~~FORM~~ ~~10-Q~~☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☒ ~~Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934~~

☐ ~~Transition Report Under Section~~ TRANSITION REPORT PURSUANT TO SECTION 13 orOR 15(d) ~~of the Securities Exchange Act of~~OF THE SECURITIES EXCHANGE ACT OF 1934

For the ~~transition~~transitional period from ~~__________~~_____________ to ~~__________~~______________

~~475 W Townplace~~3401 Market Street, Suite 200/201, Philadelphia, ~~Suite A~~
~~St Augustine~~, FLPA ~~32092~~19104
~~(Address~~

(Address of principal executive ~~offices, including Zip~~offices) (Zip Code)

~~Check~~Indicate by check mark whether the ~~issuer~~registrant (1) has filed all reports required to be filed by ~~section~~Section 13 or 15(d) of the Securities Exchange Act of 1934 during the ~~past~~preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files).

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a ~~small~~smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~“non-accelerated filer,”~~ “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

~~State the number~~As of ~~shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:~~September 6, 2022, there were ~~13,175,838~~105,286,622 shares of common stock ~~as of August 13,, 2021.~~outstanding.

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~~contain projections of future results of operations or financial condition; or~~

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~~state other “forward-looking” information.~~

We believe it is important to communicate our expectations to our stockholders. However, there may be events in the future that we are not able to accurately predict or over which we have no control. The risk factors and cautionary language discussed in this Form 10-Q and in our Form 10-K for the year ended September 30, 2020 provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described by us in our forward-looking statements, including among other things:

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~~the operating and financial results of and our relationships with our franchisees;~~

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~~actions taken by our franchisees that may harm our business;~~

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~~incidents that may impair the value of our brand;~~

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~~our failure to successfully implement our growth strategy;~~

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~~changing economic conditions;~~

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~~our need for additional financing;~~

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~~risks associated with our franchisees;~~

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~~litigation and regulatory issues;~~

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~~our failure to comply with current or future laws or regulations; and~~

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~~The impact of the Coronavirus (COVID-19) pandemic.~~

You should not place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q. Forward-looking statements involve known and unknown risks and uncertainties that may cause our actual future results to differ materially from those projected or contemplated in the forward-looking statements.

All forward-looking statements included herein attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except to the extent required by applicable laws and regulations, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events. You should be aware that the occurrence of the events described in the “Risk Factors” section and elsewhere in this Form 10-Q could have a material adverse effect on us.

~~iii~~

PART I – FINANCIAL INFORMATION

~~Item~~ITEM 1. ~~Financial Statements~~FINANCIAL STATEMENTS.

DRIVEITAWAY HOLDINGS, INC.

(FKA CREATIVE LEARNING ~~CORPORATION~~CORPORATION)

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE PERIOD ENDED JUNE 30, 2022

		Page

Condensed Consolidated Balance Sheets (Unaudited)		F-2

Condensed Consolidated Statements of Operations (Unaudited)		F-3

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited)		F-4

Condensed Consolidated Statements of Cash Flows (Unaudited)		F-6

Notes to Condensed Consolidated Financial Statements (Unaudited)		F-7

DriveItAway Holdings, Inc.

(fka Creative Learning Corporation)

Condensed Consolidated Balance Sheets

(Unaudited)

June 30,
2021 September 30,
2020
(Unaudited)

Current Assets:
Cash $ 380,408 $ 427,659
Restricted Cash (marketing fund) 8,689 20,194
Accounts receivable, less allowance for doubtful accounts of approximately $1,016,000 and $942,000, respectively 199,463 269,211
Prepaid commission expense 174,795 212,122
Prepaid expense 0 10,452
Marketing fund receivable 14,690 0
Notes receivables - current portion, less allowance for doubtful accounts of approximately $91,000 and $91,000, respectively 6,675 9,159
Total Current Assets 784,720 948,797

Security deposit 0 833
Prepaid commission expense - net of current portion 318,408 512,756
Property and equipment, net of accumulated depreciation of approximately $501,000 and $416,000, respectively 48,755 131,618
Total Assets $ 1,151,883 $ 1,594,004

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable $ 294,294 $ 69,527
SBA Loan - PPP 119,980 119,980
Deferred revenue 746,084 915,103
Accrued liabilities 22,588 8,743
Total Current Liabilities 1,182,946 1,113,353

Deferred revenue - net of current portion 1,474,589 2,297,576
Total Liabilities 2,657,535 3,410,929

Commitments and Contingencies (Note 3) 0 0

Stockholders’ Equity (Deficit)
Preferred stock, $.0001 par value; 10,000,000 shares authorized;
-0- shares issued and outstanding — —
Common stock, $.0001 par value; 50,000,000 shares authorized
13,240,938 shares issued and 13,175,838 shares outstanding as of June 30, 2021 13,363,410 shares issued and 13,298,310 shares outstanding as of September 30, 2020 1,322 1,334

Additional paid in capital 3,020,092 2,990,080
Treasury Stock 65,100 shares, at cost (34,626 ) (34,626 )
Accumulated Deficit (4,492,440 ) (4,773,713 )
Total Stockholders’ Equity (Deficit) (1,505,652 ) (1,816,925 )
Total Liabilities and Stockholders’ Equity (Deficit) $ 1,151,883 $ 1,594,004

June 30, September 30,
2022 2021
Assets
Current assets
Cash $ 389,664 $ 9,774
Accounts receivable, net 6,096 21,455
Total current assets 395,760 31,229

Goodwill 1,557,106 —
Vehicles, net of accumulated depreciation of $4,645 121,761 —
Total Assets $ 2,074,627 $ 31,229

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable $ 109,187 $ 132,696
Accrued liabilities 16,710 29,386
SBA Loan 11,183 6,128
PPP Loan — 23,750
Due to related party 726 7,268
Convertible notes payable - related parties — 30,000
Convertible note payable 612,212 —
Total Current Liabilities 750,018 229,228

SBA Loan - noncurrent 103,517 72,372
Convertible note payable - noncurrent 242,296 150,000
Convertible notes payable - related party - noncurrent — 65,000
Total Liabilities 1,095,831 516,600

Commitments and Contingencies (Note 9) 460,000 —

Stockholders’ Equity (Deficit)
Preferred stock, $.0001 par value; 10,000,000 shares authorized; 0 and 2,300,000 shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively — 230
Common stock, $0.0001 par value; 1,000,000,000 shares authorized; 105,301,722 shares issued and 105,286,622 outstanding at June 30, 2022 and 0 shares issued and outstanding as of September 30, 2021, respectively 10,531 —
Additional paid in capital 3,166,951 419,793
Treasury stock, at cost - 15,100 and 0 shares at June 30, 2022 and September 30, 2021, respectively (18,126 ) —
Accumulated deficit (2,640,560 ) (905,394 )
Total Stockholders’ Equity (Deficit) 518,796 (485,371 )
Total Liabilities and Stockholders’ Equity (Deficit) $ 2,074,627 $ 31,229

The accompanying notes are an integral part of the condensed consolidated ~~unaudited~~ financial statements.

~~CREATIVE LEARNING CORPORATION~~DriveItAway Holdings, Inc.
(fka Creative Learning Corporation)
Condensed Consolidated Statements of Operations
(Unaudited)

For the three months ended June 30, For the nine months ended
June 30,
2021 2020 2021 2020

REVENUES
Royalty fees $ 183,491 $ 342,010 $ 819,965 $ 1,248,467
Marketing fund revenue 0 12,979 0 159,773
Initial franchise fees 263,854 221,347 1,002,962 720,318
Technology fees 15,284 45,354 106,717 131,168
Merchandise sales 0 0 0 0
TOTAL REVENUES 462,629 621,690 1,929,644 2,259,726

OPERATING EXPENSES
Salaries and payroll taxes and stock-based compensation 104,781 175,240 349,551 454,006
Professional, legal and consulting fees 100,729 128,267 394,931 479,144
Bad debt expense (19,003 ) 136,182 83,936 165,550
Other general and administrative expenses 294,161 82,156 486,934 191,934
Franchise commissions 59,247 62,628 231,675 182,337
Franchise training and expenses 0 0 0 3,294
Depreciation 31,253 26,281 85,859 81,107
General advertising 15,509 658 18,148 5,963
Franchise marketing fund expense 0 12,979 0 159,773
TOTAL OPERATING EXPENSES 586,677 624,391 1,651,034 1,723,108

OPERATING INCOME (LOSS) (124,048 ) (2,701 ) 278,610 536,618

OTHER INCOME (EXPENSE) 712 (565 ) 2,663 15,202

INCOME (LOSS) BEFORE INCOME TAXES (123,336 ) (3,266 ) 281,273 551,820

PROVISION FOR INCOME TAXES 0 0 0 0

NET INCOME (LOSS) $ (123,336 ) $ (3,266 ) $ 281,273 $ 551,820

NET INCOME PER SHARE
Basic $ (0.01 ) $ 0 $ 0.02 $ 0.04
Diluted $ (0.01 ) $ 0 $ 0.02 $ 0.04
Basic weighted average number of common shares outstanding 13,240,938 13,444,592 13,189,910 13,477,299
Diluted weighted average number of common shares outstanding 13,415,151 13,444,592 13,415,151 13,477,299

Three Months Ended Nine Months Ended
June 30, June 30,
2022 2021 2022 2021

REVENUES
Insurance revenue $ 5,922 $ 68,067 $ 44,692 $ 204,295
Rental revenue 15,711 139,925 80,008 469,250
Initial fee revenue — 1,809 4,126 22,173
Miscellaneous Revenue 2,727 3,073 7,454 10,419
Vehicle owner share (11,424 ) (122,065 ) (74,313 ) (417,950 )
Driver and dealer insurance cost (5,852 ) (58,974 ) (33,237 ) (194,987 )
TOTAL REVENUES 7,084 31,835 28,730 93,200

COST OF GOODS SOLD 10,694 9,859 21,789 30,214
GROSS PROFIT (LOSS) (3,610 ) 21,976 6,941 62,986

OPERATING EXPENSES
Salaries and payroll taxes 104,525 46,500 294,600 147,551
Professional fees 175,460 173,077 541,857 231,554
General and administrative 24,851 13,331 54,697 44,570
Software development 16,442 18,868 45,827 66,540
Selling expense 9,266 432 14,155 2,812
TOTAL OPERATING EXPENSES 330,544 252,208 951,136 493,027

OPERATING LOSS (334,154 ) (230,232 ) (944,195 ) (430,041 )

OTHER INCOME (EXPENSE)
Loss on contingency liability (60,000 ) — (460,000 ) —
Gain on PPP loan forgiveness — — 24,148 —
Amortization debt discount (228,182 ) — (315,865 ) —
Interest expense (20,030 ) (3,752 ) (36,970 ) (5,338 )
Interest expense - related parties — (1,421 ) (2,296 ) (3,943 )
Interest income �� 7 — 12 —
TOTAL OTHER EXPENSE (308,205 ) (5,173 ) (790,971 ) (9,281 )

LOSS BEFORE INCOME TAXES (642,359 ) (235,405 ) (1,735,166 ) (439,322 )
Provision for income taxes — — — —
NET LOSS $ (642,359 ) $ (235,405 ) $ (1,735,166 ) $ (439,322 )

NET LOSS PER SHARE:
Basic and diluted net loss per share $ (0.01 ) $ — $ (0.06 ) $ —
Basic and diluted weighted average number of common shares outstanding 87,135,481 — 31,381,342 —
��
The accompanying notes are an integral part of the condensed consolidated financial statements.
DriveItAway Holdings, Inc.
(fka Creative Learning Corporation)
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit)
For the Three and Nine Months Ended June 30, 2022
(Unaudited)

Series A Additional Total Stockholders’
Preferred Stock Common Stock Paid in Treasury Stock Accumulated Equity
Shares Amount Shares Amount Capital Shares Amount Deficit (Deficit)

Balance - September 30, 2021 2,300,000 $ 230 — $ — $ 419,793 — $ — $ (905,394 ) $ (485,371 )

Stock based compensation — — — — 173,077 — — — 173,077
Net loss — — — — — — — (251,721 ) (251,721 )
Balance - December 31, 2021 2,300,000 230 — — 592,870 — — (1,157,115 ) (564,015 )

Stock based compensation — — — — 115,384 — — — 115,384
Preferred stock issued for conversion of debt- related party 52,284 5 — — 104,559 — — — 104,564
Preferred stock issued for conversion of debt 129,809 13 — — 288,445 — — — 288,458
Preferred stock issued for exercise of stock option - related party 112,500 11 — — 84,364 — — — 84,375
Reorganization — — 13,716,041 1,372 1,737,621 (15,100 ) (18,126 ) — 1,720,867
Common stock and warrant issued in connection with promissory note — — 4,000,000 400 344,296 — — — 344,696
Net loss — — — — — — (841,086 ) (841,086 )
Balance - March 31, 2022 2,594,593 259 17,716,041 1,772 3,267,539 (15,100 ) (18,126 ) (1,998,201 ) 1,253,243

Conversion of preferred stock to common stock (2,594,593 ) (259 ) 88,085,681 8,809 (8,550 ) — — — —
Cancellation of common shares against note receivable — — (500,000 ) (50 ) (99,950 ) — — — (100,000 )
Debt discount recorded for warrants issued in connection with convertible notes — — — — 7,912 — — — 7,912
Net loss — — — — — — (642,359 ) (642,359 )
Balance - June 30, 2022 — $ — 105,301,722 $ 10,531 $ 3,166,951 (15,100 ) $ (18,126 ) $ (2,640,560 ) $ 518,796

The accompanying notes are an integral part of the condensed consolidated ~~unaudited~~ financial statements.

DriveItAway Holdings, Inc.
(fka Creative Learning ~~Corporation~~Corporation)
Condensed Consolidated Statement of Changes in Stockholders’ Equity (Deficit) ~~(Unaudited)~~
For the ~~three months ended~~Three and Nine Months Ended June 30, 2021

Additional Total Stockholder’s
Treasury Stock Common stock Paid-in Accumulated Equity
Shares Value Shares Amount Capital Deficit (Deficit)

Balance, March 31, 2021 (65,100 ) $ (34,626 ) 13,240,938 $ 1,322 $ 3,020,092 $ (4,369,104 ) $ (1,382,316 )

Net Income — — — — — (123,336 ) (123,335 )

Balance, June 30, 2021 (65,100 ) $ (34,626 ) 13,240,938 $ 1,322 $ 3,020,092 $ (4,492,440 ) $ (1,505,652 )
(Unaudited)

~~For the nine months ended June 30, 2021~~
Additional Total Stockholder’s
Treasury Stock Common stock Paid-in Accumulated Equity
Shares Value Shares Amount Capital Deficit (Deficit)

Balance, September 30, 2020 (65,100 ) $ (34,626 ) 13,363,410 $ 1,334 $ 2,990,080 $ (4,773,713 ) $ (1,816,925 )

Shares Issued — — 150,000 15 29,985 — 30,000

Shares Cancelled — — (272,472 ) (27 ) 27 — —

Net Income — — — — — 281,273 281,274

Balance, June 30, 2021 (65,100 ) $ (34,626 ) 13,240,938 $ 1,322 $ 3,020,092 $ (4,492,440 ) $ (1,505,652 )

~~For the three months ended June 30, 2020~~
Additional Total Stockholder’s
Treasury Stock Common stock Paid-in Accumulated Equity
Shares Value Shares Amount Capital Deficit (Deficit)

Balance, March 31, 2020 (65,100 ) $ (34,626 ) 13,642,816 $ 1,362 $ 2,990,052 $ (4,838,788 ) $ (1,882,000 )

Shares cancelled — — (279,406 ) (28 ) 28 — —

Net income — — — — — (3,266 ) (3,266 )

Balance, June 30, 2020 (65,100 ) $ (34,626 ) 13,363,410 $ 1,334 $ 2,990,080 $ (4,842,054 ) $ (1,885,266 )
~~For the nine months ended June 30, 2020~~
Additional Total Stockholder’s
Treasury Stock Common stock Paid-in Accumulated Equity
Shares Value Shares Amount Capital Deficit (Deficit)

Balance, September 30, 2019 (65,100 ) $ (34,626 ) 13,607,102 $ 1,360 $ 2,897,554 $ (5,393,874 ) $ (2,439,586 )

Compensatory stock issuances — — 35,714 2 2,498 — 2,500

Shares Cancelled — — (279,406 ) (28 ) 28 — —

Net income — — — — — 551,820 551,820

Balance, June 30, 2020 (65,100 ) $ (34,626 ) 13,363,410 $ 1,334 $ 2,990,080 $ (4,842,054 ) $ (1,885,266 )
Series A Additional Total Stockholders’
Preferred Stock Common Stock Paid in Accumulated Equity
Shares Amount Shares Amount Capital Deficit (Deficit)

Balance - September 30, 2020 2,000,000 $ 200 — $ — $ 10,410 — — $ (229,710 ) $ (219,100 )

Net loss — — — — — — — (98,759 ) (98,759 )
Balance - December 31, 2020 2,000,000 200 — — 10,410 — — (328,469 ) (317,859 )

Stock-based compensation 300,000 30 — — 57,663 — 57,693
Net loss — — — — — — (105,158 ) (105,158 )
Balance - March 31, 2021 2,300,000 230 — — 68,073 — (433,627 ) (365,324 )

Stock based compensation — — — — 173,077 — 173,077
Related party contributions — — — — 5,566 — 5,566
Net loss — — — — — — (235,405 ) (235,405 )
Balance - June 30, 2021 2,300,000 $ 230 — $ — $ 246,716 — — $ (669,032 ) $ (422,086 )

The accompanying notes are an integral part of the condensed consolidated ~~unaudited~~ financial ~~statements~~statements.
DriveItAway Holdings, Inc.

~~CREATIVE LEARNING CORPORATION~~(fka Creative Learning Corporation)
Condensed Consolidated Statements of Cash Flows
(Unaudited)

For the nine months ended
June 30,
2021 2020

Cash flows from operating activities:
Net Income $ 281,273 $ 551,820
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:
Depreciation 85,859 81,107
Gain on sale of assets held for sale 0 (20,602 )
Bad debt expense 83,936 29,368
Stock based compensation 30,000 2,500
Changes in operating assets and liabilities:
Accounts receivable (14,188 ) (208,150 )
Prepaid expenses 10,452 (6,585 )
Prepaid commission expense 231,675 176,916
Deposits 833 (833 )
Accounts payable 224,767 (32,750 )
Accrued liabilities 13,845 (92,017 )
Deferred Revenue (992,006 ) (655,051 )
Accrued marketing fund (14,690 ) (64,790 )
Net cash provided by (used in) operating activities (58,244 ) (239,067 )
Cash flows from investing activities:
Acquisition of property and equipment (2,996 ) 0
Sale of assets held for sale 0 100,231
Collection of Notes receivable 2,484 (6,987 )
Net cash provided by (used in) investing activities (512 ) 93,244
Cash flows from financing activities
Proceeds from PPP Loan 0 119,980
Net cash provided by (used in) financing activities 0 119,980
Net change in cash, cash equivalents and restricted cash (58,756 ) (25,843 )
Cash, cash equivalents and restricted cash at beginning of period 447,853 540,021
Cash, cash equivalents and restricted cash at end of period $ 389,097 $ 514,178

Nine Months Ended
June 30,
2022 2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (1,735,166 ) $ (439,322 )
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on PPP Loan Forgiveness (24,148 ) —
Stock-based compensation expense 372,836 230,770
Depreciation 4,645
Loss on contingency liability 460,000 —
Amortization of debt discount 315,865 —
Changes in operating assets and liabilities:
Due to related party 3,022 3,943
Accounts receivable 15,359 4,278
Accounts payable (23,508 ) (2,460 )
Accrued liabilities (5,420 ) 32,054
Net Cash used in Operating Activities (616,515 ) (170,737 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of subsidiary 70,361 —
Purchase of vehicles (126,406 ) —
Net Cash used in Investing Activities (56,045 ) —

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceed from related party — 65,000
Proceeds from convertible debt 1,016,250 150,000
Proceeds from the SBA Loan 36,200 —
Proceeds from contributions from related parties — 5,566
Net Cash provided by Financing Activities 1,052,450 220,566

Net change in cash 379,890 49,829
Cash, beginning of period 9,774 28,975
Cash, end of period $ 389,664 $ 78,804

Supplemental cash flow information
Cash paid for interest $ 19,792 $ —

Non-cash Investing and Financing transactions:
Preferred stock issued for conversion of debt -related party $ 104,564 $ —
Preferred stock issued for conversion of debt $ 288,458 $ —
Common stock and warrant issued in connection with promissory note $ 344,696 $ —
Debt discount recorded for warrants issued in connection with convertible notes $ 7,912 $ —
Conversion of preferred stock to common stock $ 8,809 $ —
Cancellation of common shares against note receivable $ 100,000 $ —

The accompanying notes are an integral part of the condensed consolidated ~~unaudited~~ financial statements.

~~CREATIVE LEARNING CORPORATION~~DriveItAway Holdings, Inc.
(fka Creative Learning Corporation)
Notes to the Condensed Consolidated ~~Unaudited~~ Financial Statements
June 30, 2022
(Unaudited)

~~(1)~~Note 1 - Nature of Organization ~~Operations~~ and Summary of Significant Accounting ~~Policies:~~Policies

Nature of Organization

~~Creative Learning Corporation (the “Company”~~DriveItAway Holdings, Inc. (“DIA Holdings”, “we” or “us”) ~~operates wholly owned subsidiaries,~~was formed in Delaware on March 8, 2006 as B2 Health, Inc. On July 2, 2010, the Company acquired BFK ~~Franchise Co., LLC (“BFK”) and SF~~ Franchise Company, LLC (“~~SF”~~BFK”), ~~under~~a Nevada limited liability company, and concurrently changed its name to Creative Learning Corporation. On February 24, 2022, the ~~trade names Bricks 4 Kidz®~~Company acquired DriveItAway, Inc., and ~~Sew Fun Studios™ respectively, that offer children’s enrichment~~on March 18, 2022, disposed of BFK and ~~education franchises. As of June 30, 2021, BFK franchisees operated~~its other subsidiaries involved in ~~496 territories in 35 states and 40 countries.~~the learning business. On April 18, 2022, the name was changed to DriveItAway Holdings, Inc.

DIA Holdings is a national dealer focused mobility platform that enables car dealers to sell more vehicles in a seamless way through eCommerce, with its exclusive “Pay as You Go” app-based subscription program. DIA provides a comprehensive turnkey, solutions driven program with proprietary mobile technology and driver app, insurance coverages and training to get dealerships up and running quickly and profitably in emerging online sales opportunities. The company is planning to soon expand its easy and transparent consumer app ‘subscription to ownership’ platform to enable entry level consumers to drive and acquire new Electric Vehicles. For further information, please see www.driveitaway.com.
Share Exchange and Reorganization
On February 24, 2022 (the “Effective Date”), the Company, DriveItAway, Inc., and the existing shareholders of DriveItAway, Inc. (“DIA”) executed an Agreement and Plan of Share Exchange, under which the Company acquired all of the issued and outstanding common stock of DIA by issuing one share of Series A Convertible Preferred Stock (the “Series A Preferred”) of the Company for each outstanding share of DIA common stock (the “Share Exchange”). At the closing, the Company agreed to issue one share of Series A Preferred for each share of DIA common stock that was subsequently issued in conversion of certain outstanding convertible notes of DIA, provided that the holders converted their notes prior to December 31, 2022. All of the holders of the convertible notes of DIA agreed to convert their notes in March 2022 and were issued one share of Series A Preferred in exchange for the DIA common stock they acquired as a result of the conversion. A total of 2,594,593 shares of Series A Preferred were issued in exchange for all of the outstanding shares of DIA, including DIA shares issued at closing or shortly thereafter as a result of the exercise or conversion of all outstanding options or convertible notes issued by DIA.
Recapitalization
For financial accounting purposes, this transaction was treated as a reverse acquisition by DIA and resulted in a recapitalization with DIA being the accounting acquirer and DIA, Inc. as the acquired company. The consummation of this reverse acquisition resulted in a change of control. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, DIA and have been prepared to give retroactive effect to the reverse acquisition completed on February 24, 2022, and represent the operations of DIA. The consolidated financial statements after the acquisition date, February 24, 2022, include the balance sheets of both companies at fair value, the historical results of DIA and the results of the Company from the acquisition date. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization.
Basis of Presentation

The Company prepares its financial statements in accordance with rules and regulations of the Securities and Exchange Commission (“SEC”) and Generally Accepted Accounting Principles (“GAAP”) in the United States of America. The accompanying ~~unaudited consolidated~~interim financial statements have been prepared in accordance with ~~accounting principles generally accepted in the United States~~GAAP for interim financial information in accordance with ~~the instructions to Form 10-Q and with Rule 10-01~~Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the Company’s opinion, all adjustments (consisting of ~~management, these consolidated financial statements contain all~~ normal recurring ~~adjustments~~accruals) considered necessary for a fair presentation ~~of the Company’s~~have been included. Operating results for the ~~interim periods that have been included. The results for the three months and~~ nine months ended June 30, ~~2021~~2022, are not necessarily indicative of the results ~~to be expected~~ for the full year. ~~These~~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 ~~Company’s~~ audited ~~consolidated~~ financial statements and ~~management’s discussion and analysis included in~~ the ~~Company’s annual report on Form 10-K~~footnotes thereto for the year ended September 30, ~~2020.~~2021, contained in the Company’s Form 8-K/A, exhibit 99.1, as filed on February 24, 2022.

~~Related Parties~~Basis of Consolidation
The consolidated financial statements include the accounts of DriveItAway Holdings Inc. and its wholly owned subsidiary DriveItAway, Inc., collectively referred to as the “Company”. All inter-company balances and transactions are eliminated in consolidation.
Fiscal year

The Company has been involved in transactions with related parties. A party is considered to be related to the Company if the party directly or indirectly or through one or more intermediaries, controls, is controlled by, or is under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. A party which can significantly influence the management or operating policies of the transacting parties or if it has an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests is alsooperates on a ~~related party.~~September 30 fiscal year-end.

Use of Estimates

The preparation of financial statements in accordance with ~~generally accepted accounting principles~~GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. The ~~more~~ significant estimates and assumptions made by management include allowance for doubtful accounts, ~~the valuation~~ allowance for deferred tax assets, ~~depreciation of property and equipment, amortization of intangible assets, recoverability of long-lived assets and~~ fair ~~market~~ value of equity instruments. Actual results could differ from those estimates as the current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions.

~~Cash, Restricted~~ Cash and Cash Equivalents

The Company ~~had restricted~~considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. As of ~~approximately $9,000~~ ~~8,689~~ ~~and $20,000~~ ~~20,194~~ at June 30, ~~2021~~2022 and September 30, ~~2020, respectively, associated with marketing funds collected from the franchisees. Per the franchise agreements a marketing fund of~~ 2~~% of franchisees gross cash receipts is collected and held to be spent on the promotion of the brand. Any cash collected by~~2021 the Company ~~for marketing funds is held in a separate bank account~~had cash of $389,664 and ~~any balance at period end is presented as “restricted cash”~~$9,774, respectively and ~~“accrued marketing fund” or “marketing fund receivable” on the balance sheet.~~did not have cash equivalents.

Accounts ~~and Note Receivables~~Receivable

The Company reviews accounts ~~and notes~~ receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary. The Company records an allowance for doubtful accounts ~~and notes~~ that is based on historical trends, customer knowledge, any known disputes, and considers the aging of the accounts receivable balances combined with management’s estimate of future potential recoverability. ~~Receivables~~Accounts and ~~notes~~receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its ~~allowance~~allowances for doubtful accounts atas of June 30, ~~2021~~2022 and September 30, ~~2020~~2021 are adequate, but actual write-offs could exceed the recorded allowance. As of June 30, 2022 and September 30, 2021 the balances in the allowance for doubtful accounts was $0.

Property ~~Equipment~~ and ~~Depreciation~~Equipment
Property and equipment, consisting of vehicle are stated at cost. Depreciation expense is ~~calculated using the straight-line method~~recognized over the assets’ estimated useful lives of five years using the ~~related assets, which range from three to forty years. Expenditures for~~straight-line method. Major additions and improvements are capitalized as additions to the property and equipment accounts, while replacements, maintenance and repairs ~~and maintenance costs~~that do not improve or extend the life of the respective assets, are expensed as incurred. ~~The cost~~Estimated useful lives are periodically reviewed and, ~~related accumulated depreciation of property and equipment sold or otherwise disposed of~~when appropriate, changes are ~~removed from the accounts and any gain or loss is recorded in the year of disposal.~~
~~Property and Equipment Useful Lifes~~
~~Fixed Assets~~ ~~Useful Life~~
~~Equipment~~ 5 ~~years~~
~~Furniture and Fixtures~~ 5 ~~years~~
~~Property Improvements~~ 15-40 ~~years~~
~~Software~~ 3 ~~years~~
~~Long-Lived Assets~~
~~The Company’s long-lived assets consist of property and equipment, and intangible assets. The Company tests for impairment losses on long-lived assets used in operations whenever~~made prospectively. When certain events or changes in ~~circumstances indicate that~~operating conditions occur, asset lives may be adjusted and an impairment assessment may be performed on the ~~carrying amount of the asset may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison~~recoverability of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds its fair value. Impairment evaluations involve management’s estimates of asset useful lives and future cash flows. Actual useful lives and cash flows could be different from those estimated by management which could have a material effect on our reporting results and financial positions. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.amounts.

~~Fair Value of Financial Instruments~~
The carrying amounts of cash, accounts receivable, and accounts payable approximate fair value because of the relative short-term maturity of these items and current payment expected. These fair value estimates are subjective in nature and involve uncertainties and matters of significant judgment, and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates. The Company does not hold or issue financial instruments for trading purposes, nor does it utilize derivative instruments. Notes receivable are recorded at par value less allowance for doubtful accounts. The carrying amount is consistent with fair value based upon similar notes issued to other franchisees.
ASC 825, Financial Instruments, clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. It also requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs as follows:
~~Level 1:~~ ~~Quoted prices in active markets for identical assets or liabilities.~~
~~Level 2:~~ ~~Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.~~
~~Level 3:~~ ~~Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.~~
~~The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.~~
The carrying value of financial assets and liabilities recorded at fair value is measured on a recurring or nonrecurring basis. Financial assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. The Company had no financial assets or liabilities carried and measured on a recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared

Revenue Recognition

The Company’s revenue is recognized in accordance with Accounting Standards Codification(“ASC”) 606, Revenue from Contracts with Customers, for all periods presented. The Company, through its DriveItAway online/app-based platform, operates in the retail automotive industry. The Company assists subprime and deep subprime candidates, with little or no down payment, in purchasing the used vehicle of his/her choice by first starting in an app based, turnkey rental, through participating franchise and independent car dealers. During the period ended June 30, 2022 and 2021, the Company derived its rental revenue from contract revenue share for rentals between participating franchise and independent car dealers and individual car rental customers (“customers”). In conjunction with the rental revenue, the Company generates ~~almost all of its~~ revenue ~~from contracts~~by providing driver and vehicle insurance through a third party, included in the rental contract with ~~customers.~~ each customer.
The Company’s performance obligation for rental revenue is to provide an application to track car rental arrangements and to collect cash from car rental customers and remit those payments to participating franchise ~~agreements enter~~and independent car dealers, net of the ~~parties into a contractual agreement, typically~~Company’s revenue share. The car rental arrangements are over a ~~ten years term,~~fixed contracted period; therefore, the Company recognizes revenue ratably during the contract term. The Company’s performance obligation for insurance revenue is to collect insurance fees from the customer and ~~include performance obligations as follows: protected territory designation, access~~provide the third-party provider payment for the insurance provided to ~~proprietary manuals~~the customer. The insurance is offered over a fixed contracted period; therefore, the Company recognizes revenue ratably during the contract term.
Rental and handbooks, initial training and on-going assistance, consulting, promotion of goodwill, administration of marketing fund, marketing and promotion items, initial marketing program development assistance, company website access, Franchise Management Tool access, lessons and model plans, project kits, Duplo bricks, frames stop motion animation software, and useinsurance transactions are prepaid at the beginning of the ~~franchisor’s intellectual property (IP) (e.g., trade name – Bricks for Kidz). Upon entering into~~rental cycle (typically a ~~franchise agreement,~~one-week rental that has an automatic renewal) with an automatic charge to the ~~Company charges an initial franchise fee, which~~customer’s credit card on file through the DIA system. The DIA system then distributes the vehicle owner share (typically 85% of rental revenue) to the vehicle owner’s bank account from the Stripe Account. This amount is ~~fully collectible and nonrefundable~~shown as a deduction to Revenues (“Vehicle Owner Share”) on the Company’s Statements of Operations. The net amount is then transferred from the Company’s Stripe Account to the DIA operating bank account. DIA also distributes insurance amounts due to the third^-party insurance provider on a monthly basis. This amount is shown as a deduction to revenues (“Driver & Dealer Insurance Cost”) on the Company’s Statements of Operations.
DIA also generates miscellaneous revenue in a number of ways. At the end of the ~~date of~~rental term, the ~~signing of the franchise agreement. Further, because the Company’s franchises are primarily a mobile concept~~DIA software system checks for any excess usage and ~~do not require finding locations or construction, the franchisees can begin operations as soon as they complete training.~~

~~Per~~charges, based on the terms of the ~~franchise agreements,~~rental contract, and will automatically charge a customer’s credit card. These charges are recognized when the credit card charge goes through and recorded as miscellaneous revenue on the Company’s Statements of Operations. Additional miscellaneous revenue represents amounts earned on telematics equipment and telematics software services related to each rental vehicle used to track excess usage and charges. DIA performance obligation is to provide the equipment to the vehicle owner for self-installation and allow access to the software throughout the rental term. The Company ~~charges for royalty fees~~recognizes revenue when the equipment is delivered to the vehicle owner. Miscellaneous revenue associated with use of the telematics software is recognized on a monthly basis, generally set at a fixed amount, but in some cases are based on a percentage of franchisee’s monthly gross revenues. The Company also charges fees for a marketing fund, generally based on 2% of franchisee’s monthly gross revenues, which is managed by the Company, to allocate towards national branding of the Company’s concepts to benefit the franchisees. Lastly, the Company charges for technology fees on a monthly basis, generally at a fixed amount, for the use of the company Franchise Management tool as well as company emails, etc.basis.

~~Effective October 1, 2018~~The Company’s Cost of Goods sold consists of credit card fees incurred from the ~~Company began recognizing revenue under ASC 606.~~ 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 ~~considers initial franchise fees~~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 ~~be a part of~~vest is recognized as compensation cost over the ~~license of symbolic intellectual property (“IP”), therefore the performance obligation related~~requisite service period. We have elected to these fees is satisfied over time as the Company fulfills its promise to grant the customer rights to use, and benefit from, the Company’s IP, as well as support and maintain the IP. The initial franchise fee, then, is recorded as deferred revenue at inception and recognizedrecognize compensation expense for all options with graded vesting on a straight-line basis over the ~~contract term.~~
In accordance with ASC 606-10-55-65, the Company has determined that the royalty fees, marketing fees, and technology fees are subject to a sales and usage-based royalties’ constraint on licenses of IP. Accordingly, these fees are recognized as revenue at the later of when the sales or usage occurs or the related performance obligation is satisfied. Technology fees are recorded net of processing fees. Marketing fees are limited to the lesser of marketing amounts earned or expensed; therefore, the Company will recognize amounts received in excess of amounts spent on the balance sheet in the accrued marketing fund liability and will recognize amounts spent in excess of amounts received on the balance sheet in the marketing fund receivable.
The Company collects transfer fees when contracts are transferred between parties and accounts for the transfer as a contract modification under ASC 606. Because the transfer does not increase the scopevesting period of the ~~contract or promise any additional goods or services~~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 there are no new distinct services that will be provided after the transfer the Company considers the transfer fee part of the existing contract. Transfer fees, then, are recorded as deferred revenue at inception and recognized on a straight-line basis over the remaining contract term.
When contracts are terminated due to default, or in conjunction with an early termination agreement, the Company accounts for the early termination as a contract modification under ASC 606. Because the termination eliminates any future performance obligations of the Company any deferred revenue associated with the terminated contract is recognized into revenue at the time of termination, along with any early termination fees, in the initial franchise fee line on the Company’s Statement of Operations.
~~The Company generates revenue from sales of merchandise where the performance obligation is met, and therefore revenue recognized, upon the delivery of merchandise to the customer.~~
~~Contract Liability – Deferred Revenue~~
In conjunction with the adoption of ASC 606, effective October 1, 2018 the Company recorded deferred revenue as a contract liability for its initial franchise fees collected and related to contracts with remaining performance obligations. During the nine months ended June 30, 2021 the activity in the deferred revenue account was as follows:

Summary of deferred revenue activity
Balance, September 30, 2020 $ 3,212,679
Initial franchise fees collected 10,956
Deferred revenue recognized into revenue (1,002,962 )
Balance, June 30, 2021 2,220,673
Current portion (746,084 )
Deferred revenue, net of current portion $ 1,474,589
~~Amounts~~subjective variables, including expected ~~to be recognized into revenue related to performance obligations that are unsatisfied (or partially unsatisfied) as of June 30, 2021 were as follows:~~
Summary of performance obligations
Twelve months ended June 30, 2022 $ 746,084
Twelve months ended June 30, 2023 657,817
Twelve months ended June 30, 2024 451,429
Twelve months ended June 30, 2025 191,089
Twelve months ended June 30, 2026 and thereafter 174,254
Total $ 2,220,673
~~Contract Liability / Asset – Accrued Marketing Fund / Marketing Fund Receivable~~
Per the terms of the franchise agreements, the Company collects 2% of franchisee’s gross revenues for a marketing fund, managed by the Company, to allocate toward national branding of the Company’s concepts to benefit the franchisees.
~~The marketing fund amounts owed to the Company are accounted for as a liability on the balance sheet~~stock price volatility and the actual collections are deposited into a marketing fund bank account, presented as restricted cash on the balance sheet. Expenses pertaining to the marketing fund activities are paid from the marketing fund and reduce the liability account. Upon adoption of FASB 606 on October 1, 2018, the Company presents these marketing fund revenues and expenses on a gross basis on its statement of operations. Any unused funds at the end of the period are recorded as accrued marketing fees or any funds used in excess of funds collected are recorded as a marketing fund receivable. The Company expects to collect this advance in future periods from the 2% fees collected on future franchisee gross revenues. The activity in the accrued marketing fund liability account for the nine months ended June 30, 2021 was as follows:
Summary of accrued marketing fund for advertising fund revenue accounts
Marketing fund liability (receivable), September 30, 2020 —
Marketing fund billings recognized into income —
Marketing funds recognized into expense —
Marketing funds advanced by the Company (14,690 )
Marketing fund liability (receivable), June 30, 2021 $ (14,690 )
~~Contract Asset – Prepaid Commission Expense~~
In accordance with ASC 606 the costs related to obtaining a contract are to be capitalized as long as the costs are recoverable and incremental. Effective October 1, 2018, the date the Company adopted ASC 606, it capitalized the value of sales commissions as a contract asset and is amortizing those costs straight-line over the contract life of the franchise agreement to which they relate. During the nine months ended June 30, 2021, the activity in the contract asset account was as follows:

Summary of contract asset activity
Balance, September 30, 2020 $ 724,878
Commissions paid —
Commissions recognized into expense (231,675 )
Balance, June 30, 2021 493,203
Current portion (174,795 )
Prepaid commission expense, net of current portion $ 318,408
~~General Advertising Costs~~
~~General advertising costs are expensed as incurred. The Company incurred general advertising costs for the three months and nine months ended June 30, 2021 of $7,927~~ ~~15,509~~ ~~and $10,566,~~ ~~18,148~~ ~~respectively and $658~~ ~~and $5,963, for the three and nine months ended June 30, 2020, respectively.~~risk-free interest rate.

Income Taxes

The provision for income taxes and deferred income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a periodic basis, the Company assesses the probability that its net deferred tax assets, if any, will be recovered. If after evaluating all of the positive and negative evidence, a conclusion is made that it is more likely than not that some portion or all of the net deferred tax assets will not be recovered, a valuation allowance is provided by a charge to tax expense to reserve the portion of the deferred tax assets which are not expected to be realized. Given previous recurring losses, the Company cannot conclude that it is more likely than not that such assets will be realized, therefore a full valuation allowance has been recorded during the nine months ended June 30, 2021.
~~The Company reviews its filing positions for all open tax years in all U.S. federal and state jurisdictions where the Company is required to file.~~
When there are uncertainties related to potential income tax benefits, in order to qualify for recognition, the position the Company takes has to have at least a “more likely than not” chance of being sustained (based on the position’s technical merits) upon challenge by the respective authorities. The term “more likely than not” means a likelihood of more than 50 percent. Otherwise, the Company may not recognize any of the potential tax benefit associated with the position. The Company recognizes a benefit for a tax position that meets the “more likely than not” criterion at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon its effective resolution. Unrecognized tax benefits involve management’s judgment regarding the likelihood of the benefit being sustained with the ultimate realization being dependent on generating sufficient taxable income in future years. The final resolution of uncertain tax positions could result in adjustments to recorded amounts and may affect our results of operations, financial position and cash flows.
~~The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company had~~ 0 ~~accrual for interest or penalties at June 30, 2021 and September 30, 2020, respectively, and has~~ 0~~t recognized interest and/or penalties during the nine months ended June 30, 2021, since there are~~ 0 ~~material unrecognized tax benefits. Management believes no material change to the amount of unrecognized tax benefits will occur within the next twelve months.~~

~~The tax years subject to examination by major tax jurisdictions include the years 2015 and forward by the U.S. Internal Revenue Service.~~

Net ~~earnings (loss)~~Loss per ~~share~~Share of Common Stock

~~Basic earnings~~The Company calculates net loss per share ~~are~~in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net ~~income (loss)~~loss by the weighted average number of common shares outstanding ~~for~~during the period. Diluted earnings ~~(loss)~~ per share ~~reflect the potential dilution that could occur if stock options or other contracts to issue~~of common stock ~~were exercised or converted~~are computed by dividing net earnings by the weighted average number of shares and potential shares outstanding during the period. ~~Dilutive securities having an anti-dilutive effect on diluted earnings per share are~~Potential shares of common stock consist of shares issuable upon the conversion of outstanding convertible debt, preferred stock, warrants and stock option. For the periods ended June 30, 2022 and 2021, the common stock equivalents were excluded from the ~~calculation.~~computation of diluted net loss per share as the result of the computation was anti-dilutive.
For the nine months ended June 30, 2022, and 2021, respectively, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result was anti-dilutive.
Schedule of anti dilutive securities excluded from computation of earnings per share
June 30, June 30,
2022 2021
Series A Convertible Preferred Stock — 78,084,333
Convertible notes 1,250,000 17,207
Convertible notes-related party — 72,368
Warrants 1,538,571 —
Stock options — 300,000
2,788,571 78,473,908
Reclassification
Certain accounts from prior periods have been reclassified to conform to the current period presentation.

~~Stock-based compensation~~Recent Accounting Pronouncements
In August 2020, the FASB issued ASU 2020-06, ASC Subtopic 470-20 “Debt—Debt with “Conversion and Other Options” and ASC subtopic 815-40 “Hedging—Contracts in Entity’s Own Equity”. The standard reduced the number of accounting models for convertible debt instruments and convertible preferred stock. Convertible instruments that continue to be subject to separation models are (1) those with embedded conversion features that are not clearly and closely related to the host contract, that meet the definition of a derivative, and that do not qualify for a scope exception from derivative accounting; and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. The amendments in this update are effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. On October 1, 2021, the Company adopted this standard on its consolidated financial statements.
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its consolidated financial statements.
Note 2 – Going Concern
During the nine months ended June 30, 2022, the Company had a net loss of $1,735,166 and did not have sufficient cash on hand to cover expenses for the next twelve (12) months. The reported net cash used in operating activities was $616,515 during the nine months ended June 30, 2022, which was offset by an increase in cash of $1,052,450 during the period ended June 30, 2022 from financings and $70,361 from the acquisition of a subsidiary. These factors, among others, raise substantial doubt about the entities ability to continue as a going concern.
Management plans include converting its convertible debt into the Company’s common stock in addition to raising equity capital.
The financial statements of the Company do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classifications of liabilities that might be necessary should the Company be unable to continue as a going concern.
Note 3 – Related Party Transactions
Related Party Convertible Notes Payable
On September 13, 2019, the Company issued a Convertible Promissory Note to Driveitaway, LLC, a company controlled by John Possumato, the Company’s CEO, for $30,000, with a maturity date of September 13, 2022. On October 13 and October 14, 2020, the Company issued Convertible Promissory Notes to Driveitaway, LLC and Adam Potash, the Company’s COO, for $25,000 each, which mature on October 13 and 14, 2022, respectively. On December 24, 2020, the Company issued a Convertible Promissory Note to Adam Potash, for $15,000, which matures on December 24, 2022. Each of the notes bear interest at a rate of 6% per annum. The notes automatically convert into preferred stock of DIA in the event DIA raises at least $1,000,000 by the issuance of preferred stock prior to the maturity dates of the notes (a “Qualified Financing”). In the event DIA enters into a financing that is not a Qualified Financing prior to the maturity dates of the notes, the holders have the right to convert their notes into the class and series of equity securities offered in the non-Qualified Financing at the offer price thereof. In the event DIA effects a change of control, the holders have the option of converting their notes into common stock in order to participate in the change of control or accelerating the maturity date and receiving cash at the time of the change of control.
During the nine months ended June 30, 2022 and 2021, the Company recorded interest expense of $2,296 and $3,943, respectively.
At the closing of the Share Exchange on February 24, 2022, the holders of the related party Convertible Promissory Notes agreed to convert all of the principal and interest of $104,564 due under the notes into 52,284 shares of DIA common stock, which was automatically converted into 52,284 shares of Series A Preferred (see Note 7).
Note 4 – Goodwill
The following table summarizes the consideration paid for DriveItAway Holdings, Inc and the amounts of the assets acquired, and liabilities assumed at the acquisition date of February 24, 2022:
Schedule of assets acquired and liabilities assumed
Consideration:
Convertible Preferred A stock $ 1,720,867

Assets acquired and liabilities assumed:
Cash 70,361
Note receivable 100,000
Accounts payable and accrued liabilities (6,600 )
Total Goodwill $ 1,557,106
Note 5 - Note Receivable
A note receivable of $100,000 was issued to DriveItAway Holdings in consideration for the sale of certain subsidiaries as a part of its recapitalization. The note receivable was unsecured, due on April 20, 2022 and was to incur interest at 15% per annum, provided that the payor has the right to satisfy the note in full by the return of 500,000 shares of the Company’s common stock for cancellation. In May 2022, the payor under the note receivable satisfied the note in full by returning 500,000 shares of the Company’s common stock for cancellation (see Note 7).
Note 6 – Vehicles
During the nine months ended June 30, 2022, the Company purchased 3 vehicles for $126,406 and recorded depreciation of $4,645.
Note 7 – Equity
Authorized
On April 18, 2022, the Company filed Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to authorize one billion (1,000,000,000) shares of common stock having a par value of $0.0001 per share, and ten million (10,000,000) shares of preferred stock having a par value of $0.0001 per share. All or any part of the capital stock may be issued by the Corporation from time to time and for such consideration and on such terms as may be determined and fixed by the Board of Directors, without action of the stockholders, as provided by law, unless the Board of Directors deems it advisable to obtain the advice of the stockholders.
Series A Preferred Stock

The Company ~~accounts for employee~~has authorized one series of preferred stock, ~~awards for services based~~which is known as the Series A Convertible Preferred Stock (the “Series A Preferred”). The Board has authorized the issuance of 5,000,000 shares of Series A Preferred. The Series A Preferred Stock has the following rights and preferences:
Dividends: The Series A Preferred Stock is entitled to receive non-cumulative dividends equal to the amount of dividends that the holder of such share would have received if such share of Series A Preferred Stock were converted into shares of Common Stock immediately prior to the record date of the dividend declared on the ~~grant date fair value~~Common Stock.
Liquidation Preference: The Series A Preferred Stock is entitled to receive, prior to any distribution to any junior class of securities, an amount equal to $0.01 per share as a liquidation preference before any distribution may be made to the holders of any junior security, including the Common Stock.
Voting Rights: Each holder of Series A Preferred Stock shall vote with holders of the ~~instrument issued, and those issued~~Common Stock upon any matter submitted to ~~non-employees are recorded based~~a vote of shareholders, in which event it shall have the number of votes equal to the number of shares of Common Stock into which such share of Series A Preferred Stock would be convertible on the ~~grant~~record date ~~fair value~~for the vote or consent of shareholders. Each holder of Series A Preferred Stock shall also be entitled to one vote per share on each submitted to a class vote of the ~~consideration received or~~holders of Series A Preferred Stock.
Voluntary Conversion Rights: Each share of Series A Preferred Stock is convertible into 33.94971 shares of Common Stock at the ~~fair value~~option of the ~~equity instrument, whichever is more reliably measurable.~~holder thereof.
Mandatory Conversion Right: The Company has the right to convert each share of Series A Preferred Stock ~~awards~~into 33.94971 shares of Common Stock at any time that there are ~~expensed over the service period.~~less than 200,000 shares of Series A Preferred Stock outstanding.

During the nine months ended June 30, 2021, the Company issued ~~150,000~~300,000 shares of DIA common stock which was automatically converted into 300,000 shares of Series A Preferred at the closing of the Share Exchange on February 24, 2022. The shares were issued to a ~~vendor~~consulting firm pursuant to one year consulting agreement and valued at $692,308. Stock-based compensation expense related to this issuance for the nine months ended June 30, 2022 and 2021 was $288,461 and $230,770, respectively, and was included in ~~exchange~~general and administrative expense.
During the nine months ended June 30, 2022, the Company issued 294,593 shares of DIA common stock which was automatically converted into 294,593 shares of Series A Preferred at the closing of the Share Exchange on February 24, 2022. The preferred stock is reflected retroactively for ~~professional services~~all periods presented.
● 52,284 shares issued for conversion of debt – related party and accrued interest of $104,564
● 129,809 shares issued for conversion of debt and accrued interest of $288,458
● 112,500 shares issued for exercise of stock option - related party as stock-based compensation to related parties
On April 20, 2022, holders of 2,464,784 shares of Series A Preferred agreed to convert their Series A Preferred into common stock, which resulted in the issuance of 83,678,702 shares of common stock. On the same date, the board of directors approved a resolution to exercise the Company’s right to mandatorily convert the remaining 129,809 shares of Series A Preferred into common stock, which resulted in the issuance of an additional 4,406,979 shares of common stock.
As of June 30, 2022 and ~~expensed $~~September 30, 2021, the Company had ~~30,000~~0 ~~in connection with the~~and 2,300,000 shares of Series A Preferred stock ~~issuance.~~outstanding, respectively.

~~Reclassifications~~Common Stock Issuances
~~Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations.~~
~~Recent accounting pronouncements~~
~~All newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.~~
~~(2)~~ ~~Notes and Other Receivables~~
~~At June 30, 2021 and September 30, 2020, the Company held certain notes receivable totaling approximately $7,000~~ ~~and $9,000, respectively, net of allowances, for extended payment terms of franchise fees. The notes receivable bear interest of~~ 4~~% per annum with monthly payments, payable within four years. The Company analyzes the collectability of all receivables and reserves accordingly.~~
~~(3)~~ ~~Commitments and Contingencies~~
~~Litigation~~
The Company is subject to litigation claims arising in the ordinary course of business. The Company believes that it has adequately accrued for legal matters in accordance with the requirements of GAAP. The Company records litigation accruals for legal matters which are both probable and estimable and for related legal costs as incurred. The Company does not reduce these liabilities for potential insurance or third-party recoveries.

On October 2, 2015, the Company filed suit in the state court in St. John’s County, Florida, Case No. CA 15-1076, against its former Chief Executive Officer Brian Pappas, Christine Pappas, its former Human Resources officer, and an independent company controlled by Mr. Pappas named Franventures, LLC (“Franventures”). The lawsuit sought return of Company emails and other electronic materials in the possession of the defendants, Company control over the process by which the Company’s documents are identified, and a court judgment that the property is the Company’s. Mr. and Mrs. Pappas had returned certain Company documents that they have identified, but other issues remained. On December 11, 2017, Brian Pappas filed a counterclaim alleging the Company is required to indemnify him for a multitude of matters. On October 8, 2020 the Court dismissed Brian Pappas’ indemnity counterclaim without prejudice
In a separate suit, filed on March 7, 2016 in the state court in St. John’s County, Florida (Case No. CA 16-236), Franventures filed suit against the Company alleging that it is due an unstated amount of money from the Company pursuant to a contract the Company had previously terminated. On June 23, 2016, the Company filed a counterclaim against Franventures, which also included a complaint against former Chairman of the Board and Chief Executive Officer Brian Pappas. The counterclaim seeks redress for losses and expenditures caused by alleged fraud, conversion of company assets, and breaches of fiduciary duty that the Company alleges that defendants perpetrated upon CLC, including assertions regarding actions by Brian Pappas that the Company alleges occurred while Mr. Pappas was serving as the Chief Executive Officer of CLC and as a member of its board of directors. On October 27, 2016, Brian Pappas filed a motion to amend the complaint in Case No. CA 16-236 to add a claim alleging that the Company slandered him by virtue of a press release issued on or about August 1, 2016, in which the Company reported to shareholders on steps it had taken and improvements it had implemented.
The Company’s complaint against Mr. Pappas and Franventures (Case No. CA 15-1076) was consolidated with Mr. Pappas’ and Franventures’ complaint against the Company (Case No. CA 16-236) for purposes of discovery, but not for any other purpose.
On May 22, 2021, the Company, Brian Pappas, Christine Pappas and Franventures entered into an agreement under which the parties agreed to mutually release all parties from any claims or causes of action that they have against the other, including without limitation any claims asserted in Case No. CA 15-1076 and Case No. CA 16-236. The Company agreed to pay Brian Pappas and his assigns 60 consecutive, monthly payments of $4,000 commencing on June 1, 2021 and continuing through June 1, 2026.

On February 24, ~~2017, franchisee, Team Kasa, LLC, along with its three owners, filed suit~~2022, the Company recognized the equity of DIA Holdings as part of the reorganization which resulted in the ~~Eastern District~~Company recognizing the issuance of ~~New York (Case No. 2:17-cv-01074) against former CEO Brian Pappas~~13,716,041 shares of common stock and Franventures, as well as four other defendants seeking damages under the New York Franchise Sales Act. The same Plaintiffs also initiated an arbitration proceeding against the Company on the same issues (American Arbitration Association, Case No. 01-17-0001-1968), alleging the Company is jointly and severally liable for damages resulting from the allegations against Mr. Pappas and Franventures. The Company is contesting the allegations and its liability for any damages in the arbitration case. Both cases have been held in abeyance as the parties seek15,100 shares of treasury stock, at a ~~resolution.~~value of $1,720,867 (see Note 4).

On ~~November 8, 2017, franchisee, Indy Bricks, LLC, along with its two owners, Ben and Kate Schreiber, initiated arbitration against~~February 24, 2022, the Company ~~(American Arbitration Association, Case No. 01-17-0006-8120). The Plaintiffs allege breach~~issued 4,000,000 shares of ~~contract, fraud, misrepresentations and omissions, violations~~common stock valued at $316,324 for commitment fees in conjunction with the issuance of promissory note of $750,000 (see Note 9).
On April 20, 2022, the Company issued 88,085,681 shares of common stock as a result of the ~~Indiana Franchise Act,~~conversion of all outstanding shares of Series A Preferred Stock.
In May 2022, 500,000 shares were returned for cancellation, to satisfy a note receivable in the amount of $100,000 (see Note 5).
As of June 30, 2022 and ~~violations of the Indiana Deceptive Franchise Practices Act. On April 23, 2020, a settlement agreement was entered into between the Plaintiffs and~~September 30, 2021, the Company ~~under which the arbitration was dismissed. Pursuant to the settlement agreement, Indy Bricks, LLC will pay~~had 105,301,722 and 0 common shares issued, respectively.
Treasury stock
The Company records treasury stock at cost. Treasury stock is comprised of shares of common stock purchased by the Company ~~an agreed amount~~in the secondary market. As of ~~past due franchise fees, monthly marketing~~June 30, 2022 and ~~royalty fees,~~September 30, 2021, the Company had 15,100 and ~~monthly fees to utilize the Company’s franchise management software.~~0 shares of treasury stock, respectively.

~~(4)~~ ~~Sale of Condominium~~Stock Options

On ~~October 30, 2019~~June 12, 2020, DIA’s Board of Directors and its shareholders approved its 2020 Equity Compensation Plan (“Equity Plan”). The Equity Plan permits DIA to issue awards or options to the employees, directors, consultants and advisors who provide services to the Company ~~completed~~or a subsidiary. Pursuant to the Equity Plan, 400,000 shares of DIA’s common stock were reserved for issuance. The Equity Plan allows DIA’s board or a committee of the board to issue grants of incentive stock options, nonqualified stock options, stock awards, stock units, stock appreciation rights and other equity-based awards.
As of December 31, 2021, DIA had 300,000 stock options outstanding under the Equity Plan to Messrs. Possumato, CEO, and Potash, COO in equal amounts, of which 112,500 had vested as of December 31, 2021. At the closing of the Share Exchange, Messrs. Possumato and Potash each agreed to exercise the 56,250 vested stock options issued to them, which was the number of stock options which had vested as of the date the Share Exchange Agreement was executed. The options were converted into 112,500 shares of DIA common stock, which was automatically converted into 112,500 shares of Series A Preferred. The balance of the stock options issued to Messrs. Possumato and Potash were cancelled. The stock options had an exercise price of $0.75 per share. In lieu of paying the exercise price in cash, the exercise price was recorded as compensation expense of $42,188 to each of Messrs. Possumato and Potash.
Also, at the closing of the Share Exchange, DIA’s board cancelled the Equity Plan and all outstanding options were cancelled. Accordingly, as of June 30, 2022 the Company had no options outstanding.
Warrants
On February 24, 2022, in conjunction with the issuance of a promissory note of $750,000, the Company issued 1,000,000 warrants for $0.30 per share, which were assigned a value of $28,372, and recorded to additional paid in capital. The warrants expire on February 24, 2027.
In June 2022, in conjunction with a private offering and the issuance of secured promissory notes of $250,000 (see Note 9), the Company issued 125,000 warrants for $0.30 per share, which were assigned a value of $7,912, and recorded to additional paid in capital. The warrants expire in June 2027.
The warrants were valued using the Black-Scholes pricing model. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement.
For the nine months ended June 30, 2022, the estimated fair values of the warrants were measured using the following inputs:
Schedule of assumptions used in valuing the stock options and warrants
June 30,
2022
Stock price at time of issuance $ 0.092 – 0.10
Exercise price $ 0.30
Expected term 5 years
Expected average volatility 116 – 120 %
Expected dividend yield —
Risk-free interest rate 1.84 – 3.35 %
A summary of activity during the nine months ended June 30, 2022 is as follows:
Summary of common stock warrants activity
Warrants Weighted-Average Weighted-Average
Outstanding Exercise Price Life (years)
Balance as of October 1, 2021 — $ — —
Issuance 1,125,000 $ 0.30 5.00
Warrants assumed from DIA Holdings 1,882,793 $ 0.29 0.24
Exercised — $ — —
Expired (1,764,000 ) $ 0.30 —
Balance as of June 30, 2022 1,243,793 $ 0.29 4.27
1,882,793 warrants outstanding in the Company prior to February 24, 2022, reflect the warrants as assumed in the reorganization.
The intrinsic value of the warrants as of June 30, 2022, is $0. All of the outstanding warrants are exercisable as of June 30, 2022.
Note 8 – Notes Payable
PPP Loan
On April 28, 2020, the Company was granted a loan (the “Loan”) from First Bank of the Lake in aggregate amount of $23,750, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The Loan, which was in the form of a Note dated May 9, 2020 issued by the Company, matures on May 8, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on October 23, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, cost used to continue group health care benefits, mortgage payments, rent, utilities and interest on other debt obligations incurred before February 15, 2020. The Company used the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. In December 2021, the PPP Loan of $23,750 and accrued interest of $398 were forgiven and recognized as other income. During the nine months ended June 30, 2022, the Company recorded interest expense of $59.
SBA Loan
On June 3, 2020, the Company entered into a SBA Loan for $78,500 at a rate of 3.75%. On August 12, 2021 the loan increased to $114,700 and the Company obtained $36,200 on October 8, 2021. The SBA Loan matures on May 31, 2050. During the nine months ended June 30, 2022, the Company recorded interest expense of $3,187 on the SBA Loan and as of June 30, 2022 the accrued interest on the SBA Loan was $7,091.
Note 9 – Convertible Notes Payable
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. The warrants have an exercise price of $0.30 per share and expire five (5) years from the date of issuance (see Note 7). Each Secured Convertible Note bears interest at 15% per annum, matures 2 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 lien on two 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 June 2022, the Company sold a total of $250,000 of Units to two accredited investors, which resulted in the issuance of two secured promissory notes with an aggregate principal amount of $250,000, and the issuance of 125,000 warrants.
The allocation of the warrant to the debt component resulted in a $7,912 debt discount that is being amortized to interest expense over the term of the Note.
During the nine months ended June 30, 2022, the Company recorded interest expense of $2,000, and amortization of debt discount of $207. As of June 30, 2022, the debt discount recorded on the note was $7,704, resulting in a note payable balance of $242,296.
AJB Capital Investments, LLC Note
Effective February 24, 2022, Creative Learning Corporation (the “Company”) entered into a Securities Purchase Agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”), and issued a Promissory Note in the principal amount of $750,000 (the “AJB Note”) to AJB in a private transaction for a purchase price of $675,000 (after giving effect to a 10% original issue discount). In connection with the sale of the AJB Note, the Company also paid certain fees and due diligence costs of AJB and brokerage fees to J.H. Darbie & Co., a ~~condominium conference space~~registered broker-dealer. After payment of the fees and costs, the net proceeds to the Company were $641,250, which will be used for ~~proceeds~~working capital and other general corporate purposes.
The maturity date of ~~approximately~~the AJB Note was extended to February 24, 2023. 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 Common Stock of the Company at any time that the note is in default, provided that at no time may the note be convertible into an amount of common stock that would result in the holder having beneficial ownership of more than 4.99% of the outstanding shares of common stock, as determined in accordance with Section 13(d) under the Securities Exchange Act of 1934 (the “Exchange Act”). The conversion price equals the lowest trading price during either the 20 days trading days prior to the date of conversion or the 20 trading days prior to the date of issuance of the note (which was $0.14 per share). The conversion is subject to reduction in the following situations: (i) a 10% discount will apply anytime a conversion occurs when the company is not eligible to deliver the shares by DWAC; (ii) a 15% discount will apply whenever the shares are “chilled” for deposit into the DTC system; (iii) a 15% discount will apply if the Company’s common stock ceases to be registered under Section 12 of the Exchange Act; (iv) a 15% discount will apply if the note cannot be converted into free trading shares 181 days after its issue date; (v) in the event any other party has the right to convert debt into Common Stock at a greater discount to market than under the note, then the holder has the right to utilize such discount in determining the conversion price; or (vi) if the Company issues any shares of Common Stock for less than the conversion price in effect on the date of issuance, including any options, warrants or securities convertible into Common Stock at price less than the conversion price, then the conversion price shall be automatically reduced to the amount of consideration received by the company for such shares, except for any issuance that is an exempt issuance.
Also pursuant to the SPA, the Company paid AJB a commitment fee of $~~100,000~~800,000, payable in the form of 4,000,000 unregistered shares of the Company’s common stock (the “Commitment Fee Shares”). 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. The Company calculated and recorded a ~~gain of approximately $21,000, which represented~~contingent liability for the ~~excess~~Commitment Fee Shares, based on the closing stock price on reporting date. On issuance of the ~~proceeds~~note, the Company valued the 4,000,000 Commitment Fee Shares of common stock at $316,324 and recorded this as additional paid in capital.
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 $28,372 that was recorded as additional paid in capital. 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.
The allocation of financing costs, issuance of the Commitment Fee shares, and the warrant to the debt component resulted in a $453,446 debt discount that is being amortized to interest expense over the ~~carrying value~~term of the AJB Note.
During the nine months ended June 30, 2022, the Company recorded interest expense of $26,250, amortization of debt discount of $315,658, and a loss on ~~that date.~~contingency liability of $460,000 for the Commitment Fee Shares. As of June 30, 2022, the contingent liability balance was $460,000 and the debt discount recorded on the note was $137,788, resulting in a note payable balance of $612,212.

~~(5)~~ Knightsgate Ventures II, LP Note
On April 1, 2021, DIA borrowed $~~Related Party Transactions~~150,000 in Convertible Notes from Knightsgate Ventures II, LP, a third-party lender at a rate of 8%. The loan matures on December 31, 2022. During the year ended September 30, 2021 the Company recorded interest expense of $5,983 on the note and that amount is recorded as accrued interest as of September 30, 2021.
The Convertible Note automatically converts into preferred stock of DIA in the event DIA raised at least $2,000,000 by the issuance of preferred stock prior to the maturity date of the Convertible Note (a “Qualified Financing”), in which case the conversion price is equal to the lesser of (i) 90% of the price paid by investors in the Qualified Financing or (ii) the price obtained by dividing $6,000,000 by the Company’s fully diluted shares outstanding immediately prior to conversion (the “Cap Price”). In the event DIA had not entered into a Qualified Financing prior to the maturity date, the Convertible Note is convertible at the option of the holder into DIA common stock on the Maturity Date at a price per share equal to the Cap Price. In the event DIA effects a change of control, the holder has the option of converting the Convertible Note into DIA’s common stock at a price per share equal to the Cap Price or accelerating the maturity date and receiving cash at the time of the change of control.
During the nine months ended June 30, 2022, the Company recorded interest expense of $4,833.
Individual Investor Notes
During the nine months ended June 30, 2022, DIA issued an aggregate of five convertible notes to five investors, each for $25,000. The notes bear interest at a rate of 8% per annum, mature on December 31, 2022, and are convertible into DIA’s common stock on the same basis that is described for the Convertible Note issued to Knightsgate Ventures II, LP on April 1, 2021, as described above. During the nine months ended June 30, 2022 the Company recorded interest expense of $2,641 on the notes.
In March 2022, the holders of all of the convertible notes issued to unrelated investors agreed to convert their notes of $275,000 and accrued interest of $13,458 into 129,809 shares of DIA’s common stock, each of which was automatically converted into one share of Series A Preferred of the Company Holdings in accordance with the Share Exchange Agreement (see Note 7).
Note 10 – Subsequent Events

Management has evaluated subsequent events through the date these financial statements were available to be issued. Based on our evaluation no material events have occurred that require disclosure.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS
Special Note Regarding Forward-Looking Information
The following discussion and analysis of the results of operations and financial condition of DriveItAway Holdings, Inc., and its wholly owned subsidiary, DriveItAway, Inc., should be read in conjunction with the financial statements of the Company. and the notes to those financial statements that are included elsewhere in this Form 10-Q. References in this Management’s Discussion and Analysis of Financial Condition and Results of Operations to “us”, “we”, “our” and similar terms refer to the Company. This Quarterly Report contains forward-looking statements as that term is defined in the federal securities laws. The events described in forward-looking statements contained in this Quarterly Report may not occur. Generally, these statements relate to business plans or strategies, projected or anticipated benefits or other consequences of our plans or strategies, projected or anticipated benefits from acquisitions to be made by us, or projections involving anticipated revenues, earnings or other aspects of our operating results. The words “may,” “will,” “expect,” “believe,” “anticipate,” “project,” “plan,” “intend,” “estimate,” and “continue,” and their opposites and similar expressions, are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences, many of which are beyond our control, which may influence the accuracy of the statements and the projections upon which the statements are based.
Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. Except as required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.
U.S. Dollars are denoted herein by “USD,” “$” and “dollars”.
COVID-19
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency in response to a new strain of a coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic based on the rapid increase in exposure globally. The COVID-19 pandemic is a highly fluid situation, and it is not currently possible for us to reasonably estimate the impact it may have on our financial and operating results. We will continue to evaluate the impact of the COVID-19 pandemic on our business as we learn more and the impact of COVID-19 on our industry becomes clearer. We are complying health guidelines regarding safety procedures, including, but are not limited to, social distancing, remote working, and teleconferencing. The extent of the future impact of the COVID-19 pandemic on our business is uncertain and difficult to predict. Adverse global economic and market conditions as a result of COVID-19 could also adversely affect our business. If the pandemic continues to cause significant negative impacts to economic conditions, our results of operations, financial condition and liquidity could be adversely impacted.
Overview
DIA is the first national dealer focused mobility platform that enables car dealers to sell more vehicles in a seamless way through eCommerce, with its exclusive “Pay as You Go” app-based subscription program. DIA provides a comprehensive turnkey, solutions driven program with proprietary mobile technology and driver app, insurance coverages and training to get dealerships up and running quickly and profitably in emerging online sales opportunities. The company is planning to soon to expand its easy and transparent consumer app ‘subscription to ownership’ platform to enable entry level consumers to drive and acquire new Electric Vehicles. For further information, please see www.driveitaway.com.
Recent Developments
Share Exchange Transaction
On December 7, 2021, the Company, DriveItAway, Inc., a Delaware corporation (“DIA”), and the existing shareholders of DIA executed an Agreement and Plan of Share Exchange (the “Share Exchange Agreement”), under which the Company would acquire all of the issued and outstanding common stock of DIA by issuing one share of Series A Convertible Preferred Stock (the “Series A Preferred”) of the Company for each outstanding share of DIA common stock (the “Share Exchange”). Each share of Series A Preferred will be convertible into that number of shares of common stock of the Company which would entitle the Series A Preferred holders to 85% of the Company’s common stock, determined on a fully diluted basis, but prior to any shares issued or issuable as a result of the Financing (as defined below). The exact conversion rate of the Series A Preferred will be determined at closing of the Share Exchange. In addition, each share of Series A Preferred will be entitled to dividends and voting rights on an “as converted” basis with the common stockholders.
On February 24, 2022, the Company consummated the Share Exchange, which resulted in the Company issuing 2,594,593 shares of Series A Preferred to acquire all of the issued and outstanding common stock of DIA. Each share of Series A Preferred is convertible into 33.94971 share of common stock. In addition, each share of Series A Preferred is entitled to dividends and voting rights on an “as converted” basis with the common stockholders. As a result, prior holders of DIA common stock own Series A Preferred that has approximately 85% of the voting rights on any matter submitted to shareholders for a vote.
Upon closing of the Share Exchange, all of the existing members of the board of directors (the “Board”) of the Company resigned and John Possumato, Adam Potash and Paul Patrizio were appointed to the Company’s Board. Upon closing of the Share Exchange, Christopher Rego ~~has been~~and Rod Whiton resigned as officers, and John Possumato was appointed chief executive officer and Adam Potash was appointed chief operating officer. Mike Elkin agreed to remain as chief financial officer of the Company.
Names Change and Capital Structure
On April 18, 2022, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State to change its name from Creative Learning Corporation to DriveItAway Holdings, Inc. and to increase the number of authorized shares of common stock from 50,000,000 to 1,000,000,000.
RESULTS OF OPERATIONS
Three months ended June 30, 2022, compared to three months ended June 30, 2021:
Our operating results for the three months ended June 30,2022, and 2021 are summarized as follows
Three Months Ended
June 30,
2022 2021 Change %
Revenues $ 7,084 $ 31,835 $ (24,751 ) (78 %)
Cost of revenue 10,694 9,859 835 8 %
Gross Profit (Loss) (3,610 ) 21,976 (25,586 ) (116 %)
Gross Profit Percentage (51 %) 69 %

Operating expense 330,544 252,208 78,336 31 %
Other income (expense) (308,205 ) (5,173 ) (303,032 ) n/a
Net loss $ (642,359 ) $ (235,405 ) $ (406,954 ) 173 %
Revenues for the three months ended June 30, 2022 was $7,084, as compared to $31,835 for the three months ended June 30, 2021, a ~~director since February 5, 2020,~~decrease of $24,751, primarily due to the nation-wide used car shortage resulting from supply chain disruptions due in part to the COVID-19 pandemic. In addition, semiconductor chips, one of the main components that run vehicle electronics, came in short supply, which affected both new and used car markets, causing significantly higher prices and low inventory.
Operating expenses for the three months ended June 30, 2022 were $330,544, as compared to $252,208 for the three months ended June 30, 2021. The increase of $78,336 was largely attributable to an increase in salaries and payroll taxes of $58,025 and selling expenses of $8,834.
Operating loss was $334,154 for the three months ended June 30, 2022, as compared to $230,232 for the three months ended June 30, 2021. The increase of $103,922 was largely attributable to an increase in salaries, payroll taxes, selling expenses and a decrease in revenues.
Other expenses for three months ended June 30, 2022 were $308,205, as compared to $5,173 for the three months ended June 30, 2021. The increase of $303,032 was attributable to loss on contingency liability, associated with our ~~Chief Executive Officer since May 1, 2020. Prior~~convertible debt, of $60,000, amortization debt discount of $228,182 and an increase in interest expenses of $16,278.
Nine months ended June 30, 2022, compared to ~~his appointment, Mr. Rego~~nine months ended June 30, 2021
3
Our operating results for the nine months ended June 30, 2022 and 2021 are summarized as follows:
Nine Months Ended
June 30,
2022 2021 Change %
Revenues $ 28,730 $ 93,200 $ (64,470 ) (69 %)
Cost of revenue 21,789 30,214 (8,425 ) (28 %)
Gross Profit 6,941 62,986 (56,045 ) (89 %)
Gross Profit Percentage 24 % 68 %

Operating expense 951,136 493,027 458,109 93 %
Other income (expense) (790,971 ) (9,281 ) (781,690 ) n/a
Net loss $ (1,735,166 ) $ (439,322 ) $ (1,295,844 ) 295 %
Revenues for the nine months ended June 30, 2022 was $28,730, as compared to $93,200 for the nine months ended June 30, 2021, a decrease of $64,470, primarily due to the nation-wide used car shortage resulting from supply chain disruptions due in part to the COVID-19 pandemic. In addition, semiconductor chips, one of the main components that run vehicle electronics, came in short supply, which affected both new and used car markets, causing significantly higher prices and low inventory.
Operating expenses for the nine months ended June 30, 2022 were $951,136, as compared to $493,027 for the nine months ended June 30, 2021. The increase of $458,109 was attributable to an increase in professional fees of $310,303, salaries and payroll taxes of $147,049 and selling expenses of $11,343, reduced by a decrease in general and administrative expenses of $10,127 and software development expenses of $20,713.
Operating loss was $944,195 for the nine months ended June 30, 2022, as compared to $430,041 for the nine months ended June 30, 2021. The increase of $514,154 was largely attributable to an increase in professional fees, salaries, payroll taxes, selling expenses and a decrease in revenues.
Other expenses for nine months ended June 30, 2022 were $790,971, as compared to $9,281 for the nine months ended June 30, 2021. The increase of $781,690 was attributable to loss on contingency liability, associated with our convertible debt, of $460,000, amortization debt discount of $315,865 and an increase in interest expenses of $29,985, offset by a gain on PPP loan forgiveness of $24,148.
Liquidity and Capital Resources:
The following table provides selected financial data about our Company as of June 30,2022.
Working Capital
June 30, September 30,
2022 2021 Change
Cash $ 389,664 $ 9,774 $ 379,890

Current assets $ 395,760 $ 31,229 $ 364,531
Current liabilities 750,018 229,228 520,790
Working capital (deficiency) $ (354,258 ) $ (197,999 ) $ (156,259 )
As of June 30, 2022, and September 30, 2021, our total current assets were $395,760 and $31,229 which were comprised of $389,664 and $9,774 in cash and $6,096 and $21,455 in accounts receivable, respectively.
As of June 30, 2022, our current liabilities were $750,018 which were comprised of $109,187 in accounts payable, $16,710 in accrued liabilities, $11,183 in SBA loan and $612,212 in convertible notes payable and $726 in due to related party. As of September 30, 2021, our current liabilities were $229,228 which were comprised of $132,696 in accounts payable, $29,386 in accrued liabilities, $29,878 in SBA and PPP loans, $7,268 in due to related party and $30,000 in convertible note-related parties.
As of June 30, 2022, and September 30, 2021, our working capital deficiency was $354,258 and $197,999, respectively.
Cash Flow Data:
Nine Months Ended
June 30,
2022 2021 Change
Cash used in operating activities $ 616,515 $ 170,737 $ 445,778
Cash used in investing activities $ 56,045 $ — $ 56,045
Cash provided by financing activities $ 1,052,450 $ 220,566 $ 831,884
Net Change in Cash for period $ 379,890 $ 49,829 $ 330,061
Cash Flows from Operating Activities
During the nine months ended June 30, 2022, we did not generate positive cash flows from operating activities. For the nine months ended June 30, 2022, net cash flows used in operating activities was $616,515, consisting of a net loss of $1,735,166, reduced by stock-based compensation expenses of $372,836, loss on contingency liability of $460,000, amortization debt discount of $315,865, depreciation of $4,645, and increased by gain on PPP loan forgiveness of $24,148 and a change in working capital of $10,547.
During the nine months ended June 30, 2021, we did not generate positive cash flows from operating activities. For the nine months end June 30, 2021, net cash flows used in operating activities was $170,737, consisting of a net loss of $439,322, reduced by an increase in stock -based compensation expenses of $230,770 and a change in working capital of $37,815.
Cash Flows from Investing Activities
During the nine months ended June 30, 2022, the Company generated cash of $70,361 from the acquisition of a subsidiary and purchased three vehicles for $126,406.
The Company did not use any funds for investing activities during the nine months ended June 30, 2021.
Cash Flows from Financing Activities
During the nine months ended June 30, 2022, the Company generated $1,016,250 from issuance convertible notes and $36,200 from an ~~active franchise in California.~~ SBA loan.
During the nine months ended June 30, 2021, the Company ~~recognized royalty revenue~~generated $150,000 from ~~the franchise~~issuance of $~~6,828~~convertible notes, $65,000 from related party loan and ~~recognized marketing fee revenue~~$5,566 contribution from ~~the franchise of $~~0~~. Total payments made by the franchisee were $6,265~~. related party as additional paid-in-capital.
Going Concern
As of June 30, ~~2021 and September 30, 2020 the accounts receivable balance with the franchisee was $18,081~~ ~~and $11,894~~ ~~, respectively and the franchisee had a deferred revenue balance of $~~0.
Mr. Rego is also the CEO of Teknowland, a software development company, with which the Company entered into an agreement on March 10, 2020 to perform development and maintenance services in relation to the Company’s franchise management software. The term of the agreement was six months, subject to auto-renewal until Teknowland had completed its obligations under the agreement, but subject to each party’s right to terminate the agreement at any time on 30 days’ notice. Under the agreement, the Company was obligated to pay Teknowland a fee of $~~12,900per month~~ ~~for development and maintenance services. Starting in November 2020, the Company and Teknowland orally agreed to reduce the monthly amount that the Company is obligated to pay to $3,000~~ ~~per month.~~
During the year ended September 30, 2020, the Company and Mr. Rego orally agreed that Mr. Rego and Teknowland would develop an eLearning program to enable the Company to offer educational programs over the internet. No agreement was reached regarding whether the Company or Teknowland would own the eLearning program, or the terms under which the Company would be entitled to use the program on a long-term basis, whether as owner or licensee. ~~The Company orally agreed to pay Teknowland $10,000 per month for five months for hosting and content costs incurred by Teknowland. After testing the program, the Company’s board decided in December 2020 not to pursue the E-Learning program.~~
~~Beginning in January 2021, Teknowland began hosting the Company’s website at a cost of $5,000~~ ~~per month pursuant to an oral agreement.~~
On February 12, 2021, the Company, Chris Rego and Teknowland entered into an agreement under which the parties mutually agreed to terminate the March 10, 2020 agreement to develop and maintain the Company’s franchise management system, and the oral agreement under which Teknowland hosted the Company’s website. In both cases, the Company has engaged an independent firm to provide the services. Under the same agreement, the Company agreed to transfer and assign to Teknowland all of the Company’s rights in the E-Learning program developed by Teknowland for the Company. The Company evaluated the E-Learning program on a trial basis, and elected not to pursue it as a line of business. The Company agreed to pay Teknowland $~~50,000~~ to pay all invoices associated with the two agreements and the E-Learning program, of which $20,000 was payable at execution of the agreement, $20,000 was payable 30 days later and $10,000 was payable 60 days later. As of June 30, 2021 $~~20,000~~ ~~has been paid and $30,000~~ ~~is still owed.~~
~~During the nine months ended June 30, 2021, JoyAnn Kenny-Charlton, a director of the Company, agreed to relinquish~~ ~~272,472~~ ~~shares previously approved for issuance to her for director services.~~

~~(6)~~ ~~Subsequent Events~~
On July 20, 2021, the Company entered into an Agreement to acquire the remaining 51% of Bricks4Schoolz, LLC (“Bricks4Schoolz”) that it did not own. Consideration for the purchase includes payment of $108,000 payable in twelve payments of $9,000 monthly beginning on August 1, 2021 and continuing through July 31, 2022, ~~and~~ ~~300,000~~ shares of the Company’s restricted stock. In addition, the principles of the Bricks4Schoolz agreed to assign any rights that they had to proprietary software and content developed for Bricks4Schoolz. In July 2019, the company had acquired a 49% interest in Bricks4Schoolz by entering into an operating agreement with the owner of the 51% interest. As part of the acquisition, the Company and the sellers of the 51% interest in Bricks4Schoolz entered into mutual releases of liability. The Company is currently evaluating the impact of this acquisition, therefore, as of the date of this filing the accounting for this transaction is not yet complete and the disclosures have yet to be finalized.

~~Item 2. Management’s Discussion and Analysis of Financial Condition and Plan of Operation~~
~~Overview~~
Creative Learning Corporation, operating under the trade names of Bricks 4 Kidz® and Sew Fun Studios®, offers educational and enrichment programs to children ages 3 to 13+ through its franchisees. The Company’s business model is to sell franchise territories and collect a one-time franchise fee and subsequent monthly royalty fees from each territory. Through the Company’s franchise business model, which includes a proprietary curriculum and marketing strategy plus a proprietary franchise management tool, the Company provides a wide variety of programs designed to enhance students’ problem solving and critical thinking skills. As of June 30, 2021, the Company had ~~496 Bricks 4 Kidz®~~a net loss of $1,735,166, accumulated deficit of $2,640,560 and ~~Sew Fun Studios® franchise territories, 28 Bricks 4 Kidz® master franchises, and 141 Bricks 4 Kidz® sub-franchises operating in 40 countries.~~
The Company temporarily suspended domestic franchise offers and sales of Bricks 4 Kidz® and Sew Fun Studios® franchises in compliance with FTC Franchise Rule, Section 436.7(a) due to delay in completion of the Company’s fiscal year 2018 and 2019 consolidated audited financial statements. In turn, this delayed completion of the Company’s 2018 and 2019 FDDs for the Bricks 4 Kidz® and Sew Fun Studios® franchise offerings. The Company has completed all required financial statements, and expects to update its FDDs shortly to resume new franchise sales. However, the resumption of new franchise sales may be further delayed due to disruptions caused by the COVID-19 pandemic. At this time, the Company is unable to predict when it will resume new franchise sales.
~~Three and Nine Months ended June 30, 2021 and 2020~~
Revenues were $462,629 and $1,929,644 during the three and nine months ended June 30, 2021, as compared to $621,690 and $2,259,726 during the three and nine months ended June 30, 2020, respectively. The drop in gross revenues in 2021 as compared to 2020 is mainly attributable to decreases in royalty fees and marketing fund revenue, which was offset by an increase in initial franchise fees caused by the offboarding of existing franchisees. The decline in revenues in 2021 as compared to 2020 was mainly the result of the impact of the Coronavirus (“COVID-19”) pandemic on our business.
Initial franchise fees were $263,854 and $1,002,962 during the three and nine months ended June 30, 2021, as compared to $221,347 and $720,318 during the three and nine months ended June 30, 2020, respectively. The increase in initial franchise fees during the three and nine months ended June 30, 2021 was primarily due to the acceleration of deferred revenues in 2021 due to the offboarding of franchisees during the nine months ended June 30, 2021, which was partially offset by fewer new franchise sales due to the COVID-19 pandemic.
Royalty fee revenues were $183,491 and $819,965 during the three and nine months ended June 30, 2021, respectively, as compared to $342,010 and $1,248,467 during the three and nine months ended June 30, 2020, respectively. Royalty fee revenues decreased as compared to the comparative periods due to the offboarding of franchisees during the year ended September 30, 2020, and the nine months ended June 30, 2021, which resulted in fewer franchisees being charged royalties in the current period versus the same period of the prior year. In addition, royalty fee revenues were lower because of the interruption of normal operation at many franchises because of the COVID-19 pandemic.

Marketing fund revenues were $0 during the three and nine months ended June 30, 2021, as compared to $12,979 and $159,773 during the three and nine months ended June 30, 2020, respectively. The Company had no marketing fund revenue in the current period due to the impact of COVID-19. In particular, due to the impact of the COVID-19 pandemic on the business of our franchisees, we voluntarily elected to cease charging our franchises for marketing fees in March 2020. The Company expects to resume charging franchisees for marketing when they are able to return to normal operations following the COVID-19 pandemic.
Technology fees were $15,284 and $106,717 during the three and nine months ended June 30, 2021, respectively, as compared to $45,354 and $131,168 during the three and nine months ended June 30, 2020, respectively. Technology fees decreased during the nine months ended June 30, 2021 over the comparative prior period due to the due to the impact of the COVID-19.
Operating expenses were $586,677 and $1,651,034 during the three and nine months ended June 30, 2021, respectively, as compared to $624,391 and $1,723,108, respectively during the three and nine months ended June 30, 2020. Operating expenses declined in 2021 as compared to 2020 primarily due to lower marketing fund expenses, payroll expenses and professional expenses, which was offset to some extent by higher bad debt expense and higher franchise commissions in 2021 as compared to 2020. Franchise commissions increased as a result of the offboarding of franchisees, which triggered the recognition of prepaid commissions into expense.
Net income (loss) for the three months and nine months ended June 30, 2021 was approximately $(123,000) and $281,000, respectively as compared to approximately $(3,000) and $552,000 in the three and nine months ended June 30, 2020. The decrease in net income in the nine months ended June 30, 2021 as compared to June 30, 2020 was a result of lower revenues partially offset by lower expenses. The lower revenues were due to more offboards of franchises in fiscal 2020, and the nine months ended June 30, 2021, and the lack of new franchise sales, which resulted in lower royalty fee revenue in the current period. However, lower royalty fee revenue was partially offset by the higher recognition of deferred revenue in the current period. The lower expenses, as explained above, were due to lower marketing fund, payroll and professional expenses.
~~Liquidity and Capital Resources~~
The Company’s primary source of liquidity is cash generated through operations. As of June 30, 2021, the Company had approximately $380,000 of unrestricted cash, and used cash flow from operations of approximately $58,000 in the nine months ended June 30, 2021. The Company believes it hasdid not have sufficient cash on hand to cover expenses for the next 12twelve (12) months. The Company intends to convert its convertible debt into common stock and to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending September 30, 2022.
The ability of our Company to emerge from the development stage is dependent upon, among other things, obtaining additional financing to continue operations, and development of our business plan. In response to these requirements, management intends to raise additional funds through public or private placement offerings. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), which require management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We believe our most critical accounting policies and estimates relate to the following:
● Recapitalization
● Revenue Recognition
● Stock-Based Compensation
● Income Taxes
While our estimates and assumptions are based on our knowledge of current events and actions we may undertake in the future, actual results may ultimately differ from these estimates and assumptions. For a discussion of the Company’s significant accounting policies, refer to Note 1 of Notes to the Condensed Consolidated Financial Statements.
Recapitalization
On February 24, 2022, the Company, DriveItAway, Inc., and the existing shareholders of DriveItAway, Inc. (“DIA”) executed an Agreement and Plan of Share Exchange, under which the Company acquired all of the issued and outstanding common stock of DIA by issuing one share of Series A Convertible Preferred Stock of the Company for each outstanding share of DIA common stock. For financial accounting purposes, this transaction was treated as a reverse acquisition by DIA and resulted in a recapitalization with DIA being the accounting acquirer and DIA, Inc. as the acquired company. The consummation of this reverse acquisition resulted in a change of control. Accordingly, the historical financial statements prior to the acquisition are those of the accounting acquirer, DIA and have been prepared to give retroactive effect to the reverse acquisition completed on February 24, 2022, and represent the operations of DIA. The consolidated financial statements after the acquisition date, February 24, 2022, include the balance sheets of both companies at fair value, the historical results of DIA and the results of the Company from the acquisition date. All share and per share information in the accompanying consolidated financial statements and footnotes has been retroactively restated to reflect the recapitalization.
Revenue Recognition
The Company’s revenue is recognized in accordance with Accounting Standards Codification(“ASC”) 606, Revenue from Contracts with Customers, for all periods presented. The Company, through its DriveItAway online/app-based platform, operates in the retail automotive industry. The Company assists subprime and deep subprime candidates, with little or no down payment, in purchasing the used vehicle of his/her choice by first starting in an app based, turnkey rental, through participating franchise and independent car dealers. During the period ended June 30, 2022 and 2021, the Company derived its rental revenue from contract revenue share for rentals between participating franchise and independent car dealers and individual car rental customers (“customers”). In conjunction with the rental revenue, the Company generates revenue by providing driver and vehicle insurance through a third party, included in the rental contract with each customer.
The Company’s performance obligation for rental revenue is to provide an application to track car rental arrangements and to collect cash from car rental customers and remit those payments to participating franchise and independent car dealers, net of the Company’s revenue share. The car rental arrangements are over a fixed contracted period; therefore, the Company recognizes revenue ratably during the contract term. The Company’s performance obligation for insurance revenue is to collect insurance fees from the customer and provide the third-party provider payment for the insurance provided to the customer. The insurance is offered over a fixed contracted period; therefore, the Company recognizes revenue ratably during the contract term.
Rental and insurance transactions are prepaid at the beginning of the rental cycle (typically a one-week rental that has an automatic renewal) with an automatic charge to the customer’s credit card on file through the DIA system. The DIA system then distributes the vehicle owner share (typically 85% of rental revenue) to the vehicle owner’s bank account from the Stripe Account. This amount is shown as a deduction to Revenues (“Vehicle Owner Share”) on the Company’s Statements of Operations. The net amount is then transferred from the Company’s Stripe Account to the DIA operating bank account. DIA also distributes insurance amounts due to the third^-party insurance provider on a monthly basis. This amount is shown as a deduction to revenues (“Driver & Dealer Insurance Cost”) on the Company’s Statements of Operations.
DIA also generate miscellaneous revenue in a number of ways. At the end of the rental term, the DIA software system checks for any excess usage and charges, based on the terms of the rental contract, and will automatically charge a customer’s credit card. These charges are recognized when the credit card charge goes through and recorded as miscellaneous revenue on the Company’s Statements of Operations. Additional miscellaneous revenue represents amounts earned on telematics equipment and telematics software services related to each rental vehicle used to track excess usage and charges. DIA performance obligation is to provide the equipment to the vehicle owner for self-installation and allow access to the software throughout the rental term. The Company recognizes revenue when the equipment is delivered to the vehicle owner. Miscellaneous revenue associated with use of the telematics software is recognized on a monthly basis as it is a monthly service.
The Company’s Cost of Goods sold consists of 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 ~~dependent upon both franchise sales~~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 ~~royalty fees~~the portion that is ultimately expected to ~~continue current business operations~~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 ~~liquidity.~~subjective variables, including expected stock price volatility and the risk-free interest rate.
Income Taxes

The ~~recent COVID-19 outbreak has been declared~~provision for income taxes and deferred income taxes are determined using the asset and liability method. Deferred tax assets and liabilities are determined based on temporary differences between the financial carrying amounts and the tax basis of assets and liabilities using enacted tax rates in effect in the years in which the temporary differences are expected to reverse. On a ~~pandemic by~~periodic basis, the ~~World Health Organization, has spread to~~Company assesses the ~~United States and many other parts~~probability that its net deferred tax assets, if any, will be recovered. If after evaluating all of the ~~world~~positive and ~~has adversely affected our business operations, employee availability, financial condition, liquidity and cash flow and the length of such impacts are uncertain. The outbreak~~negative evidence, a conclusion is made that it is more likely than not that some portion or all of the ~~COVID-19 continues~~net deferred tax assets will not be recovered, a valuation allowance is provided by a charge to ~~grow both in~~tax expense to reserve the United States and globally, and related government and private sector responsive actions have and will continue to adversely affect our business operations. It is impossible to predict the effect and ultimate impact of the COVID-19 pandemic as the situation is rapidly evolving.

The spread of COVID-19 has caused public health officials to recommend precautions to mitigate the spread of the virus, including warning against congregating in heavily populated areas, such as malls and shopping centers. Among the precautions has been the closure of a substantial portion of the schools in the United States, which will adversely impact our royalty revenue from franchisees and our ability to sell new franchises. There is significant uncertainty around the breadth and duration of these school closures and other business disruptions related to COVID-19, as well as its impact on the U.S. and global economy. The extent to which COVID-19 impacts our results will depend on future developments,deferred tax assets which are ~~highly uncertain and cannot~~not expected to be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions taken to contain it or treat its impact. We have asked our corporate employees whose jobs allow them to work remotely to do so for the foreseeable future. Such precautionary measures could create operational challenges as we adjust to a remote workforce, which could adversely impact our business.realized.

~~Cash funds are used for ongoing operating expenses, the purchase of equipment, property improvement, and software development.~~Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.

~~Item~~ITEM 3. ~~Quantitative and Qualitative Disclosures about Market Risk~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~Not applicable to us as~~We are a smaller reporting ~~company.~~company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

~~Item~~ITEM 4. ~~Controls and Procedures~~CONTROLS AND PROCEDURES.

~~Evaluation of~~(a) Disclosure Controls and Procedures

As of June 30, 2022, being the end of the period covered by this ~~report (the “Evaluation Date”),~~Report, we carried out an evaluation ~~regarding~~required by Rule 13a-15 of the ~~three months ended June 30, 2021,~~Securities Exchange Act of 1934, as amended (the “Exchange Act”) under the supervision and with the participation of our management, including our ~~President~~principal executive officer and ~~Chief Financial Officer,~~principal financial officer, of the effectiveness of the design and operation of ~~our~~the Company’s “disclosure controls and procedures” and “internal control over financial reporting” as of the end of the period covered by this Quarterly Report.
We maintain disclosure controls and procedures ~~pursuant to Rule 13a-15 under~~as defined in Rules 13a-15(e) and 15d-15(e) of the ~~Securities~~ Exchange Act ~~of 1934, as amended (the “Exchange Act”). Based upon this evaluation, our management concluded~~ that ~~as of the Evaluation Date, our disclosure controls and procedures were not effective~~are designed to ~~provide reasonable assurance~~ensure that information required to be disclosed in ~~the~~our reports ~~that are~~ filed or submitted to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the ~~Securities and Exchange Commission’s~~SEC’s rules and forms, and that information is accumulated and communicated to management, including the principal executive and financial officer as appropriate, to allow timely decisions regarding required disclosures. Our principal executive officer and principal financial officer evaluated the effectiveness of disclosure controls and procedures as of the end of the period covered by this quarterly report (the “Evaluation Date”), pursuant to Rule 13a- 15(b) under the Exchange Act. Based on that evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures ~~are designed~~were not effective to ensure that information required to be disclosed in ~~the~~our reports ~~that we file or submit~~ under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our ~~management,~~principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required ~~disclosure.~~disclosure, due to material weaknesses in our control environment and financial reporting process.

Our management, including our principal executive officer and principal financial officer, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that ~~the Company’s disclosure controls~~all control issues and ~~procedures will detect or uncover every situation involving the failure~~instances of ~~persons~~fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision- making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.
Because of the inherent limitations in a cost-effective control system, misstatements due to ~~disclose material information otherwise required to~~error or fraud may occur and not be ~~set forth in the Company’s periodic reports.~~detected.

~~Changes in~~(b) Management’s Quarterly Report on Internal Control ~~Over~~over Financial Reporting

~~The Company’s~~Our management is ~~also~~ responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). In evaluating the effectiveness of our internal control over financial reporting, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (2013). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting ~~principles. During~~principles and includes those policies and procedures that (a) pertain to the ~~period ending~~maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of the our management and directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Based on our evaluation under the framework described above, as of June 30, ~~2021,~~2022, our management concluded that we had “material weaknesses” (as such term is defined below) in our control environment and financial reporting process consisting of the following as of the Evaluation Date:
1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our Board of Directors, resulting in ineffective oversight in the establishment and monitoring of required internal control and procedures;
2) inadequate segregation of duties consistent with control objectives; and
3) ineffective controls over period end financial disclosure and reporting processes.
A “material weakness” is defined under SEC rules as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.
As of the date of this Quarterly Report, the Company ~~discovered~~does not intend to remedy the foregoing and therefore such material weaknesses in our control environment and financial reporting process will continue due to lack of available capital. A system of controls, no matter how well designed and operated, cannot provide absolute assurance that ~~it lacked~~the objectives of the system of controls ~~to ensure~~are met, and no evaluation of controls can provide absolute assurance that all ~~sources~~control issues and instances of ~~revenue are properly deposited~~fraud, if any, within a company have been detected.
(c) Change in ~~the Company’s accounts, and that any~~Internal Control over Financial Reporting
There were no significant changes ~~require the signature of two or more officers. The Company is conducting a review of all banking and payment processing relationships~~ to ~~ensure that the proper controls are in place, and expects to remediate the deficiency shortly. Other than the change identified earlier in this paragraph, there was no change in~~ our internal control over financial reporting ~~that occurred~~(as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ~~ended June 30, 2021~~ that ~~has~~could materially ~~affected,~~affect, or isare reasonably likely to materially affect, our internal control over financial reporting.

~~The Company continues to have the following material weaknesses in internal control:~~
● We have not established and/or maintained adequately designed internal controls in order to prevent or detect and correct material misstatements to the financial statements, including internal controls related to complex or nonroutine transactions.
● ~~We lack the necessary accounting resources with sufficient SEC reporting experience, US GAAP knowledge and accounting experience.~~
Management believes that despite our material weaknesses, our consolidated financial statements for the quarter ended June 30, 2021 are fairly stated, in all material respects, in accordance with GAAP.
PART II – OTHER INFORMATION

~~Item~~ITEM 1. ~~Legal Proceedings~~LEGAL PROCEEDINGS

~~The discussion~~We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending ~~legal matters included in Item 3~~or, to the knowledge of the ~~Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 is incorporated herein by reference.~~executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
On May 22, 2021, the Company, Brian Pappas, Christine Pappas and Franventures entered into an settlement agreement under which the parties agreed to mutually release each other from any claims or causes of action that they have against the other, including without limitation any claims asserted in a lawsuit filed by the Company against Brian Pappas, Christine Pappas, and Franventures, LLC (“Franventures”), a company controlled by Mr. Pappas, in the state court of St. John’s County, Florida, Case No. CA 15-1076, and a lawsuit filed by Franventures against the Company, with Mr. Pappas named as a third party defendant, in the state court in St. John’s County, Florida, Case No. CA 16-236. Under the settlement agreement, the Company agreed to pay Brian Pappas and his assigns 60 consecutive, monthly payments of $4,000 commencing on June 1, 2021 and continuing through June 1, 2026.
~~Other than as disclosed above, there have been no material changes in legal proceedings since the filing of the Form 10-K.~~

~~Item~~ITEM 1A. ~~Risk Factors~~RISK FACTORS

~~For information regarding factors that could affect the Company’s results of operations, financial condition and liquidity, see the risk factors discussed under Part II, Item 1A~~We are a smaller reporting company as defined by Rule 12b-2 of the ~~Company’s most recent annual report on Form 10-K.~~Exchange Act and are not required to provide the information under this item.

~~Item~~ITEM 2. ~~Unregistered Sales of Equity Securities and Use of Proceeds~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Not applicable.~~Common Stock
On April 20, 2022, the Company issued 88,085,681 shares of common stock as a result of the conversion of all outstanding shares of Series A Preferred Stock.
The securities in the foregoing transaction issued in reliance on the exemption from registration provided in Section 3(a)(9) of the Securities Act for securities solely in exchange for other securities of the issuer.
Unit Offering
In June 2022, the Company’s board of directors approved an offering of up to 10 Units in a private offering at $50,000 per Unit. Each Unit consists of a secured convertible note with an original principal balance of $50,000 and one warrant to purchase common stock for every $2 invested in the offering. The warrants have an exercise price of $0.30 per share and expire five (5) years from the date of issuance. Each secured convertible note bears interest at 15% per annum, matures two years after the date of issuance, and is convertible at the option of the holder into common stock at $0.20 per share. During June 2022, the Company sold a total of five Units for $250,000 to two accredited investors, which resulted in the issuance of two secured promissory notes with aggregate principal amount of $250,000, and the issuance of 125,000 warrants.
The securities in the transactions described above were sold or issued in reliance on the exemption from registration provided in Section 4(a)(2) of the Securities Act for transactions not involving any public offering. All certificates evidencing the shares sold or issued bore a restrictive legend. No underwriter participated in the offer and sale of these securities, and no commission or other remuneration was paid or given directly or indirectly in connection therewith. The proceeds from these sales were used for general corporate purposes.

~~Item~~ITEM 3. ~~Defaults Upon Senior Securities~~DEFAULTS UPON SENIOR SECURITIES

~~Not applicable.~~None.

~~Item~~ITEM 4. ~~Mine Safety Disclosures~~MINE SAFETY DISCLOSURES

Not applicable.

~~Item~~ITEM 5. ~~Other Information~~OTHER INFORMATION

~~None~~None.

~~Item~~ITEM 6. ~~Exhibits~~EXHIBITS

~~Exhibits~~
~~Exhibit No.~~Incorporated byReference Filed orFurnished
ExhibitNumber Exhibit Description Form Exhibit FilingDate Herewith
31.1 Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 x
31.2 Certification of Principal Financial Officer, pursuant to ~~Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.~~
~~31.2~~ ~~Certification of Principal Financial Officer pursuant to 18 U.S.C.~~ Section ~~1350, as adopted pursuant to Section 906~~302 of the Sarbanes-Oxley Act of ~~2002.~~2002
x
32.1 ~~Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Act of 1934, as amended.~~
~~32.2~~ Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. x
32.2 Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 x
~~101.INS~~ 101 Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q. ~~XBRL Instance Document~~ x
~~101.SCH~~ 104 Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set. ~~XBRL Taxonomy Extension Schema Document~~
~~101.CAL~~ ~~XBRL Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF~~ ~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~ ~~XBRL Taxonomy Extension Label Linkbase Document~~
~~101.PRE~~ ~~XBRL Taxonomy Extension Presentation Linkbase Document~~x

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

~~CREATIVE LEARNING CORPORATION~~DRIVEITAWAY HOLDINGS, INC.
~~Dated: August 16, 2021~~Date: September 7, 2022 By: ~~/s/ Mike Elkin~~/s/ John Possumato
John Possumato, Chief Executive Officer
(Principal Executive Officer)
Date: September 7, 2022 By: /s/ Mike Elkin
Mike Elkin, Chief Financial Officer
~~Chief Accounting Officer~~
(Principal Financial and Accounting Officer)
~~CREATIVE LEARNING CORPORATION~~
~~Dated: August 16, 2021~~ ~~By:~~ ~~/s/ Rod K. Whiton~~
~~Rod K. Whiton~~
President
(Principal Executive Officer)

2111

DRIVEITAWAY HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

Delaware		20-4456503
(State or other jurisdiction of incorporation or organization)		~~(I.R.S.~~(I.R.S. Employer Identification No.)

Title of each class:		Trading Symbol(s):		Name of each exchange on which registered:
N/A		N/A		N/A

Large accelerated ~~filer~~Filer	☐		Accelerated ~~filer~~Filer	☐
Non-accelerated ~~filer~~Filer	☒	~~Smaller reporting company~~	Small Reporting Company	☒
			Emerging growth company	☐

		Page ~~No.~~

	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	1F-1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	16Quantitative and Qualitative Disclosures About Market Risk	7
Item 4.	Controls and Procedures	8

	~~Item 3.~~PART II – OTHER INFORMATION	~~Quantitative and Qualitative Disclosure About Market Risk~~	18

~~Item 4.~~	~~Controls and Procedures~~	18

	~~PART II~~

Item 1.	Legal Proceedings	199

Item 1A.	Risk Factors	199

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	199

Item 3.	Defaults Upon Senior Securities	1910

Item 4.	Mine Safety Disclosures	1910

Item 5.	Other Information	20 10

Item 6.	Exhibits	2010


	June 30, 2021			September 30, 2020
	(Unaudited)

Current Assets:
Cash	$	380,408		$	427,659
Restricted Cash (marketing fund)		8,689			20,194
Accounts receivable, less allowance for doubtful accounts of approximately $1,016,000 and $942,000, respectively		199,463			269,211
Prepaid commission expense		174,795			212,122
Prepaid expense		0			10,452
Marketing fund receivable		14,690			0
Notes receivables - current portion, less allowance for doubtful accounts of approximately $91,000 and $91,000, respectively		6,675			9,159
Total Current Assets		784,720			948,797

Security deposit		0			833
Prepaid commission expense - net of current portion		318,408			512,756
Property and equipment, net of accumulated depreciation of approximately $501,000 and $416,000, respectively		48,755			131,618
Total Assets	$	1,151,883		$	1,594,004

Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	294,294		$	69,527
SBA Loan - PPP		119,980			119,980
Deferred revenue		746,084			915,103
Accrued liabilities		22,588			8,743
Total Current Liabilities		1,182,946			1,113,353

Deferred revenue - net of current portion		1,474,589			2,297,576
Total Liabilities		2,657,535			3,410,929

Commitments and Contingencies (Note 3)		0			0

Stockholders’ Equity (Deficit)
Preferred stock, $.0001 par value; 10,000,000 shares authorized; -0- shares issued and outstanding		—			—
Common stock, $.0001 par value; 50,000,000 shares authorized 13,240,938 shares issued and 13,175,838 shares outstanding as of June 30, 2021 13,363,410 shares issued and 13,298,310 shares outstanding as of September 30, 2020		1,322			1,334

Additional paid in capital		3,020,092			2,990,080
Treasury Stock 65,100 shares, at cost		(34,626	)		(34,626	)
Accumulated Deficit		(4,492,440	)		(4,773,713	)
Total Stockholders’ Equity (Deficit)		(1,505,652	)		(1,816,925	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	1,151,883		$	1,594,004


	June 30,			September 30,
	2022			2021
Assets
Current assets
Cash	$	389,664		$	9,774
Accounts receivable, net		6,096			21,455
Total current assets		395,760			31,229

Goodwill		1,557,106			—
Vehicles, net of accumulated depreciation of $4,645		121,761			—
Total Assets	$	2,074,627		$	31,229

Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities
Accounts payable	$	109,187		$	132,696
Accrued liabilities		16,710			29,386
SBA Loan		11,183			6,128
PPP Loan		—			23,750
Due to related party		726			7,268
Convertible notes payable - related parties		—			30,000
Convertible note payable		612,212			—
Total Current Liabilities		750,018			229,228

SBA Loan - noncurrent		103,517			72,372
Convertible note payable - noncurrent		242,296			150,000
Convertible notes payable - related party - noncurrent		—			65,000
Total Liabilities		1,095,831			516,600

Commitments and Contingencies (Note 9)		460,000			—

Stockholders’ Equity (Deficit)
Preferred stock, $.0001 par value; 10,000,000 shares authorized; 0 and 2,300,000 shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively		—			230
Common stock, $0.0001 par value; 1,000,000,000 shares authorized; 105,301,722 shares issued and 105,286,622 outstanding at June 30, 2022 and 0 shares issued and outstanding as of September 30, 2021, respectively		10,531			—
Additional paid in capital		3,166,951			419,793
Treasury stock, at cost - 15,100 and 0 shares at June 30, 2022 and September 30, 2021, respectively		(18,126	)		—
Accumulated deficit		(2,640,560	)		(905,394	)
Total Stockholders’ Equity (Deficit)		518,796			(485,371	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	2,074,627		$	31,229


	For the three months ended June 30,						For the nine months ended June 30,
	2021			2020			2021		2020

REVENUES
Royalty fees	$	183,491		$	342,010		$	819,965	$	1,248,467
Marketing fund revenue		0			12,979			0		159,773
Initial franchise fees		263,854			221,347			1,002,962		720,318
Technology fees		15,284			45,354			106,717		131,168
Merchandise sales		0			0			0		0
TOTAL REVENUES		462,629			621,690			1,929,644		2,259,726

OPERATING EXPENSES
Salaries and payroll taxes and stock-based compensation		104,781			175,240			349,551		454,006
Professional, legal and consulting fees		100,729			128,267			394,931		479,144
Bad debt expense		(19,003	)		136,182			83,936		165,550
Other general and administrative expenses		294,161			82,156			486,934		191,934
Franchise commissions		59,247			62,628			231,675		182,337
Franchise training and expenses		0			0			0		3,294
Depreciation		31,253			26,281			85,859		81,107
General advertising		15,509			658			18,148		5,963
Franchise marketing fund expense		0			12,979			0		159,773
TOTAL OPERATING EXPENSES		586,677			624,391			1,651,034		1,723,108

OPERATING INCOME (LOSS)		(124,048	)		(2,701	)		278,610		536,618

OTHER INCOME (EXPENSE)		712			(565	)		2,663		15,202

INCOME (LOSS) BEFORE INCOME TAXES		(123,336	)		(3,266	)		281,273		551,820

PROVISION FOR INCOME TAXES		0			0			0		0

NET INCOME (LOSS)	$	(123,336	)	$	(3,266	)	$	281,273	$	551,820

NET INCOME PER SHARE
Basic	$	(0.01	)	$	0		$	0.02	$	0.04
Diluted	$	(0.01	)	$	0		$	0.02	$	0.04
Basic weighted average number of common shares outstanding		13,240,938			13,444,592			13,189,910		13,477,299
Diluted weighted average number of common shares outstanding		13,415,151			13,444,592			13,415,151		13,477,299


	Three Months Ended						Nine Months Ended
	June 30,						June 30,
	2022			2021			2022			2021

REVENUES
Insurance revenue	$	5,922		$	68,067		$	44,692		$	204,295
Rental revenue		15,711			139,925			80,008			469,250
Initial fee revenue		—			1,809			4,126			22,173
Miscellaneous Revenue		2,727			3,073			7,454			10,419
Vehicle owner share		(11,424	)		(122,065	)		(74,313	)		(417,950	)
Driver and dealer insurance cost		(5,852	)		(58,974	)		(33,237	)		(194,987	)
TOTAL REVENUES		7,084			31,835			28,730			93,200

COST OF GOODS SOLD		10,694			9,859			21,789			30,214
GROSS PROFIT (LOSS)		(3,610	)		21,976			6,941			62,986

OPERATING EXPENSES
Salaries and payroll taxes		104,525			46,500			294,600			147,551
Professional fees		175,460			173,077			541,857			231,554
General and administrative		24,851			13,331			54,697			44,570
Software development		16,442			18,868			45,827			66,540
Selling expense		9,266			432			14,155			2,812
TOTAL OPERATING EXPENSES		330,544			252,208			951,136			493,027

OPERATING LOSS		(334,154	)		(230,232	)		(944,195	)		(430,041	)

OTHER INCOME (EXPENSE)
Loss on contingency liability		(60,000	)		—			(460,000	)		—
Gain on PPP loan forgiveness		—			—			24,148			—
Amortization debt discount		(228,182	)		—			(315,865	)		—
Interest expense		(20,030	)		(3,752	)		(36,970	)		(5,338	)
Interest expense - related parties		—			(1,421	)		(2,296	)		(3,943	)
Interest income	��	7			—			12			—
TOTAL OTHER EXPENSE		(308,205	)		(5,173	)		(790,971	)		(9,281	)

LOSS BEFORE INCOME TAXES		(642,359	)		(235,405	)		(1,735,166	)		(439,322	)
Provision for income taxes		—			—			—			—
NET LOSS	$	(642,359	)	$	(235,405	)	$	(1,735,166	)	$	(439,322	)

NET LOSS PER SHARE:
Basic and diluted net loss per share	$	(0.01	)	$	—		$	(0.06	)	$	—
Basic and diluted weighted average number of common shares outstanding		87,135,481			—			31,381,342			—


	Series A												Additional												Total Stockholders’
	Preferred Stock						Common Stock						Paid in			Treasury Stock						Accumulated			Equity
	Shares			Amount			Shares			Amount			Capital			Shares			Amount			Deficit			(Deficit)

Balance - September 30, 2021		2,300,000		$	230			—		$	—		$	419,793			—		$	—		$	(905,394	)	$	(485,371	)

Stock based compensation		—			—			—			—			173,077			—			—			—			173,077
Net loss		—			—			—			—			—			—			—			(251,721	)		(251,721	)
Balance - December 31, 2021		2,300,000			230			—			—			592,870			—			—			(1,157,115	)		(564,015	)

Stock based compensation		—			—			—			—			115,384			—			—			—			115,384
Preferred stock issued for conversion of debt- related party		52,284			5			—			—			104,559			—			—			—			104,564
Preferred stock issued for conversion of debt		129,809			13			—			—			288,445			—			—			—			288,458
Preferred stock issued for exercise of stock option - related party		112,500			11			—			—			84,364			—			—			—			84,375
Reorganization		—			—			13,716,041			1,372			1,737,621			(15,100	)		(18,126	)		—			1,720,867
Common stock and warrant issued in connection with promissory note		—			—			4,000,000			400			344,296			—			—			—			344,696
Net loss		—			—						—			—			—			—			(841,086	)		(841,086	)
Balance - March 31, 2022		2,594,593			259			17,716,041			1,772			3,267,539			(15,100	)		(18,126	)		(1,998,201	)		1,253,243

Conversion of preferred stock to common stock		(2,594,593	)		(259	)		88,085,681			8,809			(8,550	)		—			—			—			—
Cancellation of common shares against note receivable		—			—			(500,000	)		(50	)		(99,950	)		—			—			—			(100,000	)
Debt discount recorded for warrants issued in connection with convertible notes		—			—			—			—			7,912			—			—			—			7,912
Net loss		—			—						—			—			—			—			(642,359	)		(642,359	)
Balance - June 30, 2022		—		$	—			105,301,722		$	10,531		$	3,166,951			(15,100	)	$	(18,126	)	$	(2,640,560	)	$	518,796


											Additional					Total Stockholder’s
	Treasury Stock						Common stock				Paid-in		Accumulated			Equity
	Shares			Value			Shares		Amount		Capital		Deficit			(Deficit)

Balance, March 31, 2021		(65,100	)	$	(34,626	)		13,240,938	$	1,322	$	3,020,092	$	(4,369,104	)	$	(1,382,316	)

Net Income		—			—			—		—		—		(123,336	)		(123,335	)

Balance, June 30, 2021		(65,100	)	$	(34,626	)		13,240,938	$	1,322	$	3,020,092	$	(4,492,440	)	$	(1,505,652	)


	For the nine months ended
	June 30,
	2021			2020

Cash flows from operating activities:
Net Income	$	281,273		$	551,820
Adjustments to reconcile net loss to net cash provided by/(used in) operating activities:
Depreciation		85,859			81,107
Gain on sale of assets held for sale		0			(20,602	)
Bad debt expense		83,936			29,368
Stock based compensation		30,000			2,500
Changes in operating assets and liabilities:
Accounts receivable		(14,188	)		(208,150	)
Prepaid expenses		10,452			(6,585	)
Prepaid commission expense		231,675			176,916
Deposits		833			(833	)
Accounts payable		224,767			(32,750	)
Accrued liabilities		13,845			(92,017	)
Deferred Revenue		(992,006	)		(655,051	)
Accrued marketing fund		(14,690	)		(64,790	)
Net cash provided by (used in) operating activities		(58,244	)		(239,067	)
Cash flows from investing activities:
Acquisition of property and equipment		(2,996	)		0
Sale of assets held for sale		0			100,231
Collection of Notes receivable		2,484			(6,987	)
Net cash provided by (used in) investing activities		(512	)		93,244
Cash flows from financing activities
Proceeds from PPP Loan		0			119,980
Net cash provided by (used in) financing activities		0			119,980
Net change in cash, cash equivalents and restricted cash		(58,756	)		(25,843	)
Cash, cash equivalents and restricted cash at beginning of period		447,853			540,021
Cash, cash equivalents and restricted cash at end of period	$	389,097		$	514,178

~~Property and Equipment Useful Lifes~~
~~Fixed Assets~~		~~Useful Life~~
~~Equipment~~		5 ~~years~~
~~Furniture and Fixtures~~		5 ~~years~~
~~Property Improvements~~		15-40 ~~years~~
~~Software~~		3 ~~years~~

~~Level 1:~~	~~Quoted prices in active markets for identical assets or liabilities.~~
~~Level 2:~~	~~Quoted prices in active markets for similar assets and liabilities and inputs that are observable for the asset or liability.~~
~~Level 3:~~	~~Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.~~

Summary of deferred revenue activity
Balance, September 30, 2020	$	3,212,679
Initial franchise fees collected		10,956
Deferred revenue recognized into revenue		(1,002,962	)
Balance, June 30, 2021		2,220,673
Current portion		(746,084	)
Deferred revenue, net of current portion	$	1,474,589

Summary of performance obligations
Twelve months ended June 30, 2022	$	746,084
Twelve months ended June 30, 2023		657,817
Twelve months ended June 30, 2024		451,429
Twelve months ended June 30, 2025		191,089
Twelve months ended June 30, 2026 and thereafter		174,254
Total	$	2,220,673

Summary of accrued marketing fund for advertising fund revenue accounts
Marketing fund liability (receivable), September 30, 2020		—
Marketing fund billings recognized into income		—
Marketing funds recognized into expense		—
Marketing funds advanced by the Company		(14,690	)
Marketing fund liability (receivable), June 30, 2021	$	(14,690	)

Summary of contract asset activity
Balance, September 30, 2020	$	724,878
Commissions paid		—
Commissions recognized into expense		(231,675	)
Balance, June 30, 2021		493,203
Current portion		(174,795	)
Prepaid commission expense, net of current portion	$	318,408

Schedule of anti dilutive securities excluded from computation of earnings per share
	June 30,		June 30,
	2022		2021
Series A Convertible Preferred Stock		—		78,084,333
Convertible notes		1,250,000		17,207
Convertible notes-related party		—		72,368
Warrants		1,538,571		—
Stock options		—		300,000
		2,788,571		78,473,908

Schedule of assets acquired and liabilities assumed
Consideration:
Convertible Preferred A stock	$	1,720,867

Assets acquired and liabilities assumed:
Cash		70,361
Note receivable		100,000
Accounts payable and accrued liabilities		(6,600	)
Total Goodwill	$	1,557,106

	●	52,284 shares issued for conversion of debt – related party and accrued interest of $104,564
	●	129,809 shares issued for conversion of debt and accrued interest of $288,458
	●	112,500 shares issued for exercise of stock option - related party as stock-based compensation to related parties

Schedule of assumptions used in valuing the stock options and warrants
	June 30,
	2022
Stock price at time of issuance	$	0.092 – 0.10
Exercise price	$	0.30
Expected term		5 years
Expected average volatility		116 – 120	%
Expected dividend yield		—
Risk-free interest rate		1.84 – 3.35	%

Summary of common stock warrants activity
	Warrants			Weighted-Average		Weighted-Average
	Outstanding			Exercise Price		Life (years)
Balance as of October 1, 2021		—		$	—		—
Issuance		1,125,000		$	0.30		5.00
Warrants assumed from DIA Holdings		1,882,793		$	0.29		0.24
Exercised		—		$	—		—
Expired		(1,764,000	)	$	0.30		—
Balance as of June 30, 2022		1,243,793		$	0.29		4.27

	●	We have not established and/or maintained adequately designed internal controls in order to prevent or detect and correct material misstatements to the financial statements, including internal controls related to complex or nonroutine transactions.

	●	~~We lack the necessary accounting resources with sufficient SEC reporting experience, US GAAP knowledge and accounting experience.~~

		~~Exhibit No.~~Incorporated byReference		Filed orFurnished
ExhibitNumber	Exhibit Description	Form	Exhibit	FilingDate	Herewith

31.1	Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002				x
31.2	Certification of Principal Financial Officer, pursuant to ~~Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Exchange Act of 1934, as amended.~~

~~31.2~~		~~Certification of Principal Financial Officer pursuant to 18 U.S.C.~~ Section ~~1350, as adopted pursuant to Section 906~~302 of the Sarbanes-Oxley Act of ~~2002.~~2002
		x
32.1		~~Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities Act of 1934, as amended.~~

~~32.2~~		Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.				x
32.2	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002				x
~~101.INS~~ 101	Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.	~~XBRL Instance Document~~			x

~~101.SCH~~ 104	Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.	~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document~~x

	~~CREATIVE LEARNING CORPORATION~~DRIVEITAWAY HOLDINGS, INC.

~~Dated: August 16, 2021~~Date: September 7, 2022	By:	~~/s/ Mike Elkin~~/s/ John Possumato
		John Possumato, Chief Executive Officer
		(Principal Executive Officer)

Date: September 7, 2022	By:	/s/ Mike Elkin
		Mike Elkin, Chief Financial Officer
		~~Chief Accounting Officer~~ (Principal Financial and Accounting Officer)

	~~CREATIVE LEARNING CORPORATION~~

~~Dated: August 16, 2021~~	~~By:~~	~~/s/ Rod K. Whiton~~
		~~Rod K. Whiton~~
		President (Principal Executive Officer)