8 unchanged sentences
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
−Removed: To the Board of Directors and Stockholders of Hammer Fiber Optics Holdings Corp.
+Added: To the Board of Directors and Shareholders of Hammer Fiber Optics Holding Corp
Opinion on the Financial Statements
−Removed: We have audited the accompanying consolidated balance sheet of Hammer Fiber Optics Holdings Corp.
−Removed: ("the Company") as of July 31, 2022, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the financial statements).
−Removed: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2022 , and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.
+Added: We have audited the accompanying consolidated balance sheets of Hammer Fiber Optics Holding Corp (“the Company”) as of July 31, 2023 and 2022, and the related consolidated statements of operations, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended July 31, 2023, and the related notes (collectively referred to as the financial statements).
+Added: In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2023 and 2022 and the results of its operations and its cash flows for each of the years in the two-year period ended July 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
2 unchanged sentences
This factor, among others, raise substantial doubt about the Company’s ability to continue as a going concern.
−Removed: Management's plans in regard to these matters are also described in Note 4.
+Added: Management’s plans in regard to this matter is also described in Note 4.
The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
17 unchanged sentences
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.
−Removed: Accounting for Business Combination and Valuation of Intangible Assets - Refer to Note 6 to the financial statements
−Removed: Critical Audit Matter Description
−Removed: The Company transacted in a share exchange agreement with Telecom Financial Services Limited during the year which qualified as a significant, unusual transaction.
−Removed: How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our principal audit procedures to evaluate management's accounting for the business combination and resulting asset value consisted of the following, among others:
−Removed: Evaluation of management's methodology for accounting for the business combination.
−Removed: Evaluation of information available to management in determining the value of the asset.
−Removed: Accounting for Revenue - Refer to Note 3 to the financial statements
+Added: Accounting for Convertible Notes Payable and Related Transactions — Refer to Notes 10, 12, and 16 to the financial statements.
Critical Audit Matter Description
−Removed: The Company records revenue as services are provided and timing of services can impact revenue and contract liabilities balances.
+Added: The company has issued convertible notes during 2023 and 2022 with related incentives consisting of warrants and common stock.
+Added: These financing transactions required auditor judgement regarding the appropriateness of the accounting and subjectivity in relation to valuation these financing transactions.
How the Critical Audit Matter Was Addressed in the Audit
−Removed: Our principal audit procedures to evaluate management's accounting for revenue consisted of the following, among others:
−Removed: Evaluation and testing of revenue to determine appropriate cutoff.
−Removed: Evaluation of management's revenue recognition policies in accordance with ASC 606 Revenue from Contracts with Customers .
−Removed: Fruci and Associates II, PLLC
+Added: Our audit procedures related to evaluating the Company’s accounting for the notes payable, including management’s judgements and inputs related to the fair value of the incentives, included the following, among others:
+Added: Substantive detail testing to evaluate the accuracy and completeness of the recorded convertible notes.
+Added: Development of an independent fair value assessment and compared our estimates to management’s estimates.
+Added: Evaluated management’s conclusions regarding the accounting treatment applied to the convertible notes and related transactions.
+Added: Fruci & Associates II, PLLC – PCAOB ID #05525
We have served as the Company’s auditor since 2022.
3 unchanged sentences
Consolidated Balance Sheets
+Added: (as restated)
Current Assets
11 unchanged sentences
Loans payable
+Added: Warrant Liabilities
+Added: Unissued Stock
Deferred Revenue
−Removed: Total current liabilities
−Removed: Liabilities from Discontinued Operations
+Added: Current Liabilities from Discontinued Operations
Total Liabilities
1 unchanged sentence
Common stock, $ 0.001 par value, 250,000,000 shares authorized
−Removed: 61,565,851 shares issued;
+Added: 62,205,947 and 61,565,851 shares issued;
60,452,612 and 59,812,506 shares
8 unchanged sentences
For the Year Ended
+Added: (as restated)
Costs and expenses:
6 unchanged sentences
Interest expense
+Added: Warrant financing expense
Financing expenses
+Added: Warrant adjustment to Fair Value
Other expenses
14 unchanged sentences
Balance, July 31, 2021
−Removed: Treasury shares issued for acquisition
−Removed: Commitment shares issued in registration statement
−Removed: Balance, July 31, 2020
−Removed: Treasury shares issued for cash
−Removed: Treasury shares issued for prior acquisition
−Removed: Treasury shares issued for debt settlement
−Removed: Balance, July 31, 2021
Shares issued from prior acquisition
3 unchanged sentences
Treasury shares issued
+Added: Net loss (as restated)
+Added: Balance, July 31, 2022 (as restated)
+Added: Debt conversion shares issued
Balance, July 31, 2023
3 unchanged sentences
For the Years Ended
+Added: (as restated)
CASH FLOWS FROM OPERATING ACTIVITIES
+Added: Net income (loss)
Loss from discontinued operations
−Removed: Adjustments to reconcile net loss to net
−Removed: cash provided by operating activities:
−Removed: Gain on loan forgiveness
+Added: Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation expense
+Added: Warrant adjustment to Fair Value
+Added: Non-cash interest expense
+Added: Writedown of intangible assets
Changes in operating assets and liabilities:
9 unchanged sentences
Purchase of property and equipment
−Removed: Purchase of licenses
−Removed: Acquisition of customer contracts
Net cash provided by (used in) investing activities- continuing operations
13 unchanged sentences
Cash paid for taxes
+Added: SUPPLEMENTAL SCHEDULES OF NONCASH FINANCING ACTIVITIES
+Added: Common stock shares issued upon conversion of debt
The accompanying notes are an integral part of these consolidated financial statements.
3 unchanged sentences
NOTE 1 - ORGANIZATION AND DESCRIPTION BUSINESS
−Removed: 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.
+Added: Hammer Fiber Optics Holdings Corp (OTCPK:HMMR) is a company focused on sustainable shareholder value investing in both financial services technology and wireless telecommunications infrastructure.
Hammer's financial technologies business is focused on providing digital stored value technology via its HammerPay mobile payments platform to enable digital commerce between consumers and branded merchants across the developing world, ensuring Swift, Safe and Secure encrypted remittances and banking transactions.
4 unchanged sentences
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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: 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.
+Added: Tanaris Power Holdings, Inc.
+Added: 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.
+Added: On March 6, 2015, the Company amended its Articles of Incorporation to change its name to Tanaris Power Holdings, Inc.
+Added: On April 25, 2016, Tanaris Power Holdings, Inc., a Nevada corporation entered into a 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.
−Removed: 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.
+Added: to Hammer Fiber Optics Holdings Corp.
+Added: 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.
−Removed: (“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.
+Added: (“HFO Holdings”).
+Added: 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.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 2 - CORPORATE HISTORY AND BACKGROUND ON MERGER (CONTINUED)
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.
9 unchanged sentences
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.
−Removed: HAMMER FIBER OPTICS HOLDINGS CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: JULY 31, 2022 and 2021
−Removed: NOTE 2 -CORPORATE HISTORY AND BACKGROUND ON MERGER (CONTINUED)
+Added: On October 19, 2021 our board of directors approved a name change from Hammer Fiber Optics Holdings Corp to Hammer Technology Holdings Corp.
On October 25, 2021 our board of directors approved a share exchange agreement with Telecom Financial Services Limited ("TFS") for the acquisition one hundred percent ( 100 %) of its stock.
TFS owns the intellectual property critical to the operations of the company's financial technology business unit as well as certain key supplier, marketing and operating agreements.
+Added: The acquisition of TFS closed on January 3, 2022.
TFS has been renamed HammerPay [USA] Ltd.
+Added: On July 31, 2023 our board of directors approved the discontinuation of the operations of Hammer Wireless (SL) Limited, the company's data communications service in Sierra Leone.
+Added: The operations were discontinued in March 2020 and all assets have been written down.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
4 unchanged sentences
Actual results could differ from those estimates.
−Removed: COVID-19 Pandemic Update
−Removed: In March 2020, the World Health Organization declared a global health pandemic related to the outbreak of a novel coronavirus.
−Removed: The COVID-19 pandemic adversely affected the company's financial performance in the third and fourth quarters of fiscal year 2020, mostly due to the discontinuation of the operations it its Open Data Centers, LLC operations effective April 30, 2020.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: As a result, the ultimate impact on the company's business, financial condition or operating results cannot be reasonably estimated at this time.
−Removed: 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.
−Removed: 1stPoint 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.
−Removed: The amounts of have been reflected as other income in the company's financial statements.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Cash and cash equivalents
3 unchanged sentences
Depreciation is provided for on a straight-line basis over the useful lives of the assets.
−Removed: For network service equipment, and furniture and fixtures, the useful life is ten and five years , respectively.Leasehold Improvements are depreciated over six years .
+Added: For network service equipment, and furniture and fixtures, the useful life is ten and five years , respectively.
+Added: Leasehold Improvements are depreciated over six years .
Expenditures for additions and improvements are capitalized;
5 unchanged sentences
The Company has not recognized impairment losses for any long-lived assets.
−Removed: HAMMER FIBER OPTICS HOLDINGS CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: JULY 31, 2022 and 2021
−Removed: NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Notes Receivable
7 unchanged sentences
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.
−Removed: 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.
+Added: 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.
+Added: The Company has not recorded any related impairment losses.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Revenue recognition
19 unchanged sentences
The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.
+Added: Fair value measurements
+Added: 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.
+Added: 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.
HAMMER FIBER OPTICS HOLDINGS CORP.
2 unchanged sentences
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
−Removed: Fair value measurements
−Removed: 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.
−Removed: 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.
3 unchanged sentences
Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable
−Removed: Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions).
+Added: Level 3 - unobservable inputs reflecting management's assumptions about the inputs used in pricing the asset or liability.
+Added: 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.
+Added: Fair Value Measurements
+Added: Fair Value Measurements at July 31, 2023
+Added: Quoted Prices
+Added: Identical Assets
+Added: Warrant Liabilities
+Added: Fair Value Measurements at July 31, 2022
+Added: Quoted Prices
+Added: Identical Assets
+Added: Warrant Liabilities
+Added: 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.
+Added: The following table provides a summary of changes in fair value of the Company’s Level 3 financial liabilities as of July 31, 2023, and 2023:
+Added: July 31, 2023
+Added: July 31, 2022
+Added: Balance, January 1
+Added: Change in fair value of derivative liabilities
+Added: Balance, December 31
Consolidation of financial statements
Hammer Fiber Optics Holdings Corp.
−Removed: is the parent company and sole shareholder of Hammer Wireless Corporation, Hammer Fiber Optic Investments Ltd, 1stPoint Communications, LLC, Endstream Communications, LLC, Shelcomm, Inc., American Network, Inc.and HammerPay [USA], Inc.
+Added: is the parent company and sole shareholder of Hammer Wireless Corporation, Hammer Fiber Optic Investments Ltd, 1stPoint Communications, LLC, Endstream Communications, LLC, Shelcomm, Inc., American Network, Inc.
+Added: and HammerPay [USA], Inc.
The company is also the beneficial owner of Hammer Wireless SL.
2 unchanged sentences
All significant intercompany accounts and transactions have been eliminated.
−Removed: Hammer Fiber Optics Investments, Ltd and Open Data Centers, LLC have been discontinued and are reported on a summarized basis in consolidation.
+Added: Hammer Fiber Optics Investments, Ltd and Open Data Centers, LLC and Hammer Wireless (SL) Ltd have been discontinued and are reported on a summarized basis in consolidation.
Open Data Centers was dissolved on December 30, 2020.
−Removed: The discontinued operations continue to have assets valued greater than zero because there is a commitment for equipment that has yet to be manufactured that is considered by management to be of value in future deployments either in the Company’s existing telecommunications business unit, or potentially in new deployments on the African continent in support of the HammerPay, which is part of the financial technologies business unit.
+Added: Segment Information
+Added: Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (“CODM”), or decision-making group, in making decisions on how to allocate resources and assess performance.
+Added: The Company has one operating segment.
Basic and Diluted Earnings (Loss) per Common Share
2 unchanged sentences
The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity.
−Removed: Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.
+Added: Diluted EPS considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an anti-dilutive effect.
+Added: Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company and the fact that the Company has a net loss for the periods presented.
As of July 31, 2023 and 2022, there were no common stock equivalents outstanding.
As of July 31, 2023 the Company had 600,000 shares of potentially dilutive warrants.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Recent accounting pronouncements
+Added: In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses.
+Added: This ASU added a new impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses.
+Added: Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses.
+Added: The CECL model applies to most debt instruments, trade receivables, lease receivables, financial guarantee contracts, and other loan commitments.
+Added: The CECL model does not have a minimum threshold for recognition of impairment losses and entities will need to measure expected credit losses on assets that have a low risk of loss.
+Added: The Company adopted this ASU on a prospective basis as of August 1, 2022, and the adoption of this guidance had no material impact on the consolidated financial statements.
In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40)”.
1 unchanged sentence
In addition, this ASU improves and amends the related EPS guidance.
−Removed: At present this does not impact our financial statements, but may in the future if there is conversion of certain notes.
−Removed: Management will continue to evaluate if this impacts our financial statements .
−Removed: No other accounting pronouncements are applicable.
+Added: The Company adopted this ASU on a prospective basis as of August 1, 2023.
+Added: The Company is currently evaluating any impact the adoption of this ASU might have on its consolidated financial statements.
Reclassifications
Certain reclassifications have been made to the financial statements to conform to the consolidated 2023 financial statement presentation.
−Removed: HAMMER FIBER OPTICS HOLDINGS CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: JULY 31, 2022 and 2021
−Removed: NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Accounts Receivable
5 unchanged sentences
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.
+Added: The allowance for doubtful accounts was approximately $ 11,000 and $ 0 as of July 31, 2023 and 2022.
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.
−Removed: 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.
−Removed: 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.
+Added: The Company has consistently sustained losses since its inception.
+Added: 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.
+Added: 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.
+Added: 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.
3 unchanged sentences
JULY 31, 2023 and 2022
+Added: NOTE 5 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS
+Added: Subsequent to the Company's filing of its Annual Report on Form 10-K for the year ended July 31, 2022, with the Securities and Exchange Commission on February 8, 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.
+Added: and February 17, 2022 Talos Victory Fund, L.P.
+Added: convertible notes.
+Added: Management determined that the Original Form 10-K does not give effect to $ 196,043 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.
+Added: Accordingly, the Company restates its consolidated financial statements in this Form 10-K as outlined further below.
+Added: Upon review of the Company's previously filed 10-K, the following errors were discovered and recorded:
+Added: Certain intellectual property (platform software) for the HammerPay subsidiary has been reclassified as an intangible asset.
+Added: Financing expense associated with the two convertible notes have been accrued and amortized instead of expensed in accordance with ASC 470-20-25.
+Added: Warrants issued in conjunction with two convertible notes have been valued in accordance with ASC 820-10 as clarified by ASU 2022-03.
+Added: The Balance Sheet, Statement of Operations and Statement of Cash Flows has been adjusted to reflect the change in warrant financing expenses and expenses associated with the convertible notes.
+Added: Adjustments to the fair value of the warrants has been reflected as other income.
+Added: "Management's Discussion and Analysis of Financial Condition and Results of Operations" has been modified to reflect the change in warrant financing expenses and expenses associated with the convertible notes.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 5 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (CONTINUED)
+Added: The following table sets forth the effects of the adjustments on affected items within the Company's previously reported consolidated balance sheets for the year ended July 31, 2022:
+Added: (As Restated)
+Added: Current Assets
+Added: Cash and cash equivalents
+Added: Accounts receivable
+Added: Security Deposits
+Added: Prepaid expenses
+Added: Total current assets
+Added: Property and equipment, net
+Added: Intangible and other assets
+Added: Assets from Discontinued Operations
+Added: LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
+Added: Current Liabilities
+Added: Accounts payable and accrued expenses
+Added: Loans payable
+Added: Warrant Liabilities
+Added: Deferred Revenue
+Added: Liabilities from Discontinued Operations
+Added: Total Liabilities
+Added: Stockholders' Equity (Deficit)
+Added: Common stock, $ 0.001 par value, 250,000,000 shares authorized 62,205,947 and 61,565,851 shares issued;
+Added: 60,452,612 and 59,812,506 shares outstanding at July 31, 2023 and 2022, respectively
+Added: Additional paid-in capital
+Added: Accumulated deficit
+Added: Total Stockholder's Equity (Deficit)
+Added: Total Liabilities and Stockholders' Equity (Deficit)
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 5 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (CONTINUED)
+Added: The following table sets forth the effects of the adjustments on affected items within the Company's previously reported consolidated statements of operations for the year ended July 31, 2022:
+Added: (As Restated)
+Added: Costs and expenses:
+Added: Cost of sales
+Added: Selling, general and administrative expenses
+Added: Depreciation expense
+Added: Total operating expenses
+Added: Operating loss
+Added: Other income (expense)
+Added: Interest expense
+Added: Warrant financing expense
+Added: Financing expenses
+Added: Warrant adjustment to fair value
+Added: Other expenses
+Added: Total other expenses
+Added: Income (loss) Before Discontinued Operations
+Added: Income (loss) From Discontinued Operations
+Added: Net income (loss)
+Added: Weighted average number of common shares outstanding - basic and diluted
+Added: Loss per share- basic and diluted
+Added: Continuing operations
+Added: Discontinued operations
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 5 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (CONTINUED)
+Added: The following table sets forth the effects of the adjustments on affected items within the Company's previously reported consolidated statements of cash flows for the year ended July 31, 2022:
+Added: (As Restated)
+Added: CASH FLOWS FROM OPERATING ACTIVITIES
+Added: Loss from discontinued operations
+Added: Adjustments to reconcile net loss to net cash provided by operating activities:
+Added: Gain on loan forgiveness
+Added: Depreciation expense
+Added: Warrant adjustment to Fair Value
+Added: Non-cash expense
+Added: Changes in operating assets and liabilities:
+Added: Accounts receivable
+Added: Security deposits
+Added: Prepaid expenses
+Added: Accounts payable
+Added: Deferred revenue
+Added: Net cash provided by (used in) operating activities- continuing operations
+Added: Net cash provided by (used in) operating activities- discontinued operations
+Added: Net cash provided by (used in) operating activities
+Added: CASH FLOWS FROM INVESTING ACTIVITIES
+Added: Purchase of property and equipment
+Added: Purchase of licenses
+Added: Acquisition of customer contracts
+Added: Net cash provided by (used in) investing activities- continuing operations
+Added: Net cash provided by (used in) investing activities- discontinued operations
+Added: Net cash provided by (used in) investing activities
+Added: CASH FLOWS FROM FINANCING ACTIVITIES
+Added: Repayment of loans
+Added: Proceeds from loans
+Added: Net cash provided by (used in) financing activities- continuing operations
+Added: Net cash provided by (used in) financing activities- discontinued operations
+Added: Net cash provided by (used in) financing activities
+Added: Net increase (decrease) in cash
+Added: Cash, beginning of period
+Added: Cash, end of period
+Added: SUPPLEMENTAL DISCLOSURES OF CASH FLOW ACTIVITIES:
+Added: Cash paid for interest
+Added: Cash paid for taxes
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 5 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (CONTINUED)
+Added: The specific explanations for the items noted above in the restated financial statements are as follows:
+Added: (1) After reexamination of transactions that occurred in 2022, the Company has reclassified certain intellectual property (platform software) owned by subsidiary HammerPay from property, plant and equipment to intangible assets on its financial statements for the year ended July 31, 2022.
+Added: (2) During February 2022, the Company entered into two convertible notes that included warrants exercisable for five years .
+Added: 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.
+Added: The Company recorded an additional expense of $ 196,043 in relation to the Warrant.
+Added: • Financing expense associated with these convertible notes have been accrued and amortized instead of expensed in accordance with ASC 470-20-25.
+Added: • 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 .
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
NOTE 6 - DISCONTINUED OPERATIONS
−Removed: 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.
+Added: Hammer Fiber Optics Investment Ltd ceased operations 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.
−Removed: Open Data Centers, LLC ceased operating in its Piscataway, NJ location in May 2020 and was classified as a discontinued operation.
+Added: Open Data Centers, LLC ceased operating in its Piscataway, NJ location in May 2020.
+Added: Hammer Wireless (SL) Ltd ceased operating in Sierra Leone in March 2020.
Reporting of the discontinued operations is in accordance with Accounting Standards Update No.
32 unchanged sentences
JULY 31, 2023 and 2022
−Removed: NOTE 6 - ACQUISITIONS
−Removed: 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 in exchange for 5,000,000 shares of the Company's Common Stock..
−Removed: 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.
−Removed: TFS has been renamed HammerPay [USA] Ltd.
−Removed: One Hundred Percent (100%) of the value of the acquisition has been allocated to the value of the HammerPay Remit Platform (formerly TFS Remit) and associated customer contracts with United Bank for Africa which have been previously disclosed via 8-K.
NOTE 7 - PROPERTY AND EQUIPMENT
5 unchanged sentences
The Company has $ 18,934 of recognized indefinite lived intangible assets, which consist of the ownership of Internet Protocol version 4 (IPv4) address blocks.
−Removed: The Hammer Wireless SL, Ltd.
−Removed: Subsidiary has been granted a nationwide telecommunications and wireless license in the country of Sierra Leone, for which it paid $ 218,584 .
−Removed: Hammer paid $ 42,500 to Wikibuli, Inc.
−Removed: in exchange for capital stock in Wikibuli, the operating company in Dominica.
−Removed: Hammer acquired the stock of Telecom Financial Services Limited ("TFS") for the acquisition one hundred percent ( 100 %) of its stock for 5,000,000 shares of the Company's Common Stock.
−Removed: This asset was valued at $ 4,250,500 .
These assets are not amortized and are evaluated routinely for potential impairment.
1 unchanged sentence
NOTE 9 - RELATED PARTY TRANSACTIONS
−Removed: 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).
−Removed: Under the agreement, the lender advanced $ 100,000 to the Company for the purpose of providing working capital.
−Removed: The loan carries an annual interest rate of 3 %.
−Removed: 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.
−Removed: 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.
−Removed: The $ 2,400,000 note matured on January 4, 2019 .
−Removed: The terms consist of ten principal and interest payments due
−Removed: in the amount of $ 300,000 for total payments of $ 3,000,000 .
−Removed: The Company is currently in default on this loan.
−Removed: To date, the Company has made payments on this note amounting to $ 725,831 .
−Removed: The payments were applied to interest accrued as of the time of payment as well as to principal.
−Removed: The principal balance was $ 2,294,067 at July 31, 2019 and 2018.
−Removed: 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 %.
−Removed: In November 1, 2018, as a term of the Stock Purchase Agreements Amendment Number 1 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.
−Removed: These notes were converted to equity at $ 3 per share of common stock during the period ended July, 31, 2021 in the amount of 1,757,500 shares of Common Stock.
−Removed: On February 12, 2018, the Company entered into a convertible promissory note for the sum of $ 103,000 .
−Removed: On June 19, 2018, the note was settled in full on the company's behalf by a Director.
−Removed: The settlement included a prepayment penalty for a full settlement amount of $ 132,433 .
−Removed: The difference between the carrying value of the loan and the full settlement amount ($ 29,433 ) was recorded as interest expense.
−Removed: HAMMER FIBER OPTICS HOLDINGS CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: JULY 31, 2022 and 2021
−Removed: NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)
−Removed: On April, 9 2018, the Company received an additional $ 20,000 deposit from a family member of a member of the Board of Directors.
−Removed: The amount was intended as additional working capital.
−Removed: The Company anticipates execution of a loan agreement relative to this advance.
−Removed: This note was converted at $ 3 per share of the Company’s Common Stock during the period ended July 31, 2021 as part of the terms of the Stock Purchase Agreements Amendment Number 1 as part of the acquisition of Open Data Centers, LLC, 1stPoint Communications, LLC and Endstream Communications, LLC.
−Removed: 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.
−Removed: During the current fiscal year ending on July 31, 2020, the Company entered into convertible notes with a related party on April 20 th and May 5 th 2020 in the amounts of $ 36,300 , and $ 12,000 respectively.
+Added: During the current fiscal year ending on July 31, 2020, the Company entered into convertible notes with a the Chief Executive Officer and a relation of the Chief Executive Officer on April 20th and May 5th 2020 in the amounts of $ 36,300 , and $ 12,000 respectively.
The $ 12,000 note was paid on May 12th, 2020.
1 unchanged sentence
$ 4,500 has been repaid.
−Removed: The Company entered into a convertible note with two related parties on August 24, 2019 in the amount of $ 12,000 and $ 6,000 respectively.
−Removed: 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.
−Removed: On April 6, 2020, the Company entered into a promissory note for the sum of $ 36,300 with a related party.
−Removed: 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.
−Removed: The note bears interest at a rate of 6 %, payable quarterly .
−Removed: 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.
−Removed: These notes bear interest at a rate of 6 %, payable
+Added: 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.
+Added: Any interest may be accrued as either cash or stock at the option of the Company.
+Added: 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.
+Added: On September 1, 2020, the Company entered into a promissory note for the sum of $ 100,000 with a non-executive director.
+Added: The note bears interest at a rate of 6 %, payable at the end of the term , but has bee n waived by the lending party.
+Added: 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 non executive director.
+Added: These notes bear interest at a rate of 6 %,
+Added: payable at the end of the term
and may be convertible into common stock at the Company's option.
−Removed: On February 26, 2021, March 9, 2021 and March 15, 2021 the Company entered into promissory notes for the sums of $ 25,000 , $ 100,000 and $ 25,000 respectively, with a related party.
−Removed: These notes are bear interest at a rate of 6 % payable
−Removed: unless forgiven by the note holder and may be converted into common stock at the Company’s option.
−Removed: On January 15, 2022 the Company entered into a promissory note for the sum of $ 25,000 with a related party.These notes bear interest at a rate of 6 %, annually, to be expensed at the end of the note upon conversion unless forgiven by the 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 under the same terms as the note on January 15, 2022.
−Removed: As of July 31, 2022, all of the related party payables are reported as current liabilities in the Consolidated Balance Sheet.
+Added: Interest has been waived by the lender.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 9 - RELATED PARTY TRANSACTIONS (CONTINUED)
+Added: 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.
+Added: 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.
+Added: The interest has been waived by the lender.
+Added: On January 15, 2022 the Company entered into a promissory note for the sum of $ 25,000 with a non-executive director.
+Added: These notes bear interest at a rate of 6 %, 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 a relation of the Chief Executive Officer of 1stPoint Communications, under the same terms as the note on January 15, 2022.
+Added: Interest has been waived by the lender on all notes.
+Added: On February 28, 2022 and March 7, 2022 the Company entered into a promissory note totaling $ 25,000 with a non-executive director.
+Added: 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.
+Added: On June 22, 2022 and July 28, 2022 the Company entered into a promissory note totally $ 27,000 with a non-executive director.
+Added: 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.
+Added: On November 14, 2022 the Company entered into a promissory note totally $ 26,500 with a non-executive director.
+Added: 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.
+Added: On March 29, 2023 the Company entered into a promissory note totally $ 9,000 with a non-executive director.
+Added: 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.
+Added: On May 5, 2023 the Company entered into a promissory note totally $ 25,000 with a non-executive director.
+Added: 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.
+Added: On May 23, 2023 the Company entered into a promissory note totally $ 25,000 with a non-executive director.
+Added: 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.
+Added: On June 7, 2023 the Company entered into a promissory note totally $ 25,000 with a non-executive director.
+Added: 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.
+Added: On June 13, 2023 the Company entered into a promissory note totally $ 16,500 with a non-executive director.
+Added: 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.
+Added: On July 6, 2023 the Company entered into a promissory note totally $ 25,000 with a non-executive director.
+Added: 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.
+Added: As of July 31, 2023, all of the related party payables are reported as current liabilities in the Consolidated Balance Sheet and all interest has been forgiven by the holders of all promissory notes from all related parties.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
NOTE 10 - CONVERTIBLE DEBT
−Removed: The company has convertible notes with related parties in the amounts of $ 24,253 , $ 161,300 , $ 12,000 , $ 6,000 , $ 7500 , $ 36,600 and $ 295,500 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.
+Added: As of 31 July 2023, The company has convertible notes with related parties in the amounts of $ 24,253 , $ 161,300 , $ 12,000 , $ 6,000 , $ 7500 , $ 36,600 and $ 472,500 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.
+Added: 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.
11 unchanged sentences
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.
−Removed: HAMMER FIBER OPTICS HOLDINGS CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: JULY 31, 2022 and 2021
−Removed: NOTE 10 - CONVERTIBLE DEBT (CONTINUED)
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").
3 unchanged sentences
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.
−Removed: The Talos Note bears interest at a rate of 12 % per annum and matures on February 17, 2023 .
−Removed: Any amount of principal or interest on the Talos 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.
−Removed: The Talos Note may not be prepaid in whole or in part except as provided in the Talos Note by way of conversion at Talos' option.
+Added: Talos converted the note into 512,696 shares of HMMR common stock on October 4, 2022.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
NOTE 11 - INCOME TAXES
18 unchanged sentences
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.
−Removed: HAMMER FIBER OPTICS HOLDINGS CORP.
−Removed: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
−Removed: JULY 31, 2022 and 2021
−Removed: NOTE 11 - INCOME TAXES (CONTINUED)
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.
2 unchanged sentences
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.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 11 - INCOME TAXES (CONTINUED)
As of July 31, 2023 and 2022, the Company has no unrecognized income tax benefits.
5 unchanged sentences
NOTE 12 - STOCKHOLDERS' EQUITY
+Added: On October 4, 2022, Talos converted the promissory convertible note into 512,696 shares of the Company’s common stock (see Note 10).
Treasury Stock
−Removed: During the year ended July 31, 2022, the Company issued 5,000,000 shares as part of a share exchange agreement with Telecom Financial Services Limited ("TFS") for the acquisition one hundred percent ( 100 %) of its stock.
−Removed: 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.
−Removed: The acquisition of TFS closed on January 3, 2022.
−Removed: TFS has been renamed HammerPay [USA] Ltd.
+Added: The balance of Company Treasury Stock was unchanged during the period.
+Added: Unissued Stock
+Added: On March 6,2023, Mast Hill amended the terms of its promissory note.
+Added: The terms included the issuance of 475,000 shares of the Company’s common stock.
+Added: The stock had not been issued until after July 31, 2023.
+Added: The fair value of the stock at $ 105,925 has been recognized as a liability on the consolidated balance sheet as of July 31, 2023.
NOTE 13 - COMMITMENTS AND LEASES
Hammer does not currently have any material long term lease obligations.
+Added: All leases are currently month-to-month and have no obligations pursuant to ASC 842.
+Added: There are two month-to-month tenancy agreements for office space which are less than $2,000 per month.
NOTE 14 - FOREIGN CURRENCY
−Removed: We transact business in various foreign currencies including the Euro and the Leone.
+Added: We transact business in various foreign currencies including the Euro.
In general, the functional currency of a foreign operation is the local country's currency.
12 unchanged sentences
Hammer Fiber Optics Inv, Ltd.
−Removed: The matter of 15 Corporate Place, LLC v.
−Removed: Open Data Centers, LLC settled for $ 25,000 plus acceptance of the security deposit which has already been written down in assumption of this outcome.
−Removed: The final settlement was less than the $ 35,000 originally offered.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 15 - CLAIMS (CONTINUED)
Cross River Fiber has advanced its claim against Hammer Fiber Optics Investments, Ltd.
2 unchanged sentences
Levitt personally and Cross River Fiber, nor is there any security under the agreement between Cross River Fiber and Hammer Fiber Optics Investments, Ltd.
−Removed: After discovery in the claim against Hammer Fiber Optics Holdings Corp and its subsidiaries, Hammer has made a motion for Summary Judgement to dismiss the claim on the basis of the lack of evidence that any entity other than Hammer Fiber Optics Investments, Ltd.
−Removed: was a party to the claim.
−Removed: The claims in this matter are similar to those made by Zayo Group and Crown Castle Fiber, which were both settled.
−Removed: As a result of the expected outcome, management has made no allowance for loss in these matters.
+Added: After discovery in the claim against Hammer Fiber Optics Holdings Corp and its subsidiaries.
+Added: 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.
+Added: An award was given to Cross River against one of the related parties to the claim of $ 25,000 .
+Added: The judgement has not yet been entered.
NOTE 16 - WARRANTS
−Removed: On February 11, 2022, the Company issued 150,000 warrants to Mast Hill Fund, L.P.
−Removed: in conjunction with convertible debt.
+Added: On February 11, 2022, the Company issued a purchase warrant to Mast Hill Fund, L.P.
+Added: for 150,000 shares of the Company's common stock in conjunction with convertible debt.
The warrants are exercisable for 5 years at $ 1.50 per share.
The warrants were evaluated for purposes of classification between liability and equity.
−Removed: The warrants do not contain features that would require a liability classification and are therefore considered equity.
−Removed: On February 11, 2022, the Company issued 150,000 warrants to Mast Hill Fund, L.P.
−Removed: in conjunction with convertible debt.
+Added: Because the warrants were issued in conjunction with a debenture the warrants have been considered debt pursuant to ASC 820 Topic 10.
+Added: On February 11, 2022, the Company issued a purchase warrant for to Mast Hill Fund, L.P.
+Added: for 150,000 shares of the Company's common stock in conjunction with convertible debt.
The warrants are exercisable for 5 years at $ 3.00 per share.
+Added: The Company determined the Warrants should be classified as a liability as the warrants are redeemable for cash in the event of a fundamental transaction, as defined in the warrant agreement, which includes a change in control.
+Added: On February 17, 2022, the Company issued a purchase warrant to Talos Victory Fund, LLC for 75,000 shares of the Company's common stock in conjunction with convertible debt.
+Added: The warrants are exercisable for 5 years at $ 1.50 per share.
The warrants were evaluated for purposes of classification between liability and equity.
−Removed: The warrants do not contain features that would require a liability classification and are therefore considered equity.
+Added: Because the warrants were issued in conjunction with a debenture the warrants have been considered debt pursuant to ASC 820 Topic 10.
+Added: On February 17, 2022, the Company issued a purchase warrant to Talos Victory Fund, LLC for 75,000 shares of the Company's common stock in conjunction with convertible debt.
+Added: The warrants are exercisable for 5 years at $ 3.00 per share.
+Added: The warrants were evaluated for purposes of classification between liability and equity.
+Added: Because the warrants were issued in conjunction with a debenture the warrants have been considered debt pursuant to ASC 820 Topic 10.
The Black Scholes model was used to determine the fair price of the warrants, including the use of the share price, exercise price, term, volatility, risk free interest rate and the dividend rate.
−Removed: The price of the warrants was considered immaterial and because the strike price of both warrants has not been exceeded in the prior three periods it was determined by management that the price of the option should be valued at $ 0.000 /share.
+Added: The warrants were priced in each quarter and the carrying cost of the warrant adjusted in accordance with the model.
+Added: HAMMER FIBER OPTICS HOLDINGS CORP.
+Added: NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
+Added: JULY 31, 2023 and 2022
+Added: NOTE 17 - OTHER INCOME (EXPENSE) AND DISCONTINUED AND CONTINUING OPERATIONS
+Added: Discontinued Operations
+Added: The remaining assets of the operations of Hammer Fiber Optics Investments, Ltd in Atlantic County, NJ have been written down and considered a loss from discontinued operations.
+Added: The loss from discontinued operations was $ 1,013,600 .
+Added: This is a one-time write-down and will not recur.
+Added: The remaining assets of the operations of Hammer Wireless [SL] Ltd in Sierra Leone have been written down and considered a loss from discontinued operations.
+Added: The loss from discontinued operations was $ 40,506.80 .
+Added: This is a one-time write-down and will not recur.
+Added: Manage 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.
+Added: As a result management adjusted the deferred revenue from prior periods as Other Income.
+Added: Adjustments to the current period were considered revenues in the period.
+Added: The Other Income from prior periods was $ 135,037.12 .
+Added: Management evaluated revenue from Endstream Communications and recognized a customer prepayment of $ 5.38 .These are not expected to recur.
+Added: 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.
+Added: The conversion price was above the market price at closing of $ 0.355 per share.
+Added: Therefore the Company recognized a gain of $ 115,357 on conversion.
+Added: On March 23, 2023 Mast Hill exercised its rights to convert interest expense and transactions fees in the amount of $ 73,897.80 at $ 0.58 per share of the Company’s common stock.
+Added: The conversion price was above the market price at closing of $ 0.489 per share.
+Added: Therefore the Company recognized a gain of $ 11,467.31 on conversion.
+Added: Financing Expenses
+Added: The company recognized financing expenses associated with notes payable to Synergy Finance of $ 18,803.59 and $ 27,598.86 to Forward Financing.
+Added: The company recognized $ 209,129.91 in financing expenses associated with the Mast Hill note and Talos convertible notes.
+Added: Other Expenses
+Added: The company recognized a loss of $ 170,368 on currency exchange in association with the discontinuation of the Hammer Wireless SL business unit.
+Added: 1stPoint and Endstream recognized a loss of $ 3,771 and $ 5.52 respectively.
+Added: NOTE 18 - LOANS AND FINANCING AGREEMENTS
+Added: On March 20, 2023, 1stPoint Communications entered into a financing agreement with Greenbox Capital, also known as Synergy Finance in the amount of $ 58,000 and $ 2,320 in transaction fees.
+Added: On July 31, 2023 the principal remaining was $ 17,234.25
+Added: On February 26, 2021 Endstream Communications entered into a financing agreement with Forward Financing in the amount of $ 40,000 .
+Added: The amount was refinanced on March 25, 2022 and again on November 16 2022 in the amount of $ 141,750 .
+Added: On July 31, 2023 the principal remaining was $ 40,234.21 .
NOTE 19 - SUBSEQUENT EVENTS
−Removed: 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").
−Removed: 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.
−Removed: The Talos Note had an original issue discount of $ 27,500 , resulting in gross proceeds to the Company of $ 247,500 .
−Removed: Talos reserved the right at any time to convert all or any part of the outstanding and unpaid principal amount and interest of the Talos Note into common stock, subject to a 4.99 % equity blocker, at a conversion price of $ 0.58 per share under the rights pursuant to the terms defined in their entirety by the Talos SPA filed by the Company in a Current Report on Form 8-K on February 23, 2022.
−Removed: On October 4, 2022 Talos informed the Company that it had elected to convert the $ 275,000 principal amount of the Note together with $ 20,613.68 interest and $ 1,750.00 in fees totaling $ 297,363.68 into 512,696 shares of Common Stock to be issued pursuant to the conversion of the Note as set forth in the Talos SPA.
−Removed: On October 19, 2022, the Company announced that it has entered into a non-binding letter of intent with shareholders of Mobile Finance Group Ltd trading under the brand name of Wallet Factory, a provider of digital finance services and enterprise-grade e-Wallet platforms.
−Removed: The LOI contemplates that the parties will enter into a definitive agreement pursuant to which HMMR will acquire a controlling interest in the outstanding common stock of Mobile Finance Group Ltd ("Wallet Factory").
+Added: Since July 31, 2023 the Company has entered into several promissory notes with a non-executive director.
+Added: These notes total $ 406,035 .
+Added: The interest on these note has been forgiven by the note holder and may be converted into the Company's common stock at the Company's option.
+Added: 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.
+Added: 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 .
+Added: The November 6, 2023 note has a principal of $ 100,000 .
+Added: 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 .
+Added: The note on January 29, 2024 has a principal amount of $ 50,000 .
+Added: On August 23, 2023 the Company issued 475,000 shares to Mast Hill Fund pursuant to the amendment of the terms of its promissory note.
+Added: The fair value of these shares is reflected as a liability (unissued stock).
Management has reviewed the subsequent events and there is no material impact on the current financial statements or the valuation of the business.
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During the years ending July 31, 2019, 2020 and 2021, respectively and the subsequent interim periods through October 31, 2022 and to present there were no (1) disagreements with Boyle CPA on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedures, or (2) reportable events under Item 301(a)(1)(v) of Regulation S-K.
−Removed: On November 14, 2022, , the Company unanimously passed a resolution to appoint Fruci and Associates II, PLLC as our new independent public accounting firm.
+Added: On November 14, 2022, the Board of Directors of the Company unanimously passed a resolution to appoint Fruci and Associates II, PLLC as our new independent public accounting firm.
CONTROLS AND PROCEDURES
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(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 Shelcomm;
−Removed: 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:
−Removed: (i) 665,808 shares issued to (pursuant to the September 11, 2018 Purchase Agreement providing for our 100% purchase ofEndstream Communications, LLC ("Endstream), which includedErik Levitt's respectiveownership of Endstream;
+Added: 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.
+Added: 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:
+Added: (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.
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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.
−Removed: No other executive officer received total annual salary and bonus compensation in excess of $100,000.
SUMMARY COMPENSATION TABLE 1
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For purposes of determining director independence, we have applied the definitions set out in NASDAQ Rule 5605(a)(2).
−Removed: The OTCBB on which shares of the Company's Common Stock are quoted does not have any director independence requirements.
+Added: The OTCPK 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.
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HAMMER FIBER OPTICS HOLDINGS CORP
−Removed: February 8, 2023
−Removed: Principal Executive Officer
−Removed: February 8, 2023
+Added: Februar y 16, 2024
/s/ Erik Levitt
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.