Gala Pharmaceutical (GLPH) 10-Q 2012 Q3 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 August 31, 2012

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.)
Ostwall 35, Viersen, Germany	41751
(Address of principal executive offices)	(Zip Code)

+49-2162-450532

(Registrant’s telephone number, including area code)

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 October 12, 2012 the registrant had 5,860,000 shares of common stock outstanding.

GALA GLOBAL INC.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Balance Sheets	3
	Statements of Operations
	Statements of Cash Flows
	Notes to Financial Statements
Item 2.	Management Discussion & Analysis of Financial Condition and Results of Operations	4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	6
Item 4.	Controls and Procedures	6
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	7
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	7
Item 3.	Defaults Upon Senior Securities	7
Item 4.	Submission of Matters to a Vote of Security Holders	7
Item 5.	Other information	7
Item 6.	Exhibits	7

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PART I – FINANCIAL INFORMATION

Gala Global Inc.

(A Development Stage Company)

August 31, 2012

	Index
Balance Sheets (Unaudited)	F-1
Statements of Operations (Unaudited)	F-2
Statements of Cash Flows (Unaudited)	F-3
Notes to the Unaudited Financial Statements	F-4

 3               

GALA GLOBAL INC.

(A Development Stage Company)

BALANCE SHEETS

		August 30, 2012
	Nov. 30, 2011	(Unaudited)
ASSETS
Current assets
Cash	$           3,187	$                    -
Total current assets	3,187	-
Fixed assets - net	947	593
Total Assets	$           4,134	$                593
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities
Related party payable	$              100	$           19,543
Total current liabilities	100	19,543
Total Libilities	100	19,543
Stockholders' Equity
Common stock, $.001 par value;
75,000,000 shares authorized;
5,860,000 shares issued and outstanding	5,860	5,860
Additional paid in capital	18,240	18,240
Deficit accumulated during the dev. stage	(20,066)	(43,050)
Total Stockholders' Equity	4,034	(18,950)
Total Liabilities and Stockholders' Equity	$           4,134	$                593

The accompanying notes are an integral part of the financial statements.

F-1                

GALA GLOBAL INC.

(A Development Stage Company)

STATEMENTS OF OPERATIONS
(Unaudited)

								Period From
								March 15, 2010
	Three Months		Three Months		Nine Months	Nine Months		(Inception)
	Ended		Ended		Ended	Ended		To
	August 31, 2011		August 31, 2012		August 31, 2011	August 31, 2012		August 31, 2012
Revenues	$                                 -		$                                  -		$                                 -	$                                  -		$                                  -
	-		-		-	-		-
Operating expenses:
Depreciation		#	118	#	-	354	#	827
General and administrative	856		19,019		7,689	22,630		42,223
	856		19,137		7,689	22,984		43,050
Gain (loss) from operations	(856)		(19,137)		(7,689)	(22,984)		(43,050)
Other income (expense):
	-		-		-	-		-
								-
Income (loss) before
provision for income taxes	(856)		(19,137)		(7,689)	(22,984)		(43,050)
Provision for income tax	-		-		-	-		-
Net income (loss)	$              ��             (856)		$                        (19,137)		$                         (7,689)	$                        (22,984)		$                        (43,050)
Net income (loss) per share
(Basic and fully diluted)	$                           (0.00)		$                            (0.00)		$                           (0.00)	$                            (0.00)
Weighted average number of
common shares outstanding	5,860,000		5,860,000		5,860,000	5,860,000

The accompanying notes are an integral part of the financial statements.

F-2                

GALA GLOBAL INC.

(A Development Stage Company)

(Unaudited)

			Period From
			March 15, 2010
	Nine Months	Nine Months	(Inception)
	Ended	Ended	To
	August 31, 2011	August 31, 2012	August 31, 2012
Cash Flows From Operating Activities:
Net income (loss)	$                     (7,689)	$                    (22,984)	$                    (43,050)
Adjustments to reconcile net loss to
net cash provided by (used for)
operating activities:
Depreciation	316	354	827
Related party payable	-	19,443	19,543
Net cash provided by (used for)
operating activities	(7,373)	(3,187)	(22,680)
Cash Flows From Investing Activities:
Fixed assets	(1,420)	-	(1,420)
Net cash provided by (used for)
investing activities	(1,420)	-	(1,420)
Cash Flows From Financing Activities:
Sales of common stock	-	-	24,100
Net cash provided by (used for)
financing activities	-	-	24,100
Net Increase (Decrease) In Cash	(8,793)	(3,187)	-
Cash At The Beginning Of The Period	23,579	3,187	-
Cash At The End Of The Period	$                    14,786	$                           -	$                             -
Schedule Of Non-Cash Investing And Financing Activities
None
Supplemental Disclosure
Cash paid for interest	$                             -	$                             -	$                             -
Cash paid for income taxes	$                             -	$                             -	$                             -

The accompanying notes are an integral part of the financial statements.

F-3                

GALA GLOBAL INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 2012

NOTE 1.  ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Gala Global Inc. (the “Company”), was incorporated in the State of Nevada on March 15, 2010.  The Company was formed to provide garment tailoring and alteration services.  The Company has conducted only limited operations and is in the development stage.

Basis of Presentation

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements.  All adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the interim periods have been made and are of a recurring nature unless otherwise disclosed herein.  The results of operations for such interim periods are not necessarily indicative of operations for a full year.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less as cash equivalents.

Accounts receivable

The Company reviews accounts receivable periodically for collectability and establishes an allowance for doubtful accounts and records bad debt expense when deemed necessary.

Property and equipment

Property and equipment are recorded at cost and depreciated under accelerated methods over each item's estimated useful life.

Revenue recognition

Revenue is recognized on an accrual basis after services have been performed under contract terms, the event price to the client is fixed or determinable, and collectability is reasonably assured.

 F-4               

GALA GLOBAL INC.

(A DEVELOPMENT STAGE COMPANY)

NOTES TO THE FINANCIAL STATEMENTS

AUGUST 31, 2012

NOTE 1.  ORGANIZATION, OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued):

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect 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.  Actual results could differ from those estimates.

Income tax

The Company accounts for income taxes pursuant to ASC 740.  Under ASC 740 deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carryforwards and deferred tax liabilities are recognized for taxable temporary differences.  Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases.  Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net income (loss) per share

The net income (loss) per share is computed by dividing the net income (loss) by the weighted average number of shares of common outstanding.  Warrants, stock options, and common stock issuable upon the conversion of the Company's preferred stock (if any), are not included in the computation if the effect would be anti-dilutive and would increase the earnings or decrease loss per share.

Financial Instruments

The carrying value of the Company’s financial instruments, including cash and cash equivalents and accrued payables, as reported in the accompanying balance sheet, approximates fair value.

NOTE 2.  GOING CONCERN

The Company has suffered a loss from operations and in all likelihood will be required to make significant future expenditures in connection with marketing efforts along with general administrative expenses.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

The Company may raise additional capital through the sale of its equity securities, through an offering of debt securities, or through borrowings from financial institutions.  By doing so, the Company hopes through marketing efforts to generate revenues from sales of its garment tailoring and alteration services.  Management believes that actions presently being taken to obtain additional funding provide the opportunity for the Company to continue as a going concern.

NOTE 3.  SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of issuance of these financial statements and determined that there are no reportable subsequent events.

 F-5               

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 Operation

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long term operating requirements.  We expect to raise additional capital through, among other things, the sale of equity or debt securities.

Liquidity and Capital Resources

As of August 31, 2012, we had cash and cash equivalents of $nil and a working capital deficit of $19,543.  As of August 31, 2012 our accumulated deficit was $43,050.  

We used net cash of $3,187 from operating activities for the nine months ended August 31, 2012 compared to using net cash of $7,373 in operating activities for the same period in 2011.  We did not use any money in investing activities for the nine months ended August 31, 2012 compared to using net cash of $1,420 for the same period of 2011.  We did not receive any cash from financing activities for the nine months ended August 31, 2012 and the same period in 2011.  

These financial statements have been prepared on the assumption that we are a going concern, meaning we will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations.  Different bases of measurement may be appropriate when a company is not expected to continue operations for the foreseeable future.  Our continuation as a going concern is dependent upon our ability to attain profitable operations and generate funds there-from, and/or raise equity capital or borrowings sufficient to meet current and future obligations.  Management plans to raise equity financings over the next twelve months to finance operations.  There is no guarantee that we will be able to complete any of these objectives.  We have incurred losses from operations since inception and at August 31, 2012, have a working capital deficiency and an accumulated deficit that creates substantial doubt about our ability to continue as a going concern.

Results of Operations for the three months ended August 31, 2012 compared to the three months ended August 31, 2011 and from inception to August 31, 2012.

No Revenues

Since our inception on March 15, 2010 to August 31, 2012, we have not yet earned any revenues.  At this time, our ability to generate any significant revenues continues to be uncertain.  Our financial statements contain an additional explanatory paragraph in Note 2, which identifies issues that raise substantial doubt about our ability to continue as a going concern.  Our financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Net Income/Loss

We incurred a net loss of $19,137 for the three months ended August 31, 2012, compared to a net loss of $856 for the same period in 2011.  This increase in net loss was due to an increase in general and administrative expenses.  From inception on March 15, 2010 to August 31, 2012, we have incurred a net loss of $43,050.  Our basic and diluted loss per share was $0.00 for the three months ended August 31, 2012, and $0.00 for the same period in 2011.  

  4              

Expenses

Our total operating expenses increased from $856 to $19,137 for the three months ended August 31, 2012 compared to the same period in 2011.  This increase in expenses is mostly due to higher general and administrative fees.  Since our inception on March 15, 2010 to August 31, 2012, we have incurred total operating expenses of $43,050.

Results of Operations for the nine months ended August 31, 2012 compared to the nine months ended August 31, 2011

No Revenues

We did not earn any revenues during the nine months ending on August 31, 2012, nor did we earn any revenues earned during the same period in 2011.  At this time, our ability to generate any significant revenues continues to be uncertain.

Net Income/Loss

We incurred a net loss of $22,984 for the nine months ended August 31, 2012, compared to a net loss of $7,689 for the same period in 2011.  This increase in income was due to higher general and administrative expenses.  Our basic and diluted loss per share was $0.00 for the nine months ended August 31, 2012, and $0.00 for the same period in 2011.  

Expenses

Our total operating expenses increased from $7,689 to $22,984 for the nine months ended August 31, 2012 compared to the same period in 2011.  This increase in expenses is mostly due to higher general and administrative fees.

Plan of Operation

Our plan of operation for the next twelve months is to grow our retail business through marketing and building our on-line presence.

Going Concern

Our independent auditors' review report accompanying our August 31, 2012 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.  The financial statements have been prepared "assuming that we will continue as a going concern," which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

 5               

Inflation

The amounts presented in the financial statements do not provide for the effect of inflation on our operations or financial position.  The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Off-Balance Sheet Arrangements

As of August 31, 2012, we had no off-balance sheet transactions that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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 August not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that our controls August become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures August deteriorate.

As management, it is our responsibility to establish and maintain adequate internal control over financial reporting.  As of August 31, 2012, 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 August 31, 2012, 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 August 31, 2012, 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.

  6              

PART II – OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

As of July 17, 2012 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

None.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.  

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable.            

ITEM 5.  OTHER INFORMATION

None.

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
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 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:  October 15, 2012	/s/ Wolfgang Fuchs
		Wolfgang Fuchs
		President, Chief Executive Officer, Chief Financial Officer and Director
		(Authorized Officer for Registrant)

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