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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GLAG 10Q Quarterly Report

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Securities
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 gala_10q-ex31.htm
EX-32.1 gala_10q-ex32.htm

Gala Pharmaceutical Earnings 2017-02-28

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-Q 1 gala_10q-022817.htm QUARTERLY REPORT

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For the quarterly period ended February 28, 2017

 

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

 

For the transition period from _________ to _________

 

Commission File Number: 333-172744

 

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

 

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was require 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of “large accelerated filer”, “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 Exchange Act).  Yes o     No þ 

 

APPLICABLE ONLY TO CORPORATE ISSUERS

 

As of April 4, 2017 the registrant had 3,247,936 shares of common stock outstanding.

 

 

   
 

 

GALA GLOBAL INC.

 

Table of Contents

 

 

PART I – FINANCIAL INFORMATION 3
Item 1. Financial Statements (unaudited) 3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market Risk 13
Item 4. Controls and Procedures 14
   
PART II – OTHER INFORMATION 15
Item 1. Legal Proceedings 15
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Securities 15

Item 3. Defaults Upon Senior Securities 

15
Item 4. Mine Safety Disclosures 15
Item 5. Other Information 15
Item 6. Exhibits 15
SIGNATURES 16

 

 

 

 

 

 

 

 2 
 

 

GALA GLOBAL INC.

 

Condensed Consolidated Financial Statements

(unaudited)

 

For the Three Month Periods Ended February 28, 2017 and February 29, 2016

 

 

Condensed Consolidated Balance Sheets (unaudited) 4
Condensed Consolidated Statements of Operations (unaudited) 5
Condensed Consolidated Statements of Cash Flows (unaudited) 6
Notes to the Condensed Consolidated Financial Statements (unaudited) 7

 

 

 

 

 

 

 

 3 
 

 

GALA GLOBAL INC.

Condensed Consolidated Balance Sheets

(unaudited)

 

   February 28,
2017
$
   November 30,
2016
$
 
         
ASSETS          
           
Current assets          
Cash       10,841 
Inventory   2,241    2,241 
           
Total assets   2,241    13,082 
           
LIABILITIES AND STOCKHOLDERS’ DEFICIT          
           
Current liabilities          
Bank overdraft   62     
Accounts payable and accrued liabilities   15,136    20,052 
Accounts payable and accrued liabilities – related party   103,127    94,039 
Due to related parties   266,135    249,835 
Loans payable   75,200    75,200 
Loans payable - related parties   22,064    22,064 
           
Total liabilities   481,724    461,190 
           
STOCKHOLDERS’ DEFICIT          
           
Preferred stock          
Authorized: 10,000,000 shares with a par value of $0.001 per share issued and outstanding: 500,000 shares, respectively   500    500 
Common stock   1,369    1,369 
Authorized: 500,000,000 shares with a par value of $0.001 per share issued and outstanding: 1,369,224 shares, respectively          
Additional paid-in capital   786,736    786,736 
Deficit   (1,268,088)   (1,236,713)
           
Total stockholders’ deficit   (479,483)   (448,108)
           
Total liabilities and stockholders’ deficit   2,241    13,082 

 

 

 

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

 

 4 
 

 

GALA GLOBAL INC.

Condensed Consolidated Statements of Operations

(unaudited)

 

   Three months
ended
February 28,
2017
$
   Three months
ended
February 29,
2016
$
 
         
Operating expenses          
Consulting fees       17,500 
Consulting fees – related party       6,458 
General and administrative   10,652    11,919 
General and administrative – related party   19,000    9,000 
Rent   1,050     
           
Total operating expense   30,702    44,877 
           
Loss before other expense   (30,702)   (44,877)
           
Other expense          
Interest expense   (673)   (316)
           
Net loss   (31,375)   (45,193)
           
Net loss per share, basic and diluted   (0.02)   (0.03)
           
Weighted average common shares outstanding   1,369,224    1,352,036 

 

 

 

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

 

 5 
 

 

GALA GLOBAL INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

 

   For the Three Months Ended February 28, 2017 $   For the Three Months Ended February 29, 2016 $ 
         
Operating activities          
           
Net loss for the period   (31,375)   (45,193)
           
Adjustments to reconcile net loss to net cash used in operating activities:          
Stock-based compensation       17,500 
           
Changes in operating assets and liabilities:          
Inventory       460 
Prepaid expenses       6,458 
Bank overdraft   62     
Accounts payable and accrued liabilities   (416)   9,595 
Accounts payable and accrued liabilities – related party   9,088    9,213 
           
Net cash used in operating activities   (22,641)   (1,967)
           
Financing activities          
Proceeds from (due to) related parties   11,800     
Repayments of related party debt       (5,960)
Proceeds from note payable - related party       20,000 
           
Net cash provided by financing activities   11,800    14,040 
           
Increase (decrease) in cash   (10,841)   12,073 
           
Cash, beginning of period   10,841    1,804 
           
Cash, end of period       13,877 
           
Non-cash investing and financing activities:          
           
Expenses paid with related party advances   4,500     
Common shares issued for compensation to a related party       17,500 
Preferred shares issued to settle related party payables       24,167 
Preferred shares issued to settle related party debt       48,453 
           
Supplemental disclosures:          
           
Interest paid        
Income tax paid        

 

 

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

 

 6 
 

 

GALA GLOBAL INC.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

1.   Organization and Nature of Operations

 

Gala Global Inc. (the “Company”) was incorporated in the State of Nevada on March 10, 2010. The Company was formed to provide garment tailoring and alteration services.

 

The Company has 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. The Company currently is finalizing its marketing strategy for 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. The Company 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.

 

The Company’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.

 

Going Concern

 

These consolidated 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 February 28, 2017, the Company has a working capital deficit of $479,483 and an accumulated deficit of $1,268,088. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities 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 consolidated 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.

 

2.   Summary of Significant Accounting Policies

 

a)Basis of Presentation
   
  The consolidated 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.

 

b)Principles of Consolidation
   
  These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Cannabis Ventures Inc. (USA), Cannabis Ventures Inc. (Canada), from the date of their acquisition by the Company effective June 26, 2014 and CBD Life, Inc. from June 26, 2014 (date of acquisition) to December 30, 2016 (date of dissolution). 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 valuation of inventory, share-based compensation, 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.

 

 

 

 7 
 

 

GALA GLOBAL INC.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

2.   Summary of Significant Accounting Policies (continued)

 

d)Interim Financial Statements
   
  The accompanying unaudited financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In management’s opinion the financial statements include all adjustments (consisting of normal recurring accruals) necessary in order to make the financial statements not misleading. Operating results for the three months ended February 28, 2017 are not necessarily indicative of the results that may be expected for the year ended November 30, 2016. For more complete financial information, these unaudited financial statements should be read in conjunction with the audited financial statements for the year ended November 30, 2016 included in our Form 10-K filed with the SEC.

 

e)Inventory
   
  Inventory is comprised of Vape Mods purchased for resale, and is recorded at the lower of cost or net realizable value on a first-in first-out basis. The Company establishes inventory reserves for estimated obsolete or unsaleable inventory equal to the difference between the cost of inventory and the estimated realizable value based upon assumptions about future market conditions.

 

f)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 February 28, 2017 and November 30, 2016, there were no cash equivalents.

 

g)Financial Instruments
   
  The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, loans payable to related parties, loans payable, and amounts due to related parties. The recorded values of all these financial instruments approximate their current fair values because of the short term nature of these financial instruments.

 

h)Revenue Recognition
   
  The Company earns revenue from the sale of Vape Mods, which are modified electronic cigarettes and vape pens. 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.

 

i)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.

 

j)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. No potentially dilutive debt or equity instruments were issued and outstanding during the three months ended February 28, 2017 and February 29, 2016.

 

 

 8 
 

 

GALA GLOBAL INC.

Condensed Consolidated Statements of Operations

(unaudited)

 

 

2.   Summary of Significant Accounting Policies (continued)

 

k)Recent Issued 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.

 

3.   Related Party Transactions

 

a)As at February 28, 2017, the Company owed $266,135 (November 30, 2016 - $249,835) to a company controlled by a significant shareholder of the Company to fund payment of operating expenditures. The amount owed is unsecured, non-interest bearing, and due on demand.

 

b)As at February 28, 2017, the Company owed $10,000 (November 30, 2016 - $10,000) to a company controlled by a significant shareholder of the Company. The amount owed in unsecured, non-interest bearing, and due on demand.

 

c)As at February 28, 2017, the Company owed $2,064 (November 30, 2016 - $2,064) to a significant shareholder of the Company. The amount is unsecured, bears interest at 3% per annum, and due 180 days from the date of issuance. As at February 28, 2017, accrued interest of $35 (November 30, 2016 - $15) has been included in accounts payable and accrued liabilities - related parties.

 

d)As at February 28, 2017, the Company owed $10,000 (November 30, 2016 - $10,000) to the former spouse of a significant shareholder of the Company for a note issued on September 21, 2016. Under the terms of the note, the amount due is unsecured, bears interest at 3% per annum, and is due 180 days from the date of issuance. As at February 28, 2017, accrued interest of $134 (November 30, 2016 - $58) has been included in accounts payable and accrued liabilities - related party.

 

e)As at February 28, 2017, the Company owed $97,333 (November 30, 2016 - $88,333) to a significant shareholder of the Company, which has been recorded in accounts payable and accrued liabilities - related parties. The amount is unsecured, non-interest bearing, and due on demand. During the period ended February 28, 2017, the Company incurred legal fees of $19,000 (2016 - $9,000) to this significant shareholder.

 

4.   Stockholders’ Equity

 

(a)As at February 28, 2017, the Company had 1,875 of shares of common stock with a fair value of $5,625 (November 30, 2016 - $5,625) issuable to the Chief Financial Officer as compensation for consulting services, which has been included in accounts payable and accrued liabilities – related parties.

 

5.   Subsequent Events

 

(a)On March 15, 2017, the Company issued a promissory note for $88,333 to a significant shareholder. On March 22, 2017, the Company converted the full principal of $88,333 of the promissory note to 490,742 shares of common stock.

 

(b)On March 15, 2017, the Company issued a promissory note for $249,835 to a significant shareholder. On March 22, 2017, the Company converted the full principal of $249,835 of the promissory note to 1,387,970 shares of common stock.

 

(c)On March 30, 2017, the Company entered into a consulting agreement with two significant shareholders. Pursuant to the agreements, each consultant is to be compensated with 10,000,000 shares per annum. In addition, each consultant shall receive 1% of the issued and outstanding stock of the Company every six months during the term of the agreement. Each consultant shall also be paid a commission on any new business transactions introduced to the Company by the consultant at a rate of 10% of the net fee received by the Company from the new businesses. The Company may terminate the agreement upon providing 10 days of written notice to the consultant. The agreements commence on March 30, 2017 and are effective until March 30, 2021.

 

 

 

 9 
 

 

ITEM 2     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Safe Harbor Statement

 

This report on Form 10-Q contains certain forward-looking statements.  All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operation; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief; and any statement of assumptions underlying any of the foregoing. Such forward-looking statements are subject to inherent risks and uncertainties, and actual results could differ materially from those anticipated by the forward-looking statements.

 

These forward-looking statements involve significant risks and uncertainties, including, but not limited to, the following: competition, promotional costs, and risk of declining revenues.  Our actual results could differ materially from those anticipated in such forward-looking statements as a result of a number of factors.  These forward-looking statements are made as of the date of this filing, and we assume no obligation to update such forward-looking statements.  The following discusses our financial condition and results of operations based upon our financial statements which have been prepared in conformity with accounting principles generally accepted in the United States.  It should be read in conjunction with our financial statements and the notes thereto included elsewhere herein.

 

The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this Form 10-Q.  The discussions of results, causes and trends should not be construed to imply any conclusion that these results or trends will necessarily continue into the future.

 

RESULTS OF OPERATIONS

 

Working Capital

 

   February 28,
2017
$
   November 30,
2016
$
 
Current Assets   2,241    13,082 
Current Liabilities   (481,724)   (461,190)
Working Capital (Deficit)   (479,483)   (448,108)

 

 

 

 

 10 
 

 

Cash Flows

 

   Three months ended February 28,
2017
$
   Three months ended February 29
2016
$
 
Cash Flows from (used in) Operating Activities   (22,641)   (1,967)
Cash Flows from (used in) Investing  Activities        
Cash Flows from (used in) Financing Activities   11,800    14,040 
Net Increase (decrease) in Cash During Period   (10,841)   12,073 

 

Three Months Ended February 29, 2016 and February 29, 2016

 

Operating Expenses

 

During the three months ended February 28, 2017, the Company incurred operating expenses of $30,702 compared with $44,877 during the three months ended February 29, 2016. The decrease in the current period is due to a decrease of $23,958 in consulting expense. The Company reduced the amount of services utilized from third parties and relating parties related to business development and marketing services in the current year. The decrease is also due to a decrease of $1,267 in general and administrative expenses for various professional fees and administrative costs. Decreases were offset by an additional $10,000 in legal fees from a related party for work completed for the reverse stock split, and $1,050 in rent for a new office in the current period.

 

Net Loss

 

During the three months ended February 28, 2017, the Company incurred a net loss of $31,375 and a net loss per share of $0.02 compared with a net loss of $45,193 and a net loss per share of $0.03 for the three months ended February 29, 2016 due to the factors discussed above.

 

Liquidity and Capital Resources

 

As of February 28, 2017, the Company has a working capital deficit of $479,483 and an accumulated deficit of $1,268,088. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities 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.

 


Cash flow from Operating Activities

 

During the three months ended February 28, 2017, the Company used cash of $22,641 in operating activities compared to the use of $1,967 of cash for operating activities during the three months ended February 29, 2016 for an increase of $20,674 in cash used in operating activities. Cash used for operating activities increased due to the Company paying off vendors for general operating expenditures, offset by an increase in accounts payable to related parties. In the prior year, the Company had compensated certain expenses by stock and had outstanding prepaid amounts as well as increases in balances owed to third and related party vendors.

 

 

 

 

 11 
 

 

Cash flow from Financing Activities

 

During the three months ended February 28, 2017, the Company received $11,800 of cash from financing activities compared with $14,040 of cash from financing activities during the three months ended February 29, 2016. In the prior period, the Company received $20,000 as a loan from a related party, offset by $5,960 paid to a related party for amounts owing.

 

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.

 

Subsequent Events

 

(a)On March 15, 2017, the Company issued a promissory note for $88,333 owed to a significant shareholder. On March 22, 2017, the Company converted the full principal of $88,333 of the promissory note to 490,742 shares of common stock.

 

(b)On March 15, 2017, the Company issued a promissory note for $249,835 owed to a significant shareholder. On March 22, 2017, the Company converted the full principal of $249,835 of the promissory note to 1,387,970 shares of common stock.

 

(c)On March 30, 2017, the Company entered into a consulting agreement with two significant shareholders. Pursuant to the agreements, each consultant is to be compensated with 10,000,000 shares per annum. In addition, each consultant shall receive 1% of the issued and outstanding stock of the Company every six months during the term of the agreement. Each consultant shall also be paid a commission on any new business transactions introduced to the Company by the consultant at a rate of 10% of the net fee received by the Company from the new businesses. The Company may terminate the agreement upon providing 10 days of written notice to the consultant. The agreements commence on March 30, 2017 and are effective until March 30, 2021.

 

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.

 

 

 

 

 12 
 

 

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

 

The Company has reviewed all the recently issued, but not yet effective, accounting pronouncements and does not believe that the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations as reported in its 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 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

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.

 

 

 

 

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ITEM 4.     CONTROLS AND PROCEDURES

 

Management's Report on Internal Control over Financial Reporting.

 

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

 

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that our controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

 

As management, it is our responsibility to establish and maintain adequate internal control over financial reporting.  As of February 28, 2017, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our internal control over financial reporting using criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").  Based on our evaluation, we concluded that the Company maintained effective internal control over financial reporting as of February 28, 2017, based on criteria established in the Internal Control Integrated Framework issued by the COSO.

 

This quarterly report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the company to provide only management's report in this quarterly report.

 

Evaluation of disclosure controls and procedures.

 

As of February 28, 2017, the Company's chief executive officer and chief financial officer conducted an evaluation regarding the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Exchange Act.  Based upon the evaluation of these controls and procedures, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective as of the date of filing this annual report applicable for the period covered by this report.

 

Changes in internal controls.  

 

During the period covered by this report, no changes occurred in our internal control over financial reporting that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 

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PART II – OTHER INFORMATION

 

ITEM 1.     LEGAL PROCEEDINGS

 

As of February 28, 2017 there are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we or any of our subsidiaries are a party or of which any of our properties is the subject.  Also, our management is not aware of any legal proceedings contemplated by any governmental authority against us.

 

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

 

For the three months ended February 28, 2017, there were no equity transactions. No unregistered sales of equity securities were completed during the three months ended February 28, 2017.

 

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES 

  

No senior securities were issued or outstanding during the three months ended February 28, 2017 or February 29, 2016.

  

ITEM 4.     MINE SAFETY DISCLOSURES

 

Not applicable to our Company.

 

ITEM 5.      OTHER INFORMATION

 

None noted

 

ITEM 6.     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
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema
101.CAL XBRL Taxonomy Extension Calculation Linkbase
101.LAB XBRL Taxonomy Extension Label Linkbase
101.PRE XBRL Taxonomy Extension Presentation Linkbase
101.DEF XBRL Taxonomy Extension Definition Linkbase

 

 

 

 

 

 

 

 

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SIGNATURES

 

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

 

  GALA GLOBAL INC.
    (REGISTRANT)
   
Date:  April 18, 2017 /s/   Timothy Madden
    Timothy Madden
    Chief Executive Officer
    (Authorized Officer for Registrant)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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