What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-24 compared with 2024-03-08 · 168 added, 159 removed, 104 unchanged (76% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto included

elsewhere in this Form 10-K.

Management’s Discussion

and Analysis of Financial Condition and Results of Operations

The following discussion and

analysis should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Form 10-K.

All information presented herein is based on the Company’s fiscal year, which ends September 30.

otherwise stated, references to particular years, quarters, months or periods refer to the Company’s fiscal years ended in September

and the associated quarters, months and periods of those fiscal years.

Company was formed in Delaware on March 8, 2006 as B2 Health, Inc.

On July 2, 2010, the Company acquired BFK Franchise Company, LLC (“BFK”),

a Nevada limited liability company, and concurrently changed its name to Creative Learning Corporation.

On February 24, 2022, the Company

acquired DriveItAway, Inc., and on March 18, 2022, disposed of BFK and its other subsidiaries involved in the learning business.

Unless otherwise stated, references

to particular years, quarters, months or periods refer to the Company’s fiscal years ended in September and the associated quarters,

months and periods of those fiscal years.

The Company was formed in

Delaware on March 8, 2006 as B2 Health, Inc.

On July 2, 2010, the Company acquired BFK Franchise Company, LLC (“BFK”), a Nevada

limited liability company, and concurrently changed its name to Creative Learning Corporation.

On February 24, 2022, the Company acquired

DriveItAway, Inc., and on March 18, 2022, disposed of BFK and its other subsidiaries involved in the learning business.

On April 18, 2022,

the name was changed to DriveItAway Holdings, Inc.

Company is 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.

DIA provides a comprehensive turnkey, solutions driven

program with proprietary mobile technology and driver app, insurance coverages and training to get dealerships up and running quickly

and profitably in emerging online sales opportunities.

The company is planning to soon expand its easy and transparent consumer app ‘subscription

to ownership’ platform to enable entry level consumers to drive and acquire new Electric Vehicles.

OF OPERATIONS

the year ended September 30, 2023, compared to year ended September 30, 2022

operating results for the years ended September 30, 2023 and 2022 are summarized as follows:

On April 12, 2024, the Company formed DIA Leasing,

LLC, a Florida limited liability company, which is a wholly owned subsidiary.

The Company is 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.

DIA provides a comprehensive turnkey, solutions driven program with proprietary mobile

technology and driver app, insurance coverages and training to get dealerships up and running quickly and profitably in emerging online

sales opportunities.

The company is planning to soon expand its easy and transparent consumer app ‘subscription to ownership’

platform to enable entry level consumers to drive and acquire new Electric Vehicles.

RESULTS OF OPERATIONS

For the year ended September 30, 2024, compared

to year ended September 30, 2023

Our operating results for the

years ended September 30, 2024 and 2023 are summarized as follows:

Income (expense)

$ (1,475,365 )

Revenues for the year

ended September 30, 2023 was $307,284, as compared to $55,509 for the year ended September 30, 2022, an increase of $251,775 primarily

due to a $151,464 increase in rental revenue.

for the year ended September 30, 2024 was $460,991, as compared to $307,284 for the year ended September 30, 2023, an increase of $153,707

primarily due to a $149,248 increase in rental revenue.

Operating expenses for the year

ended September 30, 2024 were $706,416 as compared to $830,976 for the year ended September 30, 2023.

The decrease of $370,791 was

primarily attributable to a $299,088 decrease in professional fees and a $90,475 reduction in salaries and payroll taxes.

Operating loss was $762,455

for the year ended September 30, 2023, as compared to $1,185,156 for the year ended September 30, 2022.

The decrease of $422,701 was

largely attributable to a decrease in professional fees, salaries, and payroll taxes and a large increase in rental revenue.

Other income (expenses) for

year ended September 30, 2023 were ($167,682), as compared to ($290,209) for the year ended September 30, 2022.

The increase of $122,527

was attributable to an increase in amortization debt discount of $555,282, partially offset by decreases in gain (loss) on change in

fair value of derivative liability, gain on PPP loan forgiveness, and interest expense of $265,465, $24,148, and $103,549, respectively.

Liquidity and Capital

The decrease of $124,560 was primarily

attributable to a $29,730 decrease in salaries and payroll taxes, and a $94,664 decrease in professional fees.

Operating loss was $568,155 for

the year ended September 30, 2024, as compared to $762,455 for the year ended September 30, 2023.

The increase of $194,300 was largely

attributable to a decrease in professional fees, salaries, and payroll taxes and a large increase in rental revenue.

Other income (expenses) for year ended September 30, 2024 were ($1,680,088),

as compared to ($167,682) for the year ended September 30, 2023.

The increase of $1,512,406 was attributable to increases in amortization

debt discount of $271,667, change in fair value of derivative liability of $512,474, amortization of deferred financing costs of $201,236,

and interest expense of $563,342.

Liquidity and Capital Resources:

The following table provides

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Working capital (deficiency)

$ (1,861,864 )

As of September 30, 2023, and September

30, 2022, our total current assets net of restricted cash were $16,216 and $143,689 which were comprised of $4,632 and $127,109 in cash,

$11,584 and $6,082 in accounts receivable and $0 and $10,498 in prepaid expenses, respectively.

As of September 30, 2023, our

current liabilities were $1,861,080 which were comprised of $664,707 in accounts payable and accrued liabilities, $4,918 in accrued interest

– related party, $7,233 in deferred revenue, $2,234 in customer deposits, $25,080 in due to related party, $27,437 in promissory

notes payable, $12,500 in promissory notes payable in default, $50,000 in promissory notes payable – related parties, $1,082,654

in convertible notes payable, and $1,317 in derivative liability.

As of September 30, 2022, our current liabilities were $1,094,299 which

were comprised of $227,109 in accounts payable and accrued liabilities, $2,101 in deferred revenue, $750,000 in convertible notes payable,

$115,009 in derivative liability and $80 in due to related party.

As of September 30, 2023, and

September 30, 2022, our working capital deficiency was $1,861,864 and $950,610, respectively.

As of September 30, 2024 and September 30, 2023, our total current assets

net of restricted cash were $37,996 and $16,216 which were comprised of $33,588 and $4,632 in cash, $1,438 and $11,584 in accounts receivable

and $2,970 and $0 in prepaid expenses, respectively.

of September 30, 2024, our current liabilities were $4,373,184 which were comprised of $994,270

in accounts payable and accrued liabilities, $12,752 in accrued interest – related

party, $3,306 in deferred revenue, $1,339 in customer deposits, $25,080 in due to related

party, $270,000 in promissory notes payable in default, $42,500 in promissory notes payable

– related parties, $1,597,312 in convertible notes payable, and $1,386,014 in derivative

As of September 30, 2023 our current liabilities were $1,878,080 which were

comprised of $664,707 in accounts payable and accrued liabilities, $4,918 in accrued interest

– related party, $7,233 in deferred revenue, $2,234 in customer deposits, $25,080 in

due to related party, $27,437 in promissory notes payable, $12,500 in promissory notes payable

in default, $50,000 in promissory notes payable – related parties, $1,082,654 in convertible

notes payable, and $1,317 in derivative liability.

As of September 30, 2024 and September 30, 2023, our working capital deficiency

was $4,335,188 and $1,861,864, respectively.

Cash Flow Data:

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Cash Flows from Operating Activities

During the year ended September 30, 2024 the company did not generate positive

cash flows from operating activities.

For the year ended September 30, 2024 net cash flows used in operating activities was $424,379 consisting

of a net loss of $2,248,243, reduced by amortization debt discount of $393,964, amortization and depreciation of $57,324, gain on change

in fair value of derivative liability of $342,751, amortization of deferred financing costs of $201,236, discount on lines of credit of

$(85,000), addition to derivative liability of $686,102, discount on notes payable of $(112,246), and a change in operating assets and

liabilities of $339,751.

During the year ended September

30, 2023 the company did not generate positive cash flows from operating activities.

For the year ended September 30, 2023, net cash

flows used in operating activities was $445,105 consisting of a net loss of $930,137, reduced by stock-based compensation expenses of

$15,000, amortization debt discount of $122,279, depreciation of $36,783, a loss on debt extinguishment of $36,313, a change in operating

assets and liabilities of $444,380, and gain on change in fair value of derivative liability of $169,723.

During the year ended September

30, 2022, we did not generate positive cash flows from operating activities.

For the year ended September 30, 2022, net cash flows used

in operating activities was $827,611, consisting of a net loss of $1,475,365, reduced by stock-based compensation expenses of $288,461,

amortization debt discount of $677,561, depreciation of $8,436, a change in operating assets and liabilities of $132,632 and increased

by a gain on PPP loan forgiveness of $24,148 and a gain on change in fair value of derivative liability of $435,188.

For the year ended September 30, 2023, net cash flows

used in operating activities was $445,105 consisting of a net loss of $930,137, reduced by stock-based compensation expenses of $15,000,

amortization debt discount of $122,279, depreciation of $36,783, a loss on debt extinguishment of $36,313, a change in operating assets

and liabilities of $444,380, and gain on change in fair value of derivative liability of $169,723.

Cash Flows from Investing Activities

During the year ended September

30, 2023, purchased two vehicles for $67,039 and developed a website for a total of $5,833.

30, 2024 the Company purchased 26 vehicles for $642,647.

During the year ended September

30, 2022, the Company generated cash of $70,360 from the acquisition of a subsidiary and purchased three vehicles for $157,864.

30, 2023 the Company purchased two vehicles for $67,039 and developed a website for a total of $5,833.

Cash Flows from Financing Activities

During the year ended September 30, 2024, the Company generated $23,000 from the

sale of common stock, $100,000 from the sale of warrants, $454,250 from the issuance of notes payable, and $655,882 from lines of credit.

These proceeds were partially offset by repayments on notes payable of $155,709.

During the year ended September

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promissory notes payable, and payments for debt issuance costs of $1,460, $42,011, and $33,388, respectively.

During the year ended September

30, 2022, the Company generated $1,125,000 from the issuance of convertible notes and $36,200 from an SBA loan, offset by $128,750 of

debt issuance costs.

Going Concern

As of September 30, 2023, the

Company had a net loss of $930,137 accumulated deficit of $3,310,896 and did not have sufficient cash on hand to cover expenses for the

next twelve (12) months.

The Company intends to convert its convertible debt into common stock and to fund operations through equity

financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the

year ending September 30, 2024.

As of September 30, 2024, the Company had a net loss of $2,248,243 accumulated

deficit of $5,559,139 and did not have sufficient cash on hand to cover expenses for the next twelve (12) months.

The Company intends

to convert its convertible debt into common stock and to fund operations through equity financing arrangements, which may be insufficient

to fund its capital expenditures, working capital and other cash requirements for the year ending September 30, 2025.

The ability of our Company to

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accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies and

Critical Accounting Policies and Estimates

Our consolidated financial statements

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Stock-Based Compensation

● Income Taxes

Financial Instruments

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purchase price.

During the years ended September

30, 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 deposit.

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;

During the years ended September 30, 2024 and 2023,

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 deposit.

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”).

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

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.

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

In this case, the driver pays the cost of insurance as a separate payment in the system.

The Company analyzes the start dates of all contracts

and allocates charges to customer credit cards for this service between revenue and deferred revenue at the end of each month.

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.

Company pays the insurance company providing the coverage.

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 company.

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.

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 September 30, 2023 and 2022 refundable deposits were $2,234 and

$0 and deferred revenue was $7,233 and $2,101, 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.

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

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 company.

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 and allocates charges to customer credit cards for this service between revenue and deferred revenue at the end of each

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 September 30, 2024 and 2023 refundable deposits

were $1,339 and $2,234 and deferred revenue was $3,306 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

The Company recognizes compensation

expense for all restricted stock awards and stock options.

The fair value of restricted stock awards is measured using the grant date

fair value of our stock, as determined by the Board of Directors.

The fair value of stock options is estimated at the grant date using

the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the

requisite service period.

We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis

over the vesting period of the entire option.

The determination of fair value using the Black Scholes pricing model is affected by our

stock value as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility

and the risk-free interest rate.

The Company recognizes compensation expense for all

restricted stock awards and stock options.

The fair value of restricted stock awards is measured using the grant date fair value of our

stock, as determined by the Board of Directors.

The fair value of stock options is estimated at the grant date using the Black-Scholes

option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service

We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting

period of the entire option.

The determination of fair value using the Black Scholes pricing model is affected by our stock value as well

as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest

Fair Value Measurements

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Level 2 applies to assets or

liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices

for similar assets or liabilities in active markets;

liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for

similar assets or liabilities in active markets;

quoted prices for identical assets or liabilities in markets with insufficient volume

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Level 3 applies to assets or

liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair

value of the assets or liabilities.

liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value

of the assets or liabilities.

The carrying amounts shown of

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event that caused the reclassification.

The Black-Scholes option valuation model was used to estimate the fair

value of the embedded conversion options and warrants.

The model includes 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.

Off-Balance Sheet

The Black-Scholes option valuation

model was used to estimate the fair value of the embedded conversion options and warrants.

The model includes 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.

Off-Balance Sheet Arrangements

We have no off-balance sheet

arrangements.

and Qualitative Disclosures about Market Risk

Quantitative and Qualitative

Disclosures about Market Risk

As a smaller reporting company,

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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-K

Item 7. Management’s Discussion and Analysis