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GALA GLOBAL INC. - 10-K - Management's Discussion and Analysis of Financial Condition and Results of Operations
[April 18, 2014]

GALA GLOBAL INC. - 10-K - Management's Discussion and Analysis of Financial Condition and Results of Operations


(Edgar Glimpses Via Acquire Media NewsEdge) 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 $35,990 and $52,140 from continuing operations, respectively, for the fiscal years ended November 30, 2013 and November 30, 2012. 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 revenues are not yet sufficient 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 locate and acquire a target business, we will not be profitable. 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.

6 RESULTS OF OPERATIONS Working Capital November 30, November 30, 2013 2012 $ $ Current Assets 104 24,904 Current Liabilities 37,200 26,485 Working Capital (Deficit) (37,096) (1,581) Cash Flows Year ended Year ended November 30, November 30, 2013 2012 $ $ Cash Flows from (used in) Operating Activities (24,800) (25,283) Cash Flows from (used in) Investing Activities - - Cash Flows from (used in) Financing Activities 6,724 47,000 Net Increase (decrease) in Cash During Period (24,800) 21,717 Operating Revenues From March 15, 2010 (date of inception) to November 30, 2013, the Company did not record any revenues.

Operating Expenses Operating expenses for the year ended November 30, 2013 was $35,990 compared with $52,140 for the year ended November 30, 2012. The decrease in operating expenditures was attributed to limited cash flows that affected the ability for the Company to incur operating expenditures relating to general and administrative costs, including office expenses and professional fees.

Net Loss Net loss for the year ended November 30, 2013 was $35,990 compared with $52,140 for the year ended November 30, 2012 due to the factors discussed above.

Liquidity and Capital Resources As at November 30, 2013, the Company had cash and total assets of $104 compared with cash of $24,904 and total assets of $25,379 as at November 30, 2012. The decrease in cash and total assets was due to the use of cash for operating activities during fiscal 2013 as the Company did not raise any new proceeds from financing activities, as well as amortization of the remaining net book value of property and equipment.

As at November 30, 2013, the Company had total liabilities of $37,200 compared with total liabilities of $26,485 as at November 30, 2012. The increase in total liabilities were attributed to an increase of $3,991 in accounts payable and accrued liabilities due to the Company's lack of sufficient cash flows to repay outstanding obligations as they become due, and an increase $6,724 in amounts due to related parties which related to unpaid management fees that were accrued during the year.

As at November 30, 2013, the Company had a working capital deficit of $37,096 compared with a working capital deficit of $1,581 as at November 30, 2012. The increase in working capital deficit was attributed to the fact that the Company had insufficient cash flow to pay outstanding obligations as they became due and relied on existing cash balances to support ongoing operational cash needs.

7 Cashflow from Operating Activities During the year ended November 30, 2013, the Company used $24,800 of cash for operating activities compared to the use of $25,283 of cash for operating activities during the year ended November 30, 2012. The decrease in cash used for operating activities was due to limited cash flows as the Company had no new financing and used existing cash to repay outstanding obligations as they became due.

Cashflow from Investing Activities During the years ended November 30, 2013 and 2012, the Company did not have any cash transactions related to investing activities.

Cashflow from Financing Activities During the year ended November 30, 2013, the balance due to related parties increased by $6,724 which related to unpaid management fees that were accrued during the year did not have any transactions relating to financing activities.

By comparison, during the twelve months ended November 30, 2012 the balance dues to related parties increased by $21,474 and we received proceeds of $47,000 related to thesale of common shares.

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.

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.

8 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.

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