PTK ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
3. Initial Public Offering.
On July 15, 2020, the Company consummated the Initial Public Offering of 11,500,000 Units, 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. Each Unit consists of one share of common stock (each a Public Share, and collectively, Public Shares) and one redeemable warrant (each, a Public Warrant). Each Public Warrant
entitles the holder to purchase one-half (1/2) of one share of common stock at a price of $11.50 per whole share, subject to adjustment (see Note 6).
Of the 11,500,000 Units sold in the Initial Public Offering, an aggregate of 1,000,000 Units were purchased by Primerose Development Group Ltd.
(Primerose). Primerose also entered into an agreement with the Company providing that it will hold at least 1,000,000 shares of the Companys common stock following the Initial Business Combination. Primeroses commitment to
hold at least 1,000,000 shares of the Companys common stock following the Initial Business Combination was satisfied by a purchase of Units in the Initial Public Offering.
4. Related Party Transactions.
Insider Shares
In October 2019, the Companys Sponsor purchased 2,875,000 shares of common stock, par value $0.0001, for an aggregate price of $25,000. The
Companys Sponsor has agreed to forfeit up to 375,000 Insider Shares to the extent that the over-allotment option is not exercised in full by the underwriters. On July 15, 2020, the over-allotment option was exercised in full. Accordingly,
no Insider Shares were forfeited.
The Sponsor and the Companys officers and directors agreed to place their Insider Shares into an escrow account
maintained by Continental Stock Transfer & Trust Company, acting as escrow agent. Subject to certain limited exceptions, 50% of these shares will not be transferred, assigned, sold or released from escrow until the earlier of nine months
after the date of the consummation of the initial Business Combination and the date on which the closing price of the Companys common stock equals or exceeds $12.50 per share (as adjusted for stock splits, stock dividends, reorganizations and
recapitalizations) for any 20 trading days within any 30-trading day period commencing after the consummation of the initial Business Combination and the remaining 50% of the Insider Shares will not be
transferred, assigned, sold or released from escrow until nine months after the date of the consummation of the initial Business Combination, or earlier, in either case, if, subsequent to the initial Business Combination, the Company completes a
liquidation, merger, stock exchange or other similar transaction which results in all of the Companys stockholders having the right to exchange their shares of common stock for cash, securities or other property. The limited exceptions
referred to above include (1) transfers among the insiders, to the Companys officers, directors, advisors and employees, (2) transfers to an insiders affiliates or its members upon its liquidation, (3) transfers to
relatives and trusts for estate planning purposes, (4) transfers by virtue of the laws of descent and distribution upon death, (5) transfers pursuant to a qualified domestic relations order, (6) private sales made at prices no greater
than the price at which the securities were originally purchased or (7) transfers to the Company for cancellation in connection with the consummation of an initial Business Combination, in each case (except for clause 7) where the transferee
agrees to the terms of the escrow agreement and forfeiture, as the case may be, as well as the other applicable restrictions and agreements of the holders of the Insider Shares.
Private Placement Warrants
Simultaneously with the
closing of the Initial Public Offering, the Sponsor purchased an aggregate of 6,800,000 Private Placement Warrants, at a price of $0.50 per Private Placement Warrant to the Sponsor, generating gross proceeds to the Company of $3.4 million. A
portion of the proceeds from the Private Placement Warrants were added to the proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the Private
Placement Warrants will expire worthless.
Related Party Loans
On October 10, 2019, the Sponsor agreed to loan the Company an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering
pursuant to a promissory note (the Note). This loan was non-interest bearing, and on July 9, 2020 the Company amended such loan to provide that such loan: (A) was convertible into 600,000
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