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 ~~May~~November 3130, 2024

Commission File Number 000-56002

Allied Corp.

(Exact name of registrant as specified in its charter)

Nevada		33-1227173
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
(State or other jurisdiction of incorporation)		(I.R.S. Employer Identification No.)

~~1405~~200-460 ~~St.~~Doyle ~~Paul~~Ave ~~St., Suite 201,~~ Kelowna, BC, Canada, V1Y ~~9N2~~OC2

(Address of principal executive offices) (Zip Code)

877-255-4337

(Registrant’s telephone number, including area code)

_____________________________________________

(Former name, former address and former fiscal year, 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

Indicate by check mark whether the issuer (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	☐	Smaller 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

As of ~~May~~November 3130, 2024, there were ~~108~~115,~~316~~495,~~904~~384 shares of common stock issued and outstanding.

ALLIED CORP.

NOVEMBER 30, 2024

(UNAUDITED)

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements.	3F-1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	283
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	3713
Item 4.	Controls and Procedures.	3713
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings.	3814
Item 1A.	Risk Factors.	3914
Item 2.	Unregistered Sales of Securities and Use of Proceeds.	3914
Item 3.	Defaults Upon Senior Securities.	3914
Item 4.	Mining Safety Disclosure.	3914
Item 5.	Other Information.	3914
Item 6.	Exhibits.	15

Table of Contents

ALLIED CORP.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Condensed consolidated interim balance sheets at May 31, 2024 (unaudited) and August 31, 2023		4
Condensed consolidated interim balance sheets at November 30, 2024 (unaudited) and August 31, 2024		F-2
Condensed consolidated interim statements of operations and comprehensive loss for the three and nine months ended May 31, 2024 and May 31, 2023 (unaudited)		5
Condensed consolidated interim statements of operations and comprehensive loss for the three months ended November 30, 2024 and November 30, 2023 (unaudited)		F-3
Condensed consolidated interim statements of stockholders’ deficit for the nine months ended May 31, 2024 and May 31, 2023 (unaudited)		6
Condensed consolidated interim statements of stockholders’ deficit for the three months ended November 30 2024 and November 30, 2023 (unaudited)		F-4
Condensed consolidated interim statements of cash flows for the nine months ended May 31, 2024 and May 31, 2023 (unaudited)		8
Condensed consolidated interim statements of cash flows for the three months ended November 30, 2024 and November 30, 2023 (unaudited)		F-5
Notes to the unaudited condensed consolidated interim financial statements		9F-6

3F-1 Table of Contents

ALLIED CORP.Condensed Consolidated Interim Balance Sheets(Expressed in US Dollars)(Unaudited)

	May 31, 2024			August 31, 2023
	November 30, 2024			August 31, 2024
	(Unaudited)
Assets
Current assets
Cash	$	91195,~~586~~350		$	~~209~~359,~~736~~103
Inventory (Note 3)		~~342~~287,~~646~~053			~~107~~261,~~510~~016
Other receivables		234,573			134,482
Accounts receivable		75,939			47,955
Prepaid expenses		4854,~~446~~127			1845,~~852~~485
Total current assets		~~717~~612,~~251~~469			~~470~~713,~~580~~559
Deposits and advances (Note 4)		20,725			26,354
Non-current assets
Right-of-use assets (Note 7)		107,507			109,301
Deposits and advances (Note 5)		17,558			20,668
Property, plant and equipment (Note 5)		1,321,318			1,417,192
Right-of-use assets (Note 9)		120,114			131,865
Intangible assets (Note 6)		43,048			40,301
Property, plant and equipment (Note 6)		1,173,224			1,218,111
Total assets	$	2,209,849		$	2,063,728
Intangible assets (Note 7)		27,149			30,638
Total assets	$	1,950,514		$	2,114,841
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	2,~~705~~758,~~536~~604		$	2,~~393~~703,~~359~~163
Due to related parties (Note 11)		826,139			693,292
Due to related parties (Note 13)		122,873			353,513
Current portion of lease liabilities (Note 7)		12,741			10,745
Current portion of lease liabilities (Note 9)		17,239			17,090
Loans payable (Note 8)		2,481,118			2,027,348
Loans payable (Note 10)		2,813,600			2,699,641
Secured convertible notes payable (Note 9)		3,774,891			3,724,891
Secured convertible notes payable (Note 11)		3,774,891			3,774,891
Total current liabilities		9,~~800~~487,~~425~~207			89,~~849~~548,~~635~~298
Lease liabilities, net of current portion (Note 7)		94,767			98,556
Non-current liability
Total liabilities	$	9,895,192		$	8,948,191
Lease liabilities, net of current portion (Note 9)		103,751			115,007
Stockholders’ deficiency
Total liabilities		9,590,958			9,663,305
Preferred stock – 50,000,000 shares authorized, $0.0001 par value Nil shares issued and outstanding	$	-		$	-
Stockholders’ deficit
Common stock – 300,000,000 shares authorized, $0.0001 par value; 105,816,904 shares issued and outstanding (101,592,914 – par value $0.0001 – August 31, 2023)		10,832			10,160
Common stock - 300,000,000 shares authorized, $0.0001 par value; 115,495,384 shares issued and outstanding (August 31, 2024 - 112,471,472)		11,550			11,248
Additional paid in capital		4143,~~315~~272,~~633~~117			3942,~~404~~613,~~667~~696
Common stock issuable		30,000			8030,000
Accumulated deficit		(4850,~~202~~364,~~258~~810	)		(4549,~~608~~584,~~336~~520	)
Accumulated other comprehensive loss		(~~839~~589,~~550~~301	)		(~~770~~618,~~954~~888	)
Total stockholders’ deficit		(7,~~685~~640,~~343~~444	)		(67,~~884~~548,~~463~~464	)
Total liabilities and stockholders’ deficit	$	21,~~209~~950,~~849~~514		$	2,~~063~~114,~~728~~841

Nature of operations and going concern (Note 1)

Commitments (Note 1416)

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

4F-2 Table of Contents

ALLIED CORP.Condensed Consolidated Interim Statements of Operations and Comprehensive Loss(Expressed in US dollars, except number of shares)(Unaudited)

	For theThree Months Ended May 31, 2024			For theThree Months Ended May 31, 2023			For theNine Months Ended May 31, 2024			For theNine Months Ended May 31, 2023
	For the three months endedNovember 30,
Revenues
	2024			2023
Sales	$	77,141		$	-		$	96,180		$	69,625
Revenues
Cost of sales (Note 3)		(21,664	)		-			(23,667	)		(25,958	)
Sales	$	27,669		$	19,039
Gross margin		55,477			-			72,513			43,667
Cost of sales (Note 3)		(14,058	)		(2,003	)
Expenses
Gross margin		13,611			17,036
Amortization and depreciation		35,567			33,611			98,122			91,040
Expenses
Consulting fees (Note 11 and 16)		350,731			1,922,653			1,274,047			3,583,188
Amortization and depreciation		33,343			35,419
Foreign exchange loss (gain)		(33,054	)		(378,307	)		(93,724	)		395,632
Consulting fees (Note 13)		173,808			441,487
Interest expense and bank charges		118,625			118,812			356,097			358,858
Office and miscellaneous		208,331			152,822
Office and miscellaneous		324,429			320,983			508,331			501,291
Professional fees		112,833			60,789
Professional fees		53,558			53,990			238,350			351,086
Convertible notes interest		94,114			118,646
Travel		1,076			726			3,352			10,755
Operating expenses		622,429			809,163
Operating expenses		850,932			2,072,468			2,384,575			5,291,850
Loss before other items		(608,818	)		(792,127	)
Loss before other items		(795,455	)		(2,072,468	)		(2,312,062	)		(5,248,183	)
Other income (expenses)
Other income and expenses
Interest expense and bank charges		(123,543	)		(92,867	)
Interest expense		(95,968	)		(93,636	)		(281,860	)		(264,656	)
Foreign exchange (loss) gain		(47,929	)		48,321
Loss on debt extinguishment (Note 11)		-			-			-			(27,043	)
Net loss		(780,290	)		(836,673	)
Total other income (expenses)		(95,968	)		(93,636	)		(281,860	)		(291,699	)
Other comprehensive income (loss)
Net loss		(891,423	)		(2,166,104	)		(2,593,922	)		(5,539,882	)
Foreign currency translation adjustments		29,587			(16,622	)
Other comprehensive loss
Comprehensive loss	$	(750,703	)	$	(853,295	)
Foreign currency translation adjustments		27,441			(119,799	)		(68,596	)		422,343
Basic and diluted loss per share	$	(0.01	)	$	(0.01	)
Comprehensive loss	$	(863,982	)	$	(2,285,903	)	$	(2,662,518	)	$	(5,117,539	)
Weighted average number of common shares outstanding		113,437,620			102,861,018
Basic and diluted loss per share	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.06	)
Weighted average number of common shares outstanding		106,387,556			97,007,719			104,938,146			96,690,862

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

5F-3 Table of Contents

ALLIED CORP.

Condensed Consolidated Interim Statements of Stockholders’ Deficit

(Expressed in US dollars)

(Unaudited)

	Common stock						Additional									Accumulated other
	Number ofshares			Amount			paid in capital			Stock issuable			Accumulated deficit			comprehensive loss			Total
Balance, August 31, 2022		93,967,594		$	9,397		$	33,999,090		$	540,000		$	(34,932,665	)	$	(898,219	)	$	(1,282,397	)
Balance, August 31, 2023		101,592,914		$	10,160		$	39,404,667		$	80,000		$	(45,608,336	)	$	(770,954	)	$	(6,884,463	)
Shares issued for cash		2250,~~925,~~000			~~292~~25			149,~~169,708~~975			(~~540~~50,000	)		-			-			~~630,000~~-
Share issuance costs		-			-			(12,792	)		-			-			-			(12,792	)
Shares subscribed		-			-			-			346,000			-			-			346,000
Shares issued to settle debts		145,560			15			86,557			-			-			-			86,572
Stock-based compensation		-			-			143,653			-			-			-			143,653
Stock-based compensation		-			-			545,171			-			-			-			545,171
Comprehensive loss for the period		-			-			-			-			(836,673	)		(16,622	)		(853,295	)
Comprehensive loss for the year		-			-			-			-			(1,309,541	)		(154,000	)		(1,463,541	)
Balance, November 30, 2023		101,842,914		$	10,185		$	39,598,295		$	376,000		$	(46,445,009	)	$	(787,576	)	$	(7,248,105	)
Balance, November 30, 2022		97,038,154		$	9,704		$	35,787,734		$	-		$	(36,242,206	)	$	(1,052,219	)	$	(1,496,987	)
Shares subscribed		-			-			-			240,952			-			-			240,952
Stock-based compensation		-			-			574,075			-			-			-			574,075
Comprehensive loss for the period		-			-			-			-			(2,064,237	)		696,142			(1,368,095	)
Balance, February 28, 2023		97,038,154		$	9,704		$	36,361,809		$	240,952		$	(38,306,443	)	$	(356,077	)	$	(2,050,055	)
Shares subscribed		-			-			-			205,000			-			-			205,000
Shares cancelled		(100,000	)		(10	)		10			-			-			-			-
Stock-based compensation		-			-			1,730,453			-			-			-			1,730,453
Comprehensive loss for the period		-			-			-			-			(2,166,104	)		(119,799	)		(2,285,903	)
Balance, May 31, 2023		96,938,154		$	9,694		$	38,092,272		$	445,952		$	(40,472,547	)	$	(475,876	)	$	(2,400,505	)

	Common stock				Additional							Accumulated other
	Number of shares		Amount		paid in capital		Stock issuable		Accumulated deficit			comprehensive loss			Total

Balance, August 31, 2024		112,471,472	$	11,248	$	42,613,696	$	30,000	$	(49,584,520	)	$	(618,888	)	$	(7,548,464	)
Shares issued for cash		1,950,000		195		389,805		-		-			-			390,000
Shares issued on stock option exercise		1,073,912		107		214,675		-		-			-			214,782
Stock-based compensation		-		-		53,941		-		-			-			53,941
Comprehensive loss for the period		-		-		-		-		(780,290	)		29,587			(750,703	)

Balance, November 30, 2024		115,495,384	$	11,550	$	43,272,117	$	30,000	$	(50,364,810	)	$	(589,301	)	$	(7,640,444	)

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

6F-4 Table of Contents

ALLIED CORP.Condensed Consolidated Interim Statements of Stockholders’ Deficit(Expressed in US dollars)(Unaudited)

	Common stock				Additional									Accumulated other
	Number ofshares		Amount		paid in capital			Stock issuable			Accumulated deficit			comprehensive loss			Total
Balance, August 31, 2023		101,592,914	$	10,160	$	39,404,667		$	80,000		$	(45,608,336	)	$	(770,954	)	$	(6,884,463	)
Shares issued for cash		250,000		25		49,975			(50,000	)		-			-			-
Shares subscribed		-		-		-			346,000			-			-			346,000
Stock-based compensation		-		-		143,653			-			-			-			143,653
Comprehensive loss for the year		-		-		-			-			(836,673	)		(16,622	)		(853,295	)
Balance, November 30, 2023		101,842,914	$	10,185	$	39,598,295		$	376,000		$	(46,445,009	)	$	(787,576	)	$	(7,248,105	)
Shares issued for cash		3,931,990		393		786,005			(346,000	)		-			-			440,398
Share issuance costs		42,000		4		3,020			-			-			-			3,024
Stock-based compensation		-		-		223,055			-			-			-			223,055
Comprehensive loss for the period		-		-		-			-			(865,826	)		(79,415	)		(945,241	)
Balance, February 29, 2024		105,816,904	$	10,582	$	40,610,375		$	30,000		$	(47,310,835	)	$	(866,991	)	$	(7,526,869	)
Shares issued for cash		2,500,000		250		499,750			-			-			-			500,000
Share issuance costs		-		-		(50,000	)		-			-			-			(50,000	)
Stock-based compensation		-		-		104,836			-			-			-			104,836
Related party debt forgiveness		-		-		150,672			-			-			-			150,672
Comprehensive loss for the period		-		-		-			-			(891,423	)		27,441			(863,982	)
Balance, May 31, 2024		108,316,904	$	10,832	$	41,315,633		$	30,000		$	(48,202,258	)	$	(839,550	)	$	(7,685,343	)

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

7 Table of Contents

ALLIED CORP.

Condensed Consolidated Interim Statements of Cash Flows

(Expressed in US dollars)

(Unaudited)

	For the Nine Months Ended May 31, 2024			For the Nine Months Ended May 31, 2023
	For the three months endedNovember 30,
Cash provided by (used in):
	2024			2023
Operating activities
Net loss for the period	$	(2780,~~593,922~~290	)	$	(5836,~~539,882~~673	)
Adjustment to net loss for the period for non-cash items
Adjustments for non-cash items
Accrued interest		~~635~~217,~~630~~038			~~524~~210,790
Amortization and depreciation		~~152~~33,~~386~~343			9135,~~040~~419
Loss on debt extinguishment		-			27,043
Stock-based compensation - options		53,941			143,653
Stock-based compensation - options		471,544			2,849,699
Adjustments for changes in working capital:
Fair value of finder’s shares		3,024			-
Inventory		(10,864	)		(82,277	)
Changes in non-cash working capital balance:
Other receivables		(27,984	)		(20,277	)
(Increase) decrease in other receivables		(89,656	)		(22,073	)
Prepaid expenses		(8,642	)		(676	)
(Increase) decrease in prepaid expenses		(29,594	)		6,952
Deposits and advances		3,110			2,437
Decrease in deposits and advances		7,024			30,938
Accounts payable and accrued liabilities		35,628			(37,695	)
(Decrease) increase in accounts payable and accrued liabilities		(19,783	)		401,565
Payment of lease liabilities		(8,585	)		-
Increase in due to related parties		257,919			180,884
Due to related parties		(15,858	)		118,920
Increase in inventory		(182,481	)		(561,097	)
Net cash used in operating activities		(509,163	)		(466,379	)
		(1,387,909	)		(2,010,141	)
Investing activities
Purchase of intangible assets		(6,354	)		(3,964	)
Purchase of property, plant, and equipment		(37,394	)		-
Purchase of property, plant, and equipment		(2,710	)		(81,567	)
Net cash used in investing activities		(37,394	)		-
		(9,064	)		(85,531	)
Financing activities
Advance from related parties		25,600			70,000
Repayment of loan payable		(8,965	)		-
Proceeds from loan payable		100,000			-
Proceeds from the issuance of common stock		390,000			-
Proceeds from convertible notes payable		50,000			380,000
Proceeds for subscriptions of stock issuable		-			346,000
Proceeds from the issuance of common stock		1,236,398			617,208
Net cash provided by financing activities		381,035			346,000
Proceeds for subscriptions of stock issuable		-			445,952
Effect of exchange rate on changes of cash		1,769			(49,763	)
		1,411,998			1,513,160
Net change in cash		(165,522	)		(120,379	)
Increase (decrease) in cash		15,025			(582,512	)
Cash, beginning of period		359,103			209,736
Effect of exchange rate on changes of cash		(133,175	)		489,985
Cash, end of period	$	195,350		$	39,594
Cash, beginning of period		209,736			96,043
Cash, end of period	$	91,586		$	3,516
Supplemental cash flow disclosures:
Income taxes paid		-			-
Interest paid		-4,682			-
Non-cash activities: See Note 17

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

8F-5 Table of Contents

ALLIED CORP.Notes to the ~~unaudited~~Condensed ~~condensed~~Consolidated ~~consolidated~~Interim ~~interim~~Financial ~~financial~~StatementsFor ~~statementsMay~~the 31three months ended November 30, 2024 and 2023(Expressed in US dollars)(Unaudited)

1. ~~Nature~~NATURE ofOF ~~operations,~~OPERATIONS ~~reverse~~AND ~~take-over~~GOING ~~transaction and going concern~~CONCERN

a) Nature of operations

Allied Corp. (the “Company” or “Allied”) was incorporated in the State of Nevada on February 3, 2013~~. On July 1~~, ~~2019,~~and ~~the~~officially ~~Company~~adopted ~~changed~~ its current name toon ~~Allied~~July ~~Corp~~1, 2019. The Company's head office and ~~the~~ registered office ~~of the Company~~ are located at ~~1405~~200-460 ~~St.~~Doyle ~~Paul Street~~Ave, Kelowna, BCBritish Columbia, V1Y ~~2E4~~OC2, Canada. The Company’s common shares trade on the OTCQB under the symbol “ALID”.

~~The~~On ~~Company’s~~February ~~business~~18, ~~plan~~2020, isthe toCompany ~~discover~~acquired ~~new~~all ~~medical~~issued ~~technologies~~and ~~some~~outstanding share capital of ~~which~~Allied ~~are~~Colombia, ~~cannabis~~a ~~derived~~Colombian toentity. ~~target~~Allied ~~full~~Colombia’s ~~scope~~assets, ~~therapy~~liabilities, and ~~support~~results ~~for~~have ~~trauma~~been ~~survivors,~~consolidated ~~military~~into ~~veterans~~these ~~and~~financial ~~first~~statements ~~responders,~~from ~~however~~ the ~~Company~~date ~~has~~of ~~not~~acquisition. ~~begun~~As ~~such~~of ~~operations~~August ~~nor~~31, ~~obtained~~2024, ~~the~~Allied ~~required~~Colombia ~~permits~~operates toa ~~begin~~licensed ~~such~~cannabis ~~operations.~~farm in Colombia.

OnAllied’s ~~September~~business ~~10,~~plan ~~2019,~~includes the ~~Company~~discovery ~~was~~of ~~acquired~~new inmedical atechnologies, ~~reverse~~some ~~takeover (“RTO”) transaction and the RTO is considered a purchase~~ of ~~the~~which ~~Company’s~~are ~~net~~cannabis-derived, ~~assets~~aimed byat AMproviding ~~(Advanced~~comprehensive ~~Micro)~~therapy ~~Biosciences,~~and ~~Inc.~~support ~~(“AM~~for ~~Biosciences”).~~trauma ~~For accounting purposes~~survivors, ~~the~~military ~~legal subsidiary~~veterans, ~~AM Biosciences has been treated as the acquirer~~ and ~~Allied~~first ~~Corp~~responders. However, the ~~legal~~Company ~~parent,~~ has ~~been~~not ~~treated~~yet asbegun ~~the~~such ~~acquiree.~~operations ~~Accordingly,~~or ~~these~~obtained ~~consolidated financial statements reflect a continuation of~~ the ~~financial~~necessary ~~position,~~permits. ~~operating~~Its ~~results,~~current ~~and~~revenue ~~cash~~is ~~flow~~derived ~~of the Company’s legal subsidiary, AM Biosciences~~ from the ~~date~~sale of ~~incorporation~~cannabis onproducts ~~September~~through ~~13,~~Allied ~~2018~~Colombia.

On February 18, 2020, the Company acquired all the issued and outstanding share capital of a Colombian company, Allied Colombia S.A.S (“Allied Colombia”). The assets, liabilities and results of Allied Colombia are consolidated in these financial statements beginning from the February 18, 2020 acquisition date. As at May 31, 2024, Allied Colombia has a licensed cannabis farm in Colombia.

b) Going concern

The ~~accompanying~~unaudited condensed consolidated interim financial statements ~~have~~for ~~been~~the ~~prepared~~three ~~assuming~~months ~~that~~ended ~~the~~November ~~Company~~30, ~~will~~2024 ~~continue~~and as2023 a(the ~~going~~“financial ~~concern.~~statements”) ~~The~~have ~~Company~~been ~~incurred~~prepared on a ~~net~~going ~~loss~~concern ~~for~~basis. For the ~~nine~~three months ended ~~May~~November 3130, 2024, the Company incurred a net loss of $2780,~~593~~290 (2023 - $836,~~922~~673), ~~has~~ generated minimal revenue, and asdid not achieve positive operating cash flows. As at ~~May~~November 3130, 2024, ~~has~~the Company had a working capital deficit of $98,~~083~~874,~~174~~738 (August 31, 2024 - $8,834,739). These factors raise substantial doubt ~~regarding~~about the Company’s ability to continue as a going concern. The ~~consolidated~~ financial statements ~~of the Company~~ do not ~~include~~reflect any adjustments ~~relating~~related to the potential recoverability and classification of recorded assets, or the amounts and classifications of liabilities, ~~that~~which ~~might~~could be ~~necessary~~required ~~should~~if the Company beis unable to continue as a going concern. The Company’s ability to continue asrelies aon ~~going~~raising ~~concern is dependent upon the Company’s ability to raise~~ sufficient financing to acquire or develop a profitable business. Management ~~intends~~plans onto ~~financing~~fund ~~its~~ operations and future development ~~activities~~primarily ~~largely~~through ~~from the sale of~~ equity ~~securities with some additional funding from other traditional financing sources~~sales, ~~including~~supplemented by related party loans, until ~~such time that funds provided by~~ future ~~planned~~ operations ~~are~~can generate sufficient funds to ~~fund~~meet working capital ~~requirements~~needs.

c) Business Risks

While some states in the United States have authorized the use and sale of cannabis, it remains illegal under federal law and the approach to enforcement of U.S. federal laws against cannabis is subject to change. The Company plans to engage in cannabis-related activities in the United States, only if and when cannabis operations are federally legalized.

9F-6 Table of Contents

On January 4, 2018, the then United States Attorney General Jeff Sessions issued a memorandum to United States district attorneys (the “Sessions Memorandum”) which rescinded previous guidance from the United States Department of Justice specific to cannabis enforcement in the United States, including the Cole Memorandum. With the Cole Memorandum rescinded, United States federal prosecutors no longer have guidance relating to the exercise of their discretion in determining whether to prosecute cannabis related violations of United States federal law. Since that time, United States district attorneys have taken no legal action against state law compliant entities, and the Biden administration is generally anticipated to seek federal decriminalization of state legal cannabis activity. Nevertheless, a significant change in the federal government’s enforcement policy with respect to current federal laws applicable to cannabis could cause significant financial damage to the Company. The Company may be irreparably harmed by a change in enforcement policies of the federal government depending on the nature of such change.

Given the current illegality of cannabis under United States federal law, the Company’s ability to access both public and private capital may be hindered by the fact that certain financial institutions are regulated by the United States federal government and are thus prohibited from providing financing to companies engaged in cannabis related activities. The Company’s ability to access public capital markets in the United States is directly hindered as a result. The Company may, however, be able to access public and private capital markets in the United States through institutions which are not regulated by the United States federal government, in Canada, and in many other countries in order to support continuing operations.

2. ~~Significant~~SIGNIFICANT ~~accounting~~ACCOUNTING ~~policies~~POLICIES

Business Presentation

These unaudited condense consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and are expressed in United States dollars. The Company’s fiscal year end is August 31.

These interim unaudited financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by US GAAP for complete financial statements. Therefore, these interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended August 31, 2023, included in the Company’s Annual Report on Form 10-K filed with the SEC.

The consolidated financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at ~~May~~November 3130, 2024, and the results of its operations for the ~~nine~~three months ended ~~May~~November 3130, 2024, and cash flows for the ~~nine~~three months ended ~~May~~November 3130, 2024. The results of operations for the period ended ~~May~~November 3130, 2024 are not necessarily indicative of the results to be expected for future quarters or the full year.

F-7

Table of Contents

ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

The significant accounting policies followed are:

a) Principles of consolidation

These ~~consolidated~~ financial statements include accounts of Allied Corp. and its wholly-owned subsidiaries, including AM Biosciences, Allied US Products LLC, Tactical Relief LLC, Baleno Ltd. and Allied Colombia. Subsidiaries are consolidated from the date of acquisition and control and continue to be consolidated until the date that such control ceases. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect these returns through its power over the investee. All intercompany balances, income, expenses, and unrealized gains and losses resulting from intercompany transactions are eliminated on consolidation.

10b) ~~Table~~Foreign ofcurrency ~~Contents~~translation

~~ALLIED~~Foreign ~~CORP~~currency transactions are translated into U.~~Notes~~S. todollars at exchange rates in effect on the ~~unaudited~~date ~~condensed~~of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rate at the reporting date. All differences are recorded in the consolidated ~~interim~~statements ~~financial~~of ~~statementsMay~~income ~~31,~~and ~~2024(Expressed~~comprehensive income. Non-monetary items that are measured in USterms ~~dollars)~~of historical cost in a foreign currency are translated using the exchange rate at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.

b)Assets ~~Cash~~and liabilities of foreign operations are translated into U.S. dollars at year-end exchange rates and ~~cash~~any ~~equivalents~~revenue and expenses are translated at the average exchange rate for the year. The resulting exchange differences are recognized in other comprehensive income.

~~Cash~~c) ~~is comprised of cash on hand, cash held in trust accounts and demand deposits.~~ Cash ~~equivalents are short-term, highly liquid investments with maturities within three months when acquired. The Company did not have any cash equivalents as of May 31, 2024 and August 31, 2023.~~

c)Cash ~~Property~~is comprised of cash on hand, ~~plant~~cash held in trust accounts and ~~equipment~~demand deposits.

~~Property,~~d) Taxes ~~plant and equipment are stated at cost. The Company depreciates the cost of property, plant and equipment over their estimated useful lives at the following annual rates and methods:~~receivable

Farm facility and equipment	1 - 10 years straight-line basis
Office and computer equipment	5 - 10 years straight-line basis
Land equipment	10 years straight-line basis

Taxes receivable represent payments of VAT and are presented as part of other receivables. On a periodic basis, the Company assess recoverability of these balances based on the probability of the Colombian government to reimburse these amounts.

de) Inventory

Inventory isincludes ~~comprised~~work-in-progress ofand finished goods. Work-in-progress comprises raw materials, supplies, ~~vegetative~~pre-harvest ~~and~~cannabis ~~flowering~~ plants, ~~dried~~and ~~flower,~~ diluted crude. ~~and~~Finished goods consist of dried flower, CBD isolates available for sale, and purchased cannabis products.

F-8

Table of Contents

ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

The costs of inventory include but are not limited to labor, utilities, nutrition and irrigation, overhead and the depreciation of manufacturing equipment and production facilities, and amortization of licenses determined at normal capacity. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance and rent of grow facility. The Company began production in Colombia in late 2020, when the Company obtained approval for its strains of products. During the current period, certain costs were determined based on the actual usage of production space as compared to the normal predetermined operational production of the facility based on capacity as the Company gradually started to grow products and prepared the facility ready.

Inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment of inventory and records write-downs for excess and obsolete inventories based on the Company’s estimated forecast of product demand, production requirements, market conditions, regulatory environment, and spoilage. Actual inventory losses may differ from management’s estimates and such differences could be material to the Company’s consolidated balance sheets, statements of net loss and comprehensive loss and statements of cash flows.

ef) ~~Intangible~~Property, ~~assets~~plant and equipment

~~Intangible~~Property, ~~assets~~plant, ~~include~~and ~~licenses~~equipment ~~which~~ are ~~being~~recorded ~~amortized~~at ~~over~~cost, ~~their~~net ~~estimated~~of ~~useful~~accumulated ~~lives~~depreciation ofand 10impairment ~~years~~losses. ~~The~~Depreciation ~~Company’s~~is ~~licenses~~calculated ~~are amortized over their economic or legal life~~ on a straight-line basis, ~~whichever~~over isthe ~~shorter.~~assets’ ~~The~~estimated ~~licenses~~useful ~~have~~lives, ~~been~~which ~~amortized~~are ~~from~~as ~~the date of acquisition.~~follows:

Category	Useful life
Farm facility and equipment	1 - 10 years
Office and computer equipment	5 - 10 years
Land equipment	10 years

g) Intangible assets

Intangible assets consist of licenses, amortized on a straight-line basis over the shorter of their estimated economic life of 10 years or their legal life. Amortization of licenses begins from the acquisition date.

The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removed from the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amount may not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. The Company has no intangibles with indefinite lives.

~~For long~~F-~~lived~~9 ~~assets,~~Table ~~impairment~~of losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.Contents

11ALLIED ~~Table~~CORP.Notes ofto ~~Contents~~the Condensed Consolidated Interim Financial StatementsFor the three months ended November 30, 2024 and 2023(Expressed in US dollars)(Unaudited)

~~ALLIED~~h) ~~CORP.Notes~~Impairment toof ~~the~~long-lived ~~unaudited~~assets ~~condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)~~

f) Long-lived assets include property and equipment, right-of-use assets, and intangible assets with finite useful lives.

InAt ~~accordance~~each ~~with~~balance ~~ASC~~sheet ~~360,~~date ~~Property,~~or ~~Plant~~when ~~and~~triggering ~~Equipment~~events arise, the Company ~~tests~~assesses long-lived assets ~~or asset groups~~ for ~~recoverability~~potential ~~when~~impairment. ~~events~~Assets orare ~~changes~~grouped inat ~~circumstances~~the ~~indicate~~lowest ~~that~~level ~~their~~of ~~carrying~~separately ~~amount~~identifiable ~~may~~cash ~~not~~flows, beor ~~recoverable~~asset groups. Circumstances ~~which~~that ~~could~~may trigger aan impairment review include, ~~but are not limited to:~~ significant ~~decreases~~declines in the asset's market price, ~~of the asset; significant~~ adverse changes in ~~the~~ business climate or legal factors;, ~~accumulation~~substantially ofhigher ~~costs~~than ~~significantly in excess of the amount originally~~ expected ~~for the~~ acquisition or construction ofcosts, ~~the asset;~~ current period ~~cash flow~~ or projected operating losses ~~combined with a history of losses or a forecast of continuing losses~~ associated with the ~~use of the~~ asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, ~~which is generally determined based on the sum of the undiscounted cash flows expected to result from the use~~ and ~~the~~expectations ~~eventual disposal~~ of ~~the~~early asset, ~~as well as specific appraisal in certain instances~~disposal. ~~An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.~~

g)If ~~Foreign~~impairment ~~currency~~indicators ~~translation~~are ~~and~~present, ~~functional~~the ~~currency~~Company ~~conversion~~conducts an undiscounted cash flow analysis to assess recoverability. Impairment losses are recognized in profit or loss to the extent that an asset’s carrying amount exceeds its fair value.

Items included in these consolidated financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entities operate (the “functional currency”i). Leases

~~Prior~~At tothe ~~September~~start ~~10,~~of ~~2019~~a contract containing a lease, the Company’s ~~functional~~classifies ~~currency~~leases ~~was~~other than short-term leases as either operating or finance leases, following the ~~Canadian~~criteria ~~dollar~~outlined in ASU 2016-02 Leases. ~~Translation~~Lease ~~gains~~classification ~~and~~is ~~losses~~only ~~from~~reassessed when: (a) the ~~application~~contract ofis ~~the~~modified ~~U.S.~~and ~~dollar~~not treated as ~~the~~a ~~reporting~~separate ~~currency~~contract, ~~during~~or ~~the~~(b) ~~period~~there ~~that~~is a change in the ~~Canadian~~lease ~~dollar~~term ~~was~~or a reassessment of whether the ~~functional~~lessee ~~currency~~is ~~are~~likely ~~included~~to asexercise ~~part~~a ofpurchase ~~cumulative~~option ~~currency~~for ~~translation~~the ~~adjustment,~~underlying ~~which~~asset. isThe ~~reported~~Company ashas aelected ~~component~~not to recognize right-of-use ~~shareholders’~~assets ~~equity~~and ~~under~~lease ~~accumulated~~liabilities ~~other~~for ~~comprehensive~~short-term ~~loss~~leases with terms of 12 months or less.

~~The~~For ~~Company~~both ~~re-assessed~~finance ~~its functional currency~~ and ~~determined~~operating ~~as at September 10~~leases, ~~2019,~~right-of-use ~~its~~assets ~~functional~~and ~~currency~~lease ~~changed~~liabilities ~~from~~are ~~the~~initially ~~Canadian~~measured ~~dollar~~as to the ~~U.S.~~present ~~dollar~~value ~~based on management’s analysis~~ of ~~changes~~future inlease ~~our~~payments ~~organization.~~plus ~~The~~initial ~~change~~direct incosts, ~~functional~~discounted ~~currency~~at ~~was~~the ~~accounted~~lease's ~~for~~implicit ~~prospectively~~interest ~~from~~rate, ~~September 10~~or, ~~2019~~if ~~and prior period financial statements were~~ not ~~restated~~available, ~~for~~ the ~~change~~Company’s inincremental ~~functional~~borrowing ~~currency~~rate.

~~For~~Subsequent ~~periods~~measurements ~~commencing~~differ ~~September~~by ~~10,~~lease 2019, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets and non-monetary liabilities incurred after September 10, 2019 are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transactions. Foreign exchange gains and losses are included in the statement of operations and comprehensive loss as foreign exchange gains.type:

~~The~~· ~~Company~~For ~~assessed~~finance leases, lease liabilities are measured at amortized cost using the ~~functional~~effective ~~currency~~interest ~~for~~rate ~~Allied~~method, ~~Colombia~~and toright-of-use beassets are measured at cost less accumulated amortization, depreciated on a straight-line basis over the ~~Colombian~~lease ~~peso~~term. ~~The~~· ~~functional~~For ~~currency~~operating ~~for~~leases, ~~all~~lease ~~other~~liabilities ~~subsidiaries~~are ismeasured at the Upresent value of unpaid lease payments, discounted at the original discount rate.S. ~~dollar~~Right-of-use assets are adjusted by accumulated amortization, calculated as the difference between the straight-line lease cost (including amortization of initial direct costs) and the periodic accretion of the lease liability.

h)As ~~Share~~at ~~issuance~~November ~~costs~~30, 2024, the Company has one lease which is classified as an operating lease.

F-10

Table of Contents

ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

j) Stock-based compensation

The Company measures equity-settled share-based payments at fair value on the grant date, recognizing share-based compensation expense over the vesting period based on the estimated number of equity instruments expected to vest and uses Plain Vanilla for calculating the expected terms of options. Any consideration received from stock option exercises is recorded as an increase to common stock and additional paid-in capital.

k) Share issuance costs

Costs directly attributable to the raising of capital are charged against the related share capital. Costs related to shares not yet issued are recorded as deferred share issuance costs. These costs are deferred until the issuance of the shares to which the costs relate, at which time the costs will be charged against the related share capital or charged to operations if the shares are not issued.

il) ~~Research~~Secured ~~and~~convertible ~~development~~notes ~~costs~~payable

~~Research~~Under ~~and~~the ~~development~~simplified ~~costs~~guidance ~~are~~of ~~expensed~~ASU 2020-06, the Company accounts for convertible debt instruments, including its secured convertible notes payable as ~~incurred~~a single unit of account unless the conversion feature requires bifurcation in accordance with derivative accounting under ASC 815. ~~During~~Secured convertible notes payable are initially recorded at fair value adjusted for issuance costs and subsequently measured at amortized cost using the ~~nine~~effective ~~months~~interest ~~ended~~method. ~~May~~Convertible ~~31,~~note ~~2024,~~interest expense includes the ~~Company~~stated ~~incurred~~interest ~~research~~rate and ~~development~~any ~~costs~~applicable ofamortized ~~$nil~~discounts. ~~(May~~Upon 31conversion, ~~2023~~the –debt's ~~$nil)~~carrying amount is reclassified to equity with no gain or loss recognized.

12m) ~~Table~~Financial ~~of Contents~~instruments

~~ALLIED~~Financial ~~CORP~~instruments represent contracts that create a financial asset for one party and a financial liability or equity instrument for another.~~Notes~~ Initially, financial instruments are recorded at fair value, reflecting the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the ~~unaudited~~measurement ~~condensed~~date. ~~consolidated~~Subsequent ~~interim~~measurement depends on the classification of the financial ~~statementsMay~~instrument, 31with values measured at either fair value or amortized cost. For instruments measured at fair value, ~~2024(Expressed~~the inCompany USuses ~~dollars)~~quoted market prices when available to determine fair value.

j)Financial ~~Advertising~~instruments ~~costs~~measured at fair value are classified into one of three levels in the fair value hierarchy, based on the reliability of the lowest level of inputs used in estimating fair values. The three levels of the fair value hierarchy are as follows:

~~Advertising~~Level ~~costs~~1 ~~are~~- ~~expensed~~Unadjusted asquoted ~~incurred.~~prices ~~During~~in ~~the~~active ~~nine~~markets ~~months~~for ~~ended~~identical ~~May~~assets ~~31,~~or ~~2024, the Company incurred advertising costs of $631 (May 31, 2023 – $8,174).~~liabilities;

kLevel 2 - Inputs other than quoted prices that are observable for the asset or liability either directly (i.e. as prices) ~~Revenue~~or ~~recognition~~indirectly (i.e. derived from prices); and

~~The~~F-11 ~~Company’s~~Table ~~revenue is comprised~~ of ~~sales of cannabis products.~~Contents

~~The~~ALLIED Company’s revenue-generating activities have a single performance obligation and revenue is recognized at the point in time when control of the product transfers and the Company’s obligations have been fulfilledCORP.Notes ~~This generally occurs when the product is shipped or delivered~~ to the ~~customer,~~Condensed ~~depending~~Consolidated ~~upon~~Interim ~~the~~Financial ~~method~~StatementsFor ~~of distribution and shipping terms set forth in~~ the ~~customer~~three ~~contract.~~months ~~Revenue~~ended isNovember measured as the amount of consideration the Company expects to receive in exchange for the sale of the Company’s product. Certain of the Company’s customer contracts may provide the customer with a right of return. In certain circumstances the Company may also provide a retrospective price adjustment to a customer. These items give rise to variable consideration30, ~~which~~2024 ~~is recognized as a reduction of the transaction price based upon the expected amounts of the product returns~~ and ~~price~~2023(Expressed ~~adjustments~~in atUS the time revenue for the corresponding product sale is recognized. The determination of the reduction of the transaction price for variable consideration requires that the Company make certain estimates and assumptions that affect the timing and amounts of revenue recognized.dollars)(Unaudited)

Level 3 - Inputs that are not based on observable market data.

The Company’s financial instruments comprise cash, trade receivables, accounts payable, accrued liabilities, loans payable, and secured convertible notes payable. There are no financial assets or liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet. As of November 30, 2024, the carrying values of the Company’s financial instruments approximate their fair values, primarily due to their short-term maturities.

n) Revenue recognition

The Company’s revenue is comprised of sales of cannabis products. The Company’s revenue-generating activities have a single performance obligation and revenue is recognized at the point in time when control of the product transfers and the Company’s obligations have been fulfilled. This generally occurs when the product is shipped or delivered to the customer, depending upon the method of distribution and shipping terms set forth in the customer contract. Revenue is measured as the amount of consideration the Company expects to receive in exchange for the sale of the Company’s product.

Sales of products are for cash or otherwise agreed-upon credit terms. The Company’s payment terms vary by location and customer; however, the time period between when revenue is recognized and when payment is due is not significant. The Company estimates and reserves for its bad debt exposure based on its experience with past due accounts and collectability, write-off history, the aging of accounts receivable and an analysis of customer data.

lo) Net income (loss) per common share

Net income (loss) per share is calculated in accordance with ASC 260, Earnings per Share. The weighted-average number of common shares outstanding during each period is used to compute basic earning or loss per share. Diluted earnings or loss per share is computed using the weighted average number of shares and diluted potential common shares outstanding to the extent the effect would not be antidilutive. Dilutive potential common shares are additional common shares assumed to be exercised.

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding.

mp) Income taxes

The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. ~~A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.~~

n)A ~~Related~~valuation ~~party~~allowance ~~transactions~~is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

F-12

Table of Contents

ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

q) Related party transactions

Related parties are any entities or individuals that, through employment, ownership or other means, possess the ability to direct or cause the direction of the management and policies of the Company. The Company discloses related party transactions that are outside of normal compensatory agreements, such as salaries. Related party transactions are measured at the exchange amounts.

13r) ~~Table~~Significant ofaccounting ~~Contents~~estimates and judgments

~~ALLIED~~The ~~CORP.Notes~~preparation toof the ~~unaudited~~financial ~~condensed~~statements ~~consolidated~~in ~~interim~~conformity ~~financial~~with ~~statementsMay~~US 31GAAP requires management to make judgments, ~~2024(Expressed~~estimates and assumptions that affect the reported amounts in USthe ~~dollars)~~financial statements and accompanying notes.

o)Although ~~Significant~~management ~~accounting~~uses ~~estimates~~historical experience and its best knowledge of the amount, events or actions to for the basis for judgments and estimates, actual results may differ from these estimates.

The preparation of the financial statements in conformity with US GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Although management uses historical experience and its best knowledge of the amount, events or actions to for the basis for judgments and estimates, actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods.

Significant estimates and assumptions included in these financial statements relate to the valuation assumptions related to the estimated useful lives and recoverability of long-lived assets, stock-based compensation, and deferred income tax assets and liabilities. Judgments are required in the assessment of the Company’s ability to continue to as going concern as described in Note 1.

ps) ~~Financial~~Recent ~~instruments~~accounting pronouncements

~~ASC~~Issuance ~~825, Financial Instruments, requires an entity to maximize the use~~ of ~~observable~~ASU inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value2020-06:

~~Level~~In 1 August 2020, the Financial Accounting Standards Board (FASB) issued ASU 2020-06 - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging and Contracts in Entity’s Own Equity (Subtopic 815-40), aimed at simplifying the accounting for certain financial instruments. ASU 2020-06 eliminates the existing models that require the separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the guidance on the derivative scope exception related to the equity classification of contracts in an entity’s own equity.

~~Level~~Additionally, 1the ~~applies~~new tostandard ~~assets~~introduces orenhanced ~~liabilities~~disclosures for ~~which~~convertible ~~there~~debt ~~are~~and ~~quoted~~freestanding ~~prices~~instruments indexed to and settled in ~~active~~an ~~markets~~entity’s own equity. It also amends the diluted earnings per share guidance, mandating the use of the if-converted method for ~~identical~~all ~~assets~~convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2022, and must be applied on a full or ~~liabilities~~modified retrospective basis, with early adoption allowed starting January 1, 2021.

~~Level~~F-13 2 Table of Contents

~~Level~~ALLIED 2CORP.Notes ~~applies~~ to ~~assets~~the orCondensed ~~liabilities~~Consolidated ~~for~~Interim ~~which~~Financial ~~there~~StatementsFor ~~are inputs other than quoted prices that are observable for~~ the ~~asset~~three ormonths ~~liability~~ended ~~such~~November as30, ~~quoted~~2024 ~~prices~~and ~~for~~2023(Expressed ~~similar assets or liabilities~~ in ~~active~~US ~~markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions~~ dollars)(~~less active markets~~Unaudited)~~; or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.~~

~~Level~~Issuance 3 of ASU 2023-07:

~~Level~~In 3November ~~applies~~2023, the FASB issued ASU 2023-07, which introduces improvements to ~~assets~~the orinformation ~~liabilities~~that a public entity discloses about its reportable segments and addresses investor requests for ~~which~~more ~~there~~information ~~are~~about ~~unobservable~~reportable ~~inputs~~segment toexpenses. ~~the~~The ~~valuation~~ASU ~~methodology~~does ~~that~~not ~~are~~change ~~significant~~the current guidance related to the ~~measurement~~identification of ~~the~~operating ~~fair~~segments, ~~value~~the determination of ~~the~~reportable ~~assets~~segments, or ~~liabilities~~the aggregation criteria. Rather, the new guidance introduces additional disclosure requirements and expands those requirements to entities with a single reportable segment, not just entities with multiple reportable segments.

~~The~~ASU ~~financial~~2023-07 ~~instruments~~enhances ~~consist~~interim ~~principally~~disclosure ~~of cash~~requirements, ~~due~~clarifies ~~from~~the ~~related~~circumstances ~~parties,~~in ~~accounts~~which ~~payable,~~an ~~note~~entity ~~payable,~~can ~~and~~disclose ~~convertible~~multiple ~~notes~~segment ~~payable.~~measures ~~The fair value~~ of ~~cash~~profit ~~when~~or ~~applicable~~loss, isand ~~determined~~introduces ~~based~~the onsignificant ~~“Level~~expense ~~1” inputs~~principle, which ~~consist~~requires ofadditional ~~quoted~~disclosure ~~prices~~of insegment ~~active markets for identical assets~~expenses. ~~The~~In ~~Company~~addition, ~~believes that~~ the ~~recorded~~ASU ~~values~~provides ofnew ~~all~~segment ~~other~~disclosure ~~financial~~requirements ~~instruments~~for ~~which~~entities ~~are~~with ~~categorized~~a assingle ~~loans~~reportable ~~and~~segment ~~receivables approximate their current fair values because of their nature~~ and ~~respective~~contains ~~relatively~~other ~~short~~disclosure ~~maturity dates or current market rates of interest for similar instruments~~requirements.

~~For~~ASU ~~certain~~2023-07 ofis ~~the~~effective ~~Company’s~~for ~~financial~~all ~~instruments,~~public ~~including~~entities ~~accounts~~for ~~payable,~~fiscal ~~due~~years ~~from~~beginning ~~related~~after ~~parties~~December 15, ~~notes~~2023, and ~~loans~~interim ~~payable~~periods within fiscal years beginning after December 15, ~~the~~2024. ~~carrying~~Early ~~amounts~~adoption ~~approximate~~is ~~their~~permitted. ~~fair~~The ~~values~~enhanced ~~due~~segment disclosure requirements apply retrospectively to all prior periods presented in the ~~short~~financial ~~maturities~~statements. The Company will adopt ASU 2023-07 for effective September 1, 2024 and the effects will be present in the Company’s financial statements the fiscal year ended August 31, 2025 and all interim periods following.

The Company ~~does~~has not ~~have~~early-adopted any ~~assets~~new oraccounting ~~liabilities~~standard, ~~measured~~interpretation ator ~~fair~~amendment ~~value~~that onhas abeen ~~recurring~~issued ~~basis~~but ~~presented~~is onnot ~~the~~yet ~~Company’s~~effective ~~balance~~other ~~sheet~~than asASU of2020-06. ~~May~~The ~~31,~~adoption ~~2024~~of ~~and~~ASU ~~August~~2020-06 ~~31,~~did ~~2023~~not ~~other~~have ~~than~~a ~~cash~~material impact.

14t) ~~Table~~Reclassification and change in presentation of ~~Contents~~comparative figures

~~ALLIED~~Certain ~~CORP.Notes~~amounts toon the ~~unaudited~~Condensed ~~condensed~~Consolidated ~~consolidated~~Interim ~~interim~~Statements ~~financial~~of ~~statementsMay~~Operations ~~31,~~and ~~2024(Expressed~~Comprehensive inLoss USof ~~dollars)~~the prior year have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations.

~~Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash~~3. ~~The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.~~INVENTORY

q) Leases

The Company determines if an arrangement contains a lease in whole or in part at the inception of the contract. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset for the lease term while lease liabilities represent our obligation to make lease payments arising from the lease. All leases with terms greater than twelve months result in the recognition of a ROU asset and a liability at the lease commencement date based on the present value of the lease payments over the lease term. Unless a lease provides all of the information required to determine the implicit interest rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of the lease payments. The Company uses the implicit interest rate in the lease when readily determinable.

Our lease terms include all non-cancelable periods and may include options to extend (or to not terminate) the lease when it is reasonably certain that we will exercise that option. Leases with terms of twelve months or less at the commencement date are expensed on a straight-line basis over the lease term and do not result in the recognition of an asset or liability. See Note 7 – Leases.

r) Recent accounting pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”) to simplify accounting for certain financial instruments. ASU 2020-06 eliminates the current models that require separation of beneficial conversion and cash conversion features from convertible instruments and simplifies the derivative scope exception guidance pertaining to equity classification of contracts in an entity’s own equity. The new standard also introduces additional disclosures for convertible debt and freestanding instruments that are indexed to and settled in an entity’s own equity. ASU 2020-06 amends the diluted earnings per share guidance, including the requirement to use the if-converted method for all convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023, and should be applied on a full or modified retrospective basis, with early adoption permitted beginning on January 1, 2021. The Company adopted ASU 2020-06 effective September 1, 2022. The adoption of ASU 2020-06 did not have an impact on the Company’s financial statements.

The Company does not expect that recent accounting pronouncements or changes in accounting pronouncements during the nine months ended May 31, 2024, are of significance or potential significance to the Company.

3. Inventory

Inventory is comprised of the following items:

	May 31, 2024		August 31, 2023
	November 30, 2024		August 30, 2024
Work in progress	$	65104,~~756~~720	$	80132,~~094~~508
Finished goods		~~276~~182,~~890~~333		27128,~~416~~508
Total inventory	$	342,646	$	107,510
	$	287,053	$	261,016

15Inventory ~~Table~~as at November 30, 2024 is presented net of ~~Contents~~a net realizable value adjustment of $67,977 (August 31, 2024 - $417,862). During the three months ended November 30, 2024, the Company recognized an inventory write-off of $67,977 due to obsolescence (2023 - $417,862), recorded within cost of sales.

~~ALLIED~~F-14 ~~CORP.Notes~~Table toof ~~the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)~~Contents

~~The~~ALLIED ~~costs~~CORP.Notes ~~of inventory include but are not limited~~ to ~~labor,~~the ~~utilities,~~Condensed ~~nutrition~~Consolidated ~~and~~Interim ~~irrigation,~~Financial ~~overhead~~StatementsFor ~~and~~ the ~~depreciation~~three ofmonths ~~manufacturing~~ended ~~equipment~~November ~~and production facilities~~30, ~~and~~2024 ~~amortization of licenses determined at normal capacity. Manufacturing overhead~~ and ~~related~~2023(Expressed ~~expenses include salaries, wages, employee benefits, utilities, maintenance and rent of grow facility. The Company began production~~ in ~~Colombia~~US in late 2020, when the Company obtained approval for its strains of products. During the current period, certain costs were determined based on the actual usage of production space as compared to the normal predetermined operational production of the facility based on capacity as the Company gradually started to grow products and prepared the facility ready. dollars)(Unaudited)

~~During the nine months ended May 31, 2024, the Company recorded a $nil write-off of inventory costs to its net realizable value of $342,646~~4. ACCOUNTS RECEIVABLE

~~During~~A ~~the~~summary ~~year ended August 31, 2023, the Company recorded a $43,861 write-off~~ of ~~inventory costs for CBD isolates and other derivative products to reduce to its net realizable value of $nil. In addition,~~ the Company’s ~~recorded~~accounts ~~additional~~receivable ~~$1,463,157~~is ~~write-off~~as ~~of inventory costs to its net realizable value of $107,510.~~follows:

4. Deposits and advances

	November 30, 2024		August 31, 2024

Trade receivables	$	70,585	$	47,955
Tax receivables		5,354		-
	$	75,939	$	47,955

	May 31, 2024		August 31, 2023
Prepayments for construction facility in Colombia	$	20,725	$	26,354
Total deposits and advances	$	20,725	$	26,354

5. DEPOSITS AND ADVANCES

The Company paid certain vendors for the construction of farm facilities in Colombia in advance. At May 31, 2024, the prepayments totaled $20,725 (August 31, 2023 – $26,354).

	November 30, 2024		August 31, 2024

Prepayments for construction facility in Colombia	$	17,558	$	20,668
Total deposits and advances	$	17,558	$	20,668

5.As ~~Property~~at November 30, ~~plant~~2024 and ~~equipment~~August 31, 2024, deposits and advances were $17,558 and $20,668, respectively, representing payments made to vendors for the construction of farm facilities in Colombia.

At6. ~~May 31~~PROPERTY, ~~2024,~~PLANT ~~property,~~AND ~~plant and equipment consisted of:~~EQUIPMENT

	Construction in process		Farm facility and equipment		Office and computer equipment		Land equipment		Total
Cost
August 31, 2023	$	429,749	$	1,346,373	$	29,952	$	29,525	$	1,835,599
Additions		-		3,027		-		-		3,027
Foreign exchange		25,905		41,167		1,480		1,780		70,332
May 31, 2024	$	455,654	$	1,390,567	$	31,432	$	31,305	$	1,908,958
Accumulated depreciation
August 31, 2023	$	-	$	404,559	$	7,700	$	6,148	$	418,407
Additions		-		142,516		2,465		2,285		147,266
Foreign exchange		-		21,001		532		434		21,967
May 31, 2024	$	-	$	568,076	$	10,697	$	8,867	$	587,640
Net book value
August 31, 2023	$	429,749	$	941,814	$	22,252	$	23,377	$	1,417,192
May 31, 2024	$	455,654	$	822,491	$	20,735	$	22,438	$	1,321,318

A summary of the Company’s property, plant and equipment as at November 30, 2024 and August 31, 2024 is as follows:

As of May 31, 2024 and August 31, 2023, the construction in process has not been in use.

	November 30, 2024		August 31, 2024

Construction in process	$	416,706	$	419,592
Farm facility and equipment		1,310,889		1,332,215
Office and computer equipment		27,739		29,244
Land equipment		27,227		28,827
		1,782,561		1,809,878

Less: accumulated depreciation		609,337		591,767
Property, plant and equipment, net	$	1,173,224	$	1,218,111

During the three months ended November 30, 2024, the Company recorded depreciation of $42,082 (2023 - $56,676), and foreign currency translation loss of $40,199 (2023 – foreign currency translation gain of $16,012). ~~Table~~As at November 30, 2024, depreciation of ~~Contents~~$15,173 was included in inventory (August 31, 2024 - $74,814).

~~ALLIED~~F-15 ~~CORP.Notes~~Table toof ~~the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)~~Contents

6ALLIED CORP.Notes ~~Intangible~~to ~~assets~~the Condensed Consolidated Interim Financial StatementsFor the three months ended November 30, 2024 and 2023(Expressed in US dollars)(Unaudited)

At7. ~~May~~INTANGIBLE ~~31, 2024, intangible assets consisted of:~~ASSETS

	Cost $		Foreign exchange$			Accumulated amortization $			Accumulated impairment $			May 31, 2024 Net carrying value $		August 31, 2023 Net carrying value $
Cannabis licenses		5,457,763		(467,397	)		(1,145,651	)		(3,801,667	)		43,048		40,301
		5,457,763		(467,397	)		(1,145,651	)		(3,801,667	)		43,048		40,301

A summary of the Company’s intangible assets as at November 30, 2024 and August 2024 is as follows:

On February 17, 2020, the Company acquired $5,435,334 of licenses as part of the acquisition of Allied Colombia. The licenses acquired are issued by the Republic of Colombia and include the use of seeds for growing Cannabis, production of derivatives from Cannabis for medicinal and scientific use, cultivation of Cannabis plants, and producer of seeds. The Company recorded amortization of these licenses of $658,836 for the year ended August 31, 2021, of which $158,121 was included in cost of inventory.

	November 30, 2024		August 31, 2024

Intangible assets	$	4,198,891	$	4,445,619

Less: accumulated amortization		969,512		1,024,585
Less: accumulated impairment		3,202,230		3,390,396
Intangible assets, net	$	27,149	$	30,638

~~Management~~During ~~acquired~~ the ~~licenses~~three ~~with~~months aended ~~plan~~November to30, ~~operate~~2024, ~~in Colombia and believed~~ the ~~amounts paid for the licenses would be recovered from future operations. The~~ Company ~~has~~recorded ~~only~~amortization ~~recently~~expense ~~started its operations in Colombia~~ and ~~has~~impairment ~~limited~~of ~~history~~$1,851 ~~on which to base future outcomes from operations including cash flows. Cannabis~~ and ~~hemp~~$nil, ~~are~~respectively ~~considered~~(2023 to- be$1,437 ~~an emerging industry~~ and ~~Colombia~~$nil, does not yet have a sufficiently established observable legal market in which the Company could sell its Cannabis or hemp flower and CBD or THC extracts. Laws and regulations in Colombia are evolving and there is uncertainty in what will be legally permissible in a future market and what prices and demand there would be in Colombia for the Company’s products. At the presentrespectively), ~~the Company’s export activities are regulated~~ and ~~restricted~~foreign bycurrency ~~Colombian~~translation ~~law~~loss ~~and it is uncertain whether future changes in law would favorably impact the Company’s operations. Due to the uncertainty in the timing and amount~~ of ~~future cash flows from operations the Company has written down its licenses to the estimated recoverable amount. During the year ended August 31~~$1,638 ~~2021,~~(2023 ~~the~~– ~~Company recorded impairment of intangible assets in the amount of~~ $~~2,687,695~~388).

~~During~~8. ~~the~~ACCOUNTS ~~nine~~PAYABLE ~~months~~AND ~~ended~~ACCRUED ~~May 31, 2024, the Company recorded amortization of $5,120 (COP 20,514,189) (May 31, 2023 - $7,344 (COP 34,438,943)).~~ LIABILITIES

7.A ~~Leases~~summary of the Company’s accounts payable and accrued liabilities as at November 30, 2024 and August 2024 is as follows:

	November 30, 2024		August 31, 2024

Trade payable	$	854,232	$	832,870
Accrued liabilities		1,904,372		1,870,293
	$	2,758,604	$	2,703,163

F-16

Table of Contents

ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

9. LEASES

The Company accounts for leases under ASC 842, Leases, which establishes a right-of-use (“ROU”) model that requires a lessee to record an ROU asset and a lease liability, measured on a discounted basis, on the balance sheet for all leases with terms longer than 12 months. The Company also elected to keep all leases with an initial term of 12 months or less off the balance sheet.

~~The~~As ~~Company~~at ~~did not have any leases until the acquisition of Allied Colombia during the year ended~~ August 31, ~~2020.~~2023, ~~The acquisition resulted in~~ the ~~addition~~Company ofhad ~~$82,398~~one ofactive ~~operating~~ lease ~~assets~~for ~~and~~a ~~liabilities~~12.5-hectare ~~During~~plot ~~the~~of ~~year~~land ~~ended~~in ~~August~~Los 31Santos Municipality, ~~2021~~Colombia, ~~the~~designated ~~Company~~for ~~re-measured~~cultivation ~~its~~activities. ~~lease~~The ~~liabilities under this~~ lease ~~as the criteria~~ was ~~met~~set ~~for~~to ~~additional~~expire ~~monthly~~on ~~payment~~February ~~when~~1, ~~the~~2030. ~~Company~~This ~~started production as outlined in the~~ lease ~~agreement,~~was ~~resulting~~classified inas ~~additional~~an ~~lease~~operating ~~liabilities of $70,705~~lease.

On August 101, ~~2021~~2024, the Company ~~entered~~and ~~into~~the ~~another~~lessor ~~lease~~amended ~~for~~the ~~additional land in Colombia with monthly payment of $2,647 (COP9,970,675) for 12.5 hectares which is intended for use of outdoor cultivation, resulting in additional~~ lease ~~liabilities of $104~~,~~902.~~ ~~The~~increasing ~~lease~~the isbase ~~for~~rent ~~5 years,~~ and ~~expires~~adjusting ~~in July 2026. Management has assessed~~ the lease asterm anto ~~operating~~expire ~~lease.~~on ~~Effective~~July ~~August~~ 31, ~~2023, the Company terminated the lease~~2029. ~~Pursuant~~As toa ~~ASC~~result ~~842-20 upon the termination~~ of the ~~lease~~amendment, the ~~Company~~carrying ~~derecognized~~amounts ~~the~~of ~~lease~~right-of-use ~~related~~assets ~~asset~~ and ~~liability~~lease ~~and~~liabilities ~~included~~were ~~any~~remeasured, ~~consideration~~resulting ~~paid~~in oran ~~received~~increase ~~upon~~of ~~termination~~$39,050 ~~that was not already included~~ in the ~~lease payments in the gain or loss on termination~~ right-of-use ~~the~~asset and lease. liabilities.

17ROU ~~Table~~assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of ~~Contents~~the ROU asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the ROU asset results in front-loaded expense over the lease term. ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. At August 31, 2023, the Company did not have any finance leases.

~~ALLIED~~A ~~CORP.Notes~~summary toof the ~~unaudited~~Company’s ~~condensed~~weighted ~~consolidated~~average ~~interim~~discount ~~financial~~rate ~~statementsMay~~used ~~31,~~in ~~2024(Expressed~~calculating inlease USliabilities ~~dollars)~~and weighted average remaining lease term is as follows:

ROU assets represent the Company's right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease calculated by discounting fixed lease payments over the lease term at the rate implicit in the lease or the Company’s incremental borrowing rate. Lease liabilities are increased by interest and reduced by payments each period, and the ROU asset is amortized over the lease term. For operating leases, interest on the lease liability and the amortization of the ROU asset result in straight-line rent expense over the lease term. For finance leases, interest on the lease liability and the amortization of the ROU asset results in front-loaded expense over the lease term. ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. At May 31, 2024, the Company did not have any finance leases.

November 30,

2024

August 31,

2024

Weighted average discount rate

Weighted average remaining lease term

4.67 years

4.92 years

At May 31, 2024, the remaining operating lease term was 5.76 years and the discount rate associated with operating lease was 15%.

The components of lease expenses were as follows:

	$
Operating lease cost:
Amortization of right-of-use assets	$	84,~~158~~583
Interest on lease liabilities		12,287
Interest expense on lease liabilities		4,682
Total operating lease cost	$	209,~~445~~265

~~The~~For ~~following~~the ~~table~~three ~~provides~~months ~~supplemental~~ended ~~cash~~November ~~flow~~30, ~~and~~2024, ~~other~~the ~~information~~Company ~~related~~incurred tototal operating lease cost of $9,265 (2023 - $6,610). Lease payments on the Company’s operating lease for the ~~nine~~three months ended ~~May~~November 3130, 2024: were $8,585 (2023 - $6,610).

$F-17 ~~Lease~~Table ~~payments~~of ~~20,445~~Contents

~~Supplemental~~ALLIED ~~balance~~CORP.Notes ~~sheet~~to ~~information~~the ~~related~~Condensed toConsolidated Interim Financial StatementsFor the ~~lease~~three asmonths ofended ~~May~~November 3130, 2024 ~~are~~and as2023(Expressed ~~below:~~in US dollars)(Unaudited)

	$
Cost		159,870
Accumulated amortization		(33,175	)
Foreign exchange		(19,188	)
Net carrying value at May 31, 2024		107,507

A summary of the maturity of contractual undiscounted liabilities associated with the Company’s operating leases as at November 30, 2024 is as follows:

Future minimum lease payments related to lease obligations are as follows:

Year ending August 31,
2025	$	25,067
2026		35,231
2027		36,606
2028		36,579
2029		34,658
Total minimum lease payments		168,141
Less: amount of lease payments representing effects of discounting		(47,151	)
Present value of minimum lease payments		120,990
Less current portion of lease liability		(17,239	)
Lease liabilities, non-current portion	$	103,751

	$
2024		7,005
2025		28,014
2026		28,014
2027		28,014
2028		28,014
2029		28,014
2030		14,007
Total minimum lease payments		161,082
Less: amount of lease payments representing effects of discounting		(53,574	)
Present value of future minimum lease payments		107,508
Less: current obligations under leases		(12,741	)
Lease liabilities, net of current portion		94,767

10. LOANS PAYABLE

18A ~~Table~~continuity of ~~Contents~~the Company’s loans payable as at November 30, 2024 and August 2024 is as follows:

ALLIED CORP.Notes to the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)

	Loan for prefabricated buildings financing		Loan for equipment purchase financing		Related party loans			Other cash advance		Total
August 31, 2023	$	1,742,648	$	284,700	$	-		$	-	$	2,027,348
Additions		-		-		100,600			100,000		200,600
Interest expense		451,358		20,335		-			-		471,693
August 31, 2024		2,194,006		305,035		100,600			100,000		2,699,641
Additions		-		-		1,035			-		1,035
Repayment		-		-		(10,000	)		-		(10,000	)
Interest expense		112,840		5,084		5,000			-		122,924
November 30, 2024	$	2,306,846	$	310,119	$	96,635		$	100,000	$	2,813,600

8.a) ~~Loans~~Loan ~~payable~~for prefabricated buildings financing

a) In June 2020, the Company ~~entered~~secured ~~into~~ a financing agreement to ~~finance~~fund the ~~buildings described in Note 4(a). Pursuant to the agreement, the Company financed $1,253,772 of the~~ purchase ~~price. The Company paid $71,023 at commencement date on May 29, 2020 and agreed to make six monthly interest payments~~ of ~~$37,613~~prefabricated ~~commencing~~buildings ~~June~~intended ~~20,~~for ~~2020~~potential ~~and~~cannabis ~~repay the principal of $1,253,772 on November 20, 2020~~operations. The loan was extended after the initial maturity date. On December 27, 2021, the Company entered into an amendment agreement. Pursuant to the amendment, the Company agreed to make 27 monthly payments starting on January 20, 2022. For the first 3 months, the Company made monthly payments of $37,613. For the remaining 24 months, the Company was to make monthly payments of $66,288. Because the first 6 monthly payments were made on time, the Company may prepay the unamortized loan balance with a 2% penalty of the remaining balance. During the nine months ended May 31, 2024, the Company paid interest in the amount of $nil (2023 - $nil). As of May 31, 2024, the Company has missed 23 monthly payments and the balance owing is $2,081,167 (August 31, 2023 - $1,742,648).

b)Under Onthe ~~December 17~~agreement, ~~2021,~~ the Company ~~entered~~borrowed ~~into~~$1,253,772, awith ~~financing agreement to finance~~ an ~~equipment~~original ~~purchase.~~maturity Ondate ~~March~~of ~~31,~~November ~~2022~~20, ~~the~~2020. ~~agreement~~This date was ~~amended~~extended tothrough ~~remove~~several ~~shipping~~amendments, ~~charges.~~with ~~Pursuant to~~ the ~~amended~~most ~~agreement,~~recent ~~the~~in ~~Company~~June ~~financed $295~~2022,~~543~~ ofestablishing ~~the~~a ~~purchase~~current ~~price~~maturity ~~with~~date ~~an interest rate~~ of 8%September ~~per~~1, ~~annum~~2024. The ~~Company~~revised ~~agreed~~payment toterms ~~make~~require 21 monthly ~~principal and interest~~ payments of $1537,~~000~~613 ~~and~~for athe ~~final~~first ~~payment~~three ofmonths ~~$633~~starting inJuly ~~September~~1, ~~2023.~~2022, ~~During~~followed ~~the~~by ~~nine~~monthly ~~months~~payments ~~ended~~of ~~May 31~~$66,288 ~~2024,~~for the ~~Company~~remaining ~~paid~~period. These payments include interest inat ~~the~~a ~~amount~~monthly rate of ~~$nil~~3%. ~~(2023~~For -the ~~$nil).~~three Asmonths ofended ~~May~~November 3130, 2024, ~~the~~no ~~Company~~interest ~~has~~was ~~missed~~paid 27(2023 ~~monthly~~- ~~payments~~$nil) and the ~~balance~~loan ~~owing~~accrued isinterest ~~$299,951~~payable ~~(August~~of 31$112,840 (2023 - $~~284~~112,~~700~~840).

~~c) On January 3, 2024, a holder of the Company’s convertible notes provided a short~~F-~~term~~18 ~~loan~~Table of ~~$100,000 (August 31, 2023 - $nil). The amount is unsecured, non-interest bearing, and due on demand.~~Contents

9ALLIED CORP.Notes ~~Secured~~to ~~convertible~~the ~~notes~~Condensed ~~payable~~Consolidated Interim Financial StatementsFor the three months ended November 30, 2024 and 2023(Expressed in US dollars)(Unaudited)

~~The~~b) ~~Company~~Loan ~~has~~for ~~granted~~equipment ~~each~~purchase and every of the secured convertible note holders a continuing security interest in, a general lien upon, and aright of set-off against all existing and future assets and property under the terms of a security agreement.financing

a) On ~~May~~December 17, ~~2023~~2021, the Company ~~issued~~entered into a ~~convertible~~financing ~~note~~agreement ~~with~~to afund ~~face~~an ~~value~~equipment ofpurchase. ~~$10,000~~The ~~(the~~Company ~~“Note).~~borrowed ~~The~~$295,543 ~~Note~~at ~~bears~~an interest atrate 10of 8% per annum. ~~and~~The isequipment ~~due~~financing onloan ~~demand~~required ~~after~~the ~~September~~Company 17to make monthly payments of $15,000 with a final balloon payment of $633 due in September 2023., ~~The~~however, ~~Note~~during isthe ~~convertible~~year ~~into~~ended ~~shares~~August of31, 2024, the Company’s ~~common~~defaulted ~~stock~~on atits ~~any~~monthly ~~time~~payments. ~~prior~~During tothe ~~September~~three 17months atended aNovember ~~conversion~~30, ~~price~~2024, ~~equal~~the toCompany ~~the~~incurred ~~lesser~~interest of ~~80%~~$5,084 (2023 - $5,084). As of ~~the~~November ~~twenty-day~~30, ~~average~~2024, ~~closing~~the ~~price~~loan ~~per~~is ~~share~~due ~~(but~~on ~~not~~demand ~~less~~and ~~than~~the ~~$0.20~~balance ~~per~~owing, ~~share)~~including oraccrued interest was $~~0.50~~310,119 ~~per~~(2023 ~~share.~~- $305,035).

~~As at May 31, 2024, the Company has recorded accrued interest of $1,041 (August 31, 2023 - $504~~c), ~~which~~Related isparty ~~included in accounts payable and accrued liabilities on the consolidated balance sheets.~~loans

AsDuring ofthe ~~May~~year ended August 31, 2024, the ~~outstanding~~Company ~~principal~~received ~~owing~~loans istotaling $10100,~~000~~600 ~~(August~~from ~~31,~~its ~~2023~~key -management ~~$10,000)~~personnel. The loans bear no interest and are due on demand (Note 13(d)).

On11. ~~September~~SECURED ~~17,~~CONVERTIBLE ~~2023,~~NOTES ~~the~~PAYABLE ~~Company defaulted on the Note and is in process of amending the maturity date and conversion price.~~

b)As Onof ~~December~~August 431, 2023, the Company issued amultiple tranches of convertible ~~note~~notes with aattached ~~face~~warrants, ~~value~~raising total proceeds of $504,~~000 (the “Note)~~024,891. ~~The~~Of ~~Note~~this ~~bears~~amount, ~~interest~~$543,004 atwas ~~10%~~allocated ~~per~~to ~~annum~~the ~~and~~warrants isusing ~~due~~the onrelative ~~demand~~fair ~~after~~value ~~December~~method ~~31,~~and ~~2024.~~recorded ~~The~~as ~~Note~~additional ispaid-in ~~convertible~~capital. ~~into~~Bifurcation ~~shares~~ of the ~~Company’s~~conversion ~~common~~feature ~~stock~~is atnot ~~any~~required ~~time~~and ~~prior~~the tosecured ~~December~~convertible ~~31,~~notes ~~2024~~payable atare aclassified ~~conversion~~as ~~price~~a ~~equal~~single tofinancial $0liability.~~20 per share.~~

AsThese atnotes ~~May~~have ~~31,~~undergone ~~2024~~several amendments, ~~the~~setting ~~Company~~an ~~has~~interest ~~recorded~~rate ~~accrued~~of ~~interest~~10% ofper ~~$2,452~~annum ~~(August~~and 31extending their maturity dates. By September 30, 2023, - $~~nil)~~300,000 ~~which~~of isthe ~~included~~principal inhad ~~accounts~~been ~~payable~~repaid, and ~~accrued~~the ~~liabilities~~remaining onnotes had matured, prompting the ~~consolidated~~Company ~~balance~~to ~~sheets~~enter into negotiations with the noteholders to further extend the maturity dates.

AsOn ofMarch ~~May 31~~15, 2024, a new amendment was finalized, extending the ~~outstanding~~maturity ~~principal~~of ~~owing~~all isdefaulted ~~$50,000~~convertible ~~(August~~notes to December 31, ~~2023~~2024. The conversion prices were revised to the lesser of 80% of the 20-day average closing price per share (but no lower than $~~nil~~0.20 per share) or $0.50 per share. The interest rate remains 10% per annum.

19Additionally, ~~Table~~on December 4, 2023, the Company issued an additional convertible note with a face value of ~~Contents~~$50,000. This note bears interest at 10% per annum, matures on December 31, 2024, and is convertible into common shares at $0.20 per share prior to maturity.

~~ALLIED~~As ~~CORP.Notes~~at toNovember 30, 2024, the ~~unaudited~~principal ~~condensed~~outstanding ~~consolidated~~on ~~interim~~the ~~financial~~convertible ~~statementsMay~~notes totaled $3,774,891 (August 31, 2024 - $3,774,891), with accrued interest payable of $1,196,843 (~~Expressed~~August in31, US2024 ~~dollars~~- $1,102,729) recorded within accrued liabilities.

c)F-19 OnTable ~~March 15, 2024 the Company amended the maturity dates~~ of 25 convertible notes in default to December 31, 2024, and the conversion prices to the lesser of 80% of the twenty-day average closing price per share (but not less than $0.20 per share) or $0.50 per share. The convertible notes bear interest at 10% per annum. In addition, the Company consolidated the 25 convertible notes with common note holders to 8 convertible notes. Contents

~~The~~ALLIED ~~following~~CORP.Notes ~~table~~to ~~provide~~the aCondensed ~~summary~~Consolidated ofInterim Financial StatementsFor the ~~Company’s~~three ~~convertible~~months ~~notes:~~ended November 30, 2024 and 2023(Expressed in US dollars)(Unaudited)

Original issue date	Default date	Maturity date	Principal Balance May 31, 2024		Accrued Interest May 31, 2024		Principal Balance August 31, 2023		Accrued InterestAugust 31, 2023
1/23/2020	9/30/2022		$	-	$	-	$	200,000	$	48,603
1/23/2020	9/30/2022			-		-		200,000		48,602
9/29/2020	9/30/2022			-		-		63,341		33,540
10/26/2020	9/30/2022			-		-		37,613		10,706
11/11/2020	9/30/2022			-		-		85,937		24,087
12/2/2020	9/30/2022			-		-		600,000		164,712
1/7/2021	9/30/2022			-		-		300,000		52,521
3/26/2021	9/30/2022			-		-		18,000		4,379
3/26/2021	9/30/2022			-		-		100,000		24,274
4/29/2021	9/30/2022			-		-		180,000		42,016
4/30/2021	9/30/2022			-		-		100,000		23,370
7/25/2021	9/30/2022			-		-		35,000		7,336
7/25/2021	9/30/2022			-		-		15,000		3,144
10/1/2021	9/30/2022			-		-		100,000		19,123
10/25/2021	9/30/2022			-		-		100,000		18,466
12/23/2021	6/23/2022			-		-		100,000		16,877
12/23/2021	6/23/2022			-		-		100,000		16,877
1/11/2022	7/10/2022			-		-		150,000		24,534
1/31/2022	7/31/2022			-		-		100,000		15,808
3/29/2022	9/30/2022			-		-		500,000		71,233
6/16/2022	12/16/2022			-		-		250,000		30,206
11/28/2022	6/30/2023			-		-		100,000		7,616
12/1/2022	6/30/2023			-		-		70,000		5,236
12/7/2022	6/30/2023			-		-		60,000		4,389
2/28/2023	4/30/2023			-		-		150,000		7,562
5/17/2023	9/17/2023	On demand		10,000		1,041		10,000		504
12/4/2023		12/31/2024		50,000		2,452		50,000		-
3/15/2024		12/31/2024		570,000		159,121		-		-
3/15/2024		12/31/2024		200,000		53,644		-		-
3/15/2024		12/31/2024		286,891		97,486		-		-
3/15/2024		12/31/2024		660,000		218,646		-		-
3/15/2024		12/31/2024		1,015,000		252,190		-		-
3/15/2024		12/31/2024		233,000		65,261		-		-
3/15/2024		12/31/2024		500,000		108,767		-		-
3/15/2024		12/31/2024		250,000		48,973		-		-
			$	3,774,891	$	1,007,581	$	3,774,891	$	725,721

12. EQUITY

20a) ~~Table~~Common ofshare ~~Contents~~transactions

~~ALLIED~~During ~~CORP.Notes to~~ the ~~unaudited~~three ~~condensed~~months ~~consolidated~~ended ~~interim~~November ~~financial statementsMay 31~~30, 2024~~(Expressed in US dollars)~~:

10During the three months ended November 30, 2024, the Company entered into an agreement with certain related parties to settle outstanding payables related to prior management and consulting services. ~~Equity~~Under the terms of the agreement, payables of $214,782 were settled through the issuance of 1,073,912 common shares, with a fair value of $214,782, of which $107 was allocated to common stock and $214,675 was allocated to additional paid in capital.

~~During~~On November 14, 2024, the ~~nine~~Company ~~months~~issued ~~ended~~a ~~May~~total 31of 1,950,000 ~~2023:~~shares of common stock at $0.20 per share generating gross proceeds of $390,000.

OnDuring ~~September 21, 2022,~~ the ~~Company issued 1,350,000 shares of common stock at $0.40 per share for $540,000 subscriptions received during the~~ year ended August 31, ~~2022.~~2024:

OnThe ~~October~~Company 7,issued ~~2022~~a total of 10,181,990 ~~the~~shares ~~Company~~of ~~issued~~common 1stock at $0.20 per share and 42,~~575,~~000 shares of common stock at $0.40072 per share, ~~for~~generating gross proceeds of $~~630~~2,039,343, of which $50,000 had been received during the year ended August 31, 2023. InOf ~~connection~~the ~~with~~10,181,990 shares of common stock issued, 6,000,000 shares were issued to a shareholder under a share purchase agreement, resulting in cash proceeds of $1,199,920 during the ~~financing~~year ended August 31, 2024. As part of the agreement, the shareholder has the option to appoint a member to the Board of Directors. The Company incurred a finder’s fee of $1070,000 and share issuance costs of $250,~~792.~~000 in connection with these transactions.

On ~~October~~August 716, ~~2022~~2024, the Company ~~issued~~entered 75into an agreement with certain related parties to settle outstanding payables related to prior management and consulting services. Under the terms of the agreement,~~000~~ ~~shares~~payables of $569,475 were settled through the issuance of 654,568 common ~~stock~~shares, with a fair value of $4465,~~606~~457, toof ~~settle~~which ~~related~~$65 ~~party~~was ~~accounts~~allocated ~~payable~~to ofcommon stock and $30569,~~000,~~410 ~~resulting~~was allocated to additional paid in acapital. ~~loss~~The ondifference between the settlement amount and the par value of ~~$14,606~~the shares was recognized as an additional capital contribution from the related parties and recorded under additional paid-in capital.

Onb) ~~October~~Share 7,purchase ~~2022, the Company issued 70,560 shares of common stock with a fair value of $41,966 to settle $29,529 in debt, resulting in a loss on settlement of $12,437.~~warrants

During the nine months ended May 31, 2024:

On September 5, 2023, the Company issued 150,000 shares of common stock at $0.20 per share for $30,000 subscriptions received during the year ended August 31, 2023.

On October 20, 2023, the Company issued 100,000 shares of common stock at $0.20 per share for $20,000 subscriptions received during the year ended August 31, 2023.

On December 1, 2023, the Company issued 1,730,000 shares of common stock at $0.20 per share for $346,000 subscriptions received during the year ended August 31, 2023.

On December 1, 2023, the Company issued 2,201,990 shares of common stock at $0.20 per share for proceeds of $440,398. In connection with the financing, the Company issued 42,000 shares with a fair value of $3,024 as a finder’s fee.

On April 9, 2024, the Company entered into a securities purchase agreement and agreed to sell 2,500,000 shares of common stock at $0.20 per share. Pursuant to the agreement, the purchaser shall have the option to designate a member of the Board of Directors upon an additional investment of $750,000 over a period of twelve months. On April 26, 2024, the Company issued 1,250,000 shares of common stock at $0.20 per share for proceeds of $250,000. On May 24, 2024, the Company issued 1,250,000 shares of common stock at $0.20 per share for proceeds of $250,000. In connection with the financing, the Company incurred finder’s fee of $50,000.

At May 31, 2024, the Company had received $30,000 in cash for shares subscriptions at $0.20 per share.

21 Table of Contents

ALLIED CORP.Notes to the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)

11. Related party transactions and balances

All transactions with related parties have occurred in the normal course of operations and are recorded at the exchange amount which is the amount agreed to by the Company and the related party.

a) Key management compensation and related party transactions

The Company has identified its directors and certain senior officers as its key management personnel. The compensation costs for key management personnel were as follows:

	Nine Months Ended May 31, 2024		Nine Months Ended May 31, 2023
Consulting fees and benefits	$	361,994	$	295,075
Signing bonus		44,214		-
	$	406,208	$	295,075

b) Amounts due to related parties

In the normal course of operations, the company shares certain administrative resources with companies related by common management and directors. The administrative resources and services, which were provided in the normal course of operations, were measured at the exchange. All amounts payable and receivable are non-interest bearing, unsecured and due on demand. The following table summarizes the amounts due to related parties:

	May 31, 2024		August 31, 2023
Chief Executive Officer and Director	$	125,480	$	156,028
Chief Operating Officer and Director		153,600		201,612
An entity controlled by the Chief Financial Officer		113,048		84,962
Chief Business Development Officer		115,405		-
An entity controlled by a Director		224,690		159,690
Former director		93,916		91,000
	$	826,139	$	693,292

During the nine months ended May 31, 2024, the Chief Executive Officer and the Chief Operating Officer each forgave $75,336 of accrued consulting fees for a total of $150,672, which was recorded as a contribution to the Company’s equity on the consolidated statement of stockholders’ deficit.

As of May 31, 2024, the Company had $826,139 (August 31, 2023 - $693,292) payable to related parties. From this amount, $715,539 (August 31, 2023 - $623,292) was for expenses incurred or expensed paid on behalf of the Company by the parties and $110,600 (August 31, 2023 - $70,000) was for advances received from the parties.

22 Table of Contents

ALLIED CORP.Notes to the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)

12. Financial risk factors

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

a) Credit risk:

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its cash account. Cash accounts are held with major banks in Canada. The Company has deposited its cash with a bank from which management believes the risk of loss is low.

b) Liquidity risk:

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet liabilities when due. Accounts payable are due within the current operating period. The Company has a working capital deficit and requires additional financing to meet its current obligations (see Note 1).

c) Market risk:

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company is not exposed to market risk.

d) Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk, from time to time, on its cash balances. Surplus cash, if any, is placed on call with financial institutions and management actively negotiates favorable market related interest rates.

e) Foreign exchange risk:

Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies other than the Canadian dollar. The Company has not entered into any foreign currency contracts to mitigate risk, but manages the risk my minimizing the value of financial instruments denominated in foreign currency. The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Canadian dollars:

	May 31, 2024			May 31, 2023
Balance in Canadian dollars:
Cash and cash equivalents	$	-		$	4,668
Accounts payable and accrued liabilities		(1,043,023	)		(891,774	)
Net exposure		(1,043,023	)		(887,106	)
Balance in US dollars:	$	(764,848	)	$	(652,140	)

A 10% change in the US dollar to the Canadian dollar exchange rate would impact the Company’s net loss by approximately $76,485 for the nine months ended May 31, 2024 (2023 – $65,214).

23 Table of Contents

ALLIED CORP.Notes to the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)

The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Colombian Pesos:

	May 31, 2024			May 31, 2023
Balance in Colombian Pesos dollars:
Cash and cash equivalents	$	56,121,825		$	377,295
Other receivables		894,314,811			607,511,501
Accounts payable		(3,424,536,043	)		(3,920,117,647	)
Net exposure		(2,474,099,407	)		(3,312,228,851	)
Balance in US dollars:	$	(641,763	)	$	(744,572	)

A 10% change in the US dollar to the Colombian Peso exchange rate would impact the Company’s net loss by approximately $64,176 for the nine months ended May 31, 2024 (2023 – $74,457).

13. Capital management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the business and continue as a going concern. The Company considers capital to be all accounts in equity. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company has a working capital deficit and requires additional capital to finance is future business plans. The Company is not subject to any externally imposed capital requirements.

14. Commitments

a) As of May 31, 2024, the Company recorded a contingent liability of $547,190 (CAD$700,000) for expenses in connection with Allied Colombia acquisition, which is included in the balance of accounts payable and accrued liabilities on the consolidated balance sheet.

b) The Company has entered into a lease for farm land in Colombia. See Note 7 for details.

c) In June 2019, the Company’s wholly owned subsidiary, AM Biosciences, signed a production and manufacturing contract to begin the manufacturing of the full building initially intended for the Canada extraction and production facility. The Company had determined to utilize these building assets in connection with potential United States operations in the State of Nevada upon on the occurrence or waiver of the changes in U.S. federal law to permit the general cultivation, distribution, and possession of marijuana or to remove the regulation of such activities from the federal laws of the United States. In connection with that determination, on March 30, 2021, the Company’s wholly owned subsidiary, Allied US Products LLC, entered into a contingent asset purchase agreement (“Agreement”) to acquire two privileged licenses issued by the Nevada Department of Taxation purposed for the cultivation of cannabis (the “Licenses”). In consideration for the licenses, the Company agreed to pay $150,000, issue a $1,350,000 promissory note and assume certain liabilities. Concurrent with the execution of the Agreement, the Company’s wholly owned subsidiary, Tactical Relief LLC, agreed to enter into a 25-year land lease with the Fiore Subsidiary.

24 Table of Contents

ALLIED CORP.Notes to the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)

As the Company made payments towards the purchase of the prefabricated buildings, various parts of the building were delivered to the property on the land lease. In December 2022, the Company was advised that the Fiore Subsidiary had become insolvent and that a trustee’s sale had been scheduled for the property which the Company had agreed to lease. In order to protect the Company’s interests, the Company filed a complaint in the Eighth Judicial District Court in Clark County, Nevada seeking injunctive relief to terminate the trustee’s sale or alternatively money damages. The Company filed a lis pendens against the property to reflect this complaint and to protect its interests in the building. However, the trustee’s sale went forward and the successful bidder claimed that the buildings were part of the real property and that it became the owner of the buildings. As a result, the Company filed suit, seeking a declaration of the Company’s ownership of the buildings as the buildings were personal property and not a part of the real property. A status conference was held for December 13, 2023 and during a further status conference on April 3, 2024 the court strongly suggested to proceed with the litigation. As a consequence, further discussions are ongoing.

15. Share purchase warrants

The following table summarizes the continuity of share purchase warrants:

	Number of warrants			Weighted average exercise price $
	#			$
Balance, August 31, 2023		5,459,000			1.06
Expired		(4,459,000	)		1.25
Balance, May 31, 2024		1,000,000			0.20
Balance, November 30, 2024 and August 31, 2024		1,000,000			0.20

As at ~~May~~November 3130, 2024, ~~the~~there ~~following~~were ~~share~~1,000,000 ~~purchase~~warrants outstanding. These warrants ~~were~~have ~~outstanding:~~exercise price of $0.20 and will expire on July 30, 2025.

Number of warrants				Exercise price $				Expiry date
	1,000,000				0.20			July 30, 2025

F-20

Table of Contents

16ALLIED CORP.Notes ~~Stock~~to ~~options~~the Condensed Consolidated Interim Financial StatementsFor the three months ended November 30, 2024 and 2023(Expressed in US dollars)(Unaudited)

c) Stock options

A summary of the Company’s stock option activity is as follows:

	Number of Options			Weighted Average Exercise Price $		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value $
	Number of options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate Intrinsic Value
Balance, August 31, 2023		12,140,000			0.25		3.70		55,900
	#			$		Years		$
Granted		500,000			0.20		4.34		-
Outstanding, August 31, 2024		12,640,000			0.21				-
Unearned performance-based options		300,000			0.20		4.34		-
Granted		918,750			0.20				-
Outstanding, May 31, 2024		12,940,000			0.22		3.99		-
Exercised		(1,073,912	)		0.20				-
Exercisable, May 31, 2024		11,606,667			0.22		4.00		-
Expired		(1,861,088	)		0.20				-
Outstanding, November 30, 2024		10,623,750			0.22		1.92		-
Exercisable, November 30, 2024		8,866,667			0.22		1.43		-

25A ~~Table~~summary of ~~Contents~~the Company’s outstanding stock options is as follows:

ALLIED CORP.Notes to the unaudited condensed consolidated interim financial statementsMay 31, 2024(Expressed in US dollars)

Expiry date	Number of options		Weighted average exercise price		Weighted average remaining contractual term
	#		$		Years
December 12, 2024		1,900,000		0.20		0.03
January 8, 2025		2,150,000		0.29		0.11
February 1, 2026		2,200,000		0.21		1.17
May 1, 2027		615,000		0.20		2.42
March 8, 2028		2,200,000		0.20		3.27
June 3, 2028		140,000		0.20		3.51
October 1, 2028		200,000		0.20		3.84
March 1, 2029		300,000		0.06		4.25
October 21, 2031		918,750		0.20		6.89
		10,623,750		0.22		1.92

OnDuring ~~December~~the 20three months ended November 30, 2024, the Company ~~modified~~incurred stock-based compensation of $53,941 from the ~~exercise~~vesting ~~prices~~of ~~and~~stock ~~maturity~~options ~~dates~~(2023 ~~for~~- ~~previously~~$500,627). ~~granted~~All ~~and~~stock-based ~~unexercised~~compensation ~~options~~was asrecorded ~~follows:~~within consulting fees on the consolidated statements of operations and comprehensive loss.

Number of stock options	Exercise price before modification	Maturity date before modification	Modified exercise price	Modified maturity date
1,500,000	$0.25	February 1, 2026	$0.20	January 1, 2029
600,000	$0.22	February 1, 2026	$0.20	January 1, 2029
300,000	$0.25	May 1, 2027	$0.20	January 1, 2029
450,000	$0.22	May 1, 2027	$0.20	January 1, 2029
6,000,000	$0.24	March 8, 2028	$0.20	January 1, 2029
140,000	$0.20	June 3, 2028	$0.20	January 1, 2029

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~~There~~ALLIED ~~was no other modification to the vesting schedule of the previously issued options~~CORP.Notes ~~As a result, 8,990,000 unexercised options originally granted~~ to ~~purchase common stock at prices ranging from $0.20 to $0.25 per share were repriced. The repricing was treated as a modification of~~ the ~~original~~Condensed ~~awards~~Consolidated ~~and~~Interim ~~the~~Financial ~~additional~~StatementsFor ~~compensation costs for~~ the ~~difference~~three ~~between~~months ~~the~~ended ~~fair~~November ~~value~~30, of2024 ~~the modified award~~ and ~~the~~2023(Expressed ~~fair value of the original award on the modification date was calculated. The repricing resulted~~ in ~~incremental~~US stock-based compensation expense of $56,964, which was valued with the Black-Scholes option pricing model with the following weighted average assumptions: the risk-free rate of 4.17%; expected life of 2.73 years; volatility of 180%; forfeiture rate and dividend yield of nil; and the exercise price of $0.20. Expense related to vested shares was expensed on the repricing date and expense related to unvested shares will be amortized over the remaining vesting period.dollars)(Unaudited)

OnGranting ~~January~~of 1,new ~~2024,~~stock ~~the Company modified the exercise price and vesting terms for previously granted and unexercised~~ options ~~as follows:~~

Number of stock options	Exercise price before modification	Vesting terms before modification	Modified exercise price	Modified vesting terms
300,000	$0.22	100,000 on October 1, 2024100,000 on October 1, 2025100,000 on October 1, 2026	$0.20	150,000 on January 1, 2024150,000 on September 30, 2024

On March 1, 2024, the Company granted 300,000 options to a consultant with an exercise price of $0.06, expiring on March 1, 2029. The options vest in two equal tranches over six-month intervals. The fair value of these options was estimated at $27,573, using the Black-Scholes model with the following assumptions: stock price of $0.10, expected life of 5 years, risk-free interest rate of 4.17%, volatility of 179%, and no dividend yield.

InOn ~~addition~~October 21, 2024, the Company ~~granted~~issued ~~additional 500~~918,~~000~~750 ~~performance-based~~ options ~~with~~at an exercise price of $0.20 ~~which~~per ~~will~~share ~~vest~~to 2a ~~years~~director, ~~from~~as ~~the~~part ~~achievement~~ of ~~specified~~his ~~performance conditions~~appointment. AsThe ~~a result, 300,000 unexercised~~ options ~~originally~~expire ~~granted~~7 toyears ~~purchase~~from ~~common stock $0.22 per share were repriced along with~~ the ~~grant~~issuance ~~of 500,000 performance-based options~~date. The ~~repricing was treated as a modification of the original awards and the additional compensation costs for the difference between the~~ fair value of ~~the~~these ~~modified~~options ~~award and the fair value of the original award on the modification date~~ was ~~calculated.~~estimated ~~The~~at ~~repricing resulted in incremental stock-based compensation expense of~~ $3946,~~413~~631, ~~which~~using ~~was valued with~~ the Black-Scholes ~~option pricing~~ model with the following ~~weighted average~~ assumptions: ~~the~~stock ~~risk-free~~price ~~rate~~ of 3$0.~~93%;~~05, expected life of ~~4.75~~5 years;, ~~volatility~~risk-free ofinterest ~~178%; forfeiture~~ rate ~~and dividend yield~~ of ~~nil; and the exercise price of $0~~4.~~20. Expense related to vested shares was expensed on the repricing date and expense related to unvested shares will be amortized over the remaining vesting period. As at May 31~~00%, ~~2024,~~volatility ~~conditions~~of ~~for 200~~201%,~~000~~ ~~performance-based options have been met with 100,000 options vesting on January 28, 2026~~ and ~~100,000~~no ~~vesting~~dividend ~~on February 13, 2026~~yield. ~~The Company estimates that all 500,000 performance-based options will vest and elected to account for forfeitures as they occur.~~

~~During~~Granting ~~the nine months ended May 31, 2024, the Company recorded stock-based compensation~~ of ~~$471,544 (2023~~ performance- $2,849,699) for options granted and vested during the period as consulting fees on the consolidated statement of operations. At May 31, 2024, there was $45,146 of unrecognized compensation costs related to non-vested stock-based ~~compensation arrangements granted under the Plan.~~ options

26On ~~Table~~January 1, 2024, the Company entered into a performance-based option agreement with a consultant, allowing for the potential vesting of ~~Contents~~up to 500,000 options upon meeting specified performance conditions. The options vest over a two-year period from the date each milestone is achieved. During the year ended August 31, 2024, 200,000 options were granted following the achievement of performance conditions. These options have an exercise price of $0.20, expire on October 1, 2028, and are scheduled to fully vest by February 13, 2026.

~~ALLIED~~On ~~CORP.Notes~~October 1, 2024, the Company amended the agreement to now provide for the ~~unaudited~~grant ~~condensed~~of ~~consolidated~~up ~~interim~~to ~~financial~~700,000 ~~statementsMay~~performance-based 31options between October 1, 2024~~(Expressed~~ inand USMarch ~~dollars)~~31, 2025. Pursuant to the amendment, the consultant will be granted a maximum of 100,000 options each time a sales contract with an annual value of $100,000 is signed. For any contracts with an annual value exceeding $1,500,000, the consultant will be awarded 200,000 options. Options granted pursuant to achievement of performance targets will vest over a two-year period from the date the contract is signed.

17 The fair value of these options was $15,765 and was estimated using the Black-Scholes option pricing model, applying the following weighted average inputs: stock price of $0.085, ~~Non~~expected life of 4.75 years calculated based on Plain Vanilla, risk-~~cash~~free ~~activities~~interest rate of 3.93%, expected volatility of 178%, and no dividend yield.

	Nine Months EndedMay 31, 2024		Nine Months EndedMay 31, 2023
Non-cash activities:
Shares issued to settle debt		-		59,529
Shares cancelled		-		10
Shares issued as finder’s fee		3,024		-
Related party debt forgiveness		150,672		-

Modification of options

~~18.~~On ~~Segment~~January ~~disclosure~~1, 2024, the Company modified the exercise price and vesting terms for 300,000 previously granted and unexercised options as follows:

Number of

stock options

Original

exercise price

Original

vesting terms

Modified

exercise price

Modified

vesting terms

300,000

$0.22

100,000 on October 1, 2024

100,000 on October 1, 2025

100,000 on October 1, 2026

$0.20

150,000 on January 1, 2024

150,000 on September 30, 2024

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ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

The adjustment was treated as a modification, requiring a remeasurement of the options’ fair value as of the modification date. The fair value was determined using the Black-Scholes option pricing model with the following inputs: stock price of $0.085, expected life of 4.75 years calculated based on Plain Vanilla, risk-free interest rate of 3.93%, expected volatility of 178%, and no dividend yield. This remeasurement resulted in an incremental stock-based compensation expense of $28,129.

13. RELATED PARTY TRANSACTIONS AND BALANCES

a) Key management compensation through consulting services

The Company has identified its key management personnel to include its directors and senior officers. A summary of the compensation provided to key management during the three months ended November 30, 2024 and 2023 is as follows:

	2024		2023

Compensation to the Chief Executive Officer (“CEO”)	$	13,072	$	27,683
Compensation to the ex-Chief Financial Officer (“ex-CFO”)		12,131		23,069
Compensation to the Chief Operations Officer (“COO”)		10,988		23,069
Compensation to the Chief Business Development Officer (“CBDO”)		13,186		70,533
Compensation to the directors		2,500		25,500
	$	51,877	$	169,854

All compensation provided to key management personnel is made in the normal course of business and is included in consulting fees.

b) Stock-based compensation

A summary of stock-based compensation from vesting options granted to related parties during the three months ended November 30, 2024 and 2023 is as follows:

	2024		2023

Stock-based compensation to the directors	$	46,631	$	19,628
	$	46,631	$	19,628

All stock-based compensation is recorded within consulting fees.

c) Debt settlements with related parties

During the year ended August 31, 2024, the Company entered into a debt waiver agreement with its CEO and COO, under which each officer forgave $75,336 in payables related to past management services. As a result, the Company wrote off a total payable amount of $150,672 and recognized this as a capital contribution from the officers, which was recorded in additional paid-in capital.

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ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

On August 16, 2024, the Company entered into a debt settlement agreement with certain directors and senior officers. Under the agreement, outstanding payables owed to these individuals were settled through the issuance of the Company’s common shares. The table below summarizes the amounts settled and the number of shares issued to each related party:

	Settlement with CEO		Settlement with COO		Settlement with CBDO		Settlement with director		Total
Settlement amount	$	126,500	$	178,000	$	114,975	$	150,000	$	569,475
Number of shares issued (#)		145,402		204,597		132,155		172,414		654,568

The settlement amount of $569,475 was recognized as capital contribution from the officers and was recorded as equity.

The Company entered into a debt settlement agreement with its former CFO and a former director in connection with their termination. Pursuant to the agreement, outstanding amounts payable to these individuals were settled through the issuance of stock options, which were subsequently exercised to acquire common shares of the Company. The following table provides a summary of the amounts settled and the corresponding number of shares issued to each related party.:

	Settlement with ex-CFO		Settlement with ex-director		Total
Settlement amount	$	127,782	$	87,000	$	214,782
Number of shares issued (#)		638,912		435,000		1,073,912

The settlement amount of $214,782 was recognized as capital contribution from the officers and was recorded as equity.

d) Amounts due to related parties

In the normal course of operations, the Company shares certain administrative resources with entities related by common management and directors. These administrative resources and services are measured at their exchange value. All amounts payable and receivable from related parties are non-interest bearing, unsecured, and due on demand.

The following table summarizes the amounts due to related parties:

	November 30, 2024		August 31, 2024

Trade payables to the CEO	$	-	$	17,428
Trade payables to the COO		15,031		4,371
Trade payables to the CFO		-		129,309
Trade payable to the CBDO		8,975		7,718
Trade payable to a former director		98,867		194,687
	$	122,873	$	353,513

During the year ended August 31, 2024, the Company received short-term loans totaling $20,600 from its CBDO and $80,000 from one of its directors. These loans are due on demand and bear no interest (Note 10).

The following table summarizes the loans from related parties:

	November 30, 2024		August 31, 2024

Outstanding short-term loan from the CBDO	$	20,600	$	20,600
Outstanding short-term loan from a director		75,000		80,000
	$	95,600	$	100,600

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ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

14. FINANCIAL RISK FACTORS

a) Credit risk

Credit risk arises when one party to a financial instrument fails to meet its obligations, potentially causing financial loss to the other party. The Company’s main exposure to credit risk lies in its cash holdings and trade receivables. Cash is securely held with major Canadian banks, and trade receivables remain minimal. Management considers the overall credit risk to be low.

b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. As at November 30, 2024, the Company had a working capital deficiency of $8,874,738 (August 31, 2024 - $8,834,739). To address this risk, the Company has implemented a planning and budgeting process to assess the funding required to support its operations. Limited cash resources have impacted the Company’s ability to meet some obligations as they fall due, including accounts payable, loans payable, and secured convertible notes. Loans payable totaling $2,813,600 are due on demand. During the year ended August 31, 2024, the Company negotiated an extension of its convertible notes’ maturity to December 31, 2024. The Company continues to seek funding through equity offerings or debt financing to meet operational needs, while carefully managing existing cash resources. However, there can be no assurance that future financing will be available or on favorable terms and as a result, liquidity risk is high.

c) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to interest rate risk is minimal, as it does not hold any variable-rate financial liabilities.

d) Foreign exchange risk

Foreign currency risk is limited to the portion of the Company’s business transactions denominated in currencies other than the Canadian dollar. The Company has not entered into any foreign currency contracts to mitigate risk but manages the risk my minimizing the value of financial instruments denominated in foreign currency. The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Canadian dollars:

	November 30, 2024			August 31, 2024

Accounts payable and accrued liabilities	$	(449,240	)	$	(1,023,380	)
Net exposure in Canadian dollars	$	(449,240	)	$	(1,023,380	)
Balance in US dollars	$	(332,943	)	$	(758,452	)

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ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

As at November 30, 2024, a 10% change in the US dollar to the Canadian dollar exchange rate would impact the Company’s net loss by approximately $33,294 (August 31, 2024 - $75,845).

The Company is exposed to foreign currency risk to the extent that the following monetary assets and liabilities are denominated in Colombian Pesos:

	November 30, 2024			August 31, 2024

Cash	$	92,105,759		$	238,480,051
Accounts receivable		336,604,880			200,766,822
Accounts payable and accrued liabilities		(505,047,722	)		(496,725,947	)
Net exposure in Columbian Pesos	$	(76,337,083	)	$	(57,479,074	)
Balance in US dollars	$	(18,234	)	$	(13,730	)

As at November 30, 2024, a 10% change in the US dollar to the Colombian Peso exchange rate would impact the Company’s net loss by approximately $1,823 (August 31, 2024 - $1,373).

15. CAPITAL MANAGEMENT

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the business and continue as a going concern. The Company considers capital to be all accounts in equity. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business. The Company has a working capital deficit and requires additional capital to finance its future business plans. The Company is not subject to any externally imposed capital requirements.

16. COMMITMENTS AND CONTINGENCIES

The Company is involved in various claims, litigation and other matters in the ordinary course and conduct of business. Some of these pending matters may take a number of years to resolve. While it is not possible to determine the ultimate outcome of such actions at this time, and inherent uncertainties exist in predicting such outcomes, it is the Company’s belief that the ultimate resolution of such actions is not reasonably likely to have a material adverse effect on its consolidated financial position or results of operations.

a) As of November 30, 2024 and August 31, 2024, the Company recorded a contingent liability of $547,190 (CAD$700,000) for expenses in connection with Allied Colombia acquisition, which is included in the balance of accounts payable and accrued liabilities on the consolidated balance sheet.

b) The Company has entered into binding lease agreement for agricultural land in Colombia (Note 9).

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ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

c) In June 2019, AM Biosciences, a subsidiary of the Company, contracted to manufacture a building initially intended for Canadian operations but later designated for potential U.S. operations in Nevada, pending federal legalization of cannabis. On March 30, 2021, Allied US Products LLC, another subsidiary, agreed to purchase two Nevada cannabis cultivation licenses for $150,000, with a $1,350,000 promissory note and assumed liabilities. Tactical Relief LLC, a subsidiary, also signed a 25-year lease with Fiore Subsidiary for a Nevada property to house these buildings. By August 31, 2022, the Company had paid deposits totaling $2,656,695 for the buildings and $150,000 for the licenses, though the buildings were not yet delivered.

In December 2022, the Fiore Subsidiary became insolvent, and the leased property was scheduled for a trustee’s sale. The Company filed a lawsuit in Nevada court seeking to halt the sale or obtain damages, filing a lis pendens to assert its claim on the buildings as personal property. Despite these efforts, the sale proceeded, and the buyer claimed ownership of the buildings as part of the property. The Company is currently awaiting a court decision to affirm its ownership. Due to uncertainty in recoverability, a loss on deposit impairment of $2,656,695 and a $150,000 loss on the license advance were recorded for the year ended August 31, 2023, as the purchase agreement was effectively terminated.

17. NON-CASH ACTIVITIES

A summary of the Company’s non-cash transactions during the three months ended November 30, 2024 and 2023 is as follows:

	2024		2023

Shares issued to settle accounts payable and accrued liabilities owed to related parties	$	214,782	$	-

18. SEGMENT INFORMATION

The Company has two operating segments including:

a)· Allied Colombia, a Colombian based company through which the Company intends to commence commercial production in Colombia. (Allied Colombia) · Allied Corp. which consists of the rest of the Company’s operations (Allied)

b) Allied Corp. which consists of the rest of the Company’s operations. (Allied)

Factors used to identify the Company’s reportable segments include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker in making decisions about how to allocate resources and assess performance. The Company’s operating segments have been broken out based on similar economic and other qualitative criteria. The Company operates the Allied reporting segment in one geographical area (Canada), and the Allied Colombia reporting segment in one geographical area (Colombia).

~~Financial~~F-27 ~~statement~~Table ~~information~~of ~~by operating segment for the nine months ended May 31, 2024 is presented below:~~Contents

	Allied$			Allied Colombia$			Total$
Gross margin		-			72,513			72,513
Net loss		(1,863,299	)		(579,951	)		(2,443,250	)
Depreciation and amortization		49,863			48,259			98,122
Total assets as of May 31, 2024		637,997			1,571,852			2,209,849

ALLIED CORP.

Notes to the Condensed Consolidated Interim Financial Statements

For the three months ended November 30, 2024 and 2023

(Expressed in US dollars)

(Unaudited)

~~Geographic~~A ~~information~~summary ~~for~~of the ~~three~~Company’s ~~months~~segment ~~ended~~information ~~and~~is as ~~at May 31, 2024 is presented below~~follows:

	Gross Margin$			TotalAssets$
	Allied			Allied Colombia			Total
Canada		-			637,997
Gross margin	$	7,386		$	6,225		$	13,611
Colombia		72,513			1,571,852
Net loss	$	(510,261	)	$	(270,030	)	$	(780,291	)
Total		72,513			2,209,849
Depreciation and amortization	$	16,621		$	16,722		$	33,343
Total asset	$	701,647		$	1,248,867		$	1,950,514

~~Note~~19. 11SUBSEQUENT ~~– Subsequent Events~~EVENTS

~~Subsequent~~On ~~events~~December ~~have~~1, ~~been~~2024, ~~evaluated~~the ~~through~~Company ~~July~~granted ~~15,~~stock ~~2024~~options to a consultant for the purchase of 1,700,000 shares of the ~~date~~Company's ~~these~~common ~~financial~~stock. ~~statements~~The ~~were~~exercise ~~available~~price toof bethe ~~released~~options was set at $0.05. 850,000 of the options vest after six months and ~~noted~~the noremaining ~~other~~850,000 ~~events~~after ~~requiring~~one ~~disclosure~~year.

27On ~~Table~~December 9, 2024, the Company cancelled 1,000,000 warrants that were previously issued to an officer of ~~Contents~~the Company and issued 1,000,000 options in place of the warrant cancellation.

On December 12, 2024, 2,065,000 outstanding options held by a director of the Company expired pursuant to termination of his contract on September 12, 2024.

On January 8, 2025, 2,150,000 outstanding options previously issued to certain Ambassador Contractors of the Company expired following a Director’s Resolution dated August 16, 2024.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion relates to the historical operations and financial statements of Allied Corp. for the ~~nine~~three months ended ~~May~~November 3130, 2024 and ~~May~~November 3130, 2023.

Forward-Looking Statements

The following Management’s Discussion and Analysis should be read in conjunction with our financial statements and the related notes thereto included elsewhere in this Quarterly Report. The Management’s Discussion and Analysis contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect,” and the like, and/or future-tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements in this Annual Report. Our actual results and the timing of events could differ materially from those anticipated in these forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, without limitation, those specifically addressed under the heading “Risks Factors” in our various filings with the Securities and Exchange Commission. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this Annual Report.

The following discussion highlights the Company’s results of operations and the principal factors that have affected its consolidated financial condition as well as its liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the Company’s consolidated financial condition and results of operations presented herein. The following discussion and analysis are based upon Allied Corp’s unaudited financial statements contained in this Current Report on Form 10-Q, which have been prepared in accordance with generally accepted accounting principles in the United States. You should read the discussion and analysis together with such financial statements and the related notes thereto.

Overview

Allied Corp. (“Allied” or the “Company”) is a Nevada corporation, based in Kelowna, British Columbia, Canada. Allied is an international medical cannabis production company with a mission to address today’s medical issues by researching, creating and producing targeted cannabinoid health solutions. Allied uses what it considers to be an evidence-informed scientific approach to make this mission possible, through cutting-edge pharmaceutical research and development, innovative plant-based production and unique development of therapeutic products.

References in this periodic report on Form 10-Q to “Allied” or the “Company” may include references to the operations of our subsidiaries AM (Advanced Micro) Biosciences, Inc., Allied Colombia S.A.S., Baleno Ltd., Tactical Relief, LLC, and Allied US Products, LLC. Each of these corporations is a 100% wholly owned subsidiary of Allied and consequently report quarterly financials up to a consolidated quarterly submission.

We focus on the development of Colombian produced medicinal cannabis for patients with conditions potentially suitable for treatment. Such conditions include anxiety, insomnia, anorexia, chronic pain, epilepsy, chemotherapy-induced nausea and vomiting, post-traumatic stress disorder (PTSD), Parkinson’s disease, Tourette’s syndrome, irritable bowel syndrome (IBS) and spasticity associated with multiple sclerosis (MS) and spinal cord injury (SCI).

Our objective is to be a company that controls its own international vertically integrated supply chain, in order to maximize cash flow and profit margins. Our management team believes that having control over our supply chain should enable us to provide a consistent, rolling-harvest supply to the global cannabis community.

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Given the average cost of production in North America being approximately $1.00 to $2.00 per gram, we believe our anticipated direct agricultural cost of raw flower to be in the range of $0.05 – $0.075 per gram. Based on historical production of ours and other companies in the same region of cannabis these savings are a production afforded by our Colombian production and cultivation which should provide us a competitive advantage.

In addition to what we consider as our demonstrated ability to cultivate low-cost and high margin cannabis in Colombia primarily for international distribution, we have received commercial approval for sale of medical cannabis being produced in Colombia for export internationally. Allied Corp’s commitment to building and maintaining strong relationships with its partners and customers around the world has been a driving force behind its recent successes. The Company is dedicated to meeting the evolving needs of patients and healthcare professionals with its high-quality medical cannabis products, underpinned by rigorous quality standards and ethical cultivation & processing practices.

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Critical Accounting Policies

Business Presentation

The unaudited condensed consolidated interim financial statements and related notes in this Quarterly Report on Form 10-Q are presented in accordance with accounting principles generally accepted in the United States of America (“US GAAP”), and are expressed in United States dollars. The Company’s fiscal year end is August 31.

The unaudited condensed consolidated interim financial statements have been prepared in accordance with US GAAP for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by US GAAP for complete financial statements. Therefore, the unaudited condensed consolidated interim financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended August 31, ~~2023~~2024 included in the Company’s Annual Report on Form 10-K filed with the SEC.

The unaudited condensed consolidated interim financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at ~~May~~November 3130, 2024, and the results of its operations for the ~~nine~~three months ended ~~May~~November 3130, 2024, and cash flows for the ~~nine~~three months ended ~~May~~November 3130, 2024. The results of operations for the period ended ~~May~~November 3130, 2024 are not necessarily indicative of the results to be expected for future quarters or the full year.

The significant accounting policies followed are:

Principles of consolidation

The consolidated financial statements include accounts of Allied Corp. and its majority owned subsidiaries. Subsidiaries are consolidated from the date of acquisition and control and continue to be consolidated until the date that such control ceases. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect these returns through its power over the investee. All intercompany balances, income, expenses, and unrealized gains and losses resulting from intercompany transactions are eliminated on consolidation.

Cash and cash equivalents

Cash is comprised of cash on hand, cash held in trust accounts and demand deposits. Cash equivalents are short-term, highly liquid investments with maturities within three months when acquired. The Company did not have any cash equivalents as of ~~May~~November 3130, 2024 and August 31, ~~2023~~2024.

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Property, plant and equipment

Property, plant and equipment are stated at cost. The Company depreciates the cost of property, plant and equipment over their estimated useful lives at the following annual rates and methods:

Equipment	1- to 10 years straight-line basis
Office and computer equipment	5- to 10 years straight-line basis
Land equipment	10 years straight-line basis

Inventory

Inventory is comprised of raw materials, supplies, vegetative and flowering plants, dried flower, diluted crude and CBD isolates available for sale, and purchased cannabis products.

Intangible assets

Intangible assets include licenses which are being amortized over their estimated useful lives of 10 years. The Company’s licenses are amortized over their economic or legal life on a straight-line basis, whichever is shorter. The licenses have been amortized from the date of acquisition.

For long-lived assets, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value.

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Long-lived assets

In accordance with ASC 360, Property, Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Foreign currency translation and functional currency conversion

Items included in the consolidated financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entities operate (the “functional currency”).

Prior to September 10, 2019, the Company’s functional currency was the Canadian dollar. Translation gains and losses from the application of the U.S. dollar as the reporting currency during the period that the Canadian dollar was the functional currency are included as part of cumulative currency translation adjustment, which is reported as a component of shareholders’ equity under accumulated other comprehensive loss.

The Company re-assessed its functional currency and determined as at September 10, 2019, its functional currency changed from the Canadian dollar to the U.S. dollar based on management’s analysis of changes in our organization. The change in functional currency was accounted for prospectively from September 10, 2019 and prior period financial statements were not restated for the change in functional currency.

For periods commencing September 10, 2019, monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars using exchange rates in effect at the balance sheet date. Opening balances related to non-monetary assets and liabilities are based on prior period translated amounts, and non-monetary assets and non-monetary liabilities incurred after September 10, 2019 are translated at the approximate exchange rate prevailing at the date of the transaction. Revenue and expense transactions are translated at the approximate exchange rate in effect at the time of the transactions. Foreign exchange gains and losses are included in the statement of operations and comprehensive loss as foreign exchange gains.

The Company assessed the functional currency for Allied Colombia to be the Colombian peso. The functional currency for all other subsidiaries is the U.S. dollar.

Share issuance costs

Research and development costs

Research and development costs are expensed as incurred.

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Advertising costs

Advertising costs are expensed as incurred.

Revenue recognition

The Company’s revenue is comprised of sales of cannabis and CBD products.

The Company’s revenue-generating activities have a single performance obligation and revenue is recognized at the point in time when control of the product transfers and the Company’s obligations have been fulfilled. This generally occurs when the product is shipped or delivered to the customer, depending upon the method of distribution and shipping terms set forth in the customer contract. Revenue is measured as the amount of consideration the Company expects to receive in exchange for the sale of the Company’s product. Certain of the Company’s customer contracts may provide the customer with a right of return. In certain circumstances the Company may also provide a retrospective price adjustment to a customer. These items give rise to variable consideration, which is recognized as a reduction of the transaction price based upon the expected amounts of the product returns and price adjustments at the time revenue for the corresponding product sale is recognized. The determination of the reduction of the transaction price for variable consideration requires that the Company make certain estimates and assumptions that affect the timing and amounts of revenue recognized.

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Net income (loss) per common share

Basic net income (loss) per common share is based on the weighted average number of shares of common stock outstanding.

Income taxes

The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

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Related party transactions

Significant accounting estimates and judgments

Financial instruments

ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 825 prioritizes the inputs into three levels that may be used to measure fair value:

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.

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The financial instruments consist principally of cash, due from related parties, accounts payable, note payable, and convertible notes payable. The fair value of cash when applicable is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all other financial instruments which are categorized as loans and receivables approximate their current fair values because of their nature and respective relatively short maturity dates or current market rates of interest for similar instruments.

For certain of the Company’s financial instruments, including accounts payable, due from related parties, notes and loans payable, the carrying amounts approximate their fair values due to the short maturities.

The Company does not have any assets or liabilities measured at fair value on a recurring basis presented on the Company’s balance sheet as of ~~May~~November 3130, 2024 and August 31, ~~2023~~2024 other than cash.

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with high credit quality financial institutions.

Leases

Recent accounting pronouncements

The Company does not expect that recent accounting pronouncements or changes in accounting pronouncements during the ~~nine~~three months ended ~~May~~November 3130, 2024, are of significance or potential significance to the Company.

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Financial Condition and Results of Operations

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company incurred a net loss for the ~~nine~~three months ended ~~May~~November 3130, 2024 of $2780,~~593~~290,~~922,~~ has generated minimal revenue and as at ~~May~~November 3130, 2024 has a working capital deficit of $98,~~083~~874,~~174~~738. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company’s ability to raise sufficient financing to develop a profitable business. Management intends on financing its operations and future development activities largely from the sale of equity securities and debt financing with some additional funding from other traditional financing sources, including related party loans until such time that funds provided by future planned operations are sufficient to fund working capital requirements.

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Results of Operations

Comparison of Unaudited Results for the Three Months ended ~~May~~November 3130, 2024 compared to the Three Months Ended ~~May~~November 3130, 2023

Sales

For the three-month period ended ~~May~~November 3130, 2024, the Company had revenue of $7727,~~141~~669 compared to no$19,039 ~~revenue~~ for the three-month period ended ~~May~~November 3130, 2023.

Gross margin

For the three-month period ended ~~May~~November 3130, 2024, the Company had a gross margin of $5513,~~477~~611 compared to no$17,036 ~~gross margin~~ for the three-month period ended ~~May~~November 3130, 2023.

Expenses

For the three-month period ended ~~May~~November 3130, 2024, the Company had total expenses of $~~968~~793,~~564~~901, compared to total expenses of $2853,~~166,104~~709 for the three-month period ended ~~May~~November 3130, 2023. Of the total expenses for the three-month period ended ~~May~~November 3130, 2024, a total of $~~850~~94,~~932~~114 (~~May~~November 3130, 2023 - $2118,~~072,468~~646) was ~~operating expenses and the remainder was non-recurring expenses which included~~ interest expense ofon ~~$95,968~~convertible ~~(May 31, 2023 - $93,636)~~notes. The operating expenses consisted principally of consulting fees in the development of the Company’s cannabis business, general office expenses, professional fees and rent. The decrease in total expenses is primarily attributed to the decrease in consulting fees of $1267,~~571~~679,~~922,~~ offset by an increase of foreign exchange ~~gain~~loss of $~~345~~96,~~253 from the three-month period ended May 31, 2023 to three-month period ended May 31, 2024~~250.

Net Loss

For the three-month period ended ~~May~~November 3130, 2024, the Company had a net loss of $~~891~~780,~~423~~290 compared to a net loss of $2836,~~166,104~~673 for the three-month period ended ~~May~~November 3130, 2023. This was principally related to the expenses referenced in the previous paragraph.

~~Comparison~~10 Table of ~~Unaudited Results for the Nine months ended May 31, 2024 compared to the Nine months Ended May 31, 2023~~Contents

Sales

For the nine-month period ended May 31, 2024, the Company had revenue of $96,180 compared to revenue of $69,625 for the nine-month period ended May 31, 2023.

Gross margin

For the nine-month period ended May 31, 2024, the Company had a gross margin of $72,513 compared to a gross margin of $43,667 for the nine-month period ended May 31, 2023.

Expenses

For the nine-month period ended May 31, 2024, the Company had total expenses of $2,666,435, compared to total expenses of $5,609,507 for the nine-month period ended May 31, 2023. Of the total expenses for the nine-month period ended May 31, 2024, a total of $2,384,575 (May 31, 2023 - $5,291,850) was operating expenses and the remainder was non-recurring expenses which included interest expense of $281,860 (May 31, 2023 - $264,656). The operating expenses consisted principally of consulting fees in the development of the Company’s cannabis business, general office expenses, professional fees and rent. The decrease in total expenses is primarily attributed to the decrease in consulting fees of $2,309,141, offset by an increase of foreign exchange gain of $489,356 from the nine-month period ended May 31, 2023 to nine-month period ended May 31, 2024.

Net Loss

For the nine-month period ended May 31, 2024, the Company had a net loss of $2,593,922 compared to a net loss of $5,539,882 for the nine-month period ended May 31, 2023. This was principally related to the expenses referenced in the previous paragraph.

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Liquidity and Capital Resources

The following table sets forth the major components of our ~~statements and~~ consolidated statements of cash flows for the periods presented.

	Nine months EndedMay 31, 2024			Nine months EndedMay 31, 2023
	Three months Ended November 30,
Cash used in operating activities	$	(1,387,909	)	$	(2,010,141	)
	2024			2023
Cash used in investing activities	$	(9,064	)	$	(85,531	)
Cash used in operating activities	$	(509,163	)	$	(466,379	)
Cash from financing activities	$	1,411,998		$	1,513,160
Cash used in investing activities	$	381,035		$	346,000
Increase (decrease) in cash during the period	$	15,025		$	(582,512	)
Cash from financing activities	$	(37,394	)	$	-
Effect of exchange rate change	$	~~(133~~1,~~175~~769	)	$	~~489~~(49,~~985~~763	)
Cash, beginning of period	$	209,736		$	96,043
Increase (decrease) in cash during the period	$	(165,522	)	$	(120,379	)
Cash, end of period	$	91,586		$	3,516
Cash, beginning of period	$	359,103		$	209,736
Cash, end of period	$	195,350		$	39,594

As at ~~May~~November 3130, 2024, we had working capital deficit of $98,~~083~~874,~~174~~738. Our primary cash flow needs are for the development of our cannabis products, operating costs, administrative expenses and for general working capital.

As of ~~May~~November 3130, 2024, the Company had $~~717~~612,~~251~~469 in current assets, consisting of $91195,~~586~~350 in cash, $~~342~~287,~~646~~053 in inventory, $~~234~~75,~~573~~939 in other receivables, and $4854,~~446~~127 in prepaid expenses. Other assets mainly include property, plant and equipment of $1,~~321~~173,~~318~~224, right-of-use assets of $~~107~~120,~~507~~114 and intangible assets of $4327,~~048~~149.

To date, the Company has financed its operations through equity sales and through the sale of convertible notes.

Secured Convertible Notes

The Company has granted each and every of the secured convertible note holders a continuing security interest in, a general lien upon, and a right of set-off against all existing and future assets and property under the terms of a security agreement.

OnAs ~~May~~of 17August 31, 2023, the Company issued amultiple tranches of convertible ~~note~~notes with aattached ~~face~~warrants, ~~value~~raising total proceeds of $104,~~000~~024,891. ~~The~~Of ~~note~~this ~~bears~~amount, ~~interest at 10% per annum and is due on demand after September 17~~$543,004 ~~2023.~~was ~~The~~allocated ~~note is convertible into shares of the Company’s common stock at any time prior~~ to ~~September 17 at a conversion price equal to~~ the ~~lesser~~warrants ofusing ~~80% of~~ the ~~twenty-day~~relative ~~average~~fair ~~closing~~value ~~price~~method ~~per~~and ~~share~~recorded ~~(but~~as ~~not~~additional ~~less~~paid-in ~~than $0~~capital.20 ~~per~~Bifurcation ~~share)~~of ~~or $0.50 per share. On September 17, 2023,~~ the ~~Company~~conversion ~~defaulted~~feature onis ~~the~~not ~~note~~required and isthe insecured ~~process~~convertible ofnotes ~~amending~~payable ~~the~~are ~~maturity~~classified ~~date~~as ~~and~~a ~~conversion~~single ~~price~~financial liability.

OnThese ~~December~~notes 4,have ~~2023,~~undergone ~~the~~several ~~Company issued a convertible note with a face value of $50~~amendments,~~000.~~ ~~The~~setting ~~note~~an ~~bears~~ interest atrate of 10% per annum and isextending ~~due~~their onmaturity ~~demand~~dates. ~~after~~By ~~December~~September 3130, ~~2024.~~2023, ~~The~~$300,000 ~~note~~of isthe ~~convertible~~principal ~~into~~had ~~shares~~been ofrepaid, and the ~~Company’s~~remaining ~~common~~notes ~~stock~~had atmatured, ~~any~~prompting ~~time~~the ~~prior~~Company to ~~December~~enter ~~31,~~into ~~2024~~negotiations atwith athe ~~conversion~~noteholders ~~price~~to ~~equal~~further toextend ~~$0.20~~the ~~per~~maturity ~~share~~dates.

On March 15, 2024, ~~the~~a ~~Company~~new ~~amended~~amendment was finalized, extending the maturity ~~dates~~ of 25all defaulted convertible notes ~~in default~~ to December 31, 2024,. ~~and~~The ~~the~~ conversion prices were revised to the lesser of 80% of the ~~twenty~~20-day average closing price per share (but ~~not~~no ~~less~~lower than $0.20 per share) or $0.50 per share. The ~~convertible notes bear~~ interest atrate remains 10% per annum. ~~In addition, the Company consolidated the 25 convertible notes with common note holders to 8 convertible notes.~~

34Additionally, ~~Table~~on December 4, 2023, the Company issued an additional convertible note with a face value of ~~Contents~~$50,000. This note bears interest at 10% per annum, matures on December 31, 2024, and is convertible into common shares at $0.20 per share prior to maturity.

~~The~~As ~~following~~at ~~table~~November ~~summarizes~~30, 2024, the ~~Company’s~~principal ~~secured~~outstanding on the convertible notes ~~payable~~totaled as$3,774,891 of(August ~~May~~ 31, 2024 ~~and~~- $3,774,891), with accrued interest payable of $1,196,843 (August 31, ~~2023.~~2024 - $1,102,729) recorded within accrued liabilities.

Original issue date	Default date	Maturity date	Principal Balance May 31, 2024		Accrued Interest May 31, 2024		Principal Balance August 31, 2023		Accrued InterestAugust 31, 2023
1/23/2020	9/30/2022		$	-	$	-	$	200,000	$	48,603
1/23/2020	9/30/2022			-		-		200,000		48,602
9/29/2020	9/30/2022			-		-		63,341		33,540
10/26/2020	9/30/2022			-		-		37,613		10,706
11/11/2020	9/30/2022			-		-		85,937		24,087
12/2/2020	9/30/2022			-		-		600,000		164,712
1/7/2021	9/30/2022			-		-		300,000		52,521
3/26/2021	9/30/2022			-		-		18,000		4,379
3/26/2021	9/30/2022			-		-		100,000		24,274
4/29/2021	9/30/2022			-		-		180,000		42,016
4/30/2021	9/30/2022			-		-		100,000		23,370
7/25/2021	9/30/2022			-		-		35,000		7,336
7/25/2021	9/30/2022			-		-		15,000		3,144
10/1/2021	9/30/2022			-		-		100,000		19,123
10/25/2021	9/30/2022			-		-		100,000		18,466
12/23/2021	6/23/2022			-		-		100,000		16,877
12/23/2021	6/23/2022			-		-		100,000		16,877
1/11/2022	7/10/2022			-		-		150,000		24,534
1/31/2022	7/31/2022			-		-		100,000		15,808
3/29/2022	9/30/2022			-		-		500,000		71,233
6/16/2022	12/16/2022			-		-		250,000		30,206
11/28/2022	6/30/2023			-		-		100,000		7,616
12/1/2022	6/30/2023			-		-		70,000		5,236
12/7/2022	6/30/2023			-		-		60,000		4,389
2/28/2023	4/30/2023			-		-		150,000		7,562
5/17/2023	9/17/2023	On demand		10,000		1,041		10,000		504
12/4/2023		12/31/2024		50,000		2,452		50,000		-
3/15/2024		12/31/2024		570,000		159,121		-		-
3/15/2024		12/31/2024		200,000		53,644		-		-
3/15/2024		12/31/2024		286,891		97,486		-		-
3/15/2024		12/31/2024		660,000		218,646		-		-
3/15/2024		12/31/2024		1,015,000		252,190		-		-
3/15/2024		12/31/2024		233,000		65,261		-		-
3/15/2024		12/31/2024		500,000		108,767		-		-
3/15/2024		12/31/2024		250,000		48,973		-		-
			$	3,774,891	$	1,007,581	$	3,774,891	$	725,721

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Equity Transactions during the ~~nine~~three months ended ~~May~~November 30, 2024 and the year ended August 31, ~~2023~~2024

OnDuring ~~September 21, 2022,~~ the ~~Company~~three ~~issued~~months ~~1,350,000 shares of common stock at $0.40 per share for $540,000 subscriptions received during the year~~ ended ~~August~~November 3130, ~~2022.~~2024:

OnDuring ~~October~~the 7three months ended November 30, ~~2022~~2024, the Company ~~issued~~entered ~~1,575,000~~into ~~shares~~an ofagreement ~~common~~with ~~stock~~certain atrelated $0parties to settle outstanding payables related to prior management and consulting services.40 ~~per~~Under ~~share~~the ~~for~~terms ~~proceeds~~of the agreement, payables of $~~630~~214,~~000.~~782 Inwere ~~connection~~settled ~~with~~through the ~~financing~~issuance of 1,073,912 ~~the~~common ~~Company~~shares, ~~incurred~~with ~~finder’s~~a ~~fee~~fair value of $10214,~~000~~782, ~~and~~of ~~share~~which ~~issuance~~$107 ~~costs~~was ofallocated to common stock and $2214,~~792~~675 was allocated to additional paid in capital.

On ~~October~~November 714, ~~2022~~2024, the Company issued 75a total of 1,950,000 shares of common stock ~~with~~at ~~a fair value of~~ $~~44,606~~0.20 toper ~~settle~~share ~~related~~generating ~~party~~gross ~~accounts~~proceeds ~~payable~~ of $30390,000~~, resulting in a loss on settlement of $14,606~~.

OnDuring ~~October 7, 2022,~~ the ~~Company~~year ~~issued~~ended ~~70,560~~August ~~shares of common stock with a fair value of $41~~31,~~966~~ ~~to settle $29,529 in debt, resulting in a loss on settlement of $12,437.~~2024:

~~Equity~~The ~~Transactions~~Company issued a total of 10,181,990 shares of common stock at $0.20 per share and 42,000 shares of common stock at $0.072 per share, generating gross proceeds of $2,039,343, of which $50,000 had been received during the ~~nine~~year ~~months~~ended August 31, 2023. Of the 10,181,990 shares of common stock issued, 6,000,000 shares were issued to a shareholder under a share purchase agreement, resulting in cash proceeds of $1,199,920 during the year ended ~~May~~August 31, 2024. As part of the agreement, the shareholder has the option to appoint a member to the Board of Directors. The Company incurred a finder’s fee of $70,000 and share issuance costs of $50,000 in connection with these transactions.

On ~~September~~August 516, ~~2023~~2024, the Company ~~issued~~entered ~~150~~into an agreement with certain related parties to settle outstanding payables related to prior management and consulting services. Under the terms of the agreement,~~000~~ payables of $569,475 were settled through the issuance of 654,568 common shares, with a fair value of $65,457, of which $65 was allocated to common stock atand $0569,410 was allocated to additional paid in capital.20 ~~per~~The ~~share~~difference ~~for~~between ~~$30,000~~the ~~subscriptions~~settlement ~~received~~amount ~~during~~and the ~~year~~par ~~ended~~value ~~August~~of ~~31,~~the ~~2023~~shares was recognized as an additional capital contribution from the related parties and recorded under additional paid-in capital.

OnUse ~~October 20, 2023, the Company issued 100,000 shares~~ of ~~common stock at $0.20 per share for $20,000 subscriptions received during the year ended August 31, 2023.~~funds

OnDuring ~~December~~the 1three months ended November 30, ~~2023~~2024, the Company ~~issued~~secured 1additional equity financing. These funds have supported the Company’s ongoing operations in Colombia and Canada,~~730~~ as well as efforts related to regulatory compliance,~~000~~ ~~shares~~development of ~~common~~intellectual ~~stock~~property, atinfrastructure $0upgrades in Colombia and strengthening working capital.20 ~~per~~The ~~share~~additional ~~for~~financing ~~$346,000~~has ~~subscriptions~~also ~~received~~provided ~~during~~general ~~the~~corporate ~~year~~resources ~~ended~~to ~~August~~sustain ~~31,~~and ~~2023~~grow operational capacity in key regions.

35We ~~Table~~continually assess our operational plans to determine the most effective use of ~~Contents~~our cash resources. The timeline for completing various aspects of our operations depends significantly on the availability of funds and other factors beyond our control. There is no assurance we will successfully secure the required capital or revenue, or if obtained, that the amounts will fully fund our ongoing operations.

At May 31, 2024, the Company had received $30,000 in cash for shares subscriptions at $0.20 per share.

Future Financing

In connection with its proposed business plan and currently ongoing and proposed acquisitions, in addition to the possible proceeds from this offering the Company will be required to complete substantial and significant additional capital formation. Such formation could be through additional equity offerings, debt, bank financings or a combination of any source of financing. There can be no assurance that the Company will be successful in completion of such financings.

Plan of Operations

As noted above, the continuation of our current plan of operations requires us to raise significant additional capital. If we are successful in raising capital through the sale of convertible notes or common shares, we believe that we will have sufficient cash resources to fund our plan of operations through 2024. If we are unable to do so, we may have to curtail and possibly cease some operations. We intend to use the net proceeds from the offering for operating capacity in Colombia, Canada and the United States, regulatory compliance, intellectual property, working capital and general corporate purposes.

We continually evaluate our plan of operations to determine the manner in which we can most effectively utilize our limited cash resources. The timing of completion of any aspect of our plan of operations is highly dependent upon the availability of cash to implement that aspect of the plan and other factors beyond our control. There is no assurance that we will successfully obtain the required capital or revenues, or, if obtained, that the amounts will be sufficient to fund our ongoing operations.

Capital Expenditures

As of ~~May~~November 3130, 2024, the ~~company~~Company’s ~~had~~carrying ~~purchased~~value of property, plant and equipment ofwas $1,~~321~~173,~~318~~224 ~~and paid net cash of $2,833,049 for an asset acquisition. As of~~ (August 31, ~~2023~~2024 ~~the~~- ~~company had purchased property plant and equipment of~~ $1,~~417~~218,~~192 and paid net cash of $2,833,049 for an asset acquisition~~111).

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MediColombias Acquisition (Colombia Licensed Producer)

On August 29, 2019, the Company entered into a Share Purchase Agreement (“Purchase Agreement”) with Dorson Commercial Corp. (“Dorson”) as the sole owner of Baleno Ltd. to purchase all of the issued and outstanding shares of Baleno Ltd., the sole owner of Medicolombia Cannabis S.A.S. (“Medicolombia”). Medicolombia is based in Colombia with a full set of licenses and a lease agreement in place to produce product on a 5 hectare parcel of land. We have the ability to scale production to over hundreds of hectares. This is located in the area of Bucamaranga, Colombia.

Pursuant to the agreement the Company acquired all of the issued and outstanding shares of Medicolombia in exchange for $700,000 and 4,500,000 shares of Allied. The Company closed and completed the acquisition on February 17, 2020. Medicolombia has subsequently changed its name to Allied Colombia S.A.S.

Natural Health Products Acquisition

In May 2019 the management team of AM Biosciences were able to negotiate the inclusion of a natural health products catalogue of products. This includes 50 products in the natural health vertical market. Three of these products are of particular interest as they have Natural Health Products registration numbers with Health Canada. AM Biosciences can add these to the product offerings both in Canada and the United States.

Since the Board of Directors of the Company has determined to currently focus on the cannabis product, this project is currently on hold.

Xtreme Cubes Building

In June 2019, AM Biosciences signed the production and manufacturing contract to begin the manufacturing of the full building initially intended for the Canada extraction and production facility.

In June 2019, AM Biosciences signed the production and manufacturing contract to begin the manufacturing of the full building for the Canada extraction and production facility. The Company made an upfront payment of $230,000 USD in June 2019, an additional payment of $903,385 in August 2019 and an additional payment of $92,000 in March 2020. At August 31, 2022, Company had deposits of $2,656,695 to purchase prefabricated buildings. During the year ended August 31, 2023, the Company recorded a loss on impairment of deposit of $2,656,695 due to the legal proceedings described below.

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In 2020, Allied signed a purchase agreement to acquire a Nevada state license and had the 9800 sq ft. modular building built in Nevada as well. Allied signed a 25 year lease with a publicly listed company called FIORE cannabis. In December 2022, FIORE cannabis went insolvent so the business assets were seized by the debt holders of that company. The Allied building was on that land. Needless to say the lease was cancelled and Allied submitted an application to gain possession of the building back and have it be excluded from the bankruptcy proceedings of FIORE. This is in process with the state of Nevada. We are not aware of any other legal proceedings contemplated by any governmental authority or any other party involving us or our properties.

Commitments and Contractual Obligations

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

Off-balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Going Concern

As reflected in the accompanying financial statements, the Company had an accumulated deficit of $4850,~~202~~364,~~258~~810 at ~~May~~November 3130, 2024 and a net loss of $2780,~~593,922~~290 for the ~~nine~~three months ended ~~May~~November 3130, 2024.

The Company does not yet have a history of financial stability. Historically, the principal source of liquidity has been the issuance of convertible notes and equity securities. In addition, the Company has generated minimal revenues since inception. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The ability of the Company to continue operations is dependent on the success of Management’s plans, which include the raising of capital through the issuance of equity securities, until such time that funds provided by operations are sufficient to fund working capital requirements.

The Company will require additional funding to finance the growth of its current and expected future operations as well as to achieve its strategic objectives. The Company believes its current available cash will be sufficient to meet its cash needs for the near future. There can be no assurance that financing will be available in amounts or terms acceptable to the Company, if at all.

The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

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 required under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q. ~~Based~~In ~~upon~~making ~~that~~this ~~evaluation~~assessment, our management used the ~~Chief~~criteria ~~Financial~~set ~~Officer~~forth ~~and~~by ~~Chief~~the ~~Executive~~Committee ~~Officer~~of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. During the annual audit for the year ended August 31, 2024, management’s initial estimates used in its assessment of asset impairment were modified resulting in audit adjustments. Accordingly, based on the COSO framework criteria, management concluded that there was a material weakness in the internal control over financial reporting at August 31, 2024 as management lacked a formal policy of testing for impairment. As a result, our ~~disclosure~~internal controls ~~and~~over ~~procedures~~financial reporting were ~~effective~~also deemed ineffective for the period covered by this Report. Management is presently reviewing its internal controls and working to implement a formal policy around impairment testing to address this weakness.

3713 Table of Contents

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

In ~~June 2019~~2020, AMAllied ~~Biosciences~~signed a purchase agreement to acquire a Nevada state license and had a 9800 sq ft. modular building built in Nevada as well. Allied signed a 25 year lease with a publicly listed company called FIORE cannabis. In December 2022, FIORE cannabis went insolvent so the ~~production~~business assets were seized by the debt holders of that company. The Allied building was on that land. Needless to say the lease was cancelled and ~~manufacturing~~Allied ~~contract~~submitted an application to ~~begin~~gain possession of the ~~manufacturing~~building back and have it be excluded from the bankruptcy proceedings of FIORE. This is now the ~~full~~subject of litigation in the state of Nevada. The property was sold at auction to the debt holder who has claimed that the building ~~initially~~is ~~intended~~part ~~for~~of the ~~Canada~~acquisition. ~~extraction~~We filed to have the court determine that the building belongs to the Company and/or ~~production~~the ~~facility~~business that funded the acquisition of the building. This has become the subject of extensive negotiations between the parties which is continuing as of the date of this Report.

The Company had determined to utilize these building assets in connection with potential United States operations in the State of Nevada upon on the occurrence or waiver of the changes in U.S. federal law to permit the general cultivation, distribution and possession of marijuana or to remove the regulation of such activities from the federal laws of the United States (the “Triggering Event”). In connection with that determination, our wholly owned subsidiary, Allied US Products LLC, a Nevada limited liability company, entered into a contingent asset purchase agreement (the “Contingent Asset Purchase Agreement”) which allows for the purchase of a Nevada State US-based cannabis license from a subsidiary of Fiore Cannabis, Ltd. (“Fiore Subsidiary”). We also entered into a 25 year land lease with the Fiore Subsidiary which we intended originally to use for this operation.

We will only conduct business activities related to growing or processing cannabis in jurisdictions, including the United States, when it is federally permissible to do so. While we have several arrangements with United States based companies that may themselves participate in the United States cannabis market, these relationships do not violate the federal laws of the United States respecting cannabis and in no manner involve us in any activities in the United States respecting cannabis.

As the Company made payments towards the purchase of the prefabricated buildings, various parts of the building were delivered to the property on the land lease. In December 2022, the Company was advised that the Fiore Subsidiary had become insolvent and that a trustee’s sale had been scheduled for the property which the Company had agreed to lease. In order to protect the Company’s interests, the Company filed a complaint in the Eighth Judicial District Court in Clark County, Nevada seeking injunctive relief to terminate the trustee’s sale or alternatively obtain money damages. The Company filed a lis pendens against the property to reflect this complaint and to protect its interests in the building. However, the trustee’s sale went forward and the successful bidder claimed that the buildings were part of the real property and that it became the owner of the buildings. As a result, the Company filed suit, seeking a declaration of the Company’s ownership of the buildings as the buildings were personal property and not a part of the real property. A status conference was held for December 13, 2023 and during a further status conference on April 3, 2024 the court strongly suggested to proceed with the litigation. As a consequence, further discussions are ongoing.

We are not aware of any other legal proceedings contemplated by any governmental authority or any other party involving us or our properties.

As of the date of this report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. We are not aware of any other legal proceedings pending or that have been threatened against us or our properties.

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings or claims, other than those disclosed above, are pending against or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition.

38 Table of Contents

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 required under this item.

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

On ~~September~~November 514, ~~2023~~2024, the Company issued ~~150~~a total of 1,950,000 shares of common stock at $0.20 per share ~~for~~generating ~~$30,000~~gross ~~subscriptions~~proceeds ~~received~~of ~~during the year ended August 31~~$390, ~~2023~~000.

On October 20, 2023, the Company issued 100,000 shares of common stock at $0.20 per share for $20,000 subscriptions received during the year ended August 31, 2023.

On December 1, 2023, the Company issued 1,730,000 shares of common stock at $0.20 per share for $346,000 subscriptions received during the year ended August 31, 2023.

At May 31, 2024, the Company had received $30,000 in cash for shares subscriptions at $0.20 per share.

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures

None

Item 5. Other Information.

Not applicable

3914 Table of Contents

SIGNATURES*Item 6. Exhibits.

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.

31.1		Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Executive Officer

31.2		Rule 13(a)-14(a)/15(d)-14(a) Certification of Chief Financial Officer

32.1		Section 1350 Certification of Chief Executive Officer

32.2		Section 1350 Certification of Chief Financial Officer

101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).

101.SCH		Inline XBRL Taxonomy Extension Schema Document.

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

	Allied Corp.(Registrant)
Date: July 18, 2024	By:	/s/ Calum Hughes
		Calum Hughes
		Chief Executive Officer and Director {Principal and Executive Officer}
Date: July 18, 2024	By:	/s/ Ryan Maarschalk
		Ryan Maarschalk
		Chief Financial Officer(Principal Financial Officer Principal Accounting Officer)

Table of Contents

40SIGNATURES

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.

	Allied Corp. (Registrant)

Date: January 14, 2025	By:	/s/ Calum Hughes
		Calum Hughes
		Chief Executive Officer and Director {Principal and Executive Officer}

Date: January 14, 2025	By:	/s/ Paul Bullock
		Paul Bullock
		Interim Chief Financial Officer (Principal Financial Officer Principal Accounting Officer)

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