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,~~October 31, 2023

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

For the transition period from:

Commission File Number 000-1539680

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, ~~Suite 300,~~ Sarasota, FL ~~United States~~ 34240

(Address of principal executive offices)

~~(941) 306-3019~~941-306-3019

(Registrant's telephone number)

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

Class	Trading Symbol	Name of Each Exchange
Series B Common Stock	HMMR	OTC QBPK

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]~~[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]
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 ~~June, 14,~~October, 31, 2023, there were ~~62,078,537~~62,680,947 shares of the registrant's $0.001 par value common stock issued and ~~60,325,202~~60,927,612 shares outstanding.

HAMMER FIBER OPTICS HOLDINGS CORP.

TABLE OF CONTENTS

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.

~~EXPLANATORY NOTE~~

This quarterly report on Form 10Q for our quarter ended April 30, 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.

Condensed Consolidated Balance Sheets

(Unaudited)

April 30, July 31,
2023 2022

ASSETS
Current Assets
Cash and cash equivalents $ 113,207 $ 482,910
Accounts receivable 270,367 216,834
Security Deposits 11,082 11,082
Prepaid expenses 16,423 14,746
Total current assets 411,079 725,572

Property and equipment, net 302,108 278,345

Intangible and other assets 7,370,528 7,323,702

Assets from Discontinued Operations 1,243,960 1,243,960

Total assets $ 9,327,675 $ 9,571,579

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses $ 1,139,213 $ 1,130,465
Loans payable 1,424,688 1,544,935
Deferred Revenue 330,919 321,074
Total current liabilities 2,894,820 2,996,474

Liabilities from Discontinued Operations

546,304

546,304

Total Liabilities 3441,124 3,542,778

Stockholders' Equity
Common stock, $0.001 par value, 250,000,000 shares authorized 62,078,537 and 60,325,202 shares issued; 61,565,841 and 60,853,341 shares outstanding at April 30, 2023 and July 31, 2022, respectively 62,079 61,566
Additional paid-in capital 27,860,980 27,564,129
Accumulated deficit (22,009,139 ) (21,596,894 )
Accumulated other comprehensive loss (27,369 ) -
Total Stockholder's Equity 5,886,551 6,028,801

Total Liabilities and Stockholders' Equity $ 9,327,675 $ 9,571,579

				October 31,			July 31,
				2023			2023
				(unaudited)
ASSETS
Current Assets
	Cash and cash equivalents		$	85,692		$	66,688
	Accounts receivable			253,097			238,820
	Security Deposits			7,316			7,316
	Prepaid expenses			15,020			18,675
		Total current assets		361,125			331,499

Property and equipment, net				83,611			89,712

Intangible and other assets				7,411,216			7,406,827

Total assets			$	7,855,952		$	7,828,038


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
	Accounts payable and accrued expenses		$	1,319,390		$	1,205,995
	Loans payable			1,538,981			1,443,294
	Warrant liabilities			123,750			195,750
	Unissued Stock			-			105,925
	Deferred Revenue			153,590			172,900
	Current liabilities from discontinued operations			545,994			545,994
		Total current liabilities		3,681,705			3,669,858

Total Liabilities			$	3,681,705		$	3,669,858

Stockholders' Equity
	Common stock, $0.001 par value, 250,000,000 shares authorized 62,680,947 and 62,205,947 shares issued; 62,078,537 and 60,452,612 shares outstanding at October 31, 2023 and July 31, 2023, respectively		$	62,681		$	62,206
	Additional paid-in capital			27,913,890			27,808,440
	Accumulated deficit			(23,802,324	)		(23,712,466	)
Total Stockholder's Equity				4,174,247			4,158,180

Total Liabilities and Stockholders' Equity			$	7,855,952		$	7,828,038

See accompanying notes to condensed consolidated financial statements.

Hammer Fiber Optics Holdings Corp

Condensed Consolidated Statements of Operations

(Unaudited)

			For the Quarter Ended
			October 31,
			2023			2022
						(as restated)
Revenues		$	909,952		$	799,460

Cost of sales			648,876			592,329
Selling, general and administrative expenses			363,628			372,101
Depreciation expense			14,972			15,924
	Total operating expenses		1,027,431			980,354

Operating loss			(117,479	)		(180,894	)

Other expenses
	Other Income		3,015			-
	Interest expense		(19,857	)		(518	)
	Financing expense		(14,435	)		(67,289	)
	Warrant adjustment to fair value		72,000			49,892
	Gain on extinguishment of convertible debt		-			115,357
	Other expenses		(13,102	)		(1,220	)
	Total other expenses		27,621			96,222

Net loss		$	(89,858	)	$	(84,672	)

Weighted average number of common shares outstanding - basic and diluted			62,553,508			61,713,953

Loss per share - basic and diluted		$	(0.00	)	$	(0.00	)

See accompanying notes to condensed consolidated financial statements.

Hammer Fiber Optics Holdings Corp

~~Consolidated Statements of Operations~~

~~(Unaudited)~~

For the Three Months Ended For the Nine Months Ended
April 30, April 30,
2023 2022 2023 2022

Revenues $ 767,527 $ 819,131 $ 2,311,277 $ 2,039,367

Costs and expenses:
Cost of sales 583,813 687,407 1,749,128 1,604,958
Selling, general and administrative expenses 213,515 347,724 914,616 769,393
Depreciation expense 14,608 14,783 45,416 49,884
Total operating expenses 811,936 1,049,914 2,709,160 2,424,235

Operating income (loss) (44,409 ) (230,783 ) (397,883 ) (384,868 )

Other income (expenses)

Interest expense (231 ) (25,224 ) 11,272 (58,275 )
Financing charges (6,285 ) (554,273 ) (6,285 ) (554,273 )
Other income (expenses)
(168 ) (10,440 ) (19,349 ) (9,586 )
Total other income (expenses)
(6,684 ) (589,937 ) (14,362 ) (622,134 )

Loss Before Discontinued Operations (51,093 ) (820,720 ) (412,245 ) (1,007,002 )

Income (Loss) From Discontinued Operations - 10,000 - -

Net income (loss) $ (51,093 ) $ (810,720 ) $ (412,245 ) $ (1,007,002 )

Other Comprehensive (loss) (27,369 ) - (27,369 ) -

Comprehensive Loss $ (78,462 ) $ (810,720 ) $ (439,614 ) $ (1,007,002 )

Weighted average number of common shares outstanding - basic and diluted 62,078,537 61,495,671 61,545,118 61,061,154

Income (loss) per share- basic and diluted
Continuing operations $ (0.00) $ (0.01 ) $ (0.01 ) $ (0.02 )
Discontinued operations - - - -
Total $ - $ (0.01 ) $ (0.01 ) $ (0.02 )

~~See accompanying notes to consolidated statements.~~

~~Hammer Fiber Optics Holdings Corp.~~

Condensed Consolidated Statement of Stockholders' Equity ~~(Deficit)~~

(Unaudited)

Additional Other
Common Stock Treasury Stock Paid-in Accumulated Comprehensive
Shares Amount Shares Amount Capital Deficit Income Total

Balance, July 31, 2022 61,565,841 $ 61,566 1,753,335 $ - $ 27,564,129 $ (21,596,894 ) $ - $ 6,028,801

Conversion shares issued 512,696 513 - - 296,851 - - 297,364

Net loss for the quarter - - - - - (143,147 ) - (143,147 )

Balance, October 31, 2022 62,078,537 62,079 1,753,335 - 27,860,980 (21,740,041 ) - 6,183,018

Net loss for the quarter - - - - - (218,005 ) - (218,005 )

Balance, January 31, 2023 62,078,537 62,079 1,753,335 - 27,860,980 (21,958,046 ) - 5,965,013

Net loss for the quarter - - - - - (51,093 ) (51,093 )

Other comprehensive loss - - - - - - (27,369 ) (27,369 )

Balance, April 30, 2023 62,078,537 $ 62,079 1,753,335 $ - $ 27,860,980 $ (22,009,139 ) $ (27,369 ) $ 5,886,551

								Additional					Total
	Common Stock			Treasury Stock				Paid-in		Accumulated			Stockholders'
	Shares		Amount	Shares		Amount		Capital		Deficit			Equity

Balance, July 31, 2022	61,565,841	$	61,566	1,753,335	$	-	$	27,564,129	$	(21,792,224	)	$	5,833,471

Conversion shares issued	512,696		-	-		-		297,364		-			297,364
Net loss for the quarter	-		-	-		-		-		(84,672	)		(84,672	)

Balance, October 31, 2022	62,078,537	$	61,566	1,753,335	$	-	$	27,861,493	$	(21,876,896	)	$	6,046,163

Balance, July 31, 2023	62,205,947		62,206	1,753,335		-		27,808,440		(23,712,466	)		4,158,180

Commitment Shares Issued	475,000		475	-		-		105,450		-			105,925
Net loss for the quarter	-		-	-		-		-		(89,858	)		(89,858	)

Balance, October 31, 2023	62,680,947	$	62,681	1,753,335	$	-	$	27,913,890	$	(23,802,324	)	$	4,174,247

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

Hammer Fiber Optics Holdings Corp

Condensed Consolidated Statements of Cash Flows

(Unaudited)

For the Nine Months Ended
April 30,
2023 2022
OPERATING ACTIVITIES

Net income (loss) $ (412,245 ) $ (1,007,002 )
(Income) Loss from discontinued operations - -
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense 45,416 49,884
Commitment shares issued - 454,908
Amortization of debt discount - 33,288
Changes in operating assets and liabilities:
Accounts receivable (53,533 ) 51,469
Security deposits - -
Prepaid expenses (1,677 ) (48 )
Accounts payable 8,748 255,147
Deferred revenue 9,845 4,012
Net cash provided by (used in) operating activities- continuing operations (404,446 ) (158,342 )
Net cash provided by (used in) operating activities- discontinued operations - 1,417
Net cash provided by (used in) operating activities (404,446 ) (156,925 )

INVESTING ACTIVITIES

Purchase of property and equipment (69,179 ) (170,923 )
Net cash provided by (used in) investing activities- continuing operations (68,179 ) (170,923 )
Net cash provided by (used in) investing activities- discontinued operations -- -
Net cash provided by (used in) investing activities (68,179 ) (170,923 )

FINANCING ACTIVITIES
Repayment of loans (33,409 ) (76,774 )
Proceeds from loans 167,958 1,053,991
Net cash provided by (used in) financing activities- continuing operations 134,549 977,217
Net cash provided by (used in) financing activities- discontinued operations - -
Net cash provided by (used in) financing activities 134,549 977,217

Effect of foreign currency on cash (31,627 ) -

Net increase (decrease) in cash (369,703 ) 649,369

Cash, beginning of period 482,910 77,606

Cash, end of period $ 113,207 $ 726,975

SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES:
Cash paid for interest $ 35,859 $ 25,224

Cash paid for taxes $ 1,401 $ 10,440
Shares issued for debt conversion $ 297,364 -

				For the Quarter Ended
				October 31,
				2023			2022
							(as restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss			$	(89,858	)	$	(84,672	)
	Adjustments to reconcile net loss to net cash provided by operating activities:
		Depreciation expense		14,927			15,924
		Warrant adjustment to fair value		(72,000	)		(49,892	)
		Gain on extinguishment of convertible debt		-			(115,357	)
		Noncash interest expense		-			57,051
	Changes in operating assets and liabilities:
		Accounts receivable		(14,277	)		(27,491	)
		Prepaid expenses		3,655			(5,338	)
		Accounts Payable		109,006			140,376
		Deferred revenue		(19,310	)		10,882
	Net cash used in operating activities		$	(67,857	)	$	(58,517	)
CASH FLOWS FROM INVESTING ACTIVITIES:
	Purchase of property and equipment			(8,826	)		(5,061	)
	Net cash provided by (used in) investing activities		$	(8,826	)	$	(5,061	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Repayment of loans			(47,847	)		(131,366	)
	Proceeds from loans			143,535			-
	Net cash provided by (used in) financing activities		$	95,688		$	(131,366	)
Net increase (decrease) in cash				19,005			(194,944	)
Cash, beginning of period				66,688			482,910
Cash, end of period			$	85,693		$	287,966
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES:
	Cash paid for interest		$	19,857		$	518
	Cash paid for taxes		$	35		$	1,220
	Commitment shares issued		$	105,925		$	-

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

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL 30,~~OCTOBER 31, 2023

(Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying condensed 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 three ~~and nine~~ months ending ~~April 30,~~October 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,~~2023, as filed with the Securities and Exchange Commission ("the SEC") at www.sec.gov.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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~~

~~APRIL 30, 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.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, ~~2022,~~2023, the Company did not have any amounts recorded pertaining to uncertain tax positions.

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.~~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:

~~HAMMER FIBER OPTICS HOLDINGS CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~APRIL 30, 2023~~

~~(Unaudited)~~

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

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.

All financial assets and liabilities are approximate their fair value. Warrants are valued at Level 3.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fair Value Measurements

			Fair Value Measurements at October 31, 2023 using:
		October 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)

Liabilities	$	-		-	-	-
Warrant Liabilities	$	123,750		-	-	123,750

			Fair Value Measurements at July 31, 2023 using:
		July 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)

Liabilities	$	-		-	-	-
Warrant Liabilities	$	195,750		-	-	195,750

The warrant liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical prices for the Company's common stock and are classified within Level 3 of the valuation hierarchy.

The following table provides a summary of changes in fair value of the Company's Level 3 financial liabilities as of October 31 and July 31, 2023:

		October 31, 2023			July 31, 2023
Beginning Balance	$	195,750		$	213,750
Change in fair value of derivative liabilities		(72,000	)		(35,862	)
Ending Balance	$	123,750		$	195,750

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. ~~Its~~It's subsidiaries ~~Open Data Centers, LLC and~~ Hammer Fiber Optics Investments, Ltd., Hammer Wireless - SL, 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 April 30, 2023, and April 30, 2022 there were no common stock equivalents outstanding.~~

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The following table sets forth the number of potential shares of common stock that have been excluded from basic net loss per share because their effect was anti-dilutive:

	October 31, 2023		October 31, 2022
Warrants		450,000	450,000
Convertible Promissory Notes		1,055,172	948,276
Total		1,505,172	1,398,276

Recent accounting pronouncements

In August 2020, the FASB issued ASU 2020-06, ~~"Debt -~~“Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging -– Contracts in ~~Entity's~~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~~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~~The Company adopted this ~~does not~~ASU on a prospective basis as of August 1, 2023 and the adoption of this guidance had no material impact ~~our~~on the condensed consolidated 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.~~

NOTE 5 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Subsequent to the Company's filing of its Annual Report on Form 10-K for the three months October 31, 2022, with the Securities and Exchange Commission on February 9, 2023, the Company performed an evaluation of its accounting in connection with warrants issued in conjunction with the February 11, 2022 Mast Hill Fund, L.P. and February 17, 2022 Talos Victory Fund, L.P. convertible notes. Management determined that the Original Form 10-K does not give effect to $97,196 in expense and the issuance of warrant (the "Warrants") to purchase shares at a price between $1.50 and $3.00 per share of the common stock outstanding. Accordingly, the Company restates its consolidated financial statements in this Form 10-K as outlined further below. Upon review of the Company's previously filed 10-Q, the following errors were discovered and recorded:

1.Certain intellectual property (platform software) for the HammerPay subsidiary has been reclassified as an intangible asset.

2.Financing expense associated with the two convertible notes has been accrued and amortized instead of expensed in accordance with ASC 470-20-25.

3.Warrants issued in conjunction with two convertible notes have been valued in accordance with ASC 820-10 as clarified by ASU 2022-03.

4.The Statement of Operations and Statement of Cash Flows have been adjusted to reflect the change in warrant financing expenses, expenses associated with the convertible notes, and income associated with conversion of the convertible notes. Adjustments to the fair value of the warrants have also been reflected as other income.

The following table sets forth the effects of the adjustments on affected items within the Company's previously reported condensed consolidated statement of operations for the three months ended October 31, 2022:

		October 31,							October 31,
		2022		Adjustments					2022
		(As Filed)							(As Restated)
Revenues	$	799,699		$	(239	)	(1)	$	799,460
Costs and expenses:
Cost of sales		592,329			-				592,329
Selling, general and administrative expenses		333,619			38,482		(1)		372,101
Depreciation expense		15,924			-				15,924
Total operating expenses		941,872			-				980,354
Operating loss		(142,173	)		-				(180,894	)
Other income (expense)
Other Income
Interest expense		12,234			(12,752	)	(1)		(518	)
Financing expenses		-			(67,289	)	(1)		(67,289	)
Warrant adjustment to fair value		-			49,892		(1)		49,892
Gain on extinguishment of convertible debt		-			115,357		(2)		115,357
Other expenses		(13,208	)		11,988		(1)		(1,220	)
Total other expenses		(974	)		-				96,222	)
Net income (loss)	$	(143,147	)					$	(84,672	)
Weighted average number of common shares outstanding - basic and diluted		61,713,953							61,713,953
Loss per share- basic and diluted	$	(0.00	)					$	(0.00	)

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 5 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (CONTINUED)

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 three months ended October 31, 2022:

		October 31,								October 31,
		2022			Adjustments					2022
		(As Filed)								(As Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$	(143,147	)	$	58,475				$	(84,672	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense		14,924			1,000		(1	)		15,924
Warrant adjustment to fair value					(49,892	)	(1,2	)		(49,892	)
Gain on extinguishment of convertible debt		-			(115,357	)	(1,2	)		(115,357	)
Noncash interest expense		-			57,051		(1	)		57,051
Changes in operating assets and liabilities:
Accounts receivable		(102,577	)		75,086		(1	)		(27,491	)
Prepaid expenses		(5,422	)		84		(1	)		(5,338	)
Accounts payable		122,965			17,411		(1	)		140,376
Deferred revenue		(2,359	)		13,241		(1	)		10,882
Net cash provided by (used in) operating activities		(115,616	)							(58,517	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(49,186	)		44,125		(1	)		(5,061	)
Net cash provided by (used in) investing activities		(49,186	)							(5,061	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of loans		(42,755	)		(88,611	)	(1	)		(131,366	)
Net cash provided by (used in) financing activities		(42,755	)							(131,366	)
Net increase (decrease) in cash		(207,557	)							(194,944	)
Cash, beginning of period		482,910								482,910
Cash, end of period	$	275,353							$	287,966
SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES:
Cash paid for interest	$	-			518				$	518
Cash paid for taxes	$	1,220			-				$	1,220

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 expense of $97,196 in relation to the Warrant.

• Financing expense associated with these convertible notes have been accrued and amortized instead of expensed in accordance with ASC 470-20-25.

• The warrants issued in conjunction with the aforementioned February 2022 convertible notes have been valued in accordance with ASC 820-10 as clarified by ASU 2022-03.

(2) Management evaluated the deferred revenue of the 1stPoint Communications, LLC business unit and determined that certain revenues had not been reflected in prior periods due to changes in the underlying systems relating to its web hosting business.

As a result, Management adjusted the deferred revenue from prior periods as Other Income. Adjustments to the current period were considered revenues in the period. Management evaluated revenue from Endstream Communications and recognized a customer prepayment of $5.38. These are not expected to recur. 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.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 56 - 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.

Due to customer losses associated with the novel coronavirus and the loss of clients due to other causes, Open Data Centers, LLC ~~ceased operations at~~will cease its ~~sole location in Piscataway, NJ on~~operations. As of May 1, ~~2020. The~~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.

Open Data Centers, LLC was dissolved on December 30, 2020. The following summarizes the assets and liabilities of the ~~discontinued~~discontinue operations:

		April 30,		July 31,
		2023		2022		October 31, 2023			July 31, 2023
Assets

Current Assets
Cash					$	-		$	-
Accounts receivable						-			-
Other current assets						-			-
Total current assets						-			-
Other Assets
Property and equipment- net		1,243,960		1,243,960		-			-

Intangible assets						-			-
Total other assets						-			-
Total Assets	$	1,243,960	$	1,243,960	$	-		$	-

Liabilities and Net Assets

Current Liabilities
Accounts payable	$	546,304	$	546,304	$	545,994		$	545,994
Notes payable- related parties						-			-
Current portion of long-term notes payable - related parties						-			-
Accrued interest						-			-
Rent Concessions						-			-
Total current liabilities		546,304		546,304		545,994			545,994

Net assets (liabilities)	$	697,656	$	697,656	$	(545,994	)	$	(595,994	)

There was no net income or loss during the period.

~~HAMMER FIBER OPTICS HOLDINGS CORP.~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~APRIL 30, 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 ~~April 30,~~October 31, 2023 and July 31, ~~2022,~~2023, property and equipment consisted of the following:

		October 31,			July 31,
		2023			2023		Life
Computer and Telecom equipment	$	1,282,856		$	1,274,030		5 years
Less: Accumulated depreciation		(1,199,245	)		(1,184,318	)
Total	$	83,611		$	89,712

April 30, July 31,
2023 2022 Life
Computer, Telecom equipment & Software $ 849,784 $ 726,620 5 years
Less: Accumulated depreciation (547,379 ) (448,275 )
Total $ 302,108 $ 278,345

NOTE 8 - INDEFINITE LIVED INTANGIBLE ASSETS

The Company has ~~$7,370,528~~$7,411,216 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.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

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%. 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. These notes were converted to equity at $3 per share of common stock on October 4, 2021.

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 the Chief Executive Officer and a ~~related party~~relation of the Chief Executive Officer on April 20^th and May 5^th 2020 in the amounts of $36,300, and $12,000 respectively. The $12,000 note was paid on May 12^th, 2020. The Company entered into a convertible note with a related party 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 (who were former partners in 1stPoint Communications, LLC) 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. 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 quarterly. On~~ September 1, 2020, the Company entered into a promissory note for the sum of $100,000 with a ~~related party.~~non-executive director. The note bears interest at a rate of 6%, payable ~~quarterly.~~at the end of the term, but has been waived by the lending party. 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.~~non executive director. These notes bear interest at a rate of 6%, payable ~~quarterly~~at the end of the term and may be convertible into common stock at the Company's option. Interest has been waived by the lender.

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 non-executive director. These notes are bear interest at a rate of 6% payable at the end of the term unless forgiven by the note holder and may be converted into common stock at the Company’s option. The interest has been waived by the lender.

On January 15, 2022 the Company entered into a promissory note for the sum of $25,000 with a ~~related party.~~non-executive director. These notes bear interest at a rate of 6%, ~~payable quarterly~~annually, to be expensed at the end of the note upon conversion by the holder, may be waived or otherwise forgiven by the note holder and may be convertible 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~~relation of the Chief Executive Officer of 1stPoint Communications, under the same terms as the note on January 15, 2022.

~~HAMMER FIBER OPTICS HOLDINGS CORP.~~ Interest has been waived by the lender on all notes.

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~APRIL 30, 2023~~

~~(Unaudited)~~

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

On ~~November 15,~~February 28, 2022 and March 7, 2022 the Company entered into a promissory note ~~for the sum of $26,500~~totaling $25,000 with a ~~related party.~~non-executive director. The interest of this note ~~bears interest at a rate of 6%, payable at the end of the term, may be waived~~has been forgiven by the note holder and may be converted into the Company’s common stock at the ~~Company's~~Company’s option. On ~~December 15,~~June 22, 2022 and July 28, 2022 the Company entered into a promissory note ~~for the sum of $43,000~~totaling $27,000 with a ~~related party.~~non-executive director. The interest of this note ~~bears interest at a rate of 6%, payable at the end of the term, may be waived~~has been forgiven by the note holder and may be converted into the Company’s common stock at the ~~Company's~~Company’s option. On November 14, 2022 the Company entered into a promissory note totaling $26,500 with a non-executive director. The interest of this note has been forgiven by the note holder and may be converted into the Company’s common stock at the Company’s option. On March 29, 2023 the Company entered into a promissory note totaling $9,000 with a non-executive director. The interest of this note has been forgiven by the note holder and may be converted into the Company’s common stock at the Company’s option. On May 5, 2023 the Company entered into a promissory note totaling $25,000 with a non-executive director. The interest of this note has been forgiven by the note holder and may be converted into the Company’s common stock at the Company’s option. On May 23, 2023 the Company entered into a promissory note totaling $25,000 with a non-executive director. The interest of this note has been forgiven by the note holder and may be converted into the Company’s common stock at the Company’s option. On June 7, 2023 the Company entered into a promissory note totaling $25,000 with a non-executive director. The interest of this note has been forgiven by the note holder and may be converted into the Company’s common stock at the Company’s option. On June 13, 2023 the Company entered into a promissory note totaling $16,500 with a non-executive director. The interest of this note has been forgiven by the note holder and may be converted into the Company’s common stock at the Company’s option. On July 6, 2023 the Company entered into a promissory note totaling $25,000 with a non-executive director. The interest of this note has been forgiven by the note holder and may be converted into the Company’s common stock at the Company’s option.

The dates of the notes were August 8, 2023, August 11, 2023, August 31, 2023, September 22, 2023, October 17, 2023, October 24, 2023, November 3, 2023, November 6, 2023, December 1, 2023, December 4, 2023, December 13, 2023 and December 28 2023 and January 29, 2024. The notes on August 8, August 31, September 22, October 17, October 24, November 3, November 6, December 1 and December 28 2023 have a principal of $25,000. The November 6, 2023 note has a principal of $100,000. The note on December 13, 2023 has a principal of $20,000 and the note on December 4, 2023 has a principal of $17,500.

As of ~~April 30,~~October 31, 2023, all of the related party payables are reported as current liabilities in the Condensed Consolidated Balance ~~Sheet.~~Sheet and all interest has been forgiven by the holders of all promissory notes from all related parties.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 10 - CONVERTIBLE DEBT

As of October 31, 2023, the Company has convertible notes with related parties in the amounts of $24,253, $161,300, $12,000, $6,000, $7,500, $36,600 and $616,035 that convert into Common Stock at the Company's option and bear interest at a rate of 6% annually, to be expensed at the time of conversion. All interest on these notes have been forgiven by the parties.

On February 11, 2022, the Company entered into a Securities Purchase Agreement (the "Mast SPA") by and between the Company and Mast Hill Fund, L.P. ("Mast"). Pursuant to the terms of the Mast SPA, the Company agreed to sell to Mast and Mast agreed to purchase from the Company, a promissory note in the aggregate principal amount of $550,000 (the "Mast Note"), convertible into shares of the Company's common stock upon the terms and subject to the limitations and conditions set forth in the Mast Note. The Mast Note has an original issue discount of $55,000, resulting in gross proceeds to the Company of $495,000. Mast has piggyback registration rights pursuant to the terms of the Mast SPA.

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, 2023. 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.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 1011 - INCOME TAXES

The ~~Company's~~Company’s provision for income taxes was not material and the effective tax ~~expense,~~rate was 0% for the three months ended October 31, 2023 and 2022. The Company maintains a valuation allowance on all 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~~except in ~~the United States and numerous~~certain 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 nine months ended April 30, 2023 and 2022, to the Company's effective tax rate isjurisdictions, as ~~follows:~~

April 30,
2023 2022
Income tax benefit provision at statutory rate $ 78,624 $ 910,720
Change in valuation allowance (78,624 ) (910,720 )
$ - $ -

~~The tax effects of temporary differences~~it has concluded that ~~give rise to the Company's net deferred tax assets as of April 30, 2023 and July 31, 2022 are as follows:~~

April 30, July 31,
2023 2022
Net operating loss $ (78,624 ) $ (893,672 )
Valuation allowance 78,624 893,672
$ - $ -

The Company has approximately $21,446,000 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 $15,773,000 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~~these 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 April 30, 2023 and April 30, 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. No interest or penalties have been recorded during the quarters ended April 30, 2023 and April 30, 2022. As of April 30, 2023 and April 30, 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 or any other taxing authorities.utilized.

1519

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL 30,~~OCTOBER 31, 2023

(Unaudited)

NOTE 1112 - STOCKHOLDERS' EQUITY

~~Treasury~~Common 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~~March 6, 2023, Mast Hill amended the ~~Company repurchased 13,000,000~~terms of its promissory note, which included the issuance of 475,000 shares of ~~restricted Common Stock from substantial related-party shareholders. The shares of~~the Company’s common stock ~~were repurchased by~~issued during 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.quarter ended October 31, 2023.

InOn October 4, 2022, Talos converted the ~~quarter ended April 2021~~promissory convertible note into 512,696 shares of 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.Company's common stock (see Note 10).

~~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.Stock

~~During~~The balance of Company Treasury Stock was unchanged during the ~~three months ended April 30, 2022,~~period.

Unissued Stock

On March 6, 2023, Mast Hill amended the ~~Company issued 712,500~~terms of its promissory note. The terms included the issuance of 475,000 shares of the Company's common stock. The stock ~~as commitment shares on borrowing. The shares were valued at their fair value of $454,908 and included in Financing charges.~~was issued during the period ended October 31, 2023.

NOTE 1213 - COMMITMENTS AND LEASES

Hammer does not currently have any material long-term lease obligations. All leases are currently month-to-month and have no obligations pursuant to ASC 842. There are two month-to-month tenancy agreements for office space which are less than $2,000 per month.

NOTE 14 - 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. On July 31, 2023 the Board of Directors approved the discontinuation of the Hammer Wireless - SL, Ltd, subsidiary. As of that date the liabilities on the Hammer Wireless SL balance sheet are maintained in US Dollars.

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 31, 2023

(Unaudited)

NOTE 1315 - 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	$	9,210
Horizon Blue Cross v. Hammer Fiber Optics Inv, Ltd.	$	17,308.58	$	17,309
Cross River Fiber v. Hammer Fiber Optics Inv, Ltd.	$	273,220	$	25,000

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~~After discovery in ~~this matter are similar~~the claim against Hammer Fiber Optics Holdings Corp and its subsidiaries, A trial occurred on February 5^th and 6^th of 2024 and a ruling was issued at the end of the trial in favor of Hammer Fiber Optics Holdings Corp and its subsidiaries. An award was given to ~~those made by Zayo Group and Crown Castle Fiber, which were both settled.~~Cross River against one of the related parties to the claim of $25,000.

1621

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL 30,~~OCTOBER 31, 2023

(Unaudited)

~~NOTE 14 - NOTES PAYABLE~~

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. These shares have not yet been issued and are not reflected in the Statement of Equity.

NOTE 1517 - SUBSEQUENT EVENTS

~~On May 1, 2023 and May 25, 2023~~The Company has completed an evaluation of all subsequent events through March 18, 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.

The Company entered into ~~two~~a promissory ~~notes for the sum of $25,000 each~~note with a ~~related party.~~non-executive director on January 29, 2024 with a principal amount of $50,000. The interest on the note ~~bears interest at a rate of 6%, payable at the end of the term, may be waived~~has been forgiven by the note holder and may be converted into the Company's common stock at the Company's option.

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

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~~10-K for the year ended July 31, ~~2020,~~2023, filed with the SEC on ~~November 13, 2020.~~February 16, 2024.

Results of Operations

Three Months Ended ~~April 30,~~October 31, 2023 Compared to the Three Months Ended ~~April 30,~~October 31, 2022

Revenues for the three months ended ~~April 30,~~October 31, 2023 and ~~April 30,~~October 31, 2022 were ~~$767,527~~$909,952 and ~~$819,131 ,~~$799,460, respectively, an ~~decrease~~increase of ~~6.30%~~13.82%. The ~~decrease~~increase was primarily due to ~~changes~~growth in the ~~revenue structure of~~telecommunications business unit, particularly in the Company's Over-the-Top ("OTT") business ~~segment which includes its SMS messaging business unit. These structural changes in pricing reduced top line revenue but simultaneously increased profitability, resulting in operational efficiencies.~~segment.

During the three months ended ~~April 30, 2022,~~October 31, 2023, the Company incurred total operating expenses of ~~$811,936~~$1,027,431 compared with ~~$1,049,914, a decrease~~$980,354, an increase of ~~22.67%~~4.80%, for the comparable period ended ~~April 30,~~October 31, 2022. The ~~decrease~~increase was primarily due to expenses related to the Company’s financial technology services business unit and growth in the telecommunications business unit, specifically in software development costs.

Operating loss increased to $117,479 during the three months ended October 31, 2022 as compared with a loss of $180,894, an increase of 35.06%. The increase was primarily due to the ~~reduction in current expenses of ongoing operations~~performance of the ~~HammerPay subsidiary~~telecommunications business unit and ~~efficiencies~~reduced expenses in the ~~Telecommunications~~financial technology services business unit.

~~Operating loss decreased to $51,093,~~The Company recorded depreciation and amortization expense of $14,927 and $15,924 during the three months ended ~~April 30, 2023. The decrease in loss~~October 31, 2023 and October 31, 2022 respectively. During the three months ended October 31, 2023 and October 31, 2022 other income, interest and other expense was and $27,621 and $96,222 respectively. This was primarily due to ~~reduced current expenses associated with~~a $75,000 change in the ~~ongoing operations~~fair value of the ~~HammerPay subsidiary.~~outstanding warrants.

During the three months ended ~~April 30, 2023 and April 30, 2022 interest and other expense was $6,684 and $589,937 respectively. The decrease was due to the conversion of the Talos note payable in the prior period.~~

~~During the three months ended April 30,~~October 31, 2023 the Company recorded a loss of ~~$78,462~~$89,858 as compared to a loss of ~~$810,720~~$84,672 for the three months ended ~~April 30, 2022.~~October 31, 2022, a decrease of 6.12%. The decrease ~~in loss~~ was primarily due to ~~the retirement~~a $116,000 gain on elimination of ~~the Talos note~~convertible debt that took place in ~~the prior period and a reduction in current expenses~~early October 2022, offset by performance of ~~the financial technologies business unit as well as increased efficiencies in~~ the telecommunications business ~~unit.~~

~~Nine Months Ended April 30, 2023 Compared to the nine Months Ended April 30, 2022~~

~~Revenues for the nine months ended April 30, 2023~~unit and April 30, 2022 were $2,311,277 and $2,039,367, respectively, an increase of 13.33%. 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 and contributions from its fixed wireless operationsreduced expenses in ~~Huntsville, AL.~~

During the nine months ended April 30, 2023, the Company incurred total operating expenses of $1,749,128 compared with $1,604,958, an increase of 8.98%, for the comparable period ended April 30, 2022. The increase in loss was primarily due to increases in expenses associated with the financial ~~technologies business unit and expenses of ongoing operations of the HammerPay subsidiary.~~

Operating loss increased to $397,883 during the nine months ended April 30, 2023 as compared with a loss of $384,868 in the prior period, an increase of 3.43%. The increase in expense was primarily due to the reduction of current expenses of the financial technologies business unit.

During the nine months ended April 30, 2023 and April 30, 2022 interest and financing expense was $14,362 and $622,134 respectively. The reduction was due to the retirement of the Talos note in the April 30, 2022 period.

During the nine months ended April 30, 2022 the Company recorded a net loss of $412,245 as compared to a loss of $1,007,002 for the nine months ended April 30, 2022. The decrease was due to a reduction in the current expenses associated with the ongoing operations of the HammerPay subsidiary, the retirement of the Talos note in the prior period and improvements in efficiencies in the Company's telecommunicationstechnology services business unit.

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 ~~its new markets~~ and ~~the continuing operations of the HammerPay business.~~1stPoint's subsidiaries.

Cash Flow from Operating Activities

During the ~~nine~~three months ended ~~April 30,~~October 31, 2023 the Company’s total cash increased by $19,005, compared to a decrease in cash of $194,944 in the three months ended October 31, 2022. Cash flows used in operating activities decreased by ~~$369,703. Cash flow~~$67,857, compared to a decrease of $58,517 in the three months ended October 31, 2022. The increase in cash used in ~~Operating~~operating activities was primarily due to reduced expenses relating to the Company’s financial technology services business unit.

Cash Flow from Investing Activities ~~was $403,446,~~

During the three months ended October 31, 2023, the Company's investing activities used $8,826, compared to ~~$156,925~~$5,061 used in investing activities during the ~~nine~~three months ended ~~April 30,~~October 31, 2022. The increase was due to synergies in the ~~ongoing operations~~telecommunications business unit requiring greater new purchases of equipment for the OTT and ~~deployment of the company’s HammerPay business.~~messaging business practices.

Cash Flow from ~~Investing~~Financing Activities

During the ~~nine~~three months ended ~~April 30,~~October 31, 2023, the ~~Company's investing~~Company’s financing activities ~~used $69,179,~~generated $95,688 in cash compared ~~to $170,923~~with a decrease in cash used in ~~investing~~financing activities $131,366 during the ~~six~~three months ended ~~April 30, 2022. Cash used was primarily for the development of the HammerPay business.~~

~~Cash Flow from Financing Activities~~

~~During the nine months ended April 30, 2023, the Company netted $134,549 in cash from financing activities compared with $977,217 during the nine months ended April 30,~~October 31, 2022. The decrease was ~~mainly~~primarily due to the ~~reduction~~payoff of $131,366 in ~~proceeds from notes payable.~~loans during the period ended October 31, 2022.

Going Concern

As of ~~April 30,~~October 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~~October 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~~October 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~~We have not identified any changes in our internal ~~controls. The Company views this migration to have a positive material impact on our ability to maintain internal controls~~control over financial reporting ~~as 1stPoint has a separation in banking, day-to-day accounting and~~that occurred during the period ended October 31, 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting ~~responsibilities, however, the President and Principal Financial Officer are the same individual.~~.

2025

PART II - OTHER INFORMATION

ITEM 1.LEGAL PROCEEDINGS

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	$	9,210
Horizon Blue Cross v. Hammer Fiber Optics Inv, Ltd.	$	17,308.58	$	17,309
Cross River Fiber v. Hammer Fiber Optics Inv, Ltd.	$	273,220	$	25,000

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.

2126

HAMMER FIBER OPTICS HOLDINGS CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~APRIL 30,~~OCTOBER 31, 2023

(Unaudited)

ITEM 5.EXHIBITS

Exhibit
Number		Description of Exhibit
~~31.01~~
31.1	Certification of Principal ~~Executive~~Financial Officer Pursuant to Rule 13a-14		Filed herewith.
~~32.01~~32.1		CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act		Filed herewith.
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*		Inline XBRL Taxonomy Extension Schema Document		Filed herewith.
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document		Filed herewith.
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document		Filed herewith.
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document		Filed herewith.
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document		Filed herewith.
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit ~~101)~~101		Filed herewith.

*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.

2227

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: ~~June 21, 2023~~March 18, 2024	/s/ Erik B. Levitt
	Erik B. Levitt
	Principal ~~Executive~~Financial Officer

2328

			Page

PART I. FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS	54
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	1823
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2024
ITEM 4.	CONTROLS AND PROCEDURES	2025

PART II. OTHER INFORMATION
		~~PART II. OTHER INFORMATION~~
ITEM 1.	LEGAL PROCEEDINGS	2126
ITEM 1A.	RISK FACTORS	2126
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	2126
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	2126
ITEM 4.	OTHER INFORMATION	2126
ITEM 5.	EXHIBITS	2227

				April 30,			July 31,
				2023			2022

ASSETS
Current Assets
	Cash and cash equivalents		$	113,207		$	482,910
	Accounts receivable			270,367			216,834
	Security Deposits			11,082			11,082
	Prepaid expenses			16,423			14,746
		Total current assets		411,079			725,572

Property and equipment, net				302,108			278,345

Intangible and other assets				7,370,528			7,323,702

Assets from Discontinued Operations				1,243,960			1,243,960

Total assets			$	9,327,675		$	9,571,579


LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
	Accounts payable and accrued expenses		$	1,139,213		$	1,130,465
	Loans payable			1,424,688			1,544,935
	Deferred Revenue			330,919			321,074
		Total current liabilities		2,894,820			2,996,474

Liabilities from Discontinued Operations				546,304			546,304

Total Liabilities				3441,124			3,542,778

Stockholders' Equity
	Common stock, $0.001 par value, 250,000,000 shares authorized 62,078,537 and 60,325,202 shares issued; 61,565,841 and 60,853,341 shares outstanding at April 30, 2023 and July 31, 2022, respectively			62,079			61,566
	Additional paid-in capital			27,860,980			27,564,129
	Accumulated deficit			(22,009,139	)		(21,596,894	)
	Accumulated other comprehensive loss			(27,369	)		-
Total Stockholder's Equity				5,886,551			6,028,801

Total Liabilities and Stockholders' Equity			$	9,327,675		$	9,571,579

		For the Three Months Ended						For the Nine Months Ended
		April 30,						April 30,
		2023			2022			2023			2022

Revenues	$	767,527		$	819,131		$	2,311,277		$	2,039,367

Costs and expenses:
Cost of sales		583,813			687,407			1,749,128			1,604,958
Selling, general and administrative expenses		213,515			347,724			914,616			769,393
Depreciation expense		14,608			14,783			45,416			49,884
Total operating expenses		811,936			1,049,914			2,709,160			2,424,235

Operating income (loss)		(44,409	)		(230,783	)		(397,883	)		(384,868	)

Other income (expenses)
Interest expense		(231	)		(25,224	)		11,272			(58,275	)
Financing charges		(6,285	)		(554,273	)		(6,285	)		(554,273	)
Other income (expenses)		(168	)		(10,440	)		(19,349	)		(9,586	)
Total other income (expenses)		(6,684	)		(589,937	)		(14,362	)		(622,134	)

Loss Before Discontinued Operations		(51,093	)		(820,720	)		(412,245	)		(1,007,002	)

Income (Loss) From Discontinued Operations		-			10,000			-			-

Net income (loss)	$	(51,093	)	$	(810,720	)	$	(412,245	)	$	(1,007,002	)

Other Comprehensive (loss)		(27,369	)		-			(27,369	)		-

Comprehensive Loss	$	(78,462	)	$	(810,720	)	$	(439,614	)	$	(1,007,002	)

Weighted average number of common shares outstanding - basic and diluted		62,078,537			61,495,671			61,545,118			61,061,154

Income (loss) per share- basic and diluted
Continuing operations	$	(0.00)		$	(0.01	)	$	(0.01	)	$	(0.02	)
Discontinued operations		-			-			-			-
Total	$	-		$	(0.01	)	$	(0.01	)	$	(0.02	)

								Additional					Other
	Common Stock			Treasury Stock				Paid-in		Accumulated			Comprehensive
	Shares		Amount	Shares		Amount		Capital		Deficit			Income			Total

Balance, July 31, 2022	61,565,841	$	61,566	1,753,335	$	-	$	27,564,129	$	(21,596,894	)	$	-		$	6,028,801

Conversion shares issued	512,696		513	-		-		296,851		-			-			297,364

Net loss for the quarter	-		-	-		-		-		(143,147	)		-			(143,147	)

Balance, October 31, 2022	62,078,537		62,079	1,753,335		-		27,860,980		(21,740,041	)		-			6,183,018

Net loss for the quarter	-		-	-		-		-		(218,005	)		-			(218,005	)

Balance, January 31, 2023	62,078,537		62,079	1,753,335		-		27,860,980		(21,958,046	)		-			5,965,013

Net loss for the quarter	-		-	-		-		-		(51,093	)					(51,093	)

Other comprehensive loss	-		-	-		-		-		-			(27,369	)		(27,369	)

Balance, April 30, 2023	62,078,537	$	62,079	1,753,335	$	-	$	27,860,980	$	(22,009,139	)	$	(27,369	)	$	5,886,551