UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

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

For the fiscal year ended September 30, 2024

OR

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

Commission file number: 000-52883

DRIVEITAWAY HOLDINGS, INC.

3201 Market Street, Suite 200/201

Philadelphia, PA 10104 (856) 577-2763

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒.

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒.

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 definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒.

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant as of March 31, 2024 was $1,547,437 based on the closing price of $0.057 of the Company’s common stock as quoted on the OTCQB Marketplace on that date.

As of February 24, 2025, there are 113,951,722 shares of common stock of the registrant outstanding.

Documents Incorporated by Reference:

None

TABLE OF CONTENTS

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K (the “Report”) includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements can be identified by the use of forward-looking terminology, including the words “believes,” “estimates,” “anticipates,” “expects,” “intends,” “plans,” “may,” “will,” “potential,” “projects,” “predicts,” “continue,” or “should,” or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. You should read statements that contain these words carefully because they:

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

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

All forward-looking statements included herein attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to above. Except to the extent required by applicable laws and regulations, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Form 10K or to reflect the occurrence of unanticipated events.

PART I

Item 1. Business

General

As used in this Annual Report, references to the “Company,” “DriveItAway,” “we,” “our,” and “us” refer to DriveItAway Holdings, Inc. and its consolidated subsidiary, unless otherwise indicated. In addition, references to our “financial statements” are to our consolidated financial statements included elsewhere in this Annual Report except as the context otherwise requires.

We prepare our consolidated financial statements in United States dollars and in accordance with generally accepted accounting principles as applied in the United States, (“U.S. GAAP”). In this Annual Report, references to “$” and “dollars” are to United States dollars.

Overview

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

The Company 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. We provide 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 has expanded its easy and transparent consumer app ‘subscription to ownership’ platform to enable entry level consumers to drive and acquire new Electric Vehicles.

Agreement and Plan of Share Exchange

On December 7, 2021, the Company (f/k/a Creative Learning Corporation), DriveItAway, Inc., a Delaware corporation (“DIA”), and the existing shareholders of DIA executed an Agreement and Plan of Share Exchange, under which the Company would acquire all of the issued and outstanding common stock of DIA by issuing one share of Series A Convertible Preferred Stock (the “Series A Preferred”) of the Company for each outstanding share of DIA common stock (the “Share Exchange”). As a result of the Share Exchange, DIA will become a wholly-owned subsidiary of the Company.

Each share of Series A Preferred will be convertible into that number of shares of common stock of the Company which would entitle the Series A Preferred holders to 85% of the Company’s common stock, determined on a fully-diluted basis. The exact conversion rate of the Series A Preferred will be determined at closing of the Share Exchange. In addition, each share of Series A Preferred will be entitled to dividends and voting rights on an “as converted” basis with the common stockholders.

Closing on Share Exchange

On February 24, 2022, closing of the Share Exchange occurred. Each share of Series A Preferred is convertible into 33.94971 shares of common stock of the Company, which entitles the holders thereof to 85% of the Company’s common stock upon a conversion of all shares of Series A Preferred, determined on a fully-diluted basis. In addition, each share of Series A Preferred is entitled to dividends and voting rights on an “as converted” basis with the common stockholders.

Upon closing of the Share Exchange, all of the existing members of the board of directors (the “Board”) of the Company resigned, except that Rod Whiton’s resignation will not be effective until ten days after an information statement pursuant to Rule 14f-1 is mailed to shareholders. John Possumato, and Adam Potash were appointed to the Company’s Board, provided that the appointments of Messrs. Potash and Patrizio will not be effective until ten days after an information statement pursuant to Rule 14f-1 is mailed to shareholders. Upon closing of the Share Exchange, Christopher Rego and Rod Whiton resigned as officers, and John Possumato was appointed chief executive officer and Adam Potash was appointed chief operating officer. Mike Elkin agreed to remain as chief financial officer of the Company.

Sale Agreement with StroomX, LLC

On December 7, 2021, the Company entered into a Sale Agreement with StroomX, LLC (the “Purchaser”), under which the Company agreed to sell all of the Company’s subsidiaries (the “Learning Subsidiaries”) involved in its learning business (the “Learning Business”), as well as any assets of the Learning Business that are not owned by the Learning Subsidiaries, to the Purchaser. In connection with the sale, the Purchaser agreed to assume all liabilities of the Learning Business, and to indemnify and hold the Company harmless from any such liabilities. The Purchaser is controlled by Christopher Rego, the Company’s current chief executive officer. Closing of the sale will occur after the closing of the Share Exchange.

The sale of the Learning Business closed on March 18, 2022. As consideration for the purchase of the Learning Business, the parties agreed to offset $50,000 in severance due to Christopher Rego as part payment of the purchase price. The remainder of the purchase price was paid by a joint note executed by the Purchaser and Mr. Rego in the principal amount of $100,000, which is payable in full on April 20, 2022 without interest. Alternatively, the parties agreed that the promissory note may be satisfied in full by the delivery to the Company by the maturity date of the note of all shares of common stock owned by Mr. Rego and his spouse in the Company, provided that the number of shares is not less than 500,000. In the event the note is not paid in full by its maturity date, either in cash or shares, the note shall bear interest at 15% per annum until it is paid in full. 500,000 shares were returned to the transfer agent and cancelled as of May 12, 2022.

Series A Preferred Stock

February 24, 2022, the Company’s Board approved an amendment to its certificate of incorporation to designate a new series of preferred stock, which is known as the Series A Convertible Preferred Stock. Each share of Series A Preferred is convertible into 33.94971 shares of common stock of the Company, which entitles the holders thereof to 85% of the Company’s common stock upon a conversion of all shares of Series A Preferred, determined on a fully-diluted basis, but prior to any shares issued or issuable as a result of the Financing (as defined below). In addition, each share of Series A Preferred is entitled to dividends and voting rights on an “as converted” basis with the common stockholders.

On April 20, 2022, holders of 2,464,784 shares of Series A Preferred agreed to convert their Series A Preferred into common stock, which resulted in the issuance of 83,678,702 shares of common stock. On the same date, the board of directors approved a resolution to exercise the Company’s right to mandatorily convert the remaining 129,809 shares of Series A Preferred into common stock, which resulted in the issuance of an additional 4,406,979 shares of common stock.

Names Change and Capital Structure

On April 18, 2022, the Company filed an amendment to its certificate of incorporation with the Delaware Secretary of State to change its name from Creative Learning Corporation to DriveItAway Holdings, Inc. and to increase the number of authorized shares of common stock from 50,000,000 to 1,000,000,000.

Our Business

We have developed a consumer-facing app and Web-based platform that allows any automotive retailer the ability to provide a subscription to ownership “flexible-lease” model for any consumer, regardless of down payment or credit history, or for those who just do not want to make an immediate long term financial commitment, in an easy, transparent, and risk-free way for both the consumer and the retailer.

Under our “Drive Now, Decide Later” mantra, any consumer, regardless of credit, can go on our app, select a vehicle, sign for and pick it up, once approved, and have the subscription deal consummated in a matter of minutes. Unlike a vehicle sale or lease, a candidate that passes our detailed screening can be driving without making any long-term financial commitment, for as long as he/she wants, in the vehicle of choice. While there is really no such thing as “digital retailing” for the sale or lease of a vehicle in the U.S. today, as all states require actual “wet ink” signatures for documents either sent to the buyer or signed at a dealership, documents for a rental or subscription can all be legally signed digitally, so this process is quick, easy and can all be consummated in our app – with the vehicle delivered to the candidate. We are true digital retailing for the automotive industry.

Unlike rental car companies, or even subscription companies available to US and Canadian consumers today, a DriveItAway vehicle subscription program is differentiated with one vital element, all of our drivers are given the option to buy the vehicle they are subscribing to, with the portion of the money they are paying in as rental fees “writing down” the purchase price, should they choose to buy. All drivers have the right, but not the obligation, to buy at any time, and get the benefit of his or her specific vehicle’s reduced purchase price created by the payments they have made for vehicle usage.

Just as Divvy Homes has revolutionized the rent-to-own market for houses during these cash-strained times, DriveItAway seeks to revolutionize how both new and used vehicles are sold, where a purchase transaction starts in a commitment-free rental or subscription.

While we think this easy, transparent, and turnkey type of “Drive Now, Decide Later” subscription appeals to all potential vehicle buyers and will grow dramatically as the entire car market makes the transition to EV vehicles and we gain more visibility as an alternative in the marketplace, right now the “low hanging fruit” is indeed the subprime and deep subprime consumer, whose alternatives are limited to the bad choices outlined above.

We use a technology partner to extensively screen our applicants through a digital process for background and identity, driving history and insurance risk, income verification, etc., but we do not require any threshold credit score. As long as an applicant has a clean driving record and adequate income, etc., he/she can qualify for one of our vehicles. In the current environment, the average new vehicle is selling for approximately $47,000 dollars while the average used vehicle is selling for approximately $28,000 with an average six-year payment of over $716. Our average vehicle usage/rental fees are priced a little higher (between $150-225 a week, not counting insurance) on a subscription, but our driver is writing down the ultimate purchase price with his/her usage payments while driving, and most all are working towards a buyout – when the amount written down is low enough that he/she can successfully finance the purchase. As our mission is defined, we get our credit-challenged customers off of the “gerbil wheel” of never-ending payments, and out of vehicles that break down before the payments are finished.

In general, as banks and finance organizations are tightening up credit policies and increasing down payment requirements, particularly for subprime and deep subprime buyers as auto loan delinquencies increase, while vehicles have become higher in price relative to income, we see vehicle subscriptions at the same trajectory of growth today as consumer vehicle leasing was 25-30 years ago: a small percentage of “sales” now, but high growth in the years to come. We see our unique flexible lease to ownership model as the best subscription program for all consumers, as it offers the best of both the “walk away” ability of a turnkey monthly rental, but with the advantage of benefiting from the monthly usage payment reduction, should the driver choose to buy.

DriveItAway works with franchise and larger independent dealers (not with Buy Here/Pay Here stores), and is primarily a turnkey subscription dealer platform, although we do act as principal in many cases owning our own vehicles, always serviced and delivered by our car dealership partners. This both creates revenue for DriveItAway, and demonstrates, in an “open book” environment, how dealers can best use our technology as software as a service, to run their own program, as DriveItAway was created to offer. During 2024, we secured a 2 million dollar line of credit to expand operating our own company owned vehicles. We also acquired inventory in the past year from a large under a fleet lease agreement with a large national fleet owner. This allows the company to scale rapidly in many locations, without the burden of fixed overhead or personnel expenses.

How We Work

Without the technology available in recent years, it would not be possible for DriveItAway to exist. Many years ago, when the Buy Here/Pay Here market first developed it was necessary for those dealers to maintain 30/40% net profit margins, as typically a third of their vehicles ended up being repossessed, and, by the time the dealer actually received the vehicle back, it was in such bad repair it was worth next to nothing.

Today, with embedded app based technology, we can greatly reduce most of the risks, identify those problems that do occur quickly, and mitigate losses, so that we can maintain a high per-unit profit margin and still price very competitively as compared to other choices our retail customers might have, allowing for a good profit margin for ourselves and dealers that use us as a subscription/micro-lease platform. Note: most franchise dealers would like the extra profit and business deep subprime candidates represent (they have been, typically the most loyal and highest profit margin sector of vehicle buyers), particularly now when many “near prime” buyers are rapidly being reclassified as subprime, but do not want to deal with the typical problems a “Buy Here/Pay Here” operation represents, nor do they want to operate that type of “victimizing” enterprise.

First, our all in-app subscription process is not only quicker and much more transparent to our end user drivers, but it is also much easier to administer and maintain from an operational perspective. DriveItAway uses a third-party screening service to review an applicant’s identity and background, his/her driving history and insurance risk, income verification and employment, and credit tier. While we do not require any particular credit score, we do require a ratio of income to payment coverage for all renters, a clean driving history, and other criteria to mitigate risk. This automated screening process runs in the app with an API and is completed within minutes.

Once a candidate qualifies for the vehicle selected, we collect a security deposit commensurate with the payment and value of the vehicle, and all drivers pay in advance by credit card or ACH inside the app. Before such technologies existed, in the old days of “Buy Here/Pay Here” the payment process was (and still is in many of these small stores), literally done in person on a weekly basis – obviously, there is a lot of collection friction in a manual process.

One major key to what we do is the placement of advanced telematics on every vehicle we offer for subscription. All drivers in our subscription contract are informed and agree to have a live-time telematics device in each vehicle along with an ignition starter cut-off switch, which is tied back into our payment platform. With this, DriveItAway can monitor vehicle location, and driving pattern (speed versus speed limit, hard braking, etc.) and can set up a “red flag” monitor to identify unsafe driving. Unsafe driving is not tolerated and will result in a warning and possible vehicle return. In addition, the ignition starter cut-off switch automatically kills the start-up of the vehicle, if an advance payment is overdue (note: it does not in any way stop the vehicle while driving, but once the vehicle is shut off, it simply cannot be restarted, unless we “turn it back on”). This is not seen so much as a penalty, but a very explicit reminder that our driver must pay for the vehicle. Through our AI chat and automated system, a person can simply say when and what amount of payment they are prepared to make, and the vehicle will turn on, even if the payment commitment is in the future (we do not want to strand anyone or cause undue hardship). However, repeated late payments can result in a vehicle requiring a return.

One note, our entire program is focused on keeping our subscribers who want to buy “on the rails” and that is made clear at inception. We work with our subscribers to help each achieve their goal of vehicle ownership. We counsel all of our subscribers that, indeed, one of the benefits of being in a weekly/monthly subscription is the fact that no long-term commitment is made, so if his/her financial situation changes and the vehicle is no longer affordable, simply turn it in (each is paying in advance), and preserve the ability to come back for a new vehicle in the future.

Very clearly, without technology and integrations available in the last few years, a flexible lease to ownership platform such as DriveItAway could not exist. The fact that it does now, and we are introducing it into the market, enables us to achieve our mission to rationalize the one area of the automotive industry that has yet to become efficient and is filled with high-margin friction, the subprime and deep subprime Buy Here/Pay Here marketplace.

The EV Landscape

The DriveItAway program is uniquely designed to help alleviate the two biggest impediments to a mainstream or subprime EV sale, the higher cost (spread out over as long a period of time as required for our subscriber), and the “suitability” or anxiety of plunging into an EV sale.

While the future of federal EV new and used incentives is uncertain, what is clear is that the transition from internal combustion to electric vehicles will continue, but at a slower pace, and stimulated by new ways of ownership, one of which, we believe, will be the DriveItAway flexible lease program.

Also, during the past year used EV values continue to drop at a record pace, setting the stage for the DriveItAway platform to provide a turnkey profitable “safety valve” for a dealer’s used EV inventory creating income and sales. It is expected that in the coming quarters DriveItAway will also be able to leverage this dramatic drop in EV resale value by acting as principal in financing its own fleet of used EV vehicles and offering them at very affordable rates to its end user customers.

Getting EVs in mainstream consumer hands in a beneficial, profitable way for all constituencies, “EVs for Everyone,” is another problem that we solve.

Key Industry Tailwinds and Foundation for Future Growth

The year 2024 marked a dramatic shift in the automotive retail market, back to more “normal” conditions. Car dealers once again found themselves with an oversupply of vehicles, just as interest rates moved up to the highest level in decades, driving “floor plan” carrying costs much higher. At the same time, the average new and used vehicle sales prices did not come down significantly from historic highs of prior years, and finance institutions tightened credit and required higher down payment amounts, as delinquencies rose substantially. This has squeezed more and more “subprime” and “deep subprime” credit buyers out of the traditional market, leaving, again, few good personal vehicle purchase alternatives.

During this time, your Company has continued to lay the foundation for rapid future growth. As for the last one hundred and twenty or so years vehicles have been for sale, there has almost always been more “supply” than “demand,” we worked past the current market anomaly and we prepared for the future by continuing to develop the processes, technology, and relationships that we feel will make DriveItAway the high growth leader in its emerging market.

Highlights of the accomplishments of DriveItAway 2024 –

 · March 2024 – After a successful pilot test, DriveItAway announced its partnership with Partners Personnel, the 12th largest national staffing organization in the nation, to offer its micro-lease program to employees to help people get to work, as one of the largest employment problems for entry level employees is getting to and from the job, according to Kristy Gebhart, Regional Vice President and Chair for the Associate Resource Committee of Partners Personnel

· April 2024 – DriveItAway announced that automotive retailers can use the DriveItAway technology, with fleet credit line options provided by Westlake Fleet, part of Westlake Financial, providing a comprehensive package for a turnkey dealership-based flexible lease program

· May 2024 – DriveItAway secured a credit line of 2 million dollars, from a respected rental industry veteran, to fund its own fleet of vehicles for the DriveItAway platform, expanding its direct services and also serving as an introduction and demonstration to partner dealers on how the program works, to entice dealers to run their own fleet using DriveItAway technology

· July 2024 – DriveItAway announced a partnership with Corporate Claims Management, one of the oldest and largest independent comprehensive fleet service and accident management companies in the US, for national vehicle maintenance, mechanical service and accident management for driver-focused quality fleet care

· July 2024 – DriveItAway announced a partnership with Chapman Automotive Group, an eight location, multi-franchise dealership group in Pennsylvania and New Jersey, to supply new vehicles and to provide DriveItAway’s micro-lease to ownership program to Chapman store customers

· September 2024 – DriveItAway announced a partnership with AllShifts, one of the highest rated national healthcare staffing firms in the US, to help on-demand nurses get to the job

Long-Term Growth Strategy

 As macro developments of oversupply and affordability continue to create the automotive retail environment problems that the DriveItAway technology and platform was created to solve, and after creating the foundational relationships and technologies to scale, we look forward to further rapid growth and achievements in 2025.

Your Company has a number of goals to further growth and be ready to leverage what we see will be a massive waive towards alternative ways to drive and then buy new and used vehicles, particularly by younger buyers in the 18-34 age range, who need transportation but lack the cash, credit, or even desire to immediately make a long term financial commitment to own one.

First, we want to substantially increase our credit line to operate our own fleet of vehicles, to both increase revenues, continue to improve our technology, and act as an “open book” example to car dealers that are interested in using our platform as software-as-a-service to operate a fleet and expand sales and market share. We see this as a unique competitive advantage of DriveItAway, in partnering with dealers to supply our own fleet, to show completely how our program works – we don’t just offer SaaS, we put our “money where our mouth is” in demonstrating the returns and advantages. At root, we are designed for and remain an SaaS tool for dealers, but as any new innovation, the best sales process is live demonstration.

Second, we want to continue to make strong and deep industry alliances, not just with partner companies but with the best individuals in our sector of the market. In 2025, our goal is to have some of the best on a newly created Board of Advisors for your Company, and on our Board of Directors. Now that we have laid a firm foundation, we are looking for the best people to guide longer term strategy and growth, to fully leverage the massive opportunity we see before us.

Third, we want to open up the vast new market of small commercial (non-gig) customers. Up until now your company has focused demand for individuals, particularly those who need a vehicle to get to and from work, in 2025 our goal is to expand this market to those who use their SUV, truck or van to work, not in a gig or rideshare capacity, but as a small fleet vehicle.

There are over 3,275,000 vehicles used in small businesses in the US (Automotive News, March 2024), representing a market size of over $300B with anticipated growth CAGR of 5.59 during the next year (Precedence Research, Oct 2024). DriveItAway is now creating a strategic plan to address this large and fast-growing market with one of the leading experts in the fleet business, on how to address small commercial account needs with a flexible, pay as you go lease, with DriveItAway. As with subprime individuals, the credit criteria for conventional financing is very limited for these businesses, so DriveItAway sees a scalable, large opportunity to satisfy this need, in the same way it does for individuals, by de-risking the process for both the vehicle owner and the customer, that ultimately leads to more opportunity and sales.

Employees

As of September 30, 2024, we have 0 employees and 7 independent contractors. Some of our executive officers and directors are engaged in outside business activities that we do not believe conflict with our business. Over time, we may be required to hire additional employees or engage independent contractors to execute various projects that are necessary to grow and develop our business. These decisions will be made by our officers and directors, if and when appropriate.

Corporate Information

Our principal executive office is located at 3201 Market Street, Suite 200/201, Philadelphia, PA 19104. Our telephone number is (856) 577-2763. Our website is www.driveitaway.com. Our website’s information is not, and will not be deemed, a part of this Annual Report or incorporated into any other filings we make with the SEC.

Available Information

Copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other documents that we will file with or furnish to the SEC will be available free of charge by sending a written request to our corporate headquarters. Additionally, the documents we file with the SEC are or will be available free of charge at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Other information on the operation of the Public Reference Room may be obtained by calling the SEC at (800) SEC-0330. The SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. The SEC’s website is www.sec.gov.

We maintain a corporate website at www.driveitaway.com. You will be able to access our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, proxy statements and other information to be filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act with the SEC free of charge at our website as soon as reasonably practicable after such material will be electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of this Annual Report.

Item 1A. Risk Factors

We are not required to provide this information as we are a smaller reporting company.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

On April 1, 2022, the Company leased virtual office space at 3201 Market Street, Suite 200/201, Philadelphia, PA 19104 for its corporate office. The lease had a term of one year and was renewed on a month-to-month basis until August 2024, when the office was closed. The Company is not obligated to pay rent.

Item 3. Legal Proceedings

We are not currently 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, or proceeding 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 our subsidiary, threatened against or affecting our Company, our common stock, our subsidiary or of our companies or our subsidiary’s officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities

Market Price for Equity Securities

Our common stock is quoted on the OTC Pink under the symbol “DWAY”. The following table sets forth the quarterly high and low daily close for our common stock for the two years ended September 30, 2024 and 2023. There is a very limited market for the Company’s common stock

Holders

At February 24, 2025 , the Company had 113,951,722 outstanding shares of common stock and 143 shareholders of record.

Dividends

Holders of common stock are entitled to receive dividends as may be declared by the Company’s Board. The Company’s Board is not restricted from paying any dividends but is not obligated to declare a dividend. No dividends have ever been declared, and it is not anticipated that dividends will be paid in the foreseeable future. Any indebtedness the Company incurs in the future may also limit its ability to pay dividends. Investors should not purchase the Company’s common stock with the expectation of receiving cash dividends.

Recent Sales of Unregistered Securities

In May 2024, the Company issued 750,000 shares of its common stock to an accredited investor for $15,000 in gross proceeds. The issuance to the investor relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of restricted stock.

In May 2024, the Company issued 1,000,000 shares of its common stock to a lender as a commitment fee. The fair market value of the common stock on the date of grant was $70,000. The issuance to the investor relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of restricted stock.

In July 2024, the Company issued 400,000 shares of its common stock to four accredited investors for $8,000 in gross proceeds. The issuance to the investor relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of restricted stock.

On July 12, 2024, the Company sold a warrant to purchase 5,000,000 shares of the Company’s common stock at an exercise price of $0.00001 to an investor for $50,000. The warrant has no expiration date. The investor has the option of funding the Company with two additional tranches of $50,000. The second tranche of $50,000 is due within 60 days of the first funding date of July 12, 2024.

On August 19, 2024, the Company received the funding for the second tranche and issued to the investor a cash warrant to purchase up to 666,666 shares of Common Stock at an exercise price of $0.08 per share. The warrant has no expiration date.

In November 2024, the Company issued 250,000 shares of its common stock to an accredited investor for $5,000 in gross proceeds. The issuance to the investor relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of restricted stock.

At any time 90 days after the second tranche funding date the investor may invest an additional $50,000 and the Company will issue to the investor a pre-funded warrant to purchase up to 2,500,000 shares of Common Stock in the and a cash warrant to purchase up to 333,333 shares of Common Stock at an exercise price of $0.08 per share. The warrant does not have an expiration date.

The issuance to the investor relied on the exemption from registration provided by Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder concerning the issuance of restricted stock.

Purchase of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any securities during the fiscal year ended September 30, 2024.

Item 6. Selected Financial Data

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the consolidated financial statements and notes thereto included elsewhere in this Form 10-K. All information presented herein is based on the Company’s fiscal year, which ends September 30. Unless otherwise stated, references to particular years, quarters, months or periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.

Overview

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

The Company 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.

RESULTS OF OPERATIONS

For the year ended September 30, 2024, compared to year ended September 30, 2023

Our operating results for the years ended September 30, 2024 and 2023 are summarized as follows:

Revenues for the year ended September 30, 2024 was $460,991, as compared to $307,284 for the year ended September 30, 2023, an increase of $153,707 primarily due to a $149,248 increase in rental revenue.

Operating expenses for the year ended September 30, 2024 were $706,416 as compared to $830,976 for the year ended September 30, 2023. The decrease of $124,560 was primarily attributable to a $29,730 decrease in salaries and payroll taxes, and a $94,664 decrease in professional fees.

Operating loss was $568,155 for the year ended September 30, 2024, as compared to $762,455 for the year ended September 30, 2023. The increase of $194,300 was largely attributable to a decrease in professional fees, salaries, and payroll taxes and a large increase in rental revenue.

Other income (expenses) for year ended September 30, 2024 were ($1,680,088), as compared to ($167,682) for the year ended September 30, 2023. The increase of $1,512,406 was attributable to increases in amortization debt discount of $271,667, change in fair value of derivative liability of $512,474, amortization of deferred financing costs of $201,236, and interest expense of $563,342.

Liquidity and Capital Resources:

The following table provides selected financial data about our Company as of September 30, 2024 and 2023.

Working Capital

As of September 30, 2024 and September 30, 2023, our total current assets net of restricted cash were $37,996 and $16,216 which were comprised of $33,588 and $4,632 in cash, $1,438 and $11,584 in accounts receivable and $2,970 and $0 in prepaid expenses, respectively.

As of September 30, 2024, our current liabilities were $4,373,184 which were comprised of $994,270 in accounts payable and accrued liabilities, $12,752 in accrued interest – related party, $3,306 in deferred revenue, $1,339 in customer deposits, $25,080 in due to related party, $270,000 in promissory notes payable in default, $42,500 in promissory notes payable – related parties, $1,597,312 in convertible notes payable, and $1,386,014 in derivative liability. As of September 30, 2023 our current liabilities were $1,878,080  which were comprised of $664,707 in accounts payable and accrued liabilities, $4,918 in accrued interest – related party, $7,233 in deferred revenue, $2,234 in customer deposits, $25,080 in due to related party, $27,437 in promissory notes payable, $12,500 in promissory notes payable in default, $50,000 in promissory notes payable – related parties, $1,082,654 in convertible notes payable, and $1,317 in derivative liability.

As of September 30, 2024 and September 30, 2023, our working capital deficiency was $4,335,188 and $1,861,864, respectively.

Cash Flow Data:

Cash Flows from Operating Activities

During the year ended September 30, 2024 the company did not generate positive cash flows from operating activities. For the year ended September 30, 2024 net cash flows used in operating activities was $424,379 consisting of a net loss of $2,248,243, reduced by amortization debt discount of $393,964, amortization and depreciation of $57,324, gain on change in fair value of derivative liability of $342,751, amortization of deferred financing costs of $201,236, discount on lines of credit of $(85,000), addition to derivative liability of $686,102, discount on notes payable of $(112,246), and a change in operating assets and liabilities of $339,751.

During the year ended September 30, 2023 the company did not generate positive cash flows from operating activities. For the year ended September 30, 2023, net cash flows used in operating activities was $445,105 consisting of a net loss of $930,137, reduced by stock-based compensation expenses of $15,000, amortization debt discount of $122,279, depreciation of $36,783, a loss on debt extinguishment of $36,313, a change in operating assets and liabilities of $444,380, and gain on change in fair value of derivative liability of $169,723.

Cash Flows from Investing Activities

During the year ended September 30, 2024 the Company purchased 26 vehicles for $642,647.

During the year ended September 30, 2023 the Company purchased two vehicles for $67,039 and developed a website for a total of $5,833.

Cash Flows from Financing Activities

During the year ended September 30, 2024, the Company generated $23,000 from the sale of common stock, $100,000 from the sale of warrants, $454,250 from the issuance of notes payable, and $655,882 from lines of credit. These proceeds were partially offset by repayments on notes payable of $155,709.

During the year ended September 30, 2023, the Company generated $310,000 from the issuance of convertible notes, $104,458 from the promissory notes, $50,000 from related party notes payable, and $26,460 from related party advances. These proceeds were partially offset by repayments on related party advances, promissory notes payable, and payments for debt issuance costs of $1,460, $42,011, and $33,388, respectively.

Going Concern

As of September 30, 2024, the Company had a net loss of $2,248,243 accumulated deficit of $5,559,139 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, 2025.

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:

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 (“ASC”) 606, Revenue from Contracts with Customers, for all periods presented. The Company, through its DriveItAway online/app-based platform (“platform”), operates in the automotive rental industry. The Company assists subprime and deep subprime candidates to rent/lease vehicles on a short-term basis, generally on a weekly or, in some cases monthly, basis under a Pay-As You-Go program. Through its platform the Company will track vehicle values and reduce vehicle pricing through the customers usage payments to show drivers a vehicle purchase price should they be interested in 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 ended September 30, 2024 and 2023, the Company derived its revenue from signed contracts for vehicle rentals between the Company, other leasing companies, or car dealerships and individual car rental customers (“customers”).

Customers book a vehicle through the Company’s platform, starting first with a rental contract with 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.

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 vehicle rental arrangements and to collect cash from customers and remit those amounts to dealerships net of the Company’s revenue share.

The vehicle rental arrangements are over a fixed contracted period; therefore, the Company recognizes rental revenue ratably over the contract term. The Company analyzes the start dates of all contracts and allocates charges to customer credit cards for this service between revenue and deferred revenue at the end of each month.

Costs related to rental revenue include depreciation for Company owned vehicles and monthly lease payments when the vehicles are leased from a leasing company. The amount of revenue transferred to dealerships is treated as contra-revenue because the Company acts as an agent in these transactions resulting in only the Company’s revenue share being recognized.

The Pay-As-You-Go program manages or includes insurance. 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 collected at contract inception and covers the fixed contract period the Company recognizes insurance revenue ratably over the contract term and allocates charges to customer credit cards for this service between revenue and deferred revenue at the end of each month.

Initial non-refundable fees are recognized when payment is received as the Company has no obligation to provide additional services at that point. Miscellaneous charges for extra mileage, late fees, or toll charges calculated and charged to the customer credit card at the end of the usage cycle are recognized when the credit card charge goes through. Refundable deposits are recorded on the balance sheet until deposits are returned to customers or applied to their account for fees incurred. Deferred revenue includes rental and insurance amounts that are paid for contracts that overlap a reporting date and relate to usages after that date. As of September 30, 2024 and 2023 refundable deposits were $1,339 and $2,234 and deferred revenue was $3,306 and $7,233, respectively.

In addition to the costs associated with rental revenue and insurance revenue, within the Cost of Goods Sold account the Company also records credit card fees incurred from the cash collections and cash remittance process, as a significant portion of its performance obligation is to collect and remit payments through its credit card processors.

Stock-Based Compensation

The Company recognizes compensation expense for all restricted stock awards and stock options. The fair value of restricted stock awards is measured using the grant date fair value of our stock, as determined by the Board of Directors. The fair value of stock options is estimated at the grant date using the Black-Scholes option-pricing model, and the portion that is ultimately expected to vest is recognized as compensation cost over the requisite service 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.

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.

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.

Derivative Financial Instruments

The Company accounts for their derivative financial instruments in accordance with ASC 815 “Derivatives and Hedging” therefore any embedded conversion options and warrants accounted for as derivatives are to be recorded at their fair values as of the inception 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.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company, we are not required to provide the information required by this Item.

Item 8. Financial Statements and Supplementary Data

The following audited consolidated financial statements are included in this Annual Report:

DRIVEITAWAY HOLDINGS, INC.

INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2024 and 2023

Report of Independent Registered Public Accounting Firm

Board of Directors and Shareholders

DriveItAway Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of DriveItAway Holdings, Inc. as of September 30, 2023, and the related consolidated statements of operations, changes in stockholder’s deficit, and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of DriveItAway Holdings, Inc. as of September 30, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 1 to the financial statements, the entity has suffered recurring losses from operations, has a net capital deficiency, and has not established sufficient revenue to cover its operating costs, therefore will require additional capital to continue operations. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to DriveItAway Holdings, Inc. in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. DriveItAway Holdings, Inc. is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Complex Debt Transaction

During the year under audit the Company entered into multiple amendments to their convertible note with AJB Capital Investments, LLC (see Note 7) that changed the terms of the original agreement, including changes to the note principal, the commitment fee shares, and the warrants that were issued in conjunction with the borrowing. Due to the number of modifications to the financing arrangement the accounting for the transaction was challenging and required complex auditor judgment, including a detailed analysis and interpretation of accounting literature, and took a significant amount of audit effort.

In order to audit the accounting for the debt agreement, we reviewed managements analysis of the transaction and had to perform a significant amount of research and analysis to gain comfort in the accounting of the transaction. The detailed analysis performed resulted in material audit adjustments to the recorded debt discount, amortization of debt discount, loss on extinguishment of debt, and change in derivative liability, as one of the modifications required extinguishment accounting.

/s/ Mac Accounting Group & CPAs, LLP

We served as DriveItAway Holdings Inc.’s auditor since 2019.

Midvale, Utah

March 8, 2024

 Report of Independent Registered Public Accounting Firm

To the Shareholders and

Board of Directors of DriveItAway Holdings, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of DriveItAway Holdings, Inc. and Subsidiary (the “Company”) as of September 30, 2024, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows, for the year then ended, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2024, and the results of its operations and its cash flows for the year ended September 30, 2024, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt about the Company's ability to continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As of September 30, 2024, the Company had a net loss of $2,248,243, an accumulated deficit of $5,559,139 and the Company has not established sufficient revenue to cover its operating costs 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, 2025. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current audits of the financial statements that was communicated or required to be communicated to the Board of Directors and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

An audit of these elements is especially challenging and requires auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skill or knowledge needed.

Accounting for Warrants issued in connection with Notes Payable

As described in Notes 8, Derivative Liabilities, the Company issued prefunded warrants for the purchase of the Company’s common stock. The fair market value of the Warrants were recorded as a derivative liability. The assigned value of the warrants along with loan fees and broker fees was recorded as deferred financing costs and will be recorded as a discount to the note, amortized straight line over the life of the Promissory Note.

The Company determined that this is an asset in accordance with the guidance exception in ASC 470-20-25-2 (the “ASC”) which indicates the ASC does not apply when warrants are issued to obtain a line of credit rather than in connection with the issuance of a debt instrument. Issuing warrants to obtain a line of credit is equivalent to paying a loan commitment or access fee (equivalent to the fair value of the warrant). As such, these costs meet the definition of an asset. This exception applies, even if the line is fully drawn down at inception. The Company recorded deferred financing costs, net of discount of, $248,763, derivative liability of $1,386,014 and loss from change in fair value of derivative liability of $342,751, as of and for the year ended September 30, 2024.

Our audit procedures included, but were not limited to (1) a review of the assumptions by management and the guidance from the ASC (2) the derivative calculations, underlying assumptions to arrive at fair value, initial recognition and subsequent measurement at the balance sheet date (3) the fair value model employed in the derivative calculations (4) evaluation of whether the note exception from the ASC is applicable in the Company’s case (5) the ability of the Company to realize the asset value and (6) the method of amortization. 

/s/ Victor Mokuolu, CPA PLLC

We have served as the Company’s auditor since 2024.

Houston, Texas

February 24, 2025

DriveItAway Holdings, Inc.

Consolidated Balance Sheets

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

DriveItAway Holdings, Inc.

Consolidated Statements of Operations

DriveItAway Holdings, Inc.

Consolidated Statement of Changes in Stockholders’ Deficit Years Ended September 30, 2024 and 2023

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

DriveItAway Holdings, Inc.

Consolidated Statements of Cash Flows

DriveItAway Holdings, Inc.

Notes to Consolidated Financial Statements September 30, 2024 and 2023