Significant Accounting Policies

7 Months Ended

Dec. 31, 2021

Significant Accounting Policies [Abstract]

Note 3 — Significant Accounting Policies

Basis of Presentation

The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash and cash equivalents. As of December 31, 2021, there were no cash equivalents.

Marketable Securities Held in Trust Account

As of December 31, 2021 the Company’s portfolio of investments held in the Trust Account are comprised solely of U.S. government securities with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations. Marketable securities are presented on the balance sheet at fair value at the end of the period. Gains and losses resulting from the change in fair value of these investments are included in Interest on marketable securities held in the Trust Account in the accompanying statement of operations.

MELI KASZEK PIONEER CORP

NOTES TO FINANCIAL STATEMENTS

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Depository Insurance Coverage. The Company has not experienced losses on these accounts.

Class A Ordinary Shares Subject to Possible Redemption

The Company accounts for its Class A ordinary shares subject to possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable Class A ordinary shares (including ordinary shares that features redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) is classified as temporary equity. At all other times, Class A ordinary shares is classified as shareholders' equity. The Company’s Class A ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to the occurrence of uncertain future events.

The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable common stock to equal the redemption value at the end of each reporting period. Such changes are reflected in additional paid-in capital, or in the absence of additional capital, in accumulated deficit. As of December 31, 2021, the Company recorded an accretion of $16,715,815, $9,749,902 of which was recorded in additional paid-in capital and $6,965,913 was recorded in accumulated deficit.

Offering Costs

The Company complies with the requirements of the ASC 340-10-S99-1, “Other Assets and Deferred Costs”, and SEC Staff Accounting Bulletin (“SAB”) Topic 5A, “Expenses of Offering”. Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO. Offering costs are charged against the carrying value of Class A ordinary shares or the statement of operations based on the relative value of the Class A ordinary shares to the proceeds received from the shares sold upon the completion of the IPO. Accordingly, as of December 31, 2021, offering costs in the aggregate of $16,709,861 were recognized all of which was allocated to Class A ordinary shares, reducing the carrying amount of such shares.

Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the ASC 820, “Fair Value Measurement,” approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature.

Derivative Financial Instruments

The Company accounts for derivative financial instruments in accordance with ASC 815, “Derivatives and Hedging.” For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value upon issuance and remeasured at each reporting date, with changes in the fair value reported in the statements of operations. The classification of derivative financial instruments is evaluated at the end of each reporting period.

Fair Value Measurements

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the ASC 820 approximates the carrying amounts represented in the balance sheet.

The fair value hierarchy is categorized into three levels based on the inputs as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 inputs. Example of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

MELI KASZEK PIONEER CORP

NOTES TO FINANCIAL STATEMENTS

Income Taxes

The Company accounts for income taxes under ASC 740, “Income Taxes”. ASC 740 requires the recognition of deferred tax assets and liabilities for both the expected impact of differences between the financial statement and tax basis of assets and liabilities and for the expected future tax benefit to be derived from tax loss and tax credit carry forwards. ASC 740 additionally requires a valuation allowance to be established when it is more likely than not that all or a portion of deferred tax assets will not be realized.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting in interim period, disclosure and transition.

There is currently no taxation imposed on income by the Government of the Cayman Islands. In accordance with Cayman income tax regulations, income taxes are not levied on the Company. Consequently, income taxes are not reflected in the Company’s financial statements.

Net Loss Per Share of Ordinary Shares (Restated)

The Company complies with accounting and disclosure requirements of ASC 260, “Earnings per Share”. Net loss per share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period.

The statements of operations include a presentation of loss per Class A ordinary shares subject to possible redemption, Class A non-redeemable ordinary shares and Class L ordinary shares following the two-class method of loss per share. In order to determine the net loss attributable to Class A ordinary shares subject to possible redemption, Class A non-redeemable ordinary shares and Class L ordinary shares, the Company first considered the total loss allocable to the different classes of shares. This is calculated using the total net loss less any dividends paid and deemed dividends. For purposes of calculating net loss per share, any remeasurement of the accretion to redemption value of the Class A redeemable ordinary shares subject to possible redemption was considered to be dividends paid to the public stockholders based on ASC 480-10-S99-3A.

Subsequent to calculating the total loss allocable to the different classes of shares, the Company´s net loss for the period from October 1, 2021 through December 31, 2021 was split between the Class A ordinary shares subject to possible redemption and Class A non-redeemable ordinary shares using a ratio of 97% for the Class A ordinary shares subject to redemption and 3% for the Class A non-redeemable ordinary shares, reflective of the respective participation rights of those shares for that period. The net loss for the period from May 27, 2021 (inception) to September 30, 2021 was allocated to the Class L ordinary shares, as that was the only class of share outstanding during that period. The Class L ordinary shares had no participation rights effective October 1, 2021.

As of December 31, 2021, the Company did not have any dilutive securities and other contracts that could, potentially, be exercised or converted into common stock and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.

Class L founder shares will convert into Class A ordinary shares after the initial Business Combination only to the extent certain triggering events occur prior to the 5th anniversary of the initial Business Combination, including three equal triggering events based on the Company’s stock trading at $10, $15, $20 per share as more fully described in Note 6. For the period from October 1, 2021 to December 31, 2021, the Company has not considered the effect of the Class L ordinary shares in the calculation of diluted loss per share since the conversion of the Class L ordinary shares is contingent upon the occurrence of future events.

The earnings per share presented in the statement of operations is based on the following:

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MELI KASZEK PIONEER CORP

NOTES TO FINANCIAL STATEMENTS


		December 31, 2021
		Class A ordinary shares subject to possible redemption		Class A non-redeemable ordinary shares		Class L ordinary shares
Basic and diluted net loss per share:
Numerator:
Allocation of net loss including accretion of temporary equity	$	(43,987,843)	$	(1,491,762)	$	(55,860,934)
Accretion of temporary equity to redemption value		16,715,815		—		—
Allocation of net loss	$	(27,272,028)	$	(1,491,762)	$	(55,860,934)
Denominator:
Weighted-average shares outstanding		28,750,000		975,000		12,739,286
Basic and diluted net loss per share	$	(0.95)	$	(1.53)	$	(4.38)

Recently Adopted Accounting Standards

In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, “Debt – Debt with conversion and other options (sub-topic 470-20) and derivatives and hedging – contracts in entity’s own equity (sub-topic 815-40): accounting for convertible instruments and contracts in an entity’s own equity”, which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU 2020-06 is applicable for fiscal years beginning after December 31, 2021, with early adoption permitted no earlier than fiscal years beginning after December 15, 2020. ASU 2020-06 is to be applied using a full retrospective method or a modified retrospective method as outlined in the guidance. The Company early adopted ASU 2020-06 and it did not have an impact on the Company’s financial statements.

The Company has considered all other new accounting standards and has concluded that there are no other new standards that may have a material impact on the results of operations, financial condition, or cash flows, based on the current information.