Quarterly Report for Quarter Ending April 30, 2024 (Form 10-Q)

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 April 30, 2024

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

For the transition period from:

Commission File Number000-1539680

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, FL34240

(Address of principal executive offices)

941-306-3019

(Registrant's telephone number)

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 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 [ ]

Large Accelerated Filer	[ ]	Non-Accelerated Filer	[X]
Accelerated Filer	[ ]	Smaller Reporting Company	[X]
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 August 26, 2024, there were 63,155,947 shares of the registrant's $0.001 par value common stock issued and 61,402,612 shares outstanding.

F-2

HAMMER FIBER OPTICS HOLDING CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

		April 30,				July 31,
		2024				2023
ASSETS
Current Assets
Cash and cash equivalents	$	90,204			$	66,688
Accounts receivable		344,942				238,820
Security deposits		7,316				7,316
Prepaid expenses		14,063				18,675
Total current assets		456,525				331,499
Property and equipment, net		61,862				89,712
Intangible assets		7,439,858				7,406,827
Total assets	$	7,958,245			$	7,828,038
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	1,137,418			$	1,205,995
Notes payable		145,135				92,693
Convertible notes payable		682,000				612,000
Convertible notes payable - related parties		1,372,593				738,600
Warrant liabilities		148,500				195,750
Unissued Stock		-				105,925
Deferred Revenue		149,640				172,900
Current liabilities from discontinued operations		545,993				545,994
Total current liabilities		4,181,279				3,669,858
Total Liabilities	$	4,181,279			$	3,669,858
Commitments and contingencies
Stockholders' Equity
Common stock, $0.001 par value, 250,000,000 shares authorized
63,155,947 and 62,205,947 shares issued; 61,402,612 and 60,452,612 shares outstanding at April 30, 2024 and July 31, 2023, respectively	$	63,156			$	62,206
Additional paid-in capital		28,007,940				27,808,440
Accumulated deficit		(24,294,130	)			(23,712,466	)
Total Stockholder's Equity		3,776,966				4,158,180
Total Liabilities and Stockholders' Equity	$	7,958,245			$	7,828,038

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

F-4

HAMMER FIBER OPTICS HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		For the Three Months Ended			For the Nine Months Ended
		April 30,			April 30,
		2024			2023 (as restated)			2024			2023 (as restated)
Revenues	$	770,412		$	767,527		$	2,506,966		$	2,311,038
Cost of sales		593,468			583,813			1,819,354			1,749,128
Selling, general and administrative expenses		452,235			190,277			1,187,574			973,720
Depreciation expense		13,471			14,608			43,441			45,416
Total operating expenses		1,059,174			788,698			3,050,369			2,768,264
Loss from operation		(288,762	)		(21,171	)		(543,403	)		(457,226	)
Other income (expense)
Other income		9,621			11,467			178,420			11,467
Interest expense		(21,756	)		(6,379	)		(62,061	)		(7,628	)
Financing expenses		(173,520	)		(175,960	)		(187,955	)		(316,897	)
Change in fair value of warrant liabilities		(29,250	)		(13,500	)		47,250			27,392
Gain on extinguishment of convertible debt		-			-			-			115,357
Other expenses		(800	)		(168	)		(13,915	)		(1,401	)
Total other expense		(215,705	)		(184,540	)		(38,261	)		(171,710	)
Net loss	$	(504,467	)	$	(205,711	)	$	(581,664	)	$	(628,936	)
Weighted average number of common shares outstanding - basic and diluted		63,155,947			62,078,537			62,078,537			61,545,118
Basic and diluted loss per share	$	(0.01	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

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

F-5

HAMMER FIBER OPTICS HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

		For the Three				For the Nine
		Months Ended				Months Ended
		April 30,				April 30,
		2024				2023 (as restated)				2024				2023 (as restated)
Net loss	$	(504,467	)		$	(205,711	)		$	(581,664	)		$	(628,936	)
Foreign currency translation adjustments		-				27,125				-				(27,369	)
Comprehensive loss	$	(504,467	)		$	(178,586	)		$	(581,664	)		$	(656,305	)

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

F-6

HAMMER FIBER OPTICS HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)

(Unaudited)

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

F-7

HAMMER FIBER OPTICS HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENT CASH FLOWS

(Unaudited)

F-8

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Hammer Fiber Optics Holdings Corp (OTCPK: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.

NOTE 2 - CORPORATE HISTORY AND BACKGROUND ON MERGER

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 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 July14 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.

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 December 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 December 30, 2020 and the Company shut down its operations in its Piscataway, NJ data center.

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.

On July 31, 2023 our board of directors approved the discontinuation of the operations of Hammer Wireless (SL) Limited, the company's data communications service in Sierra Leone. The operations were discontinued in March 2020 and all assets have been written down.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

April 30, 2024

(Unaudited)

The following table sets forth the effects of the adjustments on affected items within the Company's condensed consolidated statement of comprehensive income for the three and nine months ended April 30, 2023:

The following table sets forth the effects of the adjustments on affected items within the Company's previously reported consolidated statements of cash flows for the nine months ended April 30, 2023:

The specific explanations for the items noted above in the restated financial statements are as follows:

(1) During February 2022, the Company entered into two convertible notes that included warrants exercisable for five years. Management determined that the original consolidated balance sheet, consolidated statement of operations, and consolidated statement of cash flows amounts did not give effect to the issuance of warrants to purchase shares at a price between $1.50 and $3.00 per share of the common stock outstanding. The Company recorded an additional noncash interest expense of $117,508 and $183,705 (included within selling, general and administrative expenses, interest expense and financing expenses) and the adjustment to the fair value of $(9,000) and $40,892 for the three and nine months ended April 30, 2023, respectively, in relation to the Warrant.

(2) On October 4, 2022 Talos Fund exercised its right to convert the principal and accrued interest from its promissory note in the amount of $297,364 at $0.58 per share of the Company's common stock. The conversion price was above the market price at closing of $0.355 per share. Therefore, the Company recognized a gain of $115,357 on conversion.

(3) During the three and nine months ended April 30, 2023, the business transactions of the Company's West African subsidiary, Hammer Wireless - SL, Ltd., whose functional currency is the Sierra Leonean Leone, incurred $27,369 in foreign currency translation adjustments.

(4) Other corrections with immaterial impact on the condensed consolidated statement of operations and statement of cash flow.

F-17

NOTE 6 - 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:

NOTE 7 - PROPERTY AND EQUIPMENT

As of April 30, 2024 and July 31, 2023, respectively, the Company had $7,439,858 and $7,406,827 of recognized indefinite lived intangible assets, which consist of customer contract assets from acquisitions and costs capitalized. 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. The Company did not recognize any intangible asset impairment charges during the three and nine months ended April 30, 2024 or 2023.

F-18

NOTE 9 - NOTES PAYABLE

On April 1, 2024, 1stPoint Communications entered into a financing agreement with a financial institution in the amount of $62,400. As of April 30, 2024, the principal amount remaining under this financial agreement was $56,160.

On March 20, 2023, 1stPoint Communications entered into a financing agreement with a financial institution in the amount of $58,000 and $2,320 in transaction fees. As of April 30, 2024 and July 31, 2023 the principal remaining under this financial agreement was $0 and $17,234.

On January 5, 2022, the Company entered into a convertible note with a related party in the amount of $29,253. The amount will convert into Common Stock at the Company's option and bears interest at a rate of 6% annually, to be expensed at the time of conversion. The interest on this note has been forgiven by all parties. As of April 30, 2024 and July 31, 2023, the balance of this note was $24,253.

During the fiscal year 2022, the Company entered into a non-interest bearing loan with a financial institution in the amount of $10,972. As of April 30, 2024 and July 31, 2023 the principal remaining was $10,972.

On February 26, 2021, Endstream Communications entered into a financing agreement with a financial institution in the amount of $40,000. The amount was refinanced on March 25, 2022 and again on November 16, 2022 in the amount of $141,750. The amount was refinanced once more during the nine months ended April 30, 2024 in the amount of $50,379. As of April 30, 2024 and July 31, 2023 the principal remaining was $53,750 and $40,234.

As of April 30, 2024 and July 31, 2023, notes payable consisted of the following:

		April 30, 2024				July 31, 2023
Notes payable	$	145,135			$	92,693
Less: current portion, net		(145,135	)			(92,693	)
Long-term notes payable, net	$	-			$	-

NOTE 10 - RELATED PARTY CONVERTIBLE DEBT

On August 22, 2019, the Company entered into a convertible note with a related party in the amount of $12,000. $4,500 has been repaid. The amount will convert into Common Stock at the Company's option and bears interest at a rate of 6% annually, to be expensed at the time of conversion. The interest on this note has been forgiven by all parties. As of April 30, 2024 and July 31, 2023, the balance of this note was $7,500.

On August 24, 2019, the Company entered into a convertible note with two related parties (who were former partners in 1stPoint Communications, LLC) in the amounts of $12,000 and $6,000 respectively. Both notes bear interest at a rate of 6% annually and any interest may be accrued as either cash or stock at the option of the Company. The interest on this note has been forgiven by all parties. As of April 30, 2024 and July 31, 2023, the balances of these notes were $12,000 and $6,000 for both periods.

On March 24, 2020, the Company entered into a convertible note with the Chief Financial Officer in the amount of $43,000. The amount will convert into Common Stock at the Company's option and bears interest at a rate of 6% annually, to be expensed at the time of conversion. The interest on this note has been forgiven by all parties. As of April 30, 2024 and July 31, 2023, the balance of this note was $43,000.

On April 20, 2020, the Company entered into a convertible note with the Chief Financial Officer in the amount of $36,300 with an original maturity date of April 20, 2024. The amount will convert into Common Stock at the Company's option and bears interest at a rate of 6% annually, to be expensed at the time of conversion. The interest on this note has been forgiven by all parties. As of April 30, 2024 and July 31, 2023, the balance of this note was $36,300.

On September 1, 2020, the Company entered into a promissory note for the sum of $100,000 with a non-executive director. The amount will convert into Common Stock at the Company's option and bears interest at a rate of 6% annually, to be expensed at the time of conversion. The interest on this note has been forgiven by all parties. The note has been amended several times, with a total increase in funding of $61,300. As of April 30, 2024 and July 31, 2023, the balance of this note was $161,300.

On February 26, 2021, the Company entered into a convertible note with a related party in the amount of $25,000. The note bears interest at a rate of 6%, compounded monthly and payable upon repayment or conversion. Interest has been waived by the lender. The note has been amended several times, with a total increase in funding of $1,081,493. As of April 30, 2024 and July 31, 2023, the balance of this note was $1,106,493 and $472,500, respectively.

NOTE 11 - CONVERTIBLE DEBT

The Company entered into the First Amendment to the Mast Note as of March 6, 2023, through which both parties agreed to increase the principal balance of the note by $62,000. As of April 30, 2024 and July 31, 2023, the balance of the Mast Note was $682,000.

Pursuant to the terms of the Mast SPA, the Company also agreed to issue (i) a common stock purchase warrant to purchase 150,000 shares of Company common stock at an exercise price of $3.00, subject to adjustment as set forth therein (the "Mast First Warrant"), (ii) a common stock purchase warrant to purchase 150,000 shares of Company common stock at an exercise price of $1.50, subject to adjustment as set forth therein (the "Mast Second Warrant" and together with the Mast First Warrant, the "Mast Warrants"), and (iii) 475,000 shares of Company common stock to Mast as additional consideration for the purchase of the Mast Note.

The Mast Note bears interest at a rate of 12% per annum and matures on February 11, 2025. Any amount of principal or interest on the Mast Note which is not paid when due will bear interest at a rate of the lesser of (i) 16% per annum and (ii) the maximum amount permitted by law. The Mast Note may not be prepaid in whole or in part except as provided in the Mast Note by way of conversion at Mast's option. Mast has the right at any time to convert all or any part of the outstanding and unpaid principal amount and interest of the Mast Note into common stock, subject to a 4.99% equity blocker, at a conversion price of $0.58 per share; provided, however, that Mast is entitled to deduct $1,750 from the conversion amount in each case to cover Mast's fees associated with conversion. Mast's right to exercise each of the Mast Warrants is subject to a 4.99% equity blocker. Each of the Mast Warrants expires on the five-year anniversary of issuance.

The foregoing description of the Mast SPA, the Mast Note and the Mast Warrants does not purport to be complete and is qualified in its entirety by reference to the Mast SPA, the Mast Note, the First Mast Warrant and the Second Mast Warrant, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to Form 8-K filed on February 23, 2022.

On February 17, 2022, the Company entered into a Securities Purchase Agreement (the "Talos SPA") by and between the Company and Talos Victory Fund, LLC ("Talos"). Pursuant to the terms of the Talos SPA, the Company agreed to sell to Talos, and Talos agreed to purchase from the Company, a promissory note in the aggregate principal amount of $275,000 (the "Talos Note"), convertible into shares of the Company's common stock upon the terms and subject to the limitations and conditions set forth in the Talos Note. The Talos Note has an original issue discount of $27,500, resulting in gross proceeds to the Company of $247,500. Talos has piggyback registration rights pursuant to the terms of the Talos SPA. Pursuant to the terms of the Talos SPA, the Company also agreed to issue (i) a common stock purchase warrant to purchase 75,000 shares of Company common stock at an exercise price of $3.00, subject to adjustment as set forth therein (the "Talos First Warrant"), (ii) a common stock purchase warrant to purchase 75,000 shares of Company common stock at an exercise price of $1.50, subject to adjustment as set forth therein (the "Talos Second Warrant" and together with the Talos First Warrant, the "Talos Warrants"), and (iii) 237,500 shares of Company common stock to Talos as additional consideration for the purchase of the Talos Note. Talos converted the note into 512,696 shares of HMMR common stock on October 4, 2022.

As of April 30, 2024 and July 31, 2023, convertible debt consisted of the following:

			April 30, 2024			July 31, 2023
Convertible debt		$	627,000		$	557,000
Original issue discount		$	55,000		$	55,000
Less: current portion, net			(682,000	)		(612,000	)
Long-term convertible debt, net		$	-		$	-

NOTE 12 - INCOME TAXES

The Company's provision for income taxes was not material and the effective tax rate was 0% for the three and nine months ended April 30, 2024 and 2023. The Company maintains a valuation allowance on all deferred tax assets except in certain foreign jurisdictions, as it has concluded that it is more likely than not that these assets will not be utilized.

NOTE 15 - CLAIMS

F-21

NOTE 16 - SUBSEQUENT EVENTS

The Company has completed an evaluation of all subsequent events through August 26, 2024, the date the financial statements were issued. Except as described below, the Company has concluded that no subsequent event has occurred that requires disclosure.

Management has reviewed the subsequent events and there is no material impact on the current financial statements or the valuation of the business.

On July 23, 2024, the Company received notification from Fruci & Associates II, PLLC, our independent accountant, that the original audit opinions issued by Fruci with the July 31, 2023 and July 31, 2022 Form 10-K filings by the Company were not supported with sufficient audit procedures and therefore should no longer be relied upon.

On August 7, 2024, the Company authorized and executed a Purchase Agreement with Viper Networks Inc. with the intention to sell the Company's telecommunication assets to Viper. The assets include 1st Point Communications LLC., and all its subsidiaries, Endstream Communications LLC, American Networks Inc., and 10% ownership in Wikibuli Inc. Viper is acquiring these assets in exchange for 2,500,000 (2.5 million) shares of the Company's common stock. Substantially all of the Company's revenue recognized to date has been generated byEnd Stream Communications, LLC and 1st Point Communications LLC and its subsidiaries.

F-22

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 for the year ended July 31, 2023, filed with the SEC on February 16, 2024.

Results of Operations

Three Months Ended April 30, 2024 Compared to the Three Months Ended April 30, 2023

Net revenues for the three months ended April 30, 2024, and April 30, 2023 were $770,412 and $767,527 respectively, an increase of approximately $2,885 or 0.4%. 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 April 30, 2024, the Company incurred total operating expenses of $1,059,174 compared with $788,698 during the comparable period April 30, 2023. This increase of approximately $270,476 or 35% is due to an increase in selling, general and administrative expenses of $262,008 in the quarter.

The Company recorded depreciation and amortization expense of $13,471 and $14,608 during the three months ended April 30, 2024, and April 30, 2023, respectively. During the three months ended April 30, 2024, and April 30, 2023 interest expense was $21,756 and $6,379 respectively.

During the three months ended April 30, 2024, the Company incurred total other expense of $215,705 primarily consisting of interest expense, financing expense, and loss on fair value of warrant liability, of $21,756, $173,520 and, $29,250, respectively. These expenses are partially offset by other income in the quarter of $9,621, which represents income from previously written-down customer accounts receivable. During the three months ended April 30, 2023 the Company incurred total other expense of $184,540 consisting of interest expense, financing expense, and loss on fair value of warrant liability of $6,379, $175,960, and $13,500. These expenses are partially offset by other income of $11,467.

During the three months ended April 30, 2024 the Company recorded a net loss of $504,467, compared to a loss of $205,711 in the same three-month period ended April 30, 2023. The increase in loss is due to a large increase in the Company's total other expenses and selling, general, and administrative expenses quarter over quarter.

Nine Months Ended April 30, 2024 Compared to the Nine Months Ended April 30, 2023

Net revenues for the nine months ended April 30, 2024 and April 30, 2023 were $2,506,966 and $2,311,038 respectively, an increase of approximately $195,928 or 8.5%. 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 nine months ended April 30, 2024, the Company incurred total operating expenses of $3,050,369 compared with $2,768,264, an increase of approximately $282,105 or 10.2%, for the comparable period ended April 30, 2023. The increase in 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 $43,441 and $45,416 during the nine months ended April 30, 2024 and April 30, 2023 respectively. During the nine months ended April 30, 2024 and April 30, 2023 interest expense was $62,061 and $7,628 respectively.

During the nine months ended April 30, 2024, the Company incurred total other expense of $38,261 primarily consisting of interest expense, financing expense, and other expenses of $62,061, $187,955, and $13,915, respectively. These expenses are partially offset by other income in the nine months ended April 30, 2023 of $178,420, which represents income from previously written-down customer accounts receivable. During the nine months ended April 30, 2023 the Company incurred total other expenses of $171,710 consisting of interest expense and financing expense of $7,628 and $316,897. These expenses are partially offset by other income, gain on fair value of warrant liability, and gain extinguishment of convertible debt of $11,467, $27,392, and $115,357.

During the nine months ended April 30, 2024 the Company recorded a net loss of $581,664, compared to a loss of $628,936 in the same nine month period ended April 30, 2023. The increase in loss is due to a large increase in the Company's total other expenses and selling, general, and administrative expenses year over year.

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 nine months ended April 30, 2024 the Company's total cash increased by $23,516, compared to a decrease in cash of $369,703 in the period ended April 30, 2023. Cash flow used in operating activities was $614,568, compared to $467,530 in the period ended April 30, 2023. The increase was partially due to an increase in net loss in the period as well as increases in accounts receivables, decreases in accounts payables, and decreases in deferred revenues, partially offset by a decrease in non-cash interest expense and depreciation expense.

Cash Flow from Investing Activities

During the nine months ended April 30, 2024, the Company's investing activities used $48,349, compared to $14,138 used in investing activities during the nine months ended April 30, 2023. The increase was primarily due to an increase in the purchases of property and equipment as well as an increase in capitalized intangible assets during the period ended April 30, 2024.

Cash Flow from Financing Activities

During the nine months ended April 30, 2024, cash flow provided by financing activities was $686,433 compared with $139,334 provided during the nine months ended April 30, 2023. The increase is primarily attributable to greater borrowings of notes payable and convertible notes payable - related parties during the period. During the nine months ended April 30, 2024, the Company received approximately $77,279 more in proceeds from notes payable and approximately $452,574 more in proceeds from convertible notes payable - related parties as compared to the nine months ended April 30, 2023.

Going Concern

As of April 30, 2024, 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.

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. For the nine-month period ended April 30, 2024, there were no significant changes to our critical accounting policies as identified in our Annual Report on Form 10-K for the year ended July 31, 2023.

Recently Issued Accounting Pronouncements

In the period from July 2023 through April 2024, the FASB has not issued any additional accounting standards updates that have a significant impact on the Company. Management has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our consolidated financial statements and related disclosures.

Off-Balance Sheet Arrangements

We do not have any 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.

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that are designed to reasonably ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of "disclosure controls and procedures" in Rule 15d-15(e) under the Exchange Act. In designing and evaluating the disclosure controls and procedures, our management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

At the end of the period covered by this Quarterly Report, we conducted an evaluation under the supervision and with the participation of our Principal Officer and Principal Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon the foregoing, our Principal Executive Officer and Principal Financial Officer concluded that, as of April 30, 2024, the disclosure controls and procedures of our Company were not effective.

Material Weakness

Our management assessed the effectiveness of our internal control over financial reporting as of April 30, 2024. 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).

A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects our ability to initiate, authorize, record, process, or report external financial data reliably in accordance with GAAP such that there is more than a remote likelihood that a material misstatement of our annual or interim financial statements that is more than inconsequential will not be prevented or detected. In the course of making our assessment of the effectiveness of internal controls over financial reporting, we identified a material weakness in our internal control over financial reporting. Specifically, this is due to an inherent staffing limitation to properly segregate duties and provide adequate monitoring during the process leading to and including the preparation of the condensed consolidated financial statements.

Limitations on Effectiveness of Controls and Procedures

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. 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

During the fiscal year 2024, we engaged an outsourced firm with a panel of CPA consultants to assist in building internal controls and preparing financial reports, and to establish best practices and help us document and implement all the checks and balances needed for all financial areas.

Except as listed above, there were no other changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, or proceeding by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our Company or our subsidiary, threatened against or affecting our Company, our common stock, our subsidiary or of our companies or our subsidiary's officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

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

On April 4, 2024, the Company entered into the Second Amendment to the Mast Note, which included the issuance of 475,000 shares of the Company's common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION

There is no other information required to be disclosed under this item which has not been previously disclosed.

ITEM 6.EXHIBITS

Exhibit
Number	Description of Exhibit
31.01	Certification of Principal Executive Officer Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2022
31.02	Certification of Principal Financial Officer Pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2022
32.01	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
32.02	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
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
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
104*	Cover Page Interactive Data File - the cover page from the Registrant's Quarterly Report on Form 10-Q for the quarter ended April 30, 2024 March 31, 2024, is formatted in Inline XBRL.

*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.

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: August 26, 2024	/s/ Michael Cothill
	Michael P. Cothill
	Principal Executive Officer
Date: August 26, 2024	/s/ Mark Stogdill
	Mark Stogdill
	Principal Financial Officer