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Item 1. Financial Statements

2026-02-25 compared with 2025-08-19 · 511 added, 437 removed, 893 unchanged (51% of the section changed)

FINANCIAL STATEMENTS

DRIVEITAWAY HOLDINGS,

DRIVEITAWAY HOLDINGS, INC.

INDEX TO UNAUDITED INTERIM

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2025

Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and September 30, 2024

Condensed Consolidated Statements of Operations for the three and nine months ended June 30, 2025 and 2024 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three and nine months ended June 30, 2025 and 2024 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the three and nine months ended June 30, 2025 and 2024 (Unaudited)

DECEMBER 31, 2025

Condensed Consolidated Balance Sheets as of December 31, 2025 (Unaudited) and September 30, 2025

Condensed Consolidated Statements of Operations for the three months ended December 31, 2025 and 2024 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended December 31, 2025 and 2024 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2025 and 2024 (Unaudited)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

DriveItAway Holdings,

DriveItAway Holdings, Inc.

Condensed Consolidated

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Accounts receivable, net

Prepaid expenses

Total current assets

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1,000,000,000 shares authorized;

113,951,722 shares issued and 113,701,722 outstanding at June 30, 2025 and September 30, 2024, respectively

121,525,082 shares issued and 121,509,982 outstanding at December 31, 2025 and 120,025,082 issued and 120,009,982 outstanding September 30, 2025, respectively

Additional paid in capital

Treasury stock, at cost - 15,100 shares at June 30, 2025 and September 30, 2024

Treasury stock, at cost - 15,100 shares at December 31, 2025 and September 30, 2025

Accumulated deficit

( 9,541,948 )

( 5,559,139 )

Total Stockholders’ Deficit

( 7,857,824 )

( 3,959,602 )

Total Liabilities and Stockholders’ Deficit

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an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings,

DriveItAway Holdings, Inc.

Condensed Consolidated

1 unchanged sentence

Three Months Ended

Nine Months Ended

Cost of Goods Sold

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General and administrative

Stock compensation

Software development

Advertising and marketing

Stock compensation

Total Operating Expenses

2 unchanged sentences

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

( 3,416,822 )

( 2,504,840 )

Amortization debt discount

2 unchanged sentences

Interest expense - related parties

Gain (loss) on disposition of assets

Total Other Income (Expense)

( 3,657,845 )

( 3,291,472 )

( 1,332,590 )

Income / (Loss) Before Income Tax

( 3,991,314 )

( 3,982,809 )

( 1,710,105 )

Provision for income taxes

Provision for income taxes – Note 2

Net Income (Loss)

$ ( 3,991,314 )

( 3,982,809 )

( 1,710,105 )

Net Income (Loss) Per Common Share

Basic and diluted net income (loss) per common share

Basic and diluted weighted average number of common shares outstanding

Basic net income (loss) per common share

Diluted net income (loss) per common share

Basic weighted average number of common shares outstanding

Diluted weighted average number of common shares outstanding

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings,

DriveItAway Holdings, Inc.

Condensed Consolidated

Statement of Changes in Stockholders’ Deficit

For the Three and Nine Months Ended June

For the Three Months Ended

December 31, 2025

Treasury Stock

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Balance - September 30, 2025

$ ( 5,559,139 )

$ ( 3,959,602 )

Common stock sold for cash

Warrants sold for cash

Balance - December 31, 2024

$ ( 5,102,676 )

$ ( 3,448,139 )

Balance – March 31, 2025

$ ( 5,550,634 )

$ ( 3,896,097 )

Warrants issued

Common stock issued to repay related party loan

Stock compensation

( 3,991,314 )

Balance – June 30, 2025

$ ( 9,541,948 )

$ ( 7,857,824 )

For the Three and Nine Months Ended June

Balance - December 31, 2025

For the Three Months Ended

December 31, 2024

Treasury Stock

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Balance - September 30, 2024

$ ( 3,310,896 )

$ ( 1,954,359 )

Common stock sold for cash

Warrants sold for cash

Balance - December 31, 2024

( 4,026,325 )

( 2,669,788 )

Common stock issued in connection with promissory note

Balance – March 31, 2024

( 4,502,540 )

( 3,096,003 )

Common stock issued in connection with promissory note

Common stock issued for cash

Balance – June 30, 2024 (As Restated)

$ ( 4,923,517 )

$ ( 3,431,980 )

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings,

DriveItAway Holdings, Inc.

Condensed Consolidated

Statements of Cash Flows

For the Nine Months Ended

For the Three Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ ( 3,982,809 )

$ ( 1,710,105 )

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

Stock compensation

Loss on change in fair value of derivative liability

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

Amortization of deferred financing costs

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Amortization of debt discount

Financing Fee

Stock compensation expense

Loss on sale of fixed assets

Changes in operating assets and liabilities:

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CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of vehicles

Purchase of vehicles

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Proceeds from notes payable

Repayment of short term notes payable

Repayment of promissory notes payable

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Cash paid for taxes

Non-cash Investing and Financing transactions:

Recognition of derivative liability as debt discount

Common stock in connection with promissory note

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

Non-cash transactions:

Common stock issued upon conversion of related party note

The accompanying notes are

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Notes to the Condensed Consolidated Financial Statements

June 30, 2025

December 31, 2025

1 – Organization, Description of Business and Going Concern

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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 nine months ended June 30, 2025, the Company had a net loss of $ 3 , 982,809 and cash used in operating activities of $ 260,973 .

As of June 30, 2025, the Company had an accumulated deficit of $9, 541,948 .

During the period ended December 31, 2025, the Company had net income of $ 548,868 and cash used in operating activities of $ 176,811 .

of December 31, 2025, the Company had an accumulated deficit of $ 9,912,751 .

The Company has not established sufficient revenue to cover

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Notes to the Condensed Consolidated Financial Statements

June 30, 2025

December 31, 2025

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 three months ended June 30, 2025, 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, 2025, 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, 2025, contained

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

in the Company’s Form 10K, as filed on January 13, 2025.

Basis of Consolidation

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

As of December

31, 2025 and September 30, 2025 , the Company had cash of $ 89,743 and $ 39,930 , respectively and did no t have any cash equivalents.

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Notes to the Condensed Consolidated Financial Statements

June 30, 2025

December 31, 2025

Accounts Receivable

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The Company believes its allowances for

doubtful accounts as of June 30, 2025 and September 30, 2024 are adequate, but actual write-offs

could exceed the recorded allowance.

As of June 30, 2025 and September 30, 2024 the balances

in the allowance for doubtful accounts was $ 423 .

doubtful accounts as of December 31, 2025 and September 30, 2025 are adequate, but actual

write-offs could exceed the recorded allowance.

As of December 31, 2025 and September 30, 2025

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 , 2025 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.

30 , 2025, the Company did not have leases that qualified as ROU assets.

lease portfolio for the period ended December 31, 2025 and September 30, 2025, 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, 2025, the Company did not have leases that qualified as ROU assets.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

December 31, 2025

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

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Schedule of fair value of financial assets and liabilities

Fair Value Measurements at June 30, 2025 using:

June 30, 2025

Fair Value Measurements at December 31, 2025 using:

December 31, 2025

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

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Notes to the Condensed Consolidated Financial Statements

June 30, 2025

December 31, 2025

Derivative Financial Instruments

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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, 2025 and 2024, the Company derived its revenue from signed contracts for vehicle rentals between the Company, other leasing

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

The vehicle rental arrangements are over a fixed contracted period;

the Company recognizes rental revenue ratably over the contract term.

Costs related to rental revenue include depreciation for Company

owned vehicles and monthly lease payments when the vehicles are leased from a leasing company.

The amount of revenue transferred to dealerships

is treated as contra-revenue because the Company acts as an agent in these transactions resulting in only the Company’s revenue

share being recognized.

The vehicle rental arrangements are over a fixed contracted

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

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.

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This is a cost of goods sold.

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 also allows 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.

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.

Collected payments

are treated as 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.

insurance revenue is collected at contract inception and covers the fixed contract period the Company recognizes insurance revenue ratably

over the contract term.

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 December 31, 2025 and 2024 refundable deposits were $ 0 and $ 0 and deferred revenue was

$ 15,912 and $ 15,740 , respectively.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

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 June 30 , 2025 and September

30, 2024 refundable deposits were $ 0 and $ 1,339 and deferred revenue was $ 10,785 and $ 3,306 , 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.

December 31, 2025

In addition to the costs associated with rental revenue

and insurance revenue, within the Cost of Goods Sold account the Company also records credit card fees incurred from the cash collections

and cash remittance process, as a significant portion of its performance obligation is to collect and remit payments through its credit

card processors.

Stock-Based Compensation

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Advertising and marketing costs are expensed as incurred.

The Company incurred advertising and marketing costs for the nine months ended June 30 , 2025

and 2024 of $ 0 and $ 4,288 , respectively.

The Company incurred advertising and marketing costs for the three months ended December 31, 2025 and 2024 of $ 0 and $ 0 , 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.

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

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Notes to the Condensed Consolidated Financial Statements

June 30, 2025

December 31, 2025

Reclassification

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Recent Accounting Pronouncements

In the period from October 2024 through July 2025

In the period from October 2025 through February 2026

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

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cover operating expenses.

As of June 30,

As of December

31, 2025 and September 30, 2025, the Company owed related parties for an unsecured, non-interest-bearing advance, payable on demand,

in the amount of $ 26,380 and $ 25,080 , respectively.

in the amount of $ 26,380 .

On March 1, 2023, the Company entered into three promissory

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value of $ 3,068 which was recorded as a derivative liability and debt discount (see Note 8).

During the nine months ended June 30, 2025

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.

During the three months ended December 31,

2025 the Company reclassified one of these promissory notes with a value of $ 7,500 from Promissory notes payable – related party

to Promissory notes payable due the note holder, a former director, no longer being considered a related party.

As of December

31, 2025 and September 30, 2025, the amount due to related parties for Promissory notes payable was $ 21,250 .

During the nine months ended June

30 , 2025 and 2024, the Company recorded related party interest expense of $ 2,120 and $ 6,358 respectively.

During the three months ended December 31, 2025 and

2024, the Company recorded related party interest expense of $ 1,222 and $ 2,142 , respectively.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

Note 4 – Fixed

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Vehicles with a net book value of

$674,138 are pledged as collateral with an investor.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

expense for the nine months ended June 30, 2025 and 2024, was $ 107,367 and $ 24,430 , respectively.

During the nine months ended June

30, 2025 and 2024, the Company purchased vehicles of $ 65,712 and $ 0 , respectively.

$ 236,006 are pledged as collateral on a line of credit with an investor.

expense for the three months ended December 31, 2025 and 2024, was $ 27,203 and $ 36,182 , respectively.

During the three months ended

December 31, 2025 and 2024, the Company purchased vehicles of $ 0 and $ 137,289 , respectively.

The following

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Accumulated depreciation

expense for the nine months ended June 30, 2025 and 2024, was $ 4,072 and $ 4,056 , respectively.

During the nine months ended June 30, 2025

expense for the three months ended December 31, 2025 and 2024, was $ 899 and $ 1,372 , respectively.

During the three months ended December

31, 2025 and 2024, the Company incurred no website development costs.

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record date of the dividend declared on the Common Stock.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

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

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be entitled to one vote per share on each submitted to a class vote of the holders of Series A Preferred Stock.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

Conversion Rights :

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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, 2025 and 2024 there were no issuances of the Series A Preferred shares.

As of June 30,

2025 and September 30, 2024, the Company had no shares of Series A Preferred stock

During the nine

months ended June 30, 2025, the Company issued 250,000 shares of common stock to a private investor for gross proceeds of $ 5,000 .

During the nine months ended June 30, 2024,

6,750,000 shares of common stock were issued .

As of June 30,

2025 and September 30, 2024, the Company had 113,951,722 and 113,701,722 common shares

issued, respectively.

During the three

months ended December 31, 2025 and 2024 there were no issuances of the Series A Preferred shares.

As of December

31, 2025 and September 30, 2025, the Company had no shares of Series A Preferred

stock outstanding.

In October 2025,

the Company issued 250,000 shares of common stock to a consultant as compensation.

The fair market value of the common stock on the date

of grant was $ 16,875 .

In October 2025,

the Company issued 1,250,000 shares of common stock to a related party in satisfaction of a $ 21,250 note payable and $ 3,750 of accrued

interest on the note.

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 .

As of December

31, 2025 and September 30, 2025, the Company had 121,525,082 and 120,025,082 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, 2025 and September 30, 2024 the Company had 15,100 shares of treasury stock valued at $ 18,126 .

As of December 31, 2025 and September 30, 2025 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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The warrants expire on February 24, 2027 .

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

In June 2022, in conjunction with a private offering

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The warrants expire in November 2027.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

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

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The difference between the fair value of the warrants and the net proceeds received was recognized as interest

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

In May 2024, in conjunction with the issuance of a

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

In June 2024, in conjunction with the issuance of

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

During the three months ended March

During the three months ended December

31, 2025, the Company issued warrants to purchase up to 625,000 shares of common stock for gross proceeds of $50,000.

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was $ 29,587 .

In July 2025, in conjunction with the issuance of

a promissory note of $ 60,000 , the Company issued warrants to purchase 18,000,000 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 July 18, 2025 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 $ 1,565,999

which was recorded as a derivative liability.

The note was discounted to a principal balance of $ 0 and a debt discount of $ 60,000 was

recorded at inception.

The difference between the fair value of the warrants and the net proceeds received was recognized as interest

In September 2025, in conjunction with the issuance

of a promissory note of $ 65,000 , the Company issued warrants to purchase 18,000,000 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 September 2, 2025 and until the warrant is exercised

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.

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

of $ 1,200,000 which was recorded as a derivative liability.

The note was discounted to a principal balance of $ 0 and a debt discount of

$ 65,000 was recorded at inception.

The difference between the fair value of the warrants and the net proceeds received was recognized

as interest expense.

On September 18, 2025, the Company entered into an

advisory agreement with a consultant in exchange for a warrant to purchase 5,000,000 shares of the Company’s common stock at an

exercise price of $ 0.00001 per share.

The warrant vests as follows:

25% on the six-month anniversary of the effective date, and the remaining

75% shall vest in equal monthly installments over the following 18 months.

The vesting is dependent upon the consultant,s continuing service

to the Company.

The fair market value of the warrant at inception was $ 285,000 , which will be recognized as stock compensation expense

In conjunction with the advisory agreement, the consultant was also issued a warrant to purchase up to 5,000,000 shares of

the Company’s common stock at a price of $0.02 per share.

This warrant expires on December 17, 2025.

The fair market value of the

warrant at inception was $ 228,872 , which was recorded as compensation expense.

In October 2025, the Company issued warrants to purchase

13,750,000 shares of its common stock at an exercise price of $ 0.02 per share in exchange for $ 240,000 .

The warrants do not expire.

In December 2025, the Company issued warrants to two

advisory panel members to purchase 2,500,000 shares of its common stock at an exercise price of $ 0.00001 per share.

The warrants do not

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).

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

warrant activity during the nine months ended June 30, 2025, is as follows:

warrant activity during the three months ended December 31, 2025, is as follows:

Schedule of common stock warrants activity

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Balance as of September 30, 2025

Balance as of June 30, 2025

Balance as of December 31, 2025

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

September 30, 2025 do not have an expiration date.

warrants issued during the nine months ended June 30, 2025 do not have an expiration date.

375,000 warrants issued during this period

have a five year term.

warrants issued during the three months ended December 31, 2025 do not have an expiration date.

The intrinsic

value of the warrants as of June 30, 2025, is $ 29,787 .

All of the outstanding warrants are exercisable as of June 30, 2025.

value of the warrants as of December 31, 2025, is $ 200 .

All of the outstanding warrants are exercisable as of December 31, 2025.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

Note 6 – Notes Payable

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and matures on June 7, 2050.

During the nine months ended June 30, 2025 and 2023, the Company recorded interest expense of

$ 2,180 and $ 2,157 , respectively, on the SBA Loan and as of June 30, 2025 and September 30,

During the three months ended December 31, 2025 and 2024, the Company recorded interest expense

of $ 1,070 and $ 1,093 , respectively, on the SBA Loan and as of December 31, 2025 and September

30, 2025, the accrued interest on the SBA Loan was $ 5,989 and $ 5,989 , respectively.

As of June 30 ,

2025 and September 30, 2024 the outstanding principal of SBA Loan was $ 115,007 and $ 116,838 , respectively.

As of December 31, 2025 and September 30, 2025 the

outstanding principal of SBA Loan was $ 113,758 and $ 114,386 , respectively.

The following represents the future aggregate maturities

of the Company’s SBA Loan as of June 30, 2025 , for each of the five (5) succeeding

of the Company’s SBA Loan as of December 31, 2025 , for each of the five (5) succeeding

years and thereafter as follows:

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2026 (remaining)

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

Promissory Notes Payable, in Default

As of June 30,

2025 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 $ 36,713 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).

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).

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 $ 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.

and were assigned a value of $8,136 which was recorded as a derivative liability (see Note 9) 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, 2025.

matured in June 2024 and are still outstanding.

On March 1, 2023, the Company

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

of 120 days from issuance and issuance of 25,000 warrants with exercise price of $0.05 that expire on March 1, 2028 (5 year).

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 6).

During the years ended September 30,2024, the Company

recorded interest expense of $ 2,500 and $1,109 and amortization of debt discount of $ 0 and $ 767 , respectively.

As of September 30, 2025,

the debt discount recorded on the note was $0, resulting in a note payable balance of $ 12,500 and accrued interest of $ 6,109 .

As of September

30, 2023, the Company had defaulted on the promissory note payable.

During the year ended September

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

During the year ended September 30, 2025 and 2024 , the Company recorded interest

expense of $ 1,500 and $ 1,500 , respectively.

As of September 30, 2025 and 2024, the accrued interest on the promissory note was $ 3,666

and $ 2,166 , respectively.

As of September 30, 2025 and 2024, the total outstanding principal of the promissory note payable was $ 7,500 .

As of September 30, 2025, the Company had defaulted on the promissory note payable .

Credit Agreement

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Notes to the Condensed Consolidated Financial Statements

June 30, 2025

December 31, 2025

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

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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 ,

2025, the Company has drawn $ 684,509 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 $ 66,248 of deferred offering

costs during the nine months ended June 30 , 2025.

The amount of interest accrued on the Promissory

note was $ 98,808 during the nine months ended June 30 , 2025.

The promissory notes payable

balance was $ 684,509 and $ 574,478 as of June 30 , 2025 and September 30, 2024, respectively.

The unamortized discount on the note payable was $ 10,729 and $ 34,349 at June 30 , 2025 and

September 30, 2024, respectively.

As of December 31, 2025, 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 amount of interest accrued on the Promissory note was $ 93,594 during the three months

ended December 31, 2025.

The promissory notes payable balance was $ 442,259 and $ 513,074 as of December 31, 2025 and September 30, 2025,

respectively.

The unamortized discount on the note payable was $ 0 and $ 2,769 at December 31, 2025 and September 30, 2025, respectively.

Security Agreement

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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, 2025, 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, 2025, 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, 2025

December 31, 2025

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

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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

20 unchanged sentences

$ 38,159 at September 30, 2025.

As of March 31, 2025, the note balance was rolled into the fifth note, therefore the loan was considered

paid in full as of March 31, 2025.

As of December 31, 2025, the note balance was rolled into the fifth note, therefore the loan was considered

paid in full as of December 31, 2025.

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

5 unchanged sentences

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

As of June 30, 2025, the Company had amortized $ 7,614 of the debt discount and made repayments

of $ 85,314 , resulting in a debt discount balance of $ 0 and a loan balance of $ 0 at June 30, 2025.

As of March 31, 2025, the Company had amortized $ 7,614 of the debt discount and made repayments

of 85,314 , resulting in a debt discount balance of $ 0 and a loan balance of $ 0 at March 31, 2025.

March 17, 2025, the Company executed a sixth note payable with a lender with a face amount of $ 113,600 .

5 unchanged sentences

the $ 11,132 of fixed fees as a debt discount.

As of June 30, 2025, the Company had amortized $ 4,266 of the debt discount and made repayments

of $ 43,529 , resulting in a debt discount balance of $ 6,478 and a loan balance of $ 66,109 at June 30, 2025.

following represents the future aggregate maturities as of June 30, 2025 of the Company’s Promissory Notes Payable:

As of September 30, 2025, the Company had amortized $ 11,132 of the debt discount and made

repayments of $ 113,600 , resulting in a debt discount balance of $ 0 and a loan balance of $ 0 at September 30, 2025.

On August 25, 2025, the Company

executed a seventh note payable with a lender with a face amount of $ 188,300 .

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 $ 188,300 (including fixed fees of $ 19,771 or approximately 10% of the note amount).

received net proceeds of $ 148,333 after paying off the March 2025 note and rolling $ 39,967 of its balance into the August 25, 2025 note

and recording the $ 19,771 of fixed fees as a debt discount.

As of December 31, 2025, the Company had amortized $ 8,656 of the debt discount

and made repayments of $ 62,008 , resulting in a debt discount balance of $ 11,115 and a loan balance of $ 94,756 at September 30, 2025.

following represents the future aggregate maturities as of December 31, 2025 of the Company’s Promissory Notes Payable:

Schedule of future aggregate maturities

Fiscal year ending September 30,

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

Note 7 – Convertible

Notes Payable

AJB Capital Investments,

Effective February 24, 2022,

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corporate purposes.

The maturity date of the

AJB Note was extended to February 24, 2023 .

The AJB Note bears interest at 10 % per annum for the original note’s period and 12%

per annum for extension period which was started from August 24, 2022, and it is payable on the first of each month beginning April 1,

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

The maturity date of the AJB

Note was extended to February 28, 2026 .

The AJB Note bears interest at 10 % per annum for the original note’s period and 12% per

annum for extension period which was started from August 24, 2022, and it is payable on the first of each month beginning April 1, 2022.

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

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is an exempt issuance.

Also pursuant to the SPA,

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

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

If, after the sixth month anniversary of closing

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

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

However, if the Company pays the AJB Note

off on or before its maturity date, then the Company may redeem 2,000,000 of the Commitment Fee Shares for one dollar and the amount of

the commitment fee will be reduced to $ 400,000 .

On issuance of the note, the Company determined that the guarantee on the commitment fee

was a make-whole provision and an embedded derivative within the host instrument.

The guarantee was bifurcated from the host instrument

and recorded as a derivative liability valued at $384,287 using a Black-Scholes option pricing model (see Note 8).

Pursuant to the SPA, the

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

common stock for $ 0.30 per share, which was assigned a value of $ 107,283 that was recorded as derivative liability (see Notes 5 and 8).

The warrants expire on February 24, 2027 .

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

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

right to exercise the warrants.

Also pursuant to the SPA, the Company was to pay AJB

a commitment fee of $ 800,000 , payable in the form of 4,000,000 unregistered shares of the Company’s common stock (the “Commitment

Fee Shares”) which were issued at note inception.

If, after the sixth month anniversary of closing and before the thirty-sixth month

anniversary of closing, AJB has been unable to sell the Commitment Fee Shares for $ 800,000 , then the Company may be required to issue

additional shares or pay cash in the amount of the shortfall.

However, if the Company pays the AJB Note off on or before its maturity

date, then the Company may redeem 2,000,000 of the Commitment Fee Shares for one dollar and the amount of the commitment fee will be reduced

to $ 400,000 .

On issuance of the note, the Company determined that the guarantee on the commitment fee was a make-whole provision and an

embedded derivative within the host instrument.

The guarantee was bifurcated from the host instrument and recorded as a derivative liability

valued at $ 384,287 using a Black-Scholes option pricing model (see Note 9).

Pursuant to the SPA, the Company

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

stock for $ 0.30 per share, which was assigned a value of $ 107,283 that was recorded as derivative liability (see Notes 6 and 9).

expire on February 24, 2027.

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

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

the warrants.

After recording the derivative liabilities associated

with the SPA, the Company allocated the net proceeds to the 4,000,000 common shares issued and the note itself based on their relative

fair market values, resulting in the common shares being assigned a value of $ 65,274 (see Note 6).

The allocation of the financing costs

of $ 108,750 , the derivative for the guarantee of $ 384,287 , the derivative for the warrant of $ 107,283 , and issuance of the 4,000,000 Commitment

Fee shares of $ 65,274 , to the debt component resulted in a $ 665,594 debt discount that is being amortized to interest expense over the

term of the AJB Note.

On October 31, 2022, the Company amended the AJB Note

to issue 1,000,000 additional Commitment Fee Shares, recognizing the value of the shares and a debt discount of $ 60,000 (see Note 6).

On February 10, 2023, the Company entered into second

amendment with AJB by increasing the original principal of the note by $ 85,000 , which increased the restricted cash balance to be used

for payments for professional services, replacing the original 1,000,000 warrants with an exercise price of $ 0.30 with 2,000,000 warrants

with an exercise price of $ 0.05 (see Note 6), and extending the maturity date of the note to May 24, 2023.

The Company determined the

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

therefore the Company recorded a loss on

extinguishment of debt for the total amount of $36,313 included in other income (expenses) within the accompanying statement of operation.

On September 27, 2023, the Company entered into second

amendment with AJB by increasing the original principal of the note by $ 25,000 which increased the restricted cash balance to be used

for payments for professional services.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

After recording the derivative

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

based on their relative fair market values, resulting in the common shares being assigned a value of $ 65,274 (see Note 5).

The allocation

of the financing costs of $ 108,750 , the derivative for the guarantee of $ 384,287 , the derivative for the warrant of $ 107,283 , and issuance

of the 4,000,000 Commitment Fee shares of $65,274, to the debt component resulted in a $ 665,594 debt discount that is being amortized

to interest expense over the term of the AJB Note.

On October 31, 2022, the

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

of $ 60,000 .

On February 10, 2023, the

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

cash balance to be used for payments for professional services, replacing the original 1,000,000 warrants with an exercise price of $ 0.30

with 2,000,000 warrants with an exercise price of $ 0.05 and extending the maturity date of the note to May 24, 2023.

The Company determined

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

therefore, the Company recorded a loss

on extinguishment of debt for the total amount of $36,313 included in other income (expenses) within the accompanying statement of operation.

On September 27, 2023, the

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

cash balance to be used for payments for professional services.

On November 28, 2023, the

Company entered into a third amendment with AJB Capital Investments, LLC by increasing the original principal of note with amount of $ 22,222

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

Effective December 15, 2023,

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

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

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

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

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

After payment of the fees and costs, the net proceeds to the Company

were $ 150,750 , which will be used for working capital and other general corporate purposes.

The maturity date of the

AJB Note was June 14, 2024 .

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

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

December 31, 2025

On November 28, 2023, the Company entered into a third

amendment with AJB Capital Investments, LLC by increasing the original principal of note with amount of $ 22,222 in which the Company received

$ 20,000 in cash (after giving effect to a 10% original issue discount) for payment to vendors.

Effective December 15, 2023, the Company entered into

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

Note in the principal amount of $195,000 (the “AJB Note”) to AJB in a private transaction for a purchase price of $ 165,750

(after giving effect to a 15% original issue discount).

In connection with the sale of the AJB Note, the Company also paid certain fees

and due diligence costs of AJB and brokerage fees.

After payment of the fees and costs, the net proceeds to the Company were $ 150,750 ,

which will be used for working capital and other general corporate purposes.

The note is convertible into

19 unchanged sentences

is an exempt issuance.

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

On December 15, 2023, in

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

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

$ 0.00001 per share.

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

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.

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

of $ 248,952 which was recorded as a derivative liability, with corresponding amounts of $ 150,750 was allocated to debt discount and the

difference between the fair value of the December 2023 warrants and the net proceeds received of $ 98,202 was recognized as interest expense.

Effective February 23, 2024, the Company entered into

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

Note in the principal amount of $ 140,000 (the “AJB Note”) to AJB in a private transaction for a purchase price of $ 112,000

(after giving effect to a 20% original issue discount).

In connection with the sale of the AJB Note, the Company also paid certain fees

and due diligence costs of AJB and brokerage fees, totaling $10,000.

On January 22, 2026, the Company

refinanced the note with a new note with a maturity date of July 22, 2026.

In December 2023, in conjunction

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

stock for nominal exercise price of $ 0.00001 per share.

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

warrant is exercised in full.

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

a beneficial ownership limitation on The holder that, in certain circumstances, may serve to restrict the holder’s right to exercise

the warrants.

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

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

The note was discounted to a principal balance of $0 and

a debt discount of $ 195,000 was recorded at inception.

The difference between the fair value of the warrants and the net proceeds received

was recognized as interest expense.

Effective February 23, 2024,

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

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

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

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

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

After payment of the fees and costs, the net proceeds to the Company

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

The maturity date of the AJB Note is August 31,

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

The Company may

prepay the AJB Note at any time without penalty.

Also pursuant to the SPA, the Company paid to AJB

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

On January 22, 2026 , the Company refinanced the note

with a new note with a maturity date of July 22, 2026.

The AJB Note bears interest at 12 % per year, and principal and accrued interest

is due on the maturity date.

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

Also pursuant to the SPA, the Company was to pay AJB

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

6 unchanged sentences

After payment of the fees and costs,

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

The maturity date of the AJB Note is August 31,

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

The Company may

prepay the AJB Note at any time without penalty.

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

On January 22, 2026, the Company refinanced the note

with a new note with a maturity date of July 22, 2026 .

The AJB Note bears interest at 12 % per year, and principal and accrued interest

is due on the maturity date.

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

Also pursuant to the SPA, the Company paid to AJB

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

On June 14, 2024, the Company entered into another

7 unchanged sentences

for this note as a line of credit.

The maturity date of the AJB Note is August 31,

The maturity date of the AJB Note is February

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

The Company may

prepay the AJB Note at any time without penalty.

may prepay the AJB Note at any time without penalty.

The note is convertible into Common Stock of the Company

32 unchanged sentences

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 June 30 , 2025.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

On May 8, 2025, the Company executed a note agreement

with AJB Capital with a principal balance of $ 80,000 and an original issue discount of $ 8,000 .

The notes is due on November 8, 2025 and

bears interest at 12 %.

Legal and due diligence fees totaling $ 10,000 were deducted from the gross proceeds of the note, resulting in net

proceeds of $ 62,000 to the Company.

The note bears interest at 12 %.

due diligence fees totaling $ 10,000 were deducted from the gross proceeds of the note, resulting in net proceeds of $ 62,000 to the Company.

The note is convertible into common stock of the Company in the event of a default.

On January 22, 2026, the Company refinanced the note

with a new note with a maturity date of July 22, 2026 .

In conjunction with this note, the Company issued

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financing costs and will be recorded as a discount to the note.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

On June 16, 2025, the Company executed a note agreement

with AJB Capital with a principal balance of $ 45,000 and an original issue discount of $ 4,500 .

The notes is due on December 16, 2025 and

bears interest at 12 %.

Legal and due diligence fees totaling $ 7,000 were deducted from the gross proceeds of the note, resulting in net

proceeds of $ 33,500 to the Company.

The note bears interest at 12 %.

due diligence fees totaling $ 7,000 were deducted from the gross proceeds of the note, resulting in net proceeds of $ 33,500 to the Company.

The note is convertible into common stock of the Company in the event of a default.

On January 22, 2026, the Company refinanced the note

with a new note with a maturity date of July 22, 2026 .

In conjunction with this note, the Company issued

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as deferred financing costs and will be recorded as a discount to the note.

the nine months ended June 30, 2025, the Company recorded interest expense of $ 451,638 , amortization of debt discount of $ 125,172 , amortization

of deferred financing costs of $ 203,464 and a loss on change in fair value of derivative liability of $ 2,504,840 for the guarantee and

As of June 30, 2025 and September 30, 2024, the derivative liability was $ 3,986,354 and $ 1,386,014 for the guarantee and warrants,

the debt discount recorded on the notes was $ 106,021 and $ 33,898 , the note payable principal was $ 1,717,722 and $ 1,480,222 , and the Company

owed accrued interest of $ 507,096 and $ 316,300 .

the nine months ended June 30, 2024, the Company recorded interest expense of $ 587,415 , additional debt discount of $ 362,564 , amortization

of debt discount of $ 233,483 , and a loss on change in fair value of derivative liability of $ 97,829 for the guarantee and warrants.

of June 30, 2024, and September 30, 2023, the derivative liability was $ 1,136,697 and $ 1,278 for the guarantee and warrants, the debt discount

recorded on the note was $ 114,579 and $ 51,487 , the note payable principal was $ 1,787 ,064 and $ 1,310 ,000 , and the Company owed accrued interest

of $ 282,338 and $ 131,625 .

Effective February 14, 2023,

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

interest or penalties were incurred during the nine months ended June 30 , 2025 and the AJB

note was not convertible as of June 30 , 2025.

The following represents the future aggregate maturities

of the Company’s Convertible Notes Payable as of June 30 , 2025 for each of the five

(5) succeeding years and thereafter as follows:

Schedule of future aggregate maturities

Fiscal year ending September 30,

2025 (remaining)

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

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.

On July 18, 2025, the Company executed a note agreement

with AJB Capital with a principal balance of $ 60,000 and an original issue discount of $ 6,000 .

The note bears interest at 12 %.

due diligence fees totaling $ 8,000 were deducted from the gross proceeds of the note, resulting in net proceeds of $ 46,000 to the Company.

The note is convertible into common stock of the Company in the event of a default.

On January 22, 2026, the Company refinanced the note

with a new note with a maturity date of July 22, 2026 .

In conjunction with this note, the Company issued

a warrant to purchase 18,000,000 shares of the Company’s common stock at a price of $ 0.00001 per share.

The term of the warrant

extends until such time as the warrant is exercised in full.

The warrant is exercisable at any time on or after July 18, 2025 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 $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,

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

Each Unit consists

of a Secured Convertible Note with an original principal balance of $ 50,000 and one warrant to purchase Common Stock for every $2 invested

in the offering.

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

Convertible Note bears interest at 15 % per annum, matures two years after the date of issuance, and is convertible at the option of the

holder into common stock at $0.20 per share.

Pursuant to a security agreement between the Company and investors in the Unit offering,

and the subscription agreements executed by the Company and the investors, the Secured Convertible Notes are secured by liens on four

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

vehicles that will be purchased with the proceeds of the offering, assuming all 10 Units are sold in the offering.

The Company also granted

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

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

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.

and were assigned a value of $ 1,565,999 which was recorded as a derivative liability.

As the assigned value of the warrants plus a $ 6,000

original issue discount and $ 8,000 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.

On September 2, 2025, the Company executed a note

agreement with AJB Capital with a principal balance of $ 65,000 and an original issue discount of $ 6,500 .

The note bears interest at 12 %.

Legal and due diligence fees totaling $ 8,500 were deducted from the gross proceeds of the note, resulting in net proceeds of $ 26,000 to

The note is convertible into common stock of the Company in the event of a default.

In December 2025, the Company received

the balance of the net proceeds of $ 25,000 on the note.

On January 22, 2026, the Company refinanced the note with a new note with a maturity

date of July 22, 2026 .

In conjunction with this note, the Company issued

a warrant to purchase 25,000,000 shares of the Company’s common stock at a price of $ 0.00001 per share.

The term of the warrant

extends until such time as the warrant is exercised in full.

The warrant is exercisable at any time on or after September 2, 2025 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 $ 1,200,000 which was recorded as a derivative liability.

As the assigned value of the warrants

plus a $ 6,500 original issue discount and $ 8,500 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.

During the three months ended December 31, 2025, the

Company recorded interest expense of $ 78,235 and recorded a loss on change in fair value of derivative liability of $ 914,332 related to

the aforementioned notes.

As of December 31, 2025, the derivative liability related to the notes was $ 3,212,910 , the notes payable principal

was $ 1,842,722 , the discount balance was $ 27,945 , and the Company owed accrued interest of $ 651,630 .

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 .

Effective February 14, 2023 the Company went into

default on the AJB Notes.

However, on January 22, 2026, the Company and AJB entered into a new note to refinance the notes dated December

15, 2023, February 23, 2024, May 28, 2024, March 7, 2025, May 8, 2025, June 16, 2025 and July 18, 2025 under substantially the same terms

as the original notes (the New Note).

The due date of the New Note is July 22, 2026.

Two of the aforementioned notes, dated February 24,

2022 and June 16, 2024, were not included in the New Note, however the lender waived all default provisions on these notes through February

28, 2026 and therefore no default interest or penalties were incurred during the three months ended December 31, 2025 and the AJB notes

were not convertible as of December 31, 2025.

Secured Convertible Notes

In June 2022, the Company’s board of directors

approved an offering of up to 10 Units at $ 50,000 per Unit in a private offering.

Each Unit consists of a Secured Convertible Note with

an original principal balance of $ 50,000 and one warrant to purchase Common Stock for every $2 invested in the offering.

have an exercise price of $ 0.30 per share and expire five ( 5 ) years from the date of issuance.

Each Secured Convertible Note bears interest

at 15% per annum, matures two years after the date of issuance, and is convertible at the option of the holder into common stock at $ 0.20

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

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

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

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

The Company also granted subscribers in the Unit offering piggyback

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

of the warrants issued in the Unit offering.

During November 2022, the Company sold a total of

$ 200,000 worth of Units to Cestone Family Foundation and Michele and Agnese Cestone Foundation, two accredited investors, which resulted

in the issuance of two secured promissory notes with an aggregate principal amount of $ 200,000 for cash proceeds of $ 180,000 (net of an

original issuance discount of $ 20,000 ), and the issuance of 100,000 warrants (see Note 6).

The $ 20,000 was recorded as a debt discount

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

a debt discount and derivative liability of $ 19,330 .

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

qualified for derivative accounting and were assigned a value of $ 7,254 which was recorded as a derivative liability (see Note 9) and

debt discount).

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

Effective June

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

During November

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

accredited investors, which resulted in the issuance of two secured promissory notes with an aggregate principal amount of $200,000 for

cash proceeds of $180,000 (net of an original issuance discount of $20,000), and the issuance of 100,000 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 $19,330.

As a result of the Company’s equity environment

being tainted the warrants qualified for derivative accounting and were assigned a value of $7,254 which was recorded as a derivative

liability (see Note 8) and debt discount).

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

June 30, 2025

the nine months ended June 30 , 2024 , the Company recorded interest expense of $ 34,313 , paid

interest of $ 0 and amortization of debt discount of $ 30,451 .

of June 30, 2025 and September 30, 2024, the accrued interest on the promissory notes was $ 175,548 and $ 130,589 , respectively.

30, 2025 and September 30, 2024 the outstanding principal of Promissory Notes Payable was $ 450,000 and $ 250,000 , respectively.

30, 2025, the Company had defaulted on these promissory notes payable.

December 31, 2025

the three months ended December 31, 2025 and 2024, the Company recorded interest expense of $ 22,685 and $ 21,425 , respectively on these

As of December 31, 2025 and September 30, 2025, the accrued interest on the promissory notes was $ 253,056 and $ 230,371 , 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, 2025, the Company had defaulted on these promissory notes payable.

The following represents the

future aggregate maturities of the Company’s Secured Convertible Notes as of September 30, 2026 for each of the five (5) succeeding

years and thereafter as follows:

Schedule of future aggregate maturities

Fiscal year ending September 30,

Note 8 – Derivative

7 unchanged sentences

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, 2025.

fair values at inception and as of December 31, 2025.

The Black-Scholes model requires six basic data inputs:

4 unchanged sentences

The following assumptions

were used in the Black-Scholes model during the nine months ended June 30, 2025, and year ended September 30, 2024:

were used in the Black-Scholes model during the three months ended December 31, 2025, and year ended September 30, 2025:

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

Schedule of defined benefit plan, assumptions

Nine months ended

Three months ended

September 30,

7 unchanged sentences

3.61 % - 4.93

15,625,000 warrants issued during the nine months ended June 30, 2025 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, 2025:

in fair value of the Company’s Level 3 financial liabilities during the three months ended December 31, 2025:

Schedule of derivative liabilities

2 unchanged sentences

Gain on change in fair value of the derivative

Derivative liability balance – June 30, 2025

Derivative liability balance – December 31, 2025

Note 9 – Subsequent

On January 22, 2026, the Company entered into a Securities

Purchase Agreement with AJB Capital Investments, LLC in connection with the issuance of (i) a 15% convertible promissory note in the principal

amount of $ 1,150,000 (the “January 2026 Note”);

and, a pre-funded warrant to purchase up to 10,000,000 shares of the Company’s

common stock.

The January 2026 Note bears interest at 15%, includes an original issue discount of $ 230,000 and is due on July 22, 2026.

The conversion price shall equal the lowest trading price (i) during the previous twenty (20) Trading Day period ending on the Conversion

Date, or (ii) during the previous twenty (20) Trading Day period ending on date of issuance of the note.

The January 2026 Note refinances and consolidates

the following previously issued notes to AJB Capital Investments, LLC, as of January 22, 2026:

Schedue of consolidates following

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