MANAGEMENT'S DISCUSSION AND ANALYSIS
This Annual Report on Form 10-K contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended (the
"Securities Act") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). These forward-looking statements are not
historical facts but rather are based on current expectations, estimates and
projections. We may use words such as "anticipate," "expect," "intend," "plan,"
"believe," "foresee," "estimate" and variations of these words and similar
expressions to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks, uncertainties
and other factors, some of which are beyond our control, are difficult to
predict and could cause actual results to differ materially from those expressed
or forecasted. You should read this Report completely and with the understanding
that actual future results may be materially different from what we expect. The
forward looking statements included in this Report are made as of the date of
this Report and should be evaluated with consideration of any changes occurring
after the date of this Report. We will not update forward-looking statements
even though our situation may change in the future and we assume no obligation
to update any forward- looking statements, whether as a result of new
information, future events or otherwise.
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
The company was incorporated on September 23, 2010 pursuant to the laws of the
State of Nevada under the name of Recursos Montana S.A. On March 6, 2015 the
Company amended its Articles of Incorporation to change its name to "Tanaris
Power Holding, Inc." On April 25, 2016, Tanaris Power Holdings, Inc., a Nevada
corporation (the "Company" or "TPHX") 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, closed on July
19, 2016, the Company acquired 20,000,000 shares of common stock of HFOI from
the HFOI shareholders and in exchange the Company issued to the HFOI
Shareholders 50,000,000 (post-Merger) restricted shares of its common stock. As
a result of the Share Exchange Agreement, HFOI became a wholly owned subsidiary
of the Company.
The Company was originally organized for the purpose of acquiring and developing
mineral properties. The Company had not established the existence of a
commercially viable minable ore deposit and therefore did not reach the
exploration stage. As such, the company negotiated to dispose of the business of
investing in minerals in favor of developing new business opportunities in the
technology sector. The company Hammer Fiber Optics Holdings Corp. is now an
alternative telecommunications carrier that is poised to position itself as a
premier provider of diversified dark fiber networking solutions as well as high
capacity broadband wireless access networks in the United States and abroad.
On September 11, 2018, Mark Stogdill, President and Chief Executive Officer and
Executive Director of the Board of Directors of the Company resigned from his
position as President and Chief Executive Officer of the Company. Mr. Stogdill
retains his position as a Director of the Board of Directors. In combination
with this change, Erik B. Levitt was appointed the interim President and Chief
Executive Officer, effective immediately.
On October 10, 2018 the Company announced the closure of the Atlantic City, NJ
wireless broadband network as a result of the termination of the Master Spectrum
Lease Agreement held by the Company subsidiary Hammer Fiber Optic Investments
Ltd. d/b/a Hammer Communications by Verizon Communications. Verizon
Communications had informed the Company of their intention to honor the terms of
the lease agreement, then subsequently issued a notification to the Company that
the spectrum lease for the 28 GHz spectrum will be prematurely terminated as of
October 31, 2018. The Company negotiated with Verizon to find a path forward and
was offered a less desirable spectrum leasing arrangement. After extensive
engineering discussions it was determined that it was not feasible to pursue the
alternative agreement proposed by Verizon. As a result, the Company discontinued
operations as of October 31, 2018.
12
--------------------------------------------------------------------------------
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. for the acquisition of all of the
equity of the entities. 1stPoint and its subsidiaries possess CLEC licenses in
Florida, New York State, and a nationwide CMRS (Commercial Mobile Radio
Services) license. The companies operate a data center facility in Piscataway,
New Jersey. The acquisition of 1stPoint Communications, LLC, Open Data Centers,
LLC and Shelcomm, Inc. closed on November 1, 2018. Mr. Levitt was also elected
as a member of the Board of Directors, effective immediately. The acquisition of
Endstream Communications, LLC closed on December 17, 2018.
On January 29, 2019 our Board of Directors approved a stock purchase agreement
with American Network, Inc to acquire all of its equity. The acquisition of
American Network, Inc closed on September 1, 2019.
As of April 30, 2020 our Board of Directors approved the discontinuation of the
operations of Open Data Centers LLC. 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.
On September 14, 2021, Erik B. Levitt, President and Chief Executive Officer and
Executive Director of the Board of Directors of the Company resigned from his
position as President and Chief Executive Officer of the Company. Mr. Levitt
retains his position as an Executive Director of the Board of Directors and
Principal Financial Officer as well as the Managing Member and Chief Executive
Officer of 1stPoint Communications, LLC and Endstream Communications, LLC. In
combination with this change, Michael C. Cothill was appointed the Executive
Chairman, effective immediately.
On October 19, 2021 our Board of Directors approved a name change from Hammer
Fiber Optics Holdings Corp to Hammer Technology Holdings. The name change was
submitted to the Secretary of State of Nevada on October 7, 2021 for an
effective date of October 19, 2021 and, on October 11, 2021, this corporate
action was submitted to FINRA for its review and approval.
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. TFS will be renamed
HammerPay. This acquisition has been discussed in the Subsequent Events.
COVID-19 Pandemic Update
In March 2020, the World Health Organization declared a global health pandemic
related to the outbreak of a novel coronavirus. The COVID-19 pandemic adversely
affected the company's financial performance in the third and fourth quarters of
fiscal year 2020 and could have an impact throughout fiscal year 2021. 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. 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. 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. As a result, the ultimate impact on the company's business, financial
condition or operating results cannot be reasonably estimated at this time.
As of the date of this document, one hundred percent of the loans provided under
the Paycheck Protection Program have been forgiven by the Small Business
Administration. These notes have been retired and are categorized as Other
Income on our financial statements.
Results of Operations
The Year Ended July 31, 2021 Compared to the Year Ended July 31, 2020
Net revenues from continuing operations for the year ended July 31, 2021 and
2020 were $2,199,127 and $1,781,139, respectively.
During the year ended July 31, 2021, the Company incurred total operating
expenses from continuing operations of $1,568,357 compared with $2,058,804 for
the comparable period ended in 2020. The increase in operating costs was
primarily due to expenses related to its increased revenues in its Over-the-Top
("OTT") business as well as development expenses associated with new product
development.
The Company recorded depreciation expense of $55,398 during the year ended July
31, 2021 compared to $44,454 in the comparable period in 2020, primarily due to
increases in computer equipment in support of growth in the OTT business.
During the year ended July 31, 2021, interest expense was $30,797 compared to
$31,843 in the comparable period in 2020.
13
--------------------------------------------------------------------------------
Liquidity and Capital Resources
We have financed our operations since inception primarily through private
placements of our common stock. As of July 31, 2021, we had cash and cash
equivalents of $73,971.
Net cash from operating activities was $-78,360 and $150,703 for the year ended
July 31, 2021 and July 31, 2020, respectively. The decrease was primarily due to
the development activities related to Hammer's telecommunications software and
operations of its new wireless network in Huntsville, AL.
Net cash used in investing activities was $75,503 and $50,857 for the year ended
July 31, 2021 and July 31, 2020, respectively. The increase in cash used in
investing activities was primarily due software development activities and its
new network in Huntsville, AL.
Net cash provided by financing activities was $157,538 and $299,527 for the year
ended July 31, 2021 and July 31, 2020, respectively. The decrease in cash
provided by financing activities for the period ended July 31, 2021 when
compared to the same period in 2020 was primarily the result of reduced
operating cash flow requirements associated with the continuing operations of
the business and payments for settlements against discontinued operations.
We have not attained profitable operations and are dependent upon obtaining
financing to pursue any extensive activities. For these reasons, our auditors
have included in their report on our audited financial statements for the fiscal
year ended July 31, 2021 an explanatory paragraph regarding factors that raise
substantial doubt that we will be able to continue as a going concern.
Going Concern
As at July 31, 2021, substantial doubt existed as to the Company's ability to
continue as a going concern as the Company has earned only minimal revenue, 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.
Contractual Obligations
We are a smaller reporting company as defined by Rule 12b-2 of the Securities
Exchange Act of 1934 and are not required to provide the information under this
item.
Selected Financial Data
We are a smaller reporting company as defined by Rule 12b-2 of the Securities
Exchange Act of 1934 and are not required to provide the information under this
item.
© Edgar Online, source Glimpses