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Item 1. Financial Statements

2026-05-22 compared with 2026-02-25 · 496 added, 553 removed, 851 unchanged (55% of the section changed)

FINANCIAL STATEMENTS

DRIVEITAWAY HOLDINGS, INC.

DRIVEITAWAY HOLDINGS,

INDEX TO UNAUDITED INTERIM

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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)

MARCH 31, 2026

Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and September 30, 2025

Condensed Consolidated Statements of Operations for the three and six months ended March 31, 2026 and 2025 (Unaudited)

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three and six months ended March 31, 2026 and 2025 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the three and six months ended March 31, 2026 and 2025 (Unaudited)

Notes to the Condensed Consolidated Financial Statements (Unaudited)

DriveItAway Holdings, Inc.

DriveItAway Holdings,

Condensed Consolidated

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Deferred revenue

Customer deposits

Due to related parties

9 unchanged sentences

SBA Loan - noncurrent

Promissory notes payable - noncurrent

Total Liabilities

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1,000,000,000 shares authorized;

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

121,525,082 shares issued and 121,525,082 outstanding at March 31, 2026 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 December 31, 2025 and September 30, 2025

Treasury stock, at cost - 15,100 shares at March 31, 2026 and September 30, 2025

Accumulated deficit

( 11,432,878 )

( 10,461,619 )

Total Stockholders’ Deficit

( 9,082,132 )

( 8,502,124 )

Total Liabilities and Stockholders’ Deficit

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an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings, Inc.

DriveItAway Holdings,

Condensed Consolidated

1 unchanged sentence

Three Months Ended

Six Months Ended

Cost of Goods Sold

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Amortization of deferred financing costs

Loss on extinguishment of debt

Interest expense

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Total Other Income (Expense)

Income / (Loss) Before Income Tax

Provision for income taxes – Note 2

( 1,375,327 )

Net Income (Loss)

$ ( 1,520,029 )

$ ( 447,958 )

$ ( 971,261 )

Net Income (Loss) Per Common Share

Basic net income (loss) per common share

Basic and diluted net income (loss) per common share

Diluted net income (loss) per common share

Basic weighted average number of common shares outstanding

Basic and diluted weighted average number of common shares outstanding

Diluted weighted average number of common shares outstanding

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an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings, Inc.

DriveItAway Holdings,

Condensed Consolidated

Statement of Changes in Stockholders’ Deficit

For the Three Months Ended

December 31, 2025

For the Three and Six Months

Ended March 31, 2026

Treasury Stock

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Balance - September 30, 2025

Warrants issued

Common stock issued to repay related party loan

$ ( 10,461,619 )

$ ( 8,502,123 )

Stock issued to convert related party debt

Stock compensation

Warrants issued

Balance - December 31, 2025

For the Three Months Ended

December 31, 2024

$ ( 9,912,751 )

$ ( 7,647,630 )

Sale of warrants for cash

Stock compensation

( 1,520,130 )

Balance – March 31, 2026

$ ( 11,432,878 )

$ ( 9,082,132 )

For the Three and Six Months

Ended March 31, 2025

Treasury Stock

1 unchanged sentence

Balance - September 30, 2024

$ ( 5,559,139 )

$ ( 3,959,602 )

Common stock sold for cash

1 unchanged sentence

Balance - December 31, 2024

$ ( 5,102,676 )

$ ( 3,448,139 )

Balance – March 31, 2025

$ ( 5,550,634 )

$ ( 3,896,097 )

The accompanying notes are

an integral part of these unaudited condensed consolidated financial statements.

DriveItAway Holdings, Inc.

DriveItAway Holdings,

Condensed Consolidated

Statements of Cash Flows

For the Three Months Ended

For the Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$ ( 971,259 )

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

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Amortization of debt discount

Stock compensation expense

Loss on sale of fixed assets

Loss on extinguishment of debt

Stock compensation

Changes in operating assets and liabilities:

Prepaid expenses

Due to related party

Accounts receivable

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CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from sale of vehicles

Proceeds from sale of fixed assets

Purchase of vehicles

Net Cash used in Investing Activities

Net Cash provided by (used in) Investing Activities

CASH FLOWS FROM FINANCING ACTIVITIES:

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Proceeds from notes payable

Repayment of short term notes payable

Repayment of promissory notes payable

Repayment of convertible promissory notes

Net Cash provided by Financing Activities

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Cash paid for taxes

Non-cash transactions:

Non-cash Investing and Financing transactions:

Common stock issued upon conversion of related party note

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Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

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 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 .

During the six months ended March 31, 2026, the Company had net loss of $ ( 971,259 and cash used in operating activities of $ ( 479,987 ) .

As of March 31, 2026, the Company had an accumulated deficit of $ ( 11,432,878 ) .

The Company has not established sufficient revenue to cover

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Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

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 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

results for the three months ended March 31, 2026, 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 January 13, 2025.

in the Company’s Form 10K, as filed on February 24, 2026.

Basis of Consolidation

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differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and

Foreign Currency Translation

Foreign currency translation is recognized in accordance

with ASC 830.

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

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

Cash and Cash Equivalents

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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.

31, 2026 and September 30, 2025 , the Company had cash of $ 83,006 and $ 39,930 , respectively and did not have any cash equivalents.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

Accounts Receivable

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The Company believes its allowances for

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 .

doubtful accounts as of March 31, 2026 and September 30, 2025 are adequate, but actual write-offs

could exceed the recorded allowance.

As of March 31, 2026 and September 30, 2025 the balances

in the allowance for doubtful accounts was $ 423 .

Fixed assets are recorded at

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The Company’s operating

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.

lease portfolio for the period ended March 31, 2026 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 March 31, 2026, the Company did not have leases that qualified as ROU assets.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

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 December 31, 2025 using:

December 31, 2025

Fair Value Measurements at March 31, 2026 using:

March 31, 2026

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

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Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

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 December

During the periods ended March

31, 2026 and 2025, 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

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

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This is a cost of goods sold.

The Company also allows drivers to bring their own insurance.

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

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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

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.

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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.

the contract term.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

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.

March 31, 2026

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 March 31, 2026 and September 30, 2025 refundable deposits were $ 0

and $ 0 and deferred revenue was $ 26,261 and $ 15,740 , respectively.

In addition to the costs

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

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

remit payments through its credit card processors.

Stock-Based Compensation

The Company recognizes compensation expense for all

restricted stock awards and stock options.

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

stock, as determined by the Board of Directors.

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

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

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

period of the entire option.

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

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

The Company recognizes compensation expense for

all restricted stock awards and stock options.

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

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

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

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

requisite service period.

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

basis over the vesting period of the entire option.

The determination of fair value using the Black-Scholes pricing model is

affected by our stock value as well as assumptions regarding a number of complex and subjective variables, including expected stock

price volatility and the risk-free interest rate.

Stock-based compensation expense for the six months ended March 31, 2026 and March

31, 2025 was $ 76,250 and $ 0 , respectively.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred.

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

The Company incurred advertising and marketing costs for the three months ended March 31, 2026 and 2025 of $ 0 and $ 0 , respectively.

The provision for income taxes and deferred income

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Total income tax provision

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

Income/(Loss) per Share of Common Stock

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Convertible notes

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

Reclassification

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to conform to the current period presentation.

Recent Accounting Pronouncements

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.

Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update

(“ASU”) 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information.

ASU 2023-09 is effective for

fiscal years beginning after December 15, 2024, and may be adopted on a prospective or retrospective basis.

Early adoption is permitted.

The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

In the period from October 2025 through May 2026 the

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

Management has evaluated

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cover operating expenses.

As of December

31, 2026 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 .

in the amount of $ 26,332 and $ 26,380 , respectively.

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 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 three months ended December 31, 2025 and

During the three months ended March 31, 2026

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.

31, 2026 and September 30, 2025, the amount due to related parties for Promissory notes payable was $ 21,500 and $ 42,500 , respectively.

During the six months ended March 31, 2026 and 2025,

the Company recorded related party interest expense of $ ( 3,492 ) and $ ( 4,238 ) respectively.

1 unchanged sentence

Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

Note 4 – Fixed

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$ 18,878 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.

expense for the six months ended

March 31, 2026 and 2025, was $ 40,445 and $ 36,182 , respectively.

During the six months ended March 31, 2026 and the year ended

September 30, 2025, the Company purchased vehicles of $ 0 and $ 137,290 , respectively .

The following

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Accumulated depreciation

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

During the three months ended December

expense for the six months ended March 31, 2026 and 2025, was $ 899 and $ 2,714 , respectively.

During the six months ended March 31, 2026

and 2025, the Company incurred no website development costs.

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Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

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 three

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

As of December

During the six

months ended March 31, 2026 and 2025 there were no issuances of the Series A Preferred shares.

31, 2026 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

six months ended March 31, 2026, the Company issued 250,000

shares of common stock as stock-based compensation .

During the six months ended March 31, 2026, 1,250,000 shares were issued to convert a related party debt.

During the six

months ended March 31, 2025,the Company issued 250,000 shares of common stock to a private investor for gross proceeds of $ 5,000 .

31, 2026 and September 30, 2025, the Company had 121,525,082 and 120,025,082 common

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

As of December 31, 2025 and September 30, 2025 the Company had 15,100 shares of treasury stock valued at $ 18,126 .

As of March 31, 2026 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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Notes to the Condensed Consolidated Financial Statements

December 31, 2025

March 31, 2026

In June 2022, in conjunction with a private offering

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was recognized as interest expense.

In May 2024, in conjunction with the issuance of a

promissory note of $ 63,000 , the Company issued warrants to purchase 5,000,000 shares of Company’s common stock for nominal exercise

In May 2024, in conjunction with the issuance of

a promissory note of $ 63,000 , 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 28, 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 $ 348,500

which was recorded as a derivative liability.

The note was discounted to a principal balance of $ 0 and a debt discount of $ 63,000 was

recorded at inception.

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

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.

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

value of $ 348,500 which was recorded as a derivative liability.

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

of $ 63,000 was recorded at inception.

The difference between the 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

December 31, 2025

March 31, 2026

In May 2024, in conjunction with the issuance of a

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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 December

During the three months ended March

31, 2026, the Company issued warrants to purchase up to 2,500,000 shares of common stock for gross proceeds of $50,000.

On June 11, 2025, the Company issued a warrant to

purchase up to 375,000 shares of its common stock to the chief financial officer of the Company.

The warrant has a term of 5 years and

an exercise price of $ 0.00001 .

The warrant is fully vested on the date of grant.

The fair market value of the warrant on the date of grant

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).

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

warrant activity during the six months ended March 31, 2026, is as follows:

Schedule of common stock warrants activity

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Balance as of September 30, 2025

Balance as of December 31, 2025

Balance as of March 31, 2026

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

September 30, 2025 do not have an expiration date.

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

# 28,750,000 warrants

issued during the six months ended March 31, 2026 do not have an expiration date.

The intrinsic

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

value of the warrants as of March 31, 2026, is $ 200 .

All of the outstanding warrants are exercisable as of March 31, 2026.

Note 6 – Notes Payable

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and matures on June 7, 2050.

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

During the six months ended March 31, 2026 and 2025, the Company recorded interest expense of

$ 2,135 and $ 2,180 , respectively, on the SBA Loan and as of March 31, 2026 and September 30,

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

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

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

As of March 31, 2026 and September 30, 2025 the outstanding

principal of SBA Loan was $ 113,125 and $ 114,386 , respectively.

The following represents the future aggregate maturities

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

of the Company’s SBA Loan as of March 31, 2026 , for each of the five (5) succeeding

years and thereafter as follows:

3 unchanged sentences

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.

31, 2026 and September 30, 2025, 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 $ 11,769 and $ 9,775 , respectively:

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

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 $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 .

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

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to time to reflect additional advances.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

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 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.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

As of March 31, 2026, 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 $ 11,811 of deferred offering costs during the six months ended March 31, 2026.

of interest accrued on the Promissory note was $ 98,808 during the six months ended March 31, 2026.

The promissory notes payable balance

was $ 684,509 and $ 574,478 as of March 31, 2026 and September 30, 2025, respectively.

The unamortized discount on the note payable was

$ 0 and $ 34,349 at March 31, 2026 and September 30, 2025, respectively.

Security Agreement

20 unchanged sentences

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

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

December 31, 2025

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

Under the terms of the

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

services until the Company has repaid the $ 64,206 (including fixed fees of $ 6,206 or approximately 10% of the note amount).

received net proceeds of $ 49,770 after paying off the May 1, 2023 note and rolling $8,230 of its balance into the August 15, 2023 note

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

During the 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 September 30, 2025.

As of March 31, 2026, 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.

August 15, 2023 the Company executed

a second note payable with the same lender with a face amount of $ 64,206 .

Under the terms of the agreement, the lender will withhold 20%

of the Company’s daily funds arising from sales through the lender’s payment processing services until the Company has repaid

the $ 64,206 (including fixed fees of $ 6,206 or approximately 10% of the note amount).

The Company received net proceeds of $ 49,770 after

paying off the May 1, 2023 note and rolling $8,230 of its balance into the August 15, 2023 note and recording the $ 6,206 of fixed fees

as a debt discount.

During the six months ended March 31, 2025, 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 September 30, 2025 .

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

8 unchanged sentences

the loan was considered paid in full as of September 30, 2025.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

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

5 unchanged sentences

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

As of September 30, 2025, 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

As of March 31, 2026, the Company had amortized $ 8,800 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, 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.

As of March 31, 2026, the note balance was rolled into the fifth note, therefore the loan was considered paid in

full as of March 31, 2026.

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

14 unchanged sentences

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

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.

As of March 31, 2026, the Company had amortized $ 388 of the debt discount and made repayments

of $ 3,962 , resulting in a debt discount balance of $ 10,744 and a loan balance of $ 109,639 at March 31, 2026.

On August 25, 2025, the Company

7 unchanged sentences

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,

On March 27, 2026, the Company

executed a eighth note payable with a lender with a face amount of $ 257,618 .

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 $ 257,618 (including fixed fees of $ 22,565 or approximately 10% of the note amount).

received net proceeds of $ 206,716 after paying off the August 25, 2025 note and rolling $ 28,334 of its balance into the March 27, 2026

note and recording the $ 22,565 of fixed fees as a debt discount.

As of March 31, 2026, the Company had amortized $ 99 of the debt discount

and made repayments of $ 0 , resulting in a debt discount balance of $ 22,466 and a loan balance of $ 257,618 at March 31, 2026 .

following represents the future aggregate maturities as of March 31, 2026 of the Company’s Promissory Notes Payable:

Schedule of Promissory Notes Payable

Period ending March 31,

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

Note 7 – Convertible

Notes Payable

AJB Capital Investments,

Effective February 24, 2022,

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corporate purposes.

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 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,

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

20 unchanged sentences

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 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.

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.

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.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

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.

March 31, 2026

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.

The note is convertible into

19 unchanged sentences

is an exempt issuance.

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.

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

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 .

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

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

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

The maturity date of the AJB Note is May 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

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

3 unchanged sentences

for a purchase price of $ 56,700 (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 $ 6,700 .

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.

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.

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 $ 6,700 .

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 May 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

22 unchanged sentences

for this note as a line of credit.

The maturity date of the AJB Note is February

The maturity date of the AJB Note is May 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.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

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 March 31, 2026.

On January 2, 2026, the Company refinanced the notes

dated December 15, 2023, February 23, 2024, May 28, 2024, March 7, 2025, May 8, 2025, June 16, 2025, July 18, 2025, and September 9, 2025

with a new note with a principal balance of $ 1,150,000 bearing interest at 15 % and due on July 22, 2026.

The Company may prepay the AJB

Note at any time without penalty.

The refinancing is accounted for as a debt extinguishment, upon which the Company recorded a loss on

debt extinguishment of $ 21,798 .

The note is convertible into Common Stock of the Company

at any time that the note is in default provided that at no time may the note be convertible into an amount of common stock that would

result in the holder having beneficial ownership of more than 9.99% of the outstanding shares of common stock, as determined in accordance

with Section 13(d) under the Securities Exchange Act of 1934 (the “Exchange Act”).

The conversion price shall equal $0.01

per share, subject to adjustments.

The conversion is subject to reduction in the following situations:

(i) a 15% discount will apply anytime

a conversion occurs when the company is not eligible to deliver the shares by DWAC;

(ii) a 15% discount will apply whenever the shares

are “chilled” for deposit into the DTC system;

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

to be registered under Section 12 of the Exchange Act;

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

shares 181 days after its issue date;

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

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

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

warrants or securities convertible into Common Stock at price less than the conversion price, then the conversion price shall be automatically

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial 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 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

a warrant to purchase 5,000,000 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 May 8, 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 $ 249,970 which was recorded as a derivative liability.

As the assigned value of the warrants plus a $ 8,000 original

issue discount and $ 10,000 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 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 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

a warrant to purchase 15,000,000 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 June 16, 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 $ 1,183,388 which was recorded as a derivative liability.

As the assigned value of the warrants plus a $ 4,500

original issue discount and $ 7,000 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 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 $ 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

March 31, 2026

Also pursuant to the SPA, the Company paid to AJB

a commitment fee in the form of a warrant to purchase 10,000,000 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 January 22, 2026 and until the warrant is exercised in

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 $ 450,000 which was recorded as a derivative liability.

As the assigned value of the warrants plus a $ 230,000 original issue discount

and $ 7,500 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.

The Company has drawn 100% of the available credit on the note as of March 31, 2026.

During the six months ended

March 31, 2026, the Company recorded interest expense of $ 176,406 , amortization of debt discount of $ 393,680 , amortization of deferred

financing costs of $0, and a gain on change in fair value of derivative liability of $ 92,499 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.

31, 2026 and September 30, 2025, the derivative liability was $ 4,484,743 and $ 4,127,242 for the guarantee and warrants, the debt discount

recorded on the notes was $ 430,632 and $ 136,812 , the note payable principal was $ 2,282,222 and $ 1,818,722 , and the Company owed accrued

interest of $ 597,157 and $ 573,395 .

During the six months ended March 31, 2025, the Company recorded interest expense

of $ 141,121 , 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 $ 699,850 for the guarantee and warrants.

Effective February 14, 2023,

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

interest or penalties were incurred during the six months ended March 31, 2026 and the AJB note was not convertible as of March 31, 2026.

The following represents the future aggregate maturities

of the Company’s Convertible Notes Payable as of March 31, 2026 for each of the five (5) succeeding years and thereafter as follows:

Schedule of future aggregate maturities

Period ending March 31,

2026 (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, 2025.

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

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

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,

March 31, 2026

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.

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

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

the six months ended March 31, 2026 , the Company recorded interest expense of $ 44,878 , paid

interest of $ 0 and amortization of debt discount of $ 0 .

of March 31, 2026 and September 30, 2025, the accrued interest on the Convertible Promissory Notes Payable, in Default was $ 275,249 and $ 230,371 , respectively.

March 31, 2026 and September 30, 2025 the outstanding principal of Convertible Promissory Notes Payable, in Default was $ 450,000 and $ 450,000 , respectively.

of March 31, 2026, 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.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

March 31, 2026

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, 2025.

fair values at inception and as of March 31, 2026.

The Black-Scholes model requires six basic data inputs:

4 unchanged sentences

The following assumptions

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

were used in the Black-Scholes model during the six months ended March 31, 2026, and year ended September 30, 2025:

Schedule of defined benefit plan, assumptions

Three months ended

Six months ended

September 30,

7 unchanged sentences

3.93 % - 4.93

10,000,000 warrants issued during the six months ended March 31, 2026 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 three months ended December 31, 2025:

in fair value of the Company’s Level 3 financial liabilities during the three months ended March 31, 2026:

Schedule of derivative liabilities

1 unchanged sentence

Addition of new derivatives recognized as debt discounts

Gain on change in fair value of the derivative

Derivative liability balance – December 31, 2025

Loss on change in fair value of the derivative

Derivative liability balance – March 31, 2026

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

On April 14, 2026, the Company entered into a settlement agreement with

a vendor whereby the vendor agreed to convert $ 160,000 of open invoices into 4,000,000 shares of the Company’s common stock and

a pre-funded warrant to purchase 4,000,000 shares of the Company’s common stock.

On April 15, 2026, the Company agreed to convert a promissory note with

a principal balance of $12,500 and accrued interest of $6,511, for a total of $19,011 into 970,547 shares of the Company’s common

On April 15, 2026, the Company agreed to convert a promissory note with

a principal balance of $7,500 and accrued interest of $3,900, for a total of $11,400 into 570,000 shares of the Company’s common

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