HAMMER TECHNOLOGY HOLDINGS CORP. 10-Q

ITEM 1. FINANCIAL STATEMENTS The following unaudited interim financial statements of Hammer Technology Holdings Corp. and Subsidiaries (referred to herein as the "Company," "we," "us" or "our") are included in this Quarterly Report on Form 10-Q (the "Quarterly Report"). The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States and the rules of the Securities and Exchange Commission (the "SEC"), In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the periods presented have been reflected herein. The results of operations for the periods presented are not necessarily indicative of the results to be expected for the full year. INDEX TO FINANCIAL STATEMENTS Page CONTENTS Unaudited Condensed Consolidated Balance Sheets 2 Unaudited Condensed Consolidated Statements of Operations 3 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) 4 Unaudited Condensed Consolidated Statements of Cash Flows 5 Notes to Unaudited Condensed Consolidated Financial Statements 6 1 HAMMER TECHNOLOGY HOLDINGS CORP. CONDENSED CONSOLIDATED BALANCE SHEETS October 31, July 31, 2025 2025 (unaudited) ASSETS Current Assets Cash and cash equivalents $ 40,828 $ 18,054 Prepaid expenses - 1,250 Total current assets 40,828 19,304 Property and equipment, net 385 520 Intangible assets, net 184,769 215,710 Total assets $ 225,982 $ 235,534 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities Accounts payable and accrued expenses $ 132,000 $ 184,077 Loans payable 24,253 24,253 Convertible notes payable - related parties - 61,800 Warrant liabilities 44,400 63,000 Current liabilities from discontinued operations 544,533 544,533 Total current liabilities 745,186 877,663 Convertible notes payable, noncurrent - related parties 295,946 85,946 Total liabilities 1,041,132 963,609 Commitments and contingencies (Note 9) Stockholders' Deficit Common stock, $ 0.001 par value, 250,000,000 shares authorized 73,310,489 shares issued, and 69,057,154 shares outstanding at October 31, 2025 and July 31, 2025 73,311 73,311 Treasury stock ( 4,253,335 shares held at October 31, 2025 and July 31, 2025) ( 625,000 ) ( 625,000 ) Additional paid-in capital 31,715,220 31,653,420 Accumulated deficit ( 31,978,681 ) ( 31,829,806 ) Total Stockholder's Deficit ( 815,150 ) ( 728,075 ) Total Liabilities and Stockholders' Deficit $ 225,982 $ 235,534 See accompanying notes to the unaudited condensed consolidated financial statements. 2 HAMMER TECHNOLOGY HOLDINGS CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the Three Months Ended October 31, 2025 2024 Operating expenses Selling, general and administrative expenses $ 134,032 $ 186,559 Depreciation and amortization expense 31,075 169,027 Total operating expenses 165,107 355,586 Loss from operations ( 165,107 ) ( 355,586 ) Other income (expense) Interest expense ( 2,368 ) ( 152 ) Gain (loss) on change in fair value of warrant liability 18,600 ( 56,937 ) Total other income (expense) 16,232 ( 57,089 ) Net loss from continuing operations before income taxes ( 148,875 ) ( 412,675 ) Provision for income taxes - - Net loss from continuing operations ( 148,875 ) ( 412,675 ) Net loss from discontinued operations, after taxes Net loss from discontinued operations - ( 23,264 ) Total net loss from discontinued operations, after taxes - ( 23,264 ) Net loss $ ( 148,875 ) $ ( 435,969 ) Net loss from continuing operations per share, basic and diluted $ ( 0.00 ) $ ( 0.01 ) Net loss from discontinued operations per share, basic and diluted $ 0.00 $ ( 0.00 ) Total net loss per share, basic and diluted $ ( 0.00 ) $ ( 0.01 ) Weighted average number of common shares outstanding - basic and diluted 73,310,489 63,155,947 See accompanying notes to the unaudited condensed consolidated financial statements. 3 HAMMER TECHNOLOGY HOLDINGS CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED) Additional Total Common Stock Treasury Stock Paid-in Accumulated Stockholders' Shares Amount Shares Amount Capital Deficit Deficit Balance, July 31, 2024 63,155,947 $ 63,156 1,753,335 $ - $ 28,007,940 $ ( 29,032,413 ) $ ( 961,317 ) Net loss - - - - - ( 435,969 ) ( 435,939 ) Balance, October 31, 2024 63,155,947 $ 63,156 1,753,335 $ - $ 28,007,940 $ ( 29,468,352 ) $ ( 1,397,256 ) Balance, July 31, 2025 73,310,489 73,311 4,253,335 ( 625,000 ) 31,653,420 ( 31,829,806 ) ( 728,075 ) Capital contribution due to related party debt forgiveness - - - - 61,800 - 61,800 Net loss - - - - - ( 148,875 ) ( 148,875 ) Balance, October 31, 2025 73,310,489 $ 73,311 4,253,335 $ ( 625,000 ) $ 31,715,220 $ ( 31,978,681 ) $ ( 815,150 ) See accompanying notes to the unaudited condensed consolidated financial statements. 4 HAMMER TECHNOLOGY HOLDINGS CORP. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Three Months Ended October 31, 2025 2024 Cash flows from operating activities: Net loss from continuing operations $ ( 148,875 ) $ ( 412,675 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 135 135 Amortization 30,940 168,892 Change in fair value of warrant liability ( 18,600 ) 56,937 Changes in operating assets and liabilities: Prepaid expenses 1,250 ( 5,000 ) Accounts payable and accrued expenses ( 52,076 ) ( 129,126 ) Net cash used in operating activities: $ ( 187,226 ) $ ( 320,837 ) Cash flows from investing activities: Net cash used in investing activities: $ - $ - Cash flows from financing activities: Proceeds from related party convertible notes 210,000 995,806 Repayment of notes payable - ( 682,000 ) Net cash provided by financing activities: $ 210,000 $ 313,806 Cash flows from discontinued operations: Cash used in operating activities - discontinued operations - ( 18,954 ) Cash used in investing activities - discontinued operations - ( 1,449 ) Cash provided by financing activities - discontinued operations - 14,080 Net cash used in discontinued operations: $ - $ ( 6,323 ) Net increase (decrease) in cash and cash equivalents 22,774 ( 13,354 ) Cash and cash equivalents from continuing operations - beginning of period 18,054 - Cash and cash equivalents from discontinued operations - beginning of period - 74,133 Cash and cash equivalents at beginning of period $ 18,054 $ 74,133 Cash and cash equivalents from continuing operations - end of period 40,828 26,052 Cash and cash equivalents from discontinued operations - end of period - 34,727 Cash and cash equivalents at end of period $ 40,828 $ 60,779 Supplemental Disclosure of Cash Flow Information Cash paid during the period: Interest $ - $ - Income Tax $ - $ - Supplemental Disclosure of Non-Cash Investing and Financing Activities Capital contribution due to related party debt forgiveness $ 61,800 $ - See accompanying notes to the unaudited condensed consolidated financial statements. 5 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Hammer Technology Holdings Corp. (OTCPK:HMMR) is a company focused on sustainable shareholder value investing in both financial services technology and wireless telecommunications infrastructure. Hammer Technology Holdings Corp (the "Company" or "Hammer") is incorporated in the state of Nevada. As of the filing of the accompanying financial statements, the Company had one wholly-owned active subsidiary, Hammerpay USA Ltd. Additionally, the Company had two wholly-owned inactive subsidiaries: Hammer Fiber Optics Investment Ltd., and Hammer Wireless (SL) Limited. Effective on September 3, 2025, the Company amended its Articles of Incorporation, as amended with the State of Nevada to effect a change of the Company's name from "Hammer Fiber Optics Holdings Corp." to "Hammer Technology Holdings Corp." 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. Hammerpay USA Ltd. 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. Hammer Fiber Optics Investment Ltd ceased operations on October 31, 2018 when Verizon Communications, LLC terminated the spectrum lease agreement. During the year ended December 31, 2020, the Company's board of directors approved the discontinuation of the operations of the Company's subsidiary Open Data Centers LLC. The operations of Open Data Centers, LLC were discontinued and the Company shut down its operations in its Piscataway, NJ data center. Open Data Centers, LLC was dissolved on December 30, 2020. On July 31, 2023 the Company's board of directors approved the discontinuation of the operations of Hammer Wireless (SL) Limited, the Company's data communications service in Sierra Leone. The operations were discontinued in March 2020 and all assets have been written down. On August 7, 2024, the Company authorized and executed a Purchase Agreement with Viper Networks, Inc. ("Viper") with the intention to sell the Company's telecommunications assets to Viper. The assets include 1st Point Communications LLC, and all its subsidiaries, Endstream Communications LLC, American Networks Inc., and a 10 % ownership interest in Wikibuli Inc. in exchange for returning 2,500,000 (2.5 Million) shares of the Company's common stock held by Viper. The transaction closed on November 1, 2024. The returned shares had a value of $ 0.25 per share on November 1, 2024 resulting in a total consideration value of $ 625,000 . With the divestiture of the telecommunications assets, the Company has begun to concentrate its efforts on its fintech initiatives. HammerPay is a scalable, mobile-first financial services technology platform featuring an advanced digital wallet and neo-banking system, designed for global deployment in both developed and emerging markets. NOTE 2 - 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"). Principles of Consolidation Hammer Technology Holdings Corp. is the parent company and sole shareholder of HammerPay [USA], Ltd. The financial statements for Hammer Technology Holdings Corp. and its wholly-owned subsidiary are reported on a consolidated basis. All significant intercompany accounts and transactions have been eliminated. Its subsidiaries Hammer Fiber Optics Investments, Ltd., Hammer Wireless - SL, Ltd and its former subsidiary Open Data Centers, LLC are discontinued and are considered discontinued operations. 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. Significant estimates in the accompanying financial statements include the valuation of intangible assets and the valuation of warrant liabilities 6 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) 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. For the three months ended October 31, 2025 the Company incurred a net loss from continuing operations of $ 148,875 , cash used in operating activities of $ 187,226 , and $ 0 of revenue generated from continuing operations. As of October 31, 2025 the Company had a working capital deficiency of $ 704,358 . Additionally, 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 the one year period following the issuance date 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 raise financing from third parties. No assurance can be given that the Company will be successful in these efforts. Management's plans are not expected to alleviate the substantial doubt about the Company's ability to continue as a going concern. The consolidated 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 continues to actively address this condition by seeking to raise additional funding through debt and equity financing until such time that ongoing revenues can sustain the business. The Company is also pursuing strategies to increase the amount of revenue generated, reduce the costs incurred, and to reduce the Company's outstanding liabilities. Segment Reporting The Company adopted ASU 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures as of August 1, 2024. The Company operates in one operating segment, and therefore one reportable segment, 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. The Company's Chief Executive Officer is the Chief Operating Decision Maker ("CODM"). The CODM manages the Company's business activities as a single operating and reportable segment at the consolidated level. Accordingly, the CODM uses consolidated net loss from continuing operations to allocate resources and assess performance. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. Cash and cash equivalents 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. The Company maintains its cash balances with various banks. The balances are insured by the Federal Deposit Insurance Corporation ("FDIC") up to $ 250,000 . The Company monitors the cash balances held in its bank accounts, and as of October 31, 2025 and July 31, 2025, the Company did not have any cash balances which exceeded the insured amounts. Property and equipment Property and equipment is stated at cost. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets. Expenditures for repairs and maintenance are charged to expense as incurred. For assets sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any related gain or loss is reflected in the consolidated statement of operations or the period in which the disposal occurred. The Company computes depreciation utilizing estimated useful lives, as stated below: Property and Equipment, net categories Estimated Useful Life Computer and telecom equipment 5 Years Management regularly reviews property and equipment for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management's assessment, there were no indicators of impairment of the Company's property and equipment as of October 31, 2025 and July 31, 2025, respectively. Impairment of long-lived assets The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted cash flows to be generated by the asset. If such assets are considered impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company did not recognize any impairment losses during the three months ended October 31, 2025 and 2024. 7 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) Intangible Assets The Company's intangible assets with finite lives, including customer contracts and internal-use software, are amortized over their estimated useful lives. The Company assess all amortizable intangible assets and other long-lived assets for impairment whenever circumstances or changes suggest the asset's carrying amount may not be recoverable. If impairment indicators are present, the Company evaluates recoverability by comparing the carrying amount of the asset group to its anticipated net undiscounted cash flows. Should these cash flows be less than the carrying amount, the Company proceeds to determine the asset's fair value and record any necessary impairment. Each year, the Company also re-evaluates the useful life of these intangible assets to decide if adjustments to their remaining useful lives are warranted based on current events and conditions (Note 5 - Intangible Assets, Net). Internal-Use Software The Company capitalizes costs incurred in the development or acquisition of software for internal use in accordance with ASC 350-40, Intangibles-Goodwill and Other-Internal-Use Software . Internal-use software is defined as software acquired, developed, or modified solely to meet the Company's internal needs, with no substantive plan to market the software externally. Costs are capitalized during the application development stage, which begins once the preliminary project stage is complete and management commits to funding the project. Capitalized costs may include external direct costs of materials and services, payroll and payroll-related costs for employees directly associated with the project, and interest costs incurred during development. Costs incurred during the preliminary project stage (e.g., planning, feasibility studies, vendor selection) and the post-implementation/operation stage (e.g., training, maintenance, data conversion) are expensed as incurred. Capitalized software costs are amortized on a straight-line basis over their estimated useful lives. The Company reviews the carrying value of internal-use software for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Leases The Company accounts for its lease contracts in accordance with the guidance in ASC 842. The Company determines if an arrangement is a lease at inception. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. For leases that do not provide an implicit rate, the Company uses its incremental borrowing rate. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. All leases that have lease terms of one year or less are considered short-term leases, and therefore are not recorded through a ROU asset or liability. As of October 31, 2025 and July 31, 2025, the Company did not have any leases with terms greater than 12 months. The Company does currently hold a month-to-month tenancy agreements for office space costing less than $2,000 per month. Revenue recognition The Company accounts for revenues under ASC 606, "Revenue from Contracts with Customers" (Topic 606). This standard 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 ASC 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, credit losses, and other allowances based on its historical experience. The Company did not generate any revenues for the three months ended October 31, 2025 or 2024. Income taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, "Accounting for Income Taxes". The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. As of October 31, 2025 and July 31, 2025, the Company did not have any amounts recorded pertaining to uncertain tax positions. 8 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The fair value of the warrants liability was estimated using a Black-Scholes model. Convertible Notes The Company evaluates its convertible notes to determine if those convertible notes or embedded components of those contracts qualify as derivative liabilities, to be separately accounted for in accordance with ASC 815 " Derivatives and Hedging " ("ASC 815"). Further, the Company evaluates its convertible notes in accordance with ASC 480 "Distinguishing Liabilities from Equity" ("ASC 480") for classification as a liability or as equity. This assessment, which requires the use of professional judgment, is conducted at the time of the instrument's issuance, and as of each subsequent balance sheet date while the instruments are outstanding. Treasury Stock The Company utilizes the cost method of accounting to value treasury stock when repurchasing stock. Repurchases are reflected as reductions of stockholders equity at cost. Treasury stock is not considered outstanding and is excluded from the calculation of basic and diluted weighted average shares outstanding (Note 8 - Stockholders' Equity). Basic and diluted income (loss) per share Basic income (loss) per common share is calculated by dividing net income (loss) available to common shareholders by the number of weighted average common shares issued and outstanding. Diluted income (loss) per common share is calculated by dividing net income (loss) available to common shareholders by the weighted average number of common shares issued and outstanding for the period, plus amounts representing the dilutive effect from the conversion of the convertible notes, as applicable. The Company calculates dilutive potential common shares for convertible securities using the as-if-converted method, which assumes the convertible securities will be converted as of the beginning of the period or the issuance date if later. The Company also calculates dilutive potential common shares using the treasury stock method for options and warrants. The following potentially dilutive securities have been excluded from computations of dilutive weighted average shares outstanding as they would be anti-dilutive: October 31, 2025 October 31, 2024 Warrants 300,000 300,000 Convertible Notes – Related Parties - 12,529,495 Convertible Notes 2,666,180 - Total 2,966,180 12,829,495 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: 9 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) Level 1 - quoted prices in active markets for identical assets or liabilities Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example cash flow modeling inputs based on assumptions) The Company has no assets or liabilities valued at fair value on a recurring basis. Level 3 - Unobservable inputs reflecting management's assumptions about the inputs used in pricing the asset or liability. Financial assets and liabilities (including warrants) approximate fair value. All financial assets and liabilities approximate their fair value. Warrants liabilities are valued at Level 3. Fair Value Measurements at October 31, 2025 using: October 31, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Warrant Liabilities $ 44,400 - - 44,400 Fair Value Measurements at July 31, 2025 using: July 31, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Warrant Liabilities $ 63,000 - - 63,000 The warrant liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical prices for the Company's common stock and are classified within Level 3 of the valuation hierarchy. The following table provides a summary of changes in fair value of the Company's Level 3 financial liabilities as of October 31, 2025 and July 31, 2025: As of October 31, 2025 July 31, 2025 Beginning Balance $ 63,000 $ 18,000 Change in fair value of warrant liabilities ( 18,600 ) 45,000 Ending Balance $ 44,400 $ 63,000 The below table shows the Black-Scholes option-pricing model inputs used by the Company to value the derivative liability at each measurement date: October 31, 2025 July 31, 2025 Stock Price $ 0.15 $ 0.21 Risk-free interest rates 3.71 % 3.96 % Expected life (in years) 1.29 1.55 Expected volatility 859 % 1,228 % Dividend yield 0 % 0 % Recently Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses . This guidance requires entities to disclose more detailed information about the types of expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions such as cost of sales and selling, general and administrative expenses. Such guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, although early adoption is permitted. This guidance should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the impact of adopting this ASU. In September 2025, the FASB issued ASU 2025-06, Targeted Improvements to the Accounting for Internal-Use Software, which modernizes the guidance on capitalizing costs for internal-use software by eliminating predefined development stages and introducing a principles-based approach focused on probable completion and use. The standard is effective for fiscal years beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. 10 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) NOTE 3 - DISCONTINUED OPERATIONS The Company accounts for discontinued operations in accordance with ASC 205-20, Presentation of Financial Instruments - Discontinued Operations. Hammer Fiber Optics Investment Ltd ceased operations on October 31, 2018 when Verizon Communications, LLC terminated the spectrum lease agreement. Open Data Centers, LLC ceased operations at its sole location in Piscataway, NJ on May 1, 2020. Open Data Centers, LLC was dissolved on December 30, 2020. The divestiture of Hammer Fiber Optics Investments Ltd and Open Data Centers, LLC qualified for held-for-sale accounting and represent a strategic shift with a major effect on the Company's operations and financial results. Following the divestitures, the Company does not have any significant continuing involvement in the operations of Open Data Centers, LLC or Hammer Fiber Optics Investment Ltd. As a result, the divestitures met the criteria for reporting as a discontinued operation. On August 7, 2024, the Company authorized and executed a Purchase Agreement with Viper to sell the Company's telecommunications assets to Viper (the "Viper Sale"). The assets include 1st Point Communications LCC, and all its subsidiaries, Endstream Communications LLC, American Networks Inc., and a 10 % ownership interest in Wikibuli Inc. As consideration for the Viper Sale the Company received back 2,500,000 shares of the Company's common stock. The Viper Sale closed on November 1, 2024. The returned shares had a value of $ 0.25 per share on November 1 2024 resulting in a total consideration value of $ 625,000 . The Viper Sale qualified for held-for-sale accounting and represents a strategic shift with a major effect on the Company's operations and financial results. Following the Viper Sale, the Company has no significant continuing involvement in the operations of Open Data Centers, LLC, 1 st Point Communications, LLC, Endstream Communications LLC, American Networks Inc., or Wikibuli Inc. As a result, the telecommunication assets met the criteria for reporting as a discontinued operation. With the divestiture of the telecommunications assets, the Company has begun to concentrate its efforts on fintech initiatives such as its mobile payments platform, instead of on telecommunication services. The financial results of the telecommunication assets are presented as loss from discontinued operations, after tax in the consolidated statement of operations. Discontinued operations are presented retrospectively in the financial statements. The following table represents the assets and liabilities of discontinued operations as of October 31, 2025 and July 31, 2025: October 31, July 31, 2025 2025 Current liabilities Accounts payable and accrued expenses $ 544,533 $ 544,533 Total current liabilities 544,533 544,533 Total liabilities - discontinued operations $ 544,533 $ 544,533 The following table represents the major components of the financial results of discontinued operations for the three months ended October 31, 2025 and 2024: For the Three Months Ended, October 31, 2025 2024 Revenues $ - $ 1,233,567 Cost of sales - 970,210 Gross profit - 263,357 Operating expenses Selling, general and administrative expenses - 248,052 Depreciation and amortization expense - 20,139 Total operating expenses - 268,191 OPERATING LOSS - ( 4,834 ) Other income (expense) Financing expense - ( 18,430 ) Total other income (expense) - ( 18,430 ) Net loss from discontinued operations before taxes - ( 23,264 ) Provision for income taxes - - Net loss from discontinued operations, after taxes $ - $ ( 23,264 ) 11 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) NOTE 4 - PROPERTY AND EQUIPMENT As of October 31, 2025 and July 31, 2025, property and equipment consisted of the following: October 31, July 31, 2025 2025 Life Computer and telecom equipment $ 2,675 $ 2,675 5 years Less: Accumulated depreciation ( 2,290 ) ( 2,155 ) Total $ 385 $ 520 12 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) The company regularly reviews property and equipment for possible impairment. This review occurs annually or more frequently if events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Based on management's assessment, there were no indicators of impairment of the Company's property and equipment as of October 31, 2025 and July 31, 2025, respectively. The Company recognized depreciation expense of $ 135 and $ 135 for the three months ended October 31, 2025 and 2024, respectively. NOTE 5 - INTANGIBLE ASSETS, NET The following table displays the composition of intangible assets, net as well as the respective amortization period: October 31, 2025 July 31, 2025 Useful Life Gross Amount Accumulated Amortization Net Amount Gross Amount Accumulated Amortization Net Amount Customer contracts 7 $ - $ - $ - $ - $ - $ - Software 5 618,804 434,035 184,769 618,804 403,094 215,710 Total $ 618,804 $ 434,035 $ 184,769 $ 618,804 $ 403,094 $ 215,710 In January 2022, the Company completed an asset acquisition and purchased a $ 3,862,657 customer contract intangible asset and a $ 387,843 software asset. The Company also capitalizes internal-use software development costs. During the three months ended October 31, 2025 and 2024 the Company capitalized $ 0 of software development costs (Note 2 - Summary of Significant Accounting Policies). Due to uncertainty regarding the Company's ability to accurately project future earnings and positive cash flows related to its customer contracts intangible asset, the Company fully impaired the customer contracts asset as of July 31, 2025. As a result, the Company recognized a loss from the impairment of intangible assets of $ 1,888,242 for the year ended July 31, 2025. The Company incurred amortization expense of $ 30,940 and $ 168,892 for the three months ended October 31, 2025 and 2024, respectively. Estimated annual amortization expense for intangible assets is as follows: Years Remainder of 2026 $ 92,566 2027 71,290 2028 18,011 2029 2,902 Thereafter - Total $ 184,769 NOTE 6 - LOANS PAYABLE On January 5, 2022, the Company entered into an unsecured promissory note with a lender in the amount of $ 29,253 . The promissory note bears interest at a rate of 6 % annually and has a maturity date of December 31, 2024. During the three months ended October 31, 2025 and 2024 the Company incurred interest expense of $ 367 and $ 367 , respectively, due to the promissory note. At October 31, 2025 and July 31, 2025 the Company had an outstanding accrued interest balance from the promissory note of $ 5,565 and $ 5,199 , respectively. As of October 31, 2025 and July 31, 2025, the balance of this note was $ 24,253 . As of October 31, 2025 the promissory note was past due and in default. As of October 31, 2025 and July 31, 2025, notes payable consisted of the following: October 31, 2025 July 31, 2025 Notes payable $ 24,253 $ 24,253 Less: current portion, net ( 24,253 ) ( 24,253 ) Long-term notes payable, net $ - $ - NOTE 7 - RELATED PARTY CONVERTIBLE DEBT Related party convertible notes from continued operations On August 22, 2019, the Company entered into a convertible note with Andrea Levitt, a related party, in the amount of $ 12,000 . As of July 31, 2025 $ 4,500 of the principal was paid. The note will convert into Common Stock at the Company's option and bears interest at a rate of 6 % annually, to be expensed at the time of conversion. The interest and maturity date on this convertible note have been waived by the lender. As a result, the Company did not recognize any interest expense from this note during the three months ended October 31, 2025 and 2024 . On August 9, 2025 the convertible note was forgiven by its holder. As the convertible note's holder was a related party the forgiveness was recorded as a capital contribution to additional paid-in capital of $ 7,500 . As of October 31, 2025 and July 31, 2025, the balance of this convertible note was $ 0 and $ 7,500 , respectively. 13 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) On August 24, 2019, the Company entered into two convertible notes with Andera Capital, LLC and Somerset Health Care Advisors, both of which are related parties (who were former partners in 1stPoint Communications, LLC) in the amounts of $ 12,000 and $ 6,000 respectively. Both notes bear interest at a rate of 6 % annually and any interest may be accrued as either cash or stock at the option of the Company. The interest and maturity dates on these convertible notes have been waived by the lender. As a result, the Company did not recognize any interest expense from this note during the three months ended October 31, 2025 and 2024 . The convertible notes convert at a 20 % discount to market on the date of the proposed conversion, at the option of the Company or lender. On August 9, 2025 the convertible notes were forgiven by their holder. As the convertible notes' holders were related parties, the forgiveness was recorded as a capital contribution to additional paid-in capital of $ 18,000 . As of October 31, 2025 the balances of each of these notes were $ 0 . As of July 31, 2025 the balances of each of these notes were $ 12,000 and $ 6,000 . On April 20, 2020, the Company entered into a convertible note with Erik Levitt, a former Chief Financial Officer of the Company, in the amount of $ 36,300 with an original maturity date of April 20, 2024. The convertible note bears interest at a rate of 6 % annually. The convertible note converts at a 20 % discount to market on the date of the proposed conversion, at the option of the Company or lender. The interest and maturity date on this note have been waived by the lender. As a result, the Company did not recognize any interest expense from this note during the three months ended October 31, 2025 and 2024 . On August 9, 2025 the convertible note was forgiven by its holder. As the holder of the convertible note was a related party, the forgiveness was recorded as a capital contribution to additional paid-in capital of $ 36,300 . As of October 31, 2025 and July 31, 2025, the balance of this convertible note was $ 0 and $ 36,300 , respectively. On February 26, 2021, the Company entered into a convertible note (the "February 2021 Convertible Note") with Michael Sevell, a Director of the Company, in the amount of $ 25,000 . The note bears interest at a rate of 6 %, compounded monthly and payable upon repayment or conversion. The interest and maturity date of the February 2021 Convertible Note have been waived by the lender. As a result, the Company did not recognize any interest expense from the February 2021 Convertible Note during the three months ended October 31, 2025 and 2024 . The convertible note converts at a 20 % discount to market on the date of the proposed conversion, at the option of the Company or lender. The note has been amended several times, with an additional $ 1,436,806 loaned during the year ended July 31, 2025. On May 24, 2025 the Company, Michael Sevell, and Caban Global Reach Private Equity LP ("CGRPE") entered into an Assignment and Assumption Agreement, pursuant to which, Michael Sevell assigned to CGRPE the full balance of February 2021 Convertible Note. Michael Sevell and Michael Cothill, two Directors of the Company, are both Directors of CGRPE. On May 26, 2025 the Company and CGRPE entered into a debt exchange agreement (the "exchange"), pursuant to which the entire principal balance of the February 2021 Convertible Note was forgiven in exchange for 10,154,542 shares of common stock (Note 8 - Stockholders' Equity). As a result, the Company recognized a loss on conversion of $ 974,836 . Immediately prior to the exchange the February 2021 Convertible Note had a principal balance of $ 2,680,799 . As of October 31, 2025 and July 31, 2025, the balance of this note was $ 0 . On May 2, 2025, the Company entered into a promissory note agreement ("May 2025 Convertible Note") with CGRPE, pursuant to which CGRPE agreed to fund the Company with advances in an open loan facility. All amounts lent to the Company must be repaid by May 2, 2028. Interest accrues on the May 2025 Convertible Note at a rate of 4 % per annum. The outstanding principal may be converted into shares of restricted common stock at the option of the related party. The conversion price is equal to the prevailing market price on the date of conversion at a 25 % discount. As of October 31, 2025 and July 31, 2025 the outstanding balance due to the May 2025 Convertible note was $ 295,946 and $ 85,946 , respectively. The Company recognized interest expense of $ 2,001 due to the May 2025 Convertible note during the three months ended October 31, 2025. As of October 31, 2025 and July 31, 2025, related parties convertible debt consisted of the following: October 31, 2025 July 31, 2025 Convertible notes payable - related parties $ 295,946 $ 147,746 Less: current portion, net - ( 61,800 ) Long-term convertible notes payable - related parties, net $ 295,946 $ 85,946 NOTE 8 - STOCKHOLDERS' EQUITY (DEFICIT) Common Stock The holders of common stock are entitled to receive dividends whenever funds are legally available, when and if declared by the Company's Board of Directors. As of October 31, 2025 and July 31, 2025, no cash dividend has been declared to date. Each share of common stock is entitled to one vote. 14 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) Treasury Stock On November 1, 2024, the Viper Sale closed. As a result the Company sold its telecommunications assets to Viper, including 1st Point Communications LLC, and all its subsidiaries, Endstream Communications LLC, American Networks Inc., and a 10 % ownership interest in Wikibuli Inc. As consideration for the Viper Sale the Company received back 2,500,000 shares of the Company's common stock which was recorded as treasury stock (Note 3 - Discontinued Operations). The treasury stock from the Viper Sale was recorded at $ 0.25 per share, resulting in a total value of $ 625,000 . The Company utilizes the cost method of accounting to value treasury stock when repurchasing stock. Repurchases are reflected as reductions of stockholders' equity at cost. NOTE 9 - COMMITMENTS AND CONTINGENCIES From time to time, the Company may become subject to various legal proceedings that are incidental to the ordinary conduct of its business. Although the Company cannot accurately predict the amount of any liability that may ultimately arise with respect to any of these matters, it makes provision for potential liabilities when it deems them probable and reasonably estimable. These provisions are based on current information and legal advice and may be adjusted from time to time according to developments. As of October 31, 2025 and July 31, 2025 the Company had accrued a liability of $ 26,000 due to trust fund recovery penalty ("TFRP") taxes which may be assessed against former directors or officers of the Company by the New Jersey Division of Taxation. Such former directors and officers may seek to be indemnified by the Company as a result of the TRFP taxes. The $ 26,000 accrual is recorded on the Company's Consolidated Balance Sheet as a component of accounts payable and accrued expenses. NOTE 10 - WARRANTS In February 2022, the Company and Mast Hill Fund, L.P. (“Mast”) signed a Security Purchase Agreement (the “Mast SPA”). Pursuant to the Mast SPA the Company also agreed to issue Mast (i) a common stock purchase warrant to purchase 150,000 shares of Company common stock at an exercise price of $ 3.00 (the "Mast First Warrant"), (ii) a common stock purchase warrant to purchase 150,000 shares of Company common stock at an exercise price of $ 1.50 per share(the "Mast Second Warrant" and together with the Mast First Warrant, the "Mast Warrants"). Mast's right to exercise each of the Mast Warrants is subject to a 4.99 % equity blocker. Each of the Mast Warrants expires on the five-year anniversary of issuance. The Company determined the Mast First Warrant 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. The Mast Second Warrant was evaluated for purposes of classification between liability and equity and pursuant to ASC 480 the warrants were classified as liabilities. On August 14, 2024 the Company and Mast Hill agreed to extinguish the Mast Second Warrant. 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. The warrants are exercisable for 5 years at $ 1.50 per share. The warrants were evaluated for purposes of classification between liability and equity and pursuant to ASC 480 the warrants are classified as liabilities. 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. The warrants are exercisable for 5 years at $ 3.00 per share. The warrants were evaluated for purposes of classification between liability and equity and pursuant to ASC 480 the warrants are classified as liabilities. Total outstanding warrant liabilities of the disclosed above are $ 44,400 and $ 63,000 as of October 31, 2025, and July 31, 2025, respectively. 15 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) The following schedule summarizes the changes in the Company's common stock warrants during the three months ended October 31, 2025 and 2024: Weighted Weighted Average Average Contractual Number of Exercise Term Warrants Price (Years) Balance outstanding at July 31, 2024 Granted 450,000 $ 2.25 2.54 Exercised - - - Expired/Canceled ( 150,000 ) 1.50 - Balance outstanding at October 31, 2024 300,000 2.63 2.29 Exercisable at October 31, 2024 300,000 2.63 2.29 Balance outstanding at July 31, 2025 300,000 $ 2.63 1.54 Granted - - - Exercised - - - Expired/Canceled - 2.63 - Balance outstanding at October 31, 2025 300,000 $ 2.63 1.29 Exercisable at October 31, 2025 300,000 $ 2.63 1.29 The fair values of the warrant liabilities as of October 31, 2025 and July 31, 2025 were estimated using Black-Scholes option-pricing model with the following assumptions: October 31, July 31, 2025 2025 Exercise Price $ 1.50 - $ 3.00 $ 1.50 - $ 3.00 Risk-free interest rates 3.71 % 3.96 % Expected life (in years) 1.29 1.55 Expected volatility 859 % 1,228 % Dividend yield 0 % 0 % NOTE 11 - SEGMENT REPORTING The Company operates in one operating segment, and therefore one reportable segment, 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. The accounting policies for the Company's single operating segment are the same as those described in the summary of significant accounting policies. The Company's Chief Executive Officer is the Chief Operating Decision Maker ("CODM"). The CODM manages the Company's business activities as a single operating and reportable segment at the consolidated level. Accordingly, our CODM uses consolidated net loss from continuing operations to allocate resources, and assess performance. The measure of segment assets is reported on the consolidated balance sheet as total consolidated assets. The following is a summary of the significant revenue and expense categories, and consolidated net loss from continuing operations provided to the CODM: For the Three Months Ended, October 31, 2025 2024 Revenues $ - $ - Less: Significant and other segment expenses Selling, general and administrative expenses ( 134,032 ) ( 186,559 ) Depreciation and amortization expense ( 31,075 ) ( 169,027 ) Interest expense ( 2,368 ) ( 152 ) Change in fair value of warrant liability 18,600 ( 56,937 ) Net loss from continuing operations $ ( 148,875 ) $ ( 412,675 ) 16 HAMMER TECHNOLOGY HOLDINGS CORP. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OCTOBER 31, 2025 (Unaudited) NOTE 12 - SUBSEQUENT EVENTS Between November 1, 2025 and November 19, 2025 the Company received $ 55,000 in proceeds pursuant to the May 2025 Convertible Note (Note 7 - Related Party Convertible Debt). 17