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Item 1. Financial Statements

2025-03-28 compared with 2024-08-26 · 444 added, 452 removed, 792 unchanged (53% of the section changed)

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CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2024

Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and September 30, 2023

Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2024 and June 30, 2023 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the nine months ended June 30, 2024 and June 30, 2023 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the nine months ended June 30, 2024 and June 30, 2023 (Unaudited)

DECEMBER 31, 2024

Condensed Consolidated Balance Sheets as of December 31, 2024 (Unaudited) and September 30, 2024

Condensed Consolidated Statements of Operations for the three months ended December 31, 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended December 31, 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2024 and 2023 (Unaudited)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

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Current assets

Restricted cash

Accounts receivable, net

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Due to related parties

Promissory notes payable, net of debt discount

Short term notes payable

Current portion of SBA Loan

Promissory notes payable, current portion

Promissory notes payable, in default

Promissory notes payable - related parties, in default

Convertible notes payable, net, in default

Convertible notes payable, net of debt discount

Convertible notes payable in default

Derivative liability

1 unchanged sentence

SBA Loan - noncurrent

Convertible note payable - noncurrent, net of debt discount

Promissory notes payable - noncurrent

Total Liabilities

Commitments and Contingencies

Stockholders’ Deficit

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1,000,000,000 shares authorized;

113,301,722 shares issued and 106,551,722 outstanding at June 30, 2024 and September 30, 2023, respectively

113,951,722 shares issued and 113,701,722 outstanding at December 31, 2024 and September 30, 2024, respectively

Additional paid in capital

Treasury stock, at cost - 15,100 shares at June 30, 2024 and September 30, 2023

Treasury stock, at cost - 15,100 shares at December 31, 2024 and September 30, 2024

Accumulated deficit

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Three Months Ended

Nine Months Ended

Cost of Goods Sold

Gross Profit (Loss)

Operating Expenses

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Amortization debt discount

Amortization of deferred financing costs

Interest expense

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Income / (Loss) Before Income Tax

Provision for income taxes

Provision for income taxes – Note 2

Net Income (Loss)

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Basic and diluted net income (loss) per common share

Diluted net income (loss) per common share

Basic and diluted weighted average number of common shares outstanding

Diluted weighted average number of common shares outstanding

The accompanying notes are

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Statement of Changes in Stockholders’ Deficit

For the Nine Months Ended June 30, 2024

For the Three Months Ended

December 31, 2024

Treasury Stock

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Balance - September 30, 2024

Common stock sold for cash

Warrants sold for cash

Balance - December 31, 2024

Common stock issued in connection with promissory note

Balance – March 31, 2024

Common stock issued in connection with promissory note

Common stock issued for cash

Balance – June 30, 2024

For the Nine Months Ended June 30, 2023

For the Three Months Ended

December 31, 2023

Treasury Stock

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Balance - September 30, 2023

Common stock issued in connection with promissory note

Stock based compensation

Balance - December 31, 2023

Balance – March 31, 2023

Balance - June 30, 2023

The accompanying notes are

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Statements of Cash Flows

For the Nine Months Ended

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

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

Stock-based compensation

Net income (loss)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

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

Amortization of deferred financing costs

Amortization and depreciation

Financing Fee

Amortization of debt discount

Financing Fee

Changes in operating assets and liabilities:

Prepaid expenses

Due to related party

Accounts receivable

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Purchase of intangible assets

Purchase of fixed assets

Purchase of vehicles

Net Cash used in Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:

Related party advances

Proceeds from convertible notes payable

Proceeds from the sale of common stock for cash

Proceeds from promissory notes payable – related parties

Proceeds from sale of warrants

Proceeds from notes payable

Proceeds from promissory debt

Repayment of promissory notes payable

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Non-cash Investing and Financing transactions:

Common stock in connection with promissory note

Recognition of derivative liability as debt discount

Prepaid expenses reclassified to website development

Debt discount in connection with original issue discount notes

Deferred offering costs in connection with promissory note

Amortization of deferred offering costs to debt discount

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

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

1 – Organization, Description of Business and Going Concern

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to DriveItAway Holdings, Inc.

On April 12, 2024, the Company formed DIA Leasing, LLC, a Florida limited liability company , which is a wholly owned subsidiary .

On April 12, 2024, the Company formed DIA Leasing, LLC, a Florida limited liability company, which is a

wholly owned subsidiary.

DIA is a national

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applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

During the period ended June 30, 2024, the Company had a net loss of $ 1 , 721,293

and cash used in operating activities of $ 362,766 .

As of June 30, 2024, the Company had an accumulated deficit of $ 5,032,189 .

The Company has not established sufficient revenue to cover its operating costs and will require additional capital to continue its operating

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.

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.

During the period ended December 31, 2024, the Company had net income of $ 456,463 and cash used in operating activities of $ 55,686 .

of December 31, 2024, the Company had an accumulated deficit of $ 5 , 102,676 .

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.

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.

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

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Note 2 - Summary

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opinion, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

results for the nine months ended June 30, 2024, 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

results for the three months ended December 31, 2024, 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, 2024, contained

in the Company’s Form 10K, as filed on March 8, 2024.

in the Company’s Form 10K, as filed on February 24, 2025.

Basis of Consolidation

The consolidated financial statements include the accounts of DriveItAway Holdings

and its wholly owned subsidiary DriveItAway, Inc., and its wholly owned subsidiary DIA Leasing, LLC collectively referred to as the

The consolidated financial statements include the

accounts of DriveItAway Holdings Inc.

and its wholly owned subsidiary DriveItAway, Inc., and its wholly owned subsidiary DIA Leasing,

LLC collectively referred to as the “Company”.

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

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

30, 2024 , and September 30, 2023, the Company had cash of $ 3,422 and $ 4,632 , and restricted cash of $ 0 and $ 18,559 , respectively

and did not have any cash equivalents.

Restricted Cash

As of September 30, 2023, the Company had $ 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

During the nine months ended June 30, 2024, the restrictions on the cash

were released and the funds were expended.

As of December

31, 2024 and September 30, 2024 , the Company had cash of $ 69,358 and $ 33,588 , respectively and did no t have any cash equivalents.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Accounts Receivable

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The Company believes its allowances for

doubtful accounts as of June 30, 2024 and September 30, 2023 are adequate, but actual write-offs

could exceed the recorded allowance.

As of June 30, 2024 , and September 30, 2023 the balances

in the allowance for doubtful accounts was $ 0 .

doubtful accounts as of December 31, 2024 and September 30, 2024 are adequate, but actual

write-offs could exceed the recorded allowance.

As of December 31, 2024 and September 30, 2024

the balances in the allowance for doubtful accounts was $ 0 .

Fixed assets are recorded at

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The Company’s operating

lease portfolio for the period ended June 30, 2024 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.

The Company recognizes the lease payments for short-term leases on a

straight-line basis over the lease term.

As of June 30, 2024, the Company did not have leases that qualified as ROU assets.

lease portfolio for the period ended December 31, 2024 and September 30, 2024, 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.

The Company recognizes the lease payments for short-term leases on

a straight-line basis over the lease term.

As of December 31, 2024, the Company did not have leases that qualified as ROU assets.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

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

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Derivative liabilities are valued at Level 3.

of fair value of financial assets and liabilities

Fair Value Measurements at June 30, 2024 using:

June 30, 2024

Schedule of fair value of financial assets and liabilities

Fair Value Measurements at December 31, 2024 using:

December 31, 2024

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

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Derivative Financial Instruments

The Company accounts for their derivative financial instruments in accordance with ASC 815 “Derivatives and Hedging” therefore

The Company accounts for its 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

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would procure financing if the Company determined they wanted to sell the vehicle at the listed purchase price.

During the periods ended June

During the periods ended December

31, 2024 and 2023, the Company derived its revenue from signed contracts for vehicle rentals between the Company, other leasing

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Initial non-refundable fees

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overlap a reporting date and relate to usages after that date.

As of June 30, 2024 and September

30, 2023 refundable deposits were $ 1,339 and $ 2,234 and deferred revenue was $ 759 and $ 7,233 , respectively.

As of December 31, 2024 and September 30, 2024 refundable deposits were

$ 107 and $ 1,339 and deferred revenue was $ 3,425 and $ 3,306 , respectively.

In addition to the costs

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Advertising and marketing costs are expensed as incurred.

The Company incurred advertising and marketing costs for the nine months ended June 30, 2024 and

2023 of $ 4,288 and $ 38,838 , respectively.

The Company incurred advertising and marketing costs for the three months ended December 31 , 2024

and 2023 of $ 0 and $ 176 , respectively.

The provision for income taxes and deferred income

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charge to tax expense to reserve the portion of the deferred tax assets which are not expected to be realized.

Loss per Share of Common Stock

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 period.

Potential shares of common stock

consist of shares issuable upon the conversion of outstanding convertible debt, preferred stock, warrants and stock option.

shares of common stock consist of shares issuable upon the conversion of outstanding convertible debt and warrants.

For the periods ended

June 30, 2024 and 2023, the 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 computation of anti-dilutive

Reconciliation of expected federal income tax to the

income tax provision is as follows:

Schedule of Reconciliation of expected federal income tax to the

income tax provision

Expected Federal Tax

State income taxes (net of federal benefit)

Permanent adjustments

State tax rate change

Change in valuation allowance

Total income tax provision

Income/(Loss) per Share of Common Stock

calculates net income/(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.

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

debt and warrants.

Schedule of computation of diluted net loss per share

Convertible notes

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Reclassification

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Recent Accounting Pronouncements

In the period from October 2023 through August 2024

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

Management 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.

In the period from October 2024 through February 2025 the FASB has not issued

any additional accounting standards updates that have a significant impact on the Company.

Management has evaluated other recently issued

accounting pronouncements and does not believe that any of these pronouncements will have a significant impact on our condensed consolidated

financial statements and related disclosures.

Related Party Transactions

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cover operating expenses.

As of June 30,

As of December

31, 2024 and September 30, 2024, the Company owed related parties for an unsecured, non-interest-bearing advance, payable on demand,

in the amount of $ 25,080 .

in the amount of $ 25,530 and $ 25,080 , respectively.

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 1, 2028 ( 5 years).

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 nine months ended June

issuance (December 31, 2023) and issuance of 100,000 warrants with exercise price of $ 0.05 that expire on March 1, 2028 ( 5 years).

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 ,

2024 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.

30, 2024 and September 30, 2023, the amount due to related parties for Promissory notes payable was $ 42,500 and $ 50,000 , respectively.

During the nine months ended June

30, 2024 and 2023, the Company recorded related party interest expense of $ 6,627 and $ 2,522 respectively.

As of June 30,

2024 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 $ 10,784 and $ 4,918 , respectively.

As of December

31, 2024 and September 30, 2024, the amount due to related parties for Promissory notes payable was $ 42,500 .

During the three months ended December 31 ,

2024 and 2023, the Company recorded related party interest expense of $ 2,142

respectively.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Note 4 – Fixed

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Vehicles, net

Vehicles with

a net book value of $ 94,437 are pledged as collateral on a line of credit with an investor.

expense for the nine months ended June 30, 2024 and 2023, was $ 24,430 and $ 24,141 , respectively.

During the nine months ended June

30, 2024 and 2023, the Company purchased vehicles of $ 94,837 and $ 67,039 , respectively.

Vehicles with a net book value of

$ 646,055 are pledged as collateral on a line of credit with an investor.

expense for the three months ended December 31, 2024 and 2023, was $ 36,182 and $ 8,099 , respectively.

During the three months ended

December 31, 2024 and 2023, the Company purchased vehicles of $ 137,289 and $ 0 , respectively.

The following

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Accumulated depreciation

expense for the nine months ended June 30, 2024 and 2023, was $ 4,056 and $ 3,172 , respectively.

During the nine months ended June

30, 2024 and 2023, the Company incurred website development costs of $ 0 and $ 16,331 , respectively.

expense for the three months ended December 31, 2024 and 2023, was $ 1,372 and $ 1,372 , respectively.

During the three months ended December

31, 2024 and 2023, the Company incurred no website development costs.

Note 5 – Equity

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

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

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

During the nine

months ended June 30, 2024 and 2023 there were no issuances of the Series A Preferred shares.

As of June 30,

2024 and September 30, 2023, the Company had no shares of Series A Preferred stock

During the nine

months ended June 30, 2024, the Company:

5,000,000 shares of common stock valued at $ 26,842 for commitment fees in conjunction with

the issuance of a promissory note of $ 140,000

1,000,000 shares of common stock valued at $ 100 for commitment fees in conjunction with the

issuance of a promissory note in the amount of $ 63,000

● issued 750,000 shares

of common stock to a private investor for gross proceeds of $ 15,000

the nine months ended June 30, 2023, the Company had the following common stock activity:

shares of common stock valued at $ 1,509 for commitment fees in conjunction with the issuance of promissory note of $ 750,000 .

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 June 30,

2024, and September 30, 2023, the Company had 113,301,722 and 106,551,722 common shares issued, respectively.

During the three

months ended December 31, 2024 and 2023 there were no issuances of the Series A Preferred shares.

As of December

31, 2024 and September 30, 2024, the Company had no shares of Series A Preferred

stock outstanding.

During the three

months ended December 31, 2024, the Company issued 250,000 shares of common stock to a private investor for gross proceeds of $ 5,000 .

During the three

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

As of December

31, 2024 and September 30, 2024, the Company had 113,951,722 and 113,701,722 common

shares issued, respectively.

records treasury stock at cost.

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

As of June 30, 2024, and September 30, 2023 the Company had 15,100 shares of treasury stock valued at $ 18,126 .

As of December 31, 2024 and September 30, 2024 the Company had 15,100 shares of treasury stock valued at $18,126.

On February 24, 2022, in conjunction with the issuance

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

In June 2022, in conjunction with a private offering

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Notes to the Condensed Consolidated Financial Statements

June 30, 2024

In May 2024, in conjunction with the issuance of

a line of credit of $ 2,000,000 ,

the Company issued warrants to purchase 5,000,000 shares

of Company’s common stock for nominal exercise price of $ 0.00001 per

The warrant is exercisable at any time on or after May 1, 2024 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

$ 180,000 which was recorded as a derivative liability.

The assigned value of the warrants along with $ 7,500 of loan fees and a 2%

(or $40,000) required broker fee was initially recorded as deferred financing costs and will be recorded as a discount to the note

pro rata to draws made on the Promissory Note.

December 31, 2024

In May 2024, in conjunction with the issuance of a

line of credit of $ 2,000,000 , 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 May 1, 2024 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 $ 180,000 which was recorded as a derivative liability.

The assigned value of the warrants along with $ 7,500 of

loan fees and a 2% (or $40,000) required broker fee was initially recorded as deferred financing costs and will be recorded as a discount

to the note pro rata to draws made on the Promissory Note.

Discounts will be amortized over the repayment term of the draw.

In June 2024, in conjunction with the issuance of

a line of credit of $ 250,000 ,

the Company issued warrants to purchase 5,000,000

shares of Company’s common stock for nominal exercise price of $ 0.00001

The warrant is exercisable at any time on or after June 14, 2024 and until the warrant is exercised in full.

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 $ 337,500

which was recorded as a derivative liability.

As the assigned value of the warrants plus a $ 25,000 original issue discount and $ 12,500

of loan fees exceeded the face value of the note, the face value of the note was initially recorded as deferred financing costs and will

be recorded as a discount to the note pro rata to draws made on the Promissory Note.

Discounts will be amortized over the repayment term

The difference between the fair value of the warrants and the face value of the note was recorded as interest expense.

a line of credit of $ 250,000 , 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 June 14, 2024 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 $ 337,500 which was recorded as a derivative liability.

As the assigned value of the warrants plus a $ 25,000 original

issue discount and $12,500 of loan fees exceeded the face value of the note, the face value of the note was initially recorded as deferred

financing costs and will be recorded as a discount to the note pro rata to draws made on the Promissory Note.

Discounts will be amortized

over the repayment term of the draw.

The difference between the fair value of the warrants and the face value of the note was recorded

as interest expense.

On July 12, 2024, the Company sold a warrant to purchase

5,000,000 shares of the Company’s common stock at an exercise price of $ 0.00001 to an investor for $ 50,000 (the “Investor

The warrant has no expiration date.

The investor has the option of funding the Company with two additional tranches of

The second tranche of $ 50,000 is due within 60 days of the first funding date of July 12, 2024.

On August 19, 2024, the Company received the funding

for the second tranche and issued to the investor a cash warrant to purchase up to 666,666 shares of Common Stock at an exercise price

of $ 0.08 per share.

The warrant has no expiration date.

At any time 90 days after the second tranche funding

date the investor may invest an additional $50,000 and the Company will issue to the investor a pre-funded warrant to purchase up to 2,500,000

shares of Common Stock in the and a cash warrant to purchase up to 333,333 shares of Common Stock at an exercise price of $0.08 per share.

The warrant does not have an expiration date.

On November 1, 2024, the Investor Warrant agreement

was amended to allow the purchase warrants to purchase up to 2,500,000 shares in a third tranche.

During the three months ended December

31, 2024, the Company issued warrants to purchase up to 625,000 shares of common stock for gross proceeds of $ 50,000 .

All derivative liabilities recognized for the warrants

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Changes to these inputs could produce a significantly higher or lower fair value measurement (see Note 8).

warrant activity during the nine months ended June 30, 2024, is as follows:

Schedule of warrant activity

warrant activity during the three months ended December 31, 2024, is as follows:

Schedule of common stock warrants activity

Exercise Price

Balance as of September 30, 2024

Balance as of June 30, 2024

*20,000,000 warrants issued during the nine months ended June 30, 2024 do not have an expiration date.

Balance as of December 31, 2024

*25,666,666 warrants issued during the year ended

September 30, 2024 do not have an expiration date.

# 625,000 warrants

issued during the three months ended December 31, 2024 do not have an expiration date.

The intrinsic

value of the warrants as of June 30, 2024, is $ 200 .

All of the outstanding warrants are exercisable as of June 30, 2024.

value of the warrants as of December 31, 2024, is $ 200 .

All of the outstanding warrants are exercisable as of December 31, 2024.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Note 6 – Notes Payable

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and matures on June 7, 2050.

During the nine months ended June 30, 2024 and 2023,

the Company recorded interest expense of $ 3,271 and $ 3,188 , respectively, on the SBA Loan and as of June

During the three months ended December 31 , 2024

and 2023, the Company recorded interest expense of $ 1,093 and $ 1,116 , respectively, on the SBA Loan and as of December

31, 2024 and September 30, 2024, the accrued interest on the SBA Loan was $ 5,989 and $ 5,989 , respectively.

30, 2024 and September 30, 2023 the outstanding principal of SBA Loan was $ 114,700 .

As of December 31, 2024

and September 30, 2024 the outstanding principal of SBA Loan was $ 116,233 and $ 116,838 , respectively.

The following represents the future aggregate maturities

of the Company’s SBA Loan as of June 30, 2024 , for each of the five (5) succeeding

of the Company’s SBA Loan as of December 31, 2024 , for each of the five (5) succeeding

years and thereafter as follows:

Schedule of future aggregate

Schedule of future aggregate maturities

Fiscal year ending September 30,

1 unchanged sentence

Promissory Notes Payable, in Default

March 1, 2023, the Company entered into a promissory note agreement with an investor for amount of $ 12,500 with interest bearing at 15 %

As of December

31, 2024 and September 30, 2024, the Company had defaulted on the following promissory notes payable with aggregate outstanding

principal of $ 20,000 and $ 20,000 respectively, and owed unpaid interest of $ 6,784 and $ 5,775 , respectively:

March 1, 2023, the Company entered into a promissory note agreement with an investor for the 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).

During the nine months ended

June 30, 2024 and 2023, the Company recorded interest expense of $ 1 , 875 and $ 313 , respectively.

As of June 30, 2024 and September 30,

2023, the accrued interest on the promissory note was $ 2,984 and $ 1 , 109 , respectively.

As of June 30, 2024 and September 30, 2023 the

outstanding principal of Promissory Notes Payable was $ 12,500 .

As of June 30, 2024, the Company had defaulted on the promissory note payable.

During the nine months ended

June 30, 2024 , 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 nine months ended June 30, 2024 and 2023 ,

the Company recorded interest expense of $ 1,125 and $ 378 , respectively.

As of June 30, 2024

and September 30, 2023, the accrued interest on the promissory note was $ 1,791 and $ 666 , respectively.

30, 2024 and September 30, 2023, the total outstanding principal of the promissory note payable was $ 7,500 .

of June 30, 2024, the Company had defaulted on the promissory note payable.

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 note matured on June

30, 2023 and has not been repaid.

March 1, 2023, the Company entered into a promissory note agreement with an investor for the amount of $ 7,500 with interest bearing at

15 % per annum, maturity date of 120 days from issuance and issuance of 15,000 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 $ 668 which was recorded as a derivative liability and debt discount (see Note 8).

The note matured on June

30, 2023 and has not been repaid.

Credit Agreement

On March 1, 2024, DIA Leasing, LLC.

(the “Borrower”),

a direct wholly owned subsidiary of DriveitAway Holdings, Inc.

(“DIA”), closed a $ 2,000,000 line of credit facility (the “Credit

Facility”) with an investor (the “Lender”).

In connection with the Credit Facility, a credit agreement, promissory note,

security agreement and several related ancillary agreements were entered into by the parties.

Pursuant to the Credit Agreement dated May 1, 2024

(the “Credit Agreement”), among the Borrower and the Lender, the Lender agreed to make advances of principal (the “draws”)

to the Borrower and to issue letters of credit on behalf of the Borrower.

The Lender committed to provide up to $250,000 for each draw

and up to $2,000,000 of letters of credit.

The Borrower must use the letters of credit and the proceeds of the draws only for the purchase

of motor vehicles to be used in the course of the Borrower’s business.

As of the date hereof, there are no Loans or letters of credit

outstanding under the Credit Agreement.

The Borrower will pay a commitment fee to the Lender’s broker equal to 2.0% of the available

DIA is a guarantor on the draws.

Promissory Note

Pursuant to the Promissory Note (the “Note”)

dated May 1, 2024, Borrower promises to pay Lender the principal sum of Two Million Dollars and 00/100 ($2,000,000.00), or so much thereof

as may be disbursed to, or for the benefit of the Borrower, for the sole purpose of purchasing new motor vehicles for use in Borrower’s

Disbursements shall be at the sole discretion of the Lender.

The unpaid principal of this line of credit shall bear simple interest

at the rate of fifteen percent (15%) per annum.

Interest shall be calculated based on the principal balance as may be adjusted from time

to time to reflect additional advances.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2024

Each advance of principal shall be called a “Draw”.

Each Draw shall be in an amount no greater than Two Hundred Fifty Thousand Dollars and 00/100 ($250,000.00).

The eight Draws may be taken

at any time over the 180 days following execution of the Note.

Each Draw will be paid over a period of eighteen (18) months from the date

that the funds for each Draw are disbursed to Borrower.

During the first three (3) months after disbursement, Borrower shall make payments

of interest only on the funds disbursed.

From month four (4) through month seventeen (17), Borrower shall make payments of principal and

interest based on an amortization of forty-eight (48) months.

On month eighteen (18) all outstanding principal and unpaid interest shall

be paid in full.

All payments are due on first day of the month following disbursement.

The Borrower shall be in default of this Note on the

occurrence of any of the following events:

(i) the Borrower shall fail to meet its obligation to make the required principal or interest

payments hereunder or any term contained in the Loan Documents.

(ii) the Borrower shall be dissolved or liquidated;

(iii) the Borrower

shall make an assignment for the benefit of creditors or shall be unable to, or shall admit in writing their inability to pay their debts

as they become due;

(iv) the Borrower shall commence any case, proceeding, or other action under any existing or future law of any jurisdiction

relating to bankruptcy, insolvency, reorganization or relief of debtors, or any such action shall be commenced against the undersigned;

(v) the Borrower shall suffer a receiver to be appointed for it or for any of its property or shall suffer a garnishment, attachment,

levy or execution.

Upon default of this Note, Lender may declare the entire amount due and owing hereunder to be immediately due and payable.

As of December 31, 2024, the Company has drawn $ 637,009

on the Promissory Note and $ 47,500 in broker and legal fees.

The Company recorded deferred offering costs of $ 199,999 related to the warrant

issued in conjunction with the Promissory Note.

The Company amortized $ 33,488 of deferred offering costs during the three months ended

December 31, 2024.

The amount of interest accrued on the Promissory note was $ 46,279 during the three months ended December 31,

The promissory notes payable balance was $ 684,509 and $ 574,478 as of December 31, 2024 and September 30, 2024, respectively.

unamortized discount on the note payable was $ 26,389 and $ 34,349 at December 31, 2024 and September 30, 2024, respectively.

Security Agreement

Pursuant to a Security Agreement dated May 1, 2024,

all vehicles purchased shall be titled in the name of Borrower, and Borrower consents to a lien in favor of Lender on the title to each

vehicle purchased.

Lender shall only be required to release the lien on each vehicle once Lender has received payment in full of all principal,

interest, and any other sums due on the Draw through which the vehicle was purchased.

The net book value of the vehicles that serve as

collateral on this obligation is $ 646,055 .

The gross value of the pledged vehicles is less than the gross borrowings on the Promissory

As further consideration for the credit facility,

DIA issued Lender a prefunded warrant (the “Warrant”) for the purchase of up to 5,000,000 shares of DIA’s common stock.

The fair market value of the Warrant was $ 180,000 the date of grant, which was recorded as a derivative liability.

The assigned value

of the warrants along with $ 7,500 of loan fees and a 2% (or $ 40,000 ) required broker fee was initially recorded as deferred financing

costs and will be recorded as a discount to the note pro rata to draws made on the Promissory Note.

Notes Payable

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

As of June 30, 2024, 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.

As of December 31, 2024, 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.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

August 15, 2023 the Company executed a second note payable with the same lender with a face amount of $ 64,206 .

4 unchanged sentences

and recording the $ 6,206 of fixed fees as a debt discount.

During the nine months ended June 30, 2024, the Company amortized the full

During the six months ended March 31, 2024, the Company amortized the full

$ 6,206 of the debt discount and made repayments of $ 53,132 , and rolled $ 6,856 of the notes principal still due into a third note (see

below), therefore the loan was considered paid in full as of June 30, 2024.

below), therefore the loan was considered paid in full as of September 30, 2024.

February 22, 2024, the Company executed a third note payable with the same lender with a face amount of $ 57,474 .

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 $ 57,474

(including fixed fees of $ 5,974

or approximately 10% of the note amount).

The Company received net proceeds of $ 44,644

after paying off the August 15, 2023 note and rolling $ 6,856

of its balance into the February 22, 2024 note and recording the $ 5,974

of fixed fees as a debt discount.

During the nine months ended June 30, 2024, the

Company amortized $ 1,409

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 $ 57,474 (including fixed fees of $ 5,974 or approximately 10% of the note amount).

received net proceeds of $ 44,644 after paying off the August 15, 2023 note and rolling $ 6,856 of its balance into the February 22, 2024

note and recording the $ 5,974 of fixed fees as a debt discount.

During the year ended September 30, 2024, the Company amortized $ 5,974

of the debt discount and made repayments of $ 38,211 .

This resulted in a debt discount balance of $ 4,565

and a principal balance of $ 20,300 ,

for a net notes payable balance of $ 15 , 735

as of June 30, 2024.

following represents the future aggregate maturities as of June 30, 2024 of the Company’s Promissory Notes Payable:

The remaining balance of $ 19,263 was rolled into a fourth note (see below), therefore

the loan was considered paid in full as of September 30, 2024.

July 3, 2024, the Company executed a fourth note payable with a lender with a face amount of $ 88,800 .

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 $ 88,800 (including fixed fees of $ 8,800 or approximately 10% of the note amount).

The Company received

net proceeds of $ 60,737 after paying off the February 22, 2024 note and rolling $ 19,263 of its balance into the July 3, 2024 note and

recording the $ 8,800 of fixed fees as a debt discount.

As of September 30, 2024, the Company had amortized $ 2,939 of the debt discount

and made repayments of $ 49,496 , resulting in a debt discount balance of $ 5,861 and a loan balance of $ 39,304 , for a net note balance of

$ 38,159 at September 30, 2024.

As of December 31, 2024, the note balance was rolled into the fifth note, therefore the loan was considered

paid in full as of December 31, 2024.

November 19, 2024, the Company executed a fifth note payable with a lender with a face amount of $ 85,314 .

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 $ 85,314 (including fixed fees of $ 7,614 or approximately 10% of the note amount).

The Company received

net proceeds of $ 57,816 after paying off the July 2024 note and rolling $ 19,764 of its balance into the November 19, 2024 note and recording

the $ 7,614 of fixed fees as a debt discount.

As of December 31, 2024, the Company had amortized $ 585 of the debt discount and made repayments

of $ 6,217 , resulting in a debt discount balance of $ 10,226 and a loan balance of $ 56,900 at December 31, 2024.

following represents the future aggregate maturities as of December 31, 2024 of the Company’s Promissory Notes Payable:

Schedule of future aggregate maturities

Fiscal year ending September 30,

2024 (remaining)

Credit Agreement

On March 1, 2024, DIA Leasing,

(the “Borrower”), a direct wholly owned subsidiary of DriveitAway Holdings, Inc.

(“DIA”), closed a $ 2,000,000

line of credit facility (the “Credit Facility”) with an investor (the “Lender”).

In connection with the Credit

Facility, a credit agreement, promissory note, security agreement and several related ancillary agreements were entered into by the parties.

Pursuant to the Credit Agreement

dated May 1, 2024 (the “Credit Agreement”), among the Borrower and the Lender, the Lender agreed to make advances of principal (the

“draws”) to the Borrower and to issue letters of credit on behalf of the Borrower.

The Lender committed to provide up to $ 250,000

for each draw and up to $ 2,000,000 of letters of credit.

The Borrower must use the letters of credit and the proceeds of the draws only for the

purchase of motor vehicles to be used in the course of the Borrower’s business.

As of the date hereof, there are no Loans or letters

of credit outstanding under the Credit Agreement.

The Borrower will pay a commitment fee to the Lender’s broker equal to 2.0 % of the available

DIA is a guarantor on the draws.

Promissory Note

Pursuant to the Promissory Note

(the “Note”) dated May 1, 2024, Borrower promises to pay Lender the principal sum of Two Million Dollars and 00/100 ($ 2,000,000 .00),

or so much thereof as may be disbursed to, or for the benefit of the Borrower, for the sole purpose of purchasing new motor vehicles for

use in Borrower’s business.

Disbursements shall be at the sole discretion of the Lender.

The unpaid principal of this line of credit

shall bear simple interest at the rate of fifteen percent ( 15 %) per annum.

Interest shall be calculated based on the principal balance

as may be adjusted from time to time to reflect additional advances.

Each advance of principal shall

be called a “Draw”.

Each Draw shall be in an amount no greater than Two Hundred Fifty Thousand Dollars and 00/100 ($250,000.00).

The eight Draws may be taken at any time over the 180 days following execution of the Note.

Each Draw will be paid over a period of eighteen

(18) months from the date that the funds for each Draw are disbursed to Borrower.

During the first three (3) months after disbursement,

Borrower shall make payments of interest only on the funds disbursed.

From month four (4) through month seventeen (17), Borrower shall

make payments of principal and interest based on an amortization of forty-eight (48) months.

On month eighteen (18) all outstanding principal

and unpaid interest shall be paid in full.

All payments are due on first day of the month following disbursement.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

The Borrower shall be in default

of this Note on the occurrence of any of the following events:

(i) the Borrower shall fail to meet its obligation to make the required

principal or interest payments hereunder or any term contained in the Loan Documents.

(ii) the Borrower shall be dissolved or liquidated;

(iii) the Borrower shall make an assignment for the benefit of creditors or shall be unable to, or shall admit in writing their inability

to pay their debts as they become due;

(iv) the Borrower shall commence any case, proceeding, or other action under any existing or future

law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors, or any such action shall be commenced

against the undersigned;

(v) the Borrower shall suffer a receiver to be appointed for it or for any of its property or shall suffer a

garnishment, attachment, levy or execution.

Upon default of this Note, Lender may declare the entire amount due and owing hereunder to

be immediately due and payable.

As of June 30, 2024, the

Company has drawn $ 77,766 on

the Promissory Note and $ 47,500 in deferred offering costs for broker and legal fees, and recognized $ 1,918 in

interest expense during the nine months ended June 30, 2024.

The amount of interest accrued on the Promissory note was $ 1,918 as

of June 30, 2024.

The Company also recorded a discount of $ 9,061 in

conjunction with the draws taken on the Promissory Note.

During the nine months ended June 30, 2024, the Company amortized $ 1,007 of

debt discount.

This resulted in a debt discount balance of $ 8,054 and a principal balance of $ 125,266 , for a net promissory notes

payable balance of $ 117,212 as of June 30, 2024.

Security Agreement

Pursuant to a Security

Agreement dated May 1, 2024, all vehicles purchased shall be titled in the name of Borrower, and Borrower consents to a lien in

favor of Lender on the title to each vehicle purchased.

Lender shall only be required to release the lien on each vehicle once

Lender has received payment in full of all principal, interest, and any other sums due on the Draw through which the vehicle was

The net book value of the vehicles that serve as collateral on this obligation is $ 94,437 .

The gross value of the pledged

vehicles is less than the gross borrowings on the Promissory Note.

As further consideration for the

credit facility, DIA issued Lender a prefunded warrant (the “Warrant”) for the purchase of up to 5,000,000

shares of DIA’s common stock.

The fair market value of the Warrant was $ 180,000

the date of grant, which was recorded as a derivative liability.

The assigned value of the warrants along with $ 7,500

of loan fees and a 2% (or $40,000) required broker fee was initially recorded as deferred financing costs and will be recorded as a discount

to the note pro rata to draws made on the Promissory Note.

During the nine months ended June 30, 2024, the Company amortized

of the deferred financing cost related to the Warrant.

Note 7 – Convertible

38 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Also pursuant to the SPA,

56 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

The note is convertible into

19 unchanged sentences

is an exempt issuance.

The maturity date of the note has been extended to March 31, 2025.

On December 15, 2023, in

15 unchanged sentences

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

were $ 102,000 , which were used for working capital and other general corporate purposes.

The maturity date of the AJB Note is March 31,

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

may prepay the AJB Note at any time without penalty.

The Company may

prepay the AJB Note at any time without penalty.

Also pursuant to the SPA, the Company paid to AJB

7 unchanged sentences

After payment of the fees and costs,

the net proceeds to the Company were $ 50,000 , which will be used for working capital and other general corporate purposes.

the net proceeds to the Company were $ 50,000 , which were used for working capital and other general corporate purposes.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

The maturity date of the AJB Note is November

December 31, 2024

The maturity date of the AJB Note is March 31,

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

may prepay the AJB Note at any time without penalty.

The Company may

prepay the AJB Note at any time without penalty.

Also pursuant to the SPA, the Company paid to AJB

14 unchanged sentences

On June 14, 2024, the Company entered into another

SPA with AJB, and issued a promissory note with a face amount of $ 250,000

(the “June 2024 AJB Note”) to AJB in a private transaction for a purchase price of $ 225,000

(after giving effect to a 10% 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, totaling $ 12,500 .

The Company may draw on the June 2024 AJB Note as automobiles for the rental fleet are purchased, up to a maximum amount of $ 212,500 .

As a result, the Company accounted for this note as a line of credit.

The maturity date of the AJB Note is December

SPA with AJB, and issued a promissory note with a face amount of $ 250,000 (the “June 2024 AJB Note”) to AJB in a private transaction

for a purchase price of $ 225,000 (after giving effect to a 10% 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, totaling $ 12,500 .

The Company may draw on the June

2024 AJB Note as automobiles for the rental fleet are purchased, up to a maximum amount of $ 212,500 .

As a result, the Company accounted

for this note as a line of credit.

The maturity date of the AJB Note is March 31,

The AJB Note bears interest at 15 % per year, and principal and accrued interest is due on the maturity date.

may prepay the AJB Note at any time without penalty.

The Company may

prepay the AJB Note at any time without penalty.

The note is convertible into Common Stock of the Company

20 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

December 31, 2024

Also pursuant to the SPA, the Company paid to AJB

a commitment fee in the form of a warrant to purchase 5,000,000 unregistered shares of the Company’s common stock for nominal exercise price of $ 0.00001 per share.

The warrant is exercisable

at any time on or after June 14, 2024 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 $ 337,500 which was recorded as a derivative liability.

the assigned value of the warrants plus a $ 25,000 original issue discount and $ 12,500 of loan fees exceeded the face value of the note,

the face value of the note was initially recorded as deferred financing costs and will be recorded as a discount to the note pro rata

to draws made on the Promissory Note.

Discounts will be amortized over the repayment term of the draw.

The difference between the fair

value of the warrants and the face value of the note was recorded as interest expense.

During 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.

the nine months ended June 30, 2024, the Company recorded interest expense of $ 624,699 , additional debt discount of $ 347,819 , amortization

of debt discount of $ 241,282 , and a loss on change in fair value of derivative liability of $ 98,857 for the guarantee and warrants.

of June 30, 2024 and September 30, 2023, the derivative liability was $ 1,034,472 and $ 663 for the guarantee and warrants, the debt discount

recorded on the note was $ 106,537 and $ 0 , the note payable principal was $ 1,337,064 and $ 860,000 , and the Company owed accrued interest

of $ 171,559 and $ 68,562 .

a commitment fee in the form of a warrant to purchase 5,000,000 unregistered shares of the Company’s common stock for nominal exercise

price of $ 0.00001 per share.

The warrant is exercisable at any time on or after June 14, 2024 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 $ 337,500

which was recorded as a derivative liability.

As the assigned value of the warrants plus a $ 25,000 original issue discount and $ 12,500

of loan fees exceeded the face value of the note, the face value of the note was initially recorded as deferred financing costs and will

be recorded as a discount to the note pro rata to draws made on the Promissory Note.

Discounts will be amortized over the repayment term

The difference between the fair value of the warrants and the face value of the note was recorded as interest expense.

Company has drawn 100% of the available credit on the note as of December 31, 2024.

During the three months ended

December 31, 2024, the Company recorded interest expense of $ 62,591 , amortization of debt discount of $ 46,674 , amortization of deferred

financing costs of $ 104,092 , and a gain on change in fair value of derivative liability of $ 710,050 for the guarantee and warrants.

of December 31, 2024 and September 30, 2024, the derivative liability was $ 332,531 and $ 1,034,472 for the guarantee and warrants, the

debt discount recorded on the notes was $ 0 and $ 46,674 , the note payable principal was $ 1,504,084 and $ 1,446,626 , and the Company owed

accrued interest of $ 316,728 and $ 270,549 .

During the three months ended December 31, 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.

Effective February 14, 2023,

the Company went into default on the AJB Note, however the lender waived all default provisions through August 30, 2024 therefore no

default interest or penalties were incurred during the nine months ended June 30, 2024 and the AJB note was not convertible as of June

Convertible Notes

the Company went into default on the AJB Note, however the lender waived all default provisions through March 31, 2025 therefore no default

interest or penalties were incurred during the three months ended December 31, 2024 and the AJB note was not convertible as of December

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2024

The following represents the future aggregate maturities

of the Company’s Convertible Notes Payable as of December 31, 2024 for each of the five (5) succeeding years and thereafter as follows:

Schedule of future aggregate maturities

Fiscal year ending September 30,

2025 (remaining)

Convertible Promissory Notes Payable, in Default

During 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 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 $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.

The debt discount was $0 on September 30, 2024.

matured in June 2024, are in default, and are still outstanding.

In June 2022,

15 unchanged sentences

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

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).

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.

Effective June 3, 2024 and June 16,

2024, these two secured promissory notes went into default, respectively.

December 31, 2024

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).

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 $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.

Effective June

3, 2024 and June 16, 2024, these two secured promissory notes went into default, respectively.

During November

8 unchanged sentences

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

nine months ended June 30, 2023, the Company recorded interest expense of $ 47,354 ,

paid interest of $ 13,125 and

amortization of debt discount of $ 42,814 .

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

resulting in a note payable balance of $ 38,303 .

As of June 30, 2023, the Company owed accrued interest of $ 45,812 ,

respectively.

nine months ended June 30, 2024, the Company recorded interest expense of $ 50,625 , paid interest of $ 3,125 and amortization of debt discount

of $ 43,584 .

As of June 30, 2024 and September 30, 2023, the debt discount recorded on the notes was $ 8,042 and $ 51,626 , respectively,

resulting in a net note payable balance of $ 441,958 and $ 398,374 , respectively.

As of June 30, 2024 and September 30, 2023, the Company

owed accrued interest of $ 110,563 and $ 63,063 , respectively.

The following represents the future aggregate maturities

of the Company’s Convertible Notes Payable as of June 30, 2024 for each of the five (5) succeeding years and thereafter as follows:

Schedule of future aggregate maturities

Fiscal year ending September 30,

2024 (remaining)

the three months ended December 31, 2024 and 2023, the Company recorded interest expense of $ 21,425 and $ 639 , respectively on these notes.

As of December 31, 2024 and September 30, 2024, the accrued interest on the promissory notes was $ 152,014 and $ 130,589 , respectively.

As of December 31, 2024 and September 30, 2024 the outstanding principal of Promissory Notes Payable was $ 450,000 and $ 250,000 , respectively.

As of December 31, 2024, the Company had defaulted on these promissory notes payable.

Note 8 – Derivative

6 unchanged sentences

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, 2024 .

The Black-Scholes model requires six basic

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.

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

The following assumptions were used in the Black-Scholes model during the six months ended June 30, 2024 ,

The Company 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 December 31, 2024 .

The Black-Scholes model requires six basic data inputs:

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.

The following assumptions were used in the Black-Scholes model during the three months ended December 31, 2024 ,

and year ended September 30, 2024 :

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements

June 30, 2024

Schedule of assumptions used

Nine months ended

December 31, 2024

Schedule of defined benefit plan, assumptions

Three months ended

September 30,

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3.93 % - 4.93

20,000,000 warrants issued during the nine months ended June 30, 2024 do not have an expiration date.

625,000 warrants issued during the three months ended December 31, 2024 do not have an expiration date.

The following table provides a summary of changes

in fair value of the Company’s Level 3 financial liabilities during the nine months ended June 30, 2024:

Schedule of changes

in fair value of derivative liability

in fair value of the Company’s Level 3 financial liabilities during the three months ended December 31, 2024:

Schedule of derivative liabilities

Derivative liability balance - September 30, 2024

Addition of new derivatives recognized as debt discounts

Loss on change in fair value of the derivative

Derivative liability balance - June 30, 2024

Gain on change in fair value of the derivative

Derivative liability balance – December 31, 2024

Note 9 – Subsequent

Promissory Note Payable

July 3, 2024, the Company executed a fourth note payable with a lender with a face amount of $ 88,800 .

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 $ 88,800 (including fixed fees of $ 8,800 or approximately 10% of the note amount).

The Company received

net proceeds of $ 60,737 after paying off the February 22, 2024 note and rolling $ 19,263 of its balance into the July 3, 2024 note and

recording the $ 8,800 of fixed fees as a debt discount.

Sale of Warrant

On July 12, 2024, the Company sold a warrant to purchase

5,000,000 shares of the Company’s common stock at an exercise price of $ 0.00001 to an investor for $ 50,000 .

The warrant has no expiration

The investor has the option of funding the Company with two additional tranches of $ 50,000 .

The second tranche of $ 50,000 is due

within 60 days of the first funding date of July 12, 2024.

On August 19, 2024, the Company received the funding

for the second tranche and issued to the investor a cash warrant to purchase up to 666,666 shares of Common Stock at an exercise price

of $0.08 per share.

The warrant has no expiration date.

At any time 90 days after the second tranche

funding date the investor may invest an additional $ 50,000

and the Company will issue to the investor a pre-funded warrant to purchase up to 2,500,000

shares of Common Stock in the and a cash warrant to purchase up to 333,333

shares of Common Stock at an exercise price of $ 0.08

The warrant does not have an expiration date.

Auto Purchases and Line of Credit Draws

In July and August 2024, the Company purchased 16 vehicles at a cost of

In conjunction with these vehicle purchases, the Company borrowed $ 321,417 under the Credit Facility and $ 80,354 under the June

2024 AJB Note, for a total $ 401,771 in total borrowings.

The Company performed a review of events subsequent to the balance sheet

date through the date the financial statements were issued and determined that there were no such events requiring recognition or disclosure

in the financial statements.

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