HAMMER TECHNOLOGY HOLDINGS CORP. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA July 31, 2021 and 2020 Reports of Independent Registered Public Accounting Firms F-1 Consolidated Balance Sheets F-3 Consolidated Statements of Operations F-4 Consolidated Statements of Changes in Stockholders' Equity F-5 Consolidated Statements of Cash Flows F-6 Notes to Consolidated Financial Statements F-7 14 Boyle CPA, LLC Certified Public Accountants & Consultants REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of Hammer Fiber Optics Holdings Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Hammer Fiber Optics Holdings Corp. (the "Company") as of July 31, 2021 and 2020, the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for each of the two-years in the period ended July 31, 2021, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2021 and 2020, and the results of its operations and its cash flows for each of the two years in the period ended July 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Substantial Doubt About the Company's Ability to Continue as a Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the consolidated financial statements, the Company's cumulative net losses raises substantial doubt about its ability to continue as a going concern for one year from the issuance of these financial statements. Management's plans are also described in Note 4. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty. Basis of Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to fraud or error. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 331 Newman Springs Road P (732) 784-1582 Building 1, 4 th Floor, Suite 143 F (732) 510-0665 Red Bank, NJ 07701 F-1 Intangible Assets with Indefinite Lives As described in Notes 3 and 4 to the consolidated financial statements, the Company had intangible assets with indefinite useful lives. The assessment for impairment on these intangible assets required accounting considerations and significant estimates. A significant portion of the Company's intangible assets are wireless licenses that provide wireless operations with the exclusive right to utilize designated radio frequency spectrum to provide communication services. The Company tests the wireless licenses and other indefinite lived intangible assets for potential impairment annually or more frequently if impairment indicators are present. The Company performs a qualitative assessment to determine whether it is necessary to perform a quantitative impairment test. Based upon the qualitative and quantitative factors, the Company determined that its' intangible assets were not impaired at July 31, 2021. We identified the accounting considerations of the valuation of intangible assets with indefinite lives as a critical audit matter. The principal considerations for our determination were: (1) the significant judgment by management in determining the accounting for the valuation of intangible assets with indefinite useful lives and the (2) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management's accounting for the valuation of intangible assets with indefinite useful lives. Our audit procedures related to management's conclusion on the evaluation of the valuation of intangible assets with indefinite lives, included the following, among others: (1) evaluating the assessment performed by Management and, (2) independently assessing the carrying values of the intangible assets with indefinite lives /s/ Boyle CPA, LLC We have served as the Company's auditor since 2019 Red Bank, NJ October 29, 2021 331 Newman Springs Road P (732) 784-1582 Building 1, 4 th Floor, Suite 143 F (732) 510-0665 Red Bank, NJ 07701 F-2 Hammer Fiber Optics Holdings Corp. Consolidated Balance Sheets July 31, 2021 2020 ASSETS Current Assets Cash and cash equivalents $ 77,706 $ 73,931 Accounts receivable 285,006 431,350 Security Deposits 11,802 10,446 Prepaid expenses 14,808 48,797 Total current assets 388,502 564,524 Property and equipment, net 155,939 140,758 Intangible and other assets 3,113,508 3,156,656 Assets from Discontinued Operations 1,243,090 1,281,313 Total assets $ 4,901,909 $ 5,143,251 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Accounts payable and accrued expenses $ 908,136 $ 1,206,664 Loans payable 580,597 448,302 Deferred Revenue 299,200 289,385 Total current liabilities 1,787,933 1,944,351 Liabilities from Discontinued Operations 632,318 8,538,423 Total Liabilities 2,420,318 10,482,774 Stockholders' Equity (Deficit) Common stock, $0.001 par value, 250,000,000 shares authorized 60,583,341 shares issued; 57,010,296 and 52,878,308 shares outstanding at July 31, 2021 and 2020, respectively $ 60,853 $ 60,503 Additional paid-in capital 22,859,434 17,512,284 Accumulated deficit (20,428,696 ) (22,912,310 ) Total Stockholder's Equity (Deficit) 2,481,491 (5,339,523 ) Total Liabilities and Stockholders' Equity (Deficit) $ 4,901,909 $ 5,143,251 See accompanying notes to consolidated financial statements. F-3 Hammer Fiber Optics Holdings Corp Consolidated Statements of Operations For the Year Ended July 31, 2021 2020 Revenues $ 2,199,127 $ 1,781,139 Costs and expenses: Cost of sales 1,586,357 1,156,996 Selling, general and administrative expenses 694,389 857,354 Depreciation expense 55,389 44,454 Total operating expenses 2,318,144 2,058,804 Operating loss (119,017 ) (277,665 ) Other income (expense) Other Income 213,026 - Interest expense (30,797 ) 31,843 Other expenses (2,475 ) 771 Total other expenses 179,754 32,614 Income (loss) Before Discontinued Operations 60,737 (310,279 ) Income (loss) From Discontinued Operations 2,412,877 (614,072 ) Net income (loss) $ 2,473,614 $ (924,351 ) Weighted average number of common shares outstanding - basic and diluted 60,853,341 60,853,341 Loss per share- basic and diluted Continuing operations $ - $ - Discontinued operations 0.04 (0.02 ) Total $ 0.04 $ (0.02 ) See accompanying notes to consolidated statements. F-4 Hammer Fiber Optics Holdings Corp. Consolidated Statement of Stockholders' Equity (Deficit) Total Additional Stockholders' Common Stock Treasury Stock Paid-in Accumulated Equity Shares Amount Shares Amount Capital Deficit (Deficit) Balance, July 31, 2019 60,853,341 60,853 8,825,033 - 17,201,434 (21,987,959 ) (4,725,672 ) Treasury shares issued for acquisition - - (500,000 ) - 230,000 - 230,000 Commitment shares issued in registration statement - - (350,000 ) - 80,500 - 80,500 Net loss - - - - - (924,351 ) (924,351 ) Balance, July 31, 2020 60,853,341 60,853 7,975,033 - 17,511,934 (22,912,310 ) (5,339,523 ) Treasury shares issued for cash - - (307,377 ) - 75,000 - 75,000 Treasury shares issued for prior acquisition - - (2,067,071 ) - - - - Treasury shares issued for debt settlement - - (1,757,500 ) - 5,272,500 - 5,272,500 Net income - - - - - 2,473,614 2,473,614 Balance, July 31, 2021 60,853,341 $ 60,853 3,843,085 $ - $ 22,859,434 $ (20,438,696 ) $ 2,481,591 The accompanying notes are an integral part of these consolidated financial statements. . F-5 Hammer Fiber Optics Holdings Corp Consolidated Statements of Cash Flows For the Years Ended July 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ 2,473,614 $ (924,351 ) Loss from discontinued operations (2,412,877 ) 614,072 Adjustments to reconcile net loss to net cash provided by operating activities: Gain on loan forgiveness (88,097 ) - Depreciation expense 55,389 44,454 Changes in operating assets and liabilities: Accounts receivable 146,344 54,114 Security deposits (636 ) (7,771 ) Prepaid expenses 33,989 31,565 Accounts payable (295,901 ) 277,044 Deferred revenue 9,815 61,576 Net cash provided by (used in) operating activities- continuing operations (78,360 ) 150,703 Net cash provided by (used in) operating activities- discontinued operations - - Net cash provided by (used in) operating activities (78,360 ) 150,703 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (75,503 ) (52,022 ) Purchase of licenses - - Acquisition of customer contracts - (55,476 ) Net cash provided by (used in) investing activities- continuing operations (75,503 ) (107,498 ) Net cash provided by (used in) investing activities- discontinued operations - (356,568 ) Net cash provided by (used in) investing activities (75,503 ) (464,066 ) CASH FLOWS FROM FINANCING ACTIVITIES Repayment of loans (103,493 ) (43,923 ) Proceeds from loans 411,031 343,450 Net cash provided by (used in) financing activities- continuing operations 307,538 299,527 Net cash provided by (used in) financing activities- discontinued operations (150,000 ) - Net cash provided by (used in) financing activities 157,537 299,527 Net increase (decrease) in cash 3,675 (13,836 ) Cash, beginning of period 73,931 87,767 Cash, end of period $ 77,606 $ 73,931 SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES: Cash paid for interest $ 30,797 $ 31,843 Cash paid for taxes $ 2,475 $ 771 The accompanying notes are an integral part of these consolidated financial statements. F-6 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 1 - ORGANIZATION AND DESCRIPTION BUSINESS Hammer Fiber Optics Holdings Corp (OTCQB:HMMR) is a company focused on sustainable shareholder value investing in both financial services technology and wireless telecommunications infrastructure. Hammer's financial technologies business is focused on providing digital stored value technology via its HammerPay mobile payments platform to enable digital commerce between consumers and branded merchants across the developing world, ensuring Swift, Safe and Secure encrypted remittances and banking transactions. Hammer's "Everything Wireless" go to market strategy for its telecommunications business includes the development of high speed fixed wireless service for residential, small business and enterprise clients using its wireless fiber platform, Hammer Wireless AIR®, mobility networks including 4G/LTE, Over-the-Top services such as voice, SMS and collaboration services and hosting services. 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 became 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 provided for a 1 for 1,000 exchange ratio for shareholders of both the Company and the HRO Holdings, which had the effect of a 1 for 1,000 reverse split of the common stock. Articles of Merger were filed with the Secretary of State of Nevada on April 13, 2016 and, on April 14, 2016, this corporate action was submitted to Financial Industry Regulatory Authority (the "FINRA") for its review and approval. On May 3, 2016, the FINRA approved the merger with the wholly-owned subsidiary, HMMR Fiber Optics Holdings Corp. ("HFO Holdings"). Accordingly, thereafter, the Company's name was changed and the shares of common stock began trading under new ticker symbol "HMMR" as of May 27, 2016. The merger was effected on July 19, 2016. On September 11, 2018, our Board of Directors approved stock purchase agreements with 1stPoint Communications LLC and its subsidiaries, Endstream Communications LLC, Open Data Centers LLC and Shelcomm Inc. for the acquisition of all of the equity of the entities. 1stPoint and its subsidiaries possess CLEC licenses in Florida, New York State, and a nationwide CMRS (Commercial Mobile Radio Services) license. The companies operate a data center facility in Piscataway, New Jersey. The acquisition of 1stPoint Communications, LLC, Open Data Centers, LLC and Shelcomm, Inc. closed on November 1, 2018. The acquisition of Endstream Communications, LLC closed on December 17, 2018. On January 29, 2019 our Board of Directors approved a stock purchase agreement with American Network, Inc to acquire all of its equity. The acquisition of American Network, Inc closed on September 1, 2019. As of April 30, 2020 our Board of Directors approved the discontinuation of the operations of Open Data Centers LLC. The operations of Open Data Centers, LLC were discontinued effective April 30, 2020 and the Company shut down its operations in its Piscataway, NJ data center. F-7 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 2 - CORPORATE HISTORY AND BACKGROUND ON MERGER (CONTINUED) 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. TFS will be renamed HammerPay [USA] Ltd. This acquisition has been discussed in the Subsequent Events. NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"). 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. There is uncertainty around the duration and breadth of the COVID-19 pandemic, as well as the impact it will have on the company's operations, supply chain and demand for its products. As a result, the ultimate impact on the company's business, financial condition or operating results cannot be reasonably estimated at this time. 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. Property and equipment Property and equipment is stated at cost less accumulated depreciation. Depreciation is provided for on a straight-line basis over the useful lives of the assets. For network service equipment, and furniture and fixtures, the useful life is ten and five years, respectively. Leasehold Improvements are depreciated over six years. 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 that 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 to be 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 impairment losses for any long-lived assets. F-8 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Notes Receivable These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, they are recorded at amortized cost less any provision for impairment. Individually significant receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty is more likely than not to default. 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 The Company accounts for revenues under Accounting Standards Update (ASU) 2014-09, "Revenue from Contracts with Customers" (Topic 606), which we adopted on August 1, 2018, using the modified retrospective approach. This standard update, along with related subsequently issued updates, clarifies the principles for recognizing revenue and develops a common revenue standard for GAAP. . The Company performs the following five steps: (i) identify the contract(s) with a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies the five-step model to arrangements that meet the definition of a contract under Topic 606, including when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company evaluates the goods or services promised within each contract related performance obligation and assesses whether each promised good or service is distinct. The Company recognizes as revenue, the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Amounts invoiced or collected in advance of product delivery or providing services are recorded as unearned revenue or customer deposits. The company accrues for sales returns, bad debts, and other allowances based on its historical experience. The Company's revenues have consisted primarily of subscription agreements for its broadband internet and voice-over-IP phone services. Residential broadband service delivered to customers over the Company's hybrid fiber and wireless network in Atlantic County, New Jersey has been the primary revenue source. Revenues are supplemented by phone and add-on services. Broadband services delivered via fiber optics to enterprise businesses account for the remaining sources of revenue. Services have been billed monthly to subscribers on either a one- year or two-year contract for residential customers and three-year contracts for enterprise business customers. Revenue begins accruing as service is delivered at commencement of the customer's service contract. 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. F-9 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fair value measurements The Company adopted the provisions of ASC Topic 820, "Fair Value Measurements and Disclosures", which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements. The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active markets for identical assets or liabilities Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis. Consolidation of financial statements Hammer Fiber Optics Holdings Corp. is the parent company and sole shareholder of Hammer Wireless Corporation, Hammer Fiber Optic Investments Ltd, 1stPoint Communications, LLC, Endstream Communications, LLC, Shelcomm, Inc., Open Data Centers, LLC, and American Network, Inc. The company is also the beneficial owner of Hammer Wireless SL. The financial statements for Hammer Fiber Optics Holdings Corp. and its subsidiaries are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated. Hammer Fiber Optics Investments, Ltd and Open Data Centers, LLC have been discontinued and are reported on a summarized basis in consolidation. Basic and Diluted Earnings (Loss) per Common 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 July 31, 2021 and 2020, there were no common stock equivalents outstanding. Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In addition, during 2016 the FASB has issued ASU 2016-08, ASU 2016-10 and ASU 2016-12, all of which clarify certain implementation guidance within ASU 2014-09, and ASU 2016-11, which rescinds certain SEC guidance effective upon an entity's adoption of ASU 2014-09. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted only in annual reporting periods beginning after December 15, 2016, including interim periods therein. The Company adopted ASU No. 2014-09 and related updates on August 1, 2018. Adoption did not have a material impact on the Company's consolidated financial statements. F-10 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In February 2016, FASB issued ASU No. 2016-02, Accounting Standards Update No. 2016-02, Leases (Topic 842). ASU 2016-02 provides for improvements for accounting guidance related to leasing treatments on financial statements as a response to user input. The update maintains two classifications of leases, Financial lease and Operating leases. The Update is effective for fiscal years beginning after December 15, 2018. The Company is assessing the impact this standard will have on its' consolidated financial statements. The Company does not expect the adoption of any other recent accounting pronouncements to have a material impact on its financial statements. Reclassifications Certain reclassifications have been made to the financial statements to conform to the consolidated 2021 financial statement presentation. Accounts Receivable Accounts receivable are recorded at invoiced amount and generally do not bear interest. An allowance for doubtful accounts is established, as necessary, based on past experience and other factors which, in management's judgment, deserve current recognition in estimating bad debts. Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions. The determination of the collectability of amounts due from customer accounts requires the Company to make judgments regarding future events and trends. Allowances for doubtful accounts are determined based on assessing the Company's portfolio on an individual customer and on an overall basis. This process consists of a review of historical collection experience, current aging status of the customer accounts, and the financial condition of the Company's customers. NOTE 4 - GOING CONCERN The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has consistently sustained losses since its inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a period of one year from the issuance of these financial statements. The Company's continuation as a going concern is dependent upon, among other things, its ability to increase revenues, adequately control operating expenses and receive debt and/or equity capital from third parties. No assurance can be given that the Company will be successful in these efforts. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company intends to continue to address this condition by seeking to raise additional capital through the issuance of debt and/or the sale of equity until such time that ongoing revenues can sustain the business, at which time capitalization may be considered through other means. F-11 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 5 - DISCONTINUED OPERATIONS Hammer Fiber Optics Investment Ltd ceased operations in the Atlantic County geographical market on October 31, 2018 when Verizon Communications, LLC terminated the spectrum lease agreement. The operations of Hammer Fiber Optics Investments, Ltd were classified as a discontinued operation. Open Data Centers, LLC ceased operating in its Piscataway, NJ location in May 2020 and was classified as a discontinued operation. Reporting of the discontinued operations 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 discontinue operations: July 31, 2021 July 31, 2020 Assets Current Assets Cash $ 0 $ 677 Accounts receivable 0 36,676 Other current assets 0 16,139 Total current assets 0 53,492 Other Assets Property and equipment- net 1,243,090 1,227,821 Intangible assets 0 - Total other assets 0 1,227,821 Total Assets $ 1,243,090 $ 1,281,313 Liabilities and Net Assets Current Liabilities Accounts payable $ 632,385 $ 4,632,405 Notes payable- related parties 0 210,000 Current portion of long-term notes payable - related parties 0 3,313,544 Accrued interest 0 382,474 Rent Concessions 0 - Total current liabilities 632,385 8,538,423 Net assets (liabilities) $ 611,575 $ (7,257,110 ) The following summarizes the operations of the discontinue operations: July 31, 2021 July 31, 2020 Revenue $ - $ $528,315 Operating expenses Operations and maintenance - 679,967 General and administrative - 226,916 Depreciation and amortization - 10,348 Impairment expense - 223,025 Loss from operations - (611,941 ) Other income (expense) - Interest expense - (2,131 ) Interest income - 0 Total other income (expense) - - Net Loss $ - $ (614,072 ) F-12 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 6 - ACQUISITIONS There were no new acquisitions during the period. NOTE 7 - PROPERTY AND EQUIPMENT As of July 31, 2021, property and equipment from ongoing operations included: Amount Life Computer and Telecom equipment $ 1,216,639 5 years Less: Accumulated depreciation (1,060,700 ) Total $ 155,939 Depreciation expense was $55,389 and $44,454 for the years ended July 31, 2021 and 2020, respectively. NOTE 8 - INDEFINITE LIVED INTANGIBLE ASSETS The Company has intangible assets with indefinite useful lives resulting from various acquisitions, including of 1stPoint Communications LLC and Endstream Communications, LLC. A portion of our intangible assets are wireless licenses that provide our wireless operations with the exclusive right to utilize designated radio frequency spectrum to provide communication services. While licenses are often issued for only a fixed time, such licenses are subject to renewal. License renewals have occurred routinely and at nominal cost. Moreover, the Company has determined that there are currently no legal, regulatory, contractual, competitive, economic or other factors that limit the useful life of our licenses. As a result, we treat the wireless licenses as an indefinite-lived intangible asset. We re-evaluate the useful life determination for wireless licenses each year to determine whether events and circumstances continue to support an indefinite useful life. The Company has $18,934 of recognized indefinite lived intangible assets, which consist of the ownership of Internet Protocol version 4 (IPv4) address blocks. The Hammer Wireless SL, Ltd. Subsidiary has been granted a nationwide telecommunications and wireless license in the country of Sierra Leone, for which it paid $218,584. Hammer paid $42,500 to Wikibuli, Inc. in exchange for capital stock in Wikibuli, the operating company in Dominica. 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. Based upon the qualitative and quantitative factors, the Company determined that its’ intangible assets are not impaired at July 31, 2021. NOTE 9 - RELATED PARTY TRANSACTIONS On October 9, 2016, the Company entered into a short-term loan agreement with a family member of a member of the Company's Board of Directors (BOD). Under the agreement, the lender advanced $100,000 to the Company for the purpose of providing working capital. The loan carries an annual interest rate of 3%. On September 15, 2016, the Company received $210,000 from a family member of a member of the BOD, also for the purpose of working capital, and has recorded such amount as a deposit in anticipation of executing a loan agreement. The company settled this note for the full amount in stock at $3/share of HMMR common stock on July 31, 2021. On April, 9 2018, the Company received an additional $20,000 deposit from a family member of a member of the BOD. The amount was intended as additional working capital. The Company anticipates execution of a loan agreement relative to this advance. During the fiscal year ended July 31, 2016, the Company entered into two promissory notes with a Director for an aggregate amount of $2,400,000 and $1,000,000, respectively. The $2,400,000 note matures 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. 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, 2018 and 2017. The interest accrued was $219,434 at July 31, 2018 and $69,594 at July 31, 2017, respectively. This company settled this note for the full amount in stock at $3/share of HMMR common stock on July 31, 2021. The $1,000,000 note matured on June 9, 2018 at which time the principal became due in its entirety, in addition to simple interest accrued at 3%. The company settled these amounts in full on of July 31, 2021 in exchange for HMMR common stock at $3/share. On February 12, 2018, the Company entered into a convertible promissory note for the sum of $103,000. On June 19, 2018, the note was settled in full on the company's behalf by a Director. The settlement included a prepayment penalty for a full settlement amount of $132,433. The difference between the carrying value of the loan and the full settlement amount ($29,433) was recorded as interest expense. F-13 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED) During the fiscal year 2018, the Company entered into a Stock Purchase Agreement with a related party for the sum of $14,000 of common stock at $0.4629 per share on May 5, 2019, and the sum of $12,000 of common stock at $0.405 per share on May 30, 2019. During the fiscal year 2019, the Company entered into a Stock Purchase Agreement with a related party for the sum of $25,000 of common stock at $0.25 per share on March 17, 2020, the sum of $40,000 of common stock at $0.24 per share on March 24, 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. The note bears interest at a rate of 6%, payable quarterly. As of July 31, 2021, all of the related party payables are reported as current liabilities in the Consolidated Balance Sheet. NOTE 10 - CONVERTIBLE DEBT On February 12, 2018, the Company entered into an agreement for a convertible promissory note for the sum of $103,000. The note accrues interest at a rate of 12 percent per annum due at maturity. The note matures nine months from the issuance date. Prepayment of the note is subject to a premium charge based on the amount of days prepaid before the maturity date. The note allows conversion into the Company's common stock at a discount of 37 percent of the stock's market price. The holder shall have the right after 180 days to convert all or part of the note at their discretion. On June 19, 2018 the note was settled in full on the company's behalf by a Director. NOTE 11 - INCOME TAXES The Company's income tax expense, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management's best estimate of current and future taxes to be paid. The Company is subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgments and estimate are required in the determination of the consolidated income tax expense. The reconciliation of income tax benefit at the U.S. statutory rate of 21% for the fiscal year ended July 31, 2021 and 2020, to the Company's effective tax rate is as follows: July 31, 2021 2020 Income tax benefit provision at statutory rate $ 619,512 $ (194,114 ) Change in valuation allowance (619,512 ) 194,114 $ - $ - The tax effects of temporary differences that give rise to the Company's net deferred tax assets as of July 31, 2021 and 2020 are as follows: July 31, 2021 2020 Net operating gain/loss $ 2,950,060 $ (4,876,484 ) Valuation allowance (2,950,060 ) 4,876,484 $ - $ - The Tax Cuts and Jobs Act of 2017 (the Act) reduced the statutory corporate federal income tax rate from 35% to 21% beginning in 2018. The blended tax rate for 2018 considered the tax laws enacted in 2017. The tax effect of temporary differences from net operating losses ("NOL") has been reduced to reflect the newly enacted rates. The Company has approximately $22,912,000 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 F-14 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 NOTE 11 - INCOME TAXES (CONTINUED) December 31, 2017, hence, $3,000,000 of the NOL will be subject to the 80% limitation and will be carried forward indefinitely while $19,297,000 of the NOL will be carried forward for 20 years and will begin to expire in 2036. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on the assessment, management has established a full valuation allowance against all of the deferred tax assets relating to NOLs for every period because it is more likely than not that all of the deferred tax asset will not be realized. As of July 31, 2021 and 2020, 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 years ended July 31, 2021 and 2020. As of July 31, 2021 and 2020, 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. NOTE 12 - STOCKHOLDERS' EQUITY Treasury Stock During the year ended July 31, 2021, the Company received cash of $75,000 from the sale of 307,377 treasury shares to various Directors: Price Per Share Shares Value $ 0.24 307,377 $ 75,000 Total 307,377 $ 75,000 On January 22, 2021, the company issued 2,067,071 shares of stock in accordance with the Stock Purchase Agreements between the Company and 1stPoint Communications, LLC and Endstream Communications, LLC. On July 31, 2021, the Company issued 1,757,500 shares of stock in settlement of notes payable to a related party. NOTE 13 - COMMITMENTS AND LEASES Hammer does not currently have any material long term lease obligations. F-15 HAMMER FIBER OPTICS HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JULY 31, 2021 and 2020 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 US 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. NOTE 15 - S-1 REGISTRATION STATEMENT On October 8, 2019, the Company completed an Equity Purchase Agreement with Peak One Opportunity Fund ("Peak One") and Peak One Investments, LLC ("Peak One Investments) giving the Company the option to sell up to $10,000,000 worth of our common stock to Peak One (the "Maximum Commitment Amount"), in increments, over the period ending twenty-four (24) months after the date the Registration Statement is deemed effective by the SEC (the "Commitment Period"). Additionally, the Company is required to issue Commitment Fees of 175,000 Shares each to Peak One and Peak One Investments. The Company also has an October 8, 2019 Registration Rights Agreement with Peak One requiring us to file an S-1 Registration Statement providing for the registration of 13,350,000 Shares that result from our selling to Peak One an indeterminate number of shares up to an aggregate purchase price of $10,000,000 and the subsequent resale by Peak One of such shares. One of such shares. This S-1 was effective on February 1, 2020. NOTE 16 - SUBSEQUENT EVENTS 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. TFS will be renamed HammerPay [USA] Ltd. This acquisition has been discussed in the Subsequent Events. In exchange for 100% of the stock of TFS, the Company will deliver 5,000,000 shares of HMMR common stock. This stock is being issued from treasury and the transaction is non-dilutive. In order to facilitate this transaction, 3,000,000 shares of stock that had been reserved for other transactions will be returned to treasury. F-16 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL STATEMENTS None ITEM 9A(T). 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 Chief Executive Officer and our Chief Financial Officer (who is acting as our principal executive officer, principal financial officer and principle accounting officer) to allow for timely decisions regarding required disclosure. As of July 31, 2020, we carried out an evaluation, under the supervision of our Chief Executive Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The officer concluded that the disclosure controls and procedures were not effective as of the end of the period covered by this report. Management's Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Responsibility, 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 July 31, 2021. 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. Our management has concluded that, as of July 31, 2021, our internal control over financial reporting was not effective. 15 This annual report does not include an attestation report of our company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit our company to provide only management's report in this annual report. 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. 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 There have been no changes in our internal controls over financial reporting that occurred during the year ended July 31, 2021 that have materially or are reasonably likely to materially affect, our internal controls over financial reporting. ITEM 9B. OTHER INFORMATION None. 16 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Identification of Executive Officers and Directors of the Company Name and Address of Beneficial Owner Directors and Officers: Age Class Shares Held or Controlled Percentage of Class 1 Michael Cothill 2 Director 401 East 34 th Street, Suite #N27J New York, NY 10016 64 Common 4,350,000 7.2% Erik B. Levitt 3 CEO, President & Executive Director 401 East 34 th Street, Suite #N27J New York, NY 10016 47 Common 1,130,476 1.9% Michael Sevell 4 Director 401 East 34 th Street, Suite #N27J New York, NY 10016 67 Common 9,857,359 16.3% Mark Stogdill 5 Director 401 East 34 th Street, Suite #N27J New York, NY 10016 41 Common 5,000,000 8.3% Kristen Vasicek 6 Secretary & COO 401 East 34 th Street, Suite #N27J New York, NY 10016 39 Common 206,841 >1.0% All executive officers and directors as a group (5 people) Common 20,544,856 34.0 % 1. The number and percentage of shares beneficially owned is determined under rules promulgated by the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares as to which the individual has sole or shared voting power or investment power and also any shares, which the individual has the right to acquire within 60 days through the exercise of any stock option or other right. The entities or persons named in the table have sole voting and investment power with respect to all shares of common stock shown that are beneficially owned by them, subject to community property laws where applicable and the information contained in the footnotes to this table. 2. On August 1, 2016, Michael Cothill was appointed as the Company's Treasury and Chairman of the Company's Board of Directors. The beneficial ownership of our Chairman, Michael Cothill, is held through Ambleside Trust, of which he is the Managing Member. 3. Erik Levitt's ownership is composed of 1,130,476 shares owned indirectly, as follows: (a) 91,800 shares issued (pursuant to an the September 11, 2018 Purchase Agreement for our purchase of Shelcomm, Inc.) ("Shelcomm"), in exchange for Erik Levitt's respective equity ownership in Shelcom.; and (b) 199,954 shares issued (pursuant to the September 12, 2018 Purchase Agreement for our purchase of Open Data Centers ("Open Data") in exchange for Erik Levitt's respective ownership of Open Data Centers, LLC. In addition, pursuant to vesting schedules, Erik Levitt will receive 1,534,325 shares through a single member LLC, Manhattan Carrier Company ("Manhattan), of which he is the sole member, as follows: (i) 665,808 shares issued to (pursuant to the September 11, 2018 Purchase Agreement providing for our 100% purchase of Endstream Communications, LLC ("Endstream), which included Erik Levitt's respective ownership of Endstream; (ii) 871,517 shares issued to (pursuant to the September 11, 2018 Purchase Agreement providing for our 100% purchase of lstPoint Communications, LLC) ("lstPoint"), including Erik Levitt's respective ownership of lstPoint. Amendment 2 to the Stock Purchase Agreement for Endstream and 1stPoint Communications altered the 539 Plan, and Mr. Levitt received 159,800 shares of Common Stock in exchange for Erik Levitt's respective ownership of Endstream Communications, LLC and 226,845 shares of Common Stock in exchange for Erik Levitt's respective ownership of 1stPoint Communications, LLC. In accordance with Amendment 2 of the Stock Purchase Agreements for Endstream and 1stPoint Communications altered the Plan and Mr. Levitt received an additional 141,817 shares of Stock. 4. Michael Sevell's ownership of 9,857,359 shares is composed of: (a) 7,665,039 shares owned directly by Michael Sevell; and (b) 2,192,500 shares representing his indirect ownership through 2,192,500 shares owned by Forefront Investors, LLC., for which Michael Sevell has sole dispositive power. 17 5. Mark Stogdill's ownership is 5,000,000 shares represents his indirectly ownership of 5,000,000 shares owned by Arradis Enterprises, LLC, a Limited Liability Company under his control and for which he has sole dispositive power. 6 . Pursuant to a stock grant and a Rule 539 Vesting Plan, Kristen Vasicek will receive 81,320 shares by our issuance of 16,264 shares each on January 2, 2020 2021, 2022, 2023, and 2024. Additionally, pursuant to a stock grant and a Rule 539 Vesting Plan, Kristen Vasicek will receive 52,093 shares, 10,418.6 shares each on January 2, 2020, 2021, 2022, 2023, and 2024. Amendment 2 to the Stock Purchase Agreement for Endstream and 1stPoint Communications altered the 539 Plan, and Ms. Vasicek received 12,501 shares of Common Stock in exchange for Ms. Vasicek's respective ownership of Endstream Communications, LLC and 21,167 shares of Common Stock in exchange for Ms. Vasicek's respective ownership of 1stPoint Communications, LLC. Pursuant to Amendment 2 of the Stock Purchase Agreement, Ms. Vasicek received an additional 18,113 shares of stock on January 2, 2021. Term of Office Each director of the Company serves for a term of one year and until his successor is elected and qualified at the next Annual Shareholders' Meeting, or until his death, resignation or removal. Each officer of the Company serves for a term of one year and until his successor is elected and qualified at a meeting of the Board of Directors. Significant Employees Erik B. Levitt - Principal Financial Officer, CEO - 1stPoint Communications Kristen Vasicek - Chief Operating Officer Family Relationships None. Involvement in Certain Legal Proceedings During the past ten years no director, executive officer, promoter or control person of the Company has been involved in the following: (1) A petition under the Federal bankruptcy laws or any state insolvency law which was filed by or against, or a receiver, fiscal agent or similar officer was appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; (2) Such person was convicted in a criminal proceeding or is a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) Such person was the subject of any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: (i) Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) Engaging in any type of business practice; or (iii) Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of Federal or State securities laws or Federal commodities laws; (4) Such person was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any Federal or State authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described in paragraph (f)(3)(i) of this section, or to be associated with persons engaged in any such activity; (5) Such person was found by a court of competent jurisdiction in a civil action or by the Commission to have violated any Federal or State securities law, and the judgment in such civil action or finding by the Commission has not been subsequently reversed, suspended, or vacated; 18 (6) Such person was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any Federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated; (7) Such person was the subject of, or a party to, any Federal or State judicial or administrative order, judgment, decree, or finding, not subsequently reversed, suspended or vacated, relating to an alleged violation of: (i) Any Federal or State securities or commodities law or regulation; or (ii) Any law or regulation respecting financial institutions or insurance companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty or temporary or permanent cease-and-desist order, or removal or prohibition order; or (iii) Any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or (8) Such person was the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization (as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C. 78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of the Commodity Exchange Act (7 U.S.C. 1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member. Code of Ethics The Company has not adopted any formal Code of Ethics. Committees of the Board of Directors The Company does not presently have a separately designated standing audit committee, compensation committee, nominating committee, executive committee or any other committees of our Board of Directors. The functions of those committees are undertaken by our Board of Directors as a whole. ITEM 11. EXECUTIVE COMPENSATION The following table sets forth information concerning all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the noted periods. No other executive officer received total annual salary and bonus compensation in excess of $100,000. SUMMARY COMPENSATION TABLE 1 Name and Principal Position Fiscal Year Salary ($) All Other Compensation ($) Total ($) Erik B. Levitt 4 Executive Director & Principal Financial Officer, CEO - 1stPoint Communications, LLC 2020 11,000 NIL 11,000 2019 1,000 NIL 1,000 Kristen Vasicek 6 Secretary & COO 2020 72,000 NIL 72,000 2019 72,000 NIL 72,000 1. We have omitted certain columns in the summary compensation table pursuant to Item 402(a)(5) of Regulation S-K as no compensation was awarded to, earned by, or paid to any of the executive officers or directors required to be reported in that table or column in any fiscal year covered by that table. 2. The "All Other Compensation" column is used to disclose the aggregate amount of all compensation that the company could not properly report in any other column of the Summary Compensation Table. 3. Erik B. Levitt had an employment agreement with the company but opted to take a reduction of compensation for year ending July 31, 2021 as reflected in the Summary Compensation Table. 5 . Kristen Vasicek is employed by the company under an at-will employment agreement. 19 Option Grants We have not granted any options or stock appreciation rights to our named executive officers or directors since inception. We do not have any stock option plans. Management Agreements We had executive contract agreements during the reporting period with our CEO Erik B. Levitt. Pension, Retirement or Similar Benefit Plans There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit-sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof. Compensation Committee We do not currently have a compensation committee of the Board of Directors or a committee performing similar functions. The Board of Directors as a whole participates in the consideration of executive officer and director compensation. Indebtedness of Directors, Senior Officers, Executive Officers and Other Management None of our directors or executive officers or any associate or affiliate of our company during the last two fiscal years is or has been indebted to our company by way of guarantee, support agreement, letter of credit or other similar agreement or understanding currently outstanding. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Related Party Transactions None of the directors or executive officers of the Company, nor any person who owned of record or was known to own beneficially more than 10% of the Company's outstanding shares of its common stock, nor any associate or affiliate of such persons or companies, has any material interest, direct or indirect, in any transaction that has occurred during the past two fiscal years, or in any proposed transaction, which has materially affected or will affect the Company other than as disclosed at Note 8 to the financial statements. With regard to any future related party transaction, we plan to fully disclose any and all related party transactions in the following manner: Disclosing such transactions in reports where required; Disclosing in any and all filings with the SEC, where required; Obtaining disinterested directors consent; and Obtaining shareholder consent where required. Director Independence For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2). The OTCBB on which shares of the Company's Common Stock are quoted does not have any director independence requirements. The NASDAQ definition of "Independent Director" means a person other than an Executive Officer or employee or any other individual having a relationship, which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Under the definitions outlined it is our opinion that Michael Sevell and Mark Stogdill are independent directors. Review, Approval or Ratification of Transactions with Related Persons 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. 20 ITEM 13. PRINCIPAL ACCOUNTING FEES AND SERVICES The company employs Pre-Approval Policies and Procedures Prior to engaging our accountants to perform a particular service, our Board of Directors obtains an estimate for the service to be performed. All of the services described above were approved by the Board of Directors in accordance with its procedures. Below is the aggregate amount of fees billed for professional services rendered by our principal accountants with respect to our last two fiscal years: 2021 2020 Audit fees and audit related fees $ 14,000 $ 40,000 Tax fees - - All other fees - - Total $ 14,000 $ 40,000 All of the professional services rendered by principal accountants for the audit of our annual financial statements that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for last two fiscal years were approved by our Board of Directors. Maintaining Principal Accountant's Independence Our Board of Directors has considered whether the provision of the services described herein are compatible with maintaining the principal accountant's independence and believes that such services do not compromise that independence. 21 PART IV ITEM 14 - EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Financial Statements 1. Financial statements for our company are listed in the index under Item 8 of this document 2. All financial statement schedules are omitted because they are not applicable, not material or the required information is shown in the financial statements or notes thereto. Exhibit Number Description of Exhibit Filing 2.2 Agreement and Plan of Merger by and between the Company and its wholly owned subsidiary Hammer Fiber Optics Holdings Corp. Filed with the SEC on June 14, 2016, as part of our Current Report on Form 8-K. 3.1a Articles of Incorporation Filed with the SEC on March 2, 2012, as part of our Registration Statement on Form S-1. 3.1b Articles of Merger Dated February 20, 2015 Intended to be Filed with the SEC on March 1, 2015, as part of our Current Report on Form 8-K. The Exhibit was not attached, accordingly the Articles of Merger was filed with the SEC on September 21, 2016, as part of our Amended Current Report on Form 8-K/A. 3.1c Articles of Merger Dated April 13, 2016 Filed with the SEC on September 21, 2016, as part of our Amended Current Report on Form 8-K/A. 3.2 Bylaws Filed with the SEC on March 2, 2012, as part of our Registration Statement on Form S-1. 10.1 Share Exchange Agreement by and among the Company, Hammer Fiber Optic Investments Ltd. and the shareholders of Hammer Fiber Optic Investments Ltd. Filed with the SEC on April 28, 2016, as part of our Current Report on Form 8-K. 10.2 Material Contract for exclusive distribution rights Filed with the SEC on September 21, 2016, as part of our Amended Current Report on Form 8-K/A. 10.3 Employment Agreement dated September 11, 2018 between Mark Stogdill and the Company Filed with the SEC on September 13, 2018, as part of our Form 8-K 10.4 Employment Agreement dated September 11, 2018 between Erik Levitt and the Company Filed with the SEC on September 13, 2018, as part of our Form 8-K 10.5 Stock Purchase Agreement dated September 11, 2018 between 1stPoint Communications and the Company Filed with the SEC on September 13, 2018, as part of our Form 8-K 10.6 Stock Purchase Agreement dated September 11, 2018 between Endstream Communications and the Company Filed with the SEC on September 13, 2018, as part of our Form 8-K 10.7 Stock Purchase Agreement dated September 11, 2018 between Shelcomm Inc. and the Company Filed with the SEC on September 13, 2018, as part of our Form 8-K 10.8 Stock Purchase Agreement dated September 12, 2018 between Open Data Centers and the Company Filed with the SEC on September 13, 2018, as part of our Form 8-K 31.1 Sec. 302 Certification of Principal Financial Officer Filed herewith 32.1 Sec. 906 Certification of Principal Financial Officer Filed herewith 101.INS XBRL Instance File Filed herewith 101.SCH XBRL Taxonomy Schema Linkbase Document Filed herewith 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. Filed herewith 101.DEF XBRL Taxonomy Extension Definition Linkbase Document Filed herewith 101.LAB XBRL Taxonomy Extension Label Linkbase Document Filed herewith 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document Filed herewith 22 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized. HAMMER FIBER OPTICS HOLDINGS CORP Date: October 29, 2021 /s/ Erik Levitt Erik B. Levitt Principal Financial Officer 23