GALA GLOBAL INC.

(A Development Stage Company)

Notes to the Condensed Financial Statements

For the Three and Six Months ended May 31, 2014 and 2013, and the period from March 10, 2010 (date of inception) to May 31, 2014

(unaudited)

2.

Summary of Significant Accounting Policies (continued)

l) 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 and six months ended May 31, 2014 and 2013.

3.

Related Party Transactions

a) During the three and six months ended May 31, 2014, the Company incurred $3,000 (May 31, 2013 - $nil) and $6,000 (May 31, 2013 - $nil), respectively, in management fees to the former President and Director of the Company. During the three and six months ended May 31, 2014, the former President and Director of the Company was repaid $5,000 of the balance of his loan outstanding and forgave the balance of the loan outstanding totaling $23,298. The gain on the forgiveness of this related party debt was recognized in additional paid-in capital.  As at May 31, 2014, the Company owed $nil (November 30, 2013 - $28,298) to the former President and Director of the Company. The amounts owing had been unsecured, non-interest bearing, and due on demand.

b) During the three and six months ended May 31, 2014, the Company received advances of $14,133 (2013 - $nil) from a shareholder of the Company to fund payment of operating expenditures.  The amounts owing are unsecured, non-interest bearing, and due on demand.  

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.  

5.

On June 26, 2014, Robert Frei resigned as President and Director of the Company, and George Lefevre was appointed as the Company’s new President and Director.

 In accordance with ASC 855-10 the Company has analyzed its operations subsequent to May 31, 2014 to July 18, 2014, the date these financial statements were issued, and has determined that, other than as disclosed above, it does not have any material subsequent events to disclose in these financial statements

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

Cash Flows

Operating Revenues

During the three and six months ended May 31, 2014, the Company did not recognize any revenues as it has not commenced operations as yet.

Operating Expenses 

Operating expenses for the three months ended May 31, 2014 were $5,100 compared with $8,429 for the three months ended May 31, 2013.  The decrease in operating expenses was attributed to a decrease in general and administrative expenses as the Company had limited cash flows for day-to-day operations.    

Operating expenses for the six months ended May 31, 2014 were $13,562 compared with $18,537 for the six months ended May 31, 2013.  The decrease in operating expenses was attributed to a decrease in general and administrative expenses as the Company had limited cash flows for day-to-day operations.    

Net Loss

Net loss for the three and six months ended May 31, 2014 was $5,100 (2013-$8,429) and $13,562 (2013- $18,537) respectively, due to the factors discussed above.

Liquidity and Capital Resources

As at May 31, 2014, the Company had cash and total assets of $nil compared with cash and total assets of $104 as at November 30, 2013.  

As at May 31, 2014, the Company had total liabilities of $27,360 compared with $37,200 as at November 30, 2013.  

As at May 31, 2014, the Company had a working capital deficit of $27,360 compared with $37,096 as at November 30, 2013.  

The decrease in both total liabilities and our working capital deficit was largely attributed to the fact that the former President and Director of the Company forgave an outstanding loan balance of $23,298.

Cashflow from Operating Activities

During the six months ended May 31, 2014, the Company used $24,237 of cash in operating activities compared to  $19,038 of cash used in operating activities during the six months ended May 31, 2013. The increase in cash used in operations arose due to the reduction in the balance of our accounts payable by $5,675, a $5,000 repayment of a balance due to a related party, partially offset by reduced losses incurred in the six months ended May 31, 2014 as compared to the six months ended May 31, 2013.

Cashflow from Investing Activities

During the six months ended May 31, 2014 and 2013, the Company did not have any cash transactions related to investing activities.

Cashflow from Financing Activities

During the six months ended May 31, 2014, the Company received $10,000 in financing from the issuance of a promissory note to a related party and a further $14,133 in advances from a shareholder. These borrowings are unsecured, non-interest bearing, and due on demand.  During the six months ended May 31, 2013, the Company did not have any cash transactions related to financing activities.  

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”) sold all of its 3,547,000 common shares in a private share purchase transaction to the three individuals listed below.  The consideration paid was $125,000 in cash. The certificates will be processed into the names of the Purchasers and the appropriate SEC documentation filed.  The three individuals now have voting control over 60.04% in the aggregate of the Company’s issued and outstanding common stock.

Purchasers                                            Share position                         Percentage of outstanding

James Haas  

         1,773,500 shares                                       30.02%

George Lefevre                                    886,750 shares                                       15.01%

Owen Naccarato                                  886,750 shares                                       15.01%

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 summary of these policies is included in note (1) of the notes to our condensed unaudited 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.No stock based compensation was issued or outstanding during the three and six month periods ended May 31, 2014 or 2013.  

Recently Issued Accounting Pronouncements

The Company has reviewed 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.

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 May 31, 2014, 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 May 31, 2014, 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 May 31, 2014, 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 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.

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

We were not subject to any legal proceedings during the three and six months ended May 31, 2014 or 2013 and as of May 31, 2014 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

No sales of unregistered equity securities were completed in the three or six periods ended May 31, 2014 or 2013.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

No senior securities were issued or outstanding during the three and six periods ended May 31, 2014 or 2013.  

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS

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.