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, considered necessary to present fairly the financial position, results of operations and cash flows of Kaleyra and our consolidated subsidiaries for all periods presented. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected in the future or for the full fiscal year. It is recommended that these condensed consolidated financial statements be read in conjunction with our consolidated financial statements and the notes thereto included in our 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 22, 2020.

These condensed consolidated financial statements have been prepared in conformity with US GAAP applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these condensed consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

In connection with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company evaluated its ability to continue as a going concern. The Company has negative cash flows from operating activities, and its current liabilities exceed its current assets as of March 31, 2020. The condensed consolidated balance sheet as of March 31, 2020 includes total current assets of $80.4 million and total current liabilities of $121.1 million, resulting in net liabilities due within the next 12 months of $40.7 million.

The Business Combination generated significant obligations including (i) $13.1 million of liabilities related to non-recurring Business Combination transaction related costs; (ii) $15.0 million of deferred consideration to sellers in the Business Combination transaction (iii) $13.2 million of net obligations under certain Shares Purchase Forward Agreements entered into by GigCapital, Inc. prior to the Business Combination; and (iv) $3.6 million of notes payable acquired as a result of the Business Combination. Management, concerned about the Company’s ability to fulfill these obligations, made the decision to evaluate opportunities to refinance or renegotiate some of its current obligations and, during the first four months of 2020 put in place several actions aimed to achieve such goal, including, among others:

• the subscription of a new loan agreement with a bank that is currently a lender to the Company;

• signing of two new line of credit facilities;

• a refinanced loan that extended payment terms and provided additional funds;

• the amendments of the repayment schedules of certain existing long-term financing agreements to postpone the amounts due in the next three to nine months of 2020; and

• the renegotiation of the payment terms of a payable related to costs incurred in the Business Combination.

Considering the effects of these actions and the typical financial cycle of Kaleyra, Kaleyra’s management believes that the Company’s cash, cash flows from operations, financings and amendments to agreements described above, and availability of borrowings, as described above, will be sufficient to support its planned operations for at least the next 12 months from the date these condensed consolidated financial statements were issued.

Business seasonality

The Company’s results are affected by the business cycles of its customer base, which generally results in stronger revenue in the fourth quarter of the financial year. We believe this variability is largely due to the market demand for our customers’ and/or business partners’ services due to higher levels of purchasing activity in the holiday season. As a result of our historically higher portion of sales in the fourth quarter of each year, our cost of revenue increases during such period relative to any increase in revenue. The increase in cost of revenue and other impacts of seasonality may affect profitability in a given quarter.

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly owned subsidiaries, including Kaleyra S.p.A., Solutions Infini and Buc Mobile, which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation. Actual results and outcomes may differ from management’s estimates and assumptions due to risks and uncertainties, including uncertainty in the current economic environment due to the recent outbreak of a novel strain of the coronavirus (“COVID-19”).

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash, restricted cash and cash equivalents, short-term investments and trade receivables. The Company maintains cash and cash equivalents and short-term investments with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In the three months ended March 31, 2020 and 2019, there were zero and one customer, respectively, that individually accounted for more than 10% of the Company’s consolidated total revenue. In the three months ended March 31, 2019, revenue generated by that one customer accounted for $3.1 million. As of March 31, 2020 and December 31, 2019, no individual customer accounted for more than 10% of the Company’s consolidated total trade receivables.

Reclassifications

Certain reclassifications have been made to the 2019 presentation to conform to the current period’s presentation, none of which had an effect on total assets, total liabilities, stockholders’ equity (deficit), or net loss.

Recent Accounting Pronouncements

In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments apply to contract modifications that replace a reference rate (e.g. LIBOR) affected by reference rate reform and contemporaneous modifications of other contract terms related to the replacement of the reference rate (including contract modifications to add or change fallback provisions). The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance: (i) modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate; (ii) modifications of contracts within the scope of Topics 840, Leases, and 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments. For other Topics or Industry Subtopics in the Codification, the amendments also include a general principle that permits an entity to consider contract modifications due to reference rate reform to be an event that does not require contract remeasurement at the modification date or reassessment of a previous accounting determination. When elected, the optional expedients for contract modifications must be applied consistently for all eligible contracts or eligible transactions within the relevant Topic or Industry Subtopic. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The Company adopted the amendments, and the adoption did not have a material impact on its condensed consolidated financial statements.

In March 2020, the FASB issued ASU 2020-03 “Codification Improvements to Financial Instruments”, which improves various financial instruments Topics in the Codification in order to increase stakeholder awareness of the amendments and to expedite the improvement process. The amendments in this ASU clarify or address stakeholders’ specific issues as described below:

i. Issue 1: Fair Value Option Disclosures: The amendments clarify that all entities are required to provide the fair value option disclosures in paragraphs 825-10-50-24 through 50-32.

ii. Issue 2: Applicability of Portfolio Exception in Topic 820 to Nonfinancial Items: Paragraphs 820-10-35-2A(g) and 820-10-35-18L are amended to include the phrase nonfinancial items accounted for as derivatives under Topic 815 to be consistent with the previous amendments to Section 820-10-35.

iii. Issue 3: Disclosures for Depository and Lending Institutions: The amendments clarify that the disclosure requirements in Topic 320 apply to the disclosure requirements in Topic 942 for depository and lending institutions.

iv. Issue 4: Cross-Reference to Line-of-Credit or Revolving-Debt Arrangements Guidance in Subtopic 470-50: The amendments improve the understandability of the guidance.

v. Issue 5: Cross-Reference to Net Asset Value Practical Expedient in Subtopic 820-10: The amendments improve the understandability of the guidance.

vi. Issue 6: Interaction of Topic 842 and Topic 326: The amendments clarify that the contractual term of a net investment in a lease determined in accordance with Topic 842 should be the contractual term used to measure expected credit losses under Topic 326.

vii. Issue 7: Interaction of Topic 326 and Subtopic 860-20: The amendments to Subtopic 860- 20 clarify that when an entity regains control of financial assets sold, an allowance for credit losses should be recorded in accordance with Topic 326.

For Issue 1, 2, 4 and 5, for public business entities, the amendments are effective upon issuance of this final ASU. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years beginning after December 15, 2020. Early application is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

For Issue 3, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2019-04, for the guidance related to the amendments in ASU 2016-01. The effective date of ASU 2019-04 for the amendments to ASU 2016-01 is for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company adopted the amendments in the three months period ended March 31, 2020, and the adoption did not have a material impact on its consolidated financial statements.

For Issue 6 and 7, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have not adopted the amendments in ASU 2016-13, the effective dates and the transition requirements for these amendments are the same as the effective date and transition requirements in ASU 2016-13 which for an emerging growth company is in 2023. Early adoption is permitted in any interim period as long as the entity has adopted the amendments in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In February 2020, the FASB issued ASU 2020-02 “Financial Instruments—Credit Losses (Topic 326) and Leases (Topic 842), Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (Topic 842). This ASU applies to all registrants that are creditors in loan transactions that, individually or in the aggregate, have a material effect on the registrant’s financial condition. This ASU guidance is applicable upon a registrant’s adoption of Accounting Standards Codification (“ASC”) Topic 326. On November 15, 2019, the FASB delayed the effective date of ASC Topic 326 for certain small public companies and other private companies. As amended, the effective date of ASC Topic 326 was delayed until fiscal years beginning after December 15, 2022 for U.S. Securities and Exchange Commission (“SEC”) filers that are eligible to be smaller reporting companies under the SEC’s definition, as well as private companies and not-for-profit entities. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

Moreover, the amendments in this ASU add a note to a SEC paragraph pursuant to the issuance of ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. The note added states that at the December 2019 AICPA National Conference on Current SEC and PCAOB Developments, the SEC staff announced that it would not object to a public business entity that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC adopting Topic 842 for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. This announcement is applicable only to public business entities that otherwise would not meet the definition of a public business entity except for a requirement to include or the inclusion of its financial statements or financial information in another entity’s filing with the SEC. This announcement is not applicable to other public business entities.

In January 2020, the FASB issued ASU 2020-01 “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)”, clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments under ASU 2018-13 remove, add, and modify certain disclosure requirements on fair value measurements in ASC 820. In particular, the following disclosure were added: (i) The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; (ii) The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. The Company adopted the amendments in the three months period ended March 31, 2020, and the adoption did not have a material impact on its condensed consolidated financial statements.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (‘‘US GAAP’’) applicable for an “emerging growth company” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”). The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards. In particular, an emerging growth company can delay the adoption of certain accounting standards until those standards would apply to private companies. For the purpose of these consolidated financial statements, the Company availed itself of an extended transition period for complying with new or revised accounting standards and, as a result, did not adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for public companies.

Liquidity

In connection with Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40), Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, the Company evaluated its ability to continue as a going concern. While the Company has positive cash flows from operating activities, its current liabilities exceed its current assets as of December 31, 2019. The consolidated balance sheet as of December 31, 2019 includes total current assets of $86.5 million and total current liabilities of $125.9 million, resulting in net liabilities due within the next 12 months of $39.4 million.

The Company’s business operations continued to grow in line with expectations showing positive operating margins (excluding non-recurring costs). However, the Business Combination generated significant obligations including (i) $13.1 million of liabilities related to non-recurring Business Combination transaction related costs; (ii) $15.0 million of deferred consideration to sellers in the Business Combination transaction (iii) $13.2 million of net obligations under certain Shares Purchase Forward Agreements entered into by GigCapital Inc. prior to the Business Combination; and (iv) $3.6 million of notes payable acquired as a result of the Business Combination.

Management, concerned about the Company’s ability to fulfil these obligations, made the decision to evaluate opportunities to refinance or renegotiate some of its current obligations and, during the first four months of 2020 put in place several actions aimed to achieve such goal. Such actions, described in more details in Note 27—Subsequent Events, include, among others:

• the subscription of a new loan agreement with a bank that is currently a lender to the Company;

• signing of two new line of credit facilities;

• a refinanced loan that extended payment terms and provided additional funds;

• the amendments of the repayment schedules of certain existing long-term financing agreements to postpone the amounts due in the next three to six months of 2020; and

• the renegotiation of the payment terms of a payable related to costs incurred in the Business Combination.

Considering the effects of these actions and the typical financial cycle of Kaleyra, Kaleyra’s management believes that the Company’s cash, cash flows from operations, financings and amendments to agreements subsequent to December 31, 2019, and availability of borrowings, as described above, will be sufficient to support its planned operations for at least the next 12 months from the date these consolidated financial statements were issued.

Principles of Consolidation

The consolidated financial statements include the Company and its wholly-owned subsidiaries, including Kaleyra S.p.A., Solutions Infini and Buc Mobile, which represent its major operations. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are used for, but not limited to, allowance for doubtful accounts; valuation of the Company’s stock-based awards; recoverability of long-lived and intangible assets; capitalization and useful life of the Company’s capitalized internal-use software development costs; fair value of acquired intangible assets and goodwill; accruals and contingencies, including tax related provision and valuation allowance on deferred taxes. Estimates are based on historical experience and on various assumptions that the Company believes are reasonable under current circumstances. However, future events are subject to change and best estimates and judgments may require further adjustments; therefore, actual results could differ materially from those estimates. Management periodically evaluates such estimates and they are adjusted prospectively based upon such periodic evaluation.

Concentration of Credit Risk

Financial instruments that potentially expose the Company to a concentration of credit risk consist primarily of cash and cash equivalents, marketable securities and trade receivables. The Company maintains cash and cash equivalents and marketable securities with financial institutions that management believes are financially sound.

The Company sells its services to a wide variety of customers. If the financial condition or results of operations of any significant customers deteriorate substantially, operating results could be adversely affected. To reduce credit risk, management performs ongoing credit evaluations of the financial condition of significant customers. The Company maintains reserves for estimated credit losses on customer accounts when considered necessary. Actual credit losses may differ from the Company’s estimates. In the years ended December 31, 2019 and 2018, there were one and three customers, respectively, that individually accounted for more than 10% of the Company’s consolidated total revenue. In particular in 2019, revenue generated by the first, second and third major customer of the Company accounted for $13.4 million, $10.9 million and $9.2 million; respectively, while in 2018, revenue generated by the first, second and third major customer of the Company accounted for $13.6 million, $8.1 million and $8.8 million, respectively. As of December 31, 2019 and 2018, no individual customer accounted for more than 10% of the Company’s consolidated total trade receivables.

Revenue Recognition

Adoption of Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers”

Effective January 1, 2019, the Company adopted Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” (“ASC 606”), which replaced the existing revenue recognition guidance, ASC 605, and outlines a single set of comprehensive principles for recognizing revenue under US GAAP. Among other things, ASC 606 requires entities to assess the products or services promised in contracts with customers at contract inception to determine the appropriate unit at which to record revenue, which is referred to as a performance obligation. Revenue is recognized when control of the promised products or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those products or services.

The Company did not record any adjustment to the beginning retained earnings as of January 1, 2019 in connection with the adoption of the new standard.

Prior to the adoption of ASC 606, the Company recognized the majority of its revenue according to the usage by its customers in the period in which that usage occurred. ASC 606 continues to support the recognition of revenue over time, and on a usage basis, for the majority of the Company’s contracts due to continuous transfer of control to the customer.

Revenue Recognition Policy

The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers. Taxes collected are subsequently remitted to governmental authorities.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

The Company’s revenue is primarily derived from usage-based fees earned from the sale of communications services offered through software solutions to large enterprises, as well as small and medium-sized customers.

The Company’s revenue is recognized upon the sending of a SMS message or by the authentication of a financial transaction of an end user of the Company’s customer using the Company’s platform in an amount that reflects the consideration the Company expects to receive in exchange for those services which is generally based upon agreed fixed prices per unit.

Platform access is considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. After usage occurs, there are no remaining obligations that would preclude revenue recognition. Revenue from usage-based fees represented 98% of total revenue, both in the years ended December 31, 2019 and 2018.

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support, which is generally one year. Term-based contract revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 2% of total revenue, both in the years ended December 31, 2019 and 2018.

The Company’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

Contract Balances

The Company receives payments from customers based on a billing schedule as established in its contracts. Contract assets are recorded when the Company has a conditional right to consideration for its completed performance under the contracts. Trade receivables are recorded when the right to this consideration becomes unconditional, which is as usage occurs. The Company did not have any contract assets as of December 31, 2019.

Deferred revenue is recorded when cash payments are received in advance of future usage on non-cancellable contracts. As of December 31, 2019 and 2018, the Company recorded $1.4 million and $1.5 million, respectively, as deferred revenue on its consolidated balance sheets. The deferred revenue balance as of December 31, 2018 was entirely recognized as revenue in the year ended December 31, 2019.

Disaggregated Revenue

In general, revenue disaggregated by geography is aligned according to the nature and economic characteristics of the Company’s business and provides meaningful disaggregation of the Company’s results of operations. Refer to Note 17—Geographic Information for details of revenue by geographic area.

Cost of Revenue

Cost of revenue consists primarily of costs of communications services purchased from network service providers. Cost of revenue also includes the cost of the Company’s cloud infrastructure and technology platform, amortization of capitalized internal-use software development costs related to the platform applications and amortization of developed technology acquired in the business combinations.

Research and Development Expenses

Research and development expenses consist primarily of personnel costs, the costs of the technology platform used for staging and development, outsourced engineering services, amortization of capitalized internal-use software development costs and an allocation of general overhead expenses. The Company capitalizes the portion of its software development costs that meet the criteria for capitalization.

Internal-use Software Development Costs

Certain costs of the technology platform and other software applications developed for internal use are capitalized. The Company capitalizes qualifying internal-use software development costs that are incurred during the application development stage. Capitalization of costs begins when two criteria are met: (i) the preliminary project stage is completed, and (ii) it is probable that the software will be completed and used for its intended purpose. Capitalization ceases when the software is substantially complete and ready for its intended use, including the completion of all-significant testing. The Company also capitalizes costs related to specific upgrades and enhancements when it is probable the expenditures will result in additional functionality and expenses costs incurred for maintenance and minor upgrades and enhancements. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred.

Capitalized costs of platform and other software applications are included in property and equipment. These costs are amortized over the estimated useful life of the software of four years on a straight-line basis. Management evaluates the useful life of these assets on an annual basis and tests for impairment whenever events or changes in circumstances occur that could affect the recoverability of these assets. The amortization of costs related to the platform applications is included in cost of revenue, while the amortization of costs related to other software applications developed for internal use is included in research and development expenses.

Advertising Costs

Advertising costs are expensed as incurred and were $956,000 and $578,000 in the years ended December 31, 2019 and 2018, respectively. Advertising costs are included in sales and marketing expenses in the accompanying consolidated statement of operations.

Marketable Securities

Investments in marketable securities are carried at fair value and classified as available-for-sale securities. Realized gains and losses on available-for-sale securities are included in financial expense, net in the consolidated statements of operations. Unrealized gains and losses, net of deferred taxes, on available-for-sale securities are included in the consolidated balance sheets as a component of accumulated other comprehensive income (loss). In the event the fair value of an investment declines below its cost basis, management is required to determine if the decline in fair value is other than temporary. If management determines the decline is other than temporary, an impairment charge is recorded. As of December 31, 2019 and 2018, the Company had marketable securities of $5.1 million and $3.2 million; respectively relating to mutual funds with no stated maturity.

Stock-Based Compensation

The Company measures and recognizes the compensation expense for restricted stock units (“RSUs”) granted to employees and directors, based on the fair value of the award on the grant date.

RSUs give an employee an interest in Company stock but they have no tangible value until vesting is complete. RSUs are equity classified and measured at the fair market value of the underlying stock at the grant date and recognized as expense over the related service or performance period. The Company elected to account for forfeitures as they occur. The fair value of stock awards is based on the quoted price of our common stock on the grant date. Compensation cost for RSUs is recognized using the straight-line method over the requisite service period.

In June 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-07, “Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting”. The aim of the update is to simplify several aspects of the accounting for nonemployee share-based payment transactions resulting from expanding the scope of Topic 718, Compensation—Stock Compensation, to include share-based payment transactions for acquiring goods and services from nonemployees. As a result, nonemployee share-based payment equity awards are measured at the grant date fair value of the equity instruments, similar to employee share-based payment equity awards.

The Company adopted ASU 2018-07 in 2019, following the adoption of Topic 606. At the transition date, there were no nonemployee share-based compensation awards.

Employee Benefit Plans

The Company has defined benefit plans, granted to Italian and Indian employees and regulated by Italian and Indian laws, respectively. The defined benefit plans are calculated based on the employee compensation and the duration of the employment relationship and are paid to the employee upon termination of the employment relationship. The costs of the defined benefit plans reported in the Company’s consolidated statement of operations is determined by actuarial calculation performed on an annual basis. The actuarial valuation is performed using the “Projected Unit Credit Method” based on the employees’ expected date of separation or retirement.

As a part of the purchase agreement relating to the 2018 acquisition of Solutions Infini by Kaleyra, the Company assumed the obligation to purchase a number of preference shares from certain employees in 2020 at a price determined based on the EBITDA of Solutions Infini for its fiscal year ending March 31, 2020. These preference shares represent compensation for future services for the eligible employees. The Company accounts for the liability related to the preference shares over the relevant period from July 2017 to July 2020, charging the consolidated statements of operations on a straight-line basis over that period.

Income Taxes

The Company accounts for income taxes in accordance with the asset and liability approach method. Deferred tax assets and liabilities are recognized for future tax consequences attributable to temporary differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. Deferred tax amounts are determined by using the enacted tax rates expected to be in effect when the temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance reduces the deferred tax assets to the amount that is more likely than not to be realized.

The Company recognizes the effect of income tax positions only if those positions are more-likely-than-not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50 percent likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

The Company records interest and penalties related to an underpayment of income taxes in income tax expense in the consolidated statements of operations.

Foreign Currency Translation

The functional currency of the parent company is the US Dollar. The functional currency of Kaleyra S.p.A. is the Euro, the functional currency of Solutions Infini is the India Rupee and the functional currency of Buc Mobile is the US Dollar.

Each company remeasures monetary assets and liabilities denominated in currencies other that its functional currency at period-end exchange rates and non-monetary items are at historical rates. Remeasurement adjustments are recognized in the consolidated statements of operations as foreign currency (income) loss in the period of occurrence.

These consolidated financial statements are presented in US Dollars. For legal entities where the functional currency is a currency other than the US Dollar, adjustments resulting from translating the financial statements into US Dollars are recorded as a component of accumulated other comprehensive income in stockholders’ equity (deficit). Monetary assets and liabilities denominated in a currency that is other than the US Dollar are translated into US Dollars at the exchange rate on the balance sheet date. Revenue and expenses are translated at the weighted average exchange rates during the period. Equity transactions are translated using historical exchange rates.

Comprehensive Income (Loss)

Comprehensive income (loss) refers to net income (loss) and other revenue, expenses, gains and losses that, under US GAAP, are recorded as an element of stockholders’ equity but are excluded from the calculation of net income (loss). See Note 13 – Accumulated Other Comprehensive Income (Loss).

Earnings (Loss) per Share

The equity structure in the consolidated financial statements following a reverse recapitalization reflects the equity structure of the legal acquiror (the accounting acquiree), including the equity interests issued by the legal acquiror to effect the business combination.

Basic earnings (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. In calculating the weighted-average number of common shares during the period in which the reverse merger occurs (fiscal year 2019):

a. The number of common shares outstanding from the beginning of that period to the acquisition date shall be computed on the basis of the weighted-average number of common shares of the legal acquiree (accounting acquiror) outstanding during the period multiplied by the exchange ratio established in the merger agreement;

b. The number of common shares outstanding from the acquisition date to the end of that period shall be the actual number of common shares of the legal acquiror (the accounting acquiree) outstanding during that period.

The basic EPS for each comparative period before the acquisition date presented in the consolidated financial statements following a reverse merger shall be calculated by dividing (i) by (ii):

i. The income of the legal acquiree attributable to common stockholders in each of those periods;

ii. The legal acquiree’s historical weighted average number of common shares outstanding multiplied by the exchange ratio established in the acquisition agreement.

Diluted net income (loss) per share is calculated by giving effect to all potentially dilutive common stock when determining the weighted-average number of common shares outstanding. For purposes of the diluted net income (loss) per share calculation, RSUs, options and warrants to purchase common stock are considered common stock equivalents.

Cash and Cash Equivalents

The Company considers all liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of funds deposited into saving accounts.

Restricted Cash

Restricted cash consists of cash deposited into a savings account with a financial institution as collateral for the Company’s obligations under the Forward Share Purchase Agreement with Glazer Capital and with Yakira Capital Management, Inc. See Note 10—Debt for Forward Share Purchase Agreements for a description of the contracts and Note 27 for amendments to the contracts made after year-end.

In November 2016, the FASB issued ASU No. 2016-18, “Statement of Cash Flows (Topic 830)—Restricted Cash” (“ASU 2016-18”). This standard provides guidance on the presentation of restricted cash and cash equivalents in the consolidated statements of cash flows. Restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the consolidated statements of cash flows. The Company adopted ASU 2016-18 in the first quarter of 2019 and applied the guidance retrospectively in the prior period’s consolidated statements of cash flows.

Other than the revised consolidated statements of cash flows presentation of restricted cash, the adoption of ASU 2016-18 did not have an impact on the Company’s consolidated financial statements.

The restricted cash balances as of December 31, 2019 and December 31, 2018 were $20.9 million and zero, respectively.

Trade Receivables and Allowance for Doubtful Accounts

Trade receivables are recorded net of an allowance for doubtful accounts. The allowance for doubtful accounts is estimated based on the Company’s assessment of its ability to collect on customer trade receivables. The Company regularly reviews the allowance by considering certain factors such as historical experience, credit quality, age of trade receivables balances and other known conditions that may affect a customer’s ability to pay. In cases where the Company is aware of circumstances that may impair a specific customer’s ability to meet their financial obligations, a specific allowance is recorded against amounts due from the customer which reduces the net recognized receivable to the amount the Company reasonably believes will be collected. The Company writes-off trade receivables against the allowance when a determination is made that the balance is uncollectible, and collection of the receivable is no longer being actively pursued.

The allowance for doubtful accounts was $873,000 and $157,000 as of December 31, 2019 and 2018, respectively.

Property and Equipment, net

Property and equipment is stated at cost less accumulated depreciation or amortization.

Depreciation and amortization are computed using the straight-line method over the estimated useful life of the related asset. Maintenance and repairs are expensed as incurred.

The useful lives of property and equipment are as follows:

Internal-use software development costs	4 years
Servers	3 - 6 years
Office equipment	3 - 5 years
Leasehold improvements	5 years or remaining lease term (1)
Furniture and fixtures	4 - 8 years
Vehicles	8 - 10 years
Software	3 years
Other assets	4 years

(1) Including renewal options

Intangible Assets, net

Intangible assets recorded by the Company are costs directly associated with securing legal registration of patents and the fair value of identifiable intangible assets acquired in business combinations.

Intangible assets with determinable economic lives are carried at cost, less accumulated amortization. Intangible assets arising from business combinations, such as customer relationship and developed technology, were initially recorded at estimated fair value. Amortization is computed over the estimated useful life of each asset on a straight-line basis, except for customer relationships, which are amortized over the best estimate of their expected useful life using an accelerated method (“sum of years’ digits method”), in order to better approximate the pattern in which their economic benefit are expected to be consumed. The Company determines the useful lives of identifiable intangible assets after considering the facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, the Company’s long-term strategy for using the asset, any laws or other local regulations which could impact the useful life of the asset and other economic factors, including competition and specific market conditions. Intangible assets without determinable economic lives are carried at cost, not amortized and reviewed for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The useful lives of the intangible assets are as follows:

Developed technology	3 - 6 years
Customer relationships (accelerated method)	15 - 17 years
Patent	3 - 7 years

Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of net identifiable assets acquired in a business combination. Goodwill is not amortized and is tested for impairment on an annual basis or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The Company has selected December 31 as the date to perform its annual impairment test. In the valuation of goodwill, management must make assumptions regarding estimated future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment for these assets. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if a two-step impairment test is necessary. Management may choose to proceed directly to the two-step evaluation, bypassing the initial qualitative assessment. The first step of the impairment test involves comparing the fair value of the reporting unit to which goodwill is allocated to its net book value, including goodwill. If the net book value exceeds its fair value, then the Company would perform the second step of the goodwill impairment test to determine the amount of the impairment loss. The impairment loss would be calculated by comparing the implied fair value of the goodwill to its net book value. In calculating the implied fair value of goodwill, the fair value of the entity would be allocated to all of the other assets and liabilities based on their fair values. The excess of the fair value of the entity over the amount assigned to other assets and liabilities is the implied fair value of goodwill. An impairment loss would be recognized when the carrying amount of goodwill exceeds its implied fair value. No goodwill impairment charges have been recorded for any period presented.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. There was no impairment during the years ended December 31, 2019 and 2018.

Deferred Revenue

Deferred revenue consists of advance payments from customers to be applied against future usage and customer billings in advance of revenues being recognized under the Company’s contracts. Deferred revenue is generally expected to be recognized during the succeeding 12-month period and is thus recorded as a current liability.

Segment Information

The Company’s Chief Executive Officer is the chief operating decision maker, who reviews the Company’s financial information presented on a consolidated basis for purposes of allocating resources and evaluating the Company’s financial performance. Accordingly, the Company has determined that it operates in a single reporting segment.

Derivatives

The Company has not historically entered into hedging derivatives in the ordinary course of its business. In connection with the acquisition of Solutions Infini and Buc Mobile, the Company entered into certain derivative contracts to serve as an economic hedge for risk management purposes. These derivatives include exchange rate forwards on the purchase prices denominated in Indian Rupee for the acquisition of Solutions Infini and in US Dollars for the acquisition of Buc Mobile and interest rate swaps on the bank borrowings entered into by the Company to finance the acquisitions. These derivatives were not designated as hedging instruments under US GAAP. Because hedge accounting was not applied, those derivatives have been recorded at fair value on the consolidated balance sheets with changes in fair value recorded in financial expense, net in the consolidated statements of operations. In 2019, following the payments of the consideration for the acquisitions, the exchange rate forward contracts on the purchase prices were settled.

Forward Shares Purchase Agreements

During 2019, the Company entered into certain third-party put option arrangements assuming the obligation to repurchase its common stock at a future date by transferring cash to the third-party under certain conditions described in more detail in Note 10 below. Such obligation has been recorded at fair value in the consolidated balance sheets with changes in fair value recorded in financial expense, net in the consolidated statements of operations.

Business Combinations

The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement.

The authoritative guidance allows a measurement period of the purchase price allocation that ends when the entity has obtained all relevant information about facts that existed at the acquisition date, and that cannot exceed one year from the date of acquisition. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded to the consolidated statements of operations.

Fair Value of Financial Instruments

The Company’s financial instruments, which include cash, cash equivalents, restricted cash, trade receivables and accounts payable are recorded at their carrying amounts, which approximate their fair value due to their short-term nature. All marketable securities are considered available-for-sale and recorded at their estimated fair values. Unrealized gains and losses for available-for-sale securities are recorded in other comprehensive income (loss). In valuing these items, the Company uses inputs and assumptions that market participants would use to determine their fair value, utilizing valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

Impairments are considered other than temporary if they are related to deterioration in credit risk or if it is likely that the security will be sold before the recovery of its cost basis. Realized gains and losses and declines in value deemed to be other than temporary are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations.

The accounting guidance for fair value provides a framework for measuring fair value, clarifies the definition of fair value, and expands disclosures regarding fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2: Other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

Net cash settlements on derivatives that do not qualify for hedge accounting are reported in financial income as part of financial expense, net in the consolidated statements of operations.

Recent Accounting Pronouncements

In January 2020, the FASB issued ASU 2020-01 “Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)”, clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The amendments in this ASU clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that: (a) an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method; (b) an entity should not consider whether, upon the settlement of the forward contract or exercise of the purchased option, individually or with existing investments, the underlying securities would be accounted for under the equity method in Topic 323 or the fair value option in accordance with the financial instruments guidance in Topic 825. For public business entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, including emerging growth companies as defined in the JOBS Act, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted, including early adoption in an interim period, (1) for public business entities for periods for which financial statements have not yet been issued and (2) for all other entities for periods for which financial statements have not yet been made available for issuance. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In November 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”. The objective of the simplification initiative is to identify, evaluate, and improve areas of US GAAP for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In November 2018, the FASB issued ASU 2018-18, “Collaborative Arrangements (Topic 808)”, clarifying the interaction between Topic 808 and Topic 606. A collaborative arrangement is a contractual arrangement under which two or more parties actively participate in a joint operating activity and are exposed to significant risks and rewards that depend on the activity’s commercial success. Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Some entities apply revenue guidance directly or by analogy to all or part of their arrangements, and others apply a different accounting method as an accounting policy. Those accounting differences result in diversity in practice on how entities account for transactions on the basis of their view of the economics of the collaborative arrangement. For public business entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract”. This standard aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. For all other entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early adoption is permitted, including adoption in any interim period, for all entities. The amendments in this ASU should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820) Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. The amendments under ASU 2018-13 remove, add, and modify certain disclosure requirements on fair value measurements in ASC 820. The amendments are effective for all entities for fiscal years, and interim periods within those years, beginning after December 15, 2019. An entity shall apply the ASU retrospectively to all periods presented. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In July 2018, the FASB issued ASU 2018-09, “Codification Improvements”, which does not prescribe any new accounting guidance, but instead makes minor improvements and clarifications of several different FASB ASC areas based on comments and suggestions made by various stakeholders. The transition and effective date guidance is based on the facts and circumstances of each amendment. Some of the amendments in this ASU do not require transition guidance and will be effective upon issuance of this ASU. However, there are some conforming amendments in this ASU that have been made to recently issued guidance that is not yet effective that may require application of the transition and effective date guidance in the original ASU. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In December 2017, the FASB issued ASU 2017-15, “Codification Improvements—Elimination of Topic 995”, which supersede obsolete guidance in Topic 995 on unrecognized deferred taxes related to certain statutory reserve deposits. If an entity has unrecognized deferred income taxes related to statutory deposits made on or before December 15, 1992, the entity would be required to recognize the unrecognized income taxes in accordance with Topic 740. The amendments are effective for fiscal years and first interim periods beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. The Company adopted the amendments in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In April 2019, the FASB issued ASU 2019-04, “Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments”, which affect a variety of Topics in the Codification. For entities that have not yet adopted the amendments in ASU 2016-13, the effective dates and transition requirements for the amendments are the same as the effective dates and transition requirements in ASU 2016-13. For entities that have adopted the amendments in ASU 2016-13, the amendments are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted in any interim period as long as the entity has adopted the amendments in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07, “Compensation—Retirement Benefits (Topic 715)”, which requires that an employer report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. This ASU is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those annual periods. For other entities, the amendments are effective for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. Early adoption is permitted. The Company adopted the provisions of this ASU in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715-20)”, which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The amendments are effective for fiscal years ending after December 15, 2020 for public business entities and for fiscal years ending after December 15, 2021 for all other entities. Early adoption is permitted for all entities. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment”, which removes the second step of the goodwill impairment test that requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective prospectively for public business entities for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2020 and for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2021 for other entities. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”, which amends the guidance of ASC Topic 805, “Business Combinations”, adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. This guidance is effective for public entities for annual periods beginning after December 15, 2017, including interim periods within those periods; for all other entities for annual periods beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019 and early adoption is permitted under certain circumstances. The Company adopted this standard in fiscal year 2019, and the adoption did not have a material impact on its consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments”, which changes the impairment model for most financial assets. The new model uses a forward-looking expected loss method, which will generally result in earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018-19, “Codification Improvements to Topic 326, Financial Instruments— Credit Losses”, which clarifies that receivables arising from operating leases are not within the scope of Topic 326, Financial Instruments—Credit Losses. Instead, impairment of receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. These ASUs are effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, and for other entities for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2019, the FASB issued ASU 2019-05, “Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief”, which provides a targeted transition relief and provides entities that have certain instruments, with an option to irrevocably elect the fair value option, applied on an instrument-by-instrument basis for eligible instruments, upon adoption of Topic 326. The fair value option election does not apply to held-to-maturity debt securities. For entities that have not yet adopted the amendments in ASU 2016-13, the effective date and transition methodology for the amendments in this ASU are the same as in ASU 2016-13. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases”, which was further clarified by ASU 2018-10, “Codification Improvements to Topic 842, Leases”, and ASU 2018-11, “Leases—Targeted Improvements”, both issued in July 2018. ASU 2016-02 affects all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. ASU 2018-10 clarifies or corrects unintended application of guidance related to ASU 2016-02. The amendment affects narrow aspects of ASU 2016-02 related to the implicit rate in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. ASU 2018-11 adds a transition option for all entities and a practical expedient only for lessors. The transition option allows entities to not apply the new lease standard in the comparative periods they present in their financial statements in the year of adoption. Under the transition option, entities can opt to continue to apply the legacy guidance in ASC 840, “Leases”, including its disclosure requirements, in the comparative prior periods presented in the year they adopt the new lease standard. Entities that elect this transition option will still be required to adopt the new leases standard using the modified retrospective transition method required by the standard, but they will recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. The practical expedient provides lessors with an option to not separate the non-lease components from the associated lease components when certain criteria are met and requires them to account for the combined component in accordance with the revenue recognition standard in ASC 606 if the associated non-lease components are the predominant components. The new standards are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years for a public business entity. For all other entities, the amendments in this ASU are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Earlier application is permitted. While the Company expects the adoption of these standards to result in a material increase to the reported assets and liabilities, the Company has not yet determined the full impact that the adoption of this standard will have on its consolidated financial statements.

In November 2019, the FASB issued ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates”. The amendments in this ASU amend certain effective dates for the following major ASUs (including amendments issued after the issuance of the original ASU). The effective dates for Leases after applying this ASU are as follows: Public business entities; not-for-profit entities that have issued or are conduit bond obligors for securities that are traded, listed, or quoted on an exchange or an over-the-counter market; and employee benefit plans that file or furnish financial statements with or to the SEC for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed.

ASU 2019-10 “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates” amend certain effective dates for the following major updates (including amendments issued after the issuance of the original ASU):

a)    Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (Credit Losses). The amendments in this ASU amend the mandatory effective dates for Credit Losses for all entities as follows: Public business entities that meet the definition of a Securities and Exchange Commission (SEC) filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

b)    Accounting Standards Update No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (Hedging). The effective dates for Hedging after applying this ASU are as follows: Public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. All other entities for fiscal years beginning after December 15, 2020, and interim periods within fiscal years beginning after December 15, 2021. Early application continues to be allowed. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers”. This new guidance will replace most existing US GAAP guidance on this topic. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 was originally effective for public entities for annual reporting periods beginning after December 15, 2016, and interim periods within that reporting period. The effective date for all other entities was for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. In August 2015, the FASB issued ASU 2015-14 which deferred, by one year, the effective date for the new revenue reporting standard for entities reporting under US GAAP. For Kaleyra, as an emerging growth company, ASU 2014-09 was effective for annual reporting periods beginning after December 15, 2018. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers, Principal versus Agent Considerations (Reporting Revenue Gross versus Net)” clarifying the implementation guidance on principal versus agent considerations. Specifically, an entity is required to determine whether the nature of a promise is to provide the specified good or service itself (that is, the entity is a principal) or to arrange for the good or service to be provided to the customer by another party (that is, the entity is an agent). The determination influences the timing and amount of revenue recognition. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers, Identifying Performance Obligations and Licensing”, clarifying the implementation guidance on identifying performance obligations and licensing. Specifically, the amendments reduce the cost and complexity of identifying promised goods or services and improve the guidance for determining whether promises are separately identifiable. The amendments also provide implementation guidance on determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). In May 2016, the FASB issued ASU 2016-12 “Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients”, which amends the guidance on transition, collectability, noncash consideration and the presentation of sales and other similar taxes. ASU 2016-12 clarifies that, for a contract to be considered completed at transition, all (or substantially all) of the revenue must have been recognized under legacy GAAP. In addition, ASU 2016-12 clarifies how an entity should evaluate the collectability threshold and when an entity can recognize nonrefundable consideration received as revenue if an arrangement does not meet the standard’s contract criteria. In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842)”. These amendments provide additional clarification and implementation guidance on the previously issued ASUs. These amendments do not change the core principles of the guidance stated in ASU 2014-09, instead they are intended to clarify and improve operability of certain topics included within the revenue standard. In November 2017, the FASB issued ASU 2017-14, which includes amendments to certain SEC paragraphs within the FASB Accounting Standards Codification (Codification). ASU 2017-14 amends the Codification to incorporate SEC Staff Accounting Bulletin (SAB) No. 116 and SEC Interpretive Release on Vaccines for Federal Government Stockpiles (SEC Release No. 33-10403) that bring existing SEC staff guidance into conformity with the FASB’s adoption of and amendments to ASC Topic 606, Revenue from Contracts with Customers. The effective date and transition requirements for ASU 2016-08, ASU 2016-10, ASU 2016-12, ASU 2017-13 and ASU 2017-14 are the same as the effective date and transition requirements for ASU 2015-14. The Company adopted the new accounting standard in fiscal year 2019, and, as mentioned above, the adoption did not have a material impact on its consolidated financial statements.

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Goodwill and Intangible Assets, Net

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets, Net

5. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill as of March 31, 2020 and December 31, 2019 was as follows (in thousands):

Balance as of December 31, 2019	$	16,953
Effect of exchange rate		(583	)
Balance as of March 31, 2020	$	16,370

Intangible assets, net

Intangible assets consisted of the following (in thousands):

	As of March 31, 2020						As of December 31, 2019
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortizable Intangible Assets:
Developed technology	$	2,711	$	1,080	$	1,631	$	2,775	$	952	$	1,823
Customer relationships		8,777		1,826		6,951		9,077		1,631		7,446
Patent		118		35		83		113		29		84
Total amortizable intangible assets	$	11,606	$	2,941	$	8,665	$	11,965	$	2,612	$	9,353

Amortization expense was $422,000 and $449,000 for the three months ended March 31, 2020 and 2019, respectively.

Total estimated future amortization expense as of March 31, 2020 is as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	1,221
2021		1,409
2022		1,138
2023		1,035
2024		834
2025 and thereafter		3,028
Total	$	8,665

6. GOODWILL AND INTANGIBLE ASSETS, NET

Goodwill

Goodwill as of December 31, 2019 and 2018 was as follows (in thousands):

Balance as of December 31, 2018	$	17,276
Effect of exchange rate		(323	)
Balance as of December 31, 2019	$	16,953

Intangible assets, net

Intangible assets consisted of the following (in thousands):

	As of December 31,
	2019						2018
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortizable Intangible Assets
Developed technology	$	2,775	$	952	$	1,823	$	2,810	$	310	$	2,500
Customer relationships		9,077		1,631		7,446		9,243		555		8,688
Patent		113		29		84		99		11		88
Total amortizable intangible assets	$	11,965	$	2,612	$	9,353	$	12,152	$	876	$	11,276

Amortization expense was $1.8 million and $860,000 for the years ended December 31, 2019 and 2018, respectively.

Total estimated future amortization expense as of December 31, 2019 is as follows (in thousands):

	As of December 31, 2019
2020	$	1,689
2021		1,451
2022		1,169
2023		1,062
2024		854
2025 and thereafter		3,128
Total	$	9,353

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Debt for Forward Share Purchase Agreements

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt for Forward Share Purchase Agreements

8. DEBT FOR FORWARD SHARE PURCHASE AGREEMENTS

As of March 31, 2020, the Company’s debt for forward share purchase agreements amounted to $31.5 million and accrued interest amounted to $163,000.

Greenhaven

On September 27, 2019, the Company and Greenhaven Road Capital Fund 1, LP, a Delaware limited partnership (“Greenhaven Fund 1”), and Greenhaven Road Capital Fund 2, LP, a Delaware limited partnership (“Greenhaven Fund 2” and together with Greenhaven Fund 1, “Greenhaven”) entered into a forward share purchase agreement (the “Greenhaven Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of its common stock into which Rights of the Company held by Greenhaven and any additional Rights that Greenhaven acquired, converted into shares upon the closing of the Business Combination as amended as of December 13, 2019 at the following prices: (1) $11.00 per share for the first 196,195 shares sold to the Company; (2) $10.70 per share for the next 250,000 shares sold to the Company; and (3) $10.50 per share for the next 550,000 shares sold to the Company. The Company agreed to purchase the shares on the later of the sixtieth day after the Closing of the Business Combination or January 1, 2020 (the “Greenhaven Purchase Closing Date”).

In exchange for Kaleyra, Inc.’s commitment to acquire the shares on the Greenhaven Purchase Closing Date, each of Greenhaven Fund 1 and Greenhaven Fund 2 agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of Kaleyra, Inc.’s securities), the Rights (including any additional Rights) held by Greenhaven, and any shares that such Rights (including any additional Rights) converted into, until the Greenhaven Purchase Closing Date, including not to tender the Rights (or any additional Rights) to Kaleyra, Inc. in response to any tender offer that Kaleyra, Inc. may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Greenhaven shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least 25,000 shares (the “Minimum Block Size Condition”) in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, Greenhaven shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, Greenhaven shall have the right to sell such shares at any time provided that the price received by Greenhaven (not including any commissions due by Greenhaven for the sale) is at least $10.50 (or at least $8.50 if Greenhaven meets the Minimum Block Size Condition). In the event that Greenhaven sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that Greenhaven meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay Greenhaven in accordance with Greenhaven’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the Greenhaven Purchase Agreement shall prohibit Greenhaven from entering into a contract to purchase and/or sell warrants of Kaleyra, Inc.

On January 23, 2020, the Company entered into Amendment No. 3 to the Greenhaven Forward Share Purchase Agreement (the “Greenhaven Amendment”). The Greenhaven Amendment provides that Greenhaven has the right to put its subject shares to the Company on the following dates and at the following purchase prices: (i) $11.00 per share for up to 248,963 shares to be sold to the Company on February 21, 2020; and (ii) $11.70 per share for the next 700,000 shares to be sold to the Company on August 30, 2020. Greenhaven may continue to sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $8.50 per share. On February 20, 2020, the Company repurchased an aggregate of 235,169 of its common stock for $2.6 million. In addition, the Company paid Greenhaven $152,000 for the 60,996 shares that Greenhaven sold on the open market representing the amount at which the $11.00 exceeded the selling price. On August 30, 2020, the Company shall pay Greenhaven an amount equal to (1) the number of shares (including any Additional Shares) sold by Greenhaven in the open market between February 21, 2020 and August 30, 2020 multiplied by (2) the amount by which $11.70 exceeds the sale price per share.

As of March 31, 2020, the Company’s debt in connection with the Greenhaven Purchase Agreement amounted to $8.2 million.

Kepos Alpha Fund

On October 1, 2019, the Company and Kepos Alpha Fund L.P., a Cayman Islands limited partnership (“KAF”), entered into a forward share purchase agreement (“KAF Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of common stock of the Company into which the Rights of the Company held by KAF, including any additional Rights that KAF acquired, converted into upon the closing of the Business Combination. The KAF Purchase Agreement was amended the following day to provide that the total number of additional Rights that KAF may acquire is 3,750,000 Rights. As amended December 13, 2019, the KAF Purchase Agreement provides that the Company would purchase such shares at the following price: (1) $10.70 per share for the first 102,171 shares sold to the Company; and (2) $10.50 per share for the next 93,676 shares sold to the Company. The Company agreed to purchase the shares on the earlier of the sixtieth day after the Business Combination or February 15, 2020 (the “KAF Purchase Closing Date”).

In exchange for the Company’s commitment to acquire the shares on the KAF Purchase Closing Date, KAF agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of the Company’s securities), the Rights (including any additional Rights) held by KAF, and any shares that such Rights (including any additional Rights) converted into, until the KAF Purchase Closing Date, including not to tender the Rights (or any additional Rights) to the Company in response to any Tender Offer that the Company may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that KAF shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, KAF shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, KAF shall have the right to sell such shares at any time provided that the price received by KAF (not including any commissions due by KAF for the sale) is at least $10.50 (or at least $8.50 if KAF meets the Minimum Block Size Condition). In the event that KAF sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that KAF meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay KAF in accordance with KAF’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the KAF Purchase Agreement shall prohibit KAF from entering into a contract to purchase and/or sell warrants of the Company.

On January 23, 2020, the Company entered into Amendment No. 3 to the KAF Forward Share Purchase Agreement and on April 7, 2020, the Company entered into Amendment No. 4 (the “KAF Amendments”). According to the last amendment, KAF has the right to put its subject shares to the Company on May 7, 2020 at a purchase price of: (i) $10.92 per share for the first 46,137 shares sold to the Company; and (ii) $10.82 per share for the next 93,676 Shares sold to the Company (collectively, the “KAF Share Purchase Price”). In the event the closing occurs after May 7, 2020, the KAF Share Purchase Price shall increase for the 93,676 shares sold to Kaleyra by 1% per full month until the closing date. KAF may elect, in its sole and absolute discretion, to extend the date on which it exercises its put right to a date that is provided upon 10 calendar days’ written notice. The KAF Amendments further provide that KAF may sell its subject shares in the open market, at its sole discretion, as long as the sales price is above $7.00 per share. In the event that KAF sells any shares (including any Additional Shares) at a sale price of less than $10.92 per share for the first 46,137 shares and $10.82 per share for the next 93,676 shares, the Company shall pay KAF an amount equal to (A) the number of shares (including any Additional Shares) sold multiplied by (B) the amount by which $10.92 or $10.82, as applicable, exceeds the sale price per share. Should the Company fail to make this payment, the Company shall, without prejudice or limitation to any other remedies available to KAF in law or equity, pay a penalty on such amount due at the rate of 18% per annum from the due date until the date of payment in full.

From January 1, 2020 to March 31, 2020, KAF sold 6,034 shares on the open market.

As of March 31, 2020, the Company’s debt in connection with the KAF Purchase Agreement amounted to $2.1 million.

Yakira Capital Management

On November 19, 2019, the Company and Yakira Capital Management, Inc. (“Yakira”) entered into a forward share purchase agreement (the “Yakira Purchase Agreement”) pursuant to which (i) Yakira may elect to sell and transfer to the Company, and the Company will purchase shares of common stock of the Company held by Yakira at the Business Combination Date (the “Yakira Shares”), and (ii) the Company will purchase the shares of common stock of the Company into which the Rights held by Yakira (the “Yakira Rights Shares”) were converted upon the Business Combination Date. At the Business Combination Date, Yakira held 439,299 rights, and 1,084,150 Yakira Shares.

The Company agreed that it will purchase the Yakira Rights Shares from Yakira at $1.05 per Right (which reflects $10.50 per Yakira Rights Share) (the “Yakira Rights Share Purchase Price”) as soon as practicable on or after the later of the sixtieth day after the Business Combination Date or January 1, 2020 (the “Yakira Rights Shares Closing Date”). In exchange for the Company’s agreement to purchase the Yakira Rights Shares, Yakira agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge the Rights (including any transactions involving any derivative securities of Yakira and any Short Sales involving any of the Company’s securities), and any Yakira Rights Shares that the rights converted into, until the Yakira Rights Shares Closing Date, including not to tender the Rights to the Company in response to any Tender Offer that the Company may commence for the Rights.

Yakira has the right to terminate the agreement for the Company to purchase the Yakira Rights Shares, without penalty, commencing on the thirtieth day after the Business Combination Date and ending on the day prior to the Yakira Rights Shares Closing Date, by giving written notice to the Company, in which case it will not be restricted after such time with respect to its ability to dispose of the Yakira Rights Shares (subject to the restrictions against transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities).

Except as described below, Yakira also agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any short sales involving any of the Company’s securities) the Yakira Shares prior to the six month anniversary of the Business Combination Date. Yakira further agreed to not redeem any of the Yakira Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. Notwithstanding anything to the contrary herein, commencing on the day after the Business Combination Date, Yakira may sell the Yakira Shares in the open market as long as the sales price is above $10.50 per Yakira Share.

If Yakira still owns Yakira Shares as of the four-month anniversary of the Business Combination Date, Yakira may sell such Yakira Shares between the four-month anniversary and six month anniversary of the Business Combination Date to the Company for a per share price (the “Yakira Shares Purchase Price”) equal to (a) $10.5019, plus (b) $0.03 per share for each month (prorated for a partial month) following the Business Combination Date that Yakira has held the Yakira Shares. The closing of the sale of the Yakira Shares to the Company shall occur on the business day following the Company’s receipt of the Yakira Shares exercise notice (the “Yakira Shares Closing Date”). On the Yakira Shares Closing Date, Yakira shall deliver the Yakira Shares to the Company against receipt of the aggregate Yakira Shares Purchase Price, which shall be paid by wire transfer of immediately available funds from the escrow account described below. Yakira may instruct the Escrow Agent to release to Yakira an amount equal to the Shares Purchase Price multiplied by the number of Yakira Shares delivered to the Company from the escrow account on the Yakira Shares Closing Date for Yakira’s use without restriction.

Following the Business Combination Date, the Company deposited into an escrow account with the Escrow Agent, subject to an escrow agreement, with a nationally chartered bank the amount of $11,576,509 related to Yakira. The Company’s purchase of the Yakira Shares will be made with funds from the escrow account attributed to the Yakira Shares. In the event that Yakira sells any Yakira Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and the Company may promptly release from the escrow account for its use without restriction an amount equal to the pro rata portion of the escrow account attributed to the Yakira Shares which Yakira has sold. In the event that Yakira chooses not to sell to the Company any Yakira Shares that it owns as of the six-month anniversary of the Business Combination Closing Date, the Company may promptly release all remaining funds from the escrow account for its use without restriction. In the event that the Yakira Shares Purchase Price paid on the Yakira Shares Closing Date is less than $10.6819 per Yakira Share, following payment of the Yakira Shares Purchase Price to Yakira, the Company and Yakira shall deliver joint written instructions to the Escrow Agent to release to Kaleyra from the remaining funds in the escrow account an amount equal to the difference between the Yakira Shares Purchase Price and $10.6819 per share multiplied by the number of Yakira Shares delivered by Yakira, and the Escrow Agent shall promptly disburse such amount to the Company in accordance with the payment instructions.

On February 7, 2020, the Yakira Purchase Agreement with Yakira was amended (the “First Yakira Amendment”). The First Yakira Amendment provides that the Company may be obligated to purchase some or all of the 43,930 Yakira Rights Shares if Yakira exercises an option to sell such shares to the Company at a purchase price of $10.93 per share (which is an increase from $10.50 per share) as soon as practicable on or after the six-month anniversary of the Business Combination Date.

On May 9, 2020, the Company entered into a second amendment to the Yakira Purchase Agreement (the “Second Amendment”). The Second Amendment provides that the Company will purchase from Yakira its 43,930 Rights Shares as soon as practicable on or after December 31, 2020.

Nothing in the Yakira Purchase Agreement prohibits or restricts Yakira with respect to the purchase or sale of the Company’s warrants.

As of March 31, 2020, the Company’s debt in connection with the Yakira Purchase Agreement amounted to $12.1 million. On May 12, 2020, Yakira gave notice to the Company that it was electing to sell and transfer to the Company all of the 1,084,150 Yakira Shares, and the purchase price for such sale and transfer is $11,580,782.

Glazer Capital, LLC

On November 19, 2019, the Company and Glazer Capital, LLC (“Glazer”) entered into a forward share purchase agreement (the “Glazer Purchase Agreement”) pursuant to which Glazer may elect to sell and transfer to the Company, and the Company will purchase the shares of the common stock of the company held by Glazer ( the “Glazer Shares”) at a price of $10.6819 per share (the “Glazer Shares Purchase Price”). Glazer shall notify the Company in writing five business days prior to the six month anniversary of the Business Combination Date if it is not exercising its right to sell the Glazer Shares to the Company; otherwise, absent written notification to the contrary, Glazer shall be deemed to have exercised its right to sell all of its Glazer Shares to the Company. The Company will purchase the Glazer Shares from Glazer on the six-month anniversary of the closing of the Business Combination (the “Glazer Shares Closing Date”). As of the Business Combination Date, Glazer held 922,933 shares of common stock.

In exchange for the Company’s commitment to purchase the Glazer Shares on the Glazer Shares Closing Date, Glazer agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities) the Glazer Shares prior to the six month anniversary of the Business Combination Date. Glazer further agreed that it will not redeem any of the Glazer Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Glazer shall, commencing on the day after the Business Combination Closing Date, have the right but not the obligation to sell its shares (including any Additional Shares) in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share prior to payment of any commissions due by Glazer for the sale, or, without meeting the Minimum Block Size Condition, Glazer shall have the right but not the obligation to sell any or all of its Shares (including any Additional Shares) in the open market if the sale price exceeds $10.50 per share prior to payment of any commissions due by Glazer for such sale. Glazer shall give written notice to the Company of any sale of shares (including any Additional Shares) within three (3) Business Days following the date of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $10.50 per share (or greater than $8.50 per Share provided that Glazer meets the Minimum Block Size Condition) prior to the payment of any commissions due by Glazer for the sale.

Simultaneously with the closing of the Business Combination, the Company deposited $9,858,678 which is the aggregate amount necessary to purchase the Glazer Shares, into an escrow account with Continental Stock Transfer and Trust Company (the “Escrow Agent”), subject to the terms of an escrow agreement. The Company’s purchase of the Glazer Shares will be made with funds from the escrow account attributed to the Glazer Shares. In the event that Glazer sells any Glazer Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and Glazer shall instruct the Escrow Agent to release from the escrow account for the Company’s use without restriction an amount equal to the pro rata portion of the escrow attributed to the Glazer Shares which Glazer has sold. In the event that Glazer chooses not to sell to the Company any Glazer Shares that it owns as of the six-month anniversary of the Business Combination Date, Glazer shall instruct the Escrow Agent to release all remaining funds from the escrow account for the Company’s use without restriction.

Notwithstanding the Company’s commitment to deposit funds into the escrow account for the purchase of the Glazer Shares, Kaleyra, Inc. shall use its best efforts to enter into a letter of credit agreement for the issuance of a standby letter of credit for the benefit of Glazer with a bank acceptable to Glazer (the “Issuing Bank”) as soon as possible to replace the escrow account. When the letter of credit agreement is entered into, Glazer will instruct the Escrow Agent to deposit the funds held in the escrow account into the collateral account with the Issuing Bank. Concurrently with the execution of the letter of credit agreement, the Issuing Bank shall issue the letter of credit for the benefit of Glazer in the amount of the escrow account. Glazer shall drawdown from the letter of credit to satisfy the payment due to Glazer by the Company for the purchase of the Glazer Shares. In the event that Glazer sells any Glazer Shares pursuant to the sales price restriction set forth above, it shall provide notice to the Company and the Issuing Bank within three business days of such sale, and the Issuing Bank shall release from the collateral account an amount equal to the number of Glazer Shares sold multiplied by $10.6819 to the Company for the Company’s use without restriction, with a corresponding reduction in the amount of the letter of credit. In the event that Glazer elects not to sell to the Company any Glazer Shares, the Issuing Bank shall release all funds in the collateral account to the Company for the Company’s use without restriction and terminate the letter of credit. On January 7, 2020 the Company entered into a Letter of Credit and Reimbursement agreement with EagleBank for the benefit of Glazer and $9.3 million of funds were transferred from the escrow account to a collateral account with EagleBank as collateral for the Letter of Credit and Reimbursement agreement.

Nothing in the Glazer Purchase Agreement prohibits or restricts Glazer with respect to the purchase or sale of the Company’s warrants.

From January 1, 2020 to March 31, 2020, Glazer sold 5,800 shares on the open market and the Company paid Glazer $15,000 representing the amount at which $10.50 exceeded the selling price.

As of March 31, 2020, the Company’s debt in connection with the Glazer Purchase Agreement amounted to $9.2 million.

Nomura Global Financial Products

On October 31, 2019, the Company entered into an agreement (the “Confirmation”) with Nomura Global Financial Products, Inc. (“NGFP”) for an OTC Equity Prepaid Forward Transaction (the “Forward Transaction”). Pursuant to the terms of the Confirmation, NGFP agreed to waive any redemption right that would require the redemption of shares that it holds at the Business Combination Date in exchange for a pro rata amount of the funds held in the Trust Account provided that the Business Combination date occurred prior to December 12, 2019. Rather, NGFP, at its sole discretion, may either sell such shares in one or more transactions, publicly or privately, at a market price of at least $10.50 per share, or hold such shares for a period of time following the consummation of the Business Combination, at which time the Company will be required to purchase from NGFP, and NGFP will be required to sell to the Company, any such shares not otherwise previously sold by NGFP. The Confirmation provides that the Forward Transaction with NGFP is for up to 2,000,000 shares of common stock. The actual number of shares held by NGFP at the Business Combination Date was 1,623,000 shares of common stock (the “Subject Shares”).

The Confirmation provided that following the closing of the Business Combination, the Company transferred from the Trust Account an amount equal to (a) the aggregate number of the Subject Shares held by NGFP, multiplied by (b) the per share redemption price for shares of common stock out of the Trust Account (the “Forward Price”) (such actual aggregate cash amount, the “Prepayment Amount”), as a partial prepayment to NGFP of the amount to be paid to NGFP in settlement of the Forward Transaction upon the Valuation Date (as defined below) for the number of shares owned by NGFP at the closing of the Business Combination. The amount of the Prepayment Amount transferred to NGFP on November 25, 2019 was $17,044,584.

After the Business Combination Date, NGFP may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Original Valuation Date or Extended Valuation Date (each as defined below, and each a “Valuation Date”) at a price per Subject Share not less than the Forward Price. Any Subject Shares sold by NGFP during the term of the Transaction will cease to be Subject Shares. NGFP will give written notice to the Company of any sale of Subject Shares by NGFP within two business days of the date of such sale, such notice to include the date of the sale, the number of Subject Shares sold, and confirmation that the sale price per Subject Share was not less than the Forward Price.

After the Business Combination Date, NGFP may also buy and sell additional shares for its own account or on behalf of third parties, and the pricing limitation set forth in the prior paragraph will not apply to any shares purchased after the closing of the Business Combination.

On each quarterly anniversary of the Business Combination Date (any such date, a “Cash Settlement Date”), NGFP will terminate the transaction in whole or in part by reducing the number of Subject Shares for the Forward Transaction (the reduction being “Terminated Shares”). The number of Terminated Shares with respect to any Cash Settlement Date will equal the number of Subject Shares sold by NGFP since the prior Cash Settlement Date (or with respect to the first Cash Settlement Date, the closing of the Business Combination). NGFP will notify the Company of the expected number of Terminated Shares not less than ten days prior to the applicable Cash Settlement Date. On each Cash Settlement Date, NGFP will pay the Company an amount equal to the product of (A) the number of Terminated Shares and (B) the Forward Price. With effect from the Cash Settlement Date, the remaining number of Subject Shares for the Forward Transaction will be reduced by the Terminated Shares.

The “Original Valuation Date” for the Forward Transaction will be the first anniversary of the closing of the Business Combination, provided that NGFP and the Company may, not later than ten days prior to the Original Valuation Date, agree, each in their sole discretion, to extend the Valuation Date to the second anniversary of the Business Combination (the “Extended Valuation Date”). At the Original Valuation Date or Extended Valuation Date, the Forward Transaction will be settled by NGFP delivering the remaining Subject Shares to the Company, and the Company paying NGFP an amount equal to the product of (x) the Forward Price, (y) the applicable Accrual Percentage (as defined below), and (z) the number of remaining Subject Shares. The “Accrual Percentage” is the product of (a) with respect to any settlement occurring on or before the Original Valuation Date, 2.75% per annum, and with respect to any settlement occurring after the Original Valuation Date, 3.50% per annum, and (b) the number of actual days divided by the number of days in a year beginning on the date of the Business Combination and ending on the applicable day of the settlement.

For the three months ended March 31, 2020, financial expense amounted to $117,000.

10. DEBT FOR FORWARD SHARE PURCHASE AGREEMENTS

As of December 31, 2019, the Company’s debt for forward share purchase agreements amounted to $34.1 million. Refer to Note 27—Subsequent Events for a description of amendments to forward share purchase agreements subsequent to year-end.

Greenhaven

On September 27, 2019, the Company and Greenhaven Road Capital Fund 1, LP, a Delaware limited partnership (“Greenhaven Fund 1”), and Greenhaven Road Capital Fund 2, LP, a Delaware limited partnership (“Greenhaven Fund 2” and together with Greenhaven Fund 1, “Greenhaven”) entered into a forward share purchase agreement (the “Greenhaven Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of its common stock into which Rights of the Company held by Greenhaven and any additional Rights that Greenhaven acquired, converted into shares upon the closing of the Business Combination as amended as of December 13, 2019 at the following prices: (1) $11.00 per share for the first 196,195 shares sold to the Company; (2) $10.70 per share for the next 250,000 shares sold to the Company; and (3) $10.50 per share for the next 550,000 shares sold to the Company. The Company agreed to purchase the shares on the later of the sixtieth day after the Closing of the Business Combination or January 1, 2020 (the “Greenhaven Purchase Closing Date”).

In exchange for Kaleyra, Inc.’s commitment to acquire the shares on the Greenhaven Purchase Closing Date, each of Greenhaven Fund 1 and Greenhaven Fund 2 agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of Kaleyra, Inc.’s securities), the Rights (including any additional Rights) held by Greenhaven, and any shares that such Rights (including any additional Rights) converted into, until the Greenhaven Purchase Closing Date, including not to tender the Rights (or any additional Rights) to Kaleyra, Inc. in response to any tender offer that Kaleyra, Inc. may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Greenhaven shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least 25,000 shares (the “Minimum Block Size Condition”) in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, Greenhaven shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, Greenhaven shall have the right to sell such shares at any time provided that the price received by Greenhaven (not including any commissions due by Greenhaven for the sale) is at least $10.50 (or at least $8.50 if Greenhaven meets the Minimum Block Size Condition). In the event that Greenhaven sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that Greenhaven meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay Greenhaven in accordance with Greenhaven’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the Greenhaven Purchase Agreement shall prohibit Greenhaven from entering into a contract to purchase and/or sell warrants of Kaleyra, Inc.

As of December 31, 2019, the Company’s debt in connection with the Greenhaven Purchase Agreement amounted to $10.6 million.

Kepos Alpha Fund

On October 1, 2019, the Company and Kepos Alpha Fund L.P., a Cayman Islands limited partnership (“KAF”), entered into a forward share purchase agreement (“KAF Purchase Agreement”) pursuant to which the Company agreed to purchase the shares of common stock of the Company into which the Rights of the Company held by KAF, including any additional Rights that KAF acquired, converted into upon the closing of the Business Combination. The KAF Purchase Agreement was amended the following day to provide that the total number of additional Rights that KAF may acquire is 3,750,000 Rights. As amended December 13, 2019, the KAF Purchase Agreement provides that the Company would purchase such shares at the following price: (1) $10.70 per share for the first 102,171 shares sold to the Company; and (2) $10.50 per share for the next 93,676 shares sold to the Company. The Company agreed to purchase the shares on the earlier of the sixtieth day after the Business Combination or February 15, 2020 (the “KAF Purchase Closing Date”).

In exchange for the Company’s commitment to acquire the shares on the KAF Purchase Closing Date, KAF agreed to continue to hold, and not to offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of Kaleyra, Inc. and including any short sales involving any of the Company’s securities), the Rights (including any additional Rights) held by KAF, and any shares that such Rights (including any additional Rights) converted into, until the KAF Purchase Closing Date, including not to tender the Rights (or any additional Rights) to the Company in response to any Tender Offer that the Company may commence for the Rights. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that KAF shall after the closing of the Business Combination have the right but not the obligation to sell its shares that the Rights converted into in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share, or, without meeting the Minimum Block Size Condition, KAF shall have the right but not the obligation to sell any or all of its shares that the Rights converted into in the open market if the share price equals or exceeds $10.50 per share. In furtherance of the foregoing, KAF shall have the right to sell such hares at any time provided that the price received by KAF (not including any commissions due by KAF for the sale) is at least $10.50 (or at least $8.50 if KAF meets the Minimum Block Size Condition). In the event that KAF sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that KAF meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay KAF in accordance with KAF’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the KAF Purchase Agreement shall prohibit KAF from entering into a contract to purchase and/or sell warrants of the Company.

As of December 31, 2019, the Company’s debt in connection with the KAF Purchase Agreement amounted to $2.1 million.

Yakira Capital Management

On November 19, 2019, the Company and Yakira Capital Management, Inc. (“Yakira”) entered into a forward share purchase agreement (the “Yakira Purchase Agreement”) pursuant to which (i) Yakira may elect to sell and transfer to the Company, and the Company will purchase shares of common stock of the Company held by Yakira at the Business Combination Date (the “Yakira Shares”), and (ii) the Company will purchase the shares of common stock of the Company into which the Rights held by Yakira (the “Yakira Rights Shares”) were converted upon the Business Combination Date. At the Business Combination Date, Yakira held 439,299 rights and 1,083,750 Yakira Shares.

The Company agreed that it will purchase the Yakira Rights Shares from Yakira at $1.05 per Right (which reflects $10.50 per Yakira Rights Share) (the “Yakira Rights Share Purchase Price”) as soon as practicable on or after the later of the sixtieth day after the Business Combination Date or January 1, 2020 (the “Yakira Rights Shares Closing Date”). In exchange for the Company’s agreement to purchase the Yakira Rights Shares, Yakira agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge the Rights (including any transactions involving any derivative securities of Yakira and any Short Sales involving any of the Company’s securities), and any Yakira Rights Shares that the rights converted into, until the Yakira Rights Shares Closing Date, including not to tender the Rights to the Company in response to any Tender Offer that the Company may commence for the Rights.

Yakira has the right to terminate the agreement for the Company to purchase the Yakira Rights Shares, without penalty, commencing on the thirtieth day after the Business Combination Date and ending on the day prior to the Yakira Rights Shares Closing Date, by giving written notice to the Company, in which case it will not be restricted after such time with respect to its ability to dispose of the Yakira Rights Shares (subject to the restrictions against transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities).

Except as described below, Yakira also agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any short sales involving any of the Company’s securities) the Yakira Shares prior to the six month anniversary of the Business Combination Date. Yakira further agreed to not redeem any of the Yakira Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. Notwithstanding anything to the contrary herein, commencing on the day after the Business Combination Date, Yakira may sell the Yakira Shares in the open market as long as the sales price is above $10.50 per Yakira Share.

If Yakira still owns Yakira Shares as of the four-month anniversary of the Business Combination Date, Yakira may sell such Yakira Shares between the four-month anniversary and six month anniversary of Business Combination Date to the Company for a per share price (the “Yakira Shares Purchase Price”) equal to (a) $10.5019, plus (b) $0.03 per share for each month (prorated for a partial month) following the Business Combination Date that Yakira has held the Yakira Shares. The closing of the sale of the Yakira Shares to the Company shall occur on the business day following the Company’s receipt of the Yakira Shares exercise notice (the “Yakira Shares Closing Date”). On the Yakira Shares Closing Date, Yakira shall deliver the Yakira Shares to the Company against receipt of the aggregate Yakira Shares Purchase Price, which shall be paid by wire transfer of immediately available funds from the escrow account described below. Yakira may instruct the Escrow Agent to release to Yakira an amount equal to the Shares Purchase Price multiplied by the number of Yakira Shares delivered to the Company from the escrow account on Yakira the Shares Closing Date for Yakira’s use without restriction.

Following the Business Combination Date, the Company deposited into an escrow account with the Escrow Agent, subject to an escrow agreement, with a nationally chartered bank the amount of $11,576,509 related to Yakira. The Company’s purchase of the Yakira Shares will be made with funds from the escrow account attributed to the Yakira Shares. In the event that Yakira sells any Yakira Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and the Company may promptly release from the escrow account for its use without restriction an amount equal to the pro rata portion of the escrow account attributed to the Yakira Shares which Yakira has sold. In the event that Yakira chooses not to sell to the Company any Yakira Shares that it owns as of the six-month anniversary of the Business Combination Closing Date, the Company may promptly release all remaining funds from the escrow account for its use without restriction. In the event that the Yakira Shares Purchase Price paid on the Yakira Shares Closing Date is less than $10.6819 per Yakira Share, following payment of the Yakira Shares Purchase Price to Yakira, the Company and Yakira shall deliver joint written instructions to the Escrow Agent to release to Kaleyra from the remaining funds in the escrow account an amount equal to the difference between the Yakira Shares Purchase Price and $10.6819 per share multiplied by the number of Yakira Shares delivered by Yakira, and the Escrow Agent shall promptly disburse such amount to the Company in accordance with the payment instructions. On February 7, 2020, the agreement with Yakira was amended (see Note 27—Subsequent Events).

Nothing in the Yakira Purchase Agreement prohibits or restricts Yakira with respect to the purchase or sale of the Company’s warrants.

As of December 31, 2019, the Company’s debt in connection with the Yakira Purchase Agreement amounted to $12.0 million.

Glazer Capital, LLC

On November 19, 2019, the Company and Glazer Capital, LLC (“Glazer”) entered into a forward share purchase agreement (the “Glazer Purchase Agreement”) pursuant to which Glazer may elect to sell and transfer to the Company, and the Company will purchase the shares of the common stock of the company held by Glazer (the “Glazer Shares”) at a price of $10.6819 per share (the “Glazer Shares Purchase Price”). Glazer shall notify the Company in writing five business days prior to the six month anniversary of the Business Combination Date if it is not exercising its right to sell the Glazer Shares to the Company; otherwise, absent written notification to the contrary, Glazer shall be deemed to have exercised its right to sell all of its Glazer Shares to the Company. The Company will purchase the Glazer Shares from Glazer on the six-month anniversary of the closing of the Business Combination (the “Glazer Shares Closing Date”). As of the Business Combination Date, Glazer held 922,933 shares of common stock.

In exchange for the Company’s commitment to purchase the Glazer Shares on the Glazer Shares Closing Date, Glazer agreed to continue to hold, and not offer, sell, contract to sell, pledge, transfer, assign, or otherwise dispose of, directly or indirectly, or hedge (including any transactions involving any derivative securities of the Company and any Short Sales involving any of the Company’s securities) the Glazer Shares prior to the six month anniversary of the Business Combination Date. Glazer further agreed that it will not redeem any of the Glazer Shares in conjunction with the Company’s stockholders’ approval of the Business Combination. As amended on December 13, 2019, notwithstanding anything to the contrary herein, the parties agreed that Glazer shall, commencing on the day after the Business Combination Closing Date, have the right but not the obligation to sell its shares (including any Additional Shares) in blocks of at least the Minimum Block Size Condition in the open market if the sale price exceeds $8.50 per share prior to payment of any commissions due by Glazer for the sale, or, without meeting the Minimum Block Size Condition, Glazer shall have the right but not the obligation to sell any or all of its shares (including any Additional Shares) in the open market if the sale price exceeds $10.50 per share prior to payment of any commissions due by Glazer for such sale. Glazer shall give written notice to the Company of any sale of shares (including any Additional Shares) within three (3) Business Days following the date of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $10.50 per share (or greater than $8.50 per share provided that Glazer meets the Minimum Block Size Condition) prior to the payment of any commissions due by Glazer for the sale.

Simultaneously with the closing of the Business Combination, the Company deposited $9,858,678 which is the aggregate amount necessary to purchase the Glazer Shares, into an escrow account with Continental Stock Transfer and Trust Company (the “Escrow Agent”), subject to the terms of an escrow agreement. The Company’s purchase of the Glazer Shares will be made with funds from the escrow account attributed to the Glazer Shares. In the event that Glazer sells any Glazer Shares as provided for above, it shall provide notice to the Company within three business days of such sale, and Glazer shall instruct the Escrow Agent to release from the escrow account for the Company’s use without restriction an amount equal to the pro rata portion of the escrow attributed to the Glazer Shares which Glazer has sold. In the event that Glazer chooses not to sell to the Company any Glazer Shares that it owns as of the six-month anniversary of the Business Combination Date, Glazer shall instruct the Escrow Agent to release all remaining funds from the escrow account for the Company’s use without restriction.

Notwithstanding the Company’s commitment to deposit funds into the escrow account for the purchase of the Glazer Shares, Kaleyra, Inc. shall use its best efforts to enter into a letter of credit agreement for the issuance of a standby letter of credit for the benefit of Glazer with a bank acceptable to Glazer (the “Issuing Bank”) as soon as possible to replace the escrow account. When the letter of credit agreement is entered into, Glazer will instruct the Escrow Agent to deposit the funds held in the escrow account into the collateral account with the Issuing Bank. Concurrently with the execution of the letter of credit agreement, the Issuing Bank shall issue the letter of credit for the benefit of Glazer in the amount of the escrow account. Glazer shall drawdown from the letter of credit to satisfy the payment due to Glazer by the Company for the purchase of the Glazer Shares. In the event that Glazer sells any Glazer Shares pursuant to the sales price restriction set forth above, it shall provide notice to the Company and the Issuing Bank within three business days of such sale, and the Issuing Bank shall release from the collateral account an amount equal to the number of Glazer Shares sold multiplied by $10.6819 to the Company for the Company’s use without restriction, with a corresponding reduction in the amount of the letter of credit. In the event that Glazer elects not to sell to the Company any Glazer Shares, the Issuing Bank shall release all funds in the collateral account to the Company for the Company’s use without restriction and terminate the letter of credit. On January 7, 2020 the Company entered into a Letter of Credit and Reimbursement agreement with EagleBank for the benefit of Glazer and $9.3 million of funds were transferred from the escrow account to a collateral account with EagleBank as collateral for the Letter of Credit and Reimbursement agreement.

Nothing in the Glazer Purchase Agreement prohibits or restricts Glazer with respect to the purchase or sale of the Company’s warrants.

From November 26, 2019 to December 31, 3019 Glazer sold 53,040 shares on the open market.

As of December 31, 2019, the Company’s debt in connection with the Glazer Purchase Agreement amounted to $9.3 million.

Nomura Global Financial Products

On October 31, 2019, the Company entered into an agreement (the “Confirmation”) with Nomura Global Financial Products, Inc. (“NGFP”) for an OTC Equity Prepaid Forward Transaction (the “Forward Transaction”). Pursuant to the terms of the Confirmation, NGFP agreed to waive any redemption right that would require the redemption of shares that it holds at the Business Combination Date in exchange for a pro rata amount of the funds held in the Trust Account provided that the Business Combination date occurred prior to December 12, 2019. Rather, NGFP, at its sole discretion, may either sell such shares in one or more transactions, publicly or privately, at a market price of at least $10.50 per share, or hold such shares for a period of time following the consummation of the Business Combination, at which time the Company will be required to purchase from NGFP, and NGFP will be required to sell to the Company, any such shares not otherwise previously sold by NGFP. The Confirmation provides that the Forward Transaction with NGFP is for up to 2,000,000 shares of common stock. The actual number of shares held by NGFP at the Business Combination Date was 1,623,000 shares of common stock (the “Subject Shares”).

The Confirmation provided that following the closing of the Business Combination, the Company transferred from the Trust Account an amount equal to (a) the aggregate number of the Subject Shares held by NGFP, multiplied by (b) the per share redemption price for shares of common stock out of the Trust Account (the “Forward Price”) (such actual aggregate cash amount, the “Prepayment Amount”), as a partial prepayment to NGFP of the amount to be paid to NGFP in settlement of the Forward Transaction upon the Valuation Date (as defined below) for the number of shares owned by NGFP at the closing of the Business Combination. The amount of the Prepayment Amount transferred to NGFP on November 25, 2019 was $17,044,584.

After the Business Combination Date, NGFP may sell the Subject Shares at its sole discretion in one or more transactions, publicly or privately, at any time prior to the Original Valuation Date or Extended Valuation Date (each as defined below, and each a “Valuation Date”) at a price per Subject Share not less than the Forward Price. Any Subject Shares sold by NGFP during the term of the Transaction will cease to be Subject Shares. NGFP will give written notice to the Company of any sale of Subject Shares by NGFP within two business days of the date of such sale, such notice to include the date of the sale, the number of Subject Shares sold, and confirmation that the sale price per Subject Share was not less than the Forward Price.

After the Business Combination Date, NGFP may also buy and sell additional shares for its own account or on behalf of third parties, and the pricing limitation set forth in the prior paragraph will not apply to any shares purchased after the closing of the Business Combination.

On each quarterly anniversary of the Business Combination Date (any such date, a “Cash Settlement Date”), NGFP will terminate the transaction in whole or in part by reducing the number of Subject Shares for the Forward Transaction (the reduction being “Terminated Shares”). The number of Terminated Shares with respect to any Cash Settlement Date will equal the number of Subject Shares sold by NGFP since the prior Cash Settlement Date (or with respect to the first Cash Settlement Date, the closing of the Business Combination). NGFP will notify the Company of the expected number of Terminated Shares not less than ten days prior to the applicable Cash Settlement Date. On each Cash Settlement Date, NGFP will pay the Company an amount equal to the product of (A) the number of Terminated Shares and (B) the Forward Price. With effect from the Cash Settlement Date, the remaining number of Subject Shares for the Forward Transaction will be reduced by the Terminated Shares.

The “Original Valuation Date” for the Forward Transaction will be the first anniversary of the closing of the Business Combination, provided that NGFP and the Company may, not later than ten days prior to the Original Valuation Date, agree, each in their sole discretion, to extend the Valuation Date to the second anniversary of the Business Combination (the “Extended Valuation Date”). At the Original Valuation Date or Extended Valuation Date, the Forward Transaction will be settled by NGFP delivering the remaining Subject Shares to the Company, and the Company paying NGFP an amount equal to the product of (x) the Forward Price, (y) the applicable Accrual Percentage (as defined below), and (z) the number of remaining Subject Shares. The “Accrual Percentage” is the product of (a) with respect to any settlement occurring on or before the Original Valuation Date, 2.75% per annum, and with respect to any settlement occurring after the Original Valuation Date, 3.50% per annum, and (b) the number of actual days divided by the number of days in a year beginning on the date of the Business Combination and ending on the applicable day of the settlement.

For the year ended December 31, 2019, financial expense amounted to $46,000.

XML

Preference Shares Liabilities

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Preference Shares Liabilities [Abstract]

Preference Shares Liabilities

10. PREFERENCE SHARES LIABILITIES

Preference shares liabilities amounting to $2,000 and $2.5 million as of March 31, 2020 and December 31, 2019, respectively, represent the Company’s obligation to purchase in 2020 the preference shares from certain employees of Solutions Infini as a part of the Solutions Infini 2018 Purchase Agreement.

On March 9, 2020, the Company signed a modification of the 2018 Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per each preference share. As a result of this modification, the total preference shares obligation was reduced to Indian Rupee 132,000 ($2,000 at the March 31, 2020 exchange rate).

On January 31, 2020, the Company agreed to pay to the eligible employees of the preference shares, performance bonuses for a total amount of $3.5 million (at the March 31, 2020 exchange rate), to be paid in 2020, as a replacement of the preference shares obligation.

On March 24, 2020, given the prevailing situation of the COVID-19 pandemic both globally and in India, the Company agreed with two of the eligible employees to delay payment of their performance bonuses, for a total amount of $1.4 million (at the March 31, 2020 exchange rate), and evaluate the timeline for payment thereof at a later date.

14. PREFERENCE SHARES LIABILITIES

As mentioned above, preference shares liabilities amounting to $2.5 million and $1.8 million as of December 31, 2019 and 2018, respectively, represent the Company’s obligation to purchase in 2020 the preference shares from certain employees of Solutions Infini as a part of the Solutions Infini 2018 Purchase Agreement. The purchase will be made at a predetermined price based on the EBITDA of Solutions Infini for its year ending March 31, 2020 as stated in the purchase agreement and any amendments thereto.

On May 6, 2019, the Company signed a modification of the Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in 2020 for India Rupee 70.0 million ($987,000 at the December 31, 2019 exchange rate).

On March 9, 2020, the Company signed an additional modification of the Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per share. As a result of this modification, effective on January 30, 2020, the total preference shares obligation was reduced to Indian Rupee 140,000 ($2,000 at the January 31, 2020 exchange rate). See Note 27—Subsequent Events.

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Personnel Costs

12 Months Ended

Dec. 31, 2019

Compensation Related Costs [Abstract]

Personnel Costs

18. PERSONNEL COSTS

Personnel costs amounting to $12.6 million for the year ended December 31, 2019 (of which $996,000 related to RSUs compensation expense) and $15.2 million for the year ended December 31, 2018 (of which $7.4 million related to stock-based compensation expense), were allocated as follows (in thousands):

	Year Ended December 31,
	2019		2018
Research and development	$	4,158	$	2,753
Sales and marketing		2,855		4,604
General and administrative		5,635		7,797
Total Personnel Costs	$	12,648	$	15,154

Approximately 30% of the Company employees are subject to a collective Italian national labor agreement expiring on December 31, 2023.

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Fair Value Measurements - Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Marketable securities
Total Marketable Securities		$ 5,100	$ 3,200
Recurring Basis
Assets:
Total Assets	$ 3,079	5,124
Liabilities:
Total Liabilities	31,605	36,623	2,357
Marketable securities
Total Marketable Securities		5,124	3,151
Recurring Basis | Previously Reported
Liabilities:
Total Liabilities		36,669
Recurring Basis | Mutual Fund
Assets:
Total Assets		5,124
Marketable securities
Total Marketable Securities		5,124	3,151
Recurring Basis | Interest Rate Swap
Liabilities:
Total Liabilities	73	80	97
Recurring Basis | Preference Shares
Liabilities:
Total Liabilities	2	2,530	1,834
Recurring Basis | Debt for Forward Share Repurchase Agreement
Liabilities:
Total Liabilities	31,530	34,013
Recurring Basis | Debt for Forward Share Repurchase Agreement | Previously Reported
Liabilities:
Total Liabilities		34,059
Recurring Basis | Foreign Exchange Forward
Liabilities:
Total Liabilities			(56)
Recurring Basis | Contingent Consideration for Solutions Infini Acquisition
Liabilities:
Total Liabilities			482
Recurring Basis | Certificates of Deposit
Assets:
Total Assets	3,079
Recurring Basis | Level 1
Assets:
Total Assets		5,124
Marketable securities
Total Marketable Securities		5,124	3,151
Recurring Basis | Level 1 | Mutual Fund
Assets:
Total Assets		5,124
Marketable securities
Total Marketable Securities		5,124	3,151
Recurring Basis | Level 2
Assets:
Total Assets	3,079
Liabilities:
Total Liabilities	31,603	34,093	41
Recurring Basis | Level 2 | Previously Reported
Liabilities:
Total Liabilities		34,139
Recurring Basis | Level 2 | Interest Rate Swap
Liabilities:
Total Liabilities	73	80	97
Recurring Basis | Level 2 | Debt for Forward Share Repurchase Agreement
Liabilities:
Total Liabilities	31,530	34,013
Recurring Basis | Level 2 | Debt for Forward Share Repurchase Agreement | Previously Reported
Liabilities:
Total Liabilities		34,059
Recurring Basis | Level 2 | Foreign Exchange Forward
Liabilities:
Total Liabilities			(56)
Recurring Basis | Level 2 | Certificates of Deposit
Assets:
Total Assets	3,079
Recurring Basis | Level 3
Liabilities:
Total Liabilities	2	2,530	2,316
Recurring Basis | Level 3 | Preference Shares
Liabilities:
Total Liabilities	$ 2	$ 2,530	1,834
Recurring Basis | Level 3 | Contingent Consideration for Solutions Infini Acquisition
Liabilities:
Total Liabilities			$ 482

XML

Other Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
VAT receivables	$ 1,132	$ 3,136	$ 1,852
Receivables from suppliers	812	398
Credit for tax other than income tax	505	358	273
Income tax assets	254	270	65
Other receivables	54	62	354
Total other current assets	$ 2,757	4,224	$ 2,544
Previously Reported
Other receivables		$ 460

XML

Summary of Significant Accounting Policies - Summary of Useful Lives of Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2019
Other Assets
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	4 years
Internal-use Software Development Costs
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	4 years
Servers | Minimum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	3 years
Servers | Maximum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	6 years
Office Equipment | Minimum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	3 years
Office Equipment | Maximum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	5 years
Leasehold Improvements
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	5 years or remaining lease term	[1]
Furniture and Fixtures | Minimum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	4 years
Furniture and Fixtures | Maximum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	8 years
Vehicles | Minimum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	8 years
Vehicles | Maximum
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	10 years
Software
Schedule Of Significant Accounting Policies [Line Items]
Property and equipment, useful life	3 years

[1] Including renewal options

XML

Financial Expense, Net - Schedule of Financial Expense, Net (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Financial Income:
Interest income			$ 160	$ 31
Gain on derivatives			414	134
Dividends on marketable securities			97	4
Total Financial Income			671	169
Financial Expense:
Interest expense			(1,073)	(585)
Loss on derivatives			(37)
Total Financial Expense			(1,110)	(585)
Financial expense, net	$ (41)	$ 70	$ (439)	$ (416)

XML

Restricted Stock Units - Additional Information (Details) - USD ($)				1 Months Ended	3 Months Ended	12 Months Ended
	Feb. 01, 2021	Mar. 24, 2020	Feb. 01, 2020	Dec. 31, 2019	Mar. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted		113,506
Award vesting period		3 years
Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted			135,000
Award vesting period			9 months
Within February 1, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights, percentage		25.00%
Within February 1, 2021 | Subsequent Event
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights, percentage			40.00%
Three-year Period Starting from February 1, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights, percentage		75.00%
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted				3,336,095	113,506	3,336,095
Aggregate grant date fair value of shares granted				$ 27,500,000
Grant date fair value per share				$ 8.25	$ 6.23	$ 8.25
Compensation expense					$ 6,204,000	$ 996,000
Unrecognized compensation cost				$ 26,500,000	$ 19,200,000	$ 26,500,000
Unrecognized compensation cost weighted-average remaining period					1 year 6 months 18 days	1 year 9 months
Restricted Stock Units (RSUs) | Scenario Forecast
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted	2,020,411
Award vesting period	3 years
Restricted Stock Units (RSUs) | Vest in One Year
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted						931,243
Restricted Stock Units (RSUs) | 2019 Targeted Adjusted EBITDA is Achieved
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted						124,723
Restricted Stock Units (RSUs) | 2020 Targeted Adjusted EBITDA is Achieved
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares granted						124,718
Restricted Stock Units (RSUs) | Within February 1, 2021 | Scenario Forecast
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights, percentage	25.00%
Restricted Stock Units (RSUs) | Three-year Period Starting from February 1, 2021 | Scenario Forecast
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting rights, percentage	75.00%

XML

Notes Payable - Additional Information (Details) - USD ($)			3 Months Ended	12 Months Ended
	Mar. 06, 2020	Nov. 25, 2019	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Notes, interest rate description			Interest on the Convertible Notes will accrue at a fixed interest rate equal to the one-year US dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date, plus a margin of one percent (1%) per annum. Interest will be due and payable annually on each of (1) the date which is the twelve-month anniversary of the Business Combination Date and (2) on the date which is the twenty-four-month anniversary of the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.	As of December 31, 2019, debts for Convertible Notes amounted to $7.5 million, of which $21,500 was accrued interest. Interest on the Convertible Notes will accrue at a fixed interest rate equal to the one-year US dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date, plus a margin of one percent (1%) per annum. Interest will be due and payable annually on each of (1) the date which is the twelve-month anniversary of the Business Combination Date and (2) on the date which is the twenty-four-month anniversary of the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.
Contractual Interest Rate, Percentage			1.00%	1.00%
Outstanding principal balance			50.00%	50.00%
Number of business days after the Company receives such Payoff Financing Proceeds			10 days	10 days
Percentage of remaining outstanding principal balance			100.00%	100.00%
Notes converted description			Convertible Notes are not paid in full on or before the applicable Maturity Date, then at any time after the sixtieth business day after the Maturity Date, assuming payment in full has not been made prior to such date, the outstanding principal amount of these Notes, together with all accrued but unpaid interest on these Convertible Notes, may be converted into shares of Company common stock, in part or in whole, at the option of the holder of these Convertible Notes by providing written notice at least three business days prior to the date of conversion.	Convertible Notes are not paid in full on or before the applicable Maturity Date, then at any time after the sixtieth business day after the Maturity Date, assuming payment in full has not been made prior to such date, the outstanding principal amount of these Notes, together with all accrued but unpaid interest on these Convertible Notes, may be converted into shares of Company common stock, in part or in whole, at the option of the holder of these Convertible Notes by providing written notice at least three business days prior to the date of conversion.
Promissory Note | Northland Securities
Debt Instrument [Line Items]
Debt instrument face amount	$ 400,000			$ 400,000
Interest Nominal Rate	8.00%
Debt instrument, maturity date	Dec. 31, 2020
Maximum
Debt Instrument [Line Items]
Contractual Interest Rate, Percentage			7.60%	7.60%
Proceeds from equity financing			$ 50,000,000.0	$ 50,000,000
Cash received from payoff financing proceeds			$ 75,000,000.0	$ 75,000,000
Minimum
Debt Instrument [Line Items]
Contractual Interest Rate, Percentage			0.60%	0.60%
Convertible Notes
Debt Instrument [Line Items]
Notes payable			$ 7,500,000	$ 7,500,000
Accrued interest			$ 76,000	$ 21,500
Non-convertible Notes
Debt Instrument [Line Items]
Notes, interest rate description			Interest on the Non-convertible Notes shall accrue at a fixed interest rate equal to LIBOR plus a margin of one percent (1%) per annum, which interest rate as of the date hereof is one and ninety-one hundredths percent (1.91%). As used herein, “LIBOR” means the one-year US Dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.	As of December 31, 2019, debts for Non-convertible Notes amounted to $7.5 million, of which $21,500 was accrued interest. Interest on the Non-convertible Notes shall accrue at a fixed interest rate equal to LIBOR plus a margin of one percent (1%) per annum, which interest rate as of the date hereof is one and ninety-one hundredths percent (1.91%). As used herein, “LIBOR” means the one-year US Dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.
Notes payable			$ 7,500,000	$ 7,500,000
Accrued interest			$ 76,000	$ 21,500
Notes, LIBOR interest rate			1.91%	1.91%
Number of business days after the Company receives such Financing Proceeds			10 days	10 days
Non-convertible Notes | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Contractual Interest Rate, Percentage			1.00%	1.00%
Non-convertible Notes | Maximum
Debt Instrument [Line Items]
Proceeds from equity financing			$ 11,500,000	$ 11,500,000
Extension Notes and Working Capital Notes
Debt Instrument [Line Items]
Notes, interest rate description			Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.	Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.
Notes payable			$ 3,600,000	$ 3,600,000
Notes, LIBOR interest rate			1.91%	1.91%
Number of business days after the Company receives such Financing Proceeds			10 days	10 days
Notes payable due to related parties			$ 1,900,000	$ 1,900,000
Extension Notes and Working Capital Notes | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Contractual Interest Rate, Percentage			1.00%	1.00%
Extension Notes and Working Capital Notes | Maximum
Debt Instrument [Line Items]
Proceeds from equity financing			$ 11,500,000	$ 11,500,000
Esse Effe S.p.A
Debt Instrument [Line Items]
Cash consideration		$ 6,000,000
Maya
Debt Instrument [Line Items]
Cash consideration		$ 1,500,000

XML

Fair Value Measurements - Summary of Net Realized and Unrealized Gains and Losses Included in Income Related to Level 3 Liabilities (Details) - Level 3 - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Preference Shares
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income	$ (2,486)	$ 315	$ (753)	$ (639)
Contingent Consideration for Solutions Infini Acquisition
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income			15	71
Research and Development | Preference Shares
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income	(941)	117	(225)	(249)
Sales and Marketing | Preference Shares
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income	(372)	46	(89)	(99)
General and Administrative | Preference Shares
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income	(756)	94	(180)	(200)
Financial Expense, Net | Preference Shares
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income			(259)	(91)
Financial Expense, Net | Contingent Consideration for Solutions Infini Acquisition
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income			(3)	(22)
Foreign Currency Income (Loss) | Contingent Consideration for Solutions Infini Acquisition
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income			$ 18	$ 93
Financial Income (Expense), Net | Preference Shares
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Net Realized and Unrealized (Gains) Losses Included in Income	$ (417)	$ 58

XML

Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended				12 Months Ended
	Mar. 31, 2020		Mar. 31, 2019		Dec. 31, 2019		Dec. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (8,823)		$ (1,379)		$ (5,512)		$ (7,100)
Other comprehensive income (loss):
Foreign currency translation adjustments	(502)		561		25		(175)
Net unrealized gain (loss) on marketable securities, net of tax	4	[1]	15	[1]	18	[2]	(22)	[2]
Other comprehensive income related to joint venture							156
Total other comprehensive income (loss)	(498)		576		43		(41)
Total comprehensive loss	$ (9,321)		$ (803)		$ (5,469)		$ (7,141)

[1] The Company recorded $1,000 and $5,000 of tax expense on unrealized gain on marketable securities for the three months ended March 31, 2020 and 2019, respectively.

[2] The Company recorded $6 thousand of tax expense and $7 thousand of tax benefits on marketable securities for the years ended December 31, 2019 and 2018, respectively.

XML

Accumulated Other Comprehensive Income (Loss) (Tables)

12 Months Ended

Dec. 31, 2019

Equity [Abstract]

Schedule of Accumulated Balances Related to Each Component of Other Comprehensive Income (Loss)

The accumulated balances related to each component of other comprehensive income (loss) are as follows (in thousands):

	Cumulative Foreign Currency Translation Adjustment			Cumulative net unrealized gain (loss) on marketable securities, net of tax			Cumulative other comprehensive income related to joint venture			Accumulated Other Comprehensive Income (Loss)
As of December 31, 2017	$	228		$	—		$	(156	)	$	72
Other comprehensive income (loss) before reclassifications		(175	)		(22	)		—			(197	)
Net amount reclassified from accumulated other comprehensive income (loss)		—			—			156			156
Net other comprehensive income (loss)		(175	)		(22	)		156			(41	)
As of December 31, 2018		53			(22	)		—			31
Other comprehensive income (loss) before reclassifications		25			38			—			63
Net amount reclassified from accumulated other comprehensive income (loss)		—			(20	)		—			(20	)
Net other comprehensive income (loss)		25			18			—			43
As of December 31, 2019	$	78		$	(4	)	$	—		$	74

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2020
Document Information [Line Items]
Document Type	S-1
Amendment Flag	false
Entity Registrant Name	Kaleyra, Inc.
Entity Central Index Key	0001719489
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Tax Identification Number	82-3027430
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Via Marco D’Aviano, 2
Entity Address, City or Town	Milano MI
Entity Address, Postal Zip Code	20131
City Area Code	+39 02
Local Phone Number	288 5841

XML

Property and Equipment, Net (Tables)

12 Months Ended

Dec. 31, 2019

Property Plant And Equipment [Abstract]

Summary of Useful Lives of Property and Equipment

The useful lives of property and equipment are as follows:

Internal-use software development costs	4 years
Servers	3 - 6 years
Office equipment	3 - 5 years
Leasehold improvements	5 years or remaining lease term (1)
Furniture and fixtures	4 - 8 years
Vehicles	8 - 10 years
Software	3 years
Other assets	4 years

(1) Including renewal options

Property and equipment consisted of the following (in thousands):

	As of December 31,
	2019		2018
Internal-use software development costs	$	1,470	$	1,440
Servers (1)		1,629		1,170
Office equipment		1,153		965
Leasehold improvements		616		222
Furniture and fixtures		388		189
Assets-in-progress (2)		665		108
Vehicles		23		49
Software		4		4
Other assets		91		103
Total property and equipment		6,039		4,250
Less: accumulated depreciation and amortization		2,646		1,909
Total property and equipment, net	$	3,393	$	2,341

(1) Including equipment under capital leases with gross amount of $288,000 and accumulated depreciation of $78,000 as of December 31, 2019 (gross amount of $94,000 and accumulated depreciation of $31,000 as of December 31, 2018).

(2) Assets-in progress amounting to $665,000 as of December 31, 2019 include: (i) internal-use software development costs in-progress for $546,000; and (ii) software in-progress for $119,000.

Summary of Amortization Expense

The amortization expense was allocated as follows (in thousands):

	Year Ended December 31,
	2019		2018
Cost of revenue	$	302	$	315
Research and development		53		56
Total	$	355	$	371

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands		3 Months Ended				12 Months Ended
		Mar. 31, 2020		Mar. 31, 2019		Dec. 31, 2019		Dec. 31, 2018
Cash flows from Operating Activities:
Net loss		$ (8,823)		$ (1,379)		$ (5,512)		$ (7,100)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		638		650		2,648		1,530
Stock-based compensation and preference shares						2,070		7,998
Loss on equity investments								(95)
Allowance for doubtful accounts		117		60		716		111
Employee benefit obligation		89		80		315		139
Non-cash interest expense		72		103		657		229
Deferred taxes		(323)		(398)		(14)		72
Stock-based compensation and preference share liability		6,308		315
Non-cash settlement of preference share liability		(2,486)
Change in operating assets and liabilities:
Trade receivables		1,710		534		(10,427)		(5,075)
Other current assets		1,111		(399)		(2,039)		(184)
Other long-term assets		(808)		(349)		47		185
Accounts payable		(5,694)		(3,690)		15,145		6,072
Other current liabilities		3,526		402		251		23
Deferred revenue		206		6		(64)		(182)
Long-term liabilities		1,505		434		2,660		(122)
Net cash provided by operating activities		(2,852)		(3,631)		6,453		3,601
Cash flows from Investing Activities:
Purchases of marketable securities						(5,868)		(3,873)
Sales of marketable securities						3,882		995
Purchase of short-term investments		(3,179)		(684)
Sale of short-term investments		5,041		2,062
Purchases of property and equipment		(89)		(291)		(1,413)		(248)
Sale of property and equipment		16				38		9
Capitalized software development costs		(731)				(602)		(657)
Purchases of intangible assets		(6)		(5)		(16)		(47)
Cash, cash equivalents and restricted cash acquired in the reverse merger						21,666
Net cash provided by (used in) investing activities		1,052		1,082		17,687		(11,710)
Cash flows from Financing Activities:
Change in line of credit		1,721		528		1,973		1,699
Borrowings on term loans		8,800		696		16,670		5,611
Repayments on term loans		(5,463)		(553)		(4,844)		(913)
Repurchase of common stock in connection with forward share purchase agreements		2,587
Payments related to forward share purchase agreements		(167)
Proceeds from exercise of stock options								8
Net cash provided by financing activities		2,304		671		4,702		6,405
Effect of exchange rate changes on cash, cash equivalents and restricted cash		(454)		(47)		(52)		(634)
Net increase (decrease) in cash, cash equivalents and restricted cash		50		(1,925)		28,790		(2,338)
Cash, cash equivalents and restricted cash at beginning of period		36,997	[1]	8,207	[1]	8,207	[1]	10,545
Cash, cash equivalents and restricted cash at end of period	[1]	37,047		6,282		36,997		8,207
Supplemental disclosures of other cash flow information:
Cash paid for interest		153		95		478		264
Cash paid for income taxes				$ 85		688		368
Non-cash financing activities:
Change in value of forward share purchase agreements		271
Common stock issued to settle a payable		423
Note payable issued to settle a payable		$ 400
Buc Mobile
Cash flows from Investing Activities:
Acquisition, net of cash acquired								(2,407)
Cash flows from Financing Activities:
Payment of deferred consideration in relation to the acquisition						(4,000)
Solutions Infini
Cash flows from Investing Activities:
Acquisition, net of cash acquired								$ (5,482)
Cash flows from Financing Activities:
Payment of deferred consideration in relation to the acquisition						$ (5,097)

[1] As of March 31, 2020, includes $16.2 million of cash and cash equivalents and $20.8 million of restricted cash; as of December 31, 2019, includes $16.1 million of cash and cash equivalents and $20.9 million of restricted cash.

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Fair Value Measurements (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands):

	Fair Value Hierarchy as of March 31, 2020						Aggregate Fair Value
	Level 1		Level 2		Level 3
Assets:
Certificates of deposit (1)	$	—	$	3,079	$	—	$	3,079
Total Assets	$	—	$	3,079	$	—	$	3,079
Liabilities:
Interest Rate Swap (2)	$	—	$	73	$	—	$	73
Preference shares (3)		—		—		2		2
Debt for forward share purchase agreements (4)		—		31,530		—		31,530
Total Liabilities	$	—	$	31,603	$	2	$	31,605

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(2) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”.

(3) The preference shares liability was previously estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ended March 31, 2020. On March 9, 2020, the Company signed a modification of the 2018 Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per each preference share.

(4) Based on the information available at the reporting date, debts for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option.

	Fair Value Hierarchy as of December 31, 2019						Aggregate Fair Value
	Level 1		Level 2		Level 3
Assets:
Mutual funds (1)	$	5,124	$	—	$	—	$	5,124
Total Assets	$	5,124	$	—	$	—	$	5,124
Liabilities
Interest Rate Swap (2)	$	—	$	80	$	—	$	80
Preference shares (3)		—		—		2,530		2,530
Debt for forward share purchase agreements (4)		—		34,013		—		34,013
Total Liabilities	$	—	$	34,093	$	2,530	$	36,623

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”.

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ended March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ended March 31, 2020 was materially below its expected level, this would have resulted in a change of the preference shares liability.

(4) Based on the information available at the reporting date, debt for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option.

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018 (in thousands):

	Fair Value Hierarchy as of December 31, 2019						Aggregate Fair Value
	Level 1		Level 2		Level 3
Marketable securities
Mutual funds (1)	$	5,124	$	—	$	—	$	5,124
Total Marketable Securities	$	5,124	$	—	$	—	$	5,124
Liabilities
Interest Rate Swap (2)	$	—	$	80	$	—	$	80
Preference shares (3)		—		—		2,530		2,530
Debt for forward share purchase agreements (4)		—		34,059		—		34,059
Total Liabilities	$	—	$	34,139	$	2,530	$	36,669

(1) Included in the consolidated balance sheet line item “Short-term marketable securities”.

(2) Included in the consolidated balance sheet line item “Other long-term liabilities”.

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ending March 31, 2020 will be materially below its expected level, this would result in a change of the preference shares liability.

(4) Based on the information available at the reporting date, debts for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option. The amount in the above table excludes accrued interest.

	Fair Value Hierarchy as of December 31, 2018							Aggregate Fair Value
	Level 1		Level 2			Level 3
Marketable securities
Mutual funds (1)	$	3,151	$	—		$	—	$	3,151
Total Marketable Securities	$	3,151	$	—		$	—	$	3,151
Liabilities
Interest Rate Swap (2)	$	—	$	97		$	—	$	97
Foreign Exchange Forward (2)		—		(56	)		—		(56	)
Preference shares (3)		—		—			1,834		1,834
Contingent consideration for Solutions Infini acquisition (4)		—		—			482		482
Total Liabilities	$	—	$	41		$	2,316	$	2,357

(1) Included in the consolidated balance sheet line item “Short-term marketable securities”.

(2) Included in the consolidated balance sheet line item “Other long-term liabilities”.

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ending March 31, 2020 will be materially below its expected level, this would result in a change of the preference shares liability.

(4) Based on the information available at the reporting date, the contingent consideration for the Solutions Infini acquisition was estimated as the basis of the present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2019. Such cash flows were contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates, and is significantly above the targeted EBITDA. The amount presented in the table above represents the estimated portion of the total deferred consideration. No changes in fair value were recognized as initially estimated during the year. The actual EBITDA of Solutions Infini for the year ended March 31, 2019 became available in July 2019 and confirmed the initial amount estimated by management and used to determine the contingent consideration for the Solutions Infini acquisition at the reporting date.

Summary of Values of Short-term Investments

The values of short-term investments as of March 31, 2020 and as of December 31, 2019 were as follows (in thousands):

	As of March 31,								As of December 31,
	2020								2019
	Cost		Unrealized gains		Unrealized losses		Fair value		Cost		Unrealized gains		Unrealized losses			Fair value
Mutual funds	$	—	$	—	$	—	$	—	$	5,129	$	1	$	(6	)	$	5,124
Certificates of deposit		3,079		—		—		3,079		—		—		—			—

Values of marketable securities as of December 31, 2019 and 2018 were as follows (in thousands):

	As of December 31,
	2019									2018
	Cost		Unrealized gains		Unrealized losses			Fair value		Cost		Unrealized gains		Unrealized losses			Fair value
Mutual funds	$	5,129	$	1	$	(6	)	$	5,124	$	3,180	$	—	$	(29	)	$	3,151

Summary of Changes in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis and Realized and Unrealized Gains (Losses)

The following table presents changes during the three months ended March 31, 2020 in Level 3 assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair Value Beginning of Period		Net Realized and Unrealized (Gains) Losses Included in Income			Other Comprehensive (Income) Loss			Purchases, Sales, Issuances and Settlements, Net		Change in scope of consolidation		Gross Transfers In		Fair Value End of Period
March 31, 2020
Liabilities:
Preference shares	$	2,530	$	(2,486	)	$	(42	)	$	—	$	—	$	—	$	2

The following tables present changes during the years ended December 31, 2019 and 2018 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities in the consolidated balance sheets at December 31, 2019 and 2018 (in thousands):

	Fair Value Beginning of Year		Net Realized and Unrealized Gains (Losses) Included in Income			Other Comprehensive Income (Loss)			Settlements, Net			Change in scope of consolidation		Gross Transfers Out			Fair Value End of Year
December 31, 2018
Liabilities:
Preference shares	$	—	$	639		$	(6	)	$	—		$	1,201	$	—		$	1,834
Contingent consideration for Solutions Infini acquisition		2,232		(71	)		(72	)		(1,137	)		—		(470	)		482
December 31, 2019
Liabilities:
Preference shares		1,834		753			(57	)		—			—		—			2,530
Contingent consideration for Solutions Infini acquisition		482		(15	)		23			(490	)		—		—			—

Summary of Net Realized and Unrealized (Gains) and Losses Included in Income Related to Level 3 Liabilities

Net realized and unrealized (gains) and losses included in income related to Level 3 liabilities shown above are reported in the condensed consolidated statements of operations as follows (in thousands):

	Research and development			Sales and marketing			General and administrative			Financial income (expense), net			Foreign currency Income (loss)		Total
Three months ended March 31, 2020
Liabilities:
Preference shares	$	(941	)	$	(372	)	$	(756	)	$	(417	)	$	—	$	(2,486	)
Three months ended March 31, 2019
Liabilities:
Preference shares		117			46			94			58			—		315

Net realized and unrealized gains and losses included in income related to Level 3 liabilities shown above are reported in the consolidated statements of operations as follows (in thousands):

	Research and development			Sales and marketing			General and administrative			Financial expense, net			Foreign currency loss		Total
December 31, 2018
Liabilities:
Preference shares	$	(249	)	$	(99	)	$	(200	)	$	(91	)	$	—	$	(639	)
Contingent consideration for Solutions Infini acquisition		—			—			—			(22	)		93		71
December 31, 2019
Liabilities:
Preference shares		(225	)		(89	)		(180	)		(259	)		—		(753	)
Contingent consideration for Solutions Infini acquisition		—			—			—			(3	)		18		15

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Financial Expense, Net

12 Months Ended

Dec. 31, 2019

Financial Expenses Net [Abstract]

Financial Expense, Net

19. FINANCIAL EXPENSE, NET

Financial expense, net for the years ended December 31, 2019 and 2018, consisted of the following (in thousands):

	Year Ended December 31,
	2019			2018
Financial Income:
Interest income	$	160		$	31
Gain on derivatives		414			134
Dividends on marketable securities		97			4
Total Financial Income		671			169
Financial Expense:
Interest expense		(1,073	)		(585	)
Loss on derivatives		(37	)		—
Total Financial Expense		(1,110	)		(585	)
Financial expense, net	$	(439	)	$	(416	)

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Notes Payable

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Debt Disclosure [Abstract]

Notes Payable

9. NOTES PAYABLE

Notes payable to the Sellers

As consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, (the “Convertible Notes”) and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Non-convertible Notes”).

Convertible Notes

As of March 31, 2020, the amount outstanding for Convertible Notes was $7.5 million and accrued interest on Convertible Notes was $76,000.

Interest on the Convertible Notes will accrue at a fixed interest rate equal to the one-year US dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date, plus a margin of one percent (1%) per annum. Interest will be due and payable annually on each of (1) the date which is the twelve-month anniversary of the Business Combination Date and (2) on the date which is the twenty-four-month anniversary of the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

Fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable on the fifteen-month anniversary of the Business Combination Date. The remaining outstanding principal balance of these Convertible Notes plus all accrued and unpaid interest and fees due under these Notes will be due and payable in full on the twenty-four-month anniversary of the Business Combination Date.

In the event that the Company receives, at any time while principal on these Convertible Notes remains outstanding, cash proceeds of an equity financing (the “Financing”) in an amount not less than $50.0 million (the “Notes Financing Proceeds”), fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable no later than ten business days after the Company receives such Notes Financing Proceeds. In the event of a Financing where at any time the Company receives cash proceeds of such Financing in an amount not less than $75.0 million (the “Payoff Financing Proceeds”), one hundred percent of the remaining outstanding principal balance of these Convertible Notes, plus all accrued and unpaid interest and fees due under the Notes will be due and payable no later than ten business days after the Company receives such Payoff Financing Proceeds. The date which is the earlier of (a) the twenty-four-month anniversary of the Business Combination Date, or (b) the date payment is received from Payoff Financing Proceeds, is the “Maturity Date”.

In the event that these Convertible Notes are not paid in full on or before the applicable Maturity Date, then at any time after the sixtieth business day after the Maturity Date, assuming payment in full has not been made prior to such date, the outstanding principal amount of these Notes, together with all accrued but unpaid interest on these Convertible Notes, may be converted into shares of Company common stock, in part or in whole, at the option of the holder of these Convertible Notes by providing written notice at least three business days prior to the date of conversion. A conversion of any portion of these Convertible Note into shares of Company common stock will be effected at a conversion price equal to the Current Market Price as of the date of such conversion (the “Conversion Price”). The term “Current Market Price” means, generally, the average VWAP for the twenty consecutive trading days ending on the date that is five trading days prior to the date of conversion. The term “VWAP” means, for any trading day, the volume weighted average trading price of the Company’s common stock for such trading day on the NYSE (or if the Company’s common stock is no longer traded on the NYSE, on such other exchange as the Company’s common stock is then traded).

Non-convertible Notes

As of March 31, 2020, the amount outstanding for Non-convertible Notes was $7.5 million and accrued interest on Non-convertible Notes was $76,000.

Interest on the Non-convertible Notes shall accrue at a fixed interest rate equal to LIBOR plus a margin of one percent (1%) per annum, which interest rate as of the date hereof is one and ninety-one hundredths percent (1.91%). As used herein, “LIBOR” means the one-year US Dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

The outstanding principal balance of the Non-convertible Notes, plus all accrued and unpaid interest and fees due under these notes, shall be due and payable, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), no later than ten (10) business days after the Company receives the Financing Proceeds.

Notes payable—Other

Prior to the closing of the Business Combination, the Company had issued to several of its stockholders or their affiliates various promissory notes that were due to be paid in full upon the closing of the Business Combination (such notes referred to collectively as either the “Extension Notes” or the “Working Capital Notes”). In conjunction with the completion of the Business Combination, the Company and each of GigAcquisitions, LLC (the “Sponsor”) and an affiliate of the Sponsor, GigFounders, LLC, agreed to amend and restate the Extension Notes and Working Capital Notes held by them to provide that in lieu of repaying such promissory notes in full upon the closing of the Business Combination, the outstanding principal balance of such amended and restated notes (the “Amended Extension Notes” and the “Amended Working Capital Notes”), plus all accrued and unpaid interest (as described below) and fees due under the Amended Extension Notes and Amended Working Capital Notes, shall, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), be due and payable no later than ten business days after the Company receives the Financing Proceeds. Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. None of the Amended Extension Notes or Amended Working Capital Notes will be convertible into securities of the Company. On March 31, 2020, all of the other holders of Extension Notes and Working Capital Notes similarly agreed to amend and restate these notes to exchange them into Amended Extension Notes and Amended Working Capital Notes.

As of March 31, 2020, the outstanding amount of the notes payable for these notes was $3.6 million of which $1.9 million was due to related parties.

On March 6, 2020, the Company issued to Northland, a promissory note for the principal amount of $400,000 as a partial settlement of the amounts owned to Northland for financial advisory services provided by Northland to Kaleyra S.p.A. in connection with the previously consummated Business Combination. This note bears interest at the rate of 8.0% per annum and matures on December 31, 2020.

11. NOTES PAYABLE

Notes payable to the Sellers

As mentioned above, as consideration for the Business Combination, on November 25, 2019 the Company issued unsecured convertible promissory notes to each of Esse Effe and Maya in the amount of $6.0 million and $1.5 million, respectively, (the “Convertible Notes”) and also issued other unsecured promissory notes to each of Esse Effe and Maya in the identical respective amounts (the “Non-convertible Notes”).

Convertible Notes

As of December 31, 2019, debts for Convertible Notes amounted to $7.5 million, of which $21,500 was accrued interest.

Interest on the Convertible Notes will accrue at a fixed interest rate equal to the one-year US dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date, plus a margin of one percent (1%) per annum. Interest will be due and payable annually on each of (1) the date which is the twelve-month anniversary of the Business Combination Date and (2) on the date which is the twenty-four-month anniversary of the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

Fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable on the fifteen-month anniversary of the Business Combination Date. The remaining outstanding principal balance of these Convertible Notes plus all accrued and unpaid interest and fees due under these Notes will be due and payable in full on the twenty-four-month anniversary of the Business Combination Date.

In the event that the Company receives, at any time while principal on these Convertible Notes remains outstanding, cash proceeds of an equity financing (the “Financing”) in an amount not less than $50.0 million (the “Notes Financing Proceeds”), fifty percent (50%) of the outstanding principal balance of these Notes will be due and payable no later than ten business days after the Company receives such Notes Financing Proceeds. In the event of a Financing where at any time the Company receives cash proceeds of such Financing in an amount not less than $75.0 million (the “Payoff Financing Proceeds”), one hundred percent of the remaining outstanding principal balance of these Convertible Notes, plus all accrued and unpaid interest and fees due under the Notes will be due and payable no later than ten business days after the Company receives such Payoff Financing Proceeds. The date which is the earlier of (a) the twenty-four-month anniversary of the Business Combination Date, or (b) the date payment is received from Payoff Financing Proceeds, is the “Maturity Date”.

In the event that these Convertible Notes are not paid in full on or before the applicable Maturity Date, then at any time after the sixtieth business day after the Maturity Date, assuming payment in full has not been made prior to such date, the outstanding principal amount of these Notes, together with all accrued but unpaid interest on these Convertible Notes, may be converted into shares of Company common stock, in part or in whole, at the option of the holder of these Convertible Notes by providing written notice at least three business days prior to the date of conversion. A conversion of any portion of these Convertible Note into shares of Company common stock will be effected at a conversion price equal to the Current Market Price as of the date of such conversion (the “Conversion Price”). The term “Current Market Price” means, generally, the average VWAP for the twenty consecutive trading days ending on the date that is five trading days prior to the date of conversion. The term “VWAP” means, for any trading day, the volume weighted average trading price of the Company common stock for such trading day on the NYSE (or if the Company common stock is no longer traded on the NYSE, on such other exchange as the Company common stock are then traded).

Non-convertible Notes

As of December 31, 2019, debts for Non-convertible Notes amounted to $7.5 million, of which $21,500 was accrued interest.

Interest on the Non-convertible Notes shall accrue at a fixed interest rate equal to LIBOR plus a margin of one percent (1%) per annum, which interest rate as of the date hereof is one and ninety-one hundredths percent (1.91%). As used herein, “LIBOR” means the one-year US Dollar LIBOR interest rate published in The Wall Street Journal on the Business Combination Date. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.

The outstanding principal balance of the Non-convertible Notes, plus all accrued and unpaid interest and fees due under these notes, shall be due and payable, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), no later than ten (10) business days after the Company receives the Financing Proceeds.

Notes payable—Other

Prior to the closing of the Business Combination, the Company had issued to several of its stockholders or their affiliates various promissory notes that were due to be paid in full upon the closing of the Business Combination (such notes referred to collectively as either the “Extension Notes” or the “Working Capital Notes”). In conjunction with the completion of the Business Combination, the Company and each of GigAcquisitions, LLC (the “Sponsor”) and an affiliate of the Sponsor, GigFounders, LLC, agreed to amend and restate the Extension Notes and Working Capital Notes held by them to provide that in lieu of repaying such promissory notes in full upon the closing of the Business Combination, the outstanding principal balance of such amended and restated notes (the “Amended Extension Notes” and the “Amended Working Capital Notes”), plus all accrued and unpaid interest (as described below) and fees due under the Amended Extension Notes and Amended Working Capital Notes, shall, upon the receipt by the Company, whether in a debt or equity financing event by the Company (which may include the receipt of cash from third parties with which the Company has subsequent to year end entered into forward share purchase agreements), of cash proceeds in an amount not less than $11.5 million (the “Financing Proceeds”), be due and payable no later than ten business days after the Company receives the Financing Proceeds. Interest on the Amended Extension Notes and Amended Working Capital Notes will accrue at a fixed interest rate equal to the one-year U.S. dollar LIBOR interest rate published in The Wall Street Journal on the closing of the Business Combination, which is one and ninety-one hundredths percent (1.91%), plus a margin of one percent (1%) per annum. All interest shall be computed on the basis of a 365-day year and the actual number of days elapsed. None of the Amended Extension Notes or Amended Working Capital Notes will be convertible into securities of the Company. On December 31, 2019, all of the other holders of Extension Notes and Working Capital Notes similarly agreed to amend and restate these notes to exchange them into Amended Extension Notes and Amended Working Capital Notes, although one holder did so after December 31, 2019. As of December 31, 2019, the outstanding amount of the notes payable for these notes amounted to $3.6 million of which $1.9 million was due to related parties.

XML

Other Current and Long-Term Liabilities

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Other Liabilities Disclosure [Abstract]

Other Current and Long-Term Liabilities

11. OTHER CURRENT AND LONG-TERM LIABILITIES

Other current liabilities consisted of the following (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Liabilities for tax other than income tax	$	1,038	$	583
Social securities liabilities		184		256
Accrued financial interest		413		149
Other liabilities		388		391
Total other current liabilities	$	2,023	$	1,379

Other long-term liabilities consisted of the following (in thousands):

	As of March 31,		As of December 31,
	2020		2019
Payable to supplier (1)	$	2,700	$	2,700
Long-term performance bonuses		1,433		—
Derivative contract liabilities		73		80
Other long-term liabilities		393		375
Total other long-term liabilities	$	4,599	$	3,155

(1) This obligation was settled by issuance of a note payable on May 1, 2020, when the settlement agreement with the supplier was executed. Refer to Note 19 – Subsequent events – for further details.

15. OTHER CURRENT AND LONG-TERM LIABILITIES

Other current liabilities consisted of the following (in thousands):

	As of December 31,
	2019		2018
Liabilities for tax other than income tax	$	583	$	589
Social securities liabilities		256		180
Income tax liabilities		—		43
Derivative contract liabilities		—		18
Other liabilities		390		179
Total other current liabilities	$	1,229	$	1,009

Long-term liabilities consisted of the following (in thousands):

	As of December 31,
	2019		2018
Long-term trade payable (see Note 27)	$	2,700	$	—
Derivative contract liabilities		80		106
Other long-term liabilities		375		185
Total other long-term liabilities	$	3,155	$	291

XML

Summary of Significant Accounting Policies - Summary of Useful Lives of Intangible Assets (Details)	12 Months Ended
	Dec. 31, 2019
Developed Technology | Minimum
Schedule Of Significant Accounting Policies [Line Items]
Intangible assets, useful life	3 years
Developed Technology | Maximum
Schedule Of Significant Accounting Policies [Line Items]
Intangible assets, useful life	6 years
Customer Relationships | Minimum
Schedule Of Significant Accounting Policies [Line Items]
Intangible assets, useful life	15 years
Customer Relationships | Maximum
Schedule Of Significant Accounting Policies [Line Items]
Intangible assets, useful life	17 years
Patent | Minimum
Schedule Of Significant Accounting Policies [Line Items]
Intangible assets, useful life	3 years
Patent | Maximum
Schedule Of Significant Accounting Policies [Line Items]
Intangible assets, useful life	7 years

XML

Commitments and Contingencies - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Other Commitments [Line Items]
Operating lease, rent expense	$ 309,000	$ 196,000	$ 940,000	$ 307,000
Amount of contingent liabilities payable	126,000		132,000
Provision for contingent liabilities	$ 0		$ 0
Milan office
Other Commitments [Line Items]
Operating lease, option to renew	true		true
Operating lease, renewal term	6 years		6 years

XML

Restricted Stock Units - Summary of RSUs Compensation Expense (Details) - Restricted Stock Units (RSUs) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	$ 6,204,000	$ 996,000
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	1,312,000	299,000
Sales and Marketing
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	1,053,000	115,000
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total	$ 3,839,000	$ 582,000

XML

Debt for Forward Share Purchase Agreements - Additional Information (Details) - USD ($)															1 Months Ended	3 Months Ended		12 Months Ended
	Aug. 30, 2020	May 12, 2020	May 09, 2020	May 07, 2020	Apr. 09, 2020	Apr. 07, 2020	Feb. 21, 2020	Feb. 20, 2020	Feb. 07, 2020	Dec. 13, 2019	Nov. 25, 2019	Nov. 19, 2019	Oct. 31, 2019	Oct. 01, 2019	Dec. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Jan. 23, 2020	Jan. 07, 2020
Debt Instrument [Line Items]
Financial expense																$ (41,000)	$ 70,000	$ (439,000)	$ (416,000)
Kepos Alpha Fund L.P. | Subsequent Event
Debt Instrument [Line Items]
Repurchases of common stock, shares					50,000
Repurchases of common stock, value					$ 500,000
Forward Share Purchase Agreements
Debt Instrument [Line Items]
Debt Instrument, carrying amount															$ 34,100,000	31,500,000		34,100,000
Accrued interest																$ 163,000
Forward Share Purchase Agreements | Greenhaven
Debt Instrument [Line Items]
Business combination, share price							$ 11.00	$ 11.00
Business combination payment for stock purchased								$ 152,000
Business combination payment for number of stock purchased								60,996
Forward Share Purchase Agreements | Greenhaven | Subsequent Event
Debt Instrument [Line Items]
Business combination, share price							$ 11.00	$ 11.00
Business combination payment for stock purchased								$ 152,000
Business combination payment for number of stock purchased								60,996
Forward Share Purchase Agreements | Greenhaven | Scenario Forecast
Debt Instrument [Line Items]
Business combination, share price	$ 11.70
Business combination, shares acquired	700,000
Forward Share Purchase Agreements | Greenhaven | Scenario Forecast | Subsequent Event
Debt Instrument [Line Items]
Business combination, share price	$ 11.70
Business combination, shares acquired	700,000
Forward Share Purchase Agreements | Greenhaven | Common Stock
Debt Instrument [Line Items]
Repurchases of common stock, shares								235,169
Repurchases of common stock, value								$ 2,600,000
Closing of business combination share consideration																6,034
Forward Share Purchase Agreements | Greenhaven | Common Stock | Subsequent Event
Debt Instrument [Line Items]
Repurchases of common stock, shares								235,169
Repurchases of common stock, value								$ 2,600,000
Forward Share Purchase Agreements | Greenhaven | Maximum
Debt Instrument [Line Items]
Business combination, shares acquired							248,963
Forward Share Purchase Agreements | Greenhaven | Maximum | Subsequent Event
Debt Instrument [Line Items]
Business combination, shares acquired							248,963
Forward Share Purchase Agreements | Greenhaven Road Capital Fund 1, LP
Debt Instrument [Line Items]
Debt Instrument, carrying amount															10,600,000	$ 8,200,000		10,600,000
Forward Share Purchase Agreements | Kepos Alpha Fund L.P.
Debt Instrument [Line Items]
Debt Instrument, carrying amount															2,100,000	2,100,000		2,100,000
Business combination, shares acquired														3,750,000
Forward Share Purchase Agreements | Kepos Alpha Fund L.P. | Subsequent Event
Debt Instrument [Line Items]
Percentage of increase in share purchase price				1.00%
Percentage of penalty payments						18.00%
Forward Share Purchase Agreements | Kepos Alpha Fund L.P. | Scenario Forecast
Debt Instrument [Line Items]
Percentage of increase in share purchase price				1.00%
Forward Share Purchase Agreements | Yakira
Debt Instrument [Line Items]
Debt Instrument, carrying amount															12,000,000	12,100,000		12,000,000
Forward Share Purchase Agreements | Yakira | Yakira Rights Shares
Debt Instrument [Line Items]
Business combination, share price												$ 1.05
Closing of business combination share consideration												439,299
Purchase price per share												$ 10.50
Forward Share Purchase Agreements | Yakira | Yakira Shares
Debt Instrument [Line Items]
Business combination, share price												10.50
Sale of stock price per unit												$ 10.5019
Closing of business combination share consideration												1,084,150
Sale of stock description												Yakira still owns Yakira Shares as of the four-month anniversary of the Business Combination Date, Yakira may sell such Yakira Shares between the four-month anniversary and six month anniversary of Business Combination Date to the Company for a per share price (the “Yakira Shares Purchase Price”) equal to (a) $10.5019, plus (b) $0.03 per share for each month (prorated for a partial month) following the Business Combination Date that Yakira has held the Yakira Shares.
Sale of stock basis spread per month on price per share												$ 0.03
Deposited in escrow account												$ 11,576,509
Share Purchases Price Multiplied By Number Of Share												$ 10.6819
Forward Share Purchase Agreements | Yakira | Yakira Shares | Previously Reported
Debt Instrument [Line Items]
Closing of business combination share consideration												1,083,750
Forward Share Purchase Agreements | Yakira | Subsequent Event
Debt Instrument [Line Items]
Closing of business combination share consideration		1,084,150
Business combination, purchase price		$ 11,580,782
Forward Share Purchase Agreements | Yakira | Subsequent Event | Yakira Shares
Debt Instrument [Line Items]
Business combination, share price									$ 10.93
Business combination, number of shares expected to be purchase									43,930
Forward Share Purchase Agreements | Yakira | Minimum | Yakira Shares
Debt Instrument [Line Items]
Sale of stock price per unit												$ 10.50
Forward Share Purchase Agreements | Yakira | Maximum | Yakira Shares
Debt Instrument [Line Items]
Business combination, share price												10.6819
Forward Share Purchase Agreements | Glazer Capital, LLC
Debt Instrument [Line Items]
Debt Instrument, carrying amount															$ 9,300,000	$ 9,200,000		9,300,000
Business combination, share price												$ 10.6819				$ 10.50
Business combination payment for stock purchased																$ 15,000
Business combination, shares issued description												Glazer shall notify the Company in writing five business days prior to the six month anniversary of the Business Combination Date if it is not exercising its right to sell the Glazer Shares to the Company; otherwise, absent written notification to the contrary, Glazer shall be deemed to have exercised its right to sell all of its Glazer Shares to the Company. The Company will purchase the Glazer Shares from Glazer on the six-month anniversary of the closing of the Business Combination (the “Glazer Shares Closing Date”). As of the Business Combination Date, Glazer held 922,933 shares of common stock.				Glazer shall notify the Company in writing five business days prior to the six month anniversary of the Business Combination Date if it is not exercising its right to sell the Glazer Shares to the Company; otherwise, absent written notification to the contrary, Glazer shall be deemed to have exercised its right to sell all of its Glazer Shares to the Company. The Company will purchase the Glazer Shares from Glazer on the six-month anniversary of the closing of the Business Combination (the “Glazer Shares Closing Date”). As of the Business Combination Date, Glazer held 922,933 shares of common stock.
Business combination of closing period												6 months
Business combination, deposited in to escrow account												$ 9,858,678
Business combination of sale business days												3 days
Forward Share Purchase Agreements | Glazer Capital, LLC | Letter of Credit and Reimbursement Agreement
Debt Instrument [Line Items]
Agreement collateral amount																					$ 9,300,000
Forward Share Purchase Agreements | Glazer Capital, LLC | Subsequent Event | Letter of Credit and Reimbursement Agreement
Debt Instrument [Line Items]
Agreement collateral amount																					$ 9,300
Forward Share Purchase Agreements | Glazer Capital, LLC | Common Stock
Debt Instrument [Line Items]
Closing of business combination share consideration												922,933			53,040	5,800
Forward Share Purchase Agreements | Nomura Global Financial Products
Debt Instrument [Line Items]
Business combination, share price													$ 10.50
Prepayment amount transferred to NGFP											$ 17,044,584
Number of days notice required for termination of agreement													10 days
Debt instrument interest rate percentage before original valuation date													2.75%
Debt instrument interest rate percentage after original valuation date													3.50%
Financial expense																$ 117,000		$ 46,000,000
Forward Share Purchase Agreements | Nomura Global Financial Products | Common Stock
Debt Instrument [Line Items]
Business acquisition number of shares held													1,623,000
Forward Share Purchase Agreements | Nomura Global Financial Products | Maximum | Common Stock
Debt Instrument [Line Items]
Closing of business combination share consideration													2,000,000
Forward Share Purchase Agreements | Open Market | Greenhaven
Debt Instrument [Line Items]
Business combination, share price																				$ 11.70
Number of days notice required for sale of shares under minimum block size condition										3 days
Exercise price of warrants, description																In the event that Greenhaven sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that Greenhaven meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay Greenhaven in accordance with Greenhaven’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the Greenhaven Purchase Agreement shall prohibit Greenhaven from entering into a contract to purchase and/or sell warrants of Kaleyra, Inc.		In the event that Greenhaven sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that Greenhaven meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay Greenhaven in accordance with Greenhaven’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the Greenhaven Purchase Agreement shall prohibit Greenhaven from entering into a contract to purchase and/or sell warrants of Kaleyra, Inc.
Sale of stock price per unit																				8.50
Forward Share Purchase Agreements | Open Market | Greenhaven | Subsequent Event
Debt Instrument [Line Items]
Business combination, share price																				11.70
Sale of stock price per unit																				$ 8.50
Forward Share Purchase Agreements | Open Market | Greenhaven | Minimum
Debt Instrument [Line Items]
Business combination, share price										$ 10.50
Number of additional rights acquired under minimum block size condition										25,000
Exercise price of warrants under minimum block size condition										$ 8.50
Forward Share Purchase Agreements | Open Market | Kepos Alpha Fund L.P.
Debt Instrument [Line Items]
Number of days notice required for sale of shares under minimum block size condition										3 days
Exercise price of warrants, description																In the event that KAF sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that KAF meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay KAF in accordance with KAF’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the KAF Purchase Agreement shall prohibit KAF from entering into a contract to purchase and/or sell warrants of the Company.		In the event that KAF sells any shares (including any Additional Shares), at a sale price of less than $10.50, and provided that KAF meets the Minimum Block Size Condition, it shall provide notice to the Company within three (3) Business Days of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $8.50, and the Company shall pay KAF in accordance with KAF’s written instructions an amount equal to (x) the number of shares (including any Additional Shares) sold multiplied by (y) the amount by which $10.50 exceeds the sale price per share. Furthermore, the parties agreed that nothing in the KAF Purchase Agreement shall prohibit KAF from entering into a contract to purchase and/or sell warrants of the Company.
Forward Share Purchase Agreements | Open Market | Kepos Alpha Fund L.P. | Subsequent Event
Debt Instrument [Line Items]
Sale of stock price per unit						$ 7.00
Forward Share Purchase Agreements | Open Market | Kepos Alpha Fund L.P. | Minimum
Debt Instrument [Line Items]
Business combination, share price										$ 10.50
Exercise price of warrants under minimum block size condition										$ 8.50
Forward Share Purchase Agreements | Open Market | Glazer Capital, LLC
Debt Instrument [Line Items]
Number of days notice required for sale of shares under minimum block size condition										3 days
Exercise price of warrants, description																Glazer shall give written notice to the Company of any sale of shares (including any Additional Shares) within three (3) Business Days following the date of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $10.50 per share (or greater than $8.50 per Share provided that Glazer meets the Minimum Block Size Condition) prior to the payment of any commissions due by Glazer for the sale.		Glazer shall give written notice to the Company of any sale of shares (including any Additional Shares) within three (3) Business Days following the date of such sale, and such notice shall include the date of the sale, the number of shares sold, and confirmation that the sale price per share was greater than $10.50 per share (or greater than $8.50 per share provided that Glazer meets the Minimum Block Size Condition) prior to the payment of any commissions due by Glazer for the sale.
Forward Share Purchase Agreements | Open Market | Glazer Capital, LLC | Minimum
Debt Instrument [Line Items]
Business combination, share price										$ 10.50
Exercise price of warrants under minimum block size condition										8.50
Forward Share Purchase Agreements, First right
Debt Instrument [Line Items]
Business combination, share price										$ 11.00
Business combination, shares acquired										196,195
Forward Share Purchase Agreements, Second Right
Debt Instrument [Line Items]
Business combination, share price										$ 10.70
Business combination, shares acquired										250,000
Forward Share Purchase Agreements, Third Right
Debt Instrument [Line Items]
Business combination, share price										$ 10.50
Business combination, shares acquired										550,000
Forward Share Purchase Agreements, First Right Additional Purchase | Kepos Alpha Fund L.P.
Debt Instrument [Line Items]
Business combination, share price										$ 10.70
Business combination, shares acquired										102,171
Forward Share Purchase Agreements, Second Right Additional Purchase | Kepos Alpha Fund L.P.
Debt Instrument [Line Items]
Business combination, share price										$ 10.50
Business combination, shares acquired										93,676
Forward Share Purchase Agreement Fourth Right | Kepos Alpha Fund L.P. | Subsequent Event
Debt Instrument [Line Items]
Business combination, share price				$ 10.92
Business combination, shares acquired				46,137		46,137
Forward Share Purchase Agreement Fourth Right | Kepos Alpha Fund L.P. | Scenario Forecast
Debt Instrument [Line Items]
Business combination, share price				$ 10.92
Business combination, shares acquired				46,137
Forward Share Purchase Agreement Fifth Right | Kepos Alpha Fund L.P. | Subsequent Event
Debt Instrument [Line Items]
Business combination, share price				$ 10.82		$ 10.82
Business combination, shares acquired				93,676		93,676
Forward Share Purchase Agreement Fifth Right | Kepos Alpha Fund L.P. | Scenario Forecast
Debt Instrument [Line Items]
Business combination, share price				$ 10.82
Business combination, shares acquired				93,676
Forward Share Purchase Agreement Sixth Right | Kepos Alpha Fund L.P. | Maximum | Subsequent Event
Debt Instrument [Line Items]
Business combination, share price						$ 10.92
Yakira First Amended Purchase Agreement | Yakira | Yakira Rights Shares
Debt Instrument [Line Items]
Business combination, share price									$ 10.93			$ 10.50
Business combination, number of shares expected to be purchase									43,930
Yakira Second Amended Purchase Agreement | Yakira | Subsequent Event
Debt Instrument [Line Items]
Number of rights shares to be purchased			43,930

XML

Derivative Financial Instruments - Additional Information (Details) - Not Designated as Hedging Instruments € in Millions, $ in Millions	Mar. 31, 2020 USD ($)	Mar. 31, 2020 EUR (€)	Dec. 31, 2019 USD ($)	Dec. 31, 2019 EUR (€)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 EUR (€)
Interest Rate Swap
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount	$ 6.3	€ 5.8	$ 7.0	€ 6.3	$ 9.0	€ 7.9
Foreign Exchange Forward
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount					$ 7.1

XML

Subsequent Events - Additional Information (Details)																					3 Months Ended	12 Months Ended
	Aug. 30, 2020 $ / shares shares	May 12, 2020 shares	May 07, 2020 $ / shares shares	May 01, 2020 USD ($) shares	Apr. 24, 2020 USD ($)	Apr. 16, 2020 USD ($) d $ / shares	Apr. 09, 2020 USD ($) $ / shares shares	Apr. 07, 2020 USD ($) $ / shares shares	Mar. 31, 2020 USD ($) $ / shares shares	Mar. 20, 2020 USD ($)	Mar. 11, 2020 USD ($)	Mar. 09, 2020 INR (₨) ₨ / shares	Feb. 21, 2020 $ / shares shares	Feb. 20, 2020 USD ($) $ / shares shares	Feb. 07, 2020 $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares		Nov. 25, 2019 shares	Nov. 19, 2019 $ / shares shares	Oct. 01, 2019 shares	Mar. 31, 2020 USD ($) $ / shares shares	Dec. 31, 2019 USD ($) $ / shares shares		Apr. 29, 2020 $ / shares shares	Mar. 20, 2020 EUR (€)	Mar. 11, 2020 EUR (€)	Mar. 06, 2020 USD ($)	Feb. 29, 2020 ₨ / shares	Jan. 31, 2020 USD ($)	Jan. 30, 2020 INR (₨)	Jan. 23, 2020 USD ($) $ / shares	Dec. 13, 2019 $ / shares	Dec. 31, 2018 USD ($) $ / shares shares		Dec. 12, 2017 $ / shares
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity | $									$ 6,600,000							$ 5,600,000					$ 6,600,000	$ 5,600,000											$ 4,600,000
Amounts owed to Service Firms | $																					$ 13,100,000	$ 13,100,000
Preferred stock, par value | $ / shares									$ 0.0001							$ 0.0001					$ 0.0001	$ 0.0001											$ 0.0001
Interest variable rate																					1.00%	1.00%
Common stock value | $									$ 2,000							$ 2,000	[1]				$ 2,000	$ 2,000	[1]										$ 1,000	[1]
Common stock, shares issued									20,254,217							19,977,113		19,977,113			20,254,217	19,977,113
Common stock, par value | $ / shares									$ 0.0001							$ 0.0001					$ 0.0001	$ 0.0001													$ 0.0001
Conversion of stock, shares converted																		1,321,756
Warrants issued				0
Kaleyra S.p.A
Subsequent Event [Line Items]
Common stock, shares issued																																	10,687,106
Common stock, par value | $ / shares																																	$ 0.0001
Cowen Investments and Chardan
Subsequent Event [Line Items]
Debt instrument face amount | $				$ 2,700,000
Aggregate settlement of investment shares				440,595
Cowen Investments
Subsequent Event [Line Items]
Debt instrument face amount | $				$ 2,300,000
Aggregate settlement of investment shares				374,506
Conversion of stock, shares converted				303,171
Chardan
Subsequent Event [Line Items]
Debt instrument face amount | $				$ 405,000
Aggregate settlement of investment shares				66,089
Conversion of stock, shares converted				53,501
Monte dei Paschi di Siena S.p.A.
Subsequent Event [Line Items]
Interest rate																0.95%						0.95%
Interest variable rate																						0.95%
Maximum
Subsequent Event [Line Items]
Interest variable rate																					7.60%	7.60%
Minimum
Subsequent Event [Line Items]
Interest variable rate																					0.60%	0.60%
Northland Securities
Subsequent Event [Line Items]
Business combination, share price | $ / shares																$ 0.0001						$ 0.0001
Amounts owed to Service Firms | $																$ 100,000
Consummated business combination share																140,000
Northland Securities | Promissory Note
Subsequent Event [Line Items]
Debt instrument face amount | $																$ 400,000						$ 400,000					$ 400,000
Interest rate																											8.00%
Cowen and Company, LLC and Chardan Capital markets, LLC | Scenario Forecast
Subsequent Event [Line Items]
Amounts owed to Service Firms | $						$ 5,400,000
Forward Share Purchase Agreements | Greenhaven
Subsequent Event [Line Items]
Business combination, share price | $ / shares													$ 11.00	$ 11.00
Business combination payment for stock purchased | $														$ 152,000
Business combination payment for number of stock purchased														60,996
Forward Share Purchase Agreements | Greenhaven | Scenario Forecast
Subsequent Event [Line Items]
Business combination, share price | $ / shares	$ 11.70
Business combination, shares acquired	700,000
Forward Share Purchase Agreements | Greenhaven | Open Market
Subsequent Event [Line Items]
Business combination, share price | $ / shares																															$ 11.70
Sale of stock price per share | $ / shares																															$ 8.50
Forward Share Purchase Agreements | Greenhaven | Common Stock
Subsequent Event [Line Items]
Repurchases of common stock, shares														235,169
Repurchases of common stock, value | $														$ 2,600,000
Consummated business combination share																					6,034
Forward Share Purchase Agreements | Greenhaven | Maximum
Subsequent Event [Line Items]
Business combination, shares acquired													248,963
Forward Share Purchase Agreements | Greenhaven | Minimum | Open Market
Subsequent Event [Line Items]
Business combination, share price | $ / shares																																$ 10.50
Forward Share Purchase Agreements | Kepos Alpha Fund L.P.
Subsequent Event [Line Items]
Business combination, shares acquired																				3,750,000
Forward Share Purchase Agreements | Kepos Alpha Fund L.P. | Scenario Forecast
Subsequent Event [Line Items]
Percentage of increase in share purchase price			1.00%
Forward Share Purchase Agreements | Kepos Alpha Fund L.P. | Minimum | Open Market
Subsequent Event [Line Items]
Business combination, share price | $ / shares																																$ 10.50
Forward Share Purchase Agreements | Yakira | Yakira Shares
Subsequent Event [Line Items]
Business combination, share price | $ / shares																			$ 10.50
Sale of stock price per share | $ / shares																			$ 10.5019
Consummated business combination share																			1,084,150
Forward Share Purchase Agreements | Yakira | Yakira Shares | Previously Reported
Subsequent Event [Line Items]
Consummated business combination share																			1,083,750
Forward Share Purchase Agreements | Yakira | Maximum | Yakira Shares
Subsequent Event [Line Items]
Business combination, share price | $ / shares																			$ 10.6819
Forward Share Purchase Agreements | Yakira | Minimum | Yakira Shares
Subsequent Event [Line Items]
Sale of stock price per share | $ / shares																			$ 10.50
Forward Share Purchase Agreement Fourth Right | Kepos Alpha Fund L.P. | Scenario Forecast
Subsequent Event [Line Items]
Business combination, share price | $ / shares			$ 10.92
Business combination, shares acquired			46,137
Forward Share Purchase Agreement Fifth Right | Kepos Alpha Fund L.P. | Scenario Forecast
Subsequent Event [Line Items]
Business combination, share price | $ / shares			$ 10.82
Business combination, shares acquired			93,676
Business combination number of shares acquired applicable for price increase after closing date			93,676
Modification of 2018 Solutions Infini Purchase Agreement | Preferred Stock | COVID-19
Subsequent Event [Line Items]
Preference shares, performance bonuses | $																													$ 1,400,000
Modification of 2018 Solutions Infini Purchase Agreement | Preferred Stock | COVID-19 | Previously Reported
Subsequent Event [Line Items]
Preference shares, performance bonuses | $																													1,500,000
Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini
Subsequent Event [Line Items]
Preferred stock, par value | ₨ / shares																												₨ 10.0
Preferred share obligation									$ 2,000			₨ 132,000									$ 2,000								2,000
Performance bonuses to be paid date, year												2020
Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini | Preferred Stock | COVID-19
Subsequent Event [Line Items]
Preference shares, performance bonuses | $																													3,500,000
Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini | Preferred Stock | COVID-19 | Previously Reported
Subsequent Event [Line Items]
Preference shares, performance bonuses | $																													3,700,000
Resale Registration Statement | Cowen and Company, LLC and Chardan Capital markets, LLC | Scenario Forecast
Subsequent Event [Line Items]
Common stock value | $						$ 2,700,000
Warrants exercise price | $ / shares						$ 0.01
Beneficial ownership limitation percentage						4.99%
Settlement shares, threshold percentage						15.00%
Settlement shares, trailing days | d						10
Resale Registration Statement | Cowen and Company, LLC and Chardan Capital markets, LLC | Scenario Forecast | Convertible Notes
Subsequent Event [Line Items]
Debt instrument, term						3 years
Interest rate						5.00%
Convertible notes | $						$ 2,700,000
Convertible notes, threshold percentage						5.00%
Convertible notes, trailing days | d						10
Subsequent Event
Subsequent Event [Line Items]
Line of credit facility payment | $					$ 350,000
Common stock, par value | $ / shares																								$ 0.0001
Common stock grant date value per share | $ / shares																								$ 7.00
Subsequent Event | Intesa SanPaolo S.p.A. | Kaleyra S.p.A
Subsequent Event [Line Items]
Deferment of debt repayments to next 12 months | $									$ 412,000
Subsequent Event | Intesa SanPaolo S.p.A. | Buc Mobile
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity | $																															$ 1,000,000
Subsequent Event | Unicredit | Kaleyra S.p.A
Subsequent Event [Line Items]
Deferment of debt repayments to next 12 months | $							$ 1,600,000
Subsequent Event | Kepos Alpha Fund L.P.
Subsequent Event [Line Items]
Repurchases of common stock, shares							50,000
Repurchases of common stock, value | $							$ 500,000
Subsequent Event | Cowen and Company, LLC and Chardan Capital markets, LLC
Subsequent Event [Line Items]
Amounts owed to Service Firms | $						$ 5,400,000
Subsequent Event | Forward Share Purchase Agreements | Greenhaven
Subsequent Event [Line Items]
Business combination, share price | $ / shares													$ 11.00	$ 11.00
Business combination payment for stock purchased | $														$ 152,000
Business combination payment for number of stock purchased														60,996
Subsequent Event | Forward Share Purchase Agreements | Greenhaven | Scenario Forecast
Subsequent Event [Line Items]
Business combination, share price | $ / shares	$ 11.70
Business combination, shares acquired	700,000
Subsequent Event | Forward Share Purchase Agreements | Greenhaven | Open Market
Subsequent Event [Line Items]
Business combination, share price | $ / shares																															$ 11.70
Sale of stock price per share | $ / shares																															$ 8.50
Subsequent Event | Forward Share Purchase Agreements | Greenhaven | Common Stock
Subsequent Event [Line Items]
Repurchases of common stock, shares														235,169
Repurchases of common stock, value | $														$ 2,600,000
Subsequent Event | Forward Share Purchase Agreements | Greenhaven | Maximum
Subsequent Event [Line Items]
Business combination, shares acquired													248,963
Subsequent Event | Forward Share Purchase Agreements | Kepos Alpha Fund L.P.
Subsequent Event [Line Items]
Percentage of increase in share purchase price			1.00%
Percentage of penalty payments								18.00%
Subsequent Event | Forward Share Purchase Agreements | Kepos Alpha Fund L.P. | Open Market
Subsequent Event [Line Items]
Sale of stock price per share | $ / shares								$ 7.00
Subsequent Event | Forward Share Purchase Agreements | Yakira
Subsequent Event [Line Items]
Consummated business combination share		1,084,150
Subsequent Event | Forward Share Purchase Agreements | Yakira | Yakira Shares
Subsequent Event [Line Items]
Business combination, share price | $ / shares															$ 10.93
Business combination, number of shares expected to be purchase															43,930
Subsequent Event | Forward Share Purchase Agreement Seventh Right | Kepos Alpha Fund L.P.
Subsequent Event [Line Items]
Business combination, share price | $ / shares							$ 10.92
Business combination, shares acquired							50,000
Subsequent Event | Forward Share Purchase Agreement Fourth Right | Kepos Alpha Fund L.P.
Subsequent Event [Line Items]
Business combination, share price | $ / shares			$ 10.92
Business combination, shares acquired			46,137					46,137
Subsequent Event | Forward Share Purchase Agreement Fifth Right | Kepos Alpha Fund L.P.
Subsequent Event [Line Items]
Business combination, share price | $ / shares			$ 10.82					$ 10.82
Business combination, shares acquired			93,676					93,676
Subsequent Event | Forward Share Purchase Agreement Sixth Right | Kepos Alpha Fund L.P. | Maximum
Subsequent Event [Line Items]
Business combination, share price | $ / shares								$ 10.92
Subsequent Event | Modification of 2018 Solutions Infini Purchase Agreement | Solutions Infini
Subsequent Event [Line Items]
Preferred stock, par value | ₨ / shares												₨ 10.0
Preferred share obligation																													$ 2,000	₨ 140,000
Performance bonuses to be paid date, year												2020
Subsequent Event | Loan Agreement | Monte dei Paschi di Siena S.p.A. | Kaleyra S.p.A
Subsequent Event [Line Items]
Debt instrument face amount											$ 2,200,000															€ 2,000,000
Debt instrument, term											36 months
Interest rate											1.75%															1.75%
Subsequent Event | BPM Loan Agreement | Banco Popolare di Milano S.p.A. | Kaleyra S.p.A
Subsequent Event [Line Items]
Debt instrument face amount										$ 6,500,000															€ 6,000,000
Debt instrument, term										45 months
Description of variable rate										three-month Euribor plus a spread of 3.00%.
Interest variable rate										3.00%
Frequency of periodic repayment										15 quarterly installments
Subsequent Event | BPM Loan Agreement | Banco Popolare di Milano S.p.A. | New Financing | Kaleyra S.p.A
Subsequent Event [Line Items]
Debt instrument face amount | $										$ 2,700,000
Subsequent Event | Resale Registration Statement | Cowen and Company, LLC and Chardan Capital markets, LLC
Subsequent Event [Line Items]
Common stock value | $						$ 2,700,000
Warrants exercise price | $ / shares						$ 0.01
Beneficial ownership limitation percentage						4.99%
Settlement shares, threshold percentage						15.00%
Settlement shares, trailing days | d						10
Subsequent Event | Resale Registration Statement | Cowen and Company, LLC and Chardan Capital markets, LLC | Convertible Notes
Subsequent Event [Line Items]
Debt instrument, term						3 years
Interest rate						5.00%
Convertible notes | $						$ 2,700,000
Convertible notes, threshold percentage						5.00%
Convertible notes, trailing days | d						10
Repaid earlier interest rate issuance term						1 year
Repaid after interest rate issuance term						2 years
Earnout Shares | Subsequent Event
Subsequent Event [Line Items]
Common stock, shares issued																								1,763,633
Kaleyra S.p.A | BPM Loan Agreement | Banco Popolare di Milano S.p.A.
Subsequent Event [Line Items]
Debt instrument face amount										$ 6,500,000															€ 6,000,000.0
Debt instrument, term										45 months
Description of variable rate										three-month Euribor plus a spread of 3.00%.
Interest variable rate										3.00%
Frequency of periodic repayment										15 quarterly installments
Kaleyra S.p.A | BPM Loan Agreement | Banco Popolare di Milano S.p.A. | New Financing
Subsequent Event [Line Items]
Debt instrument face amount | $										$ 2,700,000
Kaleyra S.p.A | Subsequent Event | Unicredit
Subsequent Event [Line Items]
Deferment of debt repayments to next 12 months | $							$ 1,600,000	$ 694,000

[1] Amounts as of December 31, 2018 differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and additional paid-in capital were adjusted accordingly.

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Fair Value Measurements - Additional Information (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Fair Value Disclosures [Abstract]
Transfers of liabilities into or out of level 2 or level 3	$ 0	$ 0

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Goodwill and Intangible Assets, Net (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Goodwill

Goodwill as of March 31, 2020 and December 31, 2019 was as follows (in thousands):

Balance as of December 31, 2019	$	16,953
Effect of exchange rate		(583	)
Balance as of March 31, 2020	$	16,370

Goodwill as of December 31, 2019 and 2018 was as follows (in thousands):

Balance as of December 31, 2018	$	17,276
Effect of exchange rate		(323	)
Balance as of December 31, 2019	$	16,953

Summary of Intangible Assets

Intangible assets consisted of the following (in thousands):

	As of March 31, 2020						As of December 31, 2019
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortizable Intangible Assets:
Developed technology	$	2,711	$	1,080	$	1,631	$	2,775	$	952	$	1,823
Customer relationships		8,777		1,826		6,951		9,077		1,631		7,446
Patent		118		35		83		113		29		84
Total amortizable intangible assets	$	11,606	$	2,941	$	8,665	$	11,965	$	2,612	$	9,353

Intangible assets consisted of the following (in thousands):

	As of December 31,
	2019						2018
	Gross		Accumulated amortization		Net		Gross		Accumulated amortization		Net
Amortizable Intangible Assets
Developed technology	$	2,775	$	952	$	1,823	$	2,810	$	310	$	2,500
Customer relationships		9,077		1,631		7,446		9,243		555		8,688
Patent		113		29		84		99		11		88
Total amortizable intangible assets	$	11,965	$	2,612	$	9,353	$	12,152	$	876	$	11,276

Summary of Estimated Future Amortization Expense

Total estimated future amortization expense as of March 31, 2020 is as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	1,221
2021		1,409
2022		1,138
2023		1,035
2024		834
2025 and thereafter		3,028
Total	$	8,665

Total estimated future amortization expense as of December 31, 2019 is as follows (in thousands):

	As of December 31, 2019
2020	$	1,689
2021		1,451
2022		1,169
2023		1,062
2024		854
2025 and thereafter		3,128
Total	$	9,353

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Condensed Consolidated Statements of Stockholders' Equity (Deficit) (Unaudited) (Parenthetical) - $ / shares	Mar. 06, 2020	Dec. 31, 2018
Common stock, shares authorized		100,000
Common stock, no par value		$ 0
Northland Securities Inc
Common stock issued to settle a payable, shares	140,000

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Useful Lives of Property and Equipment

The useful lives of property and equipment are as follows:

Internal-use software development costs	4 years
Servers	3 - 6 years
Office equipment	3 - 5 years
Leasehold improvements	5 years or remaining lease term (1)
Furniture and fixtures	4 - 8 years
Vehicles	8 - 10 years
Software	3 years
Other assets	4 years

(1) Including renewal options

Property and equipment consisted of the following (in thousands):

	As of December 31,
	2019		2018
Internal-use software development costs	$	1,470	$	1,440
Servers (1)		1,629		1,170
Office equipment		1,153		965
Leasehold improvements		616		222
Furniture and fixtures		388		189
Assets-in-progress (2)		665		108
Vehicles		23		49
Software		4		4
Other assets		91		103
Total property and equipment		6,039		4,250
Less: accumulated depreciation and amortization		2,646		1,909
Total property and equipment, net	$	3,393	$	2,341

(1) Including equipment under capital leases with gross amount of $288,000 and accumulated depreciation of $78,000 as of December 31, 2019 (gross amount of $94,000 and accumulated depreciation of $31,000 as of December 31, 2018).

(2) Assets-in progress amounting to $665,000 as of December 31, 2019 include: (i) internal-use software development costs in-progress for $546,000; and (ii) software in-progress for $119,000.

Summary of Useful Lives of Intangible Assets

The useful lives of the intangible assets are as follows:

Developed technology	3 - 6 years
Customer relationships (accelerated method)	15 - 17 years
Patent	3 - 7 years

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Consolidated Statement of Operations - USD ($)	3 Months Ended				12 Months Ended
	Mar. 31, 2020		Mar. 31, 2019		Dec. 31, 2019		Dec. 31, 2018
Income Statement [Abstract]
Revenue	$ 33,633,000		$ 27,725,000		$ 129,558,000		$ 77,845,000
Cost of revenue	28,902,000		22,476,000		103,205,000		62,425,000
Gross profit	4,731,000		5,249,000		26,353,000		15,420,000
Operating expenses:
Research and development	2,810,000		1,196,000		5,310,000		3,368,000
Sales and marketing	3,743,000		1,472,000		6,031,000		6,313,000
General and administrative	7,759,000		3,779,000		17,431,000		11,359,000
Loss on equity investments							(95,000)
Total operating expenses	14,312,000		6,447,000		28,772,000		20,945,000
Loss from operations	(9,581,000)		(1,198,000)		(2,419,000)		(5,525,000)
Other income, net	42,000		82,000		136,000		297,000
Financial income (expense), net	(41,000)		70,000		(439,000)		(416,000)
Foreign currency income (loss)	168,000		(254,000)		(517,000)		(32,000)
Loss before income tax expense (benefit)	(9,412,000)		(1,300,000)		(3,239,000)		(5,676,000)
Income tax expense (benefit)	(589,000)		79,000		2,273,000		1,424,000
Net loss	(8,823,000)		(1,379,000)		(5,512,000)		(7,100,000)
Net loss attributable to non-controlling interests							(2,000)
Net loss attributable to the owners of the parent	$ (8,823,000)		$ (1,379,000)		(5,512,000)		(7,098,000)
Net loss attributable to common stockholders					$ (5,512,000)		$ (7,100,000)
Net loss per share attributable to common stockholders, basic and diluted	$ (0.44)	[1]	$ (0.13)	[1]	$ (0.48)	[2]	$ (0.72)	[2]
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted	19,979,589	[1]	10,687,106	[1]	11,603,381	[2]	9,828,411	[2]

[1] Amounts for the three months ended March 31, 2019 were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share, basic and diluted were retrospectively adjusted accordingly.

[2] Amounts for the year ended December 31, 2018 differ from those published in prior year consolidated financial statements as they were retrospectively adjusted as a result of the accounting for the Business Combination (as defined below in the notes). Specifically, the number of common shares outstanding during periods before the Business Combination are computed on the basis of the number of common shares of Kaleyra S.p.A. (accounting acquiror) during those periods multiplied by the exchange ratio established in the stock purchase agreement. Common stock and net loss per share attributable to common stockholders, basic and diluted were adjusted accordingly

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Employee Benefit (Tables)

12 Months Ended

Dec. 31, 2019

Compensation And Retirement Disclosure [Abstract]

Schedule of Changes in Obligations of Defined Benefit Plans

Changes in obligations of the defined benefit plans is as follows (in thousands):

	As of December 31,
	2019			2018
Benefit obligation at the beginning of the period	$	1,173		$	947
Change in scope of consolidation		—			155
Service cost		165			152
Interest cost		33			22
Actuarial loss		89			11
Benefit paid		(13	)		(67	)
Foreign exchange translation reserve		(23	)		(47	)
Benefit obligation at the end of the period	$	1,424		$	1,173
Of which:
Current (1)	$	26		$	26
Long-term	$	1,398		$	1,147

(1) Included within “Payroll and payroll related accrued liabilities” in the accompanying consolidated balance sheets.

Schedule of Assumptions Used to Determine Pension Benefit Obligations

The assumptions used to determine benefit obligations at year-end are as follows:

	As of December 31,
	2019	2018
Discount rate for Kaleyra S.p.A. (1)	0.78%	1.74%
Discount rate for Solutions Infini (2)	7.25%	7.75%
Rate of compensation increase for Kaleyra S.p.A.	0.50% - 3.00%	0.50% - 3.00%
Rate of compensation increase for Solutions Infini	15.00%	15.00%

(1) The discount rate for Kaleyra S.p.A. is based on the Euro area composite yields AA with a duration equal to the estimated term of the obligations, examined as of December 31, 2019.

(2) The discount rate for Solutions Infini is based on the prevailing market yields of Indian government securities at the balance sheet date for the estimated term of the obligations.

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Income Taxes - Summary of Gross Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Gross unrecognized tax benefits, beginning of the year	$ 190	$ 91
Additions for tax positions related to the current year	193	93
Effect of exchange rate	(6)	2
Subtotal	377	186
Interest and penalties	91	4
Total gross unrecognized tax benefits, end of the year	$ 468	$ 190

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Income Taxes - Schedule of Reconciliation of the Statutory Effective Tax Rate (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Income Tax Disclosure [Abstract]
Loss before income taxes	$ (9,412,000)	$ (1,300,000)	$ (3,239,000)	$ (5,676,000)
Primary tax rate of the Company			21.00%	24.00%
Tax benefit calculated according to the Company's primary tax rate			$ (680,000)	$ (1,363,000)
State income tax, net of Federal			(483,000)
Foreign tax rates differences			319,000	77,000
Change in applicable tax rates			(513,000)
Change in valuation allowance			2,027,000	213,000
Non-taxable income			(196,000)
Costs not deductible for tax purposes			541,000	2,103,000
Costs not deductible associated with investments			36,000	19,000
CFC (Controlled Foreign Corporation rules)			288,000	93,000
IRAP (Italian Regional Tax on Productive Activities)			4,000	154,000
Taxes on undistributed profits			926,000	180,000
Other taxes			4,000	(52,000)
Income tax expense	$ (589,000)	$ 79,000	$ 2,273,000	$ 1,424,000

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Property and Equipment, Net - Summary of Property and Equipment (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Total property and equipment		$ 6,039,000	$ 4,250,000
Less: accumulated depreciation and amortization		2,646,000	1,909,000
Total property and equipment, net	$ 3,888,000	3,393,000	2,341,000
Internal-Use Software Development Costs
Property Plant And Equipment [Line Items]
Total property and equipment		1,470,000	1,440,000
Servers
Property Plant And Equipment [Line Items]
Total property and equipment		1,629,000	1,170,000
Office Equipment
Property Plant And Equipment [Line Items]
Total property and equipment		1,153,000	965,000
Leasehold Improvements
Property Plant And Equipment [Line Items]
Total property and equipment		616,000	222,000
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Total property and equipment		388,000	189,000
Assets-in-Progress
Property Plant And Equipment [Line Items]
Total property and equipment		665,000	108,000
Vehicles
Property Plant And Equipment [Line Items]
Total property and equipment		23,000	49,000
Software
Property Plant And Equipment [Line Items]
Total property and equipment		4,000	4,000
Other Assets
Property Plant And Equipment [Line Items]
Total property and equipment		$ 91,000	$ 103,000

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Legal Matters - Additional Information (Details) € in Millions			12 Months Ended
	Apr. 16, 2019 EUR (€)	Oct. 17, 2018 EUR (€)	Dec. 31, 2019 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Claim filing date	April 16, 2019	October 17, 2018
Name of plaintiff	Kaleyra S.p.A.	Kaleyra S.p.A.
Name of defendant	Telecom Italia S.p.A and Telecom Italia Sparkle S.p.A.	Vodafone Italia S.p.A
Domicile of litigation	Court of Milan	Court of Milan
Compensation amount | €	€ 8.3	€ 6.1
Loss contingencies recognition of actions | $			$ 0
Loss contingencies first hearing date			Dec. 11, 2019
Loss contingencies final hearing date			Apr. 29, 2020

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Other Current and Long-Term Liabilities - Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Liabilities for tax other than income tax	$ 1,038	$ 583	$ 589
Social securities liabilities	184	256	180
Accrued financial interest	413	149
Income tax liabilities			43
Derivative contract liabilities			18
Other liabilities	388	391	179
Total other current liabilities	$ 2,023	1,379	$ 1,009
Previously Reported
Other liabilities		390
Total other current liabilities		$ 1,229

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Employee Benefit - Additional Information (Details)	12 Months Ended
	Dec. 31, 2019 USD ($) BenefitPlan	Dec. 31, 2018 USD ($)
Compensation And Retirement Disclosure [Abstract]
Number of defined benefit plans | BenefitPlan	2
Total costs of defined benefit plans	$ 287,000	$ 185,000
Plan assets servicing the defined benefit plan	$ 0
Defined contribution plan name	401(k) defined contribution plan
Defined Contribution Plan, Sponsor Location [Extensible List]	us-gaap:DomesticPlanMember
Expense for 401 (k) plan	$ 54,000	$ 0

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Goodwill and Intangible Assets, Net- Summary of Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 16,953	$ 17,276
Effect of exchange rate	(583)	(323)
Ending balance	$ 16,370	$ 16,953

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Restricted Stock Units - Summary of Outstanding RSUs (Details) - $ / shares		1 Months Ended	3 Months Ended	12 Months Ended
	Mar. 24, 2020	Dec. 31, 2019	Mar. 31, 2020	Dec. 31, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Shares granted	113,506
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Non-vested as beginning balance			3,336,095
Number of shares, Shares vested			(137,104)
Number of shares, Shares granted		3,336,095	113,506	3,336,095
Number of shares, Shares cancelled			(132,897)
Number of shares, Non-vested ending balance		3,336,095	3,179,600	3,336,095
Weighted-average grant date fair value (per share), Non-vested beginning balance			$ 8.25
Weighted-average grant date fair value (per share), Vested			8.25
Weighted-average grant date fair value (per share), Granted		$ 8.25	6.23	$ 8.25
Weighted-average grant date fair value (per share), Cancelled			8.25
Weighted-average grant date fair value (per share), Non-vested ending balance		$ 8.25	$ 8.18	$ 8.25

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Transactions with Related Parties (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Related Party Transactions [Abstract]

Schedule of Expenses for Related Parties

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,
	2020		2019
Research and development	$	—	$	94
General and administrative		56		94
Financial income (expense), net		122		—

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

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Revenue - Additional Information (Details) - USD ($)	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Disaggregation Of Revenue [Abstract]
Revenue from usage-based fees in total revenue	98.00%	99.00%
Revenue from term-based fees in total revenue	2.00%	1.00%
Deferred revenue	$ 1,500,000		$ 1,400,000
Deferred revenue, revenue recognized	$ 647,000		$ 1,500,000

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Supplemental Balance Sheet Information (Tables)

12 Months Ended

Dec. 31, 2019

Balance Sheet Related Disclosures [Abstract]

Schedule of Allowance for Doubtful Accounts

A roll-forward of the Company’s allowance for doubtful accounts for the years ended December 31, 2019 and 2018 is as follows (in thousands):

	Year Ended December 31,
	2019			2018
Balance, beginning of the period	$	157		$	60
Accruals		800			108
Utilization of provision		(84	)		—
Effect of foreign exchange rate		—			(11	)
Balance, end of the period	$	873		$	157

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Commitments and Contingencies (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments under Operating Leases

Future minimum lease payments under operating leases as of March 31, 2020 are as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	541
2021		527
2022		508
2023		400
2024		312
2025 and thereafter		416
Total Minimum Lease Payments	$	2,704

Future minimum lease payments under operating leases as of December 31, 2019 are as follows (in thousands):

	As of December 31, 2019
2020	$	636
2021		519
2022		506
2023		393
2024		314
2025 and thereafter		424
Total Minimum Lease Payments	$	2,792

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Loss Per Share Attributable to Common Stockholders

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Earnings Per Share [Abstract]

Loss Per Share Attributable to Common Stockholders

16. NET LOSS PER SHARE

The Business Combination was accounted for as a reverse recapitalization in accordance with US GAAP. Accordingly, weighted average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination.

The following table sets forth the calculation of basic and diluted net loss per share during the period presented (in thousands, except share and per share data):

	Three Months Ended March 31,
	2020			2019
Net loss	$	(8,823	)	$	(1,379	)
Weighted-average shares used to compute net loss per common share, basic and diluted		19,979,589			10,687,106
Net loss per common share, basic and diluted	$	(0.44	)	$	(0.13	)

The Company generated a net loss for each of the three months ended March 31, 2020 and 2019. Accordingly, the effect of dilutive securities is not considered in the loss per share for such periods because their effect would be anti-dilutive on the net loss per share.

For the three months ended March 31, 2020, the weighted-average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share as their effect would be anti-dilutive, was 14,346,056 (zero for the three months ended March 31, 2019).

Warrants

Warrants will only be exercisable for whole shares at $11.50 per share. Under the terms of the Warrant agreement dated December 12, 2017, the Company has agreed to use its best efforts to file a new registration statement under the Securities Act, following the completion of the Business Combination, for the registration of the shares of common stock issuable upon exercise of the Warrants there were included in the Units. That registration statement was filed by the Company on May 4, 2020 and declared effective by the SEC on May 8, 2020. No fractional shares will be issued upon exercise of the Warrants. If, upon exercise of the Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will, upon exercise, round down to the nearest whole number for the number of shares of common stock to be issued to the Warrant holder. Each Warrant became exercisable 30 days after the completion of the Business Combination and will expire five years after the completion of the Business Combination or earlier upon redemption or liquidation. If the Company is unable to deliver registered shares of common stock to the holder upon exercise of the Warrants during the exercise period, there will be no net cash settlement of these Warrants and the Warrants will expire worthless, unless they may be exercised on a cashless basis in the circumstances described in the Warrant agreement. Once the Warrants become exercisable, the Company may redeem the outstanding Warrants in whole and not in part at a price of $0.01 per Warrant upon a minimum of 30 days’ prior written notice of redemption, only in the event that the last sale price of the Company’s shares of common stock equals or exceeds $18.00 per share for any 20 trading days within the 30-trading day period ending on the third trading day before the Company sends the notice of redemption to the Warrant holders.

As of March 31, 2020, there were 11,154,938 warrants outstanding.

24. LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS

The Business Combination was accounted for as a reverse recapitalization in accordance with US GAAP (see Note 5—Business Combination). Accordingly, weighted-average shares outstanding for purposes of the net loss per share calculation have been retrospectively adjusted to reflect the exchange ratio established in the Business Combination.

The following table sets forth the calculation of basic and diluted loss per share attributable to common stockholders during the period presented (in thousands, except share and per share data):

	Year Ended December 31,
	2019			2018
Net loss attributable to common stockholders	$	(5,512	)	$	(7,100	)
Weighted-Average shares used to compute net loss per share attributable to common stockholders, basic and diluted		11,603,381			9,828,411
Net loss per share attributable to common stockholders, basic and diluted	$	(0.48	)	$	(0.72	)

The Company generated a net loss attributable to the Company’s common stockholders for each of the years ended December 31, 2019 and 2018. Accordingly, the effect of dilutive securities is not considered in the loss per share for such periods because their effect would be anti-dilutive on the net loss per share.

For the year ended December 31, 2019, the weighted-average number of outstanding shares of common stock equivalents, which were excluded from the calculation of the diluted net loss per share attributable to common stockholders as their effect would be anti-dilutive, was 1,244,043 (580,580 for the year ended December 31, 2018).

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Commitments and Contingencies

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company entered into various operating lease agreements that expire over various years in the next 7 years. The Company’s Milan office lease contains an option to renew the lease for 6 years under terms and conditions set forth in the lease agreement. Certain of the Company’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. Rent expense was $309,000 and $196,000 for the three months ended March 31, 2020 and 2019, respectively.

Future minimum lease payments under operating leases as of March 31, 2020 are as follows (in thousands):

	As of March 31, 2020
2020 (remaining nine months)	$	541
2021		527
2022		508
2023		400
2024		312
2025 and thereafter		416
Total Minimum Lease Payments	$	2,704

Contingencies

As of March 31, 2020, the Company had contingent liabilities of $126,000, relating to a tax appeal of Solutions Infini for which no provision was recognized as its occurrence was deemed remote.

20. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company entered into various operating lease agreements that expire over various years in the next 7 years. The Company’s Milan office lease contains an option to renew the lease for 6 years under terms and conditions set forth in the lease agreement. Certain of the Company’s leases contain provisions for rental adjustments. Operating lease rentals are expensed on a straight-line basis over the life of the lease beginning on the date the Company takes possession of the property. Rent expense was $940,000 and $307,000 for the years ended December 31, 2019 and 2018, respectively.

Future minimum lease payments under operating leases as of December 31, 2019 are as follows (in thousands):

	As of December 31, 2019
2020	$	636
2021		519
2022		506
2023		393
2024		314
2025 and thereafter		424
Total Minimum Lease Payments	$	2,792

Contingencies

As of December 31, 2019, the Company had contingent liabilities of $132,000, relating to a tax appeal of Solutions Infini for which no provision was recognized as its occurrence was deemed remote.

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Revenue

3 Months Ended

Mar. 31, 2020

Revenue From Contract With Customer [Abstract]

Revenue

18. REVENUE

Revenue Recognition

The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for credits and any taxes collected from customers. Taxes collected are subsequently remitted to governmental authorities.

The Company determines revenue recognition through the following steps:

• Identification of the contract, or contracts, with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Allocation of the transaction price to the performance obligations in the contract; and

• Recognition of revenue when, or as, the Company satisfies a performance obligation.

Nature of Products and Services

The Company’s revenue is primarily derived from usage-based fees earned from the sale of communications services offered through software solutions to large enterprises, as well as small and medium-sized customers.

The Company’s revenue is recognized upon the sending of a SMS message or by the authentication of a financial transaction of an end user of the Company’s customer using the Company’s platform in an amount that reflects the consideration the Company expects to receive in exchange for those services which is generally based upon agreed fixed prices per unit.

Platform access is considered a monthly series comprised of one performance obligation and usage-based fees are recognized as revenue in the period in which the usage occurs. After usage occurs, there are no remaining obligations that would preclude revenue recognition. Revenue from usage-based fees represented 98% and 99% of total revenue, for the three months ended March 31, 2020 and 2019, respectively.

Subscription-based fees are derived from certain term-based contracts, such as with the sales of short codes and customer support, which is generally one year. Term-based contract revenue is recognized on a ratable basis over the contractual term of the arrangement beginning on the date that the service is made available to the customer. Revenue from term-based fees represented 2% and 1% of total revenue for the three months ended March 31, 2020 and 2019, respectively.

The Company’s arrangements do not contain general rights of return. The contracts do not provide customers with the right to take possession of the software supporting the applications. Amounts that have been invoiced are recorded in trade receivables and in revenue or deferred revenue depending on whether the revenue recognition criteria have been met.

Contract Balances

The Company receives payments from customers based on a billing schedule as established in its contracts. Contract assets are recorded when the Company has a conditional right to consideration for its completed performance under the contracts. Trade receivables are recorded when the right to this consideration becomes unconditional, which is as usage occurs. The Company did not have any contract assets as of March 31, 2020 and December 31, 2019.

Deferred revenue is recorded when cash payments are received in advance of future usage on non-cancellable contracts. As of March 31, 2020 and December 31, 2019, the Company recorded $1.5 million and $1.4 million, respectively, as deferred revenue in its condensed consolidated balance sheets. In the three months ended March 31, 2020, the Company recognized $647,000 of revenue that was included in the deferred revenue as of December 31, 2019.

Disaggregated Revenue

In general, revenue disaggregated by geography is aligned according to the nature and economic characteristics of the Company’s business and provides meaningful disaggregation of the Company’s results of operations. Refer to Note 12 – Geographic Information for details of revenue by geographic area.

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Fair Value Measurements

3 Months Ended

12 Months Ended

Mar. 31, 2020

Dec. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

3. FAIR VALUE MEASUREMENTS

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of March 31, 2020 and December 31, 2019 (in thousands):

	Fair Value Hierarchy as of March 31, 2020						Aggregate Fair Value
	Level 1		Level 2		Level 3
Assets:
Certificates of deposit (1)	$	—	$	3,079	$	—	$	3,079
Total Assets	$	—	$	3,079	$	—	$	3,079
Liabilities:
Interest Rate Swap (2)	$	—	$	73	$	—	$	73
Preference shares (3)		—		—		2		2
Debt for forward share purchase agreements (4)		—		31,530		—		31,530
Total Liabilities	$	—	$	31,603	$	2	$	31,605

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”, with maturity terms between 4 and 12 months held in India.

(2) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”.

(3) The preference shares liability was previously estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ended March 31, 2020. On March 9, 2020, the Company signed a modification of the 2018 Solutions Infini Purchase Agreement to reduce the price of the preference shares to be purchased from the eligible employees of Solutions Infini in July 2020 to their face value, amounting to Indian Rupee 10.0 per each preference share.

(4) Based on the information available at the reporting date, debts for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option.

	Fair Value Hierarchy as of December 31, 2019						Aggregate Fair Value
	Level 1		Level 2		Level 3
Assets:
Mutual funds (1)	$	5,124	$	—	$	—	$	5,124
Total Assets	$	5,124	$	—	$	—	$	5,124
Liabilities
Interest Rate Swap (2)	$	—	$	80	$	—	$	80
Preference shares (3)		—		—		2,530		2,530
Debt for forward share purchase agreements (4)		—		34,013		—		34,013
Total Liabilities	$	—	$	34,093	$	2,530	$	36,623

(1) Included in the condensed consolidated balance sheet line item “Short-term investments”.

(2) Included in the condensed consolidated balance sheet line item “Other long-term liabilities”.

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ended March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ended March 31, 2020 was materially below its expected level, this would have resulted in a change of the preference shares liability.

(4) Based on the information available at the reporting date, debt for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option.

The values of short-term investments as of March 31, 2020 and as of December 31, 2019 were as follows (in thousands):

	As of March 31,								As of December 31,
	2020								2019
	Cost		Unrealized gains		Unrealized losses		Fair value		Cost		Unrealized gains		Unrealized losses			Fair value
Mutual funds	$	—	$	—	$	—	$	—	$	5,129	$	1	$	(6	)	$	5,124
Certificates of deposit		3,079		—		—		3,079		—		—		—			—

The following table presents changes during the three months ended March 31, 2020 in Level 3 assets and liabilities measured at fair value on a recurring basis (in thousands):

	Fair Value Beginning of Period		Net Realized and Unrealized (Gains) Losses Included in Income			Other Comprehensive (Income) Loss			Purchases, Sales, Issuances and Settlements, Net		Change in scope of consolidation		Gross Transfers In		Fair Value End of Period
March 31, 2020
Liabilities:
Preference shares	$	2,530	$	(2,486	)	$	(42	)	$	—	$	—	$	—	$	2

There were no transfers of liabilities into or out of Level 2 or Level 3 for the three months ended March 31, 2020 and the year ended December 31, 2019.

Net realized and unrealized (gains) and losses included in income related to Level 3 liabilities shown above are reported in the condensed consolidated statements of operations as follows (in thousands):

	Research and development			Sales and marketing			General and administrative			Financial income (expense), net			Foreign currency Income (loss)		Total
Three months ended March 31, 2020
Liabilities:
Preference shares	$	(941	)	$	(372	)	$	(756	)	$	(417	)	$	—	$	(2,486	)
Three months ended March 31, 2019
Liabilities:
Preference shares		117			46			94			58			—		315

3. FAIR VALUE MEASUREMENTS

The following tables provide the assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018 (in thousands):

	Fair Value Hierarchy as of December 31, 2019						Aggregate Fair Value
	Level 1		Level 2		Level 3
Marketable securities
Mutual funds (1)	$	5,124	$	—	$	—	$	5,124
Total Marketable Securities	$	5,124	$	—	$	—	$	5,124
Liabilities
Interest Rate Swap (2)	$	—	$	80	$	—	$	80
Preference shares (3)		—		—		2,530		2,530
Debt for forward share purchase agreements (4)		—		34,059		—		34,059
Total Liabilities	$	—	$	34,139	$	2,530	$	36,669

(1) Included in the consolidated balance sheet line item “Short-term marketable securities”.

(2) Included in the consolidated balance sheet line item “Other long-term liabilities”.

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ending March 31, 2020 will be materially below its expected level, this would result in a change of the preference shares liability.

(4) Based on the information available at the reporting date, debts for forward share purchase agreements have been determined as the present value to be paid at settlement in case the counterparty exercises the put option. The amount in the above table excludes accrued interest.

	Fair Value Hierarchy as of December 31, 2018							Aggregate Fair Value
	Level 1		Level 2			Level 3
Marketable securities
Mutual funds (1)	$	3,151	$	—		$	—	$	3,151
Total Marketable Securities	$	3,151	$	—		$	—	$	3,151
Liabilities
Interest Rate Swap (2)	$	—	$	97		$	—	$	97
Foreign Exchange Forward (2)		—		(56	)		—		(56	)
Preference shares (3)		—		—			1,834		1,834
Contingent consideration for Solutions Infini acquisition (4)		—		—			482		482
Total Liabilities	$	—	$	41		$	2,316	$	2,357

(1) Included in the consolidated balance sheet line item “Short-term marketable securities”.

(2) Included in the consolidated balance sheet line item “Other long-term liabilities”.

(3) Based on the information available at the reporting date, the preference shares liability was estimated on the basis of present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2020. Such cash flows are contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates and is significantly above the targeted EBITDA. Changes in the liability during the period are due to (i) compensation expense accrued on a straight-line basis during period; (ii) accrued interest expense due to the fact that the obligation will be settled in 2020; and (iii) exchange rate differences. No fair value changes were recognized during the period. If the actual EBITDA of Solutions Infini for the year ending March 31, 2020 will be materially below its expected level, this would result in a change of the preference shares liability.

(4) Based on the information available at the reporting date, the contingent consideration for the Solutions Infini acquisition was estimated as the basis of the present value of the expected future cash flows contractually due in connection with the achievement of specified levels of EBITDA of Solutions Infini for the year ending March 31, 2019. Such cash flows were contractually predetermined and the maximum pay-out was assumed in determining the estimate which is primarily based on the expected EBITDA sourced from the most updated business plan, which represents management best estimates, and is significantly above the targeted EBITDA. The amount presented in the table above represents the estimated portion of the total deferred consideration. No changes in fair value were recognized as initially estimated during the year. The actual EBITDA of Solutions Infini for the year ended March 31, 2019 became available in July 2019 and confirmed the initial amount estimated by management and used to determine the contingent consideration for the Solutions Infini acquisition at the reporting date.

Values of marketable securities as of December 31, 2019 and 2018 were as follows (in thousands):

	As of December 31,
	2019									2018
	Cost		Unrealized gains		Unrealized losses			Fair value		Cost		Unrealized gains		Unrealized losses			Fair value
Mutual funds	$	5,129	$	1	$	(6	)	$	5,124	$	3,180	$	—	$	(29	)	$	3,151

The following tables present changes during the years ended December 31, 2019 and 2018 in Level 3 assets and liabilities measured at fair value on a recurring basis, and the realized and unrealized gains (losses) related to the Level 3 assets and liabilities in the consolidated balance sheets at December 31, 2019 and 2018 (in thousands):

	Fair Value Beginning of Year		Net Realized and Unrealized Gains (Losses) Included in Income			Other Comprehensive Income (Loss)			Settlements, Net			Change in scope of consolidation		Gross Transfers Out			Fair Value End of Year
December 31, 2018
Liabilities:
Preference shares	$	—	$	639		$	(6	)	$	—		$	1,201	$	—		$	1,834
Contingent consideration for Solutions Infini acquisition		2,232		(71	)		(72	)		(1,137	)		—		(470	)		482
December 31, 2019
Liabilities:
Preference shares		1,834		753			(57	)		—			—		—			2,530
Contingent consideration for Solutions Infini acquisition		482		(15	)		23			(490	)		—		—			—

There were no transfers of liabilities into or out of Level 3 in the year ended December 31, 2019. The actual EBITDA of Solutions Infini for the twelve months ended March 31, 2018 became available in July 2018 and confirmed the initial amount estimated by management and used to determine the portion of the contingent consideration for the Solutions Infini acquisition related to the 2018 EBITDA for the year ended the December 31, 2018.

Net realized and unrealized gains and losses included in income related to Level 3 liabilities shown above are reported in the consolidated statements of operations as follows (in thousands):

	Research and development			Sales and marketing			General and administrative			Financial expense, net			Foreign currency loss		Total
December 31, 2018
Liabilities:
Preference shares	$	(249	)	$	(99	)	$	(200	)	$	(91	)	$	—	$	(639	)
Contingent consideration for Solutions Infini acquisition		—			—			—			(22	)		93		71
December 31, 2019
Liabilities:
Preference shares		(225	)		(89	)		(180	)		(259	)		—		(753	)
Contingent consideration for Solutions Infini acquisition		—			—			—			(3	)		18		15

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Property and Equipment, Net

12 Months Ended

Dec. 31, 2019

Property Plant And Equipment [Abstract]

Property and Equipment, Net

7. PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following (in thousands):

	As of December 31,
	2019		2018
Internal-use software development costs	$	1,470	$	1,440
Servers (1)		1,629		1,170
Office equipment		1,153		965
Leasehold improvements		616		222
Furniture and fixtures		388		189
Assets-in-progress (2)		665		108
Vehicles		23		49
Software		4		4
Other assets		91		103
Total property and equipment		6,039		4,250
Less: accumulated depreciation and amortization		2,646		1,909
Total property and equipment, net	$	3,393	$	2,341

(1) Including equipment under capital leases with gross amount of $288,000 and accumulated depreciation of $78,000 as of December 31, 2019 (gross amount of $94,000 and accumulated depreciation of $31,000 as of December 31, 2018).

(2) Assets-in progress amounting to $665,000 as of December 31, 2019 include: (i) internal-use software development costs in-progress for $546,000; and (ii) software in-progress for $119,000.

Depreciation and amortization expense was $879,000 and $670,000 for the years ended December 31, 2019 and 2018, respectively.

The Company capitalized $602,000 and $657,000, in internal-use software development costs in the years ended December 31, 2019 and 2018, respectively. Of the $602,000 capitalized in 2019, $60,000 relate to internal-use software in-use and $542,000 to internal-use software development in-progress, recorded within assets-in-progress. No stock-based compensation expense was capitalized. Amortization of capitalized software development costs was $355,000 and $371,000, in the years ended December 31, 2019 and 2018, respectively. The amortization expense was allocated as follows (in thousands):

	Year Ended December 31,
	2019		2018
Cost of revenue	$	302	$	315
Research and development		53		56
Total	$	355	$	371