Company Quick10K Filing
Gala Pharmaceutical
Price0.00 EPS-0
Shares108 P/E-0
MCap0 P/FCF-0
Net Debt0 EBIT-3
TEV0 TEV/EBIT-0
TTM 2019-05-31, in MM, except price, ratios
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8-K 2018-01-10

GLAG 10K Annual Report

Part I
Item 1. Description of Business
Item 1A. Risk Factors
Item 1A. Unresolved Staff Comments
Item 2. Description of Property
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosures
Part II
Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information.
Part III
Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(A) of The Exchange Act
Item 11. Executive Compensation.
Item 12.
Item 13. Certain Relationships, Related Transactions and Director Independence
Item 14. Principal Accountant Fees and Services
Item 15. Exhibits
EX-31.1 exhibit311.htm
EX-32.1 exhibit321.htm

Gala Pharmaceutical Earnings 2014-11-30

Balance SheetIncome StatementCash Flow
0.4-0.3-1.0-1.6-2.3-3.02012201420172020
Assets, Equity
0.1-0.4-0.8-1.3-1.7-2.22012201420172020
Rev, G Profit, Net Income
0.30.20.1-0.1-0.2-0.32012201420172020
Ops, Inv, Fin

10-K 1 form10k.htm FORM 10-K Filed by OTC Filings Inc. - www.otcedgar.com - 1-866-832-FILE (3453) - Gala Global Inc. - Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

þ  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended November 30, 2014

 

o TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

 

For the transition period from _________ to _________

 

Commission File Number: 000-52044

 

GALA GLOBAL INC.

(Name of Small Business Issuer in its charter)

 

Nevada

42-1771014

(state or other jurisdiction of incorporation or organization)

(I.R.S. Employer I.D. No.)


2780 South Jones Blvd. #3725

Las Vegas, Nevada 89146

(Address of principal executive offices)

 

(775) 321-8238

Issuer’s telephone number


Securities registered under Section 12(b) of the Exchange Act: None


Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value


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


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


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


Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definition of large accelerated filer and accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.  (Check one):


Large accelerated filer o            Accelerated filer o         Non-accelerated filer o        Smaller reporting company þ


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


Aggregate market value of the voting and non-voting stock of the registrant held by non-affiliates of the registrant as of the last business day of the registrants most recently completed fiscal quarter:  $5,299,200


As of March 11, 2015 the registrant’s outstanding stock consisted of 123,140,000 common shares.

 

 

                
             


GALA GLOBAL INC.


Table of Content

PART I

 

 

 

Item 1.     Description of Business

3

Item 1A.  Risk Factors

4

Item 1B.  Unresolved Staff Comments

4

Item 2.     Description of Property

4

Item 3.     Legal Proceedings

4

Item 4.     Mine Safety Disclosures

4

 

 

PART II

 

 

 

Item 5.     Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

5

Item 6.     Selected Financial Data

6

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

6

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

9

Item 8.     Financial Statements and Supplementary Data

10

Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                                      

11

Item 9A.  Controls and Procedures

11

Item 9B.  Other Information

11

 

 

PART III

 

 

 

Item 10.   Directors, Executive Officers and Corporate Governance

12

Item 11.   Executive Compensation

13

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                    

15

Item 13.   Certain Relationships, Related Transactions and Director Independence

15

Item 14.    Principal Accountant Fees and Services

16

Item 15.    Exhibits and Financial Statement Schedules

17

Signatures

17




2              

             



PART I


Item 1.  Description of Business


General


GALA Global Inc. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on March 15, 2010 (Inception). The Company was formed to provide garment tailoring and alteration services. 

On May 19, 2014, a change in control of the Company occurred when IDG Ventures Ltd., the Company’s then controlling shareholder, sold all of its 3,547,000 shares of the Company’s common stock, representing 60.04% of our issued and outstanding common shares, in a private share purchase transaction to Messrs. Haas, Lefevre and Naccarato.

On June 26, 2014, the Company had a change in management when Mr. Robert Frei resigned as President and Director of the Company and Mr. Lefevre was appointed as his successor. Concurrent with the change of management, the Company acquired two 100% owned subsidiary companies, Cannabis Ventures Inc (USA), incorporated on February 27, 2014 in the state of Nevada and Cannabis Ventures Inc. (Canada), incorporated on April 9, 2014 in Vancouver, British Columbia. Neither of these subsidiary companies had traded prior to their acquisition by the Company other than as described below.

GALA Global, Inc. is currently distributing all-natural everyday custom tailored women's clothing products from England. The Company is exploring different hemp alternatives of fabric and materials needed to produce our all new custom designed apparel.  Our new products are scheduled for launch in the latter part of 2015.

GALA Global, Inc., since its change in management effective June 26, 2014, has expanded into the Hemp and Cannabidiol (“CBD”) industry. The expansion is focusing on the development, research, and commercialization of products derived from the Hemp and Cannabis Plant. GALA Global, Inc. currently markets a new CBD flavored Thin-film strip. The film strip delivery system uses a dissolving film strip that is absorbed in the mouth. The film-strip method is an advanced method of providing CBD for dietary supplement. GALA also is seeking acquisition candidates in this area of interest in the nutraceutical and pharmaceutical industries.The Company also plans to enter into the medical marijuana cultivation industry as approved in the United States and Canada to build legalized cultivation operations

GALA Global, Inc.’s services include the development of cannabinoid based health and wellness products; the development of medical grade compounds; the licensing of proprietary testing, genetics, labeling and packaging, tracking, production, and standardization methods for the medicinal herb industry.

  3            

             

 

Cannabis Ventures Inc. (USA) (“CVI”)

In September 2014, CVI entered into a promissory note agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to finance a potential cultivation project. CVI has advanced funds of $189,972 to GFI under the promissory note, which is unsecured, bears interest at 5% per annum, and was due on December 31, 2014. As GFI was delinquent in performing certain obligations under the terms of the promissory note and our ability to recover this advance is currently uncertain, we have a provided in full against the value of this promissory note and recognized an impairment expense of $189,972 effective December 31, 2014.   

Cannabis Ventures, Inc. (Canada) (“CVI (Canada)”)

In May 2014, CVI (Canada) entered into a contract to acquire certain property in Vancouver, Canada for $600,000 (“the Contract”). It is the Company’s intention to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada. The property is owned personally by a director of CVI (Canada).

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was received by CVI (Canada) in February 6, 2015. We responded on February 26, 2015 and Health Canada acknowledged receipt on February 27, 2015.    

The Contract had an initial term of 4 months, expiring August 31, 2014, to give the Company the time to acquire the necessary license from Health Canada. During this four month period, the Company paid the owner of the property a nonrefundable payment of $4,000 a month and this expense has been recognized in our statement of operations.

The Contract had been extended on a month to month basis and as of February 2015, the Company continues to pay the property owner a reduced nonrefundable payment of $2,500 a month while it awaits the determination from Health Canada. There is no guarantee that the property owner will continue to extend the term of the Contract or that the Company will be successful in obtaining a license from Health Canada. Moreover as at the date of this report, the Company does not have the funds to complete the purchase of the property nor is there any guarantee that it will be able to raise the required funding.


Trademark


We do not have a trademark registered at this time.  At present, we have not established a valuable brand which requires protection.  We may register a trademark in the next 12 months when we feel that our brand is able beginning to gain value and recognition.  


Government Regulation


To comply with U.K. laws, in order to do business in the U.K., since we are a Nevada corporation, we will have to register as an overseas company at the Companies House in Britain within one month from the beginning of trade.  Companies House is the United Kingdom Registrar of Companies.  All forms of companies are incorporated and registered with Companies House as required by the current Companies Act 2006.  All registered limited companies, including subsidiary, small and inactive companies, must file annual financial statements, in addition to annual company returns, which are all public records.  All forms of companies as permitted by United Kingdom Companies Act are incorporated and registered with Companies House.  We are not required to be registered as an overseas company in London until we start to execute business transactions with our U.K. customers and start to earn revenue.

 

We do not believe that government regulations will have a material impact on the way we conduct business.

  4             

             

Research and Development

We have not spent any amounts on research and development activities during the years ended November 30, 2014 or 2013. We anticipate that we will not incur any expenses on research and development over the next 12 months. Our planned expenditures on our operations or a business combination are summarized under the section of this annual report entitled “Management’s Discussion and Analysis of Financial Position and Results of Operations”.


Employees and Employment Agreements


At present, we have no employees other than our sole officer and director who devotes approximately 20-30 hours a week to our business. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.


Item 1A.  Risk Factors

 

Not applicable to smaller reporting companies.


Item 1A.  Unresolved Staff Comments


 Not applicable to smaller reporting companies.


Item 2.  Description of Property


We do not currently own any property or real estate of any kind. Our mailing address located at 2780 South Jones Blvd. #3725, Las Vegas, Nevada 89146.We currently do not maintain an office at this time and have no need of a dedicated office at this stage of our business plan.

 

Item 3.  Legal Proceedings


We are currently unaware of any legal matters pending or threatened against us.


Item 4.  Mine Safety Disclosures

 

Not applicable to our Company.

 

  5             

             


PART II


Item 5.  Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

 

Market Information


Our shares of common stock are listed on the Over the Counter Bulletin Board under the symbol GALA.  Set forth below are high and low bid prices for our common stock for each quarterly period in the two most recent fiscal years.  Such quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not necessarily represent actual transactions in the common stock.  

 

Period

High

Low

Fiscal 2014

 

 

First Quarter ended February 28, 2014

$3.50

$3,50

Second Quarter ended May 31, 2014

$3.50

$3.50

Third Quarter ended August 31, 2014

$3.50

$1.97

Fourth Quarter ended November 30, 2014

$3.00

$0.06

 

 

 

Fiscal 2013

 

 

First Quarter ended February 28, 2013

$3.50

     $3.50

Second Quarter ended May 31, 2013

$3.50

$3.50

Third Quarter ended August 31, 2013

$3.50

$3.50

Fourth Quarter ended November 30, 2013

$3.50

$3.50


Number of Holders


As of November 30, 2014, the 119,140,000 issued and outstanding shares of common stock were held by a total of 46 shareholders of record.


Dividends

 

No cash dividends were paid on our shares of common stock during the fiscal years ended November 30, 2014 and 2013. We have not paid any cash dividends since our inception and do not foresee declaring any dividends on our common stock in the foreseeable future.


Recent Sales of Unregistered Securities


On September 2, 2014, the Company sold 1,000,000 shares of common stock pursuant to a stock purchase agreement valued at $0.10 per share for gross proceeds of $100,000.


Purchase of our Equity Securities by Officers and Directors


None.


Other Stockholder Matters


None



  6             

             


Item 6.  Selected Financial Data

 

Not applicable to smaller reporting companies.


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


You should read the following discussion and analysis in conjunction with our financial statements, including the notes thereto, included in this Report.  Some of the information contained in this Report may contain forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1933, as amended (the “Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements.  Forward-looking statements which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by the use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology.  These forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that the projections included in these forward-looking statements will come to pass.  Our actual results could differ materially from those expressed or implied by the forward looking statements as a result of various factors.  We undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.


Our auditors’ reports contain a statement that our net loss and limited working capital raise substantial doubt about our ability to continue as a going concern. Our independent registered public accountants have stated in their report (included in Item 8. Financial Statements) that our significant operating losses and working capital deficit raise substantial doubt about our ability to continue as a going concern. We incurred net losses of $278,875 and $35,990, respectively, for the fiscal years ended November 30, 2014 and November 30, 2013. We will be required to raise substantial capital to fund our capital expenditures, working capital, and other cash requirements since our current cash assets are exhausted and we have generated no revenues to date to sustain our operations. We will need to seek other financing to complete our business plans. The successful outcome of future financing activities cannot be determined at this time and there are no assurances that, if achieved, we will have sufficient funds to execute our intended business plan or generate positive operational results.


In addition to our current deficit, we expect to incur additional losses during the foreseeable future.  Until we are able to successfully execute our business plan. Consequently, we will require substantial additional capital to continue our development and marketing activities. There is no assurance that we will be able to obtain additional financing through private placements and/or public offerings necessary to support our working capital requirements. To the extent that funds generated from any private placements and/or public offerings are insufficient, we will have to raise additional working capital through other sources, such as bank loans and/or financings. No assurance can be given that additional financing will be available, or if available, will be on acceptable terms.


We are incurring increased costs as a result of being a publicly-traded company. As a public company, we incur significant legal, accounting and other expenses that we did not incur as a private company. In addition, the Sarbanes-Oxley Act of 2002, as well as new rules subsequently implemented by the Securities and Exchange Commission, have required changes in corporate governance practices of public companies. These new rules and regulations have increased our legal and financial compliance costs and have made some activities more time-consuming and costly. For example, as a result of becoming a public company, we have created additional board committees and have adopted policies regarding internal controls and disclosure controls and procedures. In addition, we have incurred additional costs associated with our public company reporting requirements. In addition, these new rules and regulations have made it more difficult and more expensive for us to obtain director and officer liability insurance, which we currently cannot afford to do. As a result of the new rules, it may become more difficult for us to attract and retain qualified persons to serve on our Board of Directors or as executive officers. We cannot predict or estimate the amount of additional costs we may incur as a result of being a public company or the timing of such costs.


 

  7             

             

 

RESULTS OF OPERATIONS


Operating Revenues


During the fiscal years ended November 30, 2014 and 2013, the Company did not recognize any revenue.


Operating Expenses


Operating expenses for the year ended November 30, 2014 were $88,903 compared with $35,990 for the year ended November 30, 2013. A summary of the operating expenses are as follows:  


Analysis of Operating Expenses


 

November 30,

November 30,

Variance

Operating Expense

2014

2013

$

%

 

 

 

 

 

Depreciation

$     -

$   475

$  (475)

(100.0)%

Land Purchase Option

$28,000

$     -

$28,000

100%

Management Fees

$6,000

$7,000

$(1,000)

(14.3)%

Professional Fees

$25,054

$6,500

$18,554

285.4%

Overhead and Administration

$23,905

$19,908

$3,997

20.1%

Transfer Agent and Filing Fees

$5,944

$2,107

$3,837

182.1%

 

 

 

 

 

 

$88,903

$35,990

$52,913

147.0%


Overall, the increase in operating expenses were due to payments of $28,000 for the a nonrefundable payment of $4,000 a month in respect of our proposed purchase of property in Canada and an increase in professional fees of $18,554 relating to the Company’s accounting, audit, and legal fees that were incurred as part of the SEC filing process. Additionally, the Company saw minor increases of $3,997 in overhead and administration expense due to an increase in the day-to-day activities in the Company, and $3,836 in transfer agent and filing fees relating to costs incurred with respect to the private placement that was issued during the year. The Company has fully amortized its property and equipment, which lead to the overall decrease in depreciation expense.  


Impairment of Loan Receivable


During the year ended November 30, 2014 we recognized an impairment expense of $189,972 (2013 - $0) in respect of funds we had advanced under a promissory note to Global Farmacy, Inc (“GFI”).


In September 2014, CVI entered into a promissory note agreement with GFI, an Arizona non-profit corporation, to finance a potential cultivation project. CVI has advanced funds of $189,972 to GFI under a promissory note which is unsecured, bears interest at 5% per annum and was due on December 31, 2014. As GFI was delinquent in performing certain obligations under the terms of the promissory note and our ability to recover this advance is currently uncertain, we have a provided in full against the value of this promissory note and recognized an impairment expense of $189,972 effective December 31, 2014.   


Net Loss


Net loss for the year ended November 30, 2014 was $278,875 or $(0.00) loss per share compared with a net loss of $35,990 and $(0.00) loss per share for the year ended November 30, 2013 due to the factors discussed above.   


  8             

             

 

Liquidity and Capital Resources


As of November 30, 2014, the Company has no revenue or other source of income, has a working capital deficit of $192,673, and an accumulated deficit of $387,071. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, its ability to obtain the necessary debt or equity financing, and generate profitable operations from the Company’s planned future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  


Working Capital


 

November 30,

2014

$

November 30,

2013

$

Current Assets

-

104

Current Liabilities

192,673

37,200

Working Capital (Deficit)

(192,673)

(37,096)


As at November 30, 2014, the Company had current assets of $nil and current liabilities of $192,673 compared with current assets of $104 and current liabilities of $37,200 at November 30, 2013. The increase in the working capital deficit was largely attributable to an increase in amounts due to related parties of $146,337 for amounts paid on behalf of the Company for operating expenditures and advanced to GFI under a promissory note receivable.


Cash Flows


 

Year ended

November 30,

2014

$

Year ended

November 30,

2013

$

Cash Flows from (used in) Operating Activities

(89,767)

(24,800)

Cash Flows from (used in) Investing Activities

(189,972)

-

Cash Flows from (used in) Financing Activities

279,635

-

Net Increase (decrease) in Cash During Period

(104)

(24,800)




Cashflow from Operating Activities


During the year ended November 30, 2014, the Company used $89,767 of cash for operating activities compared to the use of $24,800 of cash for operating activities during the year ended November 30, 2013. The increase in cash used for operating activities was mainly due to an increase in overall operating expenditures during the year.  


  9             

             


Cashflow from Investing Activities


During the year ended November 31, 2014 the Company used $189,972 of cash for investing activities compared to $nil for the year ended November 31, 2013. The increase in the cash used for investing activities was due to funds advanced by the Company under a promissory note receivable to GFI.  



Cashflow from Financing Activities


During the year ended November 30, 2014, $279,635 was provided by financing activities compared to $nil provided during the year ended November 30, 2013. Proceeds received include $184,635 provided by related parties and $100,000 provided from the sale of common shares. offset by a $5,000 repayment to a related party. The Company required the increased financing in the year ended November 31, 2014 to finance the operating expenses described above and the funds advanced by the Company under a promissory note receivable to GFI.  


Off-Balance Sheet Arrangements


We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


Other events


On May 19, 2014, a change in control of Gala Global Inc. (the "Company") occurred when IDG Ventures Ltd. (“IDG”), the Company’s then controlling shareholder, sold all of its 70,940,000 (post-split) common shares in a private share purchase transaction to the three individuals listed below.  The consideration paid was $125,000 in cash.  The three individuals now have voting control over 60.99% in the aggregate of the Company’s issued and outstanding common stock.



Purchasers                              Share position                         Percentage of outstanding


James Haas

35,470,000 shares                                        30.02%

George Lefevre                        17,735,000 shares                                        15.01%

Owen Naccarato                      18,855,000 shares                                        15.96%


Cannabis Ventures Inc. (USA) (“CVI”)

In September 2014, CVI entered into a promissory note agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to finance a potential cultivation project. CVI has advanced funds of $189,972 to GFI under the promissory note, which is unsecured, bears interest at 5% per annum, and was due on December 31, 2014. As GFI was delinquent in performing certain obligations under the terms of the promissory note and our ability to recover this advance is currently uncertain, we have a provided in full against the value of this promissory note and recognized an impairment expense of $189,972 effective December 31, 2014.   

Cannabis Ventures, Inc. (Canada) (“CVI (Canada)”)

In May 2014, CVI (Canada) entered into a contract to acquire certain property in Vancouver, Canada for $600,000 (“the Contract”). It is the Company’s intention to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada. The property is owned personally by a director of CVI (Canada).

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was received by CVI (Canada) in February 6, 2015. We responded on February 26, 2015 and Health Canada acknowledged receipt on February 27, 2015.    

The Contract had an initial term of 4 months, expiring August 31, 2014, to give the Company the time to acquire the necessary license from Health Canada. During this four month period, the Company paid the owner of the property a nonrefundable payment of $4,000 a month and this expense has been recognized in our statement of operations.

The Contract had been extended on a month to month basis and as of February 2015, the Company continues to pay the property owner a reduced nonrefundable payment of $2,500 a month while it awaits the determination from Health Canada. There is no guarantee that the property owner will continue to extend the term of the Contract or that the Company will be successful in obtaining a license from Health Canada. Moreover as at the date of this report, the Company does not have the funds to complete the purchase of the property nor is there any guarantee that it will be able to raise the required funding.

 10             

             

Subsequent Events


a)

On December 2, 2014, the Company entered into a marketing agreement for advertising services. The Company has agreed to issue 1,500,000 shares of common stock to the consultant as compensation for a six-month term. The agreement may be terminated by either party at the end of any month during the term of the agreement.

b)

On December 16, 2014, the Company entered into a consulting agreement with a consultant who is to become a director of the Company. The Company has agreed to issue 500,000 shares of common stock to the consultant as compensation. The agreement commences upon the date of the agreement, and continues until the Consultant resigns or upon mutual agreement with the Company to terminate such agreement.

c)

On January 9, 2015, the Company and its board of directors authorized a new class of equity instruments – Series A Preferred Stock, subject to authorized capital of 500,000 shares with a par value of $0.001 per share.  As of the date of filing, no Series A Preferred Stock have been issued.   


Going Concern


We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.


Future Financings


We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and activities.


Critical Accounting Policies


Our financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.


We regularly evaluate the accounting policies and estimates that we use to prepare our financial statements. A complete summary of these policies is included in note (1) of the notes to our financial statements. In general, management's estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.


Use of Estimates


The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes for the reporting period. Significant areas requiring the use of management estimates relate to the valuation of its mineral leases and claims and our ability to obtain final government permission to complete the project.


Stock-Based Compensation


The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.


Recently Issued Accounting Pronouncements


We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company other than those relating to Development Stage Entities as discussed below in our financial statements

Contractual Obligations


We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.


ITEM 7A.  Quantitative and Qualitative Disclosures about Market Risk


Not applicable to smaller reporting companies.


 

  11             

             




Item 8.  Financial Statements




 

GALA GLOBAL INC.


Consolidated Financial Statements


For the Years Ended November 30, 2014 and November 30, 2013


(Expressed in U.S. dollars)




Report of Independent Registered Public Accounting Firm F-1

Balance Sheets

F-2

Statement of Operations

F-3

Statements of Cash Flows

F-4

Statements of Changes in Stockholder’s Deficit

F-5

Notes to the Financial Statements

F-6

 

  12             

             

 

[form10k001.jpg]


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors

Gala Global, Inc.

Las Vegas, Nevada, 89146


We have audited the accompanying balance sheets of Gala Global, Inc. as of November 30, 2014 and 2013 and the related statement of operations, changes in stockholders' equity (deficit) and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Gala Global, Inc. as of November 30, 2014 and 2013, and the results of its operations, changes in stockholders’ equity (deficit) and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements the Company has suffered losses and negative cash flow from operations which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. 

 

 

 

 

 Wheat Ridge, formerly Arvada, Colorado

 [form10k002.jpg]

March 13,  2015

Cutler & Co., LLC


[form10k003.jpg]



 F-1          

             



GALA GLOBAL INC.

Consolidated Balance Sheets

(Expressed in U.S. dollars)


 

November 30,

2014

$

 November 30,

 2013

 $

 

 

 

ASSETS

 

 

 

 

 

Current Assets

 

 

Cash

104

       Total Current Assets

-

104

 

 

 

Total Assets

104

 

 

 

LIABILITIES AND STOCKHOLDERS’ DEFICIT

 

 

 

 

 

Current liabilities

 

 

 

 

 

Accounts payable and accrued liabilities

8,038

8,902

Due to related parties

174,635

28,298

Loan payable to related party

10,000

-

      Total Current Liabilities

192,673

37,200

 

 

 

Total Liabilities


COMMITMENTS AND CONTINGENCIES

192,673

37,200

STOCKHOLDERS’ DEFICIT

 

 

Preferred Stock

Authorized: 10,000,000 preferred shares with a par value of $0.001 per share

Issued and outstanding: none

 

 

Common Stock

Authorized: 500,000,000 common shares with a par value of $0.001 per share

 

 

Issued and outstanding: 119,140,000 and 118,140,000 common shares, respectively

119,140

118,140

 

 

 

Additional Paid-In Capital

75,258

(47,040)

 

 

 

Accumulated Deficit

(387,071)

(108,196)

 

 

 

Total Stockholders’ Deficit

(192,673)

(37,096)

 

 

 

 

 

 

Total Liabilities and Stockholders’ Deficit

104

 

 

 


(The accompanying notes are an integral part of these financial statements)


 F-2            

             




GALA GLOBAL INC.

Consolidated Statements of Operations

(Expressed in U.S. dollars)


 

Year Ended

November 30,

2014

$

Year Ended

November 30,

2013

$

 



Revenues

      

 -–

 

 

 

Operating Expenses

 

 

Depreciation

475

General and administrative

54,903

35,515

Management fees

6,000

Option expense on proposed property acquisition – related party

28,000

 

 

 

Total Operating Expenses

88,903

35,990

 

 

 

 

 

 

Operating Loss

(88,903)

(35,990)

 

 

 

Other Income (Expense)

 

 

 

 

 

Impairment of loan receivable

(189,972)

Loss before taxes

(278,875)

(35,990)

Provision for income taxes

 

 

 

 

 

 

Net Loss

(278,875)

(35,990)


Net Loss per Share – Basic and Diluted


(0.00)*


(0.00)*


Weighted Average Shares Outstanding – Basic and Diluted

118,386,575

118,140,000

 

 

 


‘* denotes a loss of less than $(0.01) per share.


(The accompanying notes are an integral part of these financial statements)


 F-3            

             



GALA GLOBAL INC.

Statements of Changes in Stockholders’ Deficit

From December 1, 2012 to November 30, 2014

(Expressed in U.S. dollars)


 

Common Stock

 

Additional

Paid-In

 


Accumulated

 

 

 

Shares

 

Par Value

 

Capital

 

Deficit

 

Total

 

#

 

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

Balance – November30, 2012

118,140,000

 

118,140

 

(47,040)

 

(72,206)

 

(1,106)

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

(35,990)

 

(35,990)

 

 

 

 

 

 

 

 

 

 

Balance – November 30, 2013

118,140,000

 

118,140

 

(47,040)

 

(108,196)

 

(37,096)

 

 

 

 

 

 

 

 

 

 

Forgiveness of related party debt

 

 

23,298

 

 

23,298

 

 

 

 

 

 

 

 

 

 

Proceeds from sale of common stock

1,000,000

 

1,000

 

99,000

 

 

100,000

 

 

 

 

 

 

 

 

 

 

Net loss for the year

 

 

 

(278,875)

 

(278,875)

 

 

 

 

 

 

 

 

 

 

Balance – November 30, 2014

119,140,000

 

119,140

 

75,258

 

(387,071)

 

(192,673)

 

 

 

 

 

 

 

 

 

 


The Company completed a forward split of stock 20:1 on September 17, 2014 that has been retroactively reflected in these financial statements.


 

(The accompanying notes are an integral part of these financial statements)


 F-4            

             


GALA GLOBAL INC.

Consolidated Statements of Cash Flows

(Expressed in U.S. dollars)


 

Year Ended  November 30,

2014

$

Year Ended  November 30,

2013

$

 

 

 

Operating Activities

 

 

 

 

 

Net loss for the year

(278,875)

(35,990)

 

 

 

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

Depreciation

 -–

 475

Impairment of promissory note receivable

 189,972

 –

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

(864)

3,991

Due to related party

6,724

 

 

 

Net Cash Used In Operating Activities

(89,767)

(24,800)

 

 

 

Investing Activities

 

 

 

 

 

Loan receivable

 (189,972)

 –

 

 

 

Net Cash Used In Investing Activities

 (189,972)

 –

 

 

 

Financing Activities

 

 

 

 

 

Proceeds from related party

 174,635

 –

Proceeds from loan payable - related party

 10,000

 –

Repayment of due to related party

 (5,000)

 –

Proceeds from issuance of common stock

 100,000

 –

 

 

 

Net Cash Provided By Financing Activities

279,635

 

 

 

Decrease in Cash

(104)

(24,800)

 

 

 

Cash – Beginning of Period

104

24,904

 

 

 

Cash – End of Period

104

 

 

 

Non-cash Investing and Financing Activities

 

 

 

 

 

Forgiveness of related party debt

23,298

 

 

 

Supplemental Disclosures

 

 

 

 

 

Interest paid

Income tax paid

 

 


(The accompanying notes are an integral part of these financial statements)


 F-5            

             


GALA GLOBAL INC.

Notes to the Consolidated Financial Statements

For the twelve months ended November 30, 2014 and 2013

(Expressed in U.S. dollars)



 

1.

Organization and Nature of Operation

GALA Global Inc. (“the Company”, “we”, “us” or “our”) was incorporated in the State of Nevada on March 15, 2010 (Inception). The Company was formed to provide garment tailoring and alteration services. 

On May 19, 2014, a change in control of the Company occurred when IDG Ventures Ltd., the Company’s then controlling shareholder, sold all of its 3,547,000 shares of the Company’s common stock, representing 60.04% of our issued and outstanding common shares, in a private share purchase transaction to Messrs. Haas, Lefevre and Naccarato.

On June 26, 2014, the Company had a change in management when Mr. Robert Frei resigned as President and Director of the Company and Mr. Lefevre was appointed as his successor. Concurrent with the change of management, the Company acquired two 100% owned subsidiary companies, Cannabis Ventures Inc (USA), incorporated on February 27, 2014 in the state of Nevada and Cannabis Ventures Inc. (Canada), incorporated on April 9, 2014 in Vancouver, British Columbia. Neither of these subsidiary companies had traded prior to their acquisition by the Company other than as described below.

GALA Global, Inc. is currently distributing all-natural everyday custom tailored women's clothing products from England. The Company is exploring different hemp alternatives of fabric and materials needed to produce our all new custom designed apparel.  Our new products are scheduled for launch in the latter part of 2015.

GALA Global, Inc., since its change in management effective June 26, 2014, has expanded into the Hemp and Cannabidiol (“CBD”) industry. The expansion is focusing on the development, research, and commercialization of products derived from the Hemp and Cannabis Plant. GALA Global, Inc. currently markets a new CBD flavored Thin-film strip. The film strip delivery system uses a dissolving film strip that is absorbed in the mouth. The film-strip method is an advanced method of providing CBD for dietary supplement. GALA also is seeking acquisition candidates in this area of interest in the nutraceutical and pharmaceutical industries.The Company also plans to enter into the medical marijuana cultivation industry as approved in the United States and Canada to build legalized cultivation operations

GALA Global, Inc.’s services include the development of cannabinoid based health and wellness products; the development of medical grade compounds; the licensing of proprietary testing, genetics, labeling and packaging, tracking, production, and standardization methods for the medicinal herb industry.

Cannabis Ventures Inc. (USA) (“CVI”)

In September 2014, CVI entered into a promissory note agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to finance a potential cultivation project. CVI has advanced funds of $189,972 to GFI under the promissory note, which is unsecured, bears interest at 5% per annum, and was due on December 31, 2014. As GFI was delinquent in performing certain obligations under the terms of the promissory note and our ability to recover this advance is currently uncertain, we have a provided in full against the value of this promissory note and recognized an impairment expense of $189,972 effective December 31, 2014.   

Cannabis Ventures, Inc. (Canada) (“CVI (Canada)”)

In May 2014, CVI (Canada) entered into a contract to acquire certain property in Vancouver, Canada for $600,000 (“the Contract”). It is the Company’s intention to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada. The property is owned personally by a director of CVI (Canada).

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was received by CVI (Canada) in February 6, 2015. We responded on February 26, 2015 and Health Canada acknowledged receipt on February 27, 2015.    

The Contract had an initial term of 4 months, expiring August 31, 2014, to give the Company the time to acquire the necessary license from Health Canada. During this four month period, the Company paid the owner of the property a nonrefundable payment of $4,000 a month and this expense has been recognized in our statement of operations.

The Contract had been extended on a month to month basis and as of February 2015, the Company continues to pay the property owner a reduced nonrefundable payment of $2,500 a month while it awaits the determination from Health Canada. There is no guarantee that the property owner will continue to extend the term of the Contract or that the Company will be successful in obtaining a license from Health Canada. Moreover as at the date of this report, the Company does not have the funds to complete the purchase of the property nor is there any guarantee that it will be able to raise the required funding.

 F-6            

             

 

2.    Going Concern

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at November 30, 2014, the Company has not earned any revenue, has a working capital deficit of $192,673, and an accumulated deficit of $387,071. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to successfully implement its business plan and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  

 

3.

Summary of Significant Accounting Policies

a)

Basis of Presentation

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is November

b)

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its two wholly owned subsidiaries, Nevada incorporated Cannabis Ventures Inc. (USA) and Vancouver, British Columbia incorporated Cannabis Ventures Inc. (Canada), from the date of their acquisition by the Company effective June 26, 2014. All inter-company transactions and balances have been eliminated on consolidation.

c)

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the recoverability of long-lived assets and investments, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

d)

Cash and Cash Equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As of November 30, 2014 and 2013, there were no cash equivalents.

e)

Development Stage Company

The Company is a development stage company as defined by section 915-10-20 of the FASB Accounting Standards Codification and among the additional disclosures required as a development stage company are that its financial statements were identified as those of a development stage company, and that the statements of operations, stockholders’ deficit and cash flows disclosed activity since the date of its inception (March 15, 2010) as a development stage company. The Company has generated no revenue since inception (March 15, 2010) and is still devoting substantially all of its efforts on establishing the business.  All losses accumulated since Inception (March 15, 2010) have been considered as part of the Company’s development stage activities.  Effective June 10, 2014 FASB changed its regulations with respect to Development Stage Entities and these additional disclosures are no longer required for annual reporting periods beginning after December 15, 2014 with the option for entities to early adopt these new provisions. The Company has elected to early adopt these provisions and consequently these additional disclosures are not included in these financial statements. 


 F-7            

             

3.

Summary of Significant Accounting Policies (continued)

f)

Financial Instruments

Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 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 820 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. The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, and amounts due to related party. Pursuant to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

g)

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.

h)

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

i)

Revenue Recognition

Revenue will be recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is assured.  The Company is not exposed to any credit risks as amounts are prepaid prior to performance of services.  

 

 F-8            

             

3.

Summary of Significant Accounting Policies (continued)

j)

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $nil during the years ended November 30, 2014 and 2013.

k)

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.  As at November 30, 2014 and 2013, the Company did not grant any stock options.  

l)

Comprehensive Loss

ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at November 30, 2014 and 2013, the Company has no items representing comprehensive income or loss.

m)

Basic and Diluted Net Loss per Share

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As at November 30, 2014 and 2013, the Company has no potentially dilutive common shares.  

n)

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

4.

Related Party Transactions

a)

During the year ended November 30, 2014, the Company incurred $6,000 (2013 - $nil) in management fees to the former President and Director of the Company.

During the year ended November 30, 2014, the former President and Director of the Company forgave all amounts outstanding totaling $23,298 which was recorded in additional paid-in capital. As at November 30, 2014, the Company owed $nil (November 30, 2013 - $28,298) to the former President and Director of the Company. The amounts owing were unsecured, non-interest bearing, and due on demand.

 

 F-9          

             

4.

Related Party Transactions (continued)

b)

During the year ended November 30, 2014, the Company received advances of $174,635 (2013 - $nil) from a shareholder of the Company to fund payment of operating expenditures and advanced to GFI under a promissory note receivebale. The amounts owing are unsecured, non-interest bearing, and due on demand.

c)

During the year ended November 30, 2014, CVI (Canada) entered into a contract to acquire certain property in Vancouver, Canada for $600,000 (“the Contract”). It is the Company’s intention to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada. The property is owned personally by a director of CVI Canada.

During the year ended November 30, 2014, the Company incurred option expenses of $28,000 (2013 - $nil) under the term of a contract to purchase property in Vancouver, Canada to a director of CVI.

5.

Promissory Note Receivable

On September 30, 2014, Cannabis Ventures Inc. (USA), a wholly-owned subsidiary of the Company entered into a promissory note agreement with Anthony McDonald (“McDonald”) and Globe Farmacy Inc. (“GFI”), an Arizona non-profit corporation, for $189,972.

The amounts owing are unsecured, bears interest at 5% per annum, and is due on December 31, 2014.  As of November 30, 2014, the amount receivable was deemed to be uncollectible and a full impairment charge on the loan receivable has been made by the

Company. 
      

6.

Loan Payable - Related Party

On March 20, 2014, the Company issued a $10,000 promissory note to a shareholder of the Company.  Under the terms of the note, the amount is unsecured, non-interest bearing, and due on demand.  

 

7.

Common Shares

(a)

On August 27, 2014, the Company approved an increase in the total number of authorized shares of common stock from 75,000,000 to 500,000,000 shares and in preferred stock from nil to 10,000,000 shares. The amendment was filed and effected on August 28, 2014.

(b)

On September 2, 2014, the Company issued 1,000,000 shares of common stock at $0.10 per common share for gross proceeds of $100,000.  

(c)

On September 17, 2014, the Company effected a 20:1 forward stock split of the Company’s common stock, thereby increasing the number of the Company’s outstanding common shares from 5,907,000 to 118,140,000 shares of common stock.  

8.

Commitments and Contingencies

In May 2014, CVI (Canada) entered into a contract to acquire certain property in Vancouver, Canada for $600,000 (“the Contract”). It is the Company’s intention to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada. The property is owned personally by a director of CVI Canada.

 

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was received by CVI (Canada) on February 6, 2015 and we will be responding before February 27, 2015 and waiting to hear back from Health Canada.   


 

 F-10           

             

8.

Commitments and Contingencies (continued)

The Contract had an initial term of 4 months, expiring August 31, 2014, to give the Company the time to acquire the necessary license from Health Canada.  During this four month period, the Company paid the owner of the property a nonrefundable payment of $4,000 a month and this expense has been recognized in our statement of operations. 

 

The Contract has now been extended on a month to month basis and the Company continues to pay the property owner a nonrefundable payment of $4,000 a month while it awaits the determination from Health Canada.  As of February 2015, the monthly payment was reduced to $2,500. There is no guarantee that the property owner will continue to extend the term of the Contract or that the Company will be successful in obtaining a license from Health Canada. Moreover as at the date of this report, the Company does not have the funds to complete the purchase of the property nor is there any guarantee that it will be able to raise the required funding.

9.

Income Taxes

The Company has $387,071 of net operating losses carried forward to offset taxable income in future years which expire commencing in fiscal 2030.  The income tax benefit differs from the amount computed by applying the US federal income tax rate of 34% to net loss before income taxes. As at November 30, 2014, the Company had no uncertain tax positions.  

 

 

November 30,

2014

$

November 30,

2013

$

 

 

 

 

Net loss before taxes

 

(278,875)

(35,990)

Statutory rate

 

34%

34%

 

 

 

 

Computed expected tax recovery

 

94,818

12,237

Valuation allowance

 

(94,818)

(12,237)

 

 

 

 

Income tax provision

 


 

The significant components of deferred income tax assets and liabilities at November 30, 2014 and 2013 are as follows:

 

 

 

November 30,

2014

$

November 30,

2013

$

 

 

 

 

Net operating loss carried forward

 

131,605

36,787

Valuation allowance

 

(131,605)

(36,787)

 

 

 

 

Net deferred income tax asset

 


 

10.

Subsequent Events

a)

On December 2, 2014, the Company entered into a marketing agreement for advertising services. The Company has agreed to issue 1,500,000 shares of common stock to the consultant as compensation for a six-month term. The agreement may be terminated by either party at the end of any month during the term of the agreement.

b)

On December 16, 2014, the Company entered into a consulting agreement with a consultant who is to become a director of the Company. The Company has agreed to issue 500,000 shares of common stock to the consultant as compensation. The agreement commences upon the date of the agreement, and continues until the Consultant resigns or upon mutual agreement with the Company to terminate such agreement.

c)

On January 9, 2015, the Company and its board of directors authorized a new class of equity instruments – Series A Preferred Stock, subject to authorized capital of 500,000 shares with a par value of $0.001 per share.  As of the date of filing, no Series A Preferred Stock have been issued.  .  

 

 F-11            

             

Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

 

None


Item 9A.  Controls and Procedures  


(a) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"), concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.


(b) Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

 

Limitations on the Effectiveness of Internal Controls


Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving an entity's disclosure objectives. The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures. These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors or mistakes or intentional circumvention of the established process.


Management's Report on Internal Control over Financial Reporting


Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("1992 COSO Framework").


A material weakness is a deficiency or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.


Our management concluded we have a material weakness due to lack of segregation of duties. Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. There is mainly one person involved in processing of transactions. Therefore, it is difficult to effectively segregate accounting duties.   We have hired an additional administrative person and retained an outside professional firm to assist in the separation of duties on an ongoing basis.  The use of the outside firm has proven successful in assisting in the separation of duties.  However, additional people are not needed to do the administrative work therefore segregation of duties will continue to be an ongoing weakness.


Based on this evaluation and because of the material weaknesses, management has concluded that our internal control over financial reporting was not effective as of November 30, 2013.  


This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to rules of the SEC that permit the company to provide only management's report on internal control in this annual report.


 Item 9B.  Other Information.


None.

 

13            

             


 

PART III


Item 10.  Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act


Directors, Executive Officers and Key Employees

 

The following table sets forth certain information regarding our directors, executive officers and key employees as of November 30, 2012 and as of the date of the filing of this report:

 

Name and Address

Age

Position(s) Held


George Lefevre

47

President, CEO, Secretary, Treasurer,

Principal Executive Officer and

Chairman of the Board of Directors

Paul Frank

47

Director


Erlend Olson

51

Director


Russell Anderson

59

Director



Background of Directors and Executive Officers


George Lefevre


Mr. Lefevre is the founder and President of HAPA Capital, LLC (“HAPA”) which has been in operation for over five years. HAPA is a business consulting firm specializing in mergers, acquisitions and structural guidance to public and private companies specifically in Bio-Tech and Hi-Tech Industries.  Mr. Lefevre is also an advisor and officer of a National Professional Employer Organization (PEO, and has served in senior management capacity with a number of life science ventures companies. From 1991 to 1998, Mr. Lefevre directly invested in and managed investment portfolios with Paine Webber and their subsidiary Correspondence Service Corporation. Mr. Lefevre was also the President of GL Investment Group, a regional investment bank in Southern California where he was directly responsible for providing in excess of $ 500 million in funding to Bio-Technology and High Tech companies.  Mr. Lefevre graduated from California State University, Long Beach with a Bachelor of Science in Business Administration, majoring in Finance.


Paul Frank


Mr. Frank has been a teacher at Orange Coast College, Costa Mesa, Ca, since 2002.  Mr. Frank is also an adjunct professor a currently is a teacher at the Art Center College of Design in Pasadena, Ca.   In addition from 2005 to present, Mr. Frank is the founder and president of Tree Stitch Design Inc.  Mr. Frank is best known for founding the Paul Frank Industries in 1995 where he created the iconic Julius the monkey character as well as the entire cast of Paul Frank characters which are still used today.  Since then Mr. Frank has assisted in various projects including movies,  designing custom musical instruments, bicycles, Lego, shoes and clothing, Marvel Comics, Nintendo, Mario Brothers, as well as participating in the Hello Kitty’s 40th birthday convention.  Mr. Frank has an AA degree in Fine Arts from Golden West College, Huntington Beach, Ca, with continuing fine arts studies from Orange Coast College.


Erland Olson


During the last five years to present, Mr. Erlend Olson was a consultant and has primarily consulted on various projects for a variety of private international ventures ranging from Medical to Energy sectors. Mr. Olson continues to maintain extensive contacts in both the medical and energy/oil/gas sectors in his current endeavors, and is experienced in international business and application of modern technology to traditional problems in natural resources, manufacturing and marketing. After a 15 year career at NASA’s Jet Propulsion Laboratory, he founded 6 successful companies during the period of 1999 through 2010, including two in ultra-low power electronics, two in natural resources exploration and two in the medical testing/diagnostics fields. Mr. Olson was also involved in raising private equity and debt capital for various private companies.   Mr. Olson is also the author/holder of 38 patents, applications and patents pending. In one of the companies he founded, Pivotal Technologies, was acquired by Broadcom in May of 2000.  Mr. Erlend Olson earned undergraduate and graduate degrees from New Mexico State University 1984 and at University of Southern California in Electrical Engineering 1986


 

14           

             

Russell Anderson


From October 2002 to present, Mr. Anderson has been the President and Principal Consultant of ANDERSON BIOMEDICAL CONSULTING.  From December 2008 to present, Mr. Anderson has been the Executive Vice President of Product Development & Engineering at ASCENTX MEDICAL CORPORATION; from September 2010 to present Mr. Anderson is also the President and Chairman of Board of Directors of BIOSTRATUS CORPORATION; and from March 2014 to present, Mr. Anderson has been a member of the Board of Directors for GENTHERA CORPORATION.  In addition, for over 28 years, Mr. Anderson has held senior management positions in Product Development and Process Engineering functions for several medical device and biopharma companies including Cohesion Technologies, Novare Surgical, Artes Medical, and AscentX Medical Corporation. Mr. Anderson has also served as a principal consultant for many clients including Amgen, Astute Medical, Baxter Pharmaceuticals, Boston Scientific, Genentech, Novartis, NuVasive, Roche and Sandoz. Mr. Anderson is a named inventor on over 30 patents in the medical device and biopharmaceutical fields. Mr. Anderson has various degrees and certificates including: Stevens Institute of Technology – M.Sci.PharmME   (4.0 GPA), Graduate Certification in Pharmaceutical Manufacturing Management; Graduate Certification in Bioprocess Systems and Biologics Management; Graduate Certification in Regulatory Affairs Management; Cal State Hayward – Master’s Degree in Business Administration, concentrations in Technology and Innovation Mgmt., Production & Operations Mgmt., and International Business Mgmt.  California Polytechnic State University at San Luis Obispo – BSEnvE, BSME; Riverside City College – A.S. in Chemistry, and additional graduate courses at Stanford, UC Riverside, UCSB, and University of La Verne.


  

Term of Office of Directors

 

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws.  Our officers are appointed by our Board of Directors and hold office until the officer dies or resigns or the Board elects a successor or removes the officer.

 

Key Employees

 

None.

 

Family Relationships

 

None.

 

Involvement in Certain Legal Proceedings

 

None.

 

Audit Committee Financial Expert

 

No determination has been made as to whether any member of the audit committee qualified as an audit committee financial expert as defined in Item 401 of Regulation S-K.


Section 16(a) Beneficial Ownership Reporting Compliance

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of beneficial ownership and changes in the beneficial ownership of our securities with the SEC of Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities). Directors, executive officers and beneficial owners of more than 10% of our Common Stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file.  The required filings have been made.

 

Code of Ethics

 

We have adopted an informal Code of Ethics that applies to our officers, directors, which we feel is sufficient at this time, given we are still in the start-up, development stage and have no employees, other than our officers and directors.

 

Item 11.  Executive Compensation.


None

  

 

15

             

SUMMARY COMPENSATION TABLE


 

Name and Principal Position

Year

Salary

Bonus

Stock

Option

Non-Equity

Change in Pension

All Other

Total

(a)

(b)

($)

($)

Awards

Awards

Incentive

Value Nonqualified

Compensation

($)

 

 

(c)

(d)

($)

($)

Plan

Deferred

($)

(j)

 

 

 

 

(e)

(f)

Compensation

Compensation

(i)

 

 

 

 

 

 

 

($)

Earnings

 

 

 

 

 

 

 

 

(g)

($)

 

 

 

 

 

 

 

 

 

(h)

 

 

 

 

 

 

 

 

 

 

 

 

George Lefevre, Chairman, President, CEO, Secretary, Treasurer, CFO and Principal Executive Officer

2014

0

0

0

0

0

0

0

0


Robert Walter Frei, President, CEO, Secretary, Treasurer, CFO and Principal Executive Officer       

2013

11,000

0

0

0

0

0

0

11,000

 

 

 

 

 

 

 

 

 

 

 

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

 

  

Name and Principal Position(s)

(a)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPTION AWARDS

STOCK AWARDS

Number of

Securities

Underlying

Unexercised

Options

(#)

(Exercisable)

(b)

 

 

 

 

 

 

 

 

 

Number of

Securities

Underlying

Unexercised

Options

(#)

(Unexercisable)

(c)

 

 

 

 

 

 

 

 

 

Equity

Incentive

Plan

Awards:

Number of

Securities

Underlying

Unexercised

Unearned

Options

(#)

(d)

 

 

 

 

 

Option

Exercise

Price

($)

(e)

 

 

 

 

 

 

 

 

 

 

 

 

Option

Expiration

Date

(f)

 

 

 

 

 

 

 

 

 

 

 

 

 

Number

of Shares

or Units

of Stock

That Have

Not

Vested

(#)

(g)

 

 

 

 

 

 

 

 

Market

Value of

Shares or

Units

of Stock

That Have

Not

Vested

($)

(h)

 

 

 

 

 

 

 

Equity

Incentive

Plan

Awards:

Number

of

Unearned

Shares,

Units or

Other

Rights

That

Have Not

Vested

(#)

(i)

 

Equity

Incentive

Plan

Awards:

Market

or Payout

Value of

Unearned

Shares,

Units or

Other

Rights

That

Have Not

Vested

($)

(j)

George Lefevre, Chairman, President, CEO, Treasurer, CFO and Principal Executive Officer

0

0

0

0

0

0

0

0

0


 

16           

             

 

Option Grants


No options were granted during the fiscal years ended November 30, 2014 and 2013.  


We had no warrants or stock options issued or outstanding during the fiscal years ending November 30, 2014 and 2013.

 

Director Compensation

 

None.

 

Employment Agreements

 

None.

 

Report on Repricing of Options

 

None.

 

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

 

The following table provides certain information regarding the ownership of our common stock, as of November 30, 2014 and as of the date of the filing of this annual report by:

 

 

 

each of our executive officers;

 

 

 

each director;

 

 

 

each person known to us to own more than 5% of our outstanding common stock; and

 

 

 

all of our executive officers and directors and as a group.


As of November 30, 2014, we had a total of 118,140,000 shares of common stock issued and outstanding.  Except as indicated in footnotes to this table, the persons named in this table have sole voting and investment power with respect to all shares of common stock indicated below.  Except where noted, the address of all listed beneficial owners is in care of our office address.

 

 

Name and Address of  

Beneficial Owner

Title of Class

Amount and  

Nature of Beneficial  

Ownership (1)

(#)

Percent of  

Class (2)  

(%)

George Lefevre, Chairman, President, CEO, Secretary, Treasurer, CFO and Principal Executive Officer

Common

Shares

17,735,000

15.01

All Officers and Directors as a Group 

Common

Shares

17,735,000

15.01

 

Changes in Control

 

On May 19, 2014, a change in control of the Company occurred when IDG Ventures Ltd., the Company’s then controlling shareholder, sold all of its 3,547,000 shares of the Company’s common stock, representing 60.04% of our issued and outstanding common shares, in a private share purchase transaction to Messrs. Haas, Lefevre and Naccarato.

 

17            

             

 

Item 13.  Certain Relationships, Related Transactions and Director Independence


a)

During the year ended November 30, 2014, the Company incurred $6,000 (2013 - $nil) in management fees to the former President and Director of the Company.

During the year ended November 30, 2014, the former President and Director of the Company forgave all amounts outstanding totaling $23,298 which was recorded against additional paid-in capital. As at November 30, 2014, the Company owed $nil (November 30, 2013 - $28,298) to the former President and Director of the Company. The amounts owing were unsecured, non-interest bearing, and due on demand.

b)

During the year ended November 30, 2014, the Company received advances of $174,635 (2013 - $nil) from an affiliate of the Company to fund payment of operating expenditures. The amounts owing are unsecured, non-interest bearing, and due on demand.

 

c)

During the year ended November 30, 2014, CVI (Canada) entered into a contract to acquire certain property in Vancouver, Canada for $600,000 (“the Contract”). It is the Company’s intention to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada. The property is owned personally by a director of CVI Canada.

During the year ended November 30, 2014, the Company incurred option expenses of $28,000 (2013 - $nil) under the term of a contract to purchase property in Vancouver, Canada to a director of CVI.


Director Independence

 

The OTC Bulletin Board does not have a requirement that a majority of our Board of Directors be independent.  However, with respect to the definition of independence utilized by NASDAQ, our officers and directors would be deemed to be independent.


Our Audit Committee is comprised of our officers and directors.  NASDAQ requires at least three members on the Audit Committee, each of whom must be independent.  NASDAQ also requires that, if its Chief Executive Officer’s compensation is determined by its Compensation Committee, the Compensation Committee must be comprised solely of independent directors.  The Company currently does not meet either of these requirements.

 

The NASDAQ rules have both objective tests and a subjective test for determining who is an “independent director.”  The objective tests state, for example, that a director is not considered independent if he or she is an employee of the Company or is a partner, executive officer or controlling stockholder of an entity to which the company made, or from which the Company received, payments in the current or any of the past three fiscal years that exceed the greater of $200,000 or 5% of the recipient’s consolidated gross revenue for that year or a family member serves in the current fiscal year or has served at any time during the last three fiscal years as an executive officer of the Company. The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.



Item 14.  Principal Accountant Fees and Services 


The Company paid or accrued the following fees in each of the prior two fiscal years to its independent certified public accountants, Cutler & Co. Certified Public Accountants for the years ended November 30, 2014 and 2013:

 

 

For the Year Ended November 30,

 

2014

2013

Audit Fees

$7,500

$7,500

Audit-Related Fees

$0

$0

Tax Fees

$0

$0

All Other Fees

$0

$0

Total Fees

$7,500

$7,500


"Audit Fees" consisted of fees billed for services rendered for the audit of the Company’s annual financial  statements and audit related fees are for review of the financial statements included in the Company’s quarterly reports on Form 10-Q.

 

18            

             


Item 15.

Exhibits 

 

The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.


Exhibits

Exhibit

Number

Exhibit

Description

31.1

Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

EX-101.INS

XBRL Instance Document

EX-101.SCH

XBRL Taxonomy Extension Schema

EX-101.CAL

XBRL Taxonomy Extension Calculation Linkbase

EX-101.LAB

XBRL Taxonomy Extension Label Linkbase

EX-101.PRE

XBRL Taxonomy Extension Presentation Linkbase

EX-101.DEF

XBRL Taxonomy Extension Definition Linkbase



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

 

  

GALA GLOBAL INC.

  

  

  

By: /s/ George Lefevre

Date:  March 13, 2015

George Lefevre

  

Chairman, President, Chief Executive Officer

  

Chief Financial Officer, Director, Secretary, Treasurer

 

 


Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

Signature

Title

Date

 

  

  

/s/ George Lefevre

President, Chairman

March 13, 2015

George Lefevre

Chief Executive Officer, Chief Financial Officer, Director, Secretary, Treasurer

 




 

19