Annual Report for Fiscal Year Ending July 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our audited financial statements and the related notes that appear elsewhere in this annual report. The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future. Our audited financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

Overview

Hammer Technology Holdings Corp. is a company focused on sustainable shareholder value investing in financial services technology. We have one wholly-owned active subsidiary, Hammerpay USA Ltd. Additionally, we have two wholly-owned inactive subsidiaries: Hammer Fiber Optics Investment Ltd., and Hammer Wireless (SL) Limited.

Our financial technologies business is focused on providing digital stored value technology via our 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.

Recent Developments

On August 7, 2024, we authorized and executed a Purchase Agreement with Viper Networks, Inc. ("Viper") to sell our 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. The telecommunication assets qualified for reporting as a discontinued operation. As a result, the results of the telecommunication assets, including the gain on disposal of subsidiaries, are excluded from continuing operations for all periods presented. Accordingly, any discussion of our historical financial information below reflects the telecommunication asset's results as a discontinued operation and amounts and disclosures below pertain to our continuing operations for all periods presented, unless otherwise noted. With the divestiture of the telecommunications assets, we have begun to concentrate our efforts on fintech initiatives such as our mobile payments platform, instead of on telecommunication services.

As consideration for the Viper Sale we 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.

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."

Results of Operations for the Year Ended July 31, 2025 Compared to the Year Ended July 31, 2024

		2025			2024			$ Change			% Change
Revenues	$	-		$	420		$	(420	)		-100.00%
Cost of sales		-			-
Selling, general and administrative expenses		(842,609	)		(728,714	)		113,895			15.63%
Depreciation and amortization expense		(677,723	)		(673,193	)		4,530			0.67%
Intangible asset impairment		(1,888,242	)		-			1,888,242			100.00%
Total operating expenses	$	(3,408,574	)	$	(1,401,907	)	$	2,006,667			143.21%

Net revenues for the year ended July 31, 2025 and 2024 were $0 and $420 respectively, a decrease of approximately $420 or 100%. We did not generate any revenues during the year ended July 31, 2025 as our mobile payments platform had not yet launched.

During the year ended July 31, 2025, we incurred total operating expenses of $3,408,574 compared with $1,401,907, an increase of approximately $2,006,667 or 143%, for the comparable period ended July 31, 2024. The increase in operating expenses is primarily the result of our intangible asset impairment of $1,888,242 during the year ended July 31, 2025. The intangible asset impairment was due to uncertainty regarding our ability to accurately project future earnings and positive cash flows related to our customer contract intangible asset, which we fully impaired as of July 31, 2025

We had an increase in selling, general and administrative expense of $113,895 or 16% for the year ended July 31, 2025 compared to the year ended July 31, 2024. The increase in selling, general and administrative expense is due primarily to an increase in professional expense ($99,618) and an increase in corporate and IT expense ($42,003), offset by a decrease in rent expense ($27,727).

We recorded depreciation and amortization expense of $677,723 and $673,193 during the years ended July 31, 2025 and 2024, respectively. Our depreciation and amortization expense for the year ended July 31, 2025 was composed of amortization of the customer contract asset of $551,808, amortization of the software asset of $123,760, and depreciation of property and equipment of $2,155. Our depreciation and amortization expense for the year ended July 31, 2024 was composed of amortization of the customer contract asset of $551,808, and amortization of the software asset of $121,385.

		2025			2024			$ Change			% Change
Other income (expense)
Interest expense		(1,500	)		(86,043	)		84,543			-98.26%
Warrant financing expenses		-			(164,525	)		164,525			-100.00%
Gain (loss) on change in fair value of warrant liability		(45,000	)		177,750			(222,750	)		-125.32%
Loss on conversion of debt		(974,836	)		-			(974,836	)		100.00%
Total other income (expense)	$	(1,021,336	)	$	(72,818	)	$	(948,518	)		1,302.59%

During the year ended July 31, 2025, we incurred total other expense of $1,021,336 primarily consisting of loss on conversion of debt of $974,836, loss on change in fair value of warrant liability of $45,000 and interest expense of $1,500. During the year ended July 31, 2024 we incurred total other expense of $72,818 consisting primarily of warrant financing expense of $164,525, interest expense of $86,043; offset by the gain on change in fair value of warrant liability of $177,750.

During the year ended July 31, 2025 we recorded a net loss from continuing operations of $4,429,910, compared to a net loss from operations of $1,474,305 from the year ended July 31, 2024. The increase in net loss from continuing operations is due primarily to the intangible asset impairment and a large increase in our total other expenses.

Liquidity and Capital Resources

Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. As of July 31, 2025, we had $18,054 in cash compared to $0 at July 31, 2024, an increase of $18,054.

As of July 31, 2025, we had total current assets of $19,304 and total current liabilities of $877,663, or negative working capital of $858,359, compared to total current assets of $206,266 and total current liabilities of $3,998,146, or negative working capital of $3,791,880 as of July 31, 2024. This is an increase in working capital of $2,933,521 driven primarily by the Viper Sale and the resulting decrease in current liabilities from discontinued operations.

We have financed our operations since inception primarily through debt from related parties. There can be no assurance that we will be able to raise additional capital, when needed, to continue operations in their current form. Our ability to remain a going concern is dependent upon whether we can raise debt and/or equity capital from third party sources for both working capital and business development needs until such time as we are substantially sustained as a going concern through cash flow from operations.

Our future capital requirements for our operations will depend on many factors, including the profitability of our businesses, and the costs of expending our operations. We plan to generate positive cash flow from the expansion of our fintech initiatives, such as our mobile payments platform. We may also choose to raise additional funds through public or private equity or debt financings, a bank line of credit, borrowings from affiliates or other arrangements. We cannot be sure that any additional funding, if needed, will be available on terms favorable to us or at all. Furthermore, any additional capital raised through the sale of equity or equity-linked securities may dilute our current stockholders' ownership in us and could also result in a decrease in the market price of our common stock. There can be no assurance that we will be able to raise additional capital, when needed, to continue operations in their current form.

See the analysis below of the cash flow statement for further details pertaining to liquidity.

		2025			2024			$ Change
Net cash used in operating activities - continuing operations		(855,780	)		(871,731	)		15,951
Net cash used in investing activities - continuing operation		-			(33,920	)		33,920
Net cash provided by financing activities - continuing operations	$	840,752		$	771,493		$	69,259
Net cash provided by operating activities - discontinued operations		(18,954	)		145,412			(164,366	)
Net cash used in investing activities - discontinued operations		(36,177	)		(19,719	)		(16,458	)
Net cash provided by financing activities - discontinued operations		14,080			15,910			(1,830	)
Net increase (decrease) in cash and cash equivalents	$	(56,079	)	$	7,445		$	(63,524	)

Cash Flow from Continuing Operating Activities

During the year ended July 31, 2025 the cash used in operating activities from continuing operations was $855,780. The cash used in operating activities was primarily the result of the loss from continuing operations of $4,429,910, offset primarily by intangible asset impairment of $1,888,242, the loss on conversion of convertible note payable to common stock of $974,836, and amortization expense of $675,568.

During the year ended July 31, 2024 the cash used in operating expenses from continuing operations was $871,731. The cash used by operating expenses was primarily the result of a net loss from continuing operations of $1,474,305, and the change in fair value of the warrant liability of $177,750, offset primarily by amortization expense of $673,193 and an increase in accounts payable and accrued expenses of $99,511.

Cash Flow from Continuing Investing Activities

We did not have cash flows from investing activities from continuing operations for the year ended July 31, 2025. The cash flows from investing activities from continuing operations for the year ended July 31, 2024 were composed of $33,920 of software costs capitalized as intangible assets.

Cash Flow from Continuing Financing Activities

During the year ended July 31, 2025, we had cash provided by financing activities from continuing operations of $840,752. The cash provided by financing activities was primarily a result of $1,522,752 of proceeds from related party convertible notes, offset primarily by $682,000 of repayments of convertible notes payable.

During the year ended July 31, 2024, we had cash provided by financing activities from continuing operations of $771,493. The cash flows from financing activities were composed of proceeds from related party convertible notes of $771,493.

Going Concern

For the year ended July 31, 2025, the Company incurred a net loss from continuing operations of $4,429,910, cash used in operating activities of $855,780, and $0 of revenue generated from continuing operations. As of July 31, 2025, the Company had a working capital deficiency of $858,359. As of July 31, 2025, substantial doubt existed as to the Company's ability to continue as a going concern as a result of these factors. 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.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The preparation of financial statements in accordance with GAAP requires application of management's subjective judgments, often requiring estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. Our actual results may differ substantially from these estimates under different assumptions or conditions. While our significant accounting policies are described in more detail in "Note 2 - Summary of Significant Accounting Policies," to our consolidated financial statements included in Item 8, "Financial Statements and Supplementary Data," of this Annual Report on Form 10-K, we believe that the following accounting policies require the application of significant judgments and estimates.

Warrant Fair Value

Our warrant fair value estimates are based on the Black Scholes model using quoted market prices and estimated volatility factors based on historical prices of the Company's common stock. Valuations derived from the Back-Scholes model are subject to ongoing internal and external verification and review. The inputs used in the Black-Scholes model involve our judgment and changes to those inputs may impact our net loss.

Intangible Assets

Our intangible assets, composed of software and customer contracts, were obtained through the Company's January 2022 acquisition of Telecom Financial Services, Ltd. ("TFS"), as well as capitalized internal software development costs. A valuation specialist was contracted to determine a purchase price allocation for the $4,250,000 paid for TFS. Ultimately, it was determined that the software is valued at approximately $387,843 and the customer contract at approximately $3,862,657. The Company also capitalized internal software costs of $230,961. These assets have useful lives of between 5 and 7 years and are amortized on a straight-line basis.

Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be fully recoverable. An impairment loss is recognized if the sum of the expected long-term undiscounted cash flows the asset is expected to generate is less than its carrying amount. Any write-downs are treated as permanent reductions in the carrying amount of the respective asset. Determining indicators of impairment and measuring impairment losses requires the use of our judgment and estimates. Changes in market conditions or operating results could materially impact these estimates.

Due to uncertainty regarding the Company's ability to accurately project future earnings and positive cash flows related to its customer contract intangible asset, the Company fully impaired the customer contract 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.

Recently Issued Accounting Pronouncements

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)". This ASU reduces the number of accounting models for convertible debt instruments and convertible preferred stock, as well as amend the guidance for the derivatives scope exception for contracts in an entity's own equity to reduce form-over-substance-based accounting conclusions. In addition, this ASU improves and amends the related EPS guidance. The Company adopted this ASU on a prospective basis as of August 1, 2023 and the adoption of this guidance had no material impact on the consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any 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.