What changed in this filing

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Item 1. Financial Statements

2024-03-08 compared with 2023-10-30 · 709 added, 497 removed, 277 unchanged (81% of the section changed)

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INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2023

Condensed Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and September 30, 2022

Condensed Consolidated Statements of Operations (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited)

Condensed Consolidated Statements of Cash Flows (Unaudited)

DECEMBER 31, 2023

Condensed Consolidated Balance Sheets as of December 31, 2023 (Unaudited) and September 30, 2023

Condensed Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022 (Unaudited)

Condensed Consolidated Statements of Changes in

Stockholders’ Deficit for the three months ended December 31, 2023 and 2022 (Unaudited)

Condensed Consolidated Statements of Cash Flows for

the three months ended December 31, 2023 and 2022 (Unaudited)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Accounts receivable, net

Prepaid expenses

Total current assets

Vehicles, net

Website development, net

Fixed assets, net

Intangible assets, net

Liabilities and Stockholders’ Deficit

Current Liabilities

Accounts payable

Accrued liabilities

Accounts payable and accrued liabilities

Accrued interest – related parties

Deferred revenue

Due to related party

Notes Payable

Promissory notes payable

Promissory notes payable - related parties

Convertible notes payable in default

Customer deposits

Due to related parties

Promissory notes payable, net of debt discount

Promissory notes payable, in default

Promissory notes payable - related parties, in default

Convertible notes payable, net of debt discount

Derivative liability

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SBA Loan - noncurrent

Convertible note payable - noncurrent, net

Notes payable - noncurrent

Convertible note payable - noncurrent, net of debt discount

Promissory notes payable - noncurrent

Total Liabilities

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1,000,000,000 shares authorized;

106,551,722 shares issued and 106,536,622 outstanding at June 30, 2023 and 105,301,722 shares issued and 105,286,622 outstanding as of September 30, 2022, respectively

106,551,722 shares issued and 106,551,722 outstanding at December 31, 2023 and September 30, 2023, respectively

Additional paid in capital

Treasury stock, at cost - 15,100 shares at June 30, 2023 and September 30, 2022

Treasury stock, at cost - 15,100 shares at December 31, 2023 and September 30, 2023

Accumulated deficit

( 4,026,325 )

( 3,310,896 )

Total Stockholders’ Deficit

( 2,669,788 )

( 1,954,359 )

Total Liabilities and Stockholders’ Deficit

The accompanying notes

are an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings,

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Three Months Ended

Nine Months Ended

Insurance revenue

Rental revenue

Initial fee revenue

Miscellaneous Revenue

Vehicle owner share

Driver and dealer insurance cost

Total Revenues

Cost of Goods Sold

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Software development

Selling expense

Advertising and marketing

Total Operating Expenses

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Other Income (Expenses)

Loss on contingency liability

Gain on change in fair value of derivative liability

Gain on PPP loan forgiveness

Gain (loss) on change in fair value of derivative liability

Amortization debt discount

1 unchanged sentence

Interest expense - related parties

Interest income

Total Other (Expense)

Total Other Income (Expense)

Loss Before Income Tax

( 1,735,166 )

Provision for income taxes

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$ ( 721,008 )

$ ( 697,482 )

$ ( 1,735,166 )

Net Loss Per Common Share

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Basic and diluted weighted average number of common shares outstanding

accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings,

Condensed Consolidated

Statement of Changes in Stockholders’ Equity (Deficit)

For the Nine Months Ended June 30,

Statement of Changes in Stockholders’ Deficit

Treasury Stock

Stockholders’

September 30, 2022 —

Balance - September 30, 2023

$ ( 3,310,896 )

$ ( 1,954,359 )

stock issued in connection with promissory note

based compensation

Balance - December 31, 2023

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$ ( 2,669,788 )

Balance - March 31, 2023 —

( 2,921,146 )

( 1,623,100 )

Balance – June 30,

$ ( 3,078,241 )

$ ( 1,780,195 )

For the Nine Months Ended June 30,

Total Stockholders’

Preferred Stock

Treasury Stock

Stockholders’

Balance – September 30, 2022

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$ ( 1,099,222 )

Common stock issued in connection with promissory note

Stock based compensation

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$ ( 3,101,767 )

Stock based compensation

Preferred stock issued for conversion of debt- related party

Preferred stock issued for conversion of debt

Preferred stock issued for exercise of stock option - related party

Reorganization

Common stock issued in connection with promissory note

Balance – March 31, 2022

$ ( 1,803,721 )

Conversion of preferred stock to common stock

( 2,594,593 )

Cancellation of common shares against note receivable

Debt discount recorded for warrants issued in connection with convertible notes

Balance - June 30, 2022

$ ( 2,640,560 )

Holdings, Inc.

Consolidated Statements of Cash Flows

For the Nine Months Ended

The accompanying notes

are an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings,

Condensed Consolidated

Statements of Cash Flows

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

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Adjustments to reconcile net loss to net cash used in operating activities:

Gain on PPP Loan Forgiveness

Stock-based compensation

Gain on change in fair value of derivative liability

Loss on change in fair value of derivative liability

Amortization and depreciation

Loss on contingency liability

Amortization of debt discount

Financing Fee

Changes in operating assets and liabilities:

Prepaid expenses

Due to related party

Prepaid website development

Accounts receivable

Deferred revenue

Accounts payable

Accrued liabilities

Customer deposits

Accounts payable and accrued liabilities

Accrued liabilities- related party

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CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of subsidiary

Website development

Purchase of vehicles

Purchase of intangible assets

Purchase of fixed assets

Net Cash used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from convertible debt

Proceeds from promissory debt

Proceeds from promissory debt - related parties

Proceeds from notes payable

Repayment of notes payable

Repayment of SBA Loan

Proceeds from convertible notes payable

Proceeds from promissory notes payable

Repayment of promissory notes payable

Debt issuance costs

Net Cash provided by Financing Activities

Net change in cash

Cash, beginning of period

Cash, end of period

Net change in cash and restricted cash

Cash and restricted cash, beginning of period

Cash and restricted cash, end of period

Supplemental cash flow information

Cash paid for interest

Cash paid for taxes

Non-cash Investing and Financing transactions:

Preferred stock issued for conversion of debt -related party

Preferred stock issued for conversion of debt

Common stock and warrant issued in connection with promissory note

Common stock in connection with promissory note

Recognition of derivative liability as debt discount

Debt discount in connection with original issue discount notes

Conversion of preferred stock to common stock

Cancellation of common shares against note receivable

Prepaid expenses reclassified to website development

Reclassification of Promissory notes payable - related parties to Promissory notes payable

The accompanying notes

are an integral part of these unaudited condensed consolidated financial statements

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

1 – Organization, Description of Business and Going Concern

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18, 2022, the name was changed to DriveItAway Holdings, Inc.

DIA is a national dealer focused mobility platform that enables car dealers to sell more vehicles in a seamless way through eCommerce,

a national dealer focused mobility platform that enables car dealers to sell more vehicles in a seamless way through eCommerce,

with its exclusive “Pay as You Go” app-based subscription program.

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course of business.

During the period ended June 30, 2023, the Company had a net loss of $ 697,482 and cash used in operating activities

of $ 366,356 .

As of June 30, 2023, the Company had an accumulated deficit of $ 3,078,241 .

The Company has not established sufficient

revenue to cover its operating costs and will require additional capital to continue its operating plan.

The ability of the Company

to continue as a going concern depends on the Company obtaining adequate capital to fund operating losses until it becomes profitable.

During the period ended December 31, 2023, the Company had a net loss of $ 715,429 and cash used in operating

activities of $ 104,496 .

As of December 31, 2023, the Company had an accumulated deficit of $ 4,026,325 .

The Company has not established

sufficient revenue to cover its operating costs and will require additional capital to continue its operating plan.

of the Company to continue as a going concern depends on the Company obtaining adequate capital to fund operating losses until

it becomes profitable.

If the Company is unable to obtain adequate capital, it could be forced to cease operations.

These factors raise substantial doubt

about its ability to continue as a going concern.

to continue as a going concern, the Company will need, among other things, additional capital resources.

Management’s plan

to obtain such resources for the Company includes:

These factors

raise substantial doubt about its ability to continue as a going concern.

as a going concern, the Company will need, among other things, additional capital resources.

Management’s plan to obtain

such resources for the Company includes:

sales of equity instruments;

traditional financing, such as loans;

and obtaining

capital from management and significant stockholders sufficient to meet its minimum operating expenses.

However, management cannot

provide any assurance that the Company will be successful in accomplishing this plan.

and obtaining capital

from management and significant stockholders sufficient to meet its minimum operating expenses.

However, management cannot provide

any assurance that the Company will be successful in accomplishing this plan.

is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available,

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financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

2 - Summary of Significant Accounting Policies

of Presentation

Company prepares its financial statements in accordance with rules and regulations of the Securities and Exchange Commission (“SEC”)

prepares its financial statements in accordance with rules and regulations of the Securities and Exchange Commission (“SEC”)

and Generally Accepted Accounting Principles (“GAAP”) in the United States of America.

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have been included.

Operating results for the nine months ended June 30, 2023, are not necessarily indicative of the results for

the full year.

Operating results for the three months ended December 31, 2023, are not necessarily indicative of the results

for the full year.

While management of the Company believes that the disclosures presented herein are adequate and not misleading,

these interim financial statements should be read in conjunction with the audited financial statements and the footnotes thereto

for the year ended September 30, 2022, contained in the Company’s Form 10K, as filed on January 13, 2023.

of Consolidation

The consolidated

financial statements include the accounts of DriveItAway Holdings Inc.

and its wholly owned subsidiary DriveItAway, Inc., collectively

referred to as the “Company”.

for the year ended September 30, 2023, contained in the Company’s Form 10K, as filed on March 8, 2024.

Basis of Consolidation

The consolidated financial statements include

the accounts of DriveItAway Holdings Inc.

and its wholly owned subsidiary DriveItAway, Inc., collectively referred to as the “Company”.

All inter-company balances and transactions are eliminated in consolidation.

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The significant estimates and

assumptions made by management include allowance for doubtful accounts, allowance for deferred tax assets, fair value of equity

assumptions made by management include allowance for doubtful accounts, allowance for deferred tax assets, and fair value of equity

Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty

inherent in these estimates and assumptions.

and Cash Equivalents

considers all highly liquid securities with original maturities of six months or less when acquired, to be cash equivalents.

of June 30, 2023, and September 30, 2022, the Company had cash of $ 30,783 and $ 127,109 , which included restricted cash of $ 26,992

and $ 0 , respectively and did not have any cash equivalents.

June 30, 2023 and September 30, 2022, the Company had $ 26,992 and $ 0 in restricted cash that is held by AJB Capital LLC, for funds

advanced by them, but are to be used for future payment for professional fees.

reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad

debt expense when deemed necessary.

The Company records an allowance for doubtful accounts that is based on historical trends,

customer knowledge, any known disputes, and considers the aging of the accounts receivable balances combined with management’s

estimate of future potential recoverability.

Accounts and receivables are written off against the allowance after all attempts

to collect a receivable have failed.

The Company believes its allowances for doubtful accounts as of June 30, 2023 and September

30, 2022 are adequate, but actual write-offs could exceed the recorded allowance.

As of June 30, 2023 and September 30, 2022 the

balances in the allowance for doubtful accounts was $ 0 .

Foreign Currency Translation

Foreign currency translation is recognized

in accordance with ASC 830.

The Company’s functional currency is USD, therefore all amounts of revenues received from foreign

accounts are translated to the Company’s functional currency (USD) upon receipt and thereby, translation gains and losses

are recognized upon receipt.

Cash and Cash Equivalents

The Company considers all highly liquid

securities with original maturities of three months or less when acquired, to be cash equivalents.

As of December 31, 2023, and

September 30, 2023, the Company had cash of $ 61,167

and $ 4,632 ,

and restricted cash of $ 0

and $ 18,559 ,

respectively and did not have any cash equivalents.

December 31, 2023 and September 30, 2023, the Company had $ 0 and $ 18,559 in restricted cash that is held by AJB Capital LLC, for

funds advanced by them, but are to be used for future payment for professional fees.

Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Accounts Receivable

The Company reviews accounts receivable periodically

for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary.

records an allowance for doubtful accounts that is based on historical trends, customer knowledge, any known disputes, and considers

the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability.

and receivables are written off against the allowance after all attempts to collect a receivable have failed.

The Company believes

its allowances for doubtful accounts as of December 31, 2023, and September 30, 2023 are adequate, but actual write-offs could

exceed the recorded allowance.

As of December 31, 2023, and September 30, 2023 the balances in the allowance for doubtful accounts

assets are recorded at cost and depreciated using the straight-line method over the estimated useful lives, currently seven ( 7 )

Maintenance and repair costs are charged to expense as incurred.

Major improvements, which extend the useful life of the

related asset, are capitalized.

Upon disposal of a fixed asset, we record a gain or loss based on the difference between the proceeds

received and the net book value of the disposed asset.

We remove fully depreciated assets from the cost and accumulated depreciation

amounts disclosed.

intangible assets include website and software development costs.

The costs incurred in the preliminary stages of website and software

development are expensed as incurred.

Once an application has reached the development stage, internal and external costs, if direct

and incremental and deemed by management to be significant, are capitalized and amortized on a straight-line basis over their estimated

useful lives.

Maintenance and enhancement costs, including those costs in the post-implementation stages, are typically expensed

as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software that result in added

functionality, in which case the costs are capitalized and amortized on a straight-line basis over the estimated useful lives.

Amortization expense related to capitalized website and software development costs is included in operating expenses in our consolidated

statements of operations.

development activities placed in service are amortized over the expected useful lives of those releases, currently estimated at

three ( 3 ) years.

The estimated useful lives of website and software development activities are reviewed frequently and adjusted

as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing

functionality.

We remove fully amortized website and software development costs from the cost and accumulated amortization amounts

Construction-in-progress

primarily consists of website development costs that are capitalizable, but for which the associated applications have not been

placed in service.

Company’s operating lease portfolio for the period ended December 31, 2023 and September 30, 2023, includes the vehicle leases

from third parties and the Company’s owned vehicles that are leased to the customers under operating leases.

The contracts

for these operating leases are short-term in nature with terms less than twelve (12) months.

The Company has elected as an accounting

policy not to apply the recognition requirements in ASC 2016-02, Leases (“ASC 842”) to short-term leases.

recognizes the lease payments for short-term leases on a straight-line basis over the lease term.

As of December 31, 2023, the

Company did not have leases that qualified as ROU assets.

Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Value Measurements

follows ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value as the exchange price that would

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amounts shown of the Company’s financial instruments including cash, accounts receivable, prepaid expense, accounts

payable, and accrued liabilities are approximate fair value due to their short-term nature.

are recorded at cost and depreciated using the straight-line method over the estimated useful lives of seven (7) years.

and repair costs are charged to expense as incurred.

Major improvements, which extend the useful life of the related asset, are

Upon disposal of a vehicle, we record a gain or loss based on the difference between the proceeds received and the

net book value of the disposed vehicle.

We remove fully depreciated vehicles from the cost and accumulated depreciation amounts

Website and Software

Development Costs

incurred in the preliminary stages of website and software development are expensed as incurred.

Once an application has reached

the development stage, internal and external costs, if direct and incremental and deemed by management to be significant, are capitalized

and amortized on a straight-line basis over their estimated useful lives.

Maintenance and enhancement costs, including those costs

in the post-implementation stages, are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements

to the website or software that result in added functionality, in which case the costs are capitalized and amortized on a straight-line

basis over the estimated useful lives.

Amortization expense related to capitalized website and software development costs is included

in operating expenses in our consolidated statements of operations.

development activities placed in service are amortized over the expected useful lives of those releases, currently estimated at

three (3) years.

The estimated useful lives of website and software development activities are reviewed frequently and adjusted

as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing

functionality.

We remove fully amortized website and software development costs from the cost and accumulated amortization amounts

Construction-in-progress primarily

consists of website development costs that are capitalizable, but for which the associated applications have not been

placed in service.

Financial Instruments

value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection

reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exception for

treatment as a derivative under ASC 815 “Derivatives and Hedging”, since “down-round protection” is not

an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to

the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

The accounting

treatment of derivative financial instruments requires that the Company record embedded conversion options and warrants at their

fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date.

Any change in

fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date.

reassesses the classification of its derivative instruments at each balance sheet date.

If the classification changes as a result

of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

payable, and accrued liabilities approximate fair value due to their short-term nature.

All financial assets and liabilities are approximate to their fair

Derivative liabilities are valued at Level 3.

Schedule of fair value of financial assets and liabilities

Fair Value Measurements at December 31, 2023 using:

December 31, 2023

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Derivative Liabilities

Fair Value Measurements at September 30, 2023 using:

September 30, 2023

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs

Derivative Liabilities

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

Derivative Financial Instruments

The Company accounts for their derivative financial instruments in accordance with ASC 815

“Derivatives and Hedging” therefore any embedded conversion options and warrants accounted for as derivatives are

to be recorded at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance

Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each

balance sheet date.

The Company reassesses the classification of its derivative instruments at each balance sheet date.

classification changes as a result of events during the period, the contract is reclassified as of the date of the event that

caused the reclassification.

The Black-Scholes

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subjective input assumptions that can materially affect the fair value estimates.

The expected volatility is estimated based on

the most recent historical period of time, of our common stock, equal to the weighted average life of the options.

Revenue Recognition

The Company’s

revenue is recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with

Customers, for all periods presented.

The Company, through its DriveItAway online/app-based platform, operates in the retail automotive

The Company assists subprime and deep subprime candidates, with little or no down payment, in purchasing the used vehicle

of his/her choice by first starting in an app based, turnkey rental, through participating franchise and independent car dealers.

The Company derived its rental revenue from contract revenue share for rentals between participating franchise and independent

car dealers and individual car rental customers (“customers”).

In conjunction with the rental revenue, the Company

generates revenue by providing driver and vehicle insurance through a third party, included in the rental contract with each customer.

The Company’s

performance obligation for rental revenue is to provide an application to track car rental arrangements and to collect cash from

car rental customers and remit those payments to participating franchise and independent car dealers, net of the Company’s

revenue share.

The car rental arrangements are over a fixed contracted period;

therefore, the Company recognizes revenue ratably

during the contract term.

The Company’s performance obligation for insurance revenue is to collect insurance fees from the

customer and provide the third-party provider payment for the insurance provided to the customer.

The insurance is offered over

a fixed contracted period;

therefore, the Company recognizes revenue ratably during the contract term.

and insurance transactions are prepaid at the beginning of the rental cycle (typically a one-week rental that has an automatic

renewal) with an automatic charge to the customer’s credit card on file through the DIA system.

The DIA system then distributes

the vehicle owner share (typically 85% of rental revenue) to the vehicle owner’s bank account from the Stripe Account.

amount is shown as a deduction to Revenues (“Vehicle Owner Share”) on the Company’s Statements of Operations.

The net amount is then transferred from the Company’s Stripe Account to the DIA operating bank account.

DIA also distributes

insurance amounts due to the third - party insurance provider on a monthly basis.

This amount is shown as a deduction

to revenues (“Driver & Dealer Insurance Cost”) on the Company’s Statements of Operations.

generates miscellaneous revenue in a number of ways.

At the end of the rental term, the DIA software system checks for any excess

usage and charges, based on the terms of the rental contract, and will automatically charge a customer’s credit card.

charges are recognized when the credit card charge goes through and recorded as miscellaneous revenue on the Company’s Statements

of Operations.

Additional miscellaneous revenue represents amounts earned on telematics equipment and telematics software services

related to each rental vehicle used to track excess usage and charges.

DIA performance obligation is to provide the equipment to

the vehicle owner for self-installation and allow access to the software throughout the rental term.

The Company recognizes revenue

when the equipment is delivered to the vehicle owner.

Miscellaneous revenue associated with use of the telematics software is recognized

on a monthly basis.

The Company’s

Cost of Goods sold consists of direct expenses, such as roadside assistance or telematics service fees, and credit card fees incurred

from the cash collections and cash remittance process, as a significant portion of its performance obligation is to collect and

remit payments through its credit card processors.

Advertising Costs

advertising costs are expensed as incurred.

The Company incurred general advertising costs for the nine months ended June 30, 2023

and 2022 of $ 38,838 and $ 14,155 , respectively.

The Company’s revenue is recognized in accordance with Accounting

Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, for all periods presented.

through its DriveItAway online/app-based platform (“platform”), operates in the automotive rental industry.

assists subprime and deep subprime candidates to rent/lease vehicles on a short-term basis, generally on a weekly or, in some cases

monthly, basis under a Pay-As You-Go program.

Through its platform the Company will track vehicle values and reduce vehicle pricing

through the customers usage payments to show drivers a vehicle purchase price should they be interested in buying the vehicle,

at which time the customer would procure financing if the Company determined they wanted to sell the vehicle at the listed purchase

During the periods ended December 31, 2023, and 2022, the Company

derived its revenue from signed contracts for vehicle rentals between the Company, other leasing companies, or car dealerships

and individual car rental customers (“customers”).

Customers book a vehicle through the Company’s platform, starting

first with a rental contract with the vehicle.

When the customer books the vehicle, per the terms of the individual rental agreements,

the customer shall pay a stated rental rate, a stated insurance amount, an initial non-refundable fee, and, in some cases, a refundable

At the end of the usage cycle, the system calculates miles driven and if the customer has driven more than the prorated,

included amount, they pay extra usage/mileage fees.

In instances when a customer pays late, they pay a late fee and in cases of

incurring charges for tolls they pay for the toll costs incurred.

Additionally, contracts may be extended (a new contract is signed)

at which time the credit card on file for the customer will be charged at the beginning of the contract extension period for rental

rate and insurance amount for the new extension period.

Vehicles available in the platform can be owned or leased by the

Company or made available through arrangements with independent car dealerships (“dealerships”).

For vehicles owned

or leased by the Company, the Company’s performance obligation for rental revenue is to provide customers with a vehicle

and an application to track vehicle rental arrangements.

For vehicles made available through dealerships the Company’s performance

obligation for rental revenue is to provide an application to track vehicle rental arrangements and to collect cash from customers

and remit those amounts to dealerships net of the Company’s revenue share.

The vehicle rental arrangements are over a fixed

contracted period;

therefore, the Company recognizes rental revenue ratably over the contract term.

Costs related to rental revenue

include depreciation for Company owned vehicles and monthly lease payments when the vehicles are leased from a leasing company.

The amount of revenue transferred to dealerships is treated as contra-revenue because the Company acts as an agent in these transactions

resulting in only the Company’s revenue share being recognized.

The Pay-As-You-Go program manages or includes insurance.

Fleet insurance

is sometimes provided where the Company has a fleet policy and the driver is added to it when needed.

In this case, the driver

pays the cost of insurance as a separate payment in the system.

This payment is a type of revenue.

The Company pays the insurance

company providing the coverage.

This is a cost of goods sold.

The Company also allows for drivers to bring their own insurance.

The Company works with associated insurance brokers to write a policy for the customer for that vehicle and a separate finance

company that pays for the policy in full.

The Company acts as trustee in collecting installments and transferring them to the finance

Collected payments are treated as a revenue and transfers to the finance company are treated as contra-revenue because

the Company acts as an agent in these transactions.

Lastly, in markets where the Company cannot support this program, drivers are

allowed to bring their own insurance and pay it directly themselves with no involvement of the Company.

No revenue is collected

or recognized in this instance.

Because any insurance revenue is collected at contract inception and covers the fixed contract

period the Company recognizes insurance revenue ratably over the contract term.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

Initial non-refundable

fees are recognized when payment is received as the Company has no obligation to provide additional services at that point.

Miscellaneous

charges for extra mileage, late fees, or toll charges calculated and charged to the customer credit card at the end of the usage

cycle are recognized when the credit card charge goes through.

Refundable deposits are recorded on the balance sheet until deposits

are returned to customers or applied to their account for fees incurred.

Deferred revenue includes rental and insurance amounts

that are paid for contracts that overlap a reporting date and relate to usages after that date.

As of December 31, 2023 and September

30, 2023 refundable deposits were $ 1,339 and $ 2,234 and deferred revenue was $ 4,967 and $ 7,233 , respectively.

In addition to the

costs associated with rental revenue and insurance revenue, within the Cost of Goods Sold account the Company also records credit

card fees incurred from the cash collections and cash remittance process, as a significant portion of its performance obligation

is to collect and remit payments through its credit card processors.

Stock-Based Compensation

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variables, including expected stock price volatility and the risk-free interest rate.

The provision

for income taxes and deferred income taxes are determined using the asset and liability method.

Deferred tax assets and liabilities

are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities

using enacted tax rates in effect in the years in which the temporary differences are expected to reverse.

On a periodic basis,

the Company assesses the probability that its net deferred tax assets, if any, will be recovered.

If after evaluating all of the

positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred

tax assets will not be recovered, a valuation allowance is provided by a charge to tax expense to reserve the portion of the deferred

tax assets which are not expected to be realized.

Advertising and Marketing Costs

Advertising and marketing costs are expensed

The Company incurred advertising and marketing costs for the three months ended December 31, 2023 and 2022 of $ 176 and

$ 8,551 , respectively.

The provision for income taxes and deferred

income taxes are determined using the asset and liability method.

Deferred tax assets and liabilities are determined based on temporary

differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect

in the years in which the temporary differences are expected to reverse.

On a periodic basis, the Company assesses the probability

that its net deferred tax assets, if any, will be recovered.

If after evaluating all of the positive and negative evidence, a conclusion

is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation

allowance is provided by a charge to tax expense to reserve the portion of the deferred tax assets which are not expected to be

Loss per Share of Common Stock

calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed

by dividing the net loss by the weighted average number of common shares outstanding during the period.

Diluted earnings per share

of common stock are computed by dividing net earnings by the weighted average number of shares and potential shares outstanding

during the period.

Potential shares of common stock consist of shares issuable upon the conversion of outstanding convertible debt,

preferred stock, warrants and stock option.

Accounting Pronouncements

has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will

have a material impact on its consolidated financial statements.

The Company calculates net

loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing

the net loss by the weighted average number of common shares outstanding during the period.

Diluted earnings per share of common

stock are computed by dividing net earnings by the weighted average number of shares and potential shares outstanding during the

Potential shares of common stock consist of shares issuable upon the conversion of outstanding convertible debt, preferred

stock, warrants and stock option.

For the periods ended December 31, 2023, and December 31, 2022, the common stock equivalents

were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

Schedule of anti-dilutive shares

Convertible notes

Reclassification

Certain accounts from prior periods have been

reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

In the period from October 2023 through March

2024 the FASB has not issued any additional accounting standards updates that have a significant impact on the Company.

has evaluated other recently issued accounting pronouncements and does not believe that any of these pronouncements will have a

significant impact on our consolidated financial statements and related disclosures.

3 – Related Party Transactions

Advances and Repayments

In the normal course of business, the Company’s

management team or their affiliates will make payments on behalf of the Company or will provide short-term advances to the Company

to cover operating expenses.

As of December 31, 2023 and September 30, 2023,

the Company owed related parties for an unsecured, non-interest-bearing advance, payable on demand, in the amount of $ 25,080 for

this activity.

On March 1, 2023, the Company entered into three

promissory note agreements with three related parties for a total of $ 50,000

with interest bearing at 15 %

per annum, maturity date of 120 days from issuance (June 30, 2023) and issuance of 100,000

warrants with exercise price of $ 0.05

that expire on March

As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were

assigned a value of $ 3,068

which was recorded as a derivative liability and debt discount (see Note 8).

During the three months ended December 31, 2023 the

Company reclassified one of these promissory notes with a value of $ 7,500

from Promissory notes payable – related party to Promissory notes payable due the note holder, a former director, no longer

being considered a related party.

As of December 31, 2023 and September 30, 2023, the amount due to related parties for Promissory

notes payable was $ 42,500

and $ 50,000 ,

respectively.

During the three months ended December 31,

2023 and 2022, the Company recorded related party interest expense of $ 2,654 and $ 0 respectively.

As of December 31, 2023 and September 30, 2023,

the Company had defaulted on the promissory notes payable with aggregate outstanding principal of $ 42,500 and $ 50,000 respectively,

and owed unpaid interest of $ 6,812 and $ 4,918 , respectively.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

4 – Fixed and Intangible Assets

The following

table summarizes the components of our vehicles as of the dates presented:

Schedule of vehicles

table summarizes the components of our fixed assets as of the dates presented:

Schedule of fixed assets

September 30,

2 unchanged sentences

Vehicles, net

expense for the nine months ended June 30, 2023 and 2022, was $ 24,141 and $ 4,645 , respectively.

During the nine months ended

June 30, 2023 and 2022, the Company purchased vehicles of $ 67,039 and $ 126,406 , respectively.

4 – Website Development

expense for the three months ended December 31, 2023, and December 31, 2022, was $ 8,099 and $ 7,199 , respectively.

The following

table summarizes the components of our website development as of the dates presented:

Schedule of website development

table summarizes the components of our intangible assets as of the dates presented:

Schedule of intangible assets

September 30,

1 unchanged sentence

Accumulated depreciation

expense for the nine months ended June 30, 2023, and 2022, was $ 3,172 and $ 0 , respectively.

During the nine months ended June

30, 2023, and 2022, we incurred website development costs of $ 16,331 and $ 0 , respectively.

expense for the three months ended December 31, 2023, and 2022, was $ 1,372 and $ 454 , respectively.

Note 5 – Equity

13 unchanged sentences

prior to the record date of the dividend declared on the Common Stock.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

The Series A Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities,

12 unchanged sentences

Common Stock at any time that there are less than 200,000 shares of Series A Preferred Stock outstanding.

June 30, 2023, and September 30, 2022, the Company had no shares of Series

the three months ended December 31, 2023 and 2022 there were no issuances of the Series A Preferred shares.

December 31, 2023 and September 30, 2023, the Company had no shares of Series

A Preferred stock outstanding.

During the nine months ended

June 30, 2022, the Company issued 294,593 shares of DIA common stock which was automatically converted into 294,593 shares of Series

A Preferred at the closing of the Share Exchange on February 24, 2022.

The preferred stock is reflected retroactively for all periods

the nine months e nded June 30, 2023, the Company issued:

the three months ended December 31, 2023, no common stock was issued.

the three months ended December 31, 2022, the Company had the following common stock activity:

1,000,000 shares of common stock valued at $ 60,000 for commitment fees in conjunction with the issuance of promissory note of $ 750,000 .

(see Note 7).

250,000 shares of common stock

valued at $ 15,000 , for consulting services, based on the fair market value of the shares on the grant date.

the nine months ended June 30, 2022, the Company had the following common stock activity:

On February 24, 2022, the Company recognized the equity of DIA Holdings as part of the reorganization which resulted in the Company recognizing the issuance of 13,716,041 shares of common stock and 15,100 shares of treasury stock, at a value of $ 1,720,867 .

On February 24, 2022, the Company issued 4,000,000 shares of common stock valued at $ 316,324 for commitment fees in conjunction with the issuance of a promissory note of $ 750,000 .

On April 20, 2022, the Company issued 88,085,681 shares of common stock as a result of the conversion of all outstanding shares of Series A Preferred Stock.

In May 2022, 500,000 shares were returned for cancellation, to satisfy a note receivable in the amount of $ 100,000 .

of June 30, 2023, and September 30, 2 022, the Company had 106,551,722 and 105,301,722

common shares issued, respectively.

250,000 shares of common stock valued at $ 15,000 , for consulting services, based on the fair market value of the shares on the grant date.

As of December 31, 2023, and

September 30, 2023, the Company had 106,551,722 common shares issued.

records treasury stock at cost.

Treasury stock is comprised of shares of common stock purchased by the Company in the secondary

As of June 30, 2023 and September 30, 2022 the Company had 15,100 shares of treasury stock valued at $ 18,126 .

As of December 31, 2023, and September 30, 2023 the Company had 15,100 shares of treasury stock valued at $ 18,126 .

On February 24, 2022, in conjunction with the

issuance of a promissory note of $ 750,000 , the Company issued 1,000,000 warrants for $ 0.30 per share.

The transaction led to no

explicit limit to the number of shares to be delivered upon future settlement of the conversion options (see Note 8), therefore

the equity environment became tainted and the warrants qualified for derivative accounting and were assigned a value of $ 107,283

which was recorded as a derivative liability and debt discount.

The warrants expire on February 24, 2027 .

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

In June 2022, in conjunction with a private

offering and the issuance of secured promissory notes of $ 250,000 (see Note 8), the Company issued 125,000 warrants for $ 0.30 per

As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and

were assigned a value of $ 8,136 which was recorded as a derivative liability and debt discount.

The warrants expire in June 2027.

2022, in conjunction with a private offering and the issuance of secured promissory notes of $ 200,000 , the Company issued 100,000 warrants

for $ 0.30 per share.

The transaction led to no explicit limit to the number of shares to be delivered upon future settlement

of the conversion options, therefore the warrants qualified for derivative accounting and were assigned a value of $ 3,794 which

was recorded as a derivative liability and debt discount.

The warrants expire in November 2027.

2023, 1,000,000 warrants with exercise price of $ 0.05 were issued that expire on February 24, 2027 ( 4 year).

As a result of the

Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of

$ 21,469 which was recorded as a derivative liability and debt discount.

2023, 125,000 warrants with exercise price of $ 0.05 were issued that expire on March 1, 2028 ( 5 year).

As a result of the Company’s equity environment being tainted the warrants qualified for derivative

accounting and were assigned a value of $ 4,074 which was recorded as a derivative liability and debt discount.

The warrants expire

in November 2027.

2023, in conjunction with a promissory note amendment which was recognized as debt extinguishment, 2,000,000 warrants with exercise

price of $ 0.05 were issued that expire on February 24, 2027 ( 4 year), which replaced the original 1,000,000 warrants issued with

an exercise price of $ 0.30 previously issued with the original promissory note.

As a result of the Company’s equity environment

being tainted the warrants qualified for derivative accounting and were assigned a value of $ 21,469 which was recorded as a derivative

liability and debt discount.

2023, 125,000 warrants with an exercise price of $ 0.05 were issued that expire on March 1, 2028 ( 5 year).

As a result of the Company’s

1 unchanged sentence

was recorded as a derivative liability and debt discount.

issued were valued using the Black-Scholes pricing model.

In December 2023, in conjunction with the issuance

of a promissory note of $ 195,000 , the Company issued warrants to purchase 5,000,000 shares of Company’s common stock for

nominal exercise price of $ 0.00001 per share.

The warrant is exercisable at any time on or after December 15, 2023 and until

the warrant is exercised in full.

The warrants also include various covenants of the Company for the benefit of the warrant holder

and includes a beneficial ownership limitation on the holder that, in certain circumstances, may serve to restrict the holder’s

right to exercise the warrants.

As a result of the Company’s equity environment being tainted the warrants qualified for

derivative accounting and were assigned a value of $ 248,952 which was recorded as a derivative liability.

The note was discounted

to a principal balance of $ 0 and a debt discount of $ 195,000 was recorded at inception.

The difference between the fair value of

the warrants and the net proceeds received was recognized as interest expense.

All derivative liabilities recognized for the

warrants issued were valued using the Black-Scholes pricing model.

The Black-Scholes model requires six basic data inputs:

or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock

price in the future, and the dividend rate.

Changes to these inputs could produce a significantly higher or lower fair value measurement

(see Note 8 ).

of warrant activity during the nine months ended June 30, 2023, is as follows:

exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of

the stock price in the future, and the dividend rate.

Changes to these inputs could produce a significantly higher or lower fair

value measurement (see Note 8).

of warrant activity during the three months ended December 31, 2023, is as follows:

Schedule of warrant activity

3 unchanged sentences

Balance as of September 30, 2023

Balance as of June 30, 2023

Balance as of December 31, 2023

*5,000,000 warrants issued on December 15,

2023 do not have an expiration date.

The intrinsic

value of the warrants as of June 30, 2023, is $ 0 .

All of the outstanding warrants are exercisable as of June 30, 2023.

value of the warrants as of December 31, 2023, is $ 234,950 .

All of the outstanding warrants are exercisable as of December 31, 2023.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

Note 6 – Notes

3, 2020, the Company entered into a SBA Loan for $ 78,500 at a rate of 3.75 %.

On August 12, 2021 the loan increased to

$ 114,700 and the Company obtained $ 36,200 on October 8, 2021.

The SBA Loan requires payments starting 30 months from

the initial funding date and matures on June 7, 2050 .

During the nine months ended June 30, 2023, and 2022, the Company

paid principal of $ 2,637 and $ 0 and interest of $ 1,690 and $ 0 , respectively.

During the nine months ended June 30, 2023 and 2022,

the Company recorded interest expense of $ 3,188 and $ 3,187 on the SBA Loan, respectively.

As of June 30, 2023, and September

30, 2022, the outstanding principal of SBA Loan was $ 112,063 and $ 114,700 and accrued interest on the SBA Loan was $ 9,673 and

$ 8,175 , respectively.

On June 3, 2020, the Company

entered into a SBA Loan for $ 78,500 at a rate of 3.75 %.

On August 12, 2021, the loan increased to $ 114,700 and the

Company obtained $ 36,200 on October 8, 2021.

The SBA Loan requires payments starting 30 months from the initial funding date

and matures on June 7, 2050 .

During the three months ended December 31, 2023, and 2022, the Company recorded interest

expense of $ 1,084 and $ 1,074 , respectively, on the SBA Loan and as of December 31, 2023, and September 30, 2023, the accrued interest

on the SBA Loan was $ 6,166 and $ 6,780 , respectively.

As of December 31, 2023, and September 30, 2023 the outstanding principal

of SBA Loan was $ 114,700 .

The following represents the future aggregate

maturities of the Company’s SBA Loan as of June 30, 2023 for each of the five (5) succeeding years and thereafter as follows:

maturities of the Company’s SBA Loan as of December 31, 2023, for each of the five (5) succeeding years and thereafter as

Schedule of future aggregate

1 unchanged sentence

2024 (remaining)

In March 2023, the

Company entered into a promissory note agreement with an investor for amount of $ 12,500 with interest bearing at 15 % per annum,

maturity date of 120 days from issuance and issuance of 25,000 warrants with exercise price of $ 0.05 that expire on March 1, 2028

During the nine months ended June 30,2023, the Company recorded interest expense of $ 313 and amortization of debt discount

As of June 30, 2023, the debt discount recorded on the notes was $ 767 , resulting in a note payable balance of $ 12,500 .

As of June 30, 2023, the Company owed accrued interest of $ 630 .

As of June 30, 2023, the

Company had defaulted on the promissory note payable with aggregate outstanding principal of $ 12,500 and owed unpaid interest of

In May 2023 the Company executed a note payable

with a face amount of $ 35,982 .

Under the terms of the agreement, the lender will withhold 20% of the Company’s daily funds

arising from sales through the lender’s payment processing services until the Company has repaid the $ 35,982 (interest is

$ 3,682 or approximately 10% of the note amount).

The Company received net proceeds of $ 32,300 .

As of June 30, 2023, the Company

has note payable balance of $ 21,539 .

The following represents the future aggregate

maturities as of June 30, 2023 of the Company’s $ 21,539 Note Payable:

Schedule of future aggregate

Promissory Notes Payable,

March 1, 2023, the Company entered into a promissory note agreement with an investor for amount of $ 12,500 with interest bearing

at 15 % per annum, maturity date of 120 days from issuance and issuance of 25,000 warrants with exercise price of $ 0.05 that expire

on March 1, 2028 (5 year).

As a result of the Company’s equity environment being tainted the warrants qualified for derivative

accounting and were assigned a value of $ 767 which was recorded as a derivative liability and debt discount (see Note 8).

the three months ended December 31, 2023 and 2022, the Company recorded interest expense of $ 639 and $ 0 , respectively.

As of December

31, 2023, and September 30, 2023, the accrued interest on the promissory note was $ 1,908 and $ 1,269 .

As of December 31, 2023, and

September 30, 2023 the outstanding principal of Promissory Notes Payable was $ 12,500 .

As of December 31, 2023, the Company had

defaulted on the promissory note payable.

During the three months ended December

31, 2023, the Company reclassified a promissory note entered on March 1, 2023 with a value of $ 7,500 , with interest bearing 15 %

per annum, maturity date 120 days from issuance (June 30, 2023) and issuance of 15,000 warrants with exercise price of $ 0.05 that

expire on March 1, 2028 (5 year), from Promissory notes payable – related party to Promissory notes payable due the note

holder, a former director, no longer being considered a related party.

As a result of the Company’s equity environment being

tainted the warrants qualified for derivative accounting and were assigned a value of $ 460 which was recorded as a derivative liability

and debt discount (see Note 8).

During the three months ended December 31, 2023 and 2022, the Company recorded interest expense

of $ 384 and $ 0 , respectively.

As of December 31, 2023, and September 30, 2023, the accrued interest on the promissory note was

$ 1,145 and $ 761 .

As of December 31, 2023, and September 30, 2023, the total outstanding principal of the promissory note payable

was $ 7,500 .

As of December 31, 2023, the Company had defaulted on the promissory note payable.

Notes Payable

May 1, 2023 the Company executed a note payable with a face amount of $ 35,982 .

Under the terms of the agreement, the lender will

withhold 20% of the Company’s daily funds arising from sales through the lender’s payment processing services until

the Company has repaid the $ 35,982 (including fixed fees of $ 3,682 or approximately 10% of the note amount).

The Company received

net proceeds of $ 32,300 and the $ 3,685 of fixed fees were recorded as debt discount.

As of December 31, 2023, the Company had amortized

the full $ 3,682 of debt discount, had made repayments of $ 27,752 , and rolled $ 8,230 of the notes principal still due into a second

note (see below), therefore the loan was considered paid in full.

Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

August 15, 2023 the Company executed a second note payable with the same lender from the May 1, 2023 note, with a face amount of

Under the terms of the agreement, the lender will withhold 20% of the Company’s daily funds arising from sales through

the lender’s payment processing services until the Company has repaid the $ 64,206 (including fixed fees of $ 6,206 or approximately

10% of the note amount).

The Company received net proceeds of $ 49,770 after paying off the May 1, 2023 note and rolling $ 8,230

of its balance into the August 15, 2023 note and recording the $ 6,206 of fixed fees as a debt discount.

During the three months

ended December 31, 2023, the Company amortized $ 1,034 of the debt discount and made repayments of $ 28,278 .

This resulted in a debt

discount balance of $ 4,827 and a principal balance of $ 21,669 , for a net notes payable balance of $ 16,842 as of December 31, 2023.

following represents the future aggregate maturities as of December 31, 2023 of the Company’s Promissory Notes Payable:

Schedule of future aggregate maturities

Fiscal year ending September 30,

1 unchanged sentence

7 – Convertible Notes Payable

Capital Investments, LLC Note

February 24, 2022 and as amended October 31, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”)

with AJB Capital Investments, LLC (“AJB”), and issued a Promissory Note in the principal amount of $ 750,000 (the

“AJB Note”) to AJB in a private transaction for a purchase price of $ 675,000 (after giving effect to a 10 % original

issue discount).

In connection with the sale of the AJB Note, the Company also paid $ 33,750 in certain fees and due diligence

costs of AJB and brokerage fees to J.H.

Darbie & Co., a registered broker-dealer.

Investments, LLC Note

Effective February

24, 2022, the Company entered into a Securities Purchase Agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”),

and issued a Promissory Note in the principal amount of $ 750,000 (the “AJB Note”) to AJB in a private transaction for

a purchase price of $ 675,000 (after giving effect to a 10% original issue discount).

In connection with the sale of the AJB Note,

the Company also paid $ 33,750 in certain fees and due diligence costs of AJB and brokerage fees to J.H.

Darbie & Co., a registered

broker dealer.

After payment of the fees and costs, the net proceeds to the Company were $ 641,250 , which will be used for working

capital and other general corporate purposes.

The maturity date

of the AJB Note was extended to February 24, 2023 .

The AJB Note bears interest at 10 % per annum for the original note’s period

and 12% per annum for extension period which was started from August 24, 2022, and it is payable on the first of each month beginning

April 1, 2022.

The Company may prepay the AJB Note at any time without penalty.

The note is convertible

into Common Stock of the Company at any time that the note is in default, provided that at no time may the note be convertible

into an amount of common stock that would result in the holder having beneficial ownership of more than 4.99% of the outstanding

shares of common stock, as determined in accordance with Section 13(d) under the Securities Exchange Act of 1934 (the “Exchange

The conversion price equals the lowest trading price during either the 20 days trading days prior to the date of conversion

or the 20 trading days prior to the date of issuance of the note (which was $0.14 per share).

The conversion is subject to reduction

in the following situations:

(i) a 10% discount will apply anytime a conversion occurs when the company is not eligible to deliver

the shares by DWAC;

(ii) a 15% discount will apply whenever the shares are “chilled” for deposit into the DTC system;

(iii) a 15% discount will apply if the Company’s common stock ceases to be registered under Section 12 of the Exchange Act;

(iv) a 15% discount will apply if the note cannot be converted into free trading shares 181 days after its issue date;

event any other party has the right to convert debt into Common Stock at a greater discount to market than under the note, then

the holder has the right to utilize such discount in determining the conversion price;

or (vi) if the Company issues any shares

of Common Stock for less than the conversion price in effect on the date of issuance, including any options, warrants or securities

convertible into Common Stock at price less than the conversion price, then the conversion price shall be automatically reduced

to the amount of consideration received by the company for such shares, except for any issuance that is an exempt issuance.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

Also pursuant to the

SPA, the Company was to pay AJB a commitment fee of $ 800,000 , payable in the form of 4,000,000 unregistered shares of the Company’s

common stock (the “Commitment Fee Shares”) which were issued at note inception.

If, after the sixth month anniversary

of closing and before the thirty-sixth month anniversary of closing, AJB has been unable to sell the Commitment Fee Shares for

$ 800,000 , then the Company may be required to issue additional shares or pay cash in the amount of the shortfall.

However, if the

Company pays the AJB Note off on or before its maturity date, then the Company may redeem 2,000,000 of the Commitment Fee Shares

for one dollar and the amount of the commitment fee will be reduced to $ 400,000 .

On issuance of the note, the Company determined

that the guarantee on the commitment fee was a make-whole provision and an embedded derivative within the host instrument.

guarantee was bifurcated from the host instrument and recorded as a derivative liability valued at $ 384,287 using a Black-Scholes

option pricing model (see Note 9).

Pursuant to the SPA,

the Company also issued to AJB common stock purchase warrants (the “warrants”) to purchase 1,000,000 shares of the

Company’s common stock for $ 0.30 per share, which was assigned a value of $ 107,283 that was recorded as derivative liability

(see Notes 5 and 9).

The warrants expire on February 24, 2027 .

The warrants also include various covenants of the Company for the

benefit of the warrant holder and includes a beneficial ownership limitation on the holder that, in certain circumstances, may

serve to restrict the holder’s right to exercise the warrants.

After recording the

derivative liabilities associated with the SPA, the Company allocated the net proceeds to the 4,000,000 common shares issued and

the note itself based on their relative fair market values, resulting in the common shares being assigned a value of $ 65,274 (see

The allocation of the financing costs of $ 108,750 , the derivative for the guarantee of $ 384,287 , the derivative for the

warrant of $ 107,283 , and issuance of the 4,000,000 Commitment Fee shares of $ 65,274 , to the debt component resulted in a $ 665,594

debt discount that is being amortized to interest expense over the term of the AJB Note.

On October 31, 2022,

the Company amended the AJB Note to issue 1,000,000 additional Commitment Fee Shares, recognizing the value of the shares and a

debt discount of $ 60,000 .

On February 10, 2023,

the Company entered into second amendment with AJB by increasing the original principal of the note by $ 85,000 , which increased

the restricted cash balance to be used for payments for professional services, replacing the original 1,000,000 warrants with an

exercise price of $ 0.30 with 2,000,000 warrants with an exercise price of $ 0.05 and extending the maturity date of the note to

May 24, 2023 .

The Company determined the extension of cash and modification to other terms met the conditions of a debt extinguishment;

therefore, the Company recorded a loss on extinguishment of debt for the total amount of $ 36,313 included in other income (expenses)

within the accompanying statement of operation.

On September 27, 2023,

the Company entered into second amendment with AJB by increasing the original principal of the note by $ 25,000 which increased

the restricted cash balance to be used for payments for professional services.

On November 28, 2023,

the Company entered into a third amendment with AJB Capital Investments, LLC by increasing the original principal of note with

amount of $ 22,222 in which the Company received $ 20,000 in cash (after giving effect to a 10% original issue discount) for payment

Effective December

15, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”),

and issued a Promissory Note in the principal amount of $ 195,000 (the “AJB Note”) to AJB in a private transaction for

a purchase price of $ 165,750 (after giving effect to a 15% original issue discount).

In connection with the sale of the AJB Note,

the Company also paid certain fees and due diligence costs of AJB and brokerage fees.

After payment of the fees and costs, the

net proceeds to the Company were $ 150,750 , which will be used for working capital and other general corporate purposes.

maturity date of the AJB Note was extended to February 24, 2023 .

The AJB Note bears interest at 10 % per annum for the

original note’s period and 12% per annum for extension period which was started from August 24, 2022, and it is payable on

the first of each month beginning April 1, 2022.

The maturity date

of the AJB Note is June 14, 2024 .

The AJB Note bears interest at 10 % per year, and principal and accrued interest is due on the

maturity date.

The Company may prepay the AJB Note at any time without penalty.

is convertible into Common Stock of the Company at any time that the note is in default, provided that at no time may the note

be convertible into an amount of common stock that would result in the holder having beneficial ownership of more than 4.99% of

the outstanding shares of common stock, as determined in accordance with Section 13(d) under the Securities Exchange Act of 1934

(the “Exchange Act”).

The conversion price equals the lowest trading price during either the 20 days trading days prior

to the date of conversion or the 20 trading days prior to the date of issuance of the note (which was $0.14 per share).

The conversion

is subject to reduction in the following situations:

(i) a 10% discount will apply anytime a conversion occurs when the company

is not eligible to deliver the shares by DWAC;

(ii) a 15% discount will apply whenever the shares are “chilled” for

deposit into the DTC system;

(iii) a 15% discount will apply if the Company’s common stock ceases to be registered under

Section 12 of the Exchange Act;

(iv) a 15% discount will apply if the note cannot be converted into free trading shares 181 days

after its issue date;

(v) in the event any other party has the right to convert debt into Common Stock at a greater discount to

market than under the note, then the holder has the right to utilize such discount in determining the conversion price;

if the Company issues any shares of Common Stock for less than the conversion price in effect on the date of issuance, including

any options, warrants or securities convertible into Common Stock at price less than the conversion price, then the conversion

price shall be automatically reduced to the amount of consideration received by the company for such shares, except for any issuance

that is an exempt issuance.

pursuant to the SPA, the Company was to pay AJB a commitment fee of $ 800,000 , payable in the form of 5,000,000 unregistered

shares of the Company’s common stock (the “Commitment Fee Shares”) of which 4,000,000 shares were issued

at note inception and 1,000,000 shares on the October 31, 2022 amendment.

If, after the sixth month anniversary of closing

and before the thirty-sixth month anniversary of closing, AJB has been unable to sell the Commitment Fee Shares for $ 800,000 , then

the Company may be required to issue additional shares or pay cash in the amount of the shortfall.

However, if the Company pays

the AJB Note off on or before its maturity date, then the Company may redeem 2,000,000 of the Commitment Fee Shares for

one dollar and the amount of the commitment fee will be reduced to $ 400,000 .

On issuance of the note, the Company determined that

the guarantee on the commitment fee was a make-whole provision and an embedded derivative within the host instrument.

The guarantee

was bifurcated from the host instrument and recorded as a derivative liability valued at $ 385,796 using a Black-Scholes option

pricing model (see Note 8).

to the SPA, the Company also issued to AJB common stock purchase warrants (the “warrants”) to purchase 1,000,000 shares

of the Company’s common stock for $ 0.30 per share, which was assigned a value of $ 107,283 that was recorded as

derivative liability.

The warrants expire on February 24, 2027 .

The warrants also include various covenants of the Company

for the benefit of the warrant holder and include a beneficial ownership limitation on the holder that, in certain circumstances,

may serve to restrict the holder’s right to exercise the warrants.

recording the derivative liabilities associated with the SPA, the Company allocated the net proceeds to the 4,000,000 common

shares issued and the note itself based on their relative fair market values, resulting in the common shares being assigned a value

of $ 65,274 .

The allocation of the financing costs of $ 108,750 , the derivative for the guarantee of $ 384,287 , the derivative for

the warrant of $ 107,283 , and issuance of the 4,000,000 Commitment Fee shares of $ 65,274 , to the debt component resulted

in a $ 665,594 debt discount that is being amortized to interest expense over the term of the AJB Note.

October 31, 2022, the Company amended the AJB Note to issue 1,000,000 additional Commitment Fee Shares, recognizing the

value of the shares and a debt discount of $ 1,509 (see Note 5).

February 10, 2023, the Company entered into second amendment with AJB by increasing the original principal of note with amount

of $ 85,000 in cash for payment to vendors, issuance 1,000,000 additional warrant (see Note 5 )

and extension maturity date of note to May 24, 2023 .

The Company determined the extension of cash and term met the conditions of

a modification.

the nine months ended June 30, 2023, the Company recorded interest expense of $ 72,217 , additional debt discount of $ 26,478 ,

amortization of debt discount of $ 25,902 , a loss on change in fair value of derivative liability of $( 272,161 ) for the guarantee

and warrants and repaid $ 31,042 of interest.

As of June 30, 2023, the derivative liability was $ 52,062 and the debt discount

recorded on the note was $ 576 , resulting in a note payable balance of $ 834,423 .

As of June 30, 2023, the Company had defaulted

on the convertible notes payable with aggregate outstanding principal of $ 835,000 and owed unpaid interest of $ 42,930 .

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

The note is convertible

into Common Stock of the Company at any time that the note is in default, provided that at no time may the note be convertible

into an amount of common stock that would result in the holder having beneficial ownership of more than 4.99% of the outstanding

shares of common stock, as determined in accordance with Section 13(d) under the Securities Exchange Act of 1934 (the “Exchange

The conversion price equals the lowest trading price during either the 20 days trading days prior to the date of conversion

or the 20 trading days prior to the date of issuance of the note (which was $0.14 per share).

The conversion is subject to reduction

in the following situations:

(i) a 15% discount will apply anytime a conversion occurs when the company is not eligible to deliver

the shares by DWAC;

(ii) a 15% discount will apply whenever the shares are “chilled” for deposit into the DTC system;

(iii) a 15% discount will apply if the Company’s common stock ceases to be registered under Section 12 of the Exchange Act;

(iv) a 15% discount will apply if the note cannot be converted into free trading shares 181 days after its issue date;

event any other party has the right to convert debt into Common Stock at a greater discount to market than under the note, then

the holder has the right to utilize such discount in determining the conversion price;

or (vi) if the Company issues any shares

of Common Stock for less than the conversion price in effect on the date of issuance, including any options, warrants or securities

convertible into Common Stock at price less than the conversion price, then the conversion price shall be automatically reduced

to the amount of consideration received by the company for such shares, except for any issuance that is an exempt issuance.

On December 15, 2023,

in conjunction with the issuance of this promissory note of $ 195,000 , the Company also issued to AJB common stock purchase warrants

(the “ December 2023 warrants”) to purchase 5,000,000 shares of the Company’s common stock for a nominal exercise

price of $ 0.00001 per share.

The December 2023 warrants may be exercised at any time on or after December 15, 2023 and until the

warrant is exercised in full.

The warrants also include various covenants of the Company for the benefit of the warrant holder

and includes a beneficial ownership limitation on the holder that, in certain circumstances, may serve to restrict the holder’s

right to exercise the warrants.

As a result of the Company’s equity environment being tainted the warrants qualified for

derivative accounting and were assigned a value of $ 248,952 which was recorded as a derivative liability, with corresponding amounts

of $ 150,750 was allocated to debt discount and the difference between the fair value of the December 2023 warrants and the net

proceeds received of $ 98,202 was recognized as interest expense.

During the three months ended December 31, 2022, the Company recorded

interest expense of $ 23,000 , additional debt discount of $ 1,509 , amortization of debt discount of $ 794 , a gain on change of derivative

liability of $ 352,627 for the guarantee and warrants and repaid $ 23,542 of interest.

During the three months

ended December 31, 2023, the Company recorded interest expense of $ 27,460 , additional debt discount of $ 197,222 , amortization of

debt discount of $ 19,070 , and a loss on change in fair value of derivative liability of $ 252,194 for the guarantee and warrants.

As of December 31, 2023 and September 30, 2023, the derivative liability was $ 502,083 and $ 663 for the guarantee and warrants,

the debt discount recorded on the note was $ 178,152 and $ 0 , the note payable principal was $ 1,077,222 and $ 860,000 , and the Company

owed accrued interest of $ 96,022 and $ 68,562 .

Effective February

14, 2023, the Company went into default on the AJB Note, however the lender waived all default provisions through January 24, 2024

therefore no default interest or penalties were incurred during the three months ended December 31, 2023 and the AJB note was not

convertible as of December 31, 2023.

Convertible Notes

2022, the Company’s board of directors approved an offering of up to 10 Units at $ 50,000 per Unit in a private

Each Unit consists of a Secured Convertible Note with an original principal balance of $ 50,000 and one warrant to

purchase Common Stock for every $2 invested in the offering.

The warrants have an exercise price of $ 0.30 per share and

expire five ( 5 ) years from the date of issuance.

Each Secured Convertible Note bears interest at 15 % per annum, matures two

years after the date of issuance, and is convertible at the option of the holder into common stock at $ 0.20 per share.

to a security agreement between the Company and investors in the Unit offering, and the subscription agreements executed by the

Company and the investors, the Secured Convertible Notes are secured by liens on four existing electric vehicles that

were owned by the Company at the time of the commencement of the offering, and eight additional electric vehicles that will be

purchased with the proceeds of the offering, assuming all 10 Units are sold in the offering.

The Company also granted subscribers

in the Unit offering piggyback registration rights with respect to any shares of common stock issuable upon conversion of the Secured

Convertible Notes or upon exercise of the warrants issued in the Unit offering.

June 2022, the Company sold a total of $ 250,000 worth

of Units to U.S.

Escrow Services Corporation and Kevin Leach, two accredited investors, which resulted in

the issuance of two secured promissory notes with an aggregate principal amount of $ 250,000 for

cash proceeds of $ 230,000 ,

and the issuance of 125,000 warrants.

conversion option embedded in the notes was bifurcated and accounted for as a derivative liability resulting in the Company

recording a debt discount and derivative liability of $ 50,491 .

allocation of the warrant to the debt component resulted in the Company recording a debt discount and derivative liability of $ 8,136 .

The cash issuance discount resulted in the recording of a debt discount of $ 20,000 .

The total debt discount of $ 78,627 is

being amortized to interest expense over the term of the Note.

2022, the Company’s board of directors approved an offering of up to 10 Units at $ 50,000 per Unit in a private offering.

Each Unit consists of a Secured Convertible Note with an original principal balance of $ 50,000 and one warrant to purchase Common

Stock for every $2 invested in the offering.

The warrants have an exercise price of $ 0.30 per share and expire five ( 5 ) years from

the date of issuance.

Each Secured Convertible Note bears interest at 15 % per annum, matures two years after the date of issuance,

and is convertible at the option of the holder into common stock at $ 0.20 per share.

Pursuant to a security agreement between the

Company and investors in the Unit offering, and the subscription agreements executed by the Company and the investors, the Secured

Convertible Notes are secured by liens on four existing electric vehicles that were owned by the Company at the time of the commencement

of the offering, and eight additional electric vehicles that will be purchased with the proceeds of the offering, assuming all

10 Units are sold in the offering.

The Company also granted subscribers in the Unit offering piggyback registration rights with

respect to any shares of common stock issuable upon conversion of the Secured Convertible Notes or upon exercise of the warrants

issued in the Unit offering.

Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

June 2022, the Company sold a total of $ 250,000 worth of Units to U.S.

Escrow Services Corporation and Kevin Leach, two accredited

investors, which resulted in the issuance of two secured promissory notes with an aggregate principal amount of $ 250,000 for cash

proceeds of $ 230,000 (net of an original issuance discount of $ 20,000 ), and the issuance of 125,000 warrants (see Note 5).

$ 20,000 was recorded as a debt discount and the conversion option embedded in the notes was bifurcated and accounted for as a derivative

liability resulting in the Company recording a debt discount and derivative liability of $ 50,491 .

As a result of the Company’s

equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $ 8,136 which was

recorded as a derivative liability (see Note 8) and debt discount.

The total debt discount of $ 78,627 is being amortized to interest

expense over the term of the Note.

November 2022, the Company sold a total of $ 200,000 worth of Units to Cestone Family Foundation and Michele and Agnese Cestone

Foundation, two accredited investors, which resulted in the issuance of two secured promissory notes with an aggregate principal

amount of $200,000 for cash proceeds of $ 180,000 , and the issuance of 100,000 warrants.

The conversion option

embedded in the notes was bifurcated and accounted for as a derivative liability resulting in the Company recording a debt discount

and derivative liability of $ 19,330 .

The allocation of the warrant to the debt component resulted

in the Company recording a debt discount and derivative liability of $ 3,794 .

The cash issuance discount resulted in the recording

of a debt discount of $ 20,000 .

The total debt discount of $ 43,124 is being amortized to interest expense over the term

the nine months ended June 30, 2023, the Company recorded interest expense of $ 47,354 , paid interest of $ 13,125 and amortization

amount of $ 200,000 for cash proceeds of $ 180,000 (net of an original issuance discount of $ 20,000 ), and the issuance of 100,000

warrants (see Note 6).

The $ 20,000 was recorded as a debt discount and the conversion option embedded in the notes was bifurcated

and accounted for as a derivative liability resulting in the Company recording a debt discount and derivative liability of $ 19,330 .

As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned

a value of $ 7,254 which was recorded as a derivative liability (see Note 9) and debt discount).

The total debt discount of $ 43,124

is being amortized to interest expense over the term of the Note.

the three months ended December 31, 2022, the Company recorded interest expense of $ 13,614 , and amortization of debt discount of

the three months ended December 31, 2023, the Company recorded interest expense of $ 17,250 , paid interest of $ 0 and amortization

of debt discount of $ 15,302 .

As of June 30, 2023, and September 30, 2022, the debt discount recorded on the notes was $ 66,970 and

$ 66,660 , resulting in a note payable balance of $ 383,031 and $ 183,340 , respectively.

As of June 30, 2023, and September 30, 2022,

As of December 31, 2023, and September 30, 2023, the debt discount recorded on the notes was $ 36,324 and

$ 51,626 , resulting in a net note payable balance of $ 413,677 and $ 398,374 , respectively.

As of December 31, 2023, and September

30, 2023, the Company owed accrued interest of $ 80,313 and $ 63,063 , respectively.

The following represents the future aggregate maturities of the

Company’s Convertible Notes Payable as of June 30, 2023 for each of the five (5) succeeding years and thereafter as follows:

Company’s Convertible Notes Payable as of December 31, 2023 for each of the five (5) succeeding years and thereafter as follows:

Schedule of future aggregate maturities

5 unchanged sentences

therefore the Company’s equity environment is tainted.

requires we record the fair market value of the derivative liabilities at inception and at the end of each reporting period and

recognize any change in the fair market value as other income or expense item.

requires that we record the fair market value of the derivative liabilities at inception and at the end of each reporting period

and recognize any change in the fair market value as other income or expense item.

determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate

the fair values at inception and as of June 30, 2023.

the fair values at inception and as of December 31, 2023.

The Black-Scholes model requires six basic data inputs:

the exercise or strike

price, time to expiration,

the risk-free interest rate, the current stock price, the estimated volatility of the stock price in

the future, and the dividend rate.

or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock

price in the future, and the dividend rate.

Changes to these inputs could produce a significantly higher or lower fair value measurement.

The following assumptions were used in the Black-Scholes model during the nine months ended June 30, 2023, and year ended

The following assumptions were used in the Black-Scholes model during the three months ended December 31, 2023, and year ended

September 30, 2023:

of defined benefit plan, assumptions

Nine months ended

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial

December 31, 2023

Schedule of assumptions used

Three months ended

September 30,

9 unchanged sentences

3.93 % - 5.03 %

The following

table summarizes the changes in the derivative liabilities during the nine months ended June 30, 2023:

of defined benefit plan, assumptions

5,000,000 warrants issued on December 15, 2023 do not have an expiration

As of December 31, 2023, the estimated fair values of the liabilities

measured on a recurring basis are as follows (level 3):

Schedule of estimated fair values of the liabilities

Commitment fee guarantee issued February 24, 2022

Warrants issued February 24, 2022

Embedded conversion feature in Note issued June 3, 2022

Warrants issued June 3, 2022

Embedded conversion feature in Note issued June 16, 2022

Warrants issued June 16, 2022

Embedded conversion feature in Note issued November 15, 2022

Warrants issued November 15, 2022

Warrants issued on February 10, 2023

Warrants issued on March 1, 2023

Warrants issued on December 15, 2023

Derivative liability balance - December 31, 2023

The following table provides a summary of changes

in fair value of the Company’s Level 3 financial liabilities during the three months ended December 31, 2023:

Schedule of changes

in fair value of derivative liability

Derivative liability balance - September 30, 2023

Addition of new derivatives recognized as debt discounts

Gain on change in fair value of the derivative

Derivative liability balance – June 30, 2023

Note 9 – Related

Party Transactions

normal course of business, the Company’s management team or their affiliates will make payments on behalf of the Company

or will provide short-term advances to the Company to cover operating expenses.

the nine months ended June 30,2023 and 2022, the Company’s related party advanced $ 25,000 and $ 0 .

As of June 30, 2023 and

September 30, 2022, the Company owed related parties for an unsecured, non-interest-bearing advance, payable on demand,

in the amount of $ 25,080 and $ 80 , respectively.

2023, the Company entered into three promissory note agreements with three related parties for a total of $ 50,000 with interest

bearing at 15 % per annum, maturity date of 120 days from issuance and issuance of 100,000 warrants with exercise price of $0.05

that expire on March 1, 2028 ( 5 year).

During the nine months ended June 30, 2023, the Company recorded interest expense of $ 2,522

and amortization of debt discount of $ 3,068 .

As of June 30, 2023, the debt discount recorded on the notes was $ 0 , resulting in

a note payable balance of $ 50,000 .

As of June 30, 2023, the Company had defaulted on the promissory notes payable with aggregate

outstanding principal of $ 50,000 and owed unpaid interest of $ 2,522 .

10 - Net Income (Loss) per Common Share

Basic net income per common share is computed

by dividing net income by the weighted average number of common shares outstanding during the periods.

Diluted net income per common

share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods.

Common equivalent shares consist of convertible preferred stock and convertible notes that are computed using the if-converted

method, and outstanding warrants that are computed using the treasury stock method.

Antidilutive stock awards consist of convertible

notes that would have been antidilutive in the application of the if-converted method.

three and nine months ended June 30, 2023 and 2022, the following common stock equivalents were excluded from the computation of

diluted net loss per share as the result of the computation was anti-dilutive.

Schedule of anti dilutive securities excluded from the

computation of earning per share

Three and Nine months ended

A Convertible Preferred Stock

11 – Subsequent Events

has evaluated subsequent events through the date these financial statements were available to be issued.

Based on our evaluation

no material events have occurred that require disclosure.

Loss on change in fair value of the derivative

Derivative liability balance - December 31, 2023

Note 9 – Subsequent

Management has evaluated

subsequent events through the date these financial statements were available to be issued.

Please note the following matters deemed

to be subsequent events.

Effective February 23, 2024, the Company entered

into a Securities Purchase Agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”), and issued

a Promissory Note in the principal amount of $ 140,000 (the “AJB Note”) to AJB in a private transaction for a purchase

price of $ 112,000 (after giving effect to a 20% original issue discount).

In connection with the sale of the AJB Note, the Company

also paid certain fees and due diligence costs of AJB and brokerage fees.

After payment of the fees and costs, the net proceeds

to the Company were $ 102,000 , which will be used for working capital and other general corporate purposes.

The maturity date of the AJB Note is November

The AJB Note bears interest at 12 % per year, and principal and accrued interest is due on the maturity date.

Company may prepay the AJB Note at any time without penalty.

Also pursuant to the SPA, the Company was to

pay AJB a commitment fee of $ 50,000 , payable in the form of 5,000,000 unregistered shares of the Company’s common stock

(the “Commitment Fee Shares”) which were issued at note inception.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements