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 January 31, 2021 Compared to the Three Months Ended January 31, 2020

Net revenues for the three months ended January 31, 2021 and January 31, 2020 were $508,848 and $410,784, respectively, an increase of 23.87%. 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.

During the three months ended January 31, 2021, the Company incurred total operating expenses of $532,956 compared with $532,881, a decrease of 0.00%, for the comparable period ended January 31, 2020.

Operating loss decreased to $30,326 during the three months ended January 31, 2021 as compared with a loss of $130,573, a decrease of 76.77%. The decrease 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.

The Company recorded depreciation and amortization expense of $12,627 and $10,934 during the three months ended January 31, 2021 and January 31, 2020 respectively. During the three months ended January 31, 2021 and January 31, 20120 interest expense was $6,204 and $8,139 respectively.

During the three months ended January 31, 2021 the Company recorded a gain of $4,286,673, compared to a loss in the same three month period ended January 31, 2020 of $69,665. The gain was due to the settlement of two large claims against its Hammer Fiber Optics Investments, Ltd. subsidiary.



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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, Open Data Centers and its new markets.

Cash Flow from Operating Activities

During the six months ended January 31 2021 the Company's total cash decreased by $13,448, compared to a decrease in cash of $27,006 in the period ended January 31, 2020. Cash flow from Operating Activities decreased by $167,535, compared to a decrease of $60,184 in the period ended January 31, 2020. The decrease was primarily due to the settlement of expenses from prior discontinued operations.


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Cash Flow from Investing Activities

During the six months ended January 31, 2021, the Company's investing activities used $3,424, compared to $61,896 provided by investing activities during the six months ended January 31, 2020. The decrease was primarily due to the investments in Wikibuli, Inc. in 2020.

Cash Flow from Financing Activities

During the six months ended January 31, 2021, the Company netted $157,511 in cash from financing activities compared with $95,087 used during the six months ended January 31, 2020. The majority of the cash was used to settle liabilities associated with discontinued operations.





Going Concern

As of January 31, 2021, 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.





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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