# EDGAR Filing Document

**Accession Number:** 0001539680
**File Stem:** 0001062993-23-007498
**Filing Date:** 2023-3
**Character Count:** 74274
**Document Hash:** 68296a8118e2b9bfdf4a7153c9253197
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001062993-23-007498.hdr.sgml**: 20230322

**ACCESSION NUMBER**: 0001062993-23-007498

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 53

**CONFORMED PERIOD OF REPORT**: 20230131

**FILED AS OF DATE**: 20230322

**DATE AS OF CHANGE**: 20230322

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** HAMMER FIBER OPTICS HOLDINGS CORP
- **CENTRAL INDEX KEY:** 0001539680
- **STANDARD INDUSTRIAL CLASSIFICATION:** COMMUNICATION SERVICES, NEC [4899]
- **IRS NUMBER:** 981032170
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 0731

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-35876
- **FILM NUMBER:** 23753535

**BUSINESS ADDRESS:**
- **STREET 1:** 6151 LAKE OSPREY DRIVE
- **CITY:** SARASOTA
- **STATE:** FL
- **ZIP:** 34240
- **BUSINESS PHONE:** 844-413-2600

**MAIL ADDRESS:**
- **STREET 1:** 6151 LAKE OSPREY DRIVE
- **CITY:** SARASOTA
- **STATE:** FL
- **ZIP:** 34240

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Tanaris Power Holdings Inc.
- **DATE OF NAME CHANGE:** 20150310

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Recursos Montana S.A.
- **DATE OF NAME CHANGE:** 20120113

?xml version="1.0" encoding="UTF-8"? Hammer Technology Holdings: Form 10-Q - Filed by newsfilecorp.com

------

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

Washington, D.C. 20549

**FORM 10-Q**

[X] **QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended January 31, 2023** 

[ ] **TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934**

For the transition period from:

**Commission File Number <u>000-1539680</u>**

**HAMMER FIBER OPTICS HOLDINGS CORP.**

(Exact name of registrant as specified in its charter)

---

| | |
|:---|:---|
| **Nevada** | **98-1032170** |
| (State of incorporation) | (I.R.S. Employer Identification No.) |

---

**6151 Lake Osprey Drive, Sarasota, FL 34240**

(Address of principal executive offices)

**941-306-3019**

(Registrant's telephone number)

Securities registered pursuant to Section 12(b) of the Act:

<u>Class</u> <u>Trading Symbol</u> <u>Name of Each Exchange</u> <br> Series B Common Stock HMMR OTC QB

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ] (Not required)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer [ ] Non-Accelerated Filer [X] <br> Accelerated Filer [ ] Smaller Reporting Company [X] <br> 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 13(a) of the Exchange Act. [ ].

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of January, 31, 2023, there were 62,078,537 shares of the registrant's $0.001 par value common stock issued and 60,325,202 shares outstanding.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| **PART I. FINANCIAL INFORMATION** | **PART I. FINANCIAL INFORMATION** |  |
| [ITEM 1.](#page_4_integixAnchor) | [FINANCIAL STATEMENTS](#page_4_integixAnchor) | [4](#page_4_integixAnchor) |
| [ITEM 2.](#page_17_integixAnchor) | [MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#page_17_integixAnchor) | [18](#page_17_integixAnchor) |
| [ITEM 3.](#page_18_integixAnchor) | [QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#page_18_integixAnchor) | [19](#page_18_integixAnchor) |
| [ITEM 4.](#page_19_integixAnchor) | [CONTROLS AND PROCEDURES](#page_19_integixAnchor) | [20](#page_19_integixAnchor) |
| **PART II. OTHER INFORMATION** | **PART II. OTHER INFORMATION** |  |
| [ITEM 1.](#page_20_integixAnchor) | [LEGAL PROCEEDINGS](#page_20_integixAnchor) | [21](#page_20_integixAnchor) |
| [ITEM 1A.](#page_20_integixAnchor) | [RISK FACTORS](#page_20_integixAnchor) | [21](#page_20_integixAnchor) |
| [ITEM 2.](#page_20_integixAnchor) | [UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#page_20_integixAnchor) | [21](#page_20_integixAnchor) |
| [ITEM 3.](#page_20_integixAnchor) | [DEFAULTS UPON SENIOR SECURITIES](#page_20_integixAnchor) | [21](#page_20_integixAnchor) |
| [ITEM 4.](#page_20_integixAnchor) | [OTHER INFORMATION](#page_20_integixAnchor) | [21](#page_20_integixAnchor) |
| [ITEM 5.](#page_21_integixAnchor) | [EXHIBITS](#page_21_integixAnchor) | [22](#page_21_integixAnchor) |

---

------

**Special Note Regarding Forward-Looking Statements**

*Information included in this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). This information may involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Hammer Fiber Optics Holdings Corp. (the "Company"), to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe future plans, strategies and expectations of the Company, are generally identifiable by use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," or "project" or the negative of these words or other variations on these words or comparable terminology. These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that these projections included in these forward-looking statements will come to pass. Actual results of the Company could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, the Company has no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.*

*Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," "HMMR," or Hammer Fiber Optics Holdings Corp. refer to the Company.*

------

EXPLANATORY NOTE

This quarterly report on Form 10Q for our quarter ended January 31, 2023 is unaudited and has not yet been reviewed by our Auditors as recommended under AS 4105 as approved by the US Securities and Exchange Commission. The Company anticipates filing an amendment to this Form 10Q when the review is complete.

**Hammer Fiber Optics Holdings Corp.**

**Consolidated Balance Sheets**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | January 31, | July 31, |
|  | 2023 | 2022 |
| **ASSETS** | **ASSETS** | **ASSETS** |
| Current Assets |  |  |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $107689 | $482910 |
| &nbsp;&nbsp;&nbsp;Accounts receivable | 258034 | 216834 |
| &nbsp;&nbsp;&nbsp;Security Deposits | 11082 | 11082 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 14388 | 14746 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current assets | 391193 | 725572 |
| Property and equipment, net | 313613 | 278345 |
| Intangible and other assets | 7298443 | 7323702 |
| Assets from Discontinued Operations | 1243960 | 1243960 |
| Total assets | $9247209 | $9571579 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** | **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** | **LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)** |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable and accrued expenses | $1130869 | $1130465 |
| &nbsp;&nbsp;&nbsp;Loans payable | 1282262 | 1544935 |
| &nbsp;&nbsp;&nbsp;Deferred Revenue | 322761 | 321074 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total current liabilities | 2735892 | 2996474 |
| Liabilities from Discontinued Operations | 546304 | 546304 |
| Total Liabilities | $3282196 | 3542778 |
| Stockholders' Equity (Deficit) |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.001 par value, 250,000,000 shares authorized |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;62,078,537 and 60,325,202 shares issued; 60,853,341 and 60,325,202 shares outstanding at January 31, 2023 and July 31, 2022, respectively | 61566 | 61566 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 27861493 | 27564129 |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (21958046) | (21596894) |
| Total Stockholder's Equity (Deficit) | 5965013 | 6028801 |
| Total Liabilities and Stockholders' Equity (Deficit) | $9247209 | $9571579 |

---

See accompanying notes to consolidated financial statements.

------

**Hammer Fiber Optics Holdings Corp**

**Consolidated Statements of Operations**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Three** <br>**Months Ended** | **For the Three** <br>**Months Ended** | **For the Six** <br>**Months Ended** | **For the Six** <br>**Months Ended** |
|  | **January 31,** | **January 31,** | **January 31,** | **January 31,** |
|  | **2023** | **2022** | **2023** | **2022** |
| Revenues | $744051 | $591901 | $1543750 | $1220236 |
| Cost of sales | 572986 | 475618 | 1165315 | 917551 |
| Selling, general and administrative expenses | 367482 | 239547 | 701101 | 421669 |
| Depreciation expense | 14884 | 17940 | 30808 | 35101 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 955352 | 733105 | 1897224 | 1374321 |
| Operating loss | (211301) | (141204) | (353474) | (154085) |
| Other income (expense) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (731) | 21817 | 11503 | 33051 |
| &nbsp;&nbsp;&nbsp;Other expenses | (5973) | (28061) | (19181) | (854) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other expenses | (6704) | (6244) | (7678) | 32197 |
| Loss Before Discontinued Operations | (218005) | (134960) | (361152) | (186282) |
| Income (Loss) From Discontinued Operations |  | 7207 |  | (10000) |
| Net income (loss) | $(218005) | $(127753) | $(361152) | $(196282) |
| Weighted average number of common shares<br>outstanding - basic and diluted | 62078537 | 60503341 | 62078537 | 60503341 |
| Gain per share- basic and diluted |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Continuing operations | $- | $- | $- | $- |
| &nbsp;&nbsp;&nbsp;Discontinued operations |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total | $- | $- | $- | $- |

---

See accompanying notes to consolidated financial statements.

------

**Hammer Fiber Optics Holdings Corp**

**Consolidated Statement of Stockholders' Equity (Deficit)** 

**(Unaudited)**

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  |  |  |  |  |  |  | Total |
|  |  |  |  |  | Additional |  | Stockholders' |
|  | Common Stock | Common Stock | Treasury Stock | Treasury Stock | Paid-in | Accumulated | Equity |
|  | Shares | Amount | Shares | Amount | Capital | Deficit | (Deficit) |
| Balance, July 31, 2021 | 60853341 | $60853 | 3843085 | $- | $22859434 | $(20438696) | $2481591 |
| Net loss for the quarter |  |  |  |  |  | (68529) | (68529) |
| Balance, October 31, 2021 | 60853341 | 60853 | 3843085 |  | 22859434 | (20507225) | 2413062 |
| Shares returned to treasury |  |  | 3000000 |  |  |  |  |
| Treasury shares issued for acquisition |  |  | (5000000) |  | 4250500 |  | 4250500 |
| Net loss for the quarter |  |  |  |  |  | (127753) | (127753) |
| Balance, January 31, 2022 | 60853341 | $60853 | 1843085 | $- | $27109934 | $(20634978) | $6535809 |
| Balance, July 31, 2022 | 61565841 | 61566 | 1753335 |  | 27564129 | (21596894) | 6028801 |
| Conversion shares issued | 512696 |  |  |  | 297364 |  | 297364 |
| Net loss for the quarter |  |  |  |  |  | (143147) | (143147) |
| Balance, October 31, 2022 | 62078537 | 61566 | 1753335 |  | 27861493 | (21740041) | 6183018 |
| Net loss for the quarter |  |  |  |  |  | (218005) | (218005) |
| Balance, January 31, 2023 | 62078537 | $61566 | 1753335 | $- | $27861493 | $(21958046) | $5965013 |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

**Hammer Fiber Optics Holdings Corp**

**Consolidated Statements of Cash Flows**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
|  | **For the Six** <br>**Months Ended** | **For the Six** <br>**Months Ended** |
|  | **January 31,** | **January 31,** |
|  | **2023** | **2022** |
| OPERATING ACTIVITIES |  |  |
| Net income (loss) | $(361152) | $(196282) |
| Adjustments to reconcile net loss to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation expense | 14884 | 35101 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (41200) | (73711) |
| &nbsp;&nbsp;&nbsp;Security deposits |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses | 358 | (7383) |
| &nbsp;&nbsp;&nbsp;Accounts payable | 404 | 231212 |
| &nbsp;&nbsp;&nbsp;Deferred revenue | 1687 | (12684) |
| Net cash provided by (used in) operating activities- continuing operations | (385019) | (23747) |
| Net cash provided by (used in) operating activities- discontinued operations |  |  |
| Net cash provided by (used in) operating activities | (385019) | (23747) |
| INVESTING ACTIVITIES |  |  |
| Purchase of property and equipment | (50152) | (23745) |
| &nbsp;&nbsp;&nbsp;Purchase of subsidiary equity |  |  |
| Net cash provided by (used in) investing activities- continuing operations | (50152) | (23745) |
| Net cash provided by (used in) investing activities- discontinued operations |  |  |
| Net cash provided by (used in) investing activities | (50152) | (23745) |
| FINANCING ACTIVITIES |  |  |
| &nbsp;&nbsp;&nbsp;Repayment of loans | (3194) | (51533) |
| &nbsp;&nbsp;&nbsp;Proceeds from loans | 95436 | 87547 |
| Net cash provided by (used in) financing activities- continuing operations | 92242 | 36014 |
| Net cash provided by (used in) financing activities- discontinued operations |  |  |
| Net cash provided by (used in) financing activities | 92242 | 36014 |
| Effect of Foreign Currency on Cash | (32292) |  |
| Net increase (decrease) in cash | (375221) | (11478) |
| Cash, beginning of period | 482910 | 77606 |
| Cash, end of period | $107689 | $66128 |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES: |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $731 | $21817 |
| &nbsp;&nbsp;&nbsp;Cash paid for taxes | $13 | $- |
| &nbsp;&nbsp;&nbsp;Shares issued for debt conversion | $297364 |  |

---

See accompanying notes to consolidated financial statements.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS**

Hammer Fiber Optics Holdings Corp (OTCQB:HMMR) is a company focused on sustainable shareholder value investing in both financial services technology and wireless telecommunications infrastructure.

Hammer's financial technologies business is focused on providing digital stored value technology via its HammerPay mobile payments platform to enable digital commerce between consumers and branded merchants across the developing world, ensuring Swift, Safe and Secure encrypted remittances and banking transactions.

Hammer's "Everything Wireless" go to market strategy for its telecommunications business includes the development of high speed fixed wireless service for residential, small business and enterprise clients using its wireless fiber platform, Hammer Wireless AIR®, mobility networks including 4G/LTE, Over-the-Top services such as voice, SMS and collaboration services and hosting services.

The Company was originally incorporated in the State of Nevada on September 23, 2010, under the name Recursos Montana S.A. The Company's principal activity was an exploration stage company engaged in the acquisition of mineral properties then owned by the Company.

On February 2, 2015, the Company entered into a Share Exchange Agreement with Tanaris Power Holdings, Inc., whereby the Company acquired 100% of Tanaris Power Holdings, Inc. issued and outstanding common stock in exchange for shares of the Company's common stock equal to 51% of the issued and outstanding common stock of the Company. Tanaris Power Holdings, Inc. was the owner of certain rights in connection with the marketing and sale of smart lithium-ion batteries and battery technologies for various industrial vehicles markets and related applications. On March 6, 2015, the Company amended its Articles of Incorporation to change its name to Tanaris Power Holdings, Inc.

On April 25, 2016, Tanaris Power Holdings, Inc., a Nevada corporation entered into s Share Exchange Agreement (the "Share Exchange Agreement") with Hammer Fiber Optics Investments, Ltd., a Delaware corporation ("HFOI"), and the controlling stockholders of HFOI (the "HFOI Shareholders"). Pursuant to the Share Exchange Agreement, the Company acquired 20,000,000 shares of common stock of HFOI from the HFOI shareholders (the "HFOI Shares") and in exchange, the Company issued to the HFOI Shareholders 50,000,000 (post-Merger) restricted shares of its common stock (the "HMMR Shares"). As a result of the Share Exchange Agreement, HFOI shall become a wholly owned subsidiary of the Company.

On April 13, 2016, the Board of Directors (BOD) approved a Plan of Merger (the "Plan of Merger") under Nevada Revised Statuses (NRS) Section 92A.180 to merge (the "Merger") with our wholly-owned subsidiary HFO Holdings, a Nevada corporation, to effect a name change from Tanaris Power Holdings Inc. to Hammer Fiber Optics Holdings Corp. The Plan of Merger also provides for a 1 for 1,000 exchange ratio for shareholders of both the Company and the HRO Holdings, which had the effect of a 1 for 1,000 reverse split of the common stock. Articles of Merger were filed with the Secretary of State of Nevada on April 13, 2016 and, on April 14, 2016, this corporate action was submitted to Financial Industry Regulatory Authority (the "FINRA") for its review and approval.

On May 3, 2016, the FINRA approved the merger with the wholly-owned subsidiary, HMMR Fiber Optics Holdings Corp. ("HFO Holdings"). Accordingly, thereafter, the Company's name was changed and the shares of common stock began trading under new ticker symbol "HMMR" as of May 27, 2016. The merger was effective on July 19, 2016.

In 2016 Hammer Fiber Optics Investments Ltd deployed its first beta network in Atlantic County, New Jersey. The network used a spectrum license agreement from Straightpath Communications, LLC. On January 17, 2018 Verizon Communications, LLC purchased Straightpath Communications, LLC and on July 14 2018, Verizon terminated the spectrum license agreement effective October 31, 2018 despite communications that it would continue to honor the agreement. On October 31, 2018 the Company ceased operations of the network in Atlantic County and subsequently classified the subsidiary as a discontinued operation.

On November 1, 2018, the Company acquired Open Data Centers, LLC, 1stPoint Communications, LLC and its subsidiaries. 1stPoint and its subsidiaries possess CLEC licenses in Florida, New York State, and a nationwide CMRS (Commercial Mobile Radio Services) license. The companies operate data center facilities in Piscataway, New Jersey and Homewood, Alabama. On December 17, 2018, the Company closed the acquisition of Endstream Communications, LLC, a wholesale voice operator in the United States.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 2 - CORPORATE HISTORY AND BACKGROUND ON MERGER (CONTINUED)**

On January 29, 2019 our board of directors approved a stock purchase agreement with American Network, Inc to acquire all of its equity. The acquisition of American Network, Inc closed on September 1, 2019.

As of April 30, 2020 our board of directors approved the discontinuation of the operations of Open Data Centers LLC. The operations of Open Data Centers, LLC were discontinued effective April 30, 2020 and the Company shut down its operations in its Piscataway, NJ data center.

On October 19, 2021 our board of directors approved a name change from Hammer Fiber Optics Holdings Corp to Hammer Technology Holdings Corp.

On October 25, 2021 our board of directors approved a share exchange agreement with Telecom Financial Services Limited ("TFS") for the acquisition one hundred percent (100%) of its stock. TFS owns the intellectual property critical to the operations of the company's financial technology business unit as well as certain key supplier, marketing and operating agreements. The acquisition of TFS closed on January 3, 2022. TFS has been renamed HammerPay [USA] Ltd.

**NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of presentation***

The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). The interim financial statements for the six months ending January 31, 2023 are unaudited. These financial statements are prepared in accordance with requirements for unaudited interim periods and consequently do not include all disclosures required to be in conformity with accounting principles generally accepted in the United States of America. The results of operations for the interim periods are not necessarily indicative of the results for the full year. In management's opinion, all adjustments necessary for a fair presentation of the Company's financial statements are reflected in the interim periods included and are of a normal recurring nature. These interim financial statements should be read in conjunction with the financial statements included in our Form 10-K, for the year ended July 31, 2022, as filed with the Securities and Exchange Commission ("the SEC") at www.sec.gov

***Use of estimates***

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

***COVID-19 Pandemic Update***

In March 2020, the World Health Organization declared a global health pandemic related to the outbreak of a novel coronavirus. The COVID-19 pandemic adversely affected the company's financial performance in the third and fourth quarters of fiscal year 2020 and could have an impact throughout fiscal year 2021. In response to the COVID-19 pandemic, government health officials have recommended and mandated precautions to mitigate the spread of the virus, including shelter-in-place orders, prohibitions on public gatherings and other similar measures. As a result, the company and certain of the company's customers and suppliers temporarily closed locations beginning late in the second quarter of fiscal year 2020, continuing into the third quarter of fiscal year 2020. Partly due to the COVID-19 pandemic, the Company shut down the operations of its' Open Data Centers, LLC operations effective April 30, 2020. On May 5, 2020 and on February 26, 2021 the Company's 1stPoint Communications LLC subsidiary entered into two $88,097 notes payable to Bank of America, pursuant to the Paycheck Protection Program ("PPP Loan") under the CARES Act. 1stPoint has met the requirements for Loan Forgiveness, and as of October 19, 2021, these notes have been forgiven by the Small Business Administration in accordance with rules of the CARES Act. The amounts of have been reflected as other income in the company's financial statements.

***Cash and cash equivalents***

Cash and cash equivalents include cash in banks, money market funds and certificates of term deposits with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

***Property and equipment***

Property and equipment is stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the useful lives of the assets. For furniture and fixtures, the useful life is five years, Leasehold Improvements are depreciated over their respective lease terms. Expenditures for additions and improvements are capitalized. Repairs and maintenance are expensed as incurred.

***Impairment of long-lived assets***

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted cash flows to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company has not recognized any related impairment losses.

***Indefinite lived intangible assets***

The Company reviews property, plant and equipment, inventory component prepayments and certain identifiable intangibles, excluding goodwill, for impairment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If property, plant and equipment, inventory component prepayments and certain identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair value. The Company has not recorded any related impairment losses. The Company does not amortize goodwill and intangible assets with indefinite useful lives, rather such assets are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired. The Company has not recorded any related impairment losses.

***Revenue recognition***

We adopted ASC 606 on August 1, 2018. Revenue is measured based on a consideration specified in a contract or agreement with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. Incidental items that are immaterial in the context of the contract are recognized as expense. Unearned revenues are recorded when cash payments are received or due in advance of the performance of the services. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

***Income taxes***

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, "Accounting for Income Taxes". The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of July 31, 2020, the Company did not have any amounts recorded pertaining to uncertain tax positions.

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**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

***Fair value measurements***

The Company adopted the provisions of ASC Topic 820, "Fair Value Measurements and Disclosures", which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 - quoted prices in active markets for identical assets or liabilities

Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis.

Level 3 - Unobservable inputs reflecting management's assumptions about the inputs used in pricing the asset or liability. Financial assets and liabilities (including warrants) approximate fair value.

***Consolidation of financial statements***

Hammer Fiber Optics Holdings Corp. is the parent company and sole shareholder of Hammer Wireless Corporation and its subsidiaries, 1stPoint Communications, LLC and its subsidiaries, which includes Shelcomm, Inc, Endstream Communications, LLC, American Network Inc., Hammer Wireless - SL, Ltd and HammerPay [USA], Ltd. The financial statements for Hammer Fiber Optics Holdings Corp. and its wholly-owned subsidiaries are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated. It's subsidiary Hammer Fiber Optics Investments, Ltd. and its former subsidiary Open Data Centers, LLC are discontinued and are considered discontinued operations. Open Data Centers, LLC was dissolved on December 30, 2020.

***Basic and Diluted Earnings (Loss) Per Share***

The basic earnings (loss) per share are calculated by dividing the Company's net income available to common shareholders by the weighted average number of common shares during the year. The diluted earnings (loss) per share is calculated by dividing the Company's net income (loss) available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company. As of January 31, 2023, and July 31, 2022, there were no common stock equivalents outstanding.

***Recent accounting pronouncements***

In August 2020, the FASB issued ASU 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)". This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. At present this does not impact our financial statements, but may in the future if there is conversion of certain notes. Management will continue to evaluate if this impacts our financial statements.

No other accounting pronouncements are applicable.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 4 - GOING CONCERN**

The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has consistently sustained losses since its inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. The Company's continuation as a going concern is dependent upon, among other things, its ability to increase revenues, adequately control operating expenses and receive debt and/or equity capital from third parties. No assurance can be given that the Company will be successful in these efforts.

The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company intends to continue to address this condition by seeking to raise additional capital through the issuance of debt and/or the sale of equity until such time that ongoing revenues can sustain the business, at which time capitalization may be considered through other means.

**NOTE 5 - DISCONTINUED OPERATIONS**

Hammer Fiber Optics Investment Ltd ceased operations in the Atlantic County geographical market on October 31, 2018 when Verizon Communications, LLC terminated the spectrum lease agreement. The operations of Hammer Fiber Optics Investments, Ltd were classified as a discontinued operation. Reporting of the discontinued operation is in accordance with Accounting Standards Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.

Open Data Centers, LLC ceased operations at its sole location in Piscataway, NJ on May 1, 2020. The operations of Open Data Centers, LLC were classified as a discontinued operation. Reporting of the discontinued operation is in accordance with Accounting Standards Update No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.

The following summarizes the assets and liabilities of the discontinued operations:

---

| | | |
|:---|:---|:---|
|  | **January 31,** | **July 31,** |
|  | **2023** | **2022** |
| Assets |  |  |
| &nbsp;&nbsp;&nbsp;Property and equipment- net | 1243960 | 1243960 |
| Total Assets | $1243960 | $1243960 |
| Liabilities and Net Assets |  |  |
| Current Liabilities |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $546304 | $546304 |
| &nbsp;&nbsp;&nbsp;Total current liabilities | 546304 | 546304 |
| Net assets (liabilities) | $697656 | $697656 |

---

There was no net income or loss during the period.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 6 - COMMITMENTS AND LEASES**

In discontinuing Open Data Centers, LLC and Hammer Fiber Optics Investments, Ltd. the company no longer has any material long term leases or obligations.

**NOTE 7 - PROPERTY AND EQUIPMENT**

As of January 31, 2023 and January 31, 2022, property and equipment consisted of the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **January 31,** | **January 31,** |  |
|  | **2023** | **2022** | **Life** |
| Computer, Telecom equipment & Software | $746384 | $558449 | 5 years |
| Less: Accumulated depreciation | (532771) | (417887) |  |
| Total | $313613 | $140562 |  |

---

**NOTE 8 - INDEFINITE LIVED INTANGIBLE ASSETS**

The Company has $7,298,443 of recognized indefinite lived intangible assets, which consist of customer and supplier contract assets from acquisitions, intellectual property and goodwill. These assets are not amortized and are evaluated routinely for potential impairment. If a determination is made that the intangible asset is impaired after performing the initial qualitative assessment, the asset's fair value will be calculated and compared with the carrying value to determine whether an impairment loss should be recognized.

**NOTE 9 - RELATED PARTY TRANSACTIONS**

During the fiscal year ended July 31, 2016, the Company entered into two promissory notes with a related party for an aggregate amount of $2,400,000 and $1,000,000, respectively. The $2,400,000 note matured on January 4, 2019. The terms consist of ten principal and interest payments due quarterly in the amount of $300,000 for total payments of $3,000,000. The Company is currently in default on this loan. To date, the Company has made payments on this note amounting to $725,831. The payments were applied to interest accrued as of the time of payment as well as to principal. The principal balance was $2,294,067 at July 31, 2019 and 2018. The interest accrued was $219,434 at July 31, 2019.

The $1,000,000 note matured on June 9, 2018 at which time the principal became due in its entirety, in addition to simple interest accrued at 3%. The company is currently in default on this loan. However, in November 1, 2018, as a term of the Stock Purchase Agreements signed as part of the acquisition of Open Data Centers, LLC, 1stPoint Communications LLC and Endstream Communications LLC, this party agreed to convert this debt at $3 per share of Common Stock at a time of the Company's choosing.

During the nine months ended April 30, 2020, the Company entered into a Stock Purchase Agreement with a related party on May 5, 2020 and May 30, 2020 in the amounts of $14,000 and $12,000 respectively. During the current fiscal year ending on July 31, 2020, the Company entered into convertible notes with Erik Levitt, the CEO of the company on April 20<sup>th</sup> and May 5<sup>th</sup> 2020 in the amounts of $36,300, and $12,000 respectively. The $12,000 note was paid on May 12<sup>th</sup>, 2020. The Company entered into a convertible note with Andrea Levitt, spouse of the CEO, Erik Levitt, on August 22, 2019 in the amount of $12,000. $4,500 has been repaid. The Company entered into a convertible note with two related parties on August 24, 2019 in the amount of $12,000 and $6,000 respectively. Any interest may be accrued as either cash or stock at the option of the Company at the end of the term. During the current fiscal year ending July 31, 2020, the Company entered into Stock Purchase Agreements from a related party in the amount of $10,000 on August 15, 2020, $25,000 on March 17, 2020, and $40,000 on March 26, 2020. On April 6, 2020, the Company entered into a promissory note for the sum of $36,300 with a related party. The note bears interest at a rate of 6%, payable at the end of the term, and may be waived by the holder and converted into Common Stock at the Company's option. On September 1, 2020, the Company entered into a promissory note for the sum of $100,000 with a related party. The note bears interest at a rate of 6%, payable at the end of the term, and may be waived by the holder. On November 23, 2020, and on January 19, 2021 the Company entered into promissory notes for the sums of $10,000 and $75,000 with a related party. The note bears interest at a rate of 6%, payable at the end of the term, and may be waived by the holder, and may be convertible into Common Stock at the Company's option.

On February 26, 2021, March 9, 2021 and March 15, 2021 the Company entered into promissory notes for the sums of $25,000, $100,000 and $25,000 respectively, with a related party. These notes bear interest at a rate of 6% payable quarterly unless forgiven by the note holder and may be converted into common stock at the Company's option.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)**

On January 15, 2022 the Company entered into a promissory note for the sum of $25,000 with a related party. The notes bear interest at a rate of 6%, payable at the end of the term, may be waived by the holder, and may be converted into common stock at the Company's option, and on December 28, 2021, January 12, 2022 and January 21, 2022 1stPoint Communications, LLC entered into three notes in the amounts of $10,200, $7,600 and $4,000 with a related party under the same terms as the note on January 15, 2022.

On November 15, 2022 the Company entered into a promissory note for the sum of $26,500 with a related party. The note bears interest at a rate of 6%, payable at the end of the term, may be waived by the holder, and may be converted into common stock at the Company's option. On December 15, 2022 the Company entered into a promissory note for the sum of $43,000 with a related party. The note bears interest at a rate of 6%, payable at the end of the term, may be waived by the holder, and may be converted into common stock at the Company's option.

As of January 31, 2023, all of the related party payables are reported as current liabilities in the Consolidated Balance Sheet.

**NOTE 10 - INCOME TAXES**

The Company's income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management's best estimate of current and future taxes to be paid. The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and estimate are required in the determination of the consolidated income tax expense. The reconciliation of income tax benefit at the U.S. statutory rate of 21% for the quarter ended January 31, 2023 and 2022, to the Company's effective tax rate is as follows:

---

| | | |
|:---|:---|:---|
|  | **January 31,** | **January 31,** |
|  | **2023** | **2022** |
| Income tax benefit provision at statutory rate | $(45781) | $(26828) |
| Change in valuation allowance | 45781 | 26828 |
|  | $- | $- |

---

The tax effects of temporary differences that give rise to the Company's net deferred tax assets as of January 31, 2023 and July 31, 2022 are as follows:

---

| | | |
|:---|:---|:---|
|  | **January 31,** | **July 31,** |
|  | **2023** | **2022** |
| Net operating loss | $(218005) | $(893672) |
| Valuation allowance | 218005 | 893672 |
|  | $- | $- |

---

The Company has approximately $23,339,000 of NOL carried forward to offset taxable income in future years. The tax laws enacted in 2017 also changed the treatment of NOL. Prior to the change, NOL could be carried back up to two years and carried forward up to 20 years to offset taxable income. In the new tax law, the NOL that can be carried forward is limited to 80% of the taxable income, can no longer be carried back, but are allowed to be carried forward indefinitely. The new law will apply to NOL arising in tax years beginning December 31, 2017, hence, $3,000,000 of the NOL will be subject to the 80% limitation and will be carried forward indefinitely while $19,297,000 of the NOL will be carried forward for 20 years and will begin to expire in 2036.

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized.

As of January 31, 2023 and January 31, 2022, the Company has no unrecognized income tax benefits. The Company's policy for classifying interest and penalties associated with unrecognized income tax benefits is to include such items as a tax expense.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 10 - INCOME TAXES (CONTINUED)**

No interest or penalties have been recorded during the quarters ended January 31, 2023 and January 31, 2022. As of January 31, 2023 and January 31, 2022, the Company did not have any amounts recorded pertaining to uncertain tax positions.

The tax years from 2015 and forward remain open to examination by federal and state authorities due to net operating loss and credit carryforwards. The Company is currently not under examination by the Internal Revenue Service. The State of New Jersey has opened an audit matter associated with Hammer Fiber Optics Investments, Ltd and the matter is currently under examination by the State of New Jersey. The subsidiary did not have any revenues, nor did it have any payroll during most of the period under review. The company has engaged outside accounting counsel to represent its subsidiary in these matters.

**NOTE 11 - STOCKHOLDERS' EQUITY**

***Treasury Stock***

In July 2016, certain shareholders of the Company contributed 9,291,670 restricted shares of their common stock to the Company's wholly-owned subsidiary, Hammer Wireless Corporation ("Treasury Shares"), for the purpose of effecting acquisitions, joint ventures or other business combinations with third parties. According to ASC 810-10-45 Consolidations, these shares are accounted for as treasury stock.

On January 4, 2019 the Company repurchased 13,000,000 shares of restricted Common Stock from substantial related-party shareholders. The shares of common stock were repurchased by the Company at $0.0001 per share. The repurchased shares were added to the Treasury stock of the Company and intend to be used for the purposes of effecting mergers, acquisitions, joint ventures, contractual relations and may be issued to investors under private placement agreements. 16,341,085 shares were issued from Treasury in conjunction with mergers and acquisitions, and operating activities. In connection with the Equity Purchase Agreement with Peak One, the Company issued 350,000 shares of treasury stock.

In the quarter ended April 2021 the Company issued 3,008,366 additional shares associated with acquisitions and to settle liability. In the quarter Ended July 2021, the Company issued 1,757,500 to a related party to settle outstanding liabilities of $5,272,500.

During the three months ended January 31, 2022, the company reclaimed 3,000,000 shares of Treasury stock in connection with a prior transaction, and will issue 5,000,000 shares of Treasury stock associated with the acquisition of TFS. The market value of the treasury shares at the closing of the acquisition were $4,250,500.

During the three months ended April 30, 2022, the Company issued 712,500 shares of common stock as commitment shares on borrowing. The shares were valued at their fair value of $454,908 and included in Financing charges.

**NOTE 12 - FOREIGN CURRENCY**

We transact business in various foreign currencies including the Euro and the Leone. In general, the functional currency of a foreign operation is the local country's currency. Consequently, revenues and expenses of operations outside the United States are translated into USD Dollars using the weighted-average exchange rates on the period end date and assets and liabilities of operations outside the United States are translated into US Dollars using the change rate on the balance sheet dates. The effects of foreign currency translation adjustments are not material to the Company's accompanying financial statements.

------

**HAMMER FIBER OPTICS HOLDINGS CORP.**

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

JANUARY 31, 2023

(Unaudited)

**NOTE 13 - CLAIMS**

From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.

The following parties have filed claims against Hammer Fiber Optics Investments Ltd and are not secured:

---

| | |
|:---|:---|
| Calvi Electric v. Hammer Fiber Optics Inv, Ltd. | $9209.69 |
| Horizon Blue Cross v. Hammer Fiber Optics Inv, Ltd. | $17308.58 |
| Cross River Fiber v. Hammer Fiber Optics Inv, Ltd. | $273220.0 |

---

Cross River Fiber has advanced its claim against Hammer Fiber Optics Investments, Ltd. Cross River Fiber has expanded its claim to include Hammer Fiber Optics Holdings Corp, 1stPoint Communications, LLC, Endstream Communications, LLC, Open Data Centers, LLC, Manhattan Carrier Company, LLC, Erik Levitt personally, Local Telecommunications Services - FL, LLC, Local Telecommunications Services - NY, LLC, American Network Inc and Hammer Wireless Corporation. There never was, nor has there ever been, a contract between any of these entities or Mr. Levitt personally and Cross River Fiber, nor is there any security under the agreement between Cross River Fiber and Hammer Fiber Optics Investments, Ltd. The claims in this matter are similar to those made by Zayo Group and Crown Castle Fiber, which were both settled.

**NOTE 14 - SUBSEQUENT EVENTS**

On March 8, 2023 the Company and Mast Hill Fund, LLP agreed to amend the Promissory Note dated December 10, 2021. The principal of the note was increased by $62,000 and the Company agreed to issue 475,000 additional shares of Common Stock ("Extension Shares"), which shall be considered earned in full as of the effective date (March 10, 2023). The maturity date of the Note has been extended to February 11, 2024.

------

**ITEM 2.** **MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following Management's Discussion and Analysis should be read in conjunction with Hammer Fiber Optics Holdings Corp., financial statements and the related notes thereto. The Management's Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect," and the like, and/or future-tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Report on Form 10-Q. The Company's actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Report on Form 10-Q.*

*The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and other financial data included elsewhere in this report. See also the notes to our condensed consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K/A for the year ended July 31, 2022, filed with the SEC on February 8, 2023.*

***Results of Operations***

**Three Months Ended January 31, 2023 Compared to the Three Months Ended January 31, 2022**

Net revenues for the three months ended January 31, 2023 and January 31, 2022 were $744,051 and $591,947 respectively, an increase of 25.71%. The increase was primarily due to the expansion of the Company's Over-the-Top ("OTT") business segment which includes its SMS messaging and hosting business units.

During the three months ended January 31, 2023, the Company incurred total operating expenses of $955,352 compared with $711,014, an increase of 30.32%, for the comparable period ended January 31, 2022. The increase is expenses is due to the expenses associated with the Company's diversification into the financial services markets and increased expenses associated with the expansion of the telecommunications business segment.

The Company recorded depreciation and amortization expense of $14,884 and $17,939 during the three months ended January 31, 2023 and January 31, 2022 respectively. During the three months ended January 31, 2023 and January 31, 2022 interest expense was $6,704 and $21,817 respectively.

During the three months ended January 31, 2023 the Company recorded a net loss of $218,005, compared to a loss of $134,960 in the same three month period ended January 31, 2022. The increase in loss is due to the Company's diversification into the financial technologies sector and the development of the Company's HammerPay technology.

***Liquidity and Capital Resources***

The Company is at risk of remaining a going concern. Its ability to remain a going concern is dependent upon whether the company can raise debt and/or equity capital from third-party sources for both working capital and business development needs until such time as the Company may be substantially sustained as a going concern through cash flow from operations or the Company increases its cash flow from operations through sale of services in the ongoing business units, Endstream Communications, 1stPoint Communications and HammerPay.

***Cash Flow from Operating Activities***

During the six months ended January 31 2023 the Company's total cash decreased by $375,221, compared to a decrease in cash of $11,478 in the period ended January 31, 2022. Cash flow from Operating Activities decreased by $385,019, compared to a decrease of $23,747 in the period ended January 31, 2022. The decrease was primarily due to improvements in operations.

------

***Cash Flow from Investing Activities***

During the six months ended January 31, 2023, the Company's investing activities used $50,152, compared to $23,745 provided by investing activities during the six months ended January 31, 2022. The increase was primarily due to the expansion of the operations of the company's telecommunications business unit, and particularly the Company's investments in its HammerPay platform.

***Cash Flow from Financing Activities***

During the six months ended January 31, 2023, the Company used $92,242 in cash from financing activities compared with $36,014 used during the six months ended January 31, 2022.

***Going Concern***

As of January 31, 2023, doubt existed as to the Company's ability to continue as a going concern as the Company has no certainty of earning additional revenues in the future, has a working capital deficit and an overall accumulated deficit since inception. The Company will require additional financing to continue operations either from management, existing shareholders, or new shareholders through equity financing and/or sources of debt financing. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

***Future Financings***

We will continue to rely on equity sales of our common shares in order to continue to fund business operations. Issuances of additional shares may result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or arrange for debt or other financing in amounts sufficient to fund our operations and other development activities.

***Off-Balance Sheet Arrangements***

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.

***Critical Accounting Policies***

Our financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States, applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

***Recently Issued Accounting Pronouncements***

The Company has implemented new accounting pronouncements that are relevant to the company and are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

------

**ITEM 4. CONTROLS AND PROCEDURES**

**Management's Report on Disclosure Controls and Procedures**

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer to allow for timely decisions regarding required disclosure.

**Management's Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibilities, estimates, and judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control include providing management with reasonable, but not absolute, assurance that assets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States. Our management assessed the effectiveness of our internal control over financial reporting as of January 31, 2023. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control-Integrated Framework (2013). Our management has concluded that, as of January 31, 2023, our internal control over financial reporting was not effective. This is due to an inherent staffing limitation and the Principal Financial Officer and the President are the same individual. That individual does not maintain day-to-day banking responsibilities to provide some limitation in such risks.

**Inherent Limitations on Effectiveness of Controls**

Internal control over financial reporting has inherent limitations which include but is not limited to the use of independent professionals for advice and guidance, interpretation of existing and/or changing rules and principles, segregation of management duties, scale of organization, and personnel factors. The President and Principal Financial Officer are the same individual. Internal control over financial reporting is a process which involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis, however these inherent limitations are known features of the financial reporting process and it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

**Changes in Internal Control over Financial Reporting**

Effective November 1, 2018 the management and accounting resources of the 1stPoint subsidiary assumed responsibility of our internal controls. The Company views this migration to have a positive material impact on our ability to maintain internal controls over financial reporting as 1stPoint has a separation in banking, day-to-day accounting and financial reporting responsibilities, however, the President and Principal Financial Officer are the same individual.

------

**PART II - OTHER INFORMATION**

**ITEM 1. LEGAL PROCEEDINGS**

From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments.

The following parties have filed claims against Hammer Fiber Optics Investments Ltd and are not secured:

---

| | |
|:---|:---|
| Calvi Electric v. Hammer Fiber Optics Inv, Ltd. | $9209.69 |
| Horizon Blue Cross v. Hammer Fiber Optics Inv, Ltd. | $17308.58 |
| Cross River Fiber v. Hammer Fiber Optics Inv, Ltd. | $273220.0 |

---

Cross River Fiber has advanced its claim against Hammer Fiber Optics Investments, Ltd. Cross River Fiber has expanded its claim to include Hammer Fiber Optics Holdings Corp, 1stPoint Communications, LLC, Endstream Communications, LLC, Open Data Centers, LLC, Manhattan Carrier Company, LLC, Erik Levitt personally, Local Telecommunications Services - FL, LLC, Local Telecommunications Services - NY, LLC, American Network Inc and Hammer Wireless Corporation. There never was, nor has there ever been, a contract between any of these entities or Mr. Levitt personally and Cross River Fiber, nor is there any security under the agreement between Cross River Fiber and Hammer Fiber Optics Investments, Ltd. The claims in this matter are similar to those made by Zayo Group and Crown Castle Fiber, which were both settled.

**ITEM 1A. RISK FACTORS**

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

None.

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. OTHER INFORMATION**

Please refer to our Current Reports on Form 8-K filed since August 19, 2016, which are incorporated by reference herein.

------

**ITEM 5. EXHIBITS**

---

| | | |
|:---|:---|:---|
| **Exhibit** |  |  |
| **Number** | **Description of Exhibit** |  |
| [31.01](exhibit31-01.htm) | [Certification of Principal Financial Officer Pursuant to Rule 13a-14](exhibit31-01.htm) | [Filed herewith.](exhibit31-01.htm) |
| [32.01](exhibit32-01.htm) | [CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act](exhibit32-01.htm) | [Filed herewith.](exhibit32-01.htm) |
| 101.INS\* | Inline XBRL Instance Document–the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document | Filed herewith. |
| [101.SCH\*](hmmr-20230131.xsd) | [Inline XBRL Taxonomy Extension Schema Document](hmmr-20230131.xsd) | [Filed herewith.](hmmr-20230131.xsd) |
| [101.CAL\*](hmmr-20230131_cal.xml) | [Inline XBRL Taxonomy Extension Calculation Linkbase Document](hmmr-20230131_cal.xml) | [Filed herewith.](hmmr-20230131_cal.xml) |
| [101.LAB\*](hmmr-20230131_lab.xml) | [Inline XBRL Taxonomy Extension Label Linkbase Document](hmmr-20230131_lab.xml) | [Filed herewith.](hmmr-20230131_lab.xml) |
| [101.PRE\*](hmmr-20230131_pre.xml) | [Inline XBRL Taxonomy Extension Presentation Linkbase Document](hmmr-20230131_pre.xml) | [Filed herewith.](hmmr-20230131_pre.xml) |
| [101.DEF\*](hmmr-20230131_def.xml) | [Inline XBRL Taxonomy Extension Definition Linkbase Document](hmmr-20230131_def.xml) | [Filed herewith.](hmmr-20230131_def.xml) |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed herewith. |

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\*Pursuant to Regulation S-T, this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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**SIGNATURES**

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| | |
|:---|:---|
|  | **HAMMER FIBER OPTICS HOLDINGS CORP** |
| Date: March 21, 2023 | */s/ Erik B. Levitt* |
|  | Erik B. Levitt |
|  | Principal Executive Officer |
| Date: March 21, 2023 | /s/ *Erik B. Levitt* |
|  | Erik B. Levitt |
|  | Principal Financial Officer |

---

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## Exhibit 31.01

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**EXHIBIT 31.01**

**CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER**

**PURSUANT TO SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002**

I, Erik B. Levitt, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this Quarterly Report on Form 10-Q of the Registrant for the period ended January 31, 2023.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. As the Registrant's certifying officer, I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c. Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d. Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. As the Registrant's certifying officer, I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant auditors and the audit committee of the Registrant's Board of Directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting.

Date: March 21, 2023

**Hammer Fiber Optics Holdings Corp.**

By: <u>*/s/ Erik B. Levitt*</u>

Name: Erik B. Levitt

Title: Principal Financial Officer

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## Exhibit 32.01

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**EXHIBIT 32.01**

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

I, Erik B. Levitt, the Chief Accounting and Financial Officer of Hammer Fiber Optics Holdings Corp, certify, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge, the Quarterly Report on Form 10-Q of the Registrant for the period ended January 31, 2022, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date: March 21, 2023

**Hammer Fiber Optics Holdings Corp.**

By: <u>*/s/ Erik B. Levitt*</u>

Name: Erik B. Levitt

Title: Principal Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Registrant and will be retained by the Registrant and furnished to the Securities and Exchange Commission or its staff upon request.

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