References in this report (the "Quarterly Report") to "we," "us" or the
"Company" refer to PTK Acquisition Corp. References to our "management" or our
"management team" refer to our officers and directors and references to the
"Sponsor" refer to PTK Holdings LLC. The following discussion and analysis of
the Company's financial condition and results of operations should be read in
conjunction with the unaudited condensed financial statements and the notes
thereto contained elsewhere in this Quarterly Report (the "Financial
Statements"). Capitalized terms used but not otherwise defined herein have the
meaning set forth in the Financial Statements. Certain information contained in
the discussion and analysis set forth below includes forward-looking statements
that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes "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") that are not historical facts, and involve risks and
uncertainties that could cause actual results to differ materially from those
expected and projected. All statements, other than statements of historical fact
included in this Quarterly Report including, without limitation, statements in
this "Management's Discussion and Analysis of Financial Condition and Results of
Operations" regarding the Company's financial position, business strategy and
the plans and objectives of management for future operations, are
forward-looking statements. Words such as "expect," "believe," "anticipate,"
"intend," "estimate," "seek" and variations and similar words and expressions
are intended to identify such forward-looking statements. Such forward-looking
statements relate to future events or future performance, but reflect
management's current beliefs, based on information currently available. A number
of factors could cause actual events, performance or results to differ
materially from the events, performance and results discussed in the
forward-looking statements. For information identifying important factors that
could cause actual results to differ materially from those anticipated in the
forward-looking statements, please refer to the Risk Factors section of the
Company's
10-K/A
for the fiscal year 2020 filed with the U.S. Securities and Exchange Commission
(the "SEC") on June 14, 2021 (the "FY 2020
10-K/A").
The Company's securities filings can be accessed on the EDGAR section of the
SEC's website at www.sec.gov. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new information,
future events or otherwise.
Overview
We are a blank check company incorporated in Delaware on August 19, 2019. We
were formed for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination with
one or more businesses (the "Business Combination").
Our sponsor is PTK Holdings LLC, a Delaware limited liability company (the
"Sponsor"). The registration statement for the initial public offering (the
"Initial Public Offering") was declared effective on July 13, 2020. On July 15,
2020, we consummated the Initial Public Offering of 11,500,000 units (each, a
"Unit" and collectively, the "Units" and, with respect to the common stock
included in the Units, the "Public Share(s)"), including the issuance of
1,500,000 Units as a result of the underwriters' exercise of their
over-allotment option in full, at $10.00 per Unit, generating gross proceeds of
$115.0 million, and incurring offering costs of approximately $7.3 million,
inclusive of approximately $4.0 million in deferred underwriting commissions.
Simultaneously with the closing of the Initial Public Offering, we consummated
the private placement ("Private Placement") of 6,800,000 warrants (each, a
"Private Placement Warrant" and collectively, the "Private Placement Warrants"),
at a price of $0.50 per Private Placement Warrant to our Sponsor, generating
gross proceeds to the Company of $3.4 million. In addition, upon the
consummation of our Initial Public Offering, 600,000 additional private
placement warrants were issued to our sponsor as a result of the conversion of a
promissory note.
Upon the closing of the Initial Public Offering and the Private Placement,
$115.0 million ($10.00 per Unit) of the net proceeds of the Initial Public
Offering and certain of the proceeds of the Private Placement was placed in a
trust account ("Trust Account"), located in the United States with Continental
Stock Transfer & Trust Company acting as trustee, and invested only in U.S.
"government securities" within the meaning of Section 2(a)(16) of the Investment

                                       17
--------------------------------------------------------------------------------
  Table of Contents
Company Act having a maturity of 185 days or less or in money market funds
meeting certain conditions under
Rule 2a-7
promulgated under the Investment Company Act which invest only in direct U.S.
government treasury obligations, until the distribution of the Trust Account as
described below.
Our management has broad discretion with respect to the specific application of
the net proceeds of the Initial Public Offering and the sale of the Private
Placement Warrants, although substantially all of the net proceeds are intended
to be applied generally toward consummating a Business Combination.
If we are unable to complete a Business Combination within 18 months from the
closing of the Initial Public Offering, or January 15, 2022 (the "Combination
Period"), we will (i) cease all operations except for the purpose of winding up,
(ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem 100% of the outstanding Public Shares for a pro rata portion
of the funds held in the Trust Account (net of interest that may be used by us
to pay income taxes or other taxes) which redemption will completely extinguish
the public stockholders' rights as stockholders (including the right to receive
further liquidation distributions, if any), subject to applicable law, and
(iii) as promptly as reasonably possible following such redemption, subject to
the approval of our remaining holders of common stock and our board of
directors, dissolve and liquidate, subject (in the case of (ii) and (iii) above)
to our obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law. We will pay the costs of any liquidation
following the redemptions from our remaining assets outside of the Trust
Account. If such funds are insufficient, our Sponsor has agreed to pay the funds
necessary to complete such liquidation (currently anticipated to be no more than
approximately $50,000) and has agreed not to seek repayment for such expenses.
Proposed Business Combination
On May 25, 2021, we entered into a business combination agreement (as it may be
amended, supplemented or otherwise modified from time to time, the "Business
Combination Agreement") with Valens Semiconductor Ltd., a limited liability
company organized under the laws of the State of Israel ("Valens") and Valens
Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Valens
("Merger Sub"), which provides for, among other things, a series of transactions
where Merger Sub will merge with and into us (the "Business Combination"), with
us surviving the Business Combination as a wholly-owned subsidiary of Valens.
The Business Combination Agreement and the transactions contemplated thereby
were unanimously approved by the Board of Directors of us on May 24, 2021. Refer
to the preliminary prospectus, as filed with the SEC on July 15, 2021 for
additional information.
Results of Operations
Our entire activity since inception through June 30, 2021 related to our
formation, the preparation for the Initial Public Offering, and since the
closing of the Initial Public Offering, the search for and efforts toward
completing an initial Business Combination. We have neither engaged in any
operations nor generated any revenues to date. We will not generate any
operating revenues until after completion of our initial Business Combination.
We generate
non-operating
income in the form of interest income from our investments held in the Trust
Account. We expect to incur increased expenses as a result of being a public
company (for legal, financial reporting, accounting and auditing compliance), as
well as for due diligence expenses.
For the three months ended June 30, 2021, we had net loss of approximately
$1.3 million, which consisted of approximately $1.2 million general and
administrative expenses, $30,000 of related part administrative fees and
approximately $50,000 franchise tax expense, partially offset by approximately
$3,000 in interest earned from investments held in the Trust Account.
For the six months ended June 30, 2021, we had net loss of approximately
$2.1 million, which consisted of approximately $2.0 million general and
administrative expenses, $60,000 of related part administrative fees and
approximately $99,000 franchise tax expense, partially offset by approximately
$6,000 in interest earned from investments held in the Trust Account.

                                       18
--------------------------------------------------------------------------------
  Table of Contents
For the three months ended June 30, 2020, we had net loss of approximately
$98,000, which consisted of approximately $201 general and administrative
expenses and approximately $98,000 franchise tax expense.
For the six months ended June 30, 2020, we had net loss of approximately
$107,000, which consisted of approximately $7,000 general and administrative
expenses and approximately $100,000 franchise tax expense.
Liquidity, Capital Resources and Going Concern
As of June 30, 2021, we had approximately $53,000 in cash and working capital
deficit of approximately $2.2 million (not taken into account tax obligations of
approximately $208,000 that may be paid using investment income earned from
Trust Account). In order to meet our working capital needs following the
consummation of the Initial Public Offering, our sponsor may, but is not
obligated to, loan us funds, from time to time or at any time, in whatever
amount it deems reasonable in its sole discretion. Each loan would be evidenced
by a promissory note. The notes would either be paid upon consummation of our
initial business combination, without interest, or, at our sponsor's discretion,
up to $1.0 million of the notes may be converted upon consummation of our
business combination into private warrants at a price of $0.50 per warrant
(which, for example, would result in our sponsor being issued 1,000,000 private
warrants at a purchase price of $0.50 per warrant if $500,000 of notes were so
converted). If we do not complete a business combination, any outstanding loans
from our sponsor, will be repaid only from amounts remaining outside our trust
account, if any.
Prior to the completion of the Initial Public Offering on July 15, 2020, our
liquidity needs were satisfied through the receipt of $25,000 from our Sponsor
in exchange for the issuance of the founder shares, and a $300,000 promissory
note issued to our Sponsor, which was converted into 600,000 private warrants
upon closing of the Initial Public Offering. Subsequent to the consummation of
the Initial Public Offering and Private Placement, our liquidity needs have been
satisfied with the proceeds from the consummation of the Private Placement not
held in the Trust Account. In addition, in order to finance transaction costs in
connection with a Business Combination, our Sponsor may, but is not obligated
to, provide us working capital loans. To date, there were no amounts outstanding
under any working capital loans.
Based on the foregoing, management has determined that the working capital
deficit raises substantial doubt about our ability to continue as a going
concern until the earlier of the consummation of the Business Combination or the
date we are required to liquidate, January 15, 2022. The unaudited condensed
financial statements do not include any adjustment that might be necessary if we
are unable to continue as a going concern.
On January 30, 2020, the World Health Organization ("WHO") announced a global
health emergency because of a new strain of coronavirus (the
"COVID-19
outbreak"). In March 2020, the WHO classified the
COVID-19
outbreak as a pandemic, based on the rapid increase in exposure globally.
Management continues to evaluate the impact of the
COVID-19
outbreak and has concluded that the specific impact is not readily determinable
as of the date of the balance sheets. The unaudited condensed financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Contractual Obligations
Registration Rights
The holders of insider shares, Private Placement Warrants, and warrants that may
be issued upon conversion of Working Capital Loans, if any, will be entitled to
registration rights pursuant to a registration rights agreement. These holders
will be entitled to certain demand and "piggyback" registration rights.
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per unit, or
$2.3 million in the aggregate, paid upon the closing of the Initial Public
Offering. In addition, $0.35 per unit, or $4.0 million in the aggregate will be
payable to the underwriters for deferred underwriting commissions. The deferred
fee is payable to the underwriters from the amounts held in the Trust Account
solely in the event that we complete a Business Combination, subject to the
terms of the underwriting agreement.

                                       19
--------------------------------------------------------------------------------
  Table of Contents
Right of First Refusal
Subject to certain conditions, we granted Chardan Capital Markets, LLC, for a
period of 15 months after the date of the consummation of the Business
Combination, a right of first refusal to act as either (at our sole
discretion) (a) a lead underwriter or (b) minimally as a
co-manager,
with at least 30% of the economics; or, in the case of a three-handed deal 20%
of the economics, for any and all future public and private equity and debt
offerings. In accordance with FINRA Rule 5110(f)(2)(E)(i), such right of first
refusal shall not have a duration of more than three years from the effective
date of the registration statement related to the Initial Public Offering.
Administrative Support Agreement
We entered into an agreement to pay our Sponsor a total of up to $10,000 per
month for overhead and administration support. Upon completion of the initial
Business Combination or our liquidation, we will cease paying these monthly
fees. We incurred $30,000 and $60,000 of such fees in the three and six months
ended June 30, 2021, respectively. As of June 30, 2021 and December 31, 2020,
$115,000 and $55,000 were included as accrued expenses - related party on the
condensed balance sheets, respectively.
Critical Accounting Policies and Estimates
Use of Estimates
This management's discussion and analysis of our financial condition and results
of operations is based on our unaudited condensed financial statements, which
have been prepared in accordance with U.S. dollars in conformity with accounting
principles generally accepted in the United States of America ("U.S. GAAP"). The
preparation of our unaudited condensed financial statements requires us to make
estimates and judgments that affect the reported amounts of assets, liabilities,
revenues and expenses and the disclosure of contingent assets and liabilities in
our financial statements. On an ongoing basis, we evaluate our estimates and
judgments, including those related to fair value of financial instruments and
accrued expenses. We base our estimates on historical experience, known trends
and events and various other factors that we believe to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.
Investments Held in Trust Account
Our portfolio of investments held in the Trust Account is comprised of U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act, with a maturity of 185 days or less, or investments in
money market funds that invest in U.S. government securities and generally have
a readily determinable fair value, or a combination thereof. When the Company's
investments held in the Trust Account are comprised of U.S. government
securities, the investments are classified as trading securities. When the
Company's investments held in the Trust Account are comprised of money market
funds, the investments are recognized at fair value. Trading securities and
investments in money market funds are presented on the balance sheets at fair
value at the end of each reporting period. Gains and losses resulting from the
change in fair value of these securities are included in net gain from
investments held in Trust Account in the accompanying unaudited condensed
statements of operations. The estimated fair values of investments held in the
Trust Account are determined using available market information.
Derivative Warrant Liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of its financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to Accounting
Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from
Equity" ("ASC 480") and ASC Topic
815-15
"Derivatives and Hedging - Embedded Derivatives." The classification of
derivative instruments, including whether such instruments should be recorded as
liabilities or as equity, is
re-assessed
at the end of each reporting period.
We account for the warrants issued in connection with its Private Placement and
conversion of note payable as derivative liabilities in accordance with
"Derivatives and Hedging-Contracts in Entity's Own Equity" ("Subtopic

                                       20
--------------------------------------------------------------------------------
  Table of Contents
815-40"):
Accounting for Convertible Instruments and Contracts in an Entity's Own Equity
. Accordingly, we recognize the warrant instruments as liabilities at fair value
and adjust the instruments to fair value at each reporting period. The
liabilities are subject to
re-measurement
at each balance sheet date until exercised, and any change in fair value is
recognized in our statements of operations. The fair value of warrants issued in
connection with the Private Placement and conversion of note payable have been
estimated using modified Black-Scholes model at each measurement date. The
determination of the fair value of the derivative warrant liability may be
subject to change as more current information becomes available and accordingly
the actual results could differ significantly. Derivative warrant liabilities
are classified as
non-current
liabilities as their liquidation is not reasonably expected to require the use
of current assets or require the creation of current liabilities.
Common Stock Subject to Possible Redemption
We account for our stock subject to possible redemption in accordance with the
guidance in ASC Topic 480. Common stock subject to mandatory redemption (if any)
is classified as a liability instrument and measured at fair value.
Conditionally redeemable common stock (including common stock 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 our
control) is classified as temporary equity. At all other times, common stock is
classified as stockholders' equity. Our common stock features certain redemption
rights that are considered to be outside of our control and subject to the
occurrence of uncertain future events. Accordingly, at June 30, 2021 and
December 31, 2020, we had 9,840,987 and 10,052,015, respectively, of shares of
common stock subject to possible redemption is presented as temporary equity,
outside of the stockholders' equity section of our condensed balance sheets.
Net Income (Loss) Per Share of Common Stock
Net income (loss) per share of common stock is computed by dividing net (income)
loss by the weighted-average number of common stock outstanding during the
periods. We have not considered the effect of the warrants sold in the Initial
Public Offering and Private Placement, as well as the warrants issued on the
Note conversion to purchase an aggregate of 18,900,000 shares of common stock in
the calculation of diluted loss per common stock, since the exercise of the
warrants are contingent upon the occurrence of future events. As a result,
diluted net loss per common stock is the same as basic net loss per common stock
for the periods presented.
Our statements of operations include a presentation of income (loss) per share
of common stock subject to possible redemption in a manner similar to the
two-class
method of income (loss) per share of common stock. Net income per share, basic
and diluted, for common stock subject to possible redemption is calculated by
dividing the proportionate share of interest income on investments held in Trust
Account, net of applicable franchise and income taxes, by the weighted average
number of common stock subject to possible redemption outstanding for the
periods.
Net loss per share, basic and diluted, for
non-redeemable
common stock is calculated by dividing the net loss, adjusted for income
attributable to common stock subject to possible redemption, by the weighted
average number of
non-redeemable
common stock outstanding for the periods.
Non-redeemable
common stock includes Insider Shares and
non-redeemable
shares of Public Shares.
Non-redeemable
common stock participates in the interest income on investments held in Trust
Account based on
non-redeemable
shares' proportionate interest.
Recent Accounting Pronouncements
In August 2020, the Financial Accounting Standards Board's ("FASB") issued
Accounting Standards Update ("ASU") No.
2020-06,
 Debt-Debt with Conversion and Other Options (Subtopic
470-20)
and Derivatives and Hedging-Contracts in Entity's Own Equity (Subtopic
815-40):
Accounting for Convertible Instruments and Contracts in an Entity's Own Equity
, which simplifies accounting for convertible instruments by removing major
separation models required under current U.S. GAAP. The ASU also removes certain
settlement conditions that are required for equity-linked contracts to qualify
for the derivative scope exception and it also simplifies the diluted earnings
per share calculation in certain areas. We early adopted the ASU on January 1,
2021. Adoption of the ASU did not impact our financial position, results of
operations or cash flows.

                                       21
--------------------------------------------------------------------------------
  Table of Contents
Our management does not believe that any recently issued, but not yet effective,
accounting standards updates, if currently adopted, would have a material effect
on the accompanying financial statement.
Off-Balance
Sheet Arrangements
As of June 30, 2021, we did not have any
off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation
S-K.
Inflation
We do not believe that inflation had a material impact on our business, revenues
or operating results during the period presented.
JOBS Act
The Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") contains
provisions that, among other things, relax certain reporting requirements for
qualifying public companies. We qualify as an "emerging growth company" and
under the JOBS Act are allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded)
companies. We are electing to delay the adoption of new or revised accounting
standards, and as a result, we may not comply with new or revised accounting
standards on the relevant dates on which adoption of such standards is required
for
non-emerging
growth companies. As a result, the financial statements may not be comparable to
companies that comply with new or revised accounting pronouncements as of public
company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of
non-emerging
growth public companies under the Dodd-Frank Wall Street Reform and Consumer
Protection Act, (iii) comply with any requirement that may be adopted by the
Public Company Accounting Oversight Board regarding mandatory audit firm
rotation or a supplement to the auditor's report providing additional
information about the audit and the financial statements (auditor discussion and
analysis) and (iv) disclose certain executive compensation related items such as
the correlation between executive compensation and performance and comparisons
of the Chief Executive Officer's compensation to median employee compensation.
These exemptions will apply for a period of five years following the completion
of our Initial Public Offering or until we are no longer an "emerging growth
company," whichever is earlier.

© Edgar Online, source Glimpses