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

GALA GLOBAL INC.

Condensed Consolidated Statements of Operations

(unaudited)

* During the three months ended August 31, 2014, $6,000 previously mistakenly classified as management fees during the three month periods ended February 28, 2014 ($3,000) and May 31, 2014 ($3,000) has been correctly reclassified as general and administrative expenses.

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

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

GALA GLOBAL INC.

Statements of Changes in Stockholders’ Deficit

From November 30, 2012 to August 31, 2014

(unaudited)

(1) As restated for the 20:1 forward split in the Company’s shares of common stock effective September 17, 2014.

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

GALA GLOBAL INC.

Condensed Consolidated Statements of Cash Flows

(unaudited)

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

Notes to the Condensed Consolidated Financial Statements (Unaudited)

For the Three and Nine Months ended August 31, 2014 and 2013

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 provided garment tailoring and alteration services.

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

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

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

GALA Global, Inc., since its change in management effective June 26, 2014, plans to expand into the Hemp and Cannabidiol (“CBD”) industry. The expansion will focus on the development, research, and commercialization of products derived from the Hemp and Cannabis Plant. GALA Global, Inc. plans to seek acquisition candidates in this area of interest in the nutraceutical and pharmaceutical industries.

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

Cannabis Ventures Inc. (USA) (“CVI”)

In July 2014, CVI entered into a joint venture agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to consult and manage a cultivation project.  This function is to be performed by a yet to be formed management company in which CVI will have a 50% ownership interest (“Joint Venture”).  In order to provide initial working capital for the Joint Venture, CVI has paid cash of $52,972 to acquire its 50% ownership interest in the Joint Venture.

Further, under the terms of the Joint Venture agreement, CVI is required to provide $100,000 cash as a security deposit for the property to be leased by the Joint Venture. As described in Note 8 Subsequent Events below, the Company transferred the $100,000 as required under the agreement on September 12, 2014.

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

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

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was filed by CVI (Canada) in September 2014 and we are waiting to hear back from Health Canada.  

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

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

Going Concern

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As at August 31, 2014, the Company has no revenue or other source of income, has a working capital deficit of $117,318, and an accumulated deficit of $158,744. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, its ability to obtain the necessary debt or equity financing, and generate profitable operations from the Company’s planned future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.   

2.

Summary of Significant Accounting Policies

a)

Basis of Presentation and Principles of Consolidation

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) and are expressed in U.S. dollars. The Company’s fiscal year end is November 30.

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

b)

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 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.

c)

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 and nine months ended August 31, 2014 are not necessarily indicative of the results that may be expected for the year ended November 30, 2014. 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, 2013 included in our Form 10-K filed with the SEC.

d)

Development Stage Company

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

e)

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 August 31, 2014 and November 30, 2013, there were no cash equivalents.

f)

Financial Instruments

We have adopted the guidance of ASC 820, “Fair Value Measurement” which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1 – Inputs are unadjusted quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 – Inputs are unadjusted quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3 – Inputs are unobservable inputs which reflect the reporting entity’s own assumption on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

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

g)

Long-Lived Assets

In accordance with ASC 360, “Property Plant and Equipment”, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

2.

Summary of Significant Accounting Policies (continued)

h)

Income Taxes

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

i)

Revenue Recognition

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

j)

Advertising Costs

The Company’s policy regarding advertising is to expense advertising when incurred. The Company incurred advertising expense of $0 during the three and nine months ended August 31, 2014 and 2013.

k)

Stock-based Compensation

The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Compensation using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued. No stock based compensation was issued or outstanding during the three and nine months period ended August, 2014 or 2013.  

l)

Comprehensive Loss

Comprehensive income is defined as all changes in stockholders' equity (deficit), exclusive of transactions with owners, such as capital investments. Comprehensive income includes net income or loss, changes in certain assets and liabilities that are reported directly in equity such as translation adjustments on investments in foreign subsidiaries and unrealized gains (losses) on available-for-sale securities. Our comprehensive loss was identical to our net loss for the three and nine month periods ended August 31, 2014 and 2013.

m)

Basic and Diluted Net Loss per Share

The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive. No potentially dilutive debt or equity instruments were issued and outstanding during the three and nine months ended August 31, 2014 and 2013.

n)

Recent Accounting Pronouncements

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

3.

Related Party Transactions

a)

During the three and nine months ended August 31, 2014, the Company incurred $6,000 (2013 - $nil) and $6,000 (2013 - $nil), respectively, in management fees to the former President and Director of the Company.  

During the three and nine months ended August 31, 2014, we repaid the former President and Director of the Company $5,000 of the balance due to him and he forgave all remaining amounts outstanding to him by the Company totaling $23,298 which was recorded as additional paid-in capital.  As at August 31, 2014, the Company owed $nil (November 30, 2013 - $28,298) to the former President and Director of the Company. The amounts owing were unsecured, non-interest bearing, and due on demand.

b)

During the three and nine months ended August 31, 2014, the Company received advances of $87,192 (2013 - $nil) and $101,325 (2013 - $nil), respectively, from a shareholder of the Company to fund payment of operating expenditures.  The amounts owing are unsecured, non-interest bearing, and due on demand.

c)

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

During the three months ended August 31, 2014 the Company paid $16,000 (2013 - $nil) under the term of a contract to purchase certain property in Vancouver, Canada to a director of CVI.

4.

Investment in Joint Venture

On July 1, 2014, Cannabis Ventures Inc. (USA), a wholly-owned subsidiary of the Company entered into a joint venture agreement with Anthony McDonald (“McDonald”) and Globe Farmacy Inc. (“GFI”), an Arizona non-profit corporation.  Under the terms of the agreement, Cannabis Ventures Inc. (USA) and McDonald will each hold 50% interest in the joint venture.  During the period ended August 31, 2014, the Company paid $52,972 (2013 - $nil) to purchase its 50% ownership interest in the joint venture.  

5.

Loan Payable – Related Party

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

6.

Commitments and Contingencies

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

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was filed by CVI (Canada) in September 2014 and we are waiting to hear back from Health Canada.  

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

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

In July 2014, CVI entered into a joint venture agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to consult and manage a cultivation project.  This function is to be performed by a yet to be formed management company in which CVI will have a 50% ownership interest (“Joint Venture”).  In order to provide initial working capital for the Joint Venture, CVI has paid cash of $52,972 to acquire its 50% ownership interest in the Joint Venture.

Further, under the terms of the Joint Venture agreement, CVI is required to provide $100,000 cash as a security deposit for the property to be leased by the Joint Venture. As described in Note 8 Subsequent Events below, the Company transferred the $100,000 as required under the agreement on September 12, 2014.

7.

Stockholders’ Deficit

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

8.

Subsequent Events

a)  On September 12, 2014 pursuant to the agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to consult and manage a cultivation project, the Company transferred $100,000 as a security deposit in place of a personal guaranty required by the landlord in connection with the facility to be leased by the Joint Venture for the cultivation project.  These funds are to continue to be held as a security deposit until completion of the project.

b)  On September 17, 2014, the Company effected a 20:1 forward split of the Company’s issued and outstanding shares of common stock, thereby increasing the number of the Company’s issued and outstanding shares of common stock from 5,907,000 to 118,140,000 shares of common stock. All references to share numbers in this Form 10Q have been adjusted to reflect the impact of this forward split.

In accordance with ASC 855-10 the Company has analyzed its operations subsequent to August 31, 2014 to October 17, 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.

NATURE OF BUSINESS

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

GALA Global, Inc., since its change in management effective June 26, 2014, plans to expand into the Hemp and Cannabidiol (“CBD”) industry. The expansion will focus on the development, research, and commercialization of products derived from the Hemp and Cannabis Plant. GALA Global, Inc. plans to seek acquisition candidates in this area of interest in the nutraceutical and pharmaceutical industries. The Company also plans to enter into the medical marijuana cultivation industry as approved in the United States and Canada to build legalized cultivation operations.

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

Cannabis Ventures Inc. (USA) (“CVI”)

In July 2014, CVI entered into a joint venture agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to consult and manage a cultivation project.  This function is to be performed by a yet to be formed management company in which CVI will have a 50% ownership interest (“Joint Venture”).  In order to provide initial working capital for the Joint Venture, CVI has paid cash of $52,972 to acquire its 50% ownership interest in the Joint Venture.

Further, under the terms of the Joint Venture agreement, CVI is required to provide $100,000 cash as a security deposit for the property to be leased by the Joint Venture. As described in Note 8 Subsequent Events of the financial statements above, the Company transferred the $100,000 as required under the agreement on September 12, 2014.

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

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

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was filed by CVI (Canada) in September 2014 and we are waiting to hear back from Health Canada.  

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

The Contract has now been extended on a month to month basis and the Company continues to pay the property owner a nonrefundable payment of $4,000 a month while it awaits the determination from Health Canada.  

There is no guarantee that the property owner will continue to extend the term of the Contract or that the Company will be successful in obtaining a license from Health Canada. Moreover as at the date of this report, the Company does not have the funds to complete the purchase of the property nor is there any guarantee that it will be able to raise the required funding.

RESULTS OF OPERATIONS

THREE AND NINE MONTHS ENDED AUGUST 31, 2014 COMPARED TO THE THREE AND NINE MONTHS ENDED AIGUST 31, 2013

Revenues

For the three and nine months ended August 31, 2014 and 2013, the Company had $nil for revenue as it has not commenced revenue generating operations as yet.

Operating Expenses

Operating expenses for the three months ended August 31, 2014 was $36,986 compared with $5,650 for the three months ended August 31, 2013.  Please see the below table for an explanation of the variances:   

During the three months ended August 31, 2014, the Company incurred $6,000 (2013 - $nil) in management fees to the former President and Director of the Company.  

We incurred travel expenses of $9,285 (2013 - $nil) during the three months ended August 31, 2014 as we are seeking to acquire certain property in Vancouver, Canada to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada.

During the three months ended August 31, 2014 we paid option payments of $16,000 (2013-$nil) to a director of CVI Canada in connection with the proposed acquisition of certain property in Vancouver, Canada to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada.    

Operating expenses for the nine months ended August 31, 2014 was $50,548 compared with $24,187 for the nine months ended August 31, 2013.  Please see the below table for an explanation of the variances.

* During the three months ended August 31, 2014, $6,000 previously mistakenly classified as management fees during the three month periods ended February 28, 2014 ($3,000) and May 31, 2014 ($3,000) has been correctly reclassified as general and administrative expenses.

During the nine months ended August 31, 2014, the Company incurred $6,000 (2013 - $nil) in management fees to the former President and Director of the Company.  $6,000 previously mistakenly classified as management fees during the three month periods ended February 28, 2014 ($3,000) and May 31, 2014 ($3,000) has been correctly reclassified as general and administrative expenses.

We incurred travel expenses of $9,285 (2013 - $6,000) during the nine months ended August 31, 2014 as we are seeking to acquire certain property in Vancouver, Canada to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada.

During the nine months ended August 31, 2014 we paid option payments of $16,000 (2013-$nil) to a director of CVI Canada in connection with the proposed acquisition of certain property in Vancouver, Canada to facilitate the cultivation of medical marijuana on the property if it is able to acquire the necessary license from Health Canada.    

Net Loss

The net loss for the three months ended August 31, 2014 was $36,986 compared with a net loss of $5,650 for the three months ended August 31, 2013 due to the factors discussed above.  

The net loss for the nine months ended August 31, 2014 was $50, compared with a net loss of $24,187 for the nine months ended August 31, 2013 due to the factors discussed above.  

Liquidity and Capital Resources

Working Capital

Cash Flows

As at August 31, 2014, the Company has no revenue or other source of income, has a working capital deficit of $117,318, and an accumulated deficit of $158,744. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, its ability to obtain the necessary debt or equity financing, and generate profitable operations from the Company’s planned future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  

Cashflow from Operating Activities

During the nine months ended August 31, 2014, the Company used $53,457 of cash for operating activities compared to the use of $23,887 of cash for operating activities during the nine months ended August 31, 2013 representing an increase of $29,570. The increase between the two periods was mainly due to an increase in operating loss for the period of $26,361.

Cashflow from Investing Activities

During the nine months ended August 31, 2014, the Company used $52,972 of cash for investing activities compared to $nil for the nine months ended August 31, 2013.  The increase in the cash used for investing activities was due to cash paid by the Company with respect to the joint venture agreement with Globe Farnacy Inc. (“GFI”) signed on July 1, 2014.  

Cashflow from Financing Activities

During the nine months ended August 31, 2014, the Company generated $106,325 from financing activities compared to $526 used in financing activities during the nine months ended August 31, 2013.During the nine months ended August 31, 2014, the Company received $101,429 by way of proceeds from related party, $10,000 by way of loan from related party and repaid $5,000 to our former director and principal shareholder. By comparison, during the nine months ended August 31, 2013 we repaid $526 to our former director and principal shareholder. The Company required the increased financing in the nine months ended August 31, 2014 to fund the operating expenses described above and its purchase of a 50% interest in the joint venture agreement with Globe Farnacy Inc. (“GFI”) signed on July 1, 2014

Off-Balance Sheet Arrangements

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

Other events

On May 19, 2014, a change in control of Gala Global Inc. (the "Company") occurred when IDG Ventures Ltd. (“IDG”), the Company’s then controlling shareholder, sold all of its 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 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%

Cannabis Ventures Inc. (USA) (“CVI”)

In July 2014, CVI entered into a joint venture agreement with Globe Farmacy, Inc., an Arizona non-profit corporation (“GFI”), to consult and manage a cultivation project.  This function is to be performed by a yet to be formed management company in which CVI will have a 50% ownership interest (“Joint Venture”).  In order to provide initial working capital for the Joint Venture, CVI has paid cash of $52,972 to acquire its 50% ownership interest in the Joint Venture.

Further, under the terms of the Joint Venture agreement, CVI is required to provide $100,000 cash as a security deposit for the property to be leased by the Joint Venture. As described in Note 8 Subsequent Events of the financial statements above, the Company transferred the $100,000 as required under the agreement on September 12, 2014.

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

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

In July 2014, CVI (Canada) filed the application with Health Canada for the MMPR License (Marihuana for Medical Purposes Regulations). The response to last round of comments received from Health Canada was filed by CVI (Canada) in September 2014 and we are waiting to hear back from Health Canada.  

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

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

Going Concern

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

Future Financings

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

Critical Accounting Policies

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

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

Use of Estimates

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

Stock-Based Compensation

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

Recently Issued Accounting Pronouncements

• Lack of appropriate segregation of duties;
• Limited capability to interpret and apply accounting principles generally accepted in the United States;
• Lack of formal accounting policies and procedures that include multiple levels of review.

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.

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 party to any legal proceedings during the three and nine months periods ended August 31, 2014 and 2013 and as of August 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

We made no sales of unregistered securities during the three and nine month periods ended August 31, 2014 or 2013.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

No senior securities were issued or outstanding during the three and nine month periods ended August 31, 2014 or 2013  

ITEM 4.  MINE SAFETY DISCLOSURES

Not applicable to our Company.

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.