UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transitional period from _____________ to ______________

Commission File Number: 000-52883

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. Employer Identification No.)

3401 Market Street,Suite 200/201,Philadelphia, PA 19104

(Address of principal executive offices) (Zip Code)

(856) 577-2763

~~(Registrant’s~~ (Registrant’s telephone number, including area code)

_____________________n/a________________________

~~(Former~~ (Former name or former address if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the 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 such files).

Yes ☒ No ☐

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

Large accelerated Filer	☐	Accelerated Filer	☐
Non-accelerated Filer	☒	Small Reporting Company	☒
		Emerging growth company	☐

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).

Yes ☐ No ☒

~~Yes ☐~~ No ☒

As of ~~February 20, 2023,~~March 8, 2024, there were 106,551,722 shares of common stock outstanding.

TABLE OF CONTENTS

		Page

	PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements	F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4.	Controls and Procedures	67

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	79
Item 1A.	Risk Factors	79
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79
Item 3.	Defaults Upon Senior Securities	89
Item 4.	Mine Safety Disclosures	89
Item 5.	Other Information	89
Item 6.	Exhibits	810

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DRIVEITAWAY HOLDINGS, INC.

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, ~~2022~~2023

		Page

Condensed Consolidated Balance Sheets as of December 31, 2023 (Unaudited) and September 30, 2023		F-2

Condensed Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022 (Unaudited)		F-3

Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended December 31, 2023 and 2022 (Unaudited)		F-4

Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2023 and 2022 (Unaudited)		F-5

Notes to the Condensed Consolidated Financial Statements ~~Unaudited~~(Unaudited)		F-6

~~F-1~~

DriveItAway Holdings, Inc.

Condensed Consolidated Balance Sheets


	December 31,			September 30,
	2023			2023
	(Unaudited)
Assets
Current assets
Cash	$	61,167		$	4,632
Restricted cash		—			18,559
Accounts receivable, net		7,532			11,584
Total current assets		68,699			34,775

Fixed assets, net		176,129			184,228
Intangible assets, net		10,415			11,787
Total Assets	$	255,243		$	230,790

Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts payable and accrued liabilities	$	794,498		$	664,707
Accrued interest – related parties		6,812			4,918
Deferred revenue		4,967			7,233
Customer deposits		1,339			2,234
Due to related parties		25,080			25,080
Promissory notes payable, net of debt discount		12,509			27,437
Promissory notes payable, in default		20,000			12,500
Promissory notes payable - related parties, in default		42,500			50,000
Convertible notes payable, net of debt discount		1,312,747			1,082,654
Derivative liability		585,546			1,317
Total Current Liabilities		2,805,998			1,878,080

SBA Loan - noncurrent		114,700			114,700
Convertible note payable - noncurrent, net of debt discount		—			175,720
Promissory notes payable - noncurrent		4,333			16,649
Total Liabilities		2,925,031			2,185,149

Commitments and Contingencies		—			—

Stockholders’ Deficit
Preferred stock, $.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.0001 par value; 1,000,000,000 shares authorized; 106,551,722 shares issued and 106,551,722 outstanding at December 31, 2023 and September 30, 2023, respectively		10,656			10,656
Additional paid in capital		1,364,007			1,364,007
Treasury stock, at cost - 15,100 shares at December 31, 2023 and September 30, 2023		(18,126	)		(18,126	)
Accumulated deficit		(4,026,325	)		(3,310,896	)
Total Stockholders’ Deficit		(2,669,788	)		(1,954,359	)
Total Liabilities and Stockholders’ Deficit	$	255,243		$	230,790

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

DriveItAway Holdings, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

December 31, September 30,
2022 2022
Assets
Current assets
Cash $ 40,130 $ 127,109
Accounts receivable, net 10,376 6,082
Prepaid expenses 10,280 10,498
Total current assets 60,786 143,689

Vehicles, net 209,268 149,428
Website development, net 15,877 —
Total Assets $ 285,931 $ 293,117

Liabilities and Stockholders’ Deficit
Current Liabilities
Accounts payable $ 196,557 $ 198,065
Accrued liabilities 81,378 29,044
SBA Loan 6,442 5,840
Deferred revenue 2,588 2,101
Due to related party 80 80
Convertible note payable 749,285 750,000
Derivative liability 592,788 115,009
Total Current Liabilities 1,629,118 1,100,139

SBA Loan - noncurrent 107,692 108,860
Convertible note payable – noncurrent, net 352,842 183,340

Total Liabilities 2,089,652 1,392,339

Commitments and Contingencies — —

Stockholders’ Deficit
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued and outstanding — —
Common stock, $0.0001 par value; 1,000,000,000 shares authorized; 106,551,722 shares issued and 106,536,622 outstanding at December 31, 2022 and 105,301,722 shares issued and 105,286,622 outstanding as of September 30, 2022, respectively 10,656 10,531
Additional paid in capital 1,305,516 1,289,132
Treasury stock, at cost - 15,100 shares at December 31, 2022 and September 30, 2022 (18,126 ) (18,126 )
Accumulated deficit (3,101,767 ) (2,380,759 )
Total Stockholders’ Deficit (1,803,721 ) (1,099,222 )
Total Liabilities and Stockholders’ Deficit $ 285,931 $ 293,117


	Three Months Ended
	December 31,
	2023			2022
Revenues	$	96,503		$	48,083
Cost of Goods Sold		85,679			39,872
Gross Profit (Loss)		10,824			8,211

Operating Expenses
Salaries and payroll taxes		66,625			81,875
Professional fees		107,015			100,430
General and administrative		20,314			19,430
Software development		11,880			13,358
Advertising and marketing		176			8,551
Total Operating Expenses		206,010			223,644

Operating Loss		(195,186	)		(215,433	)

Other Income (Expenses)
Gain (loss) on change in fair value of derivative liability		(335,277	)		(454,655	)
Amortization debt discount		(35,407	)		(13,420	)
Interest expense		(146,905	)		(37,500	)
Interest expense - related parties		(2,654	)		—
Total Other Income (Expense)		(520,243	)		(505,575	)

Loss Before Income Tax		(715,429	)		(721,008	)
Provision for income taxes		—			—
Net Loss	$	(715,429	)	$	(721,008	)

Net Loss Per Common Share
Basic and diluted net loss per common share	$	(0.01	)	$	(0.01	)
Basic and diluted weighted average number of common shares outstanding		106,551,722			106,119,657

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

~~F-2~~

F-3

DriveItAway Holdings, Inc.

Condensed Consolidated ~~Statements~~Statement of ~~Operations~~Changes in Stockholders’ Deficit

(Unaudited)

Three Months Ended
December 31,
2022 2021
Revenues
Insurance revenue $ 9,996 $ 23,883
Rental revenue 45,152 34,498
Initial Fee Revenue — 4,126
Miscellaneous Revenue 1,695 2,900
Vehicle owner share 542 (38,790 )
Driver and dealer insurance cost (9,302 ) (16,000 )
Total Revenues 48,083 10,617
Cost of Goods Sold 39,872 5,686
Gross Profit 8,211 4,931

Operating Expenses
Salaries and payroll taxes 81,875 70,125
Professional fees 100,430 173,077
General and administrative 19,430 12,522
Software development 13,358 15,679
Selling expense 8,551 2,501
Total Operating Expenses 223,644 273,904
Operating Loss (215,433 ) (268,973 )
Other income (expenses)
Loss on change in fair value of derivative liability (454,655 ) —
Gain on PPP loan forgiveness — 24,148
Amortization debt discount (13,420 ) —
Interest expense (37,500 ) (5,459 )
Interest expense - related parties — (1,437 )
Total Other Income (Expense) (505,575 ) 17,252

Loss Before Income Tax (721,008 ) (251,721 )
Provision for income taxes — —
Net Loss $ (721,008 ) $ (251,721 )

Net Loss Per Common Share
Basic and diluted net loss per common share $ (0.01 ) $ (0.11 )
Basic and diluted weighted average number of common shares outstanding 106,119,657 2,300,000


					Additional											Total
	Common Stock				Paid in		Treasury Stock						Accumulated			Stockholders’
	Shares		Amount		Capital		Shares			Amount			Deficit			Deficit

Balance - September 30, 2023		106,551,722	$	10,656	$	1,364,007		(15,100	)	$	(18,126	)	$	(3,310,896	)	$	(1,954,359	)

Net loss		—		—		—		—			—			(715,429	)		(715,429	)
Balance - December 31, 2023		106,551,722	$	10,656	$	1,364,007		(15,100	)	$	(18,126	)	$	(4,026,325	)	$	(2,669,788	)

					Additional											Total
	Common Stock				Paid in		Treasury Stock						Accumulated			Stockholders’
	Shares		Amount		Capital		Shares			Amount			Deficit			Deficit

Balance – September 30, 2022		105,301,722	$	10,531	$	1,289,132		(15,100	)	$	(18,126	)	$	(2,380,759	)	$	(1,099,222	)
Common stock issued in connection with promissory note		1,000,000		100		1,409		—			—			—			1,509
Stock based compensation		250,000		25		14,975		—			—			—			15,000
Net loss		—		—		—		—			—			(721,008	)		(721,008	)
Balance – December 31, 2022		106,551,722	$	10,656	$	1,305,516		(15,100	)	$	(18,126	)	$	(3,101,767	)	$	(1,803,721	)

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

~~F-3~~

DriveItAway Holdings, Inc.

Condensed Consolidated ~~Statement~~Statements of ~~Changes in Stockholders’ Deficit~~Cash Flows

(Unaudited)

Additional Total
Common Stock Paid in Treasury Stock Accumulated Stockholders’
Shares Amount Capital Shares Amount Deficit Deficit
Balance - September 30, 2022 — — 105,301,722 $ 10,531 $ 1,289,132 (15,100 ) $ (18,126 ) $ (2,380,759 ) $ (1,099,222 )
Common stock issued in connection with promissory note 1,000,000 100 1,409 — — — 1,509
Stock based compensation 250,000 25 14,975 — — — 15,000
Net loss — — — — — — (721,008 ) (721,008 )
Balance - December 31, 2022 — — 106,551,722 $ 10,656 $ 1,305,516 (15,100 ) $ (18,126 ) $ (3,101,767 ) $ (1,803,721 )

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


	For the Three Months Ended
	December 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(715,429	)	$	(721,008	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation		—			15,000
Loss on change in fair value of derivative liability		335,277			454,655
Amortization and depreciation		9,471			7,653
Amortization of debt discount		35,407			13,420
Financing Fee		98,202			—
Changes in operating assets and liabilities:
Prepaid website development		—			(10,280	)
Accounts receivable		4,052			(4,294	)
Deferred revenue		(2,266	)		487
Customer deposits		(895	)		—
Accounts payable and accrued liabilities		129,791			(1,508	)
Accrued liabilities- related party		1,894			52,334
Net Cash used in Operating Activities		(104,496	)		(193,541	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of intangible assets		—			(5,833	)
Purchase of fixed assets		—			(67,039	)
Net Cash used in Investing Activities		—			(72,872	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible notes payable		217,222			200,000
Proceeds from promissory notes payable		—			—
Repayment of promissory notes payable		(28,278	)		(566	)
Debt issuance costs		(46,472	)		(20,000	)
Net Cash provided by Financing Activities		142,472			179,434

Net change in cash and restricted cash		37,976			(86,979	)
Cash and restricted cash, beginning of period		23,191			127,109
Cash and restricted cash, end of period	$	61,167		$	40,130

Supplemental cash flow information
Cash paid for interest	$	1,698		$	31,667
Cash paid for taxes	$	—		$	—

Non-cash Investing and Financing transactions:
Common stock in connection with promissory note	$	—		$	1,509
Recognition of derivative liability as debt discount	$	150,750		$	23,124
Prepaid expenses reclassified to website development	$	—		$	10,498
Reclassification of Promissory notes payable - related parties to Promissory notes payable	$	7,500		$	—

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

statements

~~F-4~~

~~DriveItAway Holdings, Inc.~~

~~Condensed Consolidated Statements of Cash Flows~~

~~(Unaudited)~~

Three Months Ended
December 31,
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (721,008 ) $ (251,721 )
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on PPP Loan Forgiveness — (24,148 )
Stock-based compensation 15,000 173,077
Gain on change in fair value of derivative liability 454,655 —
Depreciation and amortization 7,653 —
Amortization of debt discount 13,420 —
Changes in operating assets and liabilities:
Prepaid expenses (10,280 ) —
Accounts receivable (4,294 ) 2,478
Deferred revenue 487 —
Accounts payable (1,508 ) (46,491 )
Accrued liabilities 52,334 5,460
Accrued liabilities - related party — 1,437
Net Cash used in Operating Activities (193,541 ) (139,908 )

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of vehicles (67,039 ) —
Purchase of intangible assets (5,833 ) —
Net Cash used in Investing Activities (72,872 ) —

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible debt 180,000 100,000
Proceeds from the SBA Loan — 36,200
Repayment of SBA Loan (566 ) —
Net Cash provided by Financing Activities 179,434 136,200

Net change in cash (86,979 ) (3,708 )
Cash, beginning of period 127,109 9,774
Cash, end of period $ 40,130 $ 6,066

Supplemental cash flow information
Cash paid for interest $ 31,667 $ —
Cash paid for taxes $ — $ —

Non-cash Investing and Financing transactions:
Common stock in connection with promissory note $ 1,509 $ —
Recognition of derivative liability as debt discount $ 23,124 $ —
Debt discount in connection with original issue discount $ 20,000 $ —
Prepaid expenses reclassified to intangible assets $ 10,498 $ —

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

~~F-5~~

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, ~~2022~~2023

Unaudited

Note 1 – Organization, Description of Business and Going Concern

Nature of Organization

DriveItAway Holdings, Inc. (“~~DIA Holdings”~~DIA”, “the Company”, “we” or “us”) was formed in Delaware on March 8, 2006 as B2 Health, Inc. On July 2, 2010, the Company acquired BFK Franchise Company, LLC (“BFK”), a Nevada limited liability company, and concurrently changed its name to Creative Learning Corporation. On February 24, 2022, the Company acquired DriveItAway, Inc., and on March 18, 2022, disposed of BFK and its other subsidiaries involved in the learning business. On April 18, 2022, the name was changed to DriveItAway Holdings, Inc.

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~~.www.driveitaway.com.

Going Concern

The Company’s financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) of the United States, applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. During the ~~year~~period ended December 31, ~~2022,~~2023, the Company had a net loss of $~~721,008~~715,429 and cash used in operating activities of $~~193,541~~104,496. As of December 31, ~~2022,~~2023, the Company had an accumulated deficit of $~~3,101,767~~4,026,325. The Company has not established sufficient revenue to cover its operating costs and will require additional capital to continue its operating plan. The ability of the Company to continue as a going concern depends on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations. These factors raise substantial doubt about its ability to continue as a going concern.

~~In order to~~To continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan to obtain such resources for the Company includes: sales of equity instruments; traditional financing, such as loans; and obtaining capital from management and significant stockholders sufficient to meet its minimum operating expenses. However, management cannot provide any assurance that the Company will be successful in accomplishing this plan.

There is no assurance that the Company will be able to obtain sufficient additional funds when needed or that such funds, if available, will be obtainable on terms satisfactory to the Company. In addition, profitability will ultimately depend upon the level of revenues received from business operations. However, there is no assurance that the Company will attain profitability. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

F-6

DriveItAway Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements
December 31, 2023
Unaudited

Note 2 - Summary of Significant Accounting Policies

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 interim financial statements have been prepared in accordance with GAAP for interim financial information in accordance with 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 normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended December 31, ~~2022,~~2023, are not necessarily indicative of the results for the full year. While management of the Company believes that the disclosures presented herein are adequate and not misleading, these interim financial statements should be read in conjunction with the audited financial statements and the footnotes thereto for the year ended September 30, ~~2022,~~2023, contained in the Company’s Form 10K, as filed on ~~January 13, 2023.~~March 8, 2024.

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.

Use of Estimates

The preparation of consolidated financial statements in accordance with 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The significant estimates and assumptions made by management include allowance for doubtful accounts, allowance for deferred tax assets, and fair 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.

Foreign Currency Translation

Foreign currency translation is recognized in accordance with ASC 830. The Company’s functional currency is USD, therefore all amounts of revenues received from foreign accounts are translated to the Company’s functional currency (USD) upon receipt and thereby, translation gains and losses are recognized upon receipt.

Cash and Cash Equivalents

The Company considers all highly liquid securities with original maturities of three months or less when acquired, to be cash equivalents. As of December 31, ~~2022,~~2023, and September 30, ~~2022,~~2023, the Company had cash of $~~40,130~~61,167 and $~~127,109~~4,632, and restricted cash of $0 and $18,559, respectively and did not have any cash equivalents.

Restricted Cash

As of December 31, 2023 and September 30, 2023, the Company had $0 and $18,559 in restricted cash that is held by AJB Capital LLC, for funds advanced by them, but are to be used for future payment for professional fees.

F-7

DriveItAway Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements
December 31, 2023
Unaudited

Accounts Receivable

The Company reviews accounts 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 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. Accounts and receivables are written off against the allowance after all attempts to collect a receivable have failed. The Company believes its allowances for doubtful accounts as of December 31, ~~2022~~2023, and September 30, ~~2022~~2023 are adequate, but actual write-offs could exceed the recorded allowance. As of December 31, ~~2022~~2023, and September 30, ~~2022~~2023 the balances in the allowance for doubtful accounts was ~~$0.~~$0.

Fixed Assets

Fixed assets are recorded at cost and depreciated using the straight-line method over the estimated useful lives, currently seven (7) years. Maintenance and repair costs are charged to expense as incurred. Major improvements, which extend the useful life of the related asset, are capitalized. Upon disposal of a fixed asset, we record a gain or loss based on the difference between the proceeds received and the net book value of the disposed asset. We remove fully depreciated assets from the cost and accumulated depreciation amounts disclosed.

Intangible Assets

Our intangible assets include website and software development costs. The costs incurred in the preliminary stages of website and software development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental and deemed by management to be significant, are capitalized and amortized on a straight-line basis over their estimated useful lives. Maintenance and enhancement costs, including those costs in the post-implementation stages, are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the website or software that result in added functionality, in which case the costs are capitalized and amortized on a straight-line basis over the estimated useful lives. Amortization expense related to capitalized website and software development costs is included in operating expenses in our consolidated statements of operations.

Capitalized development activities placed in service are amortized over the expected useful lives of those releases, currently estimated at three (3) years. The estimated useful lives of website and software development activities are reviewed frequently and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades and/or enhancements to the existing functionality. We remove fully amortized website and software development costs from the cost and accumulated amortization amounts disclosed.

Construction-in-progress primarily consists of website development costs that are capitalizable, but for which the associated applications have not been placed in service.

Leases

The Company’s operating lease portfolio for the period ended December 31, 2023 and September 30, 2023, includes the vehicle leases from third parties and the Company’s owned vehicles that are leased to the customers under operating leases. The contracts for these operating leases are short-term in nature with terms less than twelve (12) months. The Company has elected as an accounting policy not to apply the recognition requirements in ASC 2016-02, Leases (“ASC 842”) to short-term leases. The Company recognizes the lease payments for short-term leases on a straight-line basis over the lease term. As of December 31, 2023, the Company did not have leases that qualified as ROU assets.

F-6

DriveItAway Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements
December 31, 2023
Unaudited

~~Financial Instruments~~Fair Value Measurements

The Company follows ASC 820, “Fair Value Measurements and Disclosures”, which defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

~~F-7~~

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying amounts shown of the Company’s financial instruments including cash, accounts receivable, prepaid expense, accounts payable, and accrued liabilities approximate fair value due to their short-term nature.

~~Vehicles~~All financial assets and liabilities are approximate to their fair value. Derivative liabilities are valued at Level 3.

Vehicles are recorded at cost and depreciated using the straight-line method over the estimated useful lives of seven (7) years. Maintenance and repair costs are charged to expense as incurred. Major improvements, which extend the useful life of the related asset, are capitalized. Upon disposal of a vehicle, we record a gain or loss based on the difference between the proceeds received and the net book value of the disposed vehicle. We remove fully depreciated vehicles from the cost and accumulated depreciation amounts disclosed.

Schedule of fair value of financial assets and liabilities
			Fair Value Measurements at December 31, 2023 using:
	December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Liabilities	$	—		—		—	$	—
Derivative Liabilities	$	585,546		—		—	$	585,546

~~Website and Software Development Costs~~


			Fair Value Measurements at September 30, 2023 using:
	September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Liabilities	$	—		—		—	$	—
Derivative Liabilities	$	1,317		—		—	$	1,317

The costs incurred in the preliminary stages of website and software development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental and deemed by management to be significant, are capitalized and amortized on a straight-line basis over their estimated useful lives. Maintenance and enhancement costs, including those costs in the post-implementation stages, are typically expensed as incurred, unless such costs relate to substantial upgrades and enhancementsDriveItAway Holdings, Inc.

Notes to the website or software that result in added functionality, in which case the costs are capitalized and amortized on a straight-line basis over the estimated useful lives. Amortization expense related to capitalized website and software development costs is included in operating expenses in our consolidated statements of operations.Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

~~Construction-in-progress primarily consists of website development costs that are capitalizable, but for which the associated applications have not been placed in service.~~

Derivative Financial Instruments

The fair value of an embedded conversion option that is convertible into a variable amount of shares and warrants that include price protection reset provision features are deemed to be “down-round protection” and, therefore, do not meet the scope exceptionCompany accounts for ~~treatment as a~~their derivative ~~under~~financial instruments in accordance with ASC 815 “Derivatives and Hedging”, since “down-round protection” is not an input into the calculation of the fair value of the conversion option and warrants and cannot be considered “indexed to the Company’s own stock” which is a requirement for the scope exception as outlined under ASC 815.

~~F-8~~

~~The accounting treatment of derivative financial instruments requires that the Company record~~ therefore any embedded conversion options and warrants accounted for as derivatives are to be recorded at their fair values as of the inception date of the agreement and at fair value as of each subsequent balance sheet date. Any change in fair value is recorded as non-operating, non-cash income or expense for each reporting period at each balance sheet date. The Company reassesses the classification of its derivative instruments at each balance sheet date. If the classification changes as a result of events during the period, the contract is reclassified as of the date of the event that caused the reclassification.

The Black-Scholes option valuation model was used to estimate the fair value of the embedded conversion options and warrants. The model includes subjective input assumptions that can materially affect the fair value estimates. ~~The expected volatility is estimated based on the most recent historical period of time, of our common stock, equal to the weighted average life of the options.~~

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 (“platform”), operates in the ~~retail~~ automotive rental industry. The Company assists subprime and deep subprime candidates ~~with little~~to rent/lease vehicles on a short-term basis, generally on a weekly or, ~~no down payment,~~ in ~~purchasing~~some cases monthly, basis under a Pay-As You-Go program. Through its platform the ~~used~~Company will track vehicle ~~of his/her choice by first starting~~values and reduce vehicle pricing through the customers usage payments to show drivers a vehicle purchase price should they be interested in ~~an app based, turnkey rental, through participating franchise and independent car dealers.~~ buying the vehicle, at which time the customer would procure financing if the Company determined they wanted to sell the vehicle at the listed purchase price.

During the ~~years~~periods ended ~~September 30,~~December 31, 2023, and 2022, ~~and 2021,~~ the Company derived its ~~rental~~ revenue from ~~contract revenue share~~signed contracts for vehicle rentals between ~~participating franchise and independent~~the Company, other leasing companies, or car ~~dealers~~dealerships and individual car rental customers (“customers”). ~~In conjunction~~

Customers book a vehicle through the Company’s platform, starting first 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 vehicle. When the customer books the vehicle, per the terms of the individual rental agreements, the customer shall pay a stated rental rate, a stated insurance amount, an initial non-refundable fee, and, in some cases, a refundable deposit. At the end of the usage cycle, the system calculates miles driven and if the customer has driven more than the prorated, included amount, they pay extra usage/mileage fees. In instances when a customer pays late, they pay a late fee and in cases of incurring charges for tolls they pay for the toll costs incurred. Additionally, contracts may be extended (a new contract is signed) at which time the credit card on file for the customer will be charged at the beginning of the contract extension period for rental rate and insurance amount for the new extension period.

~~The~~Vehicles available in the platform can be owned or leased by the Company or made available through arrangements with independent car dealerships (“dealerships”). For vehicles owned or leased by the Company, the Company’s performance obligation for rental revenue is to provide customers with a vehicle and an application to track vehicle rental arrangements. For vehicles made available through dealerships the Company’s performance obligation for rental revenue is to provide an application to track ~~car~~vehicle rental arrangements and to collect cash from ~~car rental~~ customers and remit those ~~payments~~amounts to ~~participating franchise and independent car dealers,~~dealerships net of the Company’s revenue share. The ~~car~~vehicle rental arrangements are over a fixed contracted period; therefore, the Company recognizes rental revenue ratably ~~during~~over the contract term. Costs related to rental revenue include depreciation for Company owned vehicles and monthly lease payments when the vehicles are leased from a leasing company. The amount of revenue transferred to dealerships is treated as contra-revenue because the Company acts as an agent in these transactions resulting in only the Company’s ~~performance obligation~~revenue share being recognized.

The Pay-As-You-Go program manages or includes insurance. Fleet insurance is sometimes provided where the Company has a fleet policy and the driver is added to it when needed. In this case, the driver pays the cost of insurance as a separate payment in the system. This payment is a type of revenue. The Company pays the insurance company providing the coverage. This is a cost of goods sold. The Company also allows for drivers to bring their own insurance. The Company works with associated insurance brokers to write a policy for the customer for that vehicle and a separate finance company that pays for the policy in full. The Company acts as trustee in collecting installments and transferring them to the finance company. Collected payments are treated as a revenue and transfers to the finance company are treated as contra-revenue because the Company acts as an agent in these transactions. Lastly, in markets where the Company cannot support this program, drivers are allowed to bring their own insurance and pay it directly themselves with no involvement of the Company. No revenue is collected or recognized in this instance. Because any insurance revenue is ~~to collect insurance fees from~~collected at contract inception and covers 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,~~contract period the Company recognizes insurance revenue ratably ~~during~~over 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~~DriveItAway Holdings, Inc.

Notes to the ~~customer’s~~Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

Initial non-refundable fees are recognized when payment is received as the Company has no obligation to provide additional services at that point. Miscellaneous charges for extra mileage, late fees, or toll charges calculated and charged to the customer credit card 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.~~

~~F-9~~

~~DIA also generates miscellaneous revenue in a number of ways. At~~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~~cycle are recognized when the credit card charge goes ~~through and~~through. Refundable deposits are recorded ~~as miscellaneous revenue~~ on the ~~Company’s Statements~~balance sheet until deposits are returned to customers or applied to their account for fees incurred. Deferred revenue includes rental and insurance amounts that are paid for contracts that overlap a reporting date and relate to usages after that date. As of ~~Operations. Additional miscellaneous~~December 31, 2023 and September 30, 2023 refundable deposits were $1,339 and $2,234 and deferred revenue ~~represents amounts earned on telematics equipment~~was $4,967 and ~~telematics software services related to each rental vehicle used to track excess usage and charges. DIA performance obligation is to provide the equipment~~$7,233, respectively.

In addition 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 revenuecosts associated with ~~use of~~rental revenue and insurance revenue, within the ~~telematics software is recognized on a monthly basis.~~

~~The Company’s~~ Cost of Goods ~~sold consists of direct expenses, such as roadside assistance or telematics service fees, and~~Sold account the Company also records credit card fees incurred from the cash collections and cash remittance process, as a significant portion of its performance obligation is to collect and remit payments through its credit card processors.

~~General Advertising Costs~~

~~General advertising costs are expensed as incurred. The Company incurred general advertising costs for the three months ended December 31, 2022 and 2021 of $8,551~~ ~~and $2,501, respectively.~~

Stock-Based Compensation

The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date fair value of our stock, as determined by the Board of Directors. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service period. We have elected to recognize compensation expense for all options with graded vesting on a straight-line basis over the vesting period of the entire option. The determination of fair value using the Black-Scholes pricing model is affected by our stock value as well as assumptions regarding a number of complex and subjective variables, including expected stock price volatility and the risk-free interest rate.

Advertising and Marketing Costs

Advertising and marketing costs are expensed as incurred. The Company incurred advertising and marketing costs for the three months ended December 31, 2023 and 2022 of $176 and $8,551, respectively.

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.

Net Loss per Share of Common Stock

The Company calculates net loss per share in accordance with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted earnings per share of common stock are computed by dividing net earnings by the weighted average number of shares and potential shares outstanding during the period. Potential shares of common stock consist of shares issuable upon the conversion of outstanding convertible debt, preferred stock, warrants and stock option. For the ~~three months~~periods ended December 31, 2023, and December 31, 2022, ~~and 2021,~~ the ~~following~~ common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive..

Schedule of anti dilutive securities excluded from computation of earnings per share
December 31, December 31,
2022 2021
Shares Shares
Series A Convertible Preferred Stock — 78,084,333
Convertible notes 25,687,500 —
Warrants 1,225,000 —
26,912,500 78,084,333

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

Schedule of anti-dilutive shares
	December 31,		December 31,
	2023		2022
Convertible notes		1,750,000		25,687,500
Warrants		7,350,000		1,225,000
		9,100,000		26,912,500

Reclassification

Certain accounts from prior periods have been reclassified to conform to the current period presentation.

Recent Accounting Pronouncements

~~The Company~~In the period from October 2023 through March 2024 the FASB has ~~considered all~~not issued any additional accounting standards updates that have a significant impact on the Company. Management has evaluated other recently issued accounting pronouncements and does not believe ~~the adoption~~that any of ~~such~~these pronouncements will have a ~~material~~significant impact on ~~its~~our consolidated financial ~~statements.~~statements and related disclosures.

Note 3 – ~~Vehicles~~Related Party Transactions

Advances and Repayments

~~The following table summarizes~~In the ~~components~~normal course of ~~our vehicles as~~business, the Company’s management team or their affiliates will make payments on behalf of the ~~dates presented:~~Company or will provide short-term advances to the Company to cover operating expenses.

Schedule of vehiclesSchedule of vehicles
December 31, September 30,
2022 2022
Vehicle costs $ 224,903 $ 157,864
Accumulated depreciation (15,635 ) (8,436 )
Vehicles, net $ 209,268 $ 149,428

As of December 31, 2023 and September 30, 2023, the Company owed related parties for an unsecured, non-interest-bearing advance, payable on demand, in the amount of $25,080 for this activity.

~~Depreciation expense~~On March 1, 2023, the Company entered into three promissory note agreements with three related parties for a total of $50,000 with interest bearing at 15% per annum, maturity date of 120 days from issuance (June 30, 2023) and issuance of 100,000 warrants with exercise price of $0.05 that expire on March 1, 2028 (5 years). As a result of the ~~three months ended December 31, 2022~~Company’s equity environment being tainted the warrants qualified for derivative accounting and ~~2021,~~were assigned a value of $3,068 which was $~~7,199~~recorded as a derivative liability and $0~~, respectively.~~debt discount (see Note 8). During the three months ended December 31, ~~2022 and 2021, we purchased vehicles~~2023 the Company reclassified one of these promissory notes with a value of $~~67,039~~7,500 from Promissory notes payable – related party to Promissory notes payable due the note holder, a former director, no longer being considered a related party. As of December 31, 2023 and September 30, 2023, the amount due to related parties for Promissory notes payable was $42,500 and $50,000, respectively.

During the three months ended December 31, 2023 and 2022, the Company recorded related party interest expense of $2,654 and $0, respectively.

As of December 31, 2023 and September 30, 2023, the Company had defaulted on the promissory notes payable with aggregate outstanding principal of $42,500 and $50,000 respectively, and owed unpaid interest of $6,812 and $4,918, respectively.

~~F-10~~

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

Note 4 – ~~Website Development~~Fixed and Intangible Assets

The following table summarizes the components of our ~~website development~~fixed assets as of the dates presented:

Schedule of website development
December 31, September 30,
2022 2022
Website development costs $ 16,331 $ —
Accumulated depreciation (454 ) —
Website, net $ 15,877 $ —

Schedule of fixed assets
	December 31,			September 30,
	2023			2023
Vehicle costs	$	224,903		$	224,903
Accumulated depreciation		(48,774	)		(40,675	)
Vehicles, net	$	176,129		$	184,228

Depreciation expense for the three months ended December 31, 2023, and December 31, 2022, was $8,099 and $7,199, respectively.

The following table summarizes the components of our intangible assets as of the dates presented:

Schedule of intangible assets
	December 31,			September 30,
	2023			2023
Website development costs	$	16,331		$	16,331
Accumulated depreciation		(5,916	)		(4,544	)
Website, net	$	10,415		$	11,787

Amortization expense for the three months ended December 31, ~~2022~~2023, and ~~2021,~~2022, was $~~454~~1,372 and $0454, respectively. ~~During the three months ended December 31, 2022 and 2021, we incurred website development costs of $16,331~~ ~~and $~~0~~, respectively.~~

Note 5 – 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~~The company has authorized 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~~0.0001~~.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 has authorized one series of preferred stock, 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 Common Stock.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

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 Common Stock upon any matter submitted to 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 record date 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 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 option of the holder thereof.

Mandatory Conversion Right: The Company has the right to convert each share of Series A Preferred Stock into 33.94971 shares of Common Stock at any time that there are less than 200,000 shares of Series A Preferred Stock outstanding.

During ~~the year ended September 30, 2021, the Company issued~~ ~~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 consulting firm pursuant to one year consulting agreement and valued at $692,308. Stock-based compensation expense related to this issuance for~~ the three months ended December 31, 2023 and 2022 ~~and 2021 was $~~there were 0no ~~and $173,077, respectively, and was included in general and administrative expense~~.issuances of the Series A Preferred shares.

As of December 31, ~~2022~~2023 and ~~2021,~~September 30, 2023, the Company had 0no ~~and~~ ~~2,300,000~~ shares of Series A Preferred stock ~~outstanding, respectively.~~outstanding.

~~F-11~~

Common Stock

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

During the three months ended December 31, 2022, the Company ~~issued.~~ had the following common stock activity:

	●	1,000,000 shares of common stock valued at $~~1,509~~60,000 for commitment fees in conjunction with the issuance of promissory note of $750,000 ~~(see Note 6)~~.

	●	250,000 shares of common stock valued at $15,000, for consulting services, based on the fair market value of the shares on the grant date.

~~During the three months ended December 31, 2021, no common stock was issued.~~

As of December 31, ~~2022~~2023, and ~~2021,~~September 30, 2023, the Company had 106,551,722 ~~and~~ 0 common shares ~~issued, respectively.~~issued.

Treasury stock

The Company records treasury stock at cost. Treasury stock is comprised of shares of common stock purchased by the Company in the secondary market. As of December 31, ~~2022~~2023, and ~~2021,~~September 30, 2023 the Company had 15,100 ~~and 0~~ shares of treasury stock valued at $18,126~~and $0, respectively~~.

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. The transaction led to no explicit limit to the number of shares to be delivered upon future settlement of the conversion options (see Note 8), therefore the equity environment became tainted and the warrants qualified for derivative accounting and were assigned a value of $107,283 which was recorded as a derivative liability and debt discount. The warrants expire on February 24, 2027.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

In June 2022, in conjunction with a private offering and the issuance of secured promissory notes of $250,000 (see Note 8), the Company issued 125,000 warrants for $0.30 per share. As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $8,136 which was recorded as a derivative liability and debt discount. The warrants expire in June 2027.

In November 2022, in conjunction with a private offering and the issuance of secured promissory notes of $200,000, the Company issued 100,000 warrants for $0.30 per share. ~~The transaction led to no explicit limit to the number of shares to be delivered upon future settlement~~As a result of the ~~conversion options, therefore~~Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $~~3,555~~4,074 which was recorded as a derivative liability and debt discount. The warrants expire in November 2027.

In February 2023, in conjunction with a promissory note amendment which was recognized as debt extinguishment, 2,000,000 warrants with exercise price of $0.05 were issued that expire on February 24, 2027 (4 year), which replaced the original 1,000,000 warrants issued with an exercise price of $0.30 previously issued with the original promissory note. As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $21,469 which was recorded as a derivative liability and debt discount.

In March 2023, 125,000 warrants with an exercise price of $0.05 were issued that expire on March 1, 2028 (5 year). As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $3,837 which was recorded as a derivative liability and debt discount.

In December 2023, in conjunction with the issuance of a promissory note of $195,000, the Company issued warrants to purchase 5,000,000 shares of Company’s common stock for nominal exercise price of $0.00001 per share. The warrant is exercisable at any time on or after December 15, 2023 and until the warrant is exercised in full. The warrants also include various covenants of the Company for the benefit of the warrant holder and includes a beneficial ownership limitation on the holder that, in certain circumstances, may serve to restrict the holder’s right to exercise the warrants. As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $248,952 which was recorded as a derivative liability. The note was discounted to a principal balance of $0 and a debt discount of $195,000 was recorded at inception. The difference between the fair value of the warrants and the net proceeds received was recognized as interest expense.

All derivative liabilities recognized for the warrants issued 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 (see Note 8).

A summary of warrant activity during the three months ended December 31, ~~2022,~~ 2023, is as follows:

Schedule of warrant activity
	Warrants		Weighted-Average		Weighted-Average		Warrants		Weighted-Average		Weighted-Average
	Outstanding		Exercise Price		Life (years)		Outstanding		Exercise Price		Life (years)
Balance as of September 30, 2022		1,125,000	$	0.30		4.44
Balance as of September 30, 2023								2,350,000	$	0.07		3.51
Issuance		100,000	$	0.30		5.00		5,000,000		*		*
Exercised		—	$	—		—		—	$	—
Expired		—	$	—		—		—	$	—
Balance as of December 31, 2022		1,225,000	$	0.30		4.24
Balance as of December 31, 2023								7,350,000	$	0.02

*5,000,000 warrants issued on December 15, 2023 do not have an expiration date.

The intrinsic value of the warrants as of December 31, ~~2022,~~2023, is $0234,950. All of the outstanding warrants are exercisable as of December 31, ~~2022.~~2023.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

Note 6 – ~~Note~~Notes Payable

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 requires payments starting 30 months from the initial funding date and matures on June 7, 2050. During the three months ended December 31, ~~2022~~2023, and ~~2021~~,2022, the Company recorded interest expense of $~~1,074~~1,084 and $~~1,114~~1,074, respectively, on the SBA Loan and as of December 31, ~~2022~~2023, and September 30, ~~2022,~~2023, the accrued interest on the SBA Loan was $~~9,259~~6,166 and $~~8,175~~6,780, respectively. As of December 31, 2023, and September 30, 2023 the outstanding principal of SBA Loan was $114,700.

The following represents the future aggregate maturities of the Company’s SBA Loan as of December 31, 2023, for each of the five (5) succeeding years and thereafter as follows:

Schedule of future aggregate maturities
Fiscal year ending September 30,	Amount
2024 (remaining)	$	—
2025		—
2026		571
2027		2,431
2028		2,431
Thereafter		109,267
Total	$	114,700

Promissory Notes Payable, in Default

On March 1, 2023, the Company entered into a promissory note agreement with an investor for amount of $12,500 with interest bearing at 15% per annum, maturity date of 120 days from issuance and issuance of 25,000 warrants with exercise price of $0.05 that expire on March 1, 2028 (5 year). As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $767 which was recorded as a derivative liability and debt discount (see Note 8). During the three months ended December 31, 2023 and 2022, the Company recorded interest expense of $639 and $0, respectively. As of December 31, 2023, and September 30, 2023, the accrued interest on the promissory note was $1,908 and $1,269. As of December 31, 2023, and September 30, 2023 the outstanding principal of Promissory Notes Payable was $12,500. As of December 31, 2023, the Company had defaulted on the promissory note payable.

During the three months ended December 31, 2023, the Company reclassified a promissory note entered on March 1, 2023 with a value of $7,500, with interest bearing 15% per annum, maturity date 120 days from issuance (June 30, 2023) and issuance of 15,000 warrants with exercise price of $0.05 that expire on March 1, 2028 (5 year), from Promissory notes payable – related party to Promissory notes payable due the note holder, a former director, no longer being considered a related party. As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $460 which was recorded as a derivative liability and debt discount (see Note 8). During the three months ended December 31, 2023 and 2022, the Company recorded interest expense of $384 and $0, respectively. As of December 31, 2023, and September 30, 2023, the accrued interest on the promissory note was $1,145 and $761. As of December 31, 2023, and September 30, 2023, the total outstanding principal of the promissory note payable was $7,500. As of December 31, 2023, the Company had defaulted on the promissory note payable.

Promissory Notes Payable

On May 1, 2023 the Company executed a note payable with a face amount of $35,982. Under the terms of the agreement, the lender will withhold 20% of the Company’s daily funds arising from sales through the lender’s payment processing services until the Company has repaid the $35,982 (including fixed fees of $3,682 or approximately 10% of the note amount). The Company received net proceeds of $32,300 and the $3,685 of fixed fees were recorded as debt discount. As of December 31, 2023, the Company had amortized the full $3,682 of debt discount, had made repayments of $27,752, and rolled $8,230 of the notes principal still due into a second note (see below), therefore the loan was considered paid in full.

~~F-12~~

F-16

DriveItAway Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements
December 31, 2023
Unaudited

On August 15, 2023 the Company executed a second note payable with the same lender from the May 1, 2023 note, with a face amount of $64,206. Under the terms of the agreement, the lender will withhold 20% of the Company’s daily funds arising from sales through the lender’s payment processing services until the Company has repaid the $64,206 (including fixed fees of $6,206 or approximately 10% of the note amount). The Company received net proceeds of $49,770 after paying off the May 1, 2023 note and rolling $8,230 of its balance into the August 15, 2023 note and recording the $6,206 of fixed fees as a debt discount. During the three months ended December 31, 2023, the Company amortized $1,034 of the debt discount and made repayments of $28,278. This resulted in a debt discount balance of $4,827 and a principal balance of $21,669, for a net notes payable balance of $16,842 as of December 31, 2023.

The following represents the future aggregate maturities as of December 31, 2023 of the Company’s Promissory Notes Payable:

Schedule of future aggregate maturities
Fiscal year ending September 30,	Amount
2024 (remaining)		13,002
2025		8,667
Total	$	21,669

Note 7 – Convertible Notes Payable

AJB Capital Investments, LLC Note

Effective February 24, ~~2022 and as amended October 31,~~ 2022, 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 $33,750 in certain fees and due diligence costs of AJB and brokerage fees to J.H. Darbie & Co., a registered ~~broker-dealer.~~broker dealer. After payment of the fees and costs, the net proceeds to the Company were $641,250, which will be used for working capital and other general corporate purposes.

The maturity date of the AJB Note was extended to February 24, 2023. The AJB Note bears interest at 10% per annum for the original note’s period and 12% per annum for extension period which was started from August 24, 2022, and it is payable on the first of each month beginning April 1, 2022. 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.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

Also pursuant to the SPA, the Company was to pay AJB a commitment fee of $800,000, payable in the form of ~~5,000,000~~4,000,000 unregistered shares of the Company’s common stock (the “Commitment Fee Shares”) which ~~4,000,000~~ ~~shares~~ were issued at note ~~inception and~~ ~~1,000,000~~ ~~shares on the October 31, 2022 amendment.~~inception. If, after the sixth month anniversary of closing and before the thirty-sixth month anniversary of closing, AJB has been unable to sell the Commitment Fee Shares for $800,000, then the Company may be required to issue additional shares or pay cash in the amount of the shortfall. However, if the Company pays the AJB Note off on or before its maturity date, then the Company may redeem 2,000,000 of the Commitment Fee Shares for one dollar and the amount of the commitment fee will be reduced to $400,000. On issuance of the note, the Company determined that the guarantee on the commitment fee was a make-whole provision and an embedded derivative within the host instrument. The guarantee was bifurcated from the host instrument and recorded as a derivative liability valued at $~~385,796~~384,287 using a Black-Scholes option pricing model (see Note 8)9).

Pursuant to the SPA, the Company also issued to AJB common stock purchase warrants (the “warrants”) to purchase 1,000,000 shares of the Company’s common stock for $0.30 per share, which was assigned a value of $107,283 that was recorded as derivative ~~liability.~~liability (see Notes 5 and 9). 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.

~~F-13~~

After recording the derivative liabilities associated with the SPA, the Company allocated the net proceeds to the 4,000,000 common shares issued and the note itself based on their relative fair market values, resulting in the common shares being assigned a value of $65,274 (see Note 5). The allocation of the financing costs of $108,750, the derivative for the guarantee of $384,287, the derivative for the warrant of $107,283, and issuance of the 4,000,000 Commitment Fee shares of $65,274, to the debt component resulted in a $665,594 debt discount that is being amortized to interest expense over the term of the AJB Note.

On October 31, 2022, the Company amended the AJB Note to issue 1,000,000 additional Commitment Fee ~~Shares.~~Shares, recognizing the value of the shares and a debt discount of $60,000.

On February 10, 2023, the Company entered into second amendment with AJB by increasing the original principal of the note by $85,000, which increased the restricted cash balance to be used for payments for professional services, replacing the original 1,000,000 warrants with an exercise price of $0.30 with 2,000,000 warrants with an exercise price of $0.05 and extending the maturity date of the note to May 24, 2023. The Company determined ~~pursuant~~the extension of cash and modification to ~~ASC 470-50,~~other terms met the conditions of a debt extinguishment; therefore, the Company recorded a loss on extinguishment of debt for the total amount of $36,313 included in other income (expenses) within the accompanying statement of operation.

On September 27, 2023, the Company entered into second amendment with AJB by increasing the original principal of the note by $25,000 which increased the restricted cash balance to be used for payments for professional services.

On November 28, 2023, the Company entered into a ~~modification~~third amendment with AJB Capital Investments, LLC by increasing the original principal of note with amount of $22,222 in which the Company received $20,000 in cash (after giving effect to a 10% original issue discount) for payment to vendors.

Effective December 15, 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with AJB Capital Investments, LLC (“AJB”), and issued a Promissory Note in the principal amount of $195,000 (the “AJB Note”) to AJB in a private transaction for a purchase price of $165,750 (after giving effect to a 15% original issue discount). In connection with the sale of the AJB Note, the Company also paid certain fees and ~~accounted~~due diligence costs of AJB and brokerage fees. After payment of the fees and costs, the net proceeds to the Company were $150,750, which will be used for working capital and other general corporate purposes.

The maturity date of the AJB Note is June 14, 2024. The AJB Note bears interest at 10% per year, and principal and accrued interest is due on the maturity date. The Company may prepay the AJB Note at any time without penalty.

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

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 15% discount will apply anytime a conversion occurs when the company is not eligible to deliver the shares by DWAC; (ii) a 15% discount will apply whenever the shares are “chilled” for deposit into the DTC system; (iii) a 15% discount will apply if the Company’s common stock ceases to be registered under Section 12 of the Exchange Act; (iv) a 15% discount will apply if the note cannot be converted into free trading shares 181 days after its issue date; (v) in the event any other party has the right to convert debt into Common Stock at a greater discount to market than under the note, then the holder has the right to utilize such discount in determining the conversion price; 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.

On December 15, 2023, in conjunction with the issuance of this promissory note of $195,000, the Company also issued to AJB common stock purchase warrants (the “ December 2023 warrants”) to purchase 5,000,000 shares of the Company’s common stock for a nominal exercise price of $0.00001 per share. The December 2023 warrants may be exercised at any time on or after December 15, 2023 and until the warrant is exercised in full. The warrants also include various covenants of the Company for the ~~Commitment Fee Shares~~benefit of the warrant holder and includes a beneficial ownership limitation on the holder that, in certain circumstances, may serve to restrict the holder’s right to exercise the warrants. As a result of the Company’s equity environment being tainted the warrants qualified for derivative accounting and were assigned a value of $248,952 which was recorded as ~~an additional make-whole provision and recorded~~ a ~~day 1~~ derivative liability, ~~valued at~~with corresponding amounts of $~~1,509~~150,750~~, using a Black-Scholes option pricing model (see Note 8).~~ was allocated to debt discount and the difference between the fair value of the December 2023 warrants and the net proceeds received of $98,202 was recognized as interest expense.

During the three months ended December 31, 2022, the Company recorded interest expense of $23,000, additional debt discount of $1,509, amortization of debt discount of $794, a gain on change ~~in fair value~~ of derivative liability of $352,627 for the guarantee and warrants and repaid $23,542 of interest.

During the three months ended December 31, 2023, the Company recorded interest expense of $27,460, additional debt discount of $197,222, amortization of debt discount of $19,070, and a loss on change in fair value of derivative liability of $252,194 for the guarantee and warrants. As of December 31, ~~2022,~~2023 and September 30, 2023, the derivative liability was $~~450,556~~502,083 and $663 for the guarantee and warrants, the debt discount recorded on the note was $~~715~~178,152 and $0, ~~resulting in a~~the note payable ~~balance~~principal was $1,077,222 and $860,000, and the Company owed accrued interest of $~~749,285~~96,022 and $68,562. As

Effective February 14, 2023, the Company went into default on the AJB Note, however the lender waived all default provisions through January 24, 2024 therefore no default interest or penalties were incurred during the three months ended December 31, 2023 and the AJB note was not convertible as of December 31, ~~2022 and September 30, 2022, the Company owed unpaid interest of $1,213~~ ~~and $1,755~~.2023.

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. 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. Pursuant to a security agreement between the Company and investors in the Unit offering, and the subscription agreements executed by the Company and the investors, the Secured Convertible Notes are secured by liens on four existing electric vehicles that were owned by the Company at the time of the commencement of the offering, and eight additional electric vehicles that will be purchased with the proceeds of the offering, assuming all 10 Units are sold in the offering. The Company also granted subscribers in the Unit offering piggyback registration rights with respect to any shares of common stock issuable upon conversion of the Secured Convertible Notes or upon exercise of the warrants issued in the Unit offering.

F-19

DriveItAway Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements
December 31, 2023
Unaudited

During June 2022, the Company sold a total of $250,000 worth of Units to U.S. Escrow Services Corporation and Kevin Leach, two accredited investors, which resulted in the issuance of two secured promissory notes with an aggregate principal amount of $250,000 for cash proceeds of $230,000 (net of an original issuance discount of $20,000), and the issuance of 125,000 warrants (see Note 5). The $20,000 ~~warrants.~~ ~~The~~ was recorded as a debt discount and the conversion option embedded in the notes was bifurcated and accounted for as a derivative liability resulting in the Company recording a debt discount and derivative liability of $50,491. ~~The allocation~~As a result of the ~~warrant to~~Company’s equity environment being tainted the ~~debt component resulted in the Company recording~~warrants qualified for derivative accounting and were assigned a ~~debt discount and derivative liability~~value of $8,136~~. The cash issuance discount resulted in the recording of~~ which was recorded as a derivative liability (see Note 8) and debt ~~discount of $20,000~~.discount. The total debt discount of $78,627 is being amortized to interest expense over the term of the Note.

During November 2022, the Company sold a total of $200,000 worth of Units to Cestone Family Foundation and Michele and Agnese Cestone Foundation, two accredited investors, which resulted in the issuance of two secured promissory notes with an aggregate principal amount of $200,000 for cash proceeds of $180,000 (net of an original issuance discount of $20,000), and the issuance of 100,000 ~~warrants.~~ warrants (see Note 6). The $20,000~~The~~ was recorded as a debt discount and the conversion option embedded in the notes was bifurcated and accounted for as a derivative liability resulting in the Company recording a debt discount and derivative liability of $19,330. ~~The allocation~~As a result of the ~~warrant to~~Company’s equity environment being tainted the ~~debt component resulted in the Company recording~~warrants qualified for derivative accounting and were assigned a ~~debt discount and~~value of $7,254 which was recorded as a derivative liability ~~of $3,794. The cash issuance discount resulted in the recording of a~~(see Note 9) and debt ~~discount of $20,000~~discount). The total debt discount of $43,124 is being amortized to interest expense over the term of the Note.

During the three months ended December 31, 2022, the Company recorded interest expense of $13,614, and amortization of debt discount of $12,627.

During the three months ended December 31, 2023, the Company recorded interest expense of $17,250, paid interest of $0 and amortization of debt discount of $15,302. As of December 31, ~~2022~~2023, and September 30, ~~2022,~~2023, the debt discount recorded on the notes was $~~97,157~~36,324 and $~~66,660~~51,626, resulting in a net note payable balance of $~~352,842~~413,677 and $~~183,340~~398,374, respectively. As of December 31, ~~2022~~2023, and September 30, ~~2022,~~2023, the Company owed accrued interest of $~~16,847~~80,313 and $~~11,583~~63,063, respectively.

The following represents the future aggregate maturities of the Company’s Convertible Notes Payable as of December 31, 2023 for each of the five (5) succeeding years and thereafter as follows:

Schedule of future aggregate maturities
Fiscal year ending September 30,	Amount
2024 (remaining)	$	1,327,222
2025		200,000
Total	$	1,527,222

Note 8 – Derivative Liabilities

Certain features and instruments issued as part of the Company’s debt financing arrangements qualified for derivative accounting under ASC 815, Derivatives and Hedging, as the number of common shares that are to be issued under the arrangements are indeterminate, therefore the Company’s equity environment is tainted.

~~F-14~~

ASC 815 requires that we record the fair market value of the derivative liabilities at inception and at the end of each reporting period and recognize any change in the fair market value as other income or expense item.

The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair values at inception and as of December 31, ~~2022.~~2023. 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. The following assumptions were used in the Black-Scholes model during the three months ended December 31, ~~2022~~2023, and year ended September 30, ~~2022~~2023:

DriveItAway Holdings, Inc.

Notes to the Condensed Consolidated Financial Statements

December 31, 2023

Unaudited

Schedule of assumptions used
	Three months ended		Year Ended
	December 31,		September 30,
	2023		2023
Expected term	0.42 – 4.17 years	*	0.68 - 5.01 years
Expected average volatility	188% - 372%		111% - 372%
Expected dividend yield	—		—
Risk-free interest rate	3.60% - 4.60%		3.93% - 5.03%

*	5,000,000 warrants issued on December 15, 2023 do not have an expiration date.

As of December 31, 2023, the estimated fair values of the liabilities measured on a recurring basis are as follows (level 3):

Defined Benefit Plan, Assumptions
Three Months Ended Year Ended
December 31, September 30,
2022 2022
Expected term 1.42 - 5.00 years 1.68 - 5.00 years
Expected average volatility 105% - 116% 109% - 117%
Expected dividend yield - -
Risk-free interest rate 1.73% - 4.25% 1.73% - 4.25%

Schedule of estimated fair values of the liabilities
Commitment fee guarantee issued February 24, 2022	$	179,754
Warrants issued February 24, 2022		43,419
Embedded conversion feature in Note issued June 3, 2022		13,397
Warrants issued June 3, 2022		1,956
Embedded conversion feature in Note issued June 16, 2022		21,807
Warrants issued June 16, 2022		2,946
Embedded conversion feature in Note issued November 15, 2022		33,684
Warrants issued November 15, 2022		4,096
Warrants issued on February 10, 2023		43,959
Warrants issued on March 1, 2023		5,577
Warrants issued on December 15, 2023		234,951
Derivative liability balance - December 31, 2023	$	585,546

The following table ~~summarizes the~~provides a summary of changes in fair value of the ~~derivative~~Company’s Level 3 financial liabilities during the three months ended December 31, ~~2022:~~2023:

Schedule of derivative liabilities
Derivative liability balance - September 30, 2022 $ 115,009
Addition of new derivatives recognized as debt discounts 23,124
Loss on change in fair value of the derivative 454,655
Derivative liability balance - December 31, 2022 $ 592,788

Schedule of changes in fair value of derivative liability
Derivative liability balance - September 30, 2023	$	1,317
Addition of new derivatives recognized as debt discounts		248,952
Loss on change in fair value of the derivative		335,277
Derivative liability balance - December 31, 2023	$	585,546

Note 9 – ~~Related Party Transactions~~

In the normal course of business, the Company’s management team or their affiliates will make payments on behalf of the Company or will provide short-term advances to the Company to cover operating expenses.

~~As of December 31, 2022 and September 30, 2022, the Company owed related parties $~~80~~, for this activity.~~

~~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.~~Please note the following matters deemed to be subsequent events.

~~Subsequent to December 31, 2022,~~Effective February 23, 2024, the Company ~~and AJB~~ entered into ~~the Second Amendment to the~~a Securities Purchase Agreement (the ~~“Second Amended SPA”~~“SPA”) with AJB Capital Investments, LLC (“AJB”), and issued a Promissory Note in the principal amount of $140,000 (the “AJB Note”) to ~~amend~~AJB in a private transaction for a purchase price of $112,000 (after giving effect to a 20% original issue discount). In connection with the AJB Note (see Note 7) reflecting certain additional amendments in contemplation of the Note Amendment, and the Amended and Restated Common Stock Purchase Warrant (the “Amended Warrant”), as defined below.

~~Under the terms of the Second Amended SPA, AJB increased the principal~~sale of the AJB Note, bythe Company also paid certain fees and due diligence costs of AJB and brokerage fees. After payment of the fees and costs, the net proceeds to the Company were $~~85,000~~102,000, which will be used for working capital and ~~extended~~other general corporate purposes.

The maturity date of the AJB Note is November 23, 2024. The AJB Note bears interest at 12% per year, and principal and accrued interest is due on the maturity ~~date~~date. The Company may prepay the AJB Note at any time without penalty.

Also pursuant to ~~May 24, 2023. As consideration for~~ the ~~Amended Note and Second Amended~~ SPA, the Company ~~issued~~was to pay AJB a commitment fee of $50,000, payable in the ~~Amended Warrant, pursuant to which the number~~form of ~~shares issuable under the Amended Warrant will be increased to~~ ~~2,000,000~~5,000,000 ~~and the exercise price redefined to be $0.05. The Amended Warrant also includes various covenants~~unregistered shares 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 Amended Warrant. In addition, the Amended Warrant also contains certain conditions inCompany’s common stock (the “Commitment Fee Shares”) which ~~the exercise price may be adjusted, as well as registration rights by AJB of the shares underlying the warrants.~~were issued at note inception.

~~In addition, the Company and AJB entered into a side letter agreement, pursuant to which the Company agreed that AJB shall (i) withhold an aggregate of $3,500~~ from the proceeds under the Amended Note to reimburse AJB for legal and due diligence expenses, and (ii) disburse the remainder of the proceeds directly to certain service providers of the Company pursuant to the Company’s instructions and as provided in the Amended Note and the Second Amended SPA, rather than directly to the Company.

~~F-15~~

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”.

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.

RESULTS OF OPERATIONS

For the three months ended December 31, ~~2022,~~2023, compared to the three months ended December 31, ~~2021~~2022

Our operating results for the three months ended December 31, ~~2022~~2023, and ~~2021~~2022 are summarized as follows:

	Three Months Ended												Three months ended
	December 31,												December 31,
	2022			2021			Change			%			2023			2022			Change			%
Revenues	$	48,083		$	10,617		$	37,466			353	%	$	96,503		$	48,083		$	48,420			101	%
Cost of revenue		39,872			5,686			34,186			601	%		85,679			39,872			45,807			115	%
Gross Profit		8,211			4,931			3,280			66	%		10,824			8,211			2,613			32	%
Gross Profit Percentage		17	%		46	%								11	%		17	%

Operating expense		223,644			273,904			(50,260	)		(18	%)		206,010			223,644			(17,634	)		(8	)%
Other (income) expense		505,575			(17,252	)		522,827			n/a
Operating loss														(195,186	)		(215,433	)		20,247			(9	)%

Other expense														520,243			505,575			(14,668	)		(3	)%
Net loss	$	(721,008	)	$	(251,721	)	$	(469,287	)		186	%	$	(715,429	)	$	(721,008	)	$	5,579			(1	)%

Revenues for the three months ended December 31, ~~2022,~~2023, increased ~~$37,466,~~$48,420 from ~~$10,617 for the period ending December 31, 2021, to~~ $48,083 for the period ending December 31, ~~2022.~~2022, to $96,503 for the period ending December 31, 2023. This was ~~primarily~~ due to ~~the somewhat greater availability of the supply of vehicles on our platform through~~ a ~~sublease arrangement, a derivative of the lessoning effect of the nation-wide car shortage resulting from supply chain disruptions due in part to the COVID-19 pandemic, and the gradual~~$63,696 increase in ~~supply~~rental revenue and $22,373 increase in insurance revenue, offset by an increase of ~~semiconductor chips, one of the main components that run vehicle electronics.~~$37,649 in insurance lender payback costs.

We anticipate that, in ~~2023~~2024 automotive supply and demand will see a continuing return to a more historically normal levels which should translate into greater vehicle availability for vehicles on our platform, leading to a further increase in revenues.

Cost of revenue for the three months ended December 31, ~~2022~~2023, increased ~~$34,186,~~$45,807, from ~~$5,686 for the period ending December 31, 2021, to~~ $39,872 for the period ending December 31, ~~2022.~~2022, to $85,679 for the period ending December 31, 2023. This was primarily due to ~~one-time fees~~DIA fleet payments which increased alongside an increase in preparing a sublease car for rental, including telematics product and install fees, pick up and transport fees, etc. In general, each time a new vehicle is introduced on our platform, there are fees associated to the initial preparation.revenue.

Operating expenses for the three months ended December 31, ~~2022~~2023, decreased ~~$50,260~~$17,634 as compared to the three months ended December 31, ~~2021.~~2022. The decrease was primarily attributable to a decrease in ~~professional fees of $72,647, however, we had increases in~~ salaries and payroll taxes of ~~$11,750,~~$15,250 and ~~other operating~~advertising and marketing expenses of ~~$10,637.~~$8,375, offset by an increase in professional fees of $6,585.

Loss from operations was $195,186 for the three months ended December 31, 2023, as compared to $215,433 for the three months ended December 31, ~~2022, as compared to $268,973 for the three months ended December 31, 2021.~~2022. The decrease of ~~$53,540~~$20,247 was largely attributable to the change in operating ~~expenses.~~expenses of $17,634 and an increase in gross profit of $2,613.

Other expenses for the three months ended December ~~2022~~31, 2023, were ~~$505,575,~~$520,243, as compared to ~~a gain of $17,252~~$505,575 for the three months ended December 31, ~~2021. For 2022 we incurred~~2022. The increase of $14,668 is primarily attributable to increases in amortization of debt discount and interest expense of $21,987 and $112,059, respectively. The increases are partially offset by a decrease in loss on change in fair value of derivative liabilities of $454,655, amortization of debt discounts on our convertible notes of $13,420, and interest expense of $37,500. For 2021, the gain was primarily attributable to the forgiveness of the Paycheck Protection (PPP) loan of $24,148 and expense for interest of $6,896.$119,378.

Liquidity and Capital Resources:

The following table provides selected financial data about our Company as of December 31, ~~2022~~2023, and September 30, ~~2022.~~2023.

Working Capital

	December 31,			September 30,									December 31,			September 30,
	2022			2022			Change			%			2023			2023			Change			%
Cash	$	40,130		$	127,109		$	86,979			68	%	$	61,167		$	4,632		$	56,535			1220	%

Current assets	$	60,787		$	143,689		$	(82,902	)		(58	%)
Current assets, net of restricted cash													$	68,699		$	16,216		$	52,483			323	%
Current liabilities		1,629,118			1,100,139			528,979			48	%		2,805,998			1,878,080			927,918			49	%
Working capital (deficiency)	$	(1,568,331	)	$	(956,450	)	$	(611,881	)		(64	%)	$	(2,737,299	)	$	(1,861,864	)	$	(875,435	)		(47	)%

As of December 31, ~~2022~~2023, our working capital ~~decreased $611,881~~deficiency increased $875,435 as compared to September 30, ~~2022.~~2023. This was primarily attributable to a ~~reduction in cash of $86,979, reduction in current assets of $82,902, and an~~$584,229 increase ~~in current liabilities of $528,979 as of December 31, 2022 as compared to September 30, 2022. Our current liabilities increased primarily to a gain~~ in derivative liabilities, ~~of $477,779~~a $230,093 increase in convertible notes payable, and a $129,791 increase to accounts payable and accrued ~~liabilities of $50,826.~~liabilities.

Cash Flow Data:

Three Months Ended
December 31,
2022 2021 Change
Cash used in operating activities $ 193,541 $ 139,908 $ 53,633
Cash used in investing activities $ 72,872 $ — $ 72,872
Cash provided by financing activities $ 179,434 $ 136,200 $ 43,234
Net Change in Cash for period $ (86,979 ) $ (3,708 ) $ (83,271 )

	Three months ended
	December 31,
	2023			2022			Change
Cash provided by (used in) operating activities	$	(104,496	)	$	(193,541	)	$	89,045
Cash provided by (used in) investing activities	$	—		$	(72,872	)	$	72,872
Cash provided by (used in) financing activities	$	142,472		$	179,434		$	(36,962	)
Net Change in Cash and Restricted Cash	$	37,976		$	(86,979	)	$	124,955

Cash Flows from Operating Activities

During the three months ended December 31, 2023, we did not generate positive cash flows from operating activities. For the three months ended December 31, 2023, net cash flows used in operating activities was $104,496, consisting of a net loss of $715,429, reduced by a loss on change in fair value of derivative liability of $335,277, amortization debt discount of $35,407, depreciation and amortization of $9,471, a financing fee of $98,202, and a change in operating assets and liabilities of 132,576.

During the three months ended December 31, 2022, we did not generate positive cash flows from operating activities. For the three months ended December 31, 2022, net cash flows used in operating activities was $193,541, consisting of a net loss of $721,008, reduced by a loss on change in derivative liability of $454,655, stock-based compensation expenses of $15,000, amortization debt discount of $13,420, depreciation and amortization of $7,653, a change in operating assets and liabilities of $36,739.

During the three months ended December 31, 2021, we did not generate positive cash flows from operating activities. For the three months end December 31, 2021, net cash flows used in operating activities was $139,908, consisting of a net loss of $251,721, reduced by an increase in stock -based compensation expenses of $173,077 and increased by gain on PPP loan of $24,148, and a change in operating assets and liabilities of $37,116.

Cash Flows from Investing Activities

During the three months ended December 31, ~~2022,~~2023, the ~~Company used cash for the purchased two vehicles for $67,039 and website development costs of $5,833.~~

~~The~~ Company did not use or generate any ~~funds for~~cash from investing ~~activities during~~activities.

During the three months ended December 31, ~~2021.~~2022, the Company used cash of $72,872 for intangible asset purchases of $5,833 and fixed asset acquisition costs of $67,039.

Cash Flows from Financing Activities

During the three months ended December 31, ~~2022,~~2023, the Company generated ~~$180,000~~$22,222 from the issuance of convertible notes, and ~~repaid $566 on~~$195,000 from the ~~SBA loan..~~issuance of promissory notes, this was partially offset by $28,278 for repayment of promissory notes payable and payment for debt issuance costs of $46,472.

During the three months ended December 31, ~~2021,~~2022, the Company generated ~~$100,000~~$200,000 from the issuance of convertible notes, repaid $566 on their SBA loan, and ~~$36,200 from the SBA loan.~~paid debt issuance costs of $20,000.

Going Concern

As of December 31, ~~2022,~~2023, the Company had a net loss of ~~$721,008,~~$715,429, accumulated deficit of ~~$3,101,767~~$4,026,325 and did not have sufficient cash on hand to cover expenses for the next twelve (12) months. The Company intends to convert its convertible debt into common stock and to fund operations through equity financing arrangements, which may be insufficient to fund its capital expenditures, working capital and other cash requirements for the year ending ~~September 30, 2023.~~December 31, 2024.

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:

	●	Revenue Recognition

	●	Stock-Based Compensation

	●	Income Taxes

	●	Financial Instruments

	●	Derivative Financial Instruments

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 2 of Notes to the Consolidated Financial Statements.

Revenue Recognition

The Company’s revenue is recognized in accordance with Accounting Standards ~~Codification(“~~Codification (“ASC”) 606, Revenue from Contracts with Customers, for all periods presented. The Company, through its DriveItAway online/app-based platform (“platform”), operates in the ~~retail~~ automotive rental industry. The Company assists subprime and deep subprime candidates ~~with little~~to rent/lease vehicles on a short-term basis, generally on a weekly or, ~~no down payment,~~ in ~~purchasing~~some cases monthly, basis under a Pay-As You-Go program. Through its platform the ~~used~~Company will track vehicle ~~of his/her choice by first starting~~values and reduce vehicle pricing through the customers usage payments to show drivers a vehicle purchase price should they be interested in ~~an app based, turnkey rental, through participating franchise and independent car dealers.~~ buying the vehicle, at which time the customer would procure financing if the Company determined they wanted to sell the vehicle at the listed purchase price.

During the ~~three months~~periods ended December 31, ~~2022~~2023, and ~~2021,~~2022, the Company derived its ~~rental~~ revenue from ~~contract revenue share~~signed contracts for vehicle rentals between ~~participating franchise and independent~~the Company, other leasing companies, or car ~~dealers~~dealerships and individual car rental customers (“customers”). ~~In conjunction~~

~~Rental~~Initial non-refundable fees are recognized when payment is received as the Company has no obligation to provide additional services at that point. Miscellaneous charges for extra mileage, late fees, or toll charges calculated and ~~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~~charged to the ~~customer’s~~customer 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.~~

Stock-Based Compensation

Income Taxes

Fair Value Measurements

~~Financial Instruments~~

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying amounts shown of the Company’s financial instruments including cash, accounts receivable, prepaid expense, accounts payable, and accrued liabilities are approximate fair value due to their short-term nature.

All financial assets and liabilities are approximate to their fair value. Derivative liabilities are valued at Level 3.

			Fair Value Measurements as of December 31, 2023 using:
	December 31, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Liabilities	$	—		—		—	$	—
Derivative Liabilities	$	585,546		—		—	$	585,546

			Fair Value Measurements as of September 30, 2023 using:
	September 30, 2023		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)

Liabilities	$	—		—		—	$	—
Derivative Liabilities	$	1,317		—		—	$	1,317

Derivative Financial Instruments

The Black-Scholes option valuation model was used to estimate the fair value of the embedded conversion options and warrants. The model includes subjective input assumptions that can materially affect the fair value estimates. The expected volatility is estimated based on the most recent historical period of time of our common stock, equal to the weighted average life of the options.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

ITEM 4. CONTROLS AND PROCEDURES.

(a)

Evaluation of Disclosure Controls and Procedures

Our Principal Executive Officer and Principal Financial Officer conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on this evaluation, our Principal Executive Officer and Principal Financial Officer concluded that in light of the material weaknesses described below, our disclosure controls and procedures were not effective as of December 31, ~~2022.~~2023. See material weaknesses discussed below in Management’s Annual Report on Internal Control over Financial Reporting.

(b)

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Our internal control over financial reporting is a process designed under the supervision of our Principal Executive Officer and Principal Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external reporting purposes in accordance with GAAP. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditure are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

A material weakness is 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 our annual or interim financial statements will not be prevented or detected on a timely basis.

As of December 31, ~~2022,~~2023, we conducted an evaluation of the effectiveness of our internal control over financial reporting. Our management concluded that our internal controls over financial reporting were not effective as of December 31, ~~2022~~2023, due to the following identified material weaknesses:

●	Our control environment is inadequate. We have no risk assessment procedures, no formal information or communication process, and no monitoring activities in place. Additionally, we lack policies that require formal written approval for related party transactions.

●	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. We do not have controls in place to prevent individuals from manipulating financial data or entering inaccurate data into the accounting software, and there are no controls over the financial reporting close process. Additionally, we lack segregation of duties and review procedures to ensure our financial data is accurate.

●	We lack the necessary accounting resources with sufficient SEC reporting experience, US GAAP knowledge and accounting experience. We also lack the resources to properly account for complex debt and equity transactions and are unable to analyze such transactions timely or in sufficient detail.

Management believes that despite our material weaknesses, our consolidated financial statements for the quarter ended December 31, ~~2022~~2023 are fairly stated, in all material respects, in accordance with GAAP.

(c)

Changes in Internal Control Over Financial Reporting

During the quarter ended December 31, ~~2022,~~2023, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations Over Internal Controls

Management, including our Principal Executive Officer and Principal Financial Officer, does not expect that 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 no 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 all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgements in decision-making can be faulty, and that breakdowns can occur because of 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 override of the controls.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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 or, to the knowledge of the 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.

ITEM 1A. RISK FACTORS

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~Common Stock~~

~~On October 17, 2022, the Company issued 250,000 shares of common stock valued at $15,000, for consulting services.~~None.

~~On October 31, 2022, the Company issued 1,000,000 shares of common stock valued at $1,509 for commitment fees in conjunction with the issuance of promissory note of $750,000.~~

Except as otherwise noted, the securities in the transactions described above were 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 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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

		Incorporated by Reference		Filed or Furnished
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	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 Section 302 of the Sarbanes-Oxley Act of 2002				x
32.1*	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	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.				x
104	Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.				x

* In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are furnished and not filed.

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.

	DRIVEITAWAY HOLDINGS, INC.

Date: ~~February 21, 2023~~March 8, 2024	By:	/s/ John Possumato
		John Possumato, Chief Executive Officer
		(Principal Executive Officer)

Date: ~~February 21, 2023~~March 8, 2024	By:	/s/ Mike Elkin
		Mike Elkin, Chief Financial Officer
		(Principal Financial and Accounting Officer)

911


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

Schedule of website development
	December 31,			September 30,
	2022			2022
Website development costs	$	16,331		$	—
Accumulated depreciation		(454	)		—
Website, net	$	15,877		$	—

Defined Benefit Plan, Assumptions
	Three Months Ended	Year Ended
	December 31,	September 30,
	2022	2022
Expected term	1.42 - 5.00 years	1.68 - 5.00 years
Expected average volatility	105% - 116%	109% - 117%
Expected dividend yield	-	-
Risk-free interest rate	1.73% - 4.25%	1.73% - 4.25%

Schedule of derivative liabilities
Derivative liability balance - September 30, 2022	$	115,009
Addition of new derivatives recognized as debt discounts		23,124
Loss on change in fair value of the derivative		454,655
Derivative liability balance - December 31, 2022	$	592,788