8-K - HMMR - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 ___________________________

FORM 8-K

CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

            December 30, 2021

HAMMER FIBER OPTICS HOLDINGS CORP.(Exact name of registrant as specified in its charter)

Nevada	000-1539680	98-1032170
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

401 East 34th Street, Suite #N27J

            New York, New York, United States
            10016
         \(Address of principal executive offices\) \(ZIP Code\)

Registrant’s telephone number, including area code: (844) 413-2600

Not Applicable (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b -2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

FORWARD LOOKING STATEMENTS

The following discussion, in addition to the other information contained in this Current Report ("Report"), should be considered carefully in evaluating our prospects. This Report (including without limitation the following factors that may affect operating results) contains forward-looking statements regarding us and our business, financial condition, results of operations and prospects. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Report. Additionally, statements concerning future matters such as revenue projections, projected profitability, growth strategies, possible changes in legislation and other statements regarding matters that are not historical are forward-looking statements.

Forward-looking statements in this Report reflect the good faith judgment of our management and the statements are based on facts and factors as we currently know them. Forward-looking statements are subject to risks and uncertainties and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, those discussed in this Report. Readers are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. We undertake no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Report.

Item 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

The Acquisitions

On December 30, 2021, Hammer Fiber Optic Holdings Corp, (the "Company") completed the previously announced purchase of Telecom Financial Services Ltd. ("TFS-LTD"), whereby the Company acquired all of the outstanding equity ownership interests in TFS-LTD (the "Acquisition"). The purchase price for all of the Company Units of TFS-LTD is five million (5,000,000) shares of the Company's Common Stock from treasury stock. The shares of the Company's Common Stock to be issued are restricted securities, as defined in Rule 144 of the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended.

The foregoing provides only a brief descriptions of the material terms of the Share Exchange Agreement and does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are qualified in their entirety by reference to the full text of the forms of the Share Exchange Agreement filed as Exhibit 99.1 to this Current Report on Form 8-K, and are incorporated herein by reference.

Furthermore, the acquisition does not meet the criteria for "significant subsidiary" under Regulation S-X 3.05 as provided in the Regulation S-X testing filed as Exhibit 99.3 to this Current Report on Form 8-K, and are incorporated herein by reference.

Item 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

The shares to be issued under the Share Exchange Agreement shall qualify as a tax-free reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"); and (ii) the Share Exchange Agreement, shall be issued in reliance upon an exemption from registration afforded under Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering, or Regulation D promulgated thereunder, or Regulation S for offers and sales of securities outside the United States. The Share Exchange Agreement is an exempt transaction pursuant to Section 4(2) of the Securities Act as the share exchange was a private transaction by the Company and did not involve any public offering. Additionally, we relied upon the exemption afforded by Rule 506 of Regulation D of the Securities Act which is a safe harbor for the private offering exemption of Section 4(2) of the Securities Act whereby an issuer may sell its securities to an unlimited number of accredited investors, as that term is defined in Rule 501 of Regulation D. Further, we relied upon the safe harbor provision of Rule 903 of Regulation S of the Securities Act which permits offers or sales of securities by the Company outside of the United States that are not made to "U.S. persons" or for the account or benefit of a "U.S. person", as that term is defined in Rule 902 of Regulation S.

The information disclosed under Item 2.01 is incorporated into this Item 3.02 in its entirety.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits	Descriptions
99.1	Share Exchange Agreement, Dated October 26, 2021 by and among the Company, Telecom Financial Services Ltd and the shareholders of TFS
99.2	Press Release
99.3	Regulation S-X Testing Telecom Financial Services Limited
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Hammer Fiber Optics Holdings, Corp.

Dated: January 3, 2022
/s/ Erik B. Levitt
By: Erik B. Levitt
Its: Principal Financial Officer

Hammer Fiber Optic Holdings Corp.: Exhibit 99.1 - Filed by newsfilecorp.com

Hammer Fiber Optic Holdings Corp.: Exhibit 99.2 - Filed by newsfilecorp.com

HAMMER FIBER OPTICS HOLDINGS CORP [HMMR]

ANNOUNCES THE CLOSING OF THE DEFINITIVE AGREEMENT TO ACQUIRE TELECOM FINANCIAL SERVICES LTD

New York, N.Y., January 3, 2022 - Hammer Fiber Optics Holdings Corp., (OTCQB: HMMR), (soon to be Hammer Technology Holdings Corp.) ("the Company"), today announced the final closing of the definitive agreement between the parties to acquire a one hundred percent (100%) equity stake in Telecom Financial Services Ltd ("TFS"). As part of its evolving diversification strategy of the Hammer Group and under the terms of the agreement, TFS has been officially renamed HammerPay [USA] Ltd, which provides the Company a platform to aggressively pursue its strategy in the financial technology sector. The flagship product will be marketed under the brand name of "HammerPay" with its initial roll-out planned to service the continent of Africa-a historically underserved market for financial inclusion.

"Amongst other feature-rich digital banking capabilities, HammerPay will empower migrants living abroad, commonly known as the "diaspora", with a swift, safe, secure, and cost-effective way to send money home to their family and friends to provide a vital lifeline for food, clothing, shelter, education, healthcare, vaccines, transport, and utilities" stated Michael Cothill, Executive Chairman of Hammer Group. "In today's challenging financial markets, the HammerPay solution provides the diaspora the peace of mind that their funds will reach the intended target and not be diverted in any way. This is achieved through strict adherence to anti-money-laundering procedures inherently built into the HammerPay architecture and the flow of funds being directed exclusively and seamlessly between cross-border sending and receiving banks," said Cothill.

The TFS acquisition has accelerated the HammerPay go-to-market strategy of a rapid adoption of the service amongst the diaspora by virtue of its existing banking relationships. In addition, integration with HammerPay's simple and robust API ("Application Programming Interface") facilitates private label opportunities and alliances with world-class financial institutions, banks, telecom operators, carriers, service providers and merchants. The primary goal being to accelerate their growth in the fintech space while leaving the bulk of the complex KYC/AML compliance, cross border licensing, and banking relationships to HammerPay.

"Now that the TFS-HammerPay closing is concluded, we are actively focusing on the vital growth funding strategies of the Hammer Group to ensure our current and future plans to improve shareholder value are met while building an extraordinary business with a long runway for continued expansion," stated Michael Cothill, Executive Chairman of the Hammer Group.

For more information on the Group companies and growth strategy, see:

https://hmmrgroup.com/

About Hammer

Hammer Fiber Optics Holdings Corp. (OTCQB: HMMR) soon to be known as Hammer Technology Holdings, is a company investing in the future of technology. Hammer has broadened its strategy to focus on the rapidly evolving world of innovative technology and in an effort to keep pace, has restructured the group to allow for the creation of several related verticals. In addition to its "Everything Wireless" strategy which includes the deployment of high-speed fixed wireless service for residential and small business, Hammer seeks to enter into the Fintech industry which is rapidly becoming the mainstream technology powering today's telecommunication applications. For more information, contact Investor Relations at info@hmmrgroup.com.

Forward-Looking Statements

This press release contains projections and other forward-looking statements regarding future events or our future financial performance. All statements other than present and historical facts and conditions contained in this release, including any statements regarding our future results of operations and financial positions, business strategy, plans and our objectives for future operations, are forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). These statements are only predictions and reflect our current beliefs and expectations with respect to future events and are based on assumptions and subject to risk and uncertainties and subject to change at any time. We operate in a very competitive and rapidly changing environment. New risks emerge from time to time. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

Hammer Fiber Optic Holdings Corp.: Exhibit 99.3 - Filed by newsfilecorp.com

REGULATION S-X TESTING

Telecom Financial Services Limited

The staff of Hammer Fiber Optics Holdings Corp. has conducted Regulation S-X testing of TFS (to be acquired before December 31, 2021) and announced by 8-K no later than January 4, 2022.

Summary of Results

No financial statements should be required for this acquisition as this is a purchase of assets with no operations. In the opinion of the staff this business is an Individually Insignificant Acquiree under Section 2035.1 pursuant to the unadjusted assets under Topic 2 - Section 2035.3.

2035.1 Applicability - The requirement under S-X 3-05 to file financial statements of individually insignificant businesses under certain circumstances is applicable only to registration statements and proxies. Form 8-K does not require audited financial statements of insignificant acquirees unless they are "related businesses" and significant on a combined basis. See Section 2015.12, "Significance - Related Businesses".

Specific Results

2010.2. The staff has determined that Telecom Financial Services Limited is a "business" for the purposes of S-X 3-05. Pursuant to 2010.2: "there is sufficient continuity of operations so that disclosure of prior financial information is material to an understanding of future operations."

2010.3. The staff does consider that the acquisitions should be accounted for under the equity method to be a business for reporting purposes.

2015.1 Significance Test.

Under S-X 3-05 three tests are required:

Asset Test
Investment Test
Income Test

2015.2 Financial Statements Used to Measure Significance.

For the purposes of the significance test the staff has compared the financial statements Telecom Financial Services Limited for the Fiscal Year Ended 12/31/2020 to Hammer Technology Holdings's Fiscal Year Ended 7/31/2021, pursuant to 2015.2: "compare the most recent pre-acquisition annual financial statements of the acquired business to the registrant's pre-acquisition consolidated financial statements as of the end of the most recently completed audited fiscal year required to be filed with the SEC."

2015.3 Comprehensive Basis of Accounting Used to Measure Significance. The staff prepared financial statements in accordance with GAAP.

2015.4 Asset Test.

The acquired businesses' total assets were as follows:

Telecom Financial Services Limited	$	196,692.00	(Note 1)
Assets of Registrant	$	4,901,909.00

The assets of the acquired businesses are 0.04% of the assets of the Registrant and therefore should not be subject to audit as it does not exceed the 20% significance level pursuant to Regulation S-X.

Note 1: Pursuant to Topic 2 - Other Financial Statements Required

NOTES to SECTION 2025.3

The acquired entity's total assets and income from continuing operations before income taxes should NOT be adjusted for purchase accounting. That is, use the acquired entity's historical amounts and the registrant's pro forma amounts.

Therefore, the asset valuation of $5,000,000 as contemplated in the Purchase Agreement should not be used in the calculation of assets under Regulation S-X.

2015.5 Investment Test

The consideration transferred was as follows, whereby the staff compared the Registrant's investment in the acquired business to the Registrant's total assets

Telecom Financial Services Limited	5,000,000 Shares @ Par Value	$0.001	$5,000
Shares of Registrant	5,000,000 Shares @ Par Value	$0.001	$5,000

However, should it be determined that the fair value of the assets should be stated at the current value of HMMR Stock on the date of the transfer, such value may be fairly estimated at

Shares of Registrant	5,000,000 Shares @ $0.95/share	$4,750,000

Valuation of Earnout

In addition, the Section also states that we should only apply a value to the Earnout component of the purchase price if we can reasonably assume that the conditions of the earnout can be met. Because the earnout condition of the agreement is $10 million of annual EBITDA and the business does not have any positive EBITDA to date, it is not reasonable to assume that the earnout will be met within the next five years. Although the earnout condition does not have a time limit pursuant to the agreement, applying a discounted cash flow to $10 million by year 5 (applying Schilt Category IV to the discounted cash flows), makes the value of the earnout immaterial.

These assets should be adjusted pursuant to Section 15.5:

The adjustment - For purposes of the "investment" test, "consideration transferred" should be adjusted to exclude carrying value of assets transferred by the acquirer to the acquired business that will remain with the combined entity after the business combination.

Therefore, since this value is carried forward in the transaction upon consolidation, the target should not be subject to audit as it does not exceed 20% significance level pursuant to regulation S-X.

2015.8 Income Test

The staff compared the cumulative effect of the change in accounting principle to that of the Registrant.

Net Loss of TFS:	$	(103,308	)
Net Income of Registrant:	$	2,950,060

The Net Loss of the target is 0-0.35% of the Net Income of the Registrant and should therefore not be subject to audit as it does not exceed the 20% significance level pursuant to Regulation S-X 3-05.

for related businesses.

2030.1 Regulation S-X 3-05 Audit Requirements

As the results of all three tests for Telecom Financial Services Limited do not exceed the 20% threshold, no financial statements should be required for Telecom Financial Services Limited no financial statements should be audited pursuant to Regulation S-X under section 2035 "Individually Insignificant Acquirees" which states that "any consummated acquisition whose significance does not exceed 20% that were consummated after the balance sheet date of the most recent audited financial statements included in the registration or proxy statement through the effective date of the registration statement or the date of the proxy statement is mailed."

Prepared On Behalf of Hammer Technology Holdings By:

Signature:
Name:	Erik B. Levitt
Title:	Principal Financial Officer
Date:	10 December 2021