The following Management's Discussion and Analysis should be read in conjunction with Hammer Fiber Optics Holdings Corp., financial statements and the related notes thereto. The Management's Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words "believe," "plan," "intend," "anticipate," "target," "estimate," "expect," and the like, and/or future-tense or conditional constructions ("will," "may," "could," "should," etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Report on Form 10-Q. The Company's actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Report on Form 10-Q.

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes and other financial data included elsewhere in this report. See also the notes to our condensed consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K/A for the year ended July 31, 2020, filed with the SEC on November 13, 2020.

Results of Operations

Three Months Ended April 30, 2022 Compared to the Three Months Ended April 30, 2021

Revenues for the three months ended April 30, 2022 and April 30, 2021 were $819,131 and $611,237, respectively, an increase of 34.01%. The increase was primarily due to the expansion of the Company's Over-the-Top ("OTT") business segment which includes its SMS messaging and hosting business units and contributions from its fixed wireless operations in Huntsville, AL.

During the three months ended April 30, 2022, the Company incurred total operating expenses of $1,049,914 compared with $609,606, an increase of 72.23%, for the comparable period ended April 30, 2021. The increase was primarily due to the addition of the financial technologies business unit and expenses of ongoing operations of the HammerPay subsidiary.

Operating loss increased to $230,783 during the three months ended April 30, 2022 as compared with income of $1,631, an increase of 1,4249.79%. The loss was primarily due to expenses associated with the ongoing operations of the HammerPay subsidiary.

During the three months ended April 30, 2022 and April 30, 2021 interest and other expense was $589,937 and $9,908 respectively. The increase was due to interest and borrowing costs on new facilities.



During the three months ended April 30, 2022 the Company recorded a loss of
$810,720 as compared to a loss of $28,277 for the three months ended April 30,
2021, an increase of 2,767.07%. The increase in loss was primarily due to the
addition of the financial technologies business unit and expenses of ongoing
operations of the HammerPay subsidiary.
.
Nine Months Ended April 30, 2022 Compared to the nine Months Ended April 30,
2021

Revenues for the nine months ended April 30, 2022 and April 30, 2021 were $2,039,367 and $1,604,927, respectively, an increase of 27.06%. The increase was primarily due to the expansion of the Company's Over-the-Top ("OTT") business segment which includes its SMS messaging and hosting business units and contributions from its fixed wireless operations in Huntsville, AL.

During the nine months ended April 30, 2022, the Company incurred total operating expenses of $2,424,235 compared with $1,655,232, an increase of 46.46%, for the comparable period ended April 30, 2021. The increase in loss was primarily due to the addition of the financial technologies business unit and expenses of ongoing operations of the HammerPay subsidiary and the expansion of the Company's Over-the-Top ("OTT) business segment which includes its SMS messaging and hosting business unit.

Operating loss increased to $384,868 during the nine months ended April 30, 2022 as compared with a loss of $50,305, and increase of 665.07%. The increase in loss was primarily due to the addition of the financial technologies business unit and expenses of ongoing operations of the HammerPay subsidiary and the expansion of the Company's Over-the-Top ("OTT) business segment which includes its SMS messaging and hosting business unit.


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During the nine months ended April 30, 2022 and April 30, 2021 interest and other expense was $622,134 and $20,942 respectively. The increase was due to interest and borrowing costs on new facilities.

During the nine months ended April 30, 2022 the Company recorded a net loss of $1,007,002 as compared to net income of $4,110,749 for the nine months ended April 30, 2021. The decrease was due to expenses associated with the ongoing operations of the HammerPay subsidiary and the one-time income adjustments due to settlement of liabilities associated with discontinued operations.

Liquidity and Capital Resources

The Company is at risk of remaining a going concern. Its ability to remain a going concern is dependent upon whether the company can raise debt and/or equity capital from third-party sources for both working capital and business development needs until such time as the Company may be substantially sustained as a going concern through cash flow from operations or the Company increases its cash flow from operations through sale of services in the ongoing business units, Endstream Communications, 1stPoint Communications, its new markets and the continuing operations of the HammerPay business.

Cash Flow from Operating Activities

During the nine months ended April 30, 2022 the Company's total cash increased by $649,369, compared to an increase in cash of $1,447 in the nine months ended April 30, 2021. Cash flow used in Operating Activities was $156,925, compared to $340,932 in the nine months ended April 30, 2021. This was primarily due to improved operational efficiencies and the ongoing operations of the HammerPay business.

Cash Flow from Investing Activities

During the nine months ended April 30, 2022, the Company's investing activities used $170,923, compared to $25,535 used in investing activities during the six months ended April 30, 2021. The decrease was primarily due to the investments in licenses for Hammer Pay.

Cash Flow from Financing Activities

During the nine months ended April 30, 2022, the Company netted $977,217 in cash from financing activities compared with $367,944 used during the nine months ended April 30, 2021. The increase was mainly due to the proceeds from notes payable.

Going Concern

As of April 30, 2022, doubt existed as to the Company's ability to continue as a going concern as the Company has no certainty of earning additional revenues in the future, has a working capital deficit and an overall accumulated deficit since inception. The Company will require additional financing to continue operations either from management, existing shareholders, or new shareholders through equity financing and/or sources of debt financing. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. The financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Future Financings

We will continue to rely on equity sales of our common shares in order to continue to fund business operations. Issuances of additional shares may result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of equity securities or arrange for debt or other financing in amounts sufficient to fund our operations and other development activities.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.


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Critical Accounting Policies

Our financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States, applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.

Recently Issued Accounting Pronouncements

The Company has implemented new accounting pronouncements that are relevant to the company and are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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