UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended November 30, ~~2017~~2018

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

For the transition period from _________ to _________

Commission File Number: 000-52044

GALA PHARMACEUTICAL INC.

(Name of Small Business Issuer in its charter)

Nevada	42-1771014
(state or other jurisdiction of incorporation or organization)	(I.R.S. Employer I.D. No.)

~~2780~~18881 ~~South~~Von ~~Jones~~Karman ~~Blvd~~Ave., ~~#3725~~Suite 1440, Irvine, California 92612

Las Vegas, Nevada 89146

(Address of principal executive offices)

(775) 321-8238

Issuer’s telephone number

Securities registered under Section 12(b) of the Exchange Act: None

Securities registered under Section 12(g) of the Exchange Act: Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ~~☐ No~~o No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐ o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”,” “smaller reporting company”,” and “emerging growth 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 Emerging growth company o

~~Emerging~~ If an emerging growth company, ☐ indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to section 13(a) of the Exchange Act. o

IfIndicate ~~an emerging growth company, indicate~~ by check mark ifwhether the registrant ~~has~~is ~~elected~~a ~~not~~shell tocompany ~~use~~(as ~~the~~defined ~~extended~~in ~~transition~~Rule ~~period~~12b-2 ~~for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)~~ of the ~~Exchange~~ Act~~. ☐~~) Yes o No þ

~~Indicate by~~Aggregate ~~check~~market ~~mark~~value ~~whether~~of the voting and non-voting stock of the registrant isheld aby ~~shell~~non-affiliates ~~company~~of (the registrant as ~~defined~~of inthe ~~Rule~~last ~~12b-2~~business day of the ~~Act) Yes ☐ No~~registrant’s þmost recently completed fiscal quarter: $2,684,306

~~Aggregate~~As ~~market value~~ of ~~the~~April ~~voting~~1, ~~and non-voting~~2019 ~~stock of~~ the registrant ~~held by non-affiliates of the registrant as of the last business day of the registrant~~’s ~~most~~ ~~recently~~outstanding ~~completed~~stock consisted ~~fiscal~~of ~~quarter: $1~~99,~~994~~422,~~486~~976 common shares.

As of April 3, 2018 the registrant’s outstanding stock consisted of 47,635,145 common shares.

GALA GLOBAL INC.

Table of Contents

PART I
Item 1. Description of Business	1
Item 1A. Risk Factors	1
Item 1B. Unresolved Staff Comments	1
Item 2. Description of Property	12
Item 3. Legal Proceedings	12
Item 4. Mine Safety Disclosures	12
PART II
Item 5. Market for Common Equity, Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	23
Item 6. Selected Financial Data	46
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation	46
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	812
Item 8. Financial Statements and Supplementary Data	912
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	1013
Item 9A. Controls and Procedures	1113
Item 9B. Other Information	1113
PART III
Item 10. Directors, Executive Officers and Corporate Governance	1214
Item 11. Executive Compensation	1415
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	17
Item 13. Certain Relationships, Related Transactions and Director Independence	17
Item 14. Principal Accountant Fees and Services	20
Item 15. Exhibits and Financial Statement Schedules	2120
Item 16. Form 10-K Summary	21
Signatures	21
Signatures	22

PART I

Item 1. Description of Business

General

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

The Company then expanded into the Hemp and Cannabidiol (“CBD”) industry. The expansion focused on the development, research, and commercialization of products derived from the Hemp and Cannabis Plant. At the time ~~GALA~~GPI was also seeking acquisition candidates in this area of interest in ~~the~~ 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 Pharmaceutical Inc. ~~has~~then hired industry-leading experts in the field of Genomics ~~that~~to ~~improves~~utilize their expertise to improve crop yields by utilizing advanced breeding and molecular technologies. The company ~~will~~ intended to use proprietary equipment and techniques to ensure the genetic fingerprint of each plant is identical and is cultivated in a controlled environment significantly reducing the variability of each plants yield. ~~In addition, the company will be able to provide pharmaceutical expertise to its customers for manufacturing and production.~~ It is anticipated that Gala Pharmaceuticals Inc., ~~will~~may at some point provide oversight for the development of fully cGMP production of Active Pharmaceutical Ingredients (API) for use in forecasted clinical trials supporting the safety and efficacy of the various plant extracts.

The Company’s ~~services~~currently ~~include~~has ~~the~~been approved ~~development~~by the City of ~~cannabinoid~~Long ~~based~~Beach ~~health~~to ~~and~~build ~~wellness~~a ~~products;~~testing Cannabis Lab and the ~~development~~Lab ofbuild-out ~~medical~~is ~~grade~~scheduled ~~compounds;~~to ~~the~~be ~~licensing~~completed ofon ~~proprietary testing,~~May ~~genetics~~19, ~~labeling~~2019. ~~and~~The company ~~packaging,~~intends ~~tracking,~~to ~~production,~~provide ~~and~~Testing ~~standardization~~or ~~methods~~Analytical Chemistry tools for ~~the~~chemical, ~~medicinal~~plant, ~~herb~~soil, ~~industry~~and liquid.

The Company also will provide genetic “fingerprinting” and “sequencing” of various crop species. This Fingerprinting allows for storing genetic fingerprint information into a proprietary database. Customers can access genetic fingerprint data which can be used for predictive breeding applications and for protecting intellectual property (IP).

Research and Development

We have not spent any amounts on research and development activities during the years ended November 30, ~~2017~~2018 or ~~2016~~2017. We anticipate that we will not incur any expenses on research and development over the next 12 months. Our planned expenditures on our operations or a business combination are summarized under the section of this annual report entitled “Management’s Discussion and Analysis of Financial Position and Results of Operations”.

Employees and Employment Agreements

At present, we have a CEO and a Chief Scientific Officer who devote their full time to our business. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt such plans in the future. There are presently no personal benefits available to any officers, directors or employees.

Item 1A. Risk Factors

Not applicable to smaller reporting companies.

Item 1B. Unresolved Staff Comments

Not applicable to smaller reporting companies.

Item 2. Description of Property

We do not currently own any property or real estate of any kind. Our office and mailing address is located at 18881 Von Karman Avenue #1440, Irvine, California 92612. Our lease is month-to-month.

Gala Pharmaceutical California Inc., On May 1, 2018, Gala California, a 51% owned subsidiary of the Company, entered into a lease agreement with an individual who holds a 49% interest in Gala California to lease a commercial building in Long Beach, California. Under the terms of the lease agreement, the Company is committed to the following minimum lease payments:

Fiscal year ended		$

November 30, 2019		110,520
November 30, 2020		114,941
November 30, 2021		119,538
November 30, 2022		124,320
November 30, 2023		52,644

Total minimum lease payments		521,963

Item 3. Legal Proceedings

As of January 19, 2018, the relationship with the recently appointed Chief Operation Officer, was ended along with the related consulting agreement. ~~Litigation~~In April is2019, ~~possible~~the ~~from~~Company anticipates a settlement agreement of this ~~event~~action. ~~Please reference~~The ~~the~~Company ~~Form~~has ~~8-K~~accrued ~~that~~$64,000 ~~was~~as ~~filed~~part ~~with~~of the ~~SEC~~settlement amount onat ~~February~~November 130, 2018.

Item 4. Mine Safety Disclosures

Not applicable to our Company.

PART II

Market Information

Our shares of common stock are listed on the Over the Counter Bulletin Board under the symbol ~~GALA~~GLPH. Set forth below are high and low bid prices for our common stock for each quarterly period in the two most recent fiscal years. Such quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not necessarily represent actual transactions in the common stock.

Period	High	~~High~~Low		~~Low~~
Fiscal 2017
Fiscal 2018
First Quarter ended February 28, 2017		$	1.50	$	0.30
First Quarter ended February 28, 2018	$0.08	$0.06
Second Quarter ended May 31, 2017		$	0.54	$	0.22
Second Quarter ended May 31, 2018	$0.11	$0.06
Third Quarter ended August 31, 2017		$	1.02	$	0.22
Third Quarter ended August 31, 2018	$0.10	$0.07
Fourth Quarter ended November 30, 2017		$	0.90	$	0.20
Fourth Quarter ended November 30, 2018	$0.07	$0.04
Fiscal 2016
Fiscal 2017
First Quarter ended February 29, 2016		$	3.00	$	1.00
First Quarter ended February 28, 2017	$1.50	$0.30
Second Quarter ended May 31, 2016		$	2.00	$	1.00
Second Quarter ended May 31, 2017	$0.54	$0.22
Third Quarter ended August 31, 2016		$	1.00	$	0.00
Third Quarter ended August 31, 2017	$1.02	$0.22
Fourth Quarter ended November 30, 2016		$	2.00	$	0.00
Fourth Quarter ended November 30, 2017	$0.90	$0.20

Number of Holders

As of ~~November~~April 301, ~~2017~~2019, the 3599,~~701~~422,~~561 issued~~976 issued and outstanding shares of common stock were held by a total of 7696 shareholders of record.

Dividends

No cash dividends were paid on our shares of common stock during the fiscal years ended November 30, ~~2017~~2018 and ~~2016~~2017. We have not paid any cash dividends since our inception and do not foresee declaring any dividends on our common stock in the foreseeable future.

Recent Sales of Unregistered Securities

Stock transactions for the year ended November 30, ~~2017~~2018:

(a) On ~~January~~December 307, 2017, the Company ~~effected a share consolidation on a 100 old shares for 1 new share basis. The share consolidation has been applied retroactively to the earliest period presented. (b) On March 22, 2017, the Company~~ issued ~~490~~209,~~742~~727 common shares with a fair value of $~~176~~56,~~667~~773 to settle ~~outstanding~~convertible ~~debt~~debentures of $8830,~~333~~000 ~~owed~~and toderivative aliability ~~significant shareholder~~ of ~~the Company. The transaction resulted in a loss on settlement of debt of~~ $8850,~~334,~~993 ~~which~~resulting ~~was recorded~~ in ~~the consolidated statement of operations. (c) On March 22, 2017, the Company issued 1,387,970 common shares with~~ a ~~fair~~gain ~~value of $499,670 to settle outstanding debt of $249,835 owed to a company controlled by a significant shareholder of the Company. The transaction resulted in a loss~~ on settlement of debt of $~~249~~24,~~835, which was recorded in the consolidated statement of operations~~220. (d) On March 30, 2017, the Company issued 10,000,000 common shares with a fair value of $200,000 to a significant shareholder of the Company for compensation services for a period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $65,205 has been recorded in deferred compensation and $134,795 has been expensed.

2(b) On January 11, 2018, the Company issued 5,000,000 common shares with a fair value of $200,000 to the Chief Executive Officer of the Company as a performance bonus.

(ec) On ~~March~~February 30, 2017, the Company issued 10,000,000 common shares with a fair value of $200,000 to a significant shareholder of the Company for compensation services for a period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $65,205 has been recorded and $134,795 has been expensed. (f) On March 30, 2017, the Company issued 1,~~500,000~~ ~~common shares with a fair value of $30~~2018,~~000~~ to the ~~Chief Financial Officer of the~~ Company for compensation services for a period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $9,171 has been recorded and $20,219 has been expensed. (g) On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $3060,000 ~~to a director of the Company~~ for compensation services for a period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $9,781 has been recorded and $20,219 has been expensed. (h) On July 6, 2017, the Company issued 1,500,000 common shares at $0.08 per common share pursuant to private placement for proceeds of $120,000. Finders fees of $12,000 were paid related to this transaction which reduced additional paid in capital by the same amount. (i) On June 12, 2017, the Company issued 2,000,000 common shares for consulting services ~~over a twelve month period with a fair value of $40,000. As of November 30, 2017 prepaid expense~~ for ~~these shares is $21,175. (j) On June 13, 2017, the Company issued 1,500,000 common shares with~~ a ~~fair value of $30,000 to the former Chief Operating Officer of the Company for compensation services for a~~ period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $15,881 has been recorded and $14,119 has been expensed. (k) On July 21, 2017, the Company issued 553,625 common shares with a fair value of $166,088 to settle outstanding promissory notes and accrued interest of $44,666 resulting in a loss on settlement of debt of $121,422, including 128,750 common shares with a fair value of $38,625 to settle outstanding promissory notes and accrued interest of $10,254 resulting in a loss on settlement of debt of $28,371 to a related party. (l) On September 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services. (m) On October 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services. (n) On October 20, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000. (o) On October 23, 2017, the Company issued 400,000 common shares to settle the outstanding share purchase warrants which were issued as part of the issuance of the convertible debenture. (p) On November 9, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000. (q) At November 30, 2017, the Company had 3,000,000 common shares issuable for consulting services with a fair value of $300,000, of which $25,000 was recorded as consulting expense.

Stock transactions for the year ended November 30, 2016:

(r) On December 23, 2015, the Company issued 12,500 shares of common stock with a fair value of $25,000 to a consultant pursuant to a consulting agreement dated May 1, 2015.

(s) On December 23, 2015, the Company issued 25,000 shares of common stock with a fair value of $39,063 to the Chief Financial Officer and director of the Company pursuant to the agreement dated September 1, 2015. 12,500 shares were issued for the consultant’s services as a director, and 12,500 shares for services as the Company’s Chief Financial Officer.

(td) On ~~December~~February 232, ~~2015~~2018, the Company issued 123,~~500~~000,000 ofcommon shares, ofwhich ~~common~~were ~~stock~~issuable ~~with~~at aNovember ~~fair~~30, ~~value of $21~~2017,~~250~~ ~~to the former Chief Executive Officer of the Company~~ for ~~the~~consulting ~~consultant’s~~ services aswith a ~~director~~fair ~~pursuant~~value toof ~~the consulting agreement dated September 1~~$300, ~~2015~~000.

(ue) On ~~December~~February 232, ~~2015~~2018, the Company issued 6618,~~250~~684 ofcommon shares ~~of common stock~~ with a fair value of $1049,~~625~~495 to ~~the~~settle ~~former~~convertible ~~Chief~~debentures ~~Executive Officer~~ of ~~the~~$30,000 ~~Company~~and ~~for~~derivative ~~services~~liability asof ~~the~~$43,021 ~~Company’s~~resulting ~~Chief~~in ~~Executive~~a ~~Officer~~gain ~~pursuant~~on tosettlement ~~the~~of ~~consulting~~debt ~~agreement~~of ~~dated June 29~~$23, ~~2015~~526.

(vf) On ~~December~~February 2313, ~~2015~~2018, the Company issued 12758,~~500~~284 ofcommon shares ~~of common stock~~ with a fair value of $1741,~~500~~478 to asettle ~~consultant~~convertible ~~pursuant~~debentures toof a$30,000 ~~consulting~~and ~~agreement~~derivative ~~dated~~liability ~~December~~of 14$35,246 ~~2015~~resulting in a gain on settlement of debt of $23,768.

(wg) On ~~January~~February 2726, ~~2016~~2018, the Company issued ~~500~~846,~~000~~860 ~~shares~~common of preferred stock to significant shareholders to settle debt of $72,620. Each preferred share is entitled to receive dividends when and if declared by the Company’s board of directors, has 500 to 1 voting power and liquidation rights in the amount of the shares; ~~par value in accordance~~ with ~~the~~a ~~Company’s~~fair ~~certificate~~value of ~~designation. Of the 500~~$50,~~000~~812 ~~shares issued, 166,666 shares were issued~~ to ~~a significant shareholder to~~ settle ~~outstanding~~convertible ~~payables~~debentures ~~to a significant shareholder~~ of $2430,~~167,~~000 and ~~the~~derivative ~~remaining~~liability ~~333,334 shares are issued to another significant shareholder to settle debts~~ of $4244,~~638,~~041 ~~$5,009,~~resulting ~~and~~in ~~$806~~a ~~described~~gain aton ~~Note~~settlement 4of ~~for~~debt ~~a total~~ of $4823,~~453 in outstanding principal and accrued interest~~229.

(h)

On April 6, 2018 the Company cancelled 583,333 common shares which was returned by the former Chief Executive Officer of the Company and reversed a cancellation of 1,500,000 common shares to the former Chief Executive Officer of the Company.

(i)

On April 18, 2018, the Company issued 5,000,000 common shares to an individual who holds 49% interest in Gala California for proceeds of $200,000.

(j)

On May 14, 2018, the Company issued 1,500,000 common shares with a fair value of $60,000 to a director of the Company for consulting services for a period of one year.

(k)

On June 19, 2018, the Company issued 1,500,000 common shares with a fair value of $60,000 to for consulting services for a period of one year.

(l)

On July 3, 2018, the Company issued 653,125 common shares with a fair value of $71,844 to settle convertible debentures of $30,000 and derivative liability of $65,537 resulting in a gain on settlement of debt of $23,693.

(m)

On August 28, 2018, the Company issued 500,000 common shares for proceeds of $20,000.

(n)

On August 28, 2018, the Company issued 1,000,000 common shares to a consultant for services with a fair value of $50,000.

(o)

On September 2, 2018, the Company issued 2,500,000 common shares for proceeds of $50,000.

(p)

On September 13, 2018, the Company issued 8,250,000 common shares for proceeds of $165,000.

(q)

On September 19, 2018, the Company issued 3,000,000 common shares with a fair value of $142,500 for consulting services, of which 1,500,000 common shares with a fair value of $112,500 was issued to the Chief Executive Officer and Director of the Company.

(r)

On September 19, 2018, the Company issued 2,250,000 common shares for proceeds of $45,000.

(s)

On September 23, 2018, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(t)

On September 28, 2018, the Company issued 2,500,000 common shares for proceeds of $25,000, including 2,000,000 common shares to an individual with a 49% interest in Gala California.

(u)

On September 29, 2018, the Company issued 250,000 common shares for proceeds of $5,000.

(v)

On October 11, 2018, the Company issued 487,626 common shares with a fair value of $48,568 for the settlement of convertible debentures of $20,000 and derivative liability of $45,429 resulting in a gain on settlement of debt of $16,861.

(w)

On October 15, 2018, the Company issued 500,000 common shares for proceeds of $10,000.

(x)

On October 31, 2018, the Company issued 3,000,000 common shares with a fair value of $60,000 to officers and directors of the Company for compensation services.

(y)

On November 1, 2018, the Company issued 5,500,000 common shares as part of a repricing of common shares issued for cash on April 18, 2018 and August 28, 2018, which included 5,000,000 common shares issued to an individual who holds 49% interest in Gala California.

(z)

On November 13, 2018, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(aa)

On November 26, 2018, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(bb)

On November 26, 2018, the Company issued 569,103 common shares with a fair value of $51,162 for the settlement of $20,000 of convertible debt and derivative liability of $48,490 resulting in a gain on settlement of debt of $17,328.

Stock transactions for the year ended November 30, 2017:

(a)

On January 30, 2017, the Company effected a share consolidation on a 100 old shares for 1 new share basis. The share consolidation has been applied retroactively to the earliest period presented.

(b)

On March 22, 2017, the Company issued 490,742 common shares with a fair value of $176,667 to settle outstanding debt of $88,333 owed to a significant shareholder of the Company. The transaction resulted in a loss on settlement of debt of $88,334, which was recorded in the consolidated statement of operations.

(c)

On March 22, 2017, the Company issued 1,387,970 common shares with a fair value of $499,670 to settle outstanding debt of $249,835 owed to a company controlled by a significant shareholder of the Company. The transaction resulted in a loss on settlement of debt of $249,835, which was recorded in the consolidated statement of operations.

(d)

On March 30, 2017, the Company issued 10,000,000 common shares with a fair value of $200,000 to a significant shareholder of the Company for compensation services for a period of twelve months from the date of issuance. As of November 30, 2017, deferred compensation of $65,205 has been recorded in deferred compensation and $134,795 has been expensed.

(e)

(f)

On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Financial Officer of the Company for compensation services for a period of twelve months from the date of issuance. As of November 30, 2017, deferred compensation of $9,171 has been recorded and $20,219 has been expensed.

(g)

On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to a director of the Company for compensation services for a period of twelve months from the date of issuance. As of November 30, 2017, deferred compensation of $9,781 has been recorded and $20,219 has been expensed.

(h)

On July 6, 2017, the Company issued 1,500,000 common shares at $0.08 per common share pursuant to private placement for proceeds of $120,000. Finders fees of $12,000 were paid related to this transaction which reduced additional paid in capital by the same amount.

(i)

On June 12, 2017, the Company issued 2,000,000 common shares for consulting services over a twelve month period with a fair value of $40,000. As of November 30, 2017 prepaid expense for these shares is $21,175.

(j)

On June 13, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the former Chief Operating Officer of the Company for compensation services for a period of twelve months from the date of issuance. As of November 30, 2017, deferred compensation of $15,881 has been recorded and $14,119 has been expensed.

(k)

On July 21, 2017, the Company issued 553,625 common shares with a fair value of $166,088 to settle outstanding promissory notes and accrued interest of $44,666 resulting in a loss on settlement of debt of $121,422, including 128,750 common shares with a fair value of $38,625 to settle outstanding promissory notes and accrued interest of $10,254 resulting in a loss on settlement of debt of $28,371 to a related party.

(l)

On September 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(m)

On October 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(n)

On October 20, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000.

(o)

On October 23, 2017, the Company issued 400,000 common shares to settle the outstanding share purchase warrants which were issued as part of the issuance of the convertible debenture.

(p)

On November 9, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000.

(q)

At November 30, 2017, the Company had 3,000,000 common shares issuable for consulting services with a fair value of $300,000, of which $25,000 was recorded as consulting expense.

Purchase of our Equity Securities by Officers and Directors

None.

Other Stockholder Matters

None

Item 6. Selected Financial Data

Not applicable to smaller reporting companies.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

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 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 $1,981,856 and $170,176, respectively, for the fiscal years ended November 30, 2017 and 2016. 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 we have generated no revenues to date 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.6

4Our 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 reports (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 $1,858,877 and $1,981,856, respectively, for the fiscal years ended November 30, 2018 and 2017. 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 we have generated no revenues to date 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 successfully execute our business plan. 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.

RESULTS OF OPERATIONS

Operating Revenues

During the fiscal ~~years~~year ended November 30, 2017 ~~and 2016~~, the Company did not recognize any revenues. During the fiscal year ended November 30, 2018, the Company recorded revenues of $4,675 relating to sales generated from sale of parts and products.

Operating Expenses

Operating expenses for the year ended November 30, ~~2017~~2018 were $~~798~~1,~~284~~718,415 compared with $~~168~~798,~~432~~284 for the year ended November 30, ~~2016~~2017. A summary of the operating expenses are as follows:

Analysis of Operating Expenses

	November 30,		November 30,		Variance
Operating Expense	~~2017~~2018		~~2016~~2017		$			%
Consulting fees	$	~~132~~359,~~944~~755	$	17132,~~500~~944	$	~~115~~226,~~444~~811			~~1984~~170.26 %
Consulting fees - related party	$	~~364~~895,~~733~~494	$	26364,~~354~~733	$	~~338~~530,~~379~~761			~~404~~145.5 %
Depreciation	$	510,~~389~~900	$	–5,389	$	5,~~389~~511			~~N/A~~102.2 %
General and administrative	$	89264,~~740~~821	$	5089,~~028~~740	$	39175,~~712~~081			79195.41 %
General and administrative - related party	$	~~187~~103,~~393~~405	$	36187,~~000~~393	$	~~151~~(83,~~393~~988	)		~~420~~(44.58)%
Rent	$	18,085	$	38,550	($	20,465	)		(53.1	)%
Impairment of inventory	$	2,241	$	–	$	2,241			100 %
	$	798,284	$	168,432	$	629,852			374.0%
Rent	$	81,799	$	18,085	$	63,714			352.3 %
	$	1,718,415	$	798,284	$	920,131			115.3 %

Overall, the increase in operating expenses was due to an increase in overall day-to-day activities as the Company moved towards its new line of business. This resulted in the issuance of 24,500,000 common shares with a fair value of $490,000 for consulting services to both third parties and related parties, of which $165,853 has been deferred into fiscal 2018. In the prior year, the Company incurred $43,854 of consulting fees.7

~~The~~Overall, ~~Company~~the ~~also~~increase ~~saw~~in operating expenses was due to an increase in ~~general and~~overall ~~administrative~~day-to-day activities as the Company incurred significant operating costs with respect to ~~both~~its operations. ~~third~~Overall ~~parties~~consulting ~~and~~fees ~~related~~increased ~~parties.~~by ~~This~~$757,572 which included ~~legal~~a ~~expenses~~one-time ~~incurred~~$200,000 bonus to aour ~~director~~Chief ofExecutive ~~the~~Officer ~~Company~~and ~~totaling $177~~Director,~~294~~ and an overall increase in ~~professional~~the ~~fees~~use ~~relating~~of toconsultants ~~legal~~during ~~and~~the ~~transfer~~year ~~agents~~as ~~costs~~the ~~related~~Company tolaid the ~~issuance~~groundwork for its testing lab by employing a larger number of ~~common~~consultants ~~shares~~which ~~and~~were ~~issuance~~compensated by common shares of athe ~~convertible~~Company. ~~debenture~~In addition, ~~and~~we ansaw an increase of $91,093 in ~~accounting~~general and ~~audit~~administrative ~~fees~~costs as we incurred more cash use for our operating activities as compared to prior year. We also saw an increase in ~~the~~rent ~~complexity and~~expense ~~magnitude~~ of ~~transactions~~$63,714 ~~involved~~due inprimarily to a new lease agreement for the ~~Company’s~~testing ~~operations~~lab in ~~fiscal~~Gala California, ~~2017~~a ~~compared~~51% toowned ~~prior~~subsidiary ~~year~~of the Company.

The Company had a decrease in rent expense as the Company moved head offices to a location that was more cost effective. The Company also commenced depreciation of its fixed assets during fiscal 2017 recording depreciation costs of $5,389. The Company’s fixed asset is comprised of equipment and is amortized on a straight-line basis over its expected useful life of three to five years.

Net Loss

Net loss for the year ended November 30, ~~2017~~2018 was $1,~~981~~858,~~856~~877 or a loss per share of $0.0903 compared with a net loss of $~~170~~1,~~176~~981,856 or loss per share of $0.1209 for the year ~~ended~~ ended November 30, ~~2016~~2017. In addition to operating expenses, the Company recorded a loss on the change in fair value of derivative ~~liabilities~~ liabilities of $~~277~~257,~~578~~861 related to the change in fair value of the beneficial conversion feature of the convertible debenture that were ~~was~~ issued and outstanding during the year ended November 30, 2018. The Company also recorded interest and accretion expense of $~~393~~74,~~107~~459 related to the convertible debenture, settlement expense of $64,000 relating to a ~~loss on~~proposed settlement of ~~debt~~an outstanding litigation claim from a former consultant of the Company, and $~~459~~30,~~590~~000 ~~related~~unrealized ~~mainly~~loss toon the ~~conversion~~fair value of ~~third~~the ~~party~~common ~~and~~shares ~~related~~received from ~~party~~Greengro ~~debts~~Technologies ~~with~~Inc. for the ~~issuance~~sale of ~~common~~ ~~shares~~the Cannabis Ventures subsidiaries during the year ended November 30, ~~and~~2018. The amounts were offset by a ~~loss~~gain on settlement of debt of $53152,~~297~~626 ~~for~~from ~~costs~~the ~~incurred~~settlement/conversion ~~related~~of toconvertible adebt ~~proposed~~and ~~acquisition~~gain ~~during~~of $71,800 ~~fiscal~~from ~~2017~~the ~~that~~sale ~~never~~of ~~finalized~~the Cannabis Ventures Inc. ~~During~~ ~~the~~and ~~year~~Cannabis ~~ended~~Ventures ~~November~~(Canada) ~~30,~~Inc. ~~2016,~~subsidiaries where the Company ~~had~~exchanged all ~~interest~~rights ~~expense~~and titles to the assets and liabilities of $1the subsidiaries in exchange for 2,~~744~~000,000 ~~related~~common toshares ~~accrued~~of ~~interest~~Greengro onTechnologies Inc., ~~loans~~a ~~payable~~company with common directors.

Liquidity and Capital Resources

As of November 30, ~~2017~~2018, the Company had a working capital deficit of $893,866 and an accumulated deficit of $5,077,446 compared with a working capital deficit of $951,880 and an accumulated deficit of $3,218,569 as of November 30, 2017. 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.

Working Capital

	November 30, 2017 $			November 30, 2016 $
	November 30, 2018 $			November 30, 2017 $
Current Assets		61226,~~916~~998			1361,~~082~~916
Current Liabilities		1,~~013~~120,~~796~~864			~~461~~1,~~190~~013,796
Working Capital (Deficit)		(~~951~~893,~~880~~866	)		(~~448~~951,~~108~~880	)

As atof November 30, ~~2017~~2018, the Company had current assets of $61226,~~916~~998 and current liabilities of $1,~~013~~120,~~796~~864 compared with current assets of $1361,~~082~~916 and current liabilities of $~~461~~1,~~190~~013,796 at November 30, ~~2016~~2017. The ~~increase~~decrease in the working capital deficit was due ~~mainly~~ to the ~~issuance~~fact ofthat athe ~~convertible~~Company ~~debenture~~settled some ~~with~~outstanding aaccounts ~~face~~payable, ~~value~~convertible ~~of $280~~debentures,~~000,~~ and ~~included~~related aparty ~~default~~payables ~~penalty~~with the issuance of ~~$73,629,~~common ~~that~~shares ~~included~~and ~~the~~retained some ~~recognition~~cash ofproceeds afrom ~~derivative~~financing ~~liability of~~activities ~~$453,005~~as atof November 30, ~~2017~~2018. ~~The~~During ~~overall~~the ~~impact~~year ofended November 30, 2018, the ~~convertible~~Company ~~debenture~~entered into ~~and~~3 ~~derivative~~new ~~liability~~convertible ~~increased~~note ~~the~~agreements ~~working capital~~for ~~deficit~~$80,000, byand settled $~~806~~112,~~634.~~249 ~~The~~of ~~increase~~convertible ~~was~~debentures ~~offset~~and by$77,751 aof ~~decrease~~accrued ininterest with the ~~amounts~~issuance ~~due~~of to4,143,409 ~~related~~common ~~parties~~shares of ~~$235,532~~the ~~and~~Company. ~~loans payable~~There was also an increase of $33155,~~000~~321 asof ~~the~~amounts ~~Company~~due ~~converted~~to arelated ~~number~~parties resulting ofmainly ~~loans~~from ~~payable~~outstanding ~~and~~legal ~~related~~fees ~~party~~owed ~~debts~~to a company with ~~the~~common ~~issuance~~directors, and deferred rent of ~~common~~$29,096 ~~shares~~relating to ~~and~~rent ~~with~~liabilities anfor ~~increase~~the Company’s new testing lab held in ~~prepaid~~Gala ~~expenses~~California ofInc., $a 51~~,908~~% owned subsidiary of the Company.

Cash Flows

	Year ended November 30, 2017 $			Year ended November 30, 2016 $
	Year ended November 30, 2018 $			Year ended November 30, 2017 $
Cash Flows from (used in) Operating Activities		(~~323~~631,~~695~~890	)		(70323,~~503~~695	)
Cash Flows from (used in) Investing Activities		~~(124,746~~–	)		–(124,746	)
Cash Flows from (used in) Financing Activities		~~445~~740,~~367~~321			79445,~~540~~367
Net Increase (decrease) in Cash During Period		(3108,~~074~~431	)		10(3,~~841~~074	)

Cash flow from Operating Activities

During the year ended November 30, ~~2017~~2018, the Company used $~~323~~631,~~695~~890 of cash for operating activities compared to $70323,~~503~~695 during the year ended November 30, ~~2016~~2017. The increase in the use of cash for operating activities was due to an overall increase in operations and cash flows received from financing activities that gave the Company more flexibility to incur more day-to-day operating costs.

Cash flow from Investing Activities

During the year ended November 30, 2017, the Company used $124,746 for investing activities which included $20,000 for a loan issued to a related party, which is unsecured, non-interest bearing, and due on demand, and $104,746 for the purchase of equipment, which has been capitalized and is being depreciated on a straight-line basis over three to five years. The Company did not have any investing activities during the year ended November 30, 2018.

Cash flow from Financing Activities

During the year ended November 30, ~~2017~~2018, the Company received $~~445~~740,~~367~~321 of cash from financing activities compared to $79436,~~540~~867 during the year ended November 30, ~~2016~~2017. ~~The~~During ~~Company~~the ~~received~~year ~~$250,000~~ended ~~(after~~November ~~accounting~~30, ~~for~~2018 ~~original~~the ~~issuance~~Company ~~discount~~received of $3080,000) from the issuance of a convertible ~~debenture~~debentures, $~~170~~520,000 from the issuance of common shares, ~~less~~and ~~finder’s fees paid of~~ $12155,~~000,~~321 ~~$28,867~~ from advances from related parties~~, and $8,500 in related party loans payable~~. During the year ended November 30, ~~2016~~2017, the Company received $75250,000 from the issuance of convertible debentures, $170,000 from the issuance of common shares less finder’s fees of $12,000, $8,500 from a loan ~~payable~~from ~~and~~a ~~share~~related ~~subscriptions~~party, ofand $1028,~~000~~867 of advances from related parties.

Off-Balance Sheet Arrangements

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

Subsequent Events

(a) On ~~January~~December 15, 2018, the Company ~~entered~~issued ~~into~~500,000 acommon ~~consulting~~shares ~~agreement with a non-related party~~ for ~~consulting~~proceeds ~~services. Pursuant to the agreement, the consultant will receive compensation~~ of $525,000 ~~per month for services rendered~~. ~~In addition, the consultant will receive $2,500 per every new location the consultant manages. The Company may terminate the agreement upon providing 10 days of written notice to the consultant.~~

(b) On ~~January~~December 2931, 2018, the Company ~~completed~~issued ~~a settlement and mutual release agreement with CEG Inc. whereby the proposed acquisition of CEG Inc. was cancelled. As part of the settlement and mutual release agreement~~1, ~~the former Chief Executive Officer of the Company will return 5~~500,~~650,~~000 common shares offor ~~the~~consulting ~~Company~~services ~~and the Company will return the rights~~ to ~~the~~a ~~intellectual~~director ~~property~~of ~~that was previously held by CEG Inc., and give machinery that was previously paid by~~ the Company ~~to CEG Inc~~. ~~The Company incurred $53,297 of expenses relating to the proposed acquisition, which has been recorded for the year ended November 30, 2017.~~

(c) ~~Subsequent~~On toJanuary ~~November~~7, 302019, ~~2017~~the ~~there~~Company ~~were~~issued 91,~~500~~186,~~000~~310 common shares ~~issued~~ for ~~consulting~~the ~~services~~conversion ~~and~~of 2$20,~~433,555~~000 ~~shares issued for conversion~~ of ~~debt.~~loan payable

(b)

On February 5, 2019, the Company entered into a convertible note agreement for $5,000. The note is unsecured, bears interest at 12% per annum, and is due on February 5, 2020. The note is convertible into common shares at the lower of: (i) $0.04 per share; or (ii) 50% of the lowest three trading prices in the twenty day trading period leading up to the date of conversion. In addition, the Company granted 10,000 share purchase warrants to the note holder with an exercise price of $0.01 per share until February 5, 2026.

(c)

On February 8, 2019, the Company entered into a convertible note agreement for $210,000. The note is unsecured, bears interest at 8% per annum, and is due on January 30, 2020. The note is convertible into common shares at 62% of the average two lowest trading prices in the twenty trading days leading up to the date of conversion.

(d)

On March 19, 2019, the Company issued 1,500,000 common shares for proceeds of $75,000.

(e)

On March 19, 2019, the Company issued 1,000,000 common shares for consulting services to a non-related party.

(f)

On March 19, 2019, the Company issued 1,725,000 common shares for the conversion of $1,725 of loan payable.

(g)

Subsequent to November 30, 2018, the Company has paid $104,904 to the contractor for the build-out of the Testing Lab. The build-out is scheduled to be completed by May 19, 2019.

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~~debt ~~sales~~and equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in ~~dilution~~ 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

WeIn ~~have~~August ~~reviewed~~2018, ~~all~~ the ~~recently~~FASB issued, guidance ~~but~~to ~~not~~improve ~~yet~~the ~~effective,~~effectiveness ~~accounting~~of ~~pronouncements~~fair value measurement disclosures by removing or modifying certain disclosure requirements and adding weother dorequirements. ~~not~~The ~~believe~~guidance ~~any~~is ofeffective ~~these~~for ~~pronouncements~~fiscal ~~will~~years, ~~have~~and ainterim ~~material~~periods ~~impact~~within those fiscal years, beginning onafter ~~the~~December ~~Company~~15, 2019, with early adoption permitted. Certain amendments should be applied prospectively, while all other ~~than~~amendments should ~~those~~be ~~relating~~applied retrospectively to ~~Development~~all ~~Stage~~periods ~~Entities~~presented. asThe ~~discussed~~Company ~~below~~is incurrently ~~our~~evaluating ~~financial~~the ~~statements~~impact of the new guidance.

In February 2018, the FASB issued guidance that permits the Company to reclassify disproportionate tax effects in accumulated other comprehensive income caused by the Tax Cuts and Jobs Act of 2017 to retained earnings. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the new guidance.

In July 2017, the FASB issued ASU 2017-11 which simplifies the accounting for certain financial instruments with down round features. The new standard will reduce income statement volatility for companies that issue warrants and convertible instruments containing such features. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The Company is currently evaluating the impact of the new guidance.

In June 2016, the FASB issued a new credit loss standard that replaces the incurred loss impairment methodology in current GAAP. The new impairment model requires immediate recognition of estimated credit losses expected to occur for most financial assets and certain other instruments. It is effective for annual reporting periods beginning after December 15, 2019 and interim periods within those annual periods. Early adoption for fiscal years beginning after December 15, 2018 is permitted. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first effective reporting period. The Company is currently evaluating the impact of the new guidance.

In February 2016, the FASB issued new lease accounting guidance in ASU No. 2016-02, “Leases”. This new guidance was initiated as a joint project with the International Accounting Standards Board to simplify lease accounting and improve the quality of and comparability of financial information for users. This new guidance would eliminate the concept of off-balance sheet treatment for “operating leases” for lessees for the vast majority of lease contracts. Under ASU No. 2016-02, at inception, a lessee must classify all leases with a term of over one year as either finance or operating, with both classifications resulting in the recognition of a defined “right-of-use” asset and a lease liability on the balance sheet. However, recognition in the income statement will differ depending on the lease classification, with finance leases recognizing the amortization of the right-of-use asset separate from the interest on the lease liability and operating leases recognizing a single total lease expense. Lessor accounting under ASU No. 2016-02 would be substantially unchanged from the previous lease requirements under GAAP. ASU No. 2016-02 will take effect for public companies in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted and for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on the consolidated financial statements.

In May 2014, the FASB issued their converged standard on revenue recognition, Accounting Standards Update No. 2014-09, “Revenue from Contracts with Customers (Topic 606)”, updated in December 2016 with the release of ASU 2016-20. This standard outlines a single comprehensive model for companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The core principle of the revenue model is that an entity recognizes revenue to depict the transfer of promised goods and services in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the FASB issued ASU No 2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted but not before the original effective date.

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.

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 7A. Quantitative and Qualitative Disclosures about Market Risk

Not applicable to smaller reporting companies.

Item 8. Financial Statements

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Consolidated Financial Statements

For the Years Ended November 30, ~~2017~~2018 and ~~2016~~2017

Reports of Independent Registered Public Accounting Firms	F-1
Consolidated Balance Sheets	F-34
Consolidated Statements of Operations	F-45
Consolidated Statements of Stockholders’ Deficit	F-56
Consolidated Statements of Cash Flows	F-67
Notes to the Consolidated Financial Statements	F-78

912

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the ~~Directors~~Board ~~and~~of ~~Stockholders~~Directors ofand

Stockholders of Gala ~~Global~~Pharmaceutical, Inc. (~~now~~formerly ~~known as~~ Gala ~~Pharmaceutical~~Global, Inc.)

Las Vegas, NV

We have audited the accompanying consolidated balance sheet of Gala Global, Inc. (now known as Gala Pharmaceutical, Inc.) as of November 30, 2016 and the related consolidated statements of operations, changes in stockholders’ deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Gala Global, Inc. (now known as Gala Pharmaceutical, Inc.) as of November 30, 2016 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has suffered continuing losses and has yet established a reliable, consistent and proven source of revenue to meet its operating costs on an ongoing basis and currently does not have sufficient available funding to fully implement its business plan. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Pritchett, Siler & Hardy, P.C.

Pritchett, Siler & Hardy, P.C.

Salt Lake City, Utah

March 9, 2017

F-1

To the Board of Directors and Stockholders of Gala Pharmaceutical, Inc. (formerly Gala Global, Inc.)

Opinion on the Financial Statements

We have audited the accompanying balance sheet of Gala Pharmaceutical, Inc. (formerly Gala Global, Inc.) (the Company) as of November 30, 2017, and the related statement of operations, stockholders’ deficit, and cash flows for the year ended November 30, 2017, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2017, and the results of its operations and its cash flows for the year ended November 30, 2017, in conformity with accounting principles generally accepted in the United States of America.

Consideration of the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1 to the financial statements, the Company has recurring losses, negative working capital and negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1 to the financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. If the Company is unable to obtain financing, there could be a material adverse effect on the Company.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

F-1

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

Consideration of the Company’s Ability to Continue as a Going Concern

/s/ Haynie & Company

Haynie & Company

We have served as the Company’s auditor since 2017.

Salt Lake City, Utah April 5, 2018

April 5, 2018

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

Gala Pharmaceutical, Inc. (formerly Gala Global, Inc.)

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Gala Pharmaceutical, Inc., (formerly Gala Global, Inc.) (the "Company"), as of November 30, 2018, and the related consolidated statements of operations, stockholders' deficit and cash flows for the fiscal year ended November 30, 2018 and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of November 30, 2018, and the results of its operations and its cash flows for the fiscal year ended November 30, 2018, in conformity with accounting principles generally accepted in the United States of America.

The Company's Ability to Continue as a Going Concern

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1 to the accompanying financial statements, the Company has suffered recurring losses from operations, generated negative cash flows from operating activities, has an accumulated deficit that raise substantial doubt exists about Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans in regarding these matters are also described in Note I. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The company is not required to have, nor were we engaged to perform, an audit of the Company's internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provide a reasonable basis for our opinion.

/s/ RBSM LLP

RBSM LLP

We have served as the Company's auditor since 2018

Larkspur, CA
April 15, 2019

F-3

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Consolidated Balance Sheets

	November 30, 2017 $			November 30, 2016 $
	November 30, 2018 $			November 30, 2017 $
ASSETS
Current assets
Cash		7116,~~767~~198			107,~~841~~767
Inventory		~~2,241~~–			2,241
Prepaid expenses		~~41,908~~–			–41,908
Prepaid expenses – related parties		1069,000			–10,000
Total current assets		61,916			13,082
Marketable securities		41,800			–
Equipment, net of accumulated depreciation		46,060			–
Total current assets		226,998			61,916
Total assets		107,976			13,082
Equipment, net of accumulated depreciation		35,160			46,060
Total assets		262,158			107,976
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued liabilities		3482,~~556~~275			2034,~~052~~556
Accounts payable and accrued liabilities – related party		6149,~~475~~761			9461,~~039~~475
Due to related parties		48,367			249,835
Deferred rent		29,096			–
Loans payable		42,000			75,000
Due to related parties		203,688			48,367
Loans payable - related parties		20,764			22,264
Loans payable		42,000			42,000
Convertible note		353,629			–
Loans payable – related parties		5,764			20,764
Derivative liabilities		453,005			–
Warrant Liability		5,694			–
Total liabilities		1,013,796			461,190
Convertible note, net of discount of $76,903 and $nil, respectively		244,477			353,629
Derivative liabilities		458,109			453,005
Total liabilities		1,120,864			1,013,796
Commitments and Contingencies
STOCKHOLDERS’ DEFICIT
STOCKHOLDERS DEFICIT
Preferred stock Authorized: 10,000,000 shares with a par value of $0.001 per share Issued and outstanding: 500,000 and 500,000 shares, respectively		500			500
Common stock Authorized: 500,000,000 shares with a par value of $0.001 per share Issued and outstanding: 35,701,561 and 1,369,224 shares, respectively		35,702			1,369
Common stock Authorized: 500,000,000 shares with a par value of $0.001 per share Issued and outstanding: 92,011,666 and 35,701,590 shares, respectively		92,012			35,702
Additional paid-in capital		24,~~417~~290,~~400~~722			~~786~~2,~~736~~417,400
Common stock issuable		~~25,000~~–			–25,000
Deferred compensation – related party		(165,853	)		–
Deferred compensation		(117,021	)		(165,853	)
Accumulated deficit		(3,218,569	)		(1,236,713	)
Deficit		(5,077,446	)		(3,218,569	)
Total stockholders’ deficit		(905,820	)		(448,108	)
Total stockholders’ deficit attributable to Gala Pharmaceutical Inc.		(811,233	)		(905,820	)
Total liabilities and stockholders’ deficit		107,976			13,082
Non-controlling interest		(47,473	)		–
Total liabilities and stockholders’ deficit		262,158			107,976

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

F-34

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Consolidated Statements of Operations

	Year ended November 30, 2017 $			Year ended November 30, 2016 $
	Year ended November 30, 2018 $			Year ended November 30, 2017 $
Revenue		4,675			–
Cost of revenue		3,216			–
Gross Profit		1,459			–
Operating expenses
Consulting fees		~~132~~359,~~944~~755			17132,~~500~~944
Consulting fees – related party		~~364,733~~895.494			26364,~~354~~733
Depreciation		510,~~389~~900			–5,389
General and administrative		89264,~~740~~821			5089,~~028~~740
General and administrative – related party		~~187~~103,~~393~~405			36187,~~000~~393
Rent		18,085			38,550
Impairment of inventory		2,241			–
Total operating expense		798,284			168,432
Rent		81,799			18,085
Loss before other expense		(798,284	)		(168,432	)
Total operating expense		1,718,415			798,284
Other expense
Loss before other income (expense)		(1,716,956	)		(798,284	)
Change in fair value of derivative liabilities		(277,578	)		–
Other income (expense)
Interest expense		(393,107	)		(1,744	)
Change in fair value of derivative liabilities		(257,861	)		(277,578	)
Loss on settlement of debt		(93,050	)		–
Interest expense		(74,459	)		(393,107	)
Loss on settlement of debt – related party		(366,540	)		–
Gain on sale of subsidiaries		71,800			–
Loss on dissolution of proposed acquisition		(53,297	)		–
Gain (loss) on settlement of debt		152,626			(93,050	)
Total other expense		(1,183,572	)		(1,744	)
Loss on settlement of debt – related party		–			(366,540	)
Net loss		(1,981,856	)		(170,176	)
Loss on dissolution of proposed acquisition		–			(53,297	)
Net loss per share, basic and diluted		(0.09	)		(0.12	)
Other income		12,500			–
Weighted average common shares outstanding		21,250,299			1,369,224
Settlement expense		(64,000	)		–
Unrealized loss on marketable securities		(30,000	)		–
Total other income (expense)		(189,394	)		(1,183,572	)
Net loss		(1,906,350	)		(1,981,856	)
Less: loss attributed to non-controlling interest		47,473			–
Net loss to Gala Pharmaceutical Inc.		(1,858,877	)		(1,981,856	)
Net loss per share, basic and diluted		(0.03	)		(0.09	)
Weighted average common shares outstanding, basic and diluted		57,433,292			21,250,299

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

F-45

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Consolidated Statements of Changes in Stockholders’ Deficit

	Preferred stock	~~Preferred stock~~					Common stock		~~Common stock~~		Additional paid-in			Common Stock		~~Additional paid-in~~	Deferred			~~Common~~Non- ~~Stock~~controlling				~~Deferred~~				~~Accumulated~~
	Shares	~~Shares~~		Par Value		~~Par Value~~	Shares		~~Shares~~Par value		capital	~~Par value~~		Issuable		~~capital~~	Compensation			~~Issuable~~Interest			Deficit	~~Compensation~~		Total		~~deficit~~			~~Total~~
	#	#		$		$	#		#$		$	$		$		$	$			$			$	$		$		$			$
Balance, November 30, 2015			–				–			1,300,474			1,300				601,248				–				–				(1,066,537	)		(463,989	)
Balance, November 30, 2016		500,000			500			1,369,253		1,369		786,736			–			–			–			(1,236,713	)		(448,108	)
Shares issued for consulting services – related party			–				–			43,750			44				70,893				–				–				–			70,937
Shares issued for cash		–			–			2,000,000		2,000		168,000			–			–			–						170,000
Shares issued for consulting services			–				–			25,000			25				42,475				–				–				–			42,500
Shares issued for consulting services – related party		–			–			24,500,000		24,500		465,500			–			–			–			–			490,000
Shares issued for conversion of debt			500,000				500			–			–				72,120				–				–				–			72,620
Shares issued for consulting services		–			–			3,000,000		3,000		57,000			–			–			–			–			60,000
Net loss for the year			–				–			–			–				–				–				–				(170,176	)		(170,176	)
Shares issued for consulting services – prepaid		–			–			2,000,000		2,000		38,000			–			–			–			–			40,000
Balance, November 30, 2016			500,000				500			1,369,224			1,369				786,736				–				–				(1,236,713	)		(448,108	)
Shares issued for settlement of debt		–			–			424,875		425		127,037			–			–			–			–			127,462
Shares issued for cash			–				–			2,000,000			2,000				168,000				–				–				–			170,000
Shares issued for settlement of debt – related party		–			–			2,007,452		2,008		712,954			–			–			–			–			714,962
Shares issued for deferred compensation– related party			–				–			24,500,000			24,500				465,500				–				–				–			490,000
Shares issued from exercise of warrants		–			–			400,000		400		(400	)		–			–			–			–			–
Shares issued for consulting services - prepaid			–				–			5,000,000			5,000				38,000				–				–				–			40,000
Shares issuable for consulting services		–			–			–		–		–			25,000			–			–			–			25,000
Shares issued for consulting services			–				–			3,000,000			3,000				57,000				–				–							60,000
Deferred compensation		–			–			–		–		–			–			(165,853	)		–			–			(165,853	)
Shares issued for settlement of debt			–				–			424,875			425				127,037				–				–				–			127,462
Fair value of warrants granted		–			–			–		–		74,573			–			–			–			–			74,573
Shares issued for settlement of debt – related party			–				–			2,007,452			2,008				712,954				–				–				–			714,962
Finders’ fees		–			–			–		–		(12,000	)		–			–			–			–			(12,000	)
Shares issued from exercise of warrants			–				–			400,000			400				(400	)			–				–				–			–
Net loss for the year		–			–			–		–		–			–			–			–			(1,981,856	)		(1,981,856	)
Shares issuable for consulting services			–				–			–			–				–				25,000				–				–			25,000
Balance, November 30, 2017		500,000			500			35,701,590		35,702		2,417,400			25,000			(165,853	)		–			(3,218,569	)		(905,820	)
Deferred compensation			–				–			–			–				–				–				(165,853	)			–			(165,853	)
Shares issued for cash		–			–			27,250,000		27,250		492,750			–			–			–			–			520,000
Fair value of warrants granted			–				–			–			–				74,573				–				–				–			74,573
Shares issued for settlement of debt		–			–			4,143,409		4,143		365,989			–			–			–			–			370,132
Finders’ fees			–				–			–			–				(12,000	)			–				–				–			(12,000	)
Shares issued for consulting services		–			–			11,500,000		11,500		548,500			(25,000	)		–			–			–			535,000
Net loss for the year			–				–			–			–				–				–				–				(1,981,856	)		(1,981,856	)
Shares issued for consulting services – related party		–			–			13,416,667		13,417		466,083			–			–			–			–			479,500
Balance, November 30, 2017			500,000				500			35,701,561			35,702				2,417,400				25,000				(165,853	)			(3,218,569	)		(905,820	)
Deferred compensation		–			–					–		–			–			48,832			–			–			48,832
Net loss for the year		–			–			–		–		–			–			–			(47,473	)		(1,858,877	)		(1,906,350	)
Balance, November 30, 2018		500,000			500			92,011,666		92,012		4,290,722			–			(117,021	)		(47,473	)		(5,077,446	)		(858,706	)

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

F-56

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Consolidated Statements of Cash Flows

	Year Ended November 30, 2017 $			Year Ended November 30, 2016 $
	Year Ended November 30, 2018 $			Year Ended November 30, 2017 $
Operating activities
Net loss for the year		(1,~~981~~906,~~856~~350	)		(~~170~~1,~~166~~981,856	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of discount on convertible note		~~250~~3,~~000~~097			–250,000
Amortization of debt issuance costs		~~30,000~~–			–30,000
Change in fair value of derivative liability		~~277~~257,~~578~~861			–277,578
Amortization of deferred compensation		324,147			–
Common shares issued for services and compensation – related party		479,500			324,147
Common shares issued for services		60583,~~000~~832			–60,000
Common shares issuable for services		~~25,000~~–			–25,000
Depreciation		510,~~389~~900			–5,389
Loss on uncollectibility of loan receivable		20,000			–
Gain on sale of subsidiaries		(71,800	)		–
Loss on dissolution of proposed acquisition		53,297			–
Impairment of inventory		2,241			–
Loss on settlement of related party debt		366,540			2,064
Loss on uncollectibility of loan receivable		–			20,000
Loss on settlement of debt		93,050			–
Loss on dissolution of proposed acquisition		–			53,297
Penalty interest on default of convertible note		73,629			–
Loss on settlement of related party debt		–			366,540
Stock-based compensation		–			17,500
Loss (gain) on settlement of debt		(152,626	)		93,050
Stock-based compensation - related party		–			26,354
Penalty interest on default of convertible note		–			73,629
Unrealized loss on marketable securities		30,000			–
Changes in operating assets and liabilities:
Inventory		–			460
Prepaid expenses		41,908			(1,908	)
Prepaid expenses		(1,908	)		–
Prepaid expenses – related party		(59,000	)		(10,000	)
Prepaid expenses – related party		(10,000	)		–
Accounts payable and accrued liabilities		125,471			35,417
Accounts payable and accrued liabilities		35,417			17,002
Accounts payable and accrued liabilities – related party		(11,714	)		56,022
Accounts payable and accrued liabilities – related party		56,022			36,293
Deferred rent		29,096			–
Net cash used in operating activities		(323,695	)		(70,503	)
Warrant liability		5,694			–
Net cash used in operating activities		(631,890	)		(323,695	)
Investing activities
Loan issued to related party		~~(20,000~~–	)		–(20,000	)
Purchase of equipment		~~(104,746~~–	)		–(104,746	)
					–
Net cash used in investing activities		–			(124,746	)
Net cash used in investing activities		(124,746	)		–
Financing activities
Proceeds from related party operating advances		28155,~~867~~321			~~640~~28,867
Repayments of related party operating advances		–			(6,100	)
Proceeds from convertible notes		80,000			250,000
Proceeds from convertible note		250,000			–
Proceeds from issuance of common shares		520,000			170,000
Proceeds from issuance of common shares		170,000			–
Payment of finder’s fee		–			(12,000	)
Payment of finder’s fee		(12,000	)		–
Proceeds from loan payable – related party		–			8,500
Proceeds from shares to be issued		–			10,000
Repayments of loan payable – related party		(15,000	)		–
Proceeds from loan payable – related party		8,500			–
Net cash provided by financing activities		740,321			445,367
Proceeds from loan payable		–			75,000
Increase (decrease) in cash		108,431			(3,074	)
Net cash provided by financing activities		445,367			79,540
Cash, beginning of period		7,767			10,841
Increase (decrease) in cash		(3,074	)		9,037
Cash, end of period		116,198			7,767
Cash, beginning of period		10,841			1,804
Supplemental disclosures (Note 11)
Cash, end of period		7,767			10,841

Supplemental disclosures (Note 11)

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

F-67

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

1.	Organization and Nature of Operations

Gala Pharmaceutical Inc. (~~formerly Gala Global Inc.) (~~the “Company” or “GPI”) was incorporated in the State of Nevada on March 10, 2010. The Company provides Testing or Analytical Chemistry tools for chemical, plant, soil, and liquid composition analysis. GPI provides analysis of compositional traits for hemp and cannabis products (cannabinoid, terpenes, pesticides, residual solvents and microbial). The analysis is being done at certified labs with persistent results.

The Company also provides genetic “fingerprinting” and “sequencing” of various crop species. This fingerprinting allows for storing genetic fingerprint information into a proprietary database. Customers can access genetic fingerprint data which can be used for predictive breeding applications and for protecting intellectual property (IP). Additionally, the Company can develop new genetics by using state of the art breeding technology and provides tissue culture and cloning services. These clones are guaranteed to be disease free, chemical free and healthy and robust.

Additionally, the Company provides consulting on testing and manufacturing lab designs and ~~standard operating procedures~~SOPs. The Company provides services to customers for building turnkey labs, drug formulations and troubleshooting. It has highly qualified professionals to bring productivity and efficiency within your current resources.

Going Concern

These consolidated financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As atof November 30, ~~2017~~2018, the Company has a working capital deficit of $~~951~~893,~~880~~866 and an accumulated deficit of $35,~~218~~077,~~569~~446. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2.	Summary of Significant Accounting Policies

(a)

Basis of Presentation

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

(b)

Principles of Consolidation

These consolidated financial statements include the accounts of the Company and its ~~wholly owned~~ subsidiaries: 51% ownership of Gala Pharmaceutical (California), Inc. (“Gala California”) from February 7, 2018 (date of incorporation) to current date, and 100% ownership of Cannabis Ventures Inc. (USA), Cannabis Ventures Inc. (Canada), and CBD Life, Inc. until the sale of these subsidiaries on June 20, 2018. All inter-company transactions and balances have been eliminated on consolidation and the proportionate net income/loss on the 49% non-controlling interest has been deducted from the Company’s net loss on the consolidated statement of operations commencing with a corresponding entry within stockholders’ deficit.

The preparation of consolidated financial statements in conformity with US GAAP requires preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of inventory, valuation of derivative liability and share-based compensation, and deferred income tax asset valuation allowances.

F-7

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, 2017 and 2016

2. Summary of Significant Accounting Policies (continued)

(c) Use of Estimates (continued) 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. (d) Inventory Inventory is comprised of Vape Mods purchased for resale, and is recorded at the lower of cost or net realizable value on a first-in first-out basis. The Company establishes inventory reserves for estimated obsolete or unsaleable inventory equal to the difference between the cost of inventory and the estimated realizable value based upon assumptions about future market conditions. (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 November 30, 2017 and 2016, there were no cash equivalents. (f) Financial Instruments The Company’s financial instruments consist principally of cash, accounts payable and accrued liabilities, loans payable to related parties, loans payable, and amounts due to related 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) Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Accounting for Income Taxes. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit 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 taxes 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. On December 22, 2017, the Tax Cuts and Jobs Act was enacted which reduced the corporate statutory tax rate from 34% to 21% commencing on January 1, 2018. The Company has used an effective tax rate of 34%. (h) Property and Equipment Property and equipment are stated at cost, and is presented net of accumulated depreciation. Depreciation is computed for financial reporting purposes using the straight-line method over the estimated useful lives of the assets. Repairs and maintenance that do not extend the useful life of property and equipment are charged to expense as incurred. When property and equipment are retired or otherwise disposed of, the asset and its accumulated depreciation are removed, and the resulting profit or loss is reflected in income. The estimated service lives of property and equipment are principally as follows:

Computers and equipment	3-5 years
Furniture & Fixtures	5-10 years

F-8

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

Summary of Significant Accounting Policies (continued)

	(i)	Fair Value of Financial Instruments
		The Company complies with the accounting guidance under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 820-10, Fair Value Measurements, as well as certain related FASB staff positions. This guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact business and considers assumptions that marketplace participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance.
		The guidance also establishes a fair value hierarchy for measurements of fair value as follows:
		Level 1 — quoted market prices in active markets for identical assets or liabilities.
		Level 2 — inputs other than Level I that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
		Level 3 — unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
		As of November 30, 2017, the Company had the following assets and liabilities measured at fair value on a recurring basis.

(c)

Use of Estimates

Total $

Level 1 $

Level 2 $

Level 3 $

Derivative Liability

453,005

–

453,005

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to the valuation of inventory, valuation of derivative liability and share-based compensation, and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

(jd) ~~Revenue~~Cash ~~Recognition The Company earns revenue from the sale of Vape Mods, which are modified electronic cigarettes~~ and ~~vape~~Cash pens. Revenue will be recognized only when the price is fixed and determinable, persuasive evidence of an arrangement exists, the service has been provided, and collectability is assured. The Company is not exposed to any credit risks as amounts are prepaid prior to performance of services. (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. (l) Deferred Compensation Deferred compensation is comprised of the fair value of common shares issued to officers and directors of the Company for which services have not been rendered. As services are rendered, the amounts in deferred compensation are expensed as incurred in the consolidated statements of operations. As at November 30, 2017, the Company recorded $165,853 (2016 - $nil) of deferred compensation.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 November 30, 2018 and 2017, there were no cash equivalents.

(e)

Equipment

Equipment is comprised of machinery and is recorded at the lower of cost or net book value and amortized on a straight-line basis over an estimated useful life of three to five years.

(f)

Financial Instruments

Pursuant to ASC 820, Fair Value Measurements and Disclosures, an entity is required to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. GRNH shares are quoted on the OTC Markets Pink Sheets.

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

F-9

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

Summary of Significant Accounting Policies (continued)

(mf) ~~Foreign~~Financial ~~Currency~~Instruments Translation The Company’s functional and reporting currency is the U.S. dollar. Monetary assets and liabilities of integrated operations and other monetary assets and liabilities denominated in foreign currencies are translated to U.S. dollars at exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at average rates for the period, except for amortization, which is translated on the same basis as the related asset. The resulting exchange gains or losses are recognized in the statements of operations. (ncontinued) 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. All effects of the reverse stock split discussed at Note 9(d) has been applied retroactively to calculations of basic and diluted net loss per share for periods presented. As at November 30, 2017, the Company had 2,659,468 (2016 – nil) potentially issuable shares from an outstanding convertible note, which are anti-dilutive. (o) Derivative Liability From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is recorded at its fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations (p) Beneficial Conversion Features From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method. (q) Recent Accounting Pronouncements The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3The Company’s financial instruments consist principally of cash, marketable securities, accounts payable and accrued liabilities, accounts payable and accrued liabilities – related parties, loans payable, loans payable – related parties, convertible debt, derivative liabilities, and amounts due to related parties. ~~Deferred~~Pursuant ~~Compensation~~to ASC 820, the fair value of cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

~~Deferred~~The ~~compensation is~~following ~~comprised~~table ofrepresents assets ~~common~~and ~~shares~~liabilities ~~issued~~that toare ~~officers~~measured and ~~directors~~recognized ofin ~~the~~fair ~~Company~~value ~~for~~as ~~compensation~~of ~~services. During the year ended~~ November 30, ~~2017~~2018, ~~the~~on ~~Company issued 24,500,000 common shares with~~ a ~~fair~~recurring ~~value~~basis of(see ~~$490,000~~footnote 2(f) ~~for~~- ~~compensation~~ASC ~~of which $324~~820,~~147 was~~ ~~expensed~~Fair ~~during~~Value ~~the~~Measurements ~~period~~ and ~~the remaining $165,853 was recorded as deferred compensation within shareholders’ equity.~~Disclosures):

	Level 1 $		Level 2 $		Level 3 $			Total gains and (losses)

Marketable securities		41,800		–		–			(30,000	)
Warrant liability		–		–		(5,694	)		–
Derivative liabilities		–		–		(458,109	)		(257,861	)

Total		41,800		–		(463,803	)		(287,861	)

The following table represents assets and liabilities that are measured and recognized in fair value as of November 30, 2017, on a recurring basis:

	Level 1 $		Level 2 $		Level 3 $			Total gains and (losses)

Derivative liabilities		–		–		(453,005	)		(277,578	)

Total		–		–		(453,005	)		(277,578	)

(g)

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.

(h)

Marketable Securities

Marketable securities consist of common shares of a publicly-traded company and are available-for-sale. The marketable securities are recorded at its fair value, with any corresponding unrealized gains and losses recorded in the statement of operations.

(i)

Revenue Recognition

The Company recognizes and accounts for revenue in accordance with ASC 606 as a principal on the sale of goods. Pursuant to ASC 606, revenue is measured based on a consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer.

F-10

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

42. ~~Equipment~~Summary of Significant Accounting Policies (continued)

Cost $

Accumulated amortization $

November 30, 2017 $

November 30, 2016 $

Machinery

52,869

6,809

46,060

–

(j)

Stock-based Compensation

~~During~~The ~~the~~Company records stock-based ~~year~~compensation ~~ended~~in ~~November~~accordance ~~30,~~with ~~2017~~ASC 718, Compensation – Stock Compensation using the ~~Company~~fair ~~recorded~~value $5method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued,~~389~~ ~~(2016~~whichever -is ~~$nil)~~more reliably measurable. Equity instruments issued to employees and the cost of ~~depreciation~~the ~~expense~~services received as consideration are measured and recognized based on the fair value of the equity instruments issued.

5.(k) ~~Convertible~~Comprehensive ~~Debenture~~Loss

OnASC ~~May~~220, 15Comprehensive Income, ~~2017,~~establishes ~~the~~standards ~~Company entered into a promissory note agreement with a non-related party~~ for ~~proceeds~~the ofreporting ~~$280,000, net of an original issuance discount~~ and ~~legal~~display ~~fees~~ of ~~$30,000~~comprehensive ~~which~~loss ~~were capitalized~~ and ~~amortized~~its ~~over~~components ~~the~~in ~~period of~~ the ~~convertible~~consolidated ~~debenture~~financial statements. ~~The~~As ~~promissory~~of ~~note~~November ~~is unsecured~~30, ~~bears~~2018 ~~interest at 10% per annum,~~ and ~~is due on November 30~~2017, ~~2017. The promissory note is convertible into common shares at~~ the ~~lesser of: (a) $0.35; or (b) 65% of the average of the three lowest volume weighted average price of the~~ Company’s ~~common~~has ~~shares~~no initems ~~the~~representing 20comprehensive ~~days~~income ~~preceding~~or ~~the notice of conversion limited by a conversion floor price of $0~~loss.~~05 per share.~~

~~The~~(l) ~~embedded~~Basic ~~conversion option qualifies for derivative accounting under ASC 815-15, Derivatives~~ and ~~Hedging.~~Diluted ~~The~~Net ~~fair~~Loss ~~value~~per of the derivative liability resulted in a full discount of the $250,000 based on the net proceeds received from promissory note. The carrying value of the convertible debenture was accreted over the term of the convertible debenture up to the face value of $280,000. The note is in default and now has a default interest rate of 22%. On November 30, 2017, a default penalty of $73,629 was applied as the Company defaulted on the convertible debenture. As at November 30, 2017, the carrying value of the convertible debenture was $353,629 and the unamortized discount on the convertible debenture was $nil.Share

6The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share. ~~Derivative~~ASC ~~Liability~~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 years ended November 30, 2018 and 2017. All effects of the reverse stock split discussed at Note 9(d) has been applied retroactively to calculations of basic and diluted net loss per share for periods presented. As of November 30, 2018, the Company had 12,254,104 (2017 – 2,659,468) potentially issuable shares from outstanding convertible notes.

The Company records the fair value of the conversion price of the convertible debentures, as disclosed in Note 5, in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative liability is revalued on each balance sheet date or upon conversion of the underlying convertible debenture into equity with corresponding gains and losses recorded in the consolidated statement of operations. The fair value of the derivative as of May 15, 2017 was $305,957 calculated using the binomial option pricing model. At inception, there was a debt discount related to the conversion feature of $175,427 and a loss on the derivative of $130,530. During the year ended November 30, 2017, the Company recorded a loss on the change in fair value of the derivative liability of $277,578 (~~2016 - $nil~~m). AsDerivative ~~at November 30, 2017, the Company had a derivative liability of $453,005 (2016 - $nil).~~Liability

Balance, November 30, 2016	$	–
Conversion feature at inception		175,427
Loss at inception		130,530
Change in fair value		147,048
Balance, November 30, 2017	$	453,005

From time to time, the Company may issue equity instruments that may contain an embedded derivative instrument which may result in a derivative liability. A derivative liability exists on the date the equity instrument is issued when there is a contingent exercise provision. The derivative liability is recorded at its fair value calculated by using an option pricing model such as a multi-nominal lattice model. The fair value of the derivative liability is then calculated on each balance sheet date with the corresponding gains and losses recorded in the consolidated statement of operations.

~~The~~Fair ~~following~~value ~~inputs~~of ~~and~~warrant ~~assumptions~~liability ~~were~~is ~~used~~based toon ~~value~~using the ~~convertible~~Black-Scholes ~~debentures outstanding during the year ended November 30, 2017:~~Model.

	Expected Volatility		Risk-free Interest Rate		Expected Dividend Yield		Expected Life (in years)
May 15, 2017 convertible debenture:
As at May 15, 2017 (date of issuance)		288%		1.02%		0%		0.5
As at November 30, 2017 (mark-to-market)		338%		1.27%		0%		0.3

(n)

Beneficial Conversion Features

From time to time, the Company may issue convertible notes that may contain an embedded beneficial conversion feature. A beneficial conversion feature exists on the date a convertible note is issued when the fair value of the underlying common stock to which the note is convertible into is in excess of the remaining unallocated proceeds of the note after first considering the allocation of a portion of the note proceeds to the fair value of the warrants, if related warrants have been granted. The intrinsic value of the beneficial conversion feature is recorded as a debt discount with a corresponding amount to additional paid in capital. The debt discount is amortized to interest expense over the life of the note using the effective interest method.

F-11

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

72. ~~Related~~Summary ~~Party~~of ~~Transactions~~Significant Accounting Policies (continued)

~~a) As at November 30, 2017, the Company owed $48,367~~ (~~2016 - $249,835~~o) toConcentration ~~a company controlled by a significant shareholder~~ of ~~the~~Credit Company to fund payment of operating expenditures. During the year ended November 30, 2017, the Company settled $249,835 of related party debt with the issuance of 1,387,970 common shares. Refer to Note 9(c). The remaining amount owed is unsecured, non-interest bearing, and due on demand.Risk

b)The ~~As at November 30, 2017, the~~ Company ~~owed~~may ~~$17,000~~hold ~~(2016~~balances that -are ~~$nil)~~in toexcess ~~the~~of ~~former~~FDIC ~~Chief~~insured ~~Executive~~limits. ~~Officer~~As of ~~the~~November ~~Company for compensation and consulting services~~30, ~~which~~2018 ~~has been recorded in accounts payable~~ and ~~accrued liabilities – related parties. The amounts owing are unsecured~~2017, ~~non-interest~~the ~~bearing,~~Company ~~and~~had ~~due~~no onuninsured ~~demand~~balances.

~~c) As at November 30, 2017, the Company owed $25,000~~ (~~2016 - $79,333~~p) toRecent aAccounting significant shareholder of the Company, which has been recorded in accounts payable and accrued liabilities - related parties. The amount owed is unsecured, non-interest bearing, and due on demand. During the year ended November 30, 2017, the Company incurred $177,295 (2016 - $36,000) of consulting expense relating to services provided to the Company. In August 2017, the Company settled $88,333 of related party debt with the issuance of 490,742 common shares.Pronouncements

d)In AsAugust at2018, ~~November~~the ~~30,~~FASB ~~2017,~~issued guidance to improve the ~~Company~~effectiveness ~~owed~~of ~~$5,625~~fair ~~(2016~~value -measurement $5disclosures by removing or modifying certain disclosure requirements and adding other requirements. The guidance is effective for fiscal years,~~625)~~ toand aninterim ~~officer~~periods ofwithin ~~the~~those ~~Company~~fiscal years, ~~which~~beginning after ~~has~~December ~~been~~15, ~~recorded~~2019, inwith ~~accounts~~early ~~payable~~adoption ~~and~~permitted. ~~accrued~~Certain ~~liabilities~~amendments –should ~~related~~be ~~parties~~applied prospectively, while all other amendments should be applied retrospectively to all periods presented. The ~~amount~~Company ~~owing~~ is ~~unsecured,~~currently ~~non-interest~~evaluating ~~bearing,~~the ~~and~~impact ~~due~~of onthe ~~demand~~new guidance.

e)In AsFebruary at2018, ~~November~~the ~~30,~~FASB ~~2017,~~issued guidance that permits the Company ~~owed~~to ~~$18,500~~reclassify ~~(November~~disproportionate ~~30,~~tax ~~2016~~effects -in ~~$10,000)~~accumulated toother acomprehensive ~~company~~income ~~controlled~~caused by the aTax ~~significant~~Cuts ~~shareholder~~and Jobs Act of ~~the~~2017 ~~Company~~to retained earnings. The ~~amount~~guidance ~~owed~~ is ~~unsecured,~~effective ~~non-interest~~for ~~bearing~~fiscal years, and ~~due~~interim onperiods ~~demand~~within those fiscal years, beginning after December 15, 2018, with early adoption permitted. The Company is currently evaluating the impact of the new guidance.

f)In AsJuly ~~at November 30,~~ 2017, the ~~Company~~FASB ~~owed~~issued ASU ~~$2,064~~2017-11 ~~(2016~~which -simplifies ~~$2,064)~~the toaccounting afor ~~significant~~certain ~~shareholder~~financial ofinstruments ~~the~~with ~~Company~~down round features. The ~~amount~~new isstandard ~~unsecured,~~will ~~bears~~reduce income ~~interest~~statement atvolatility 3%for ~~per~~companies ~~annum,~~that ~~and~~issue ~~due~~warrants ~~180~~and ~~days~~convertible ~~from~~instruments ~~the~~containing ~~date~~such ~~of issuance~~features. AsThe atguidance is ~~November~~effective ~~30,~~for ~~2017,~~fiscal ~~accrued~~years ~~interest~~beginning ofafter ~~$82~~December ~~(November 30~~15, ~~2016~~2018 -with ~~$15)~~early ~~has~~adoption ~~been~~permitted. ~~included~~The inCompany ~~accounts~~is ~~payable~~currently ~~and~~evaluating the ~~accrued~~impact ~~liabilities,~~of ~~related~~the ~~parties~~new guidance.

g)In AsJune at2016, ~~November~~the ~~30,~~FASB ~~2017,~~issued a new credit loss standard that replaces the ~~Company~~incurred ~~owed~~loss ~~$12,500~~impairment ~~(2016~~methodology -$in ~~nil)~~current toGAAP. ~~the~~The ~~Chief~~new ~~Operating~~impairment ~~Officer~~model requires immediate recognition of ~~the~~estimated ~~Company~~credit losses expected to occur for ~~consulting~~most ~~services,~~financial ~~which~~assets ~~has~~and ~~been~~certain ~~recorded~~other ininstruments. ~~accounts~~It is ~~payable~~effective for annual reporting periods beginning after December 15, 2019 and ~~accrued~~interim ~~liabilities~~periods –within ~~related~~those ~~parties~~annual periods. ~~The~~Early adoption ~~amounts~~for ~~owing~~fiscal ~~are~~years ~~unsecured~~beginning after December 15, ~~non~~2018 is permitted. Entities will apply the standard’s provisions as a cumulative-~~interest~~effect ~~bearing,~~adjustment ~~and~~to ~~due~~retained onearnings ~~demand~~as of the beginning of the first effective reporting period. The Company is currently evaluating the impact of the new guidance.

h)In AsFebruary at2016, ~~November~~the ~~30,~~FASB ~~2017,~~issued new ~~the~~lease ~~Company~~accounting ~~owed~~guidance ~~$1,195~~in ~~(2016~~ASU No. 2016-02, ~~$nil)~~“Leases”. This new guidance was initiated as a joint project with the International Accounting Standards Board to simplify lease accounting and improve the ~~Chief~~quality ~~Executive~~of ~~Officer~~and comparability of financial information for users. This new guidance would eliminate the ~~Company~~concept of off-balance sheet treatment for ~~services~~“operating leases” for lessees for the vast majority of lease contracts. Under ASU No. 2016-02, ~~which~~at ~~has~~inception, ~~been~~a ~~recorded~~lessee must classify all leases with a term of over one year as either finance or operating, with both classifications resulting in ~~accounts~~the ~~payable~~recognition of a defined “right-of-use” asset and ~~accrued~~a ~~liabilities~~lease –liability ~~related~~on ~~parties~~the balance sheet. ~~The~~However, ~~amounts~~recognition ~~owing~~in ~~are~~the ~~unsecured~~income statement will differ depending on the lease classification, ~~non~~with finance leases recognizing the amortization of the right-of-use asset separate from the interest ~~bearing~~on the lease liability and operating leases recognizing a single total lease expense. Lessor accounting under ASU No. 2016-02 would be substantially unchanged from the previous lease requirements under GAAP. ASU No. 2016-02 will take effect for public companies in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted and ~~due~~for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. The Company is currently evaluating the new guidance and has not determined the impact this standard may have on ~~demand~~the consolidated financial statements.

i) As at November 30, 2017, the Company owed $nil (2016 - $10,000) to the spouse of a former significant shareholder of the Company for a note issued on September 21, 2016. Under the terms of the note, the amount due was unsecured, bore interest at 3% per annum, and was due 180 days from the date of issuance. In July 2017, the Company issued 128,750 common shares with a fair value of $38,625 to settle $10,000 of principal balance and $254 of accrued interest.

F-12

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

72. ~~Related~~Summary ~~Party~~of ~~Transactions~~Significant Accounting Policies (continued)

j(p) OnRecent ~~May~~Accounting 8,Pronouncements ~~2017, the Company entered into an agreement whereby the Company agreed to acquire 80% of the issued and outstanding common stock of Controlled Environment Genomics Inc~~ (~~"CEG Inc"~~continued), in exchange for a new series of the Company’s preferred shares, and issue 5,000,000 restricted common shares in exchange for CEG's intellectual property. In the event that CEG, Inc. becomes its own public entity, the executive shall receive 51% ownership of the new entity, and the Company will retain the remaining 49%. As at November 30, 2017, the agreement to acquire the common stock of CEG Inc. was cancelled and costs of $53,297 relating to the proposed acquisition was expensed as incurred.

k)In ~~During~~January 2016, the ~~year~~FASB ~~ended~~issued new ~~November~~guidance 30which amends various aspects of the recognition, ~~2017~~measurement, presentation, and disclosure of financial instruments. With respect to the Company’s ~~issued~~consolidated 24financial statements,~~500,000~~ ~~common~~the ~~shares~~most ~~with~~significant aimpact ~~fair~~relates ~~value~~to ofthe ~~$490,000~~accounting tofor equity ~~officers~~investments ~~and~~(other ~~directors~~than ofthose that are consolidated or accounted under the ~~Company~~equity asmethod) ~~compensation~~which ~~for~~will ~~services~~be measured at fair value through earnings. The new guidance is effective for aannual ~~period~~reporting ofperiods, ~~one~~and ~~year.~~interim Asperiods atwithin ~~November~~those 30years beginning after December 15, 2017, ~~the~~with ~~Company~~early ~~recorded~~adoption ~~$165,853~~permitted asonly ~~deferred~~for ~~compensation~~certain ~~within~~provisions. ~~shareholders’~~The ~~equity.~~amendments ~~During~~should be applied by means of a cumulative-effect adjustment to the ~~year~~balance ~~ended~~sheet ~~November~~as ~~30,~~of ~~2017,~~the beginning of the ~~Company~~fiscal ~~recorded~~year ~~$324~~of adoption,~~147~~ ~~(2016~~with -other ~~$nil)~~amendments ofrelated specifically ~~share~~to ~~based~~equity ~~compensation~~securities ~~expense~~without readily determinable fair values applied prospectively. The adoption is not expected to have a material impact on the Company's consolidated financial statements.

l)In ~~During~~May 2014, the ~~year~~FASB issued ~~ended~~their ~~November~~converged ~~30,~~standard ~~2017~~on revenue recognition, ~~the~~Accounting ~~Company~~Standards ~~loaned~~Update ~~$20~~No. 2014-09,~~000~~ “Revenue from Contracts with Customers (~~2016-~~Topic ~~$nil~~606)”, toupdated ain ~~company~~December ~~controlled~~2016 bywith the ~~former~~release ~~Chief~~of ~~Executive~~ASU ~~Officer~~2016-20. ofThis ~~the~~standard outlines ~~Company~~a single comprehensive model for ~~day-~~companies to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-~~day~~specific ~~expenses~~guidance. The ~~amount~~core ~~owing~~principle of the revenue model is ~~unsecured,~~that ~~non-interest~~an ~~bearing,~~entity recognizes revenue to depict the transfer of promised goods and ~~due~~services onin ~~demand~~an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods and services. AsIn addition, atthe ~~November~~new 30standard requires that reporting companies disclose the nature, ~~2017~~amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, the ~~Company~~FASB ~~recorded~~issued anASU ~~impairment~~No ~~charge~~2015-14 “Revenue from Contracts with Customers (Topic 606): Deferral of ~~$20,000~~the ~~due~~Effective toDate," which deferred the ~~unlikelihood~~effective date of ~~collecting~~ASU ~~outstanding~~2014-09 ~~amounts~~to ~~owed~~annual toreporting periods beginning after December 15, 2017, with earlier application permitted but not before the ~~Company~~original effective date.

8.The ~~Loans~~Company ~~Payable~~has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

~~a) On December 29, 2015, the Company issued a $20,000 promissory note to an unrelated party. Under the terms of the note, the amount due is unsecured, bears interest at~~ 3~~% per annum, and was due 180 days from the date of issuance and was considered to be in default~~. OnSale ~~July 21, 2017, the Company issued 965,625 common shares with a fair value~~ of ~~$77,250 to settle outstanding principal amount of $20,000 and accrued interest of $966 resulting in a loss on settlement of debt of $56,284.~~Subsidiaries

b) On ~~April~~June 1920, ~~2016~~ 2018, the Company ~~issued~~approved ~~a $3,000 promissory note to an unrelated party. Under~~ the ~~terms~~sale of ~~the~~its ~~note~~wholly-owned subsidiaries, ~~the~~Cannabis ~~amount due is unsecured~~Ventures, ~~bears~~Inc. ~~interest~~(USA) atand 3%Cannabis ~~per annum~~Ventures, ~~and~~Inc. (Canada) ~~was~~including ~~due~~any ~~180~~and ~~days~~all ~~from~~of ~~the~~its ~~date~~rights, oftitle ~~issuance~~ and ~~was~~interest ~~considered~~in toexchange befor in2,000,000 ~~default.~~common Onshares ~~July~~of ~~21,~~Greengro ~~2017~~Technologies Inc., ~~the~~a ~~Company~~company ~~issued~~with ~~37,500~~ common ~~shares~~shareholders, ~~with~~at athe fair value of $1171,~~587~~800, towhich ~~settle~~has ~~outstanding~~been ~~principal~~recorded ~~amount~~as ofa ~~$3,000~~gain ~~and~~on ~~accrued~~sale ~~interest~~ of ~~$116~~subsidiaries since ~~resulting~~the insubsidiaries ahad ~~loss~~no onassets ~~settlement~~or ~~of debt of $8,471~~liabilities.

~~c) On April 22, 2016, the Company issued a $22,000 promissory note to an unrelated party~~4. ~~Under~~Deferred the terms of the note, the amount due is unsecured, bears interest at 3% per annum, and was due 180 days from the date of issuance and is now considered in default. As at November 30, 2017, the outstanding balance of the promissory note was $22,000 (2016 - $22,000) and accrued interest of $1,093 (2016 - $409) was recorded in accounts payable and accrued liabilities.Compensation

d)Deferred Oncompensation is ~~June~~comprised 3,of ~~2016,~~common ~~the~~shares ~~Company~~ issued ato ~~$20,000~~officers ~~promissory~~and ~~note~~directors toof anthe ~~unrelated~~Company ~~party~~for compensation services. ~~Under~~During the ~~terms~~year ofended November ~~the~~30, ~~note~~2018, the ~~amount~~Company ~~due~~issued ~~is unsecured~~6,000,000 ~~bears~~(2017 ~~interest~~- ~~at 3% per annum~~24,500,000) ~~and~~common ~~was~~shares ~~due~~with ~~180~~a ~~days~~fair ~~from~~value ~~the date~~ of ~~issuance and considered in default. As at November 30~~$232,500 (2017, ~~the~~- ~~outstanding~~$490,000) for ~~balance~~compensation of ~~the~~which ~~promissory note was~~ $20281,~~000~~334 (~~2016~~2017 - $20324,~~000~~146) ~~and~~was ~~accrued~~expensed ~~interest~~during ofthe period and the remaining $~~901~~117,021 (~~2016~~2017 - $~~282~~165,853) was recorded inas ~~accounts~~deferred ~~payable~~compensation ~~and~~within ~~accrued~~shareholders’ ~~liabilities~~equity.

e) On June 23, 2016, the Company issued a $10,000 promissory note to an unrelated party. Under the terms of the note, the amount due is unsecured, bears interest at 3% per annum, and was due 180 days from the date of issuance and was considered in default. On July 21, 2017, the Company issued 125,000 common shares with a fair value of $38,625 to settle outstanding principal amount of $10,000 and accrued interest of $331 resulting in a loss on settlement of debt of $28,294.

F-13

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

95. ~~Common Shares~~Equipment

Stock transactions for the year ended November 30, 2017:

	Cost $		Accumulated amortization $		November 30, 2018 $		November 30, 2017 $

Machinery		51,449		16,289		35,160		46,060

~~(a)~~During ~~On January 30, 2017,~~ the year ~~Company~~ended ~~effected~~November ~~a share consolidation on a 100 old shares for 1 new share basis. The share consolidation has been applied retroactively to the earliest period presented. (b) On March 22~~30, ~~2017~~2018, the Company issued 490,742 common shares with a fair value of $176,667 to settle outstanding debt of $88,333 owed to a significant shareholder of the Company. The transaction resulted in a loss on settlement of debt of $88,334, which was recorded ~~in the consolidated statement of operations. (c) On March 22, 2017, the Company issued 1,387,970 common shares with a fair value of~~ $~~499~~10,~~670~~900 to settle outstanding debt of $249,835 owed to a company controlled by a significant shareholder of the Company. The transaction resulted in a loss on settlement of debt of $249,835, which was recorded in the consolidated statement of operations. (~~d) On March 30,~~ 2017, ~~the~~- ~~Company issued 10,000,000 common shares with a fair value of~~ $~~200~~5,000 to a significant shareholder of the Company for compensation services for a period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $65,205 has been recorded in deferred compensation and $134,795 has been expensed. (e389) ~~On March 30, 2017, the Company issued 10,000,000 common shares with a fair value~~ of ~~$200,000~~depreciation ~~to a significant shareholder of the Company for compensation services for a period of twelve months from the date of issuance~~expense. As ~~at November 30, 2017, deferred compensation~~ of $65,205 has been recorded and $134,795 has been expensed.. (f) On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Financial Officer of the Company for compensation services for a period of twelve months from the date of issuance. As at November 30, ~~2017~~2018, ~~deferred compensation of $9,171 has been recorded and $20,219 has been expensed. (g) On March 30, 2017,~~ the Company issued 1,500,000 common shares with a fair value of $30,000 to a director of the Company for compensation services for a period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $9,781 has been recorded ~~and~~accumulated ~~$20,219~~amortization ~~has been expensed. (h) On July 6, 2017, the Company issued 1,500,000 common shares at $0.08 per common share pursuant to private placement for proceeds~~ of $~~120~~16,~~000.~~289 ~~Finder’s fees of $12,000 were paid related to this transaction which reduced additional paid in capital by the same amount.~~ (~~i) On June 12,~~ 2017, ~~the~~- ~~Company issued 2,000,000 common shares for consulting services over a twelve month period with a fair value of~~ $406,~~000. As of November 30, 2017 prepaid expense for these shares is $21,175. (j~~809) On June 13, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the former Chief Operating Officer of the Company for compensation services for a period of twelve months from the date of issuance. As at November 30, 2017, deferred compensation of $15,881 has been recorded and $14,119 has been expensed. (k) On July 21, 2017, the Company issued 553,625 common shares with a fair value of $166,088 to settle outstanding promissory notes and accrued interest of $44,666 resulting in a loss on settlement of debt of $121,422, including 128,750 common shares with a fair value of $38,625 to settle outstanding promissory notes and accrued interest of $10,254 resulting in a loss on settlement of debt of $28,371 to a related party.

Convertible Debentures

(a)

On May 15, 2017, the Company entered into a promissory note agreement with a non-related party for proceeds of $280,000, net of an original issuance discount and legal fees of $30,000 which were capitalized and amortized over the period of the convertible debenture. The promissory note is unsecured, bears interest at 10% per annum, and is due on November 30, 2017. The promissory note is convertible into common shares at the lesser of: (a) $0.35; or (b) 65% of the average of the three lowest volume weighted average price of the Company’s common shares in the 20 days preceding the notice of conversion limited by a conversion floor price of $0.05 per share.

The embedded conversion option qualifies for derivative accounting under ASC 815-15, Derivatives and Hedging. The fair value of the derivative liability resulted in a full discount of the $250,000 based on the net proceeds received from promissory note. The carrying value of the convertible debenture will be accreted over the term of the convertible debenture up to the face value of $280,000. On November 30, 2017, a default penalty of $73,629 was applied as the Company defaulted on the convertible debenture. During the year ended November 30, 2018, the Company issued 4,143,409 common shares for the conversion of $112,249 of principal balance and $77,751 of accrued interest. As of November 30, 2018, the carrying value of the convertible debenture was $241,380 (2017 - $353,629).

(b)

On June 6, 2018, the Company issued a callable secured convertible note for $15,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum, and is due on June 1, 2019. The note is also convertible into common shares of the Company at the lesser of: (a) $0.04; or (b) 50% of the lowest 3 trading prices during the 20 trading days prior to the date of conversion. Upon default of the note, the interest rate will increase to 15% per annum. In addition to the note, the Company also issued 30,000 share purchase warrants which entitles the note holder to acquire 30,000 common shares at $0.01 per common share for a period of seven years.

The embedded conversion option qualifies for derivative accounting under ASC 815-15, Derivatives and Hedging. The fair value of the derivative liability resulted in a full discount of the $15,000 based on the net proceeds received from promissory note. The carrying value of the convertible debenture will be accreted over the term of the convertible debenture up to the face value of $15,000. As of November 30, 2018, the carrying value of the convertible debenture was $1,675 (2017 - $nil) and the unamortized discount on the convertible debenture was $13,325 (2017 - $nil).

(c)

On July 24, 2018, the Company issued a callable secured convertible note for $15,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum, and is due on June 1, 2019. The note is also convertible into common shares of the Company at the lesser of: (a) $0.04; or (b) 50% of the lowest 3 trading prices during the 20 trading days prior to the date of conversion. Upon default of the note, the interest rate will increase to 15% per annum. In addition to the note, the Company also issued 30,000 share purchase warrants which entitles the note holder to acquire 30,000 common shares at $).01 per common share for a period of seven years.

F-14

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

96. ~~Common~~Convertible ~~Shares~~Debentures (continued)

	(l)	On September 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.
	(m)	On October 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.
	(n)	On October 20, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000.
	(o)	On October 23, 2017, the Company issued 400,000 common shares to settle the outstanding share purchase warrants which were issued as part of the issuance of the convertible debenture.
	(p)	On November 9, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000.
	(q)	At November 30, 2017, the Company had 3,000,000 common shares issuable for consulting services with a fair value of $300,000, of which $25,000 was recorded as consulting expense.
	Stock transactions for the year ended November 30, 2016:
	(r)	On December 23, 2015, the Company issued 12,500 shares of common stock with a fair value of $25,000 to a consultant pursuant to a consulting agreement dated May 1, 2015.
	(s)	On December 23, 2015, the Company issued 25,000 shares of common stock with a fair value of $39,063 to the Chief Financial Officer and director of the Company pursuant to the agreement dated September 1, 2015. 12,500 shares were issued for the consultant’s services as a director, and 12,500 shares for services as the Company’s Chief Financial Officer.
	(t)	On December 23, 2015, the Company issued 12,500 of shares of common stock with a fair value of $21,250 to the former Chief Executive Officer of the Company for the consultant’s services as a director pursuant to the consulting agreement dated September 1, 2015.
	(u)	On December 23, 2015, the Company issued 6,250 of shares of common stock with a fair value of $10,625 to the former Chief Executive Officer of the Company for services as the Company’s Chief Executive Officer pursuant to the consulting agreement dated June 29, 2015.

The embedded conversion option qualifies for derivative accounting under ASC 815-15, Derivatives and Hedging. The fair value of the derivative liability resulted in a full discount of the $15,000 based on the net proceeds received from promissory note. The carrying value of the convertible debenture will be accreted over the term of the convertible debenture up to the face value of $15,000. As of November 30, 2018, the carrying value of the convertible debenture was $1,089 (2017 - $nil) and the unamortized discount on the convertible debenture was $13,911 (2017 - $nil).

(d)

On November 10, 2018, the Company issued a callable secured convertible note for $50,000. Under the terms of the note, the amount owing is unsecured, bears interest at 12% per annum, and is due on November 10, 2019. The note is also convertible into common shares of the Company at the lesser of: (a) $0.04; or (b) 50% of the lowest 3 trading prices during the 20 trading days prior to the date of conversion. Upon default of the note, the interest rate will increase to 15% per annum.

The embedded conversion option qualifies for derivative accounting under ASC 815-15, Derivatives and Hedging. The fair value of the derivative liability resulted in a full discount of the $50,000 based on the net proceeds received from promissory note. The carrying value of the convertible debenture will be accreted over the term of the convertible debenture up to the face value of $15,000. As of November 30, 2018, the carrying value of the convertible debenture was $333 (2017 - $nil) and the unamortized discount on the convertible debenture was $49,667 (2017 - $nil).

7.	Derivative Liability

The Company records the fair value of the conversion price of the convertible debentures, as disclosed in Note 6, in accordance with ASC 815, Derivatives and Hedging. The fair value of the derivative liability is revalued on each balance sheet date or upon conversion of the underlying convertible debenture into equity with corresponding gains and losses recorded in the consolidated statement of operations. During the year ended November 30, 2018, the Company recorded a loss on the change in fair value of the derivative liability of $257,861 (2017 – $277,578). As of November 30, 2018, the Company had a derivative liability of $458,109 (2017 - $453,005).

The following inputs and assumptions were used to value the derivative liabilities outstanding during the years ended November 30, 2018 and 2017, assuming no dividend yield:

	November 30, 2018		November 30, 2017

Expected volatility		485%		338%
Risk free rate		2.52%		1.27%
Expected life (in years)		0.5		0.3

A summary of the activity of the derivative liability is shown below:

	$

Balance, November 30, 2017		453,005
Derivative loss due to new issuances		122,114
Adjustment for conversion		(374,871	)
Mark to market adjustment		257,861

Balance, November 30, 2018		458,109

F-15

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

98. ~~Common~~Related ~~Shares~~Party ~~(continued)~~Transactions

(va) OnAs ~~December~~of 23November 30, ~~2015~~2018, the Company ~~issued~~owed 12$203,~~500~~688 of(2017 ~~shares~~- of$48,367) ~~common~~to ~~stock~~a ~~with~~company controlled by a ~~fair~~significant ~~value~~shareholder of ~~$17,500~~the Company to afund ~~consultant~~payment ~~pursuant~~of tooperating aexpenditures. ~~consulting~~During ~~agreement~~the ~~dated~~year ~~December~~ended 14November 30, ~~2015~~2018, the Company received an additional $75,000 of financing. The amount owed is unsecured, non-interest bearing, and due on demand.

~~Preferred Shares~~b) As of November 30, 2018, the Company owed $43,000 (2017 - $25,000) to a significant shareholder of the Company, which has been recorded in accounts payable and accrued liabilities - related parties. The amount owed is unsecured, non-interest bearing, and due on demand. During the year ended November 30, 2018, the Company incurred $103,405 (2017 - $177,295) of consulting expense relating to services provided to the Company.

Onc) ~~January~~As 27of November 30, ~~2016~~2018, the Company ~~issued~~ ~~500,000~~owed ~~shares of preferred stock to significant shareholders to settle debt of~~ $725,~~620.~~625 ~~Each~~(2017 ~~preferred~~- ~~share is entitled to receive dividends when and if declared by the Company’s board of directors~~$5,625) ~~has 500~~ to 1an ~~voting~~officer ~~power and liquidation rights in the amount~~ of the ~~shares; par value in accordance with the~~ Company~~’s certificate of designation. Of the 500~~,~~000 shares~~ ~~issued,~~which ~~166,666~~has ~~shares~~been ~~were~~recorded ~~issued~~in toaccounts apayable ~~significant shareholder to settle outstanding payables to a significant shareholder of $24,167,~~ and ~~the~~accrued ~~remaining~~liabilities ~~333,334~~– ~~shares~~related ~~are~~parties. ~~issued~~The toamount ~~another~~owing ~~significant~~is ~~shareholder to settle debts of $42~~unsecured,~~638,~~ ~~$5,009, and~~non-interest ~~$806 described at Note 4 for a total of $48~~bearing,~~453~~ ~~in outstanding principal~~ and ~~accrued~~due ~~interest~~on demand.

10d) As of November 30, 2018, the Company owed $2,064 (2017 - $2,064) to a significant shareholder of the Company. ~~Share~~The ~~Purchase~~amount ~~Warrants~~is unsecured, bears interest at 3% per annum, and due 180 days from the date of issuance. As of November 30, 2018, accrued interest of $129 (2017 - $82) has been included in accounts payable and accrued liabilities, related parties.

One) ~~May~~As 15of November 30, ~~2017~~2018, the Company ~~issued~~ ~~486,783~~owed ~~share purchase warrants with an exercise price of~~ $~~0.09~~3,500 ~~per~~(2017 ~~share~~- ~~for a period of five years in conjunction with the issuance of convertible debt. The fair value of the share purchase warrants was~~ $~~105~~18,~~396,~~500) ~~calculated~~to ~~using~~a ~~the~~company ~~binomial~~controlled ~~option pricing~~by ~~model assuming no expected dividends, volatility of 199%, expected life of 5 years, and~~ a ~~risk~~significant ~~free~~shareholder ~~rate~~ of ~~1.05%. The allocated relative fair value of~~ the ~~warrants was $74,573~~Company. The ~~fair~~amount ~~value~~owed ofis ~~the share purchase warrants were recorded in the consolidated statement of operations as debt discount. In October 2017~~unsecured, ~~the~~non-interest ~~Company issued 400~~bearing,~~000~~ ~~common shares as a settlement~~ and ~~return of~~due ~~the~~on ~~outstanding share purchase warrants by the convertible note holder~~demand.

Onf) ~~October~~As 23of November 30, 2018, the Company owed $6,560 (2017 - $1,195) to the ~~share purchase~~Chief ~~warrants~~Executive ~~were~~Officer ~~cancelled~~of ~~and~~the ~~replaced~~Company. ~~with~~During the ~~issuance~~year ended November 30, 2018, the Company incurred $476,429 (2017 - $nil) of ~~400~~compensation costs. During the year ended November 30, 2018, the Company issued 5,000,000 common shares. ~~Refer~~with toa ~~Note~~fair ~~9(o)~~value of $200,000 as bonus compensation, and 1,500,000 common shares with a fair value of $112,500 as part of his management agreement.

	Number of warrants			Weighted average exercise price $
Balance, November 30, 2015 and 2016		–			–
Issued		486,783			0.09
Cancelled		(486,783	)		0.09
Balance, November 30, 2017		–			–

As of November 30, 2018, the Company prepaid $27,000 (2017 - $nil) of prepaid rent to a shareholder that holds 49% interest of Gala California. The amounts owed are unsecured, non-interest bearing, and due on demand.

During the year ended November 30, 2018, the Company issued 6,000,000 (2017 - 24,500,000) common shares with a fair value of $232,500 (2017 - $490,000) to officers and directors of the Company as compensation for services for a period of one year. As of November 30, 2018, the Company recorded $117,020 (2017 - $165,853) as deferred compensation within shareholders’ equity. During the year ended November 30, 2018, the Company recorded $281,334 (2017 - $324,147) of compensation expense.

9.	Loans Payable

On April 22, 2016, the Company issued a $22,000 promissory note to an unrelated party. Under the terms of the note, the amount due is unsecured, bears interest at 3% per annum, and is due 180 days from the date of issuance. This note is past due and payable on demand. As of November 30, 2018, the outstanding balance of the promissory note was $22,000 (2017 - $22,000).

On June 3, 2016, the Company issued a $20,000 promissory note to an unrelated party. Under the terms of the note, the amount due is unsecured, bears interest at 3% per annum, and is due 180 days from the date of issuance. This note is past due and payable on demand As of November 30, 2018, the outstanding balance of the promissory note was $20,000 (2017 - $20,000).

F-16

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

1110. ~~Supplemental~~Common ~~Disclosures~~Shares

	Year ended November 30, 2017 $		Year ended November 30, 2016 $
Non-cash investing and financing activities:
Common shares issued for deferred compensation		490,000		–
Common shares issued for settlement of related party debt		714,962		–
Common shares issued to settle third party debt		127,462		–
Common shares issued to settle outstanding payables		–		25,000
Expenses paid by related parties that increased related party debt		19,500		2,064
Preferred shares issued to settle related party payables		–		24,167
Preferred shares issued to settle related party debt		–		48,453
Shares issued for prepaid expenses		40,000		–
Warrants issued with debt		74,573		–
Exercise of warrants		400		–
Original issue discount		25,000		–
Debt issuance costs		5,000		–
Debt conversion feature		175,427		–
Supplemental disclosures:
Interest paid		–		–
Income tax paid		–		–

Stock transactions for the year ended November 30, 2018:

~~12.~~(a) ~~Income~~On ~~Taxes~~December 7, 2017, the Company issued 209,727 common shares with a fair value of $56,773 to settle convertible debentures of $30,000 and derivative liability of $50,993 resulting in a gain on settlement of debt of $24,220.

As(b) atOn ~~November~~January 3011, ~~2017~~2018, the Company ~~has~~issued $15,~~294~~000,000 ofcommon ~~net~~shares ~~operating~~with ~~losses~~a ~~carried~~fair ~~forward~~value toof ~~offset taxable income in future years through fiscal 2036. No tax benefit has been reported during the years ended November 30~~$200,000 ~~2017~~to ~~and 2016 as~~ the ~~potential~~Chief ~~tax~~Executive ~~benefit~~Officer isof ~~offset by a valuation allowance as there is uncertainty as to whether~~ the Company ~~can~~as ~~be profitable in the future to utilize tax losses. Net operating loss carryforwards for federal income tax reporting purposes are subject to annual limitations. Should~~ a ~~change~~performance ~~in ownership occur in the future, net operating losses carryfoward may be limited as to use in future years~~bonus.

	2017 $			2016 $
Net loss before taxes		(1,981,856	)		(170,176	)
Statutory rate		34%			34%
Computed expected tax recovery		(673,800	)		(57,900	)
Permanent differences and other		490,000			(68,100	)
Change in valuation allowance		183,800			126,000
Income tax provision		–			–

(c)

On February 1, 2018, the Company issued 1,500,000 common shares with a fair value of $60,000 for consulting services for a period twelve months from the date of issuance.

(d)

On February 2, 2018, the Company issued 3,000,000 common shares, which were issuable at November 30, 2017, for consulting services with a fair value of $300,000.

(e)

On February 2, 2018, the Company issued 618,684 common shares with a fair value of $49,495 to settle convertible debentures of $30,000 and derivative liability of $43,021 resulting in a gain on settlement of debt of $23,526.

(f)

On February 13, 2018, the Company issued 758,284 common shares with a fair value of $41,478 to settle convertible debentures of $30,000 and derivative liability of $35,246 resulting in a gain on settlement of debt of $23,768.

(g)

On February 26, 2018, the Company issued 846,860 common shares with a fair value of $50,812 to settle convertible debentures of $30,000 and derivative liability of $44,041 resulting in a gain on settlement of debt of $23,229.

(h)

(i)

On April 18, 2018, the Company issued 5,000,000 common shares to an individual who holds 49% interest in Gala California for proceeds of $200,000.

(j)

On May 14, 2018, the Company issued 1,500,000 common shares with a fair value of $60,000 to a director of the Company for consulting services for a period of one year.

(k)

On June 19, 2018, 1,500,000 common shares with a fair value of $60,000 for consulting services for a period of one year.

(l)

(m)

On August 28, 2018, the Company issued 500,000 common shares for proceeds of $20,000.

(n)

On August 28, 2018, the Company issued 1,000,000 common shares to a consultant for services with a fair value of $50,000.

(o)

On September 2, 2018, the Company issued 2,500,000 common shares for proceeds of $50,000.

(p)

On September 13, 2018, the Company issued 8,250,000 common shares for proceeds of $165,000.

(q)

On September 19, 2018, the Company issued 3,000,000 common shares with a fair value of $142,500 for consulting services, which included 1,500,000 common shares with a fair value of $112,500 to the Chief Executive Officer and Director of the Company.

(r)

On September 19, 2018, the Company issued 2,250,000 common shares for proceeds of $45,000.

F-17

GALA PHARMACEUTICAL INC.

(formerly Gala Global Inc.)

Notes to the Consolidated Financial Statements

Years ended November 30, ~~2017~~2018 and ~~2016~~2017

1210. ~~Income~~Common ~~Taxes~~Shares (continued)

~~The~~(s) ~~significant~~On ~~components~~September ~~of deferred~~23, ~~income~~2018, ~~tax~~the ~~assets~~Company ~~and~~issued ~~liabilities~~1,500,000 atcommon ~~November~~shares ~~30,~~with ~~2017~~a ~~and~~fair ~~2016~~value ~~are~~of as$30,000 ~~follows:~~for consulting services.

	2017 $			2016 $
Deferred tax assets:
Net operating losses carried forward		439,900			281,180
Accrued interest		5,900			500
Related party payables		20,900			32,000
Deferred tax liabilities:
Accumulated depreciation above book value		(3,300	)		–
Deferred income tax assets		463,400			313,700
Valuation allowance		(463,400	)		(313,700	)
Net deferred income tax asset		–			–

(t)

On September 28, 2018, the Company issued 2,500,000 common shares for proceeds of $25,000, including 2,000,000 common shares to an individual with a 49% interest in Gala California.

~~13.~~(u) ~~Subsequent~~On ~~Events~~September 29, 2018, the Company issued 250,000 common shares for proceeds of $5,000.

(av) On ~~December~~October 2611, ~~2017~~2018, the Company ~~received~~issued ~~$75~~487,~~000~~626 incommon shares with a ~~promissory~~fair ~~note~~value ~~from~~of a$48,568 ~~company~~for ~~controlled~~the bysettlement aof ~~shareholder~~convertible debentures of ~~the~~$20,000 ~~Company.~~and ~~The~~derivative ~~amounts~~liability ~~are~~of ~~unsecured~~$45,429 ~~non-interest~~resulting ~~bearing,~~in ~~and~~a ~~due~~gain on ~~demand~~settlement of debt of $16,861.

(bw) On ~~January~~October 115, 2018, the Company ~~entered~~issued ~~into~~500,000 acommon ~~consulting~~shares ~~agreement with a non-related party~~ for ~~consulting~~proceeds ~~services. Pursuant to the agreement, the consultant will receive compensation~~ of $510,000 ~~per month for services rendered~~. ~~In addition, the consultant will receive $2,500 per every new location the consultant manages. The Company may terminate the agreement upon providing 10 days of written notice to the consultant.~~

(cx) On ~~January~~October 2931, 2018, the Company ~~completed~~issued ~~a settlement and mutual release agreement with CEG Inc. whereby the proposed acquisition of CEG Inc. was cancelled. As part of the settlement and mutual release agreement~~3, ~~the former Chief Executive Officer of the Company will return 5~~000,~~650,~~000 common shares ofwith ~~the~~a ~~Company~~fair ~~and~~value ~~the~~of ~~Company~~$60,000 ~~will return the rights~~ to ~~the~~officers ~~intellectual property that was previously held by CEG Inc.,~~ and ~~give~~directors ~~machinery~~of ~~that was previously paid by~~ the Company ~~to CEG Inc. The Company incurred $53,297 of expenses relating to the proposed acquisition, which has been recorded~~ for ~~the~~compensation ~~year ended November 30, 2017~~services.

(dy) ~~Subsequent~~On to November 301, ~~2017~~2018, ~~there~~the ~~were~~Company 9issued 5,500,000 common shares as part of a repricing of common shares issued for ~~consulting~~cash ~~services~~on April 18, 2018 and 2August 28,~~433~~ 2018,~~555~~ which included 5,000,000 common shares issued ~~for~~to ~~conversion~~an ofindividual ~~debt~~who holds 49% interest in Gala California.

(z)

On November 13, 2018, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(aa)

On November 26, 2018, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(bb)

Stock transactions for the year ended November 30, 2017:

(cc)

On January 30, 2017, the Company effected a share consolidation on a 100 old shares for 1 new share basis. The share consolidation has been applied retroactively to the earliest period presented.

(dd)

On March 22, 2017, the Company issued 490,742 common shares with a fair value of $176,667 to settle outstanding debt of $88,333 owed to a director of the Company. The transaction resulted in a loss on settlement of debt of $88,334, which was recorded in the consolidated statement of operations.

(ee)

On March 22, 2017, the Company issued 1,387,970 common shares with a fair value of $499,670 to settle outstanding debt of $249,835 owed to a company controlled by a director of the Company. The transaction resulted in a loss on settlement of debt of $249,835, which was recorded in the consolidated statement of operations.

(ff)

On March 30, 2017, the Company issued 10,000,000 common shares with a fair value of $200,000 to a director of the Company for compensation services for a period of twelve months from the date of issuance. As of August 31, 2017, deferred compensation of $115,068 has been recorded in deferred compensation.

(gg)

F-18

~~Item~~GALA 9.PHARMACEUTICAL ~~Changes in and Disagreements With Accountants on Accounting and Financial Disclosure~~INC.

~~None~~Notes to the Consolidated Financial Statements

Years ended November 30, 2018 and 2017

10.

Common Shares (continued)

Stock transactions for the year ended November 30, 2017:

(hh)

On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Financial Officer of the Company for compensation services for a period of twelve months from the date of issuance. As of August 31, 2017, deferred compensation of $17,260 has been recorded in deferred compensation.

(ii)

On March 30, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to an officer of the Company for compensation services for a period of twelve months from the date of issuance. As of August 31, 2017, deferred compensation of $17,260 has been recorded in prepaid expense.

(jj)

On May 17, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Executive Officer of the Company for compensation services for a period of twelve months from the date of issuance. As of November 30, 2017, the common shares were returnable to the Company.

(kk)

On May 17, 2017, the Company issued 5,000,000 common shares with a fair value of $30,000 to a company controlled by the Chief Executive Officer of the Company for the purchase of intangible assets. As of November 30, 2017, the common shares were returned to the Company.

(ll)

On July 6, 2017, the Company issued 1,500,000 common shares at $0.08 per common share pursuant to private placement for proceeds of $120,000.

(mm)

On June 12, 2017, the Company issued 2,000,000 common shares for consulting services over a twelve month period with a fair value of $40,000.

(nn)

On June 13, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 to the Chief Operating Officer of the Company for compensation services for a period of twelve months from the date of issuance. As of August 31, 2017, deferred compensation of $23,361 has been recorded in deferred compensation.

(oo)

(pp)

On September 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(qq)

On October 1, 2017, the Company issued 1,500,000 common shares with a fair value of $30,000 for consulting services.

(rr)

On October 20, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000.

(ss)

On October 23, 2017, the Company issued 400,000 common shares to settle the outstanding share purchase warrants which were issued as part of the issuance of the convertible debenture.

(tt)

On November 9, 2017, the Company issued 250,000 common shares at $0.10 per share for proceeds of $25,000.

(uu)

At November 30, 2017, the Company had 3,000,000 common shares issuable for consulting services with a fair value of $300,000, of which $25,000 was recorded as consulting expense.

F-19

GALA PHARMACEUTICAL INC.

Notes to the Consolidated Financial Statements

Years ended November 30, 2018 and 2017

11.

Share Purchase Warrants

During the year ended November 30, 2018, the Company issued 60,000 share purchase warrants as part of the issuance of convertible debentures. The fair value of the share purchase warrants was $5,694, calculated using the Black-Scholes option pricing model assuming no expected dividends, volatility of 216%, expected life of 7 years, and a risk free rate of 2.89%.

	Number of warrants		Weighted average exercise price $

Balance, November 30, 2016 and 2017		–		–
Issued		60,000		0.01

Balance, November 30, 2018		60,000		0.01

12.

Supplemental Disclosures

	Year ended November 30, 2018 $		Year ended November 30, 2017 $
Non-cash investing and financing activities:

Common shares issued for deferred compensation		232,500		490,000
Common shares issued for settlement of related party debt		–		714,962
Common shares issued to settle third party debt		370,131		127,462
Common shares issued for prepaid services		335,000		40,000
Debt conversion feature		162,074		175,427
Expenses paid by related parties that increased related party debt		–		19,500
Original issue discount		–		25,000
Warrants issued with debt		5,694		74,573

Supplemental disclosures:

Interest paid		–		–
Income tax paid		–		–

13.

Income Taxes

As of November 30, 2018, the Company has $2,915,300 of net operating losses carried forward to offset taxable income through fiscal 2037. No tax benefit has been reported during the years ended November 30, 2018 and 2017 as the potential tax benefit is offset by a valuation allowance as there is uncertainty as to whether the Company can be profitable in the future to utilize tax losses. Net operating loss carryforwards for federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur in the future, net operating losses carryfoward may be limited as to use in future years.

	2018 $			2017$

Net loss before taxes		(1,858,877	)		(1,981,856	)
Statutory rate		21%			34%

Computed expected tax recovery		(390,400	)		(673,830	)
Permanent differences and other		34,100			490,000
Change in enacted tax rates		168,200			–
Change in valuation allowance		188,100			183,800

Income tax provision		–			–

F-20

GALA PHARMACEUTICAL INC.

Notes to the Consolidated Financial Statements

Years ended November 30, 2018 and 2017

13.

Income Taxes (continued)

The significant components of deferred income tax assets and liabilities at November 30, 2018 and 2017 are as follows:

	2018 $			2017 $

Net operating losses carried forward		643,100			439,900
Accrued interest		1,100			5,900
Related party payables		10,400			20,900
Accumulated depreciation above book value		(1,800	)		(3,300	)
Valuation allowance		(652,800	)		(463,400	)

Net deferred income tax asset		–			–

14.

Commitments and Contingencies

(a)

On May 1, 2018, Gala California, a 51% owned subsidiary of the Company, entered into a lease agreement with an individual who holds a 49% interest in Gala California to lease a commercial building in Long Beach, California. Under the terms of the lease agreement, the Company is committed to the following minimum lease payments:

Fiscal year ended	$

November 30, 2019		110,520
November 30, 2020		114,941
November 30, 2021		119,538
November 30, 2022		124,320
November 30, 2023		52,644

Total minimum lease payments		521,963

During the year ended November 30, 2018, the Company recorded rent expense of $81,799 (2017 - $18,085).

(b)

As of November 30, 2018, the Company is subject of a civil action relating to a former consultant for a breach of contract. In April 2019, the Company anticipates a settlement agreement of this action. The Company has accrued $64,000 as part of the settlement amount at November 30, 2018.

15.

Subsequent Events

In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through to the date of issuance of the financial statements, and did not have any material recognizable subsequent events after November 30, 2018 with the exception of the following:

(a)

On December 5, 2018, the Company issued 500,000 common shares for proceeds of $25,000.

(b)

On December 31, 2018, the Company issued 1,500,000 common shares for consulting services to a director of the company.

(c)

On January 7, 2019, the Company issued 1,186,310 common shares for the conversion of $20,000 of loan payable

(d)

F-21

GALA PHARMACEUTICAL INC.

Notes to the Consolidated Financial Statements

Years ended November 30, 2018 and 2017

15.

Subsequent Events (continued)

(c)

(d)

On March 19, 2019, the Company issued 1,500,000 common shares for proceeds of $75,000.

(e)

On March 19, 2019, the Company issued 1,000,000 common shares for consulting services to a non-related party.

(f)

On March 19, 2019, the Company issued 1,725,000 common shares for the conversion of $1,725 of loan payable.

(g)

Subsequent to November 30, 2018, the Company has paid $104,904 to the contractor for the build-out of the Testing Lab. The build-out is scheduled to be completed by May 19, 2019.

F-22

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

The required disclosure related to our previous registered public accounting firm can be found in our Current Report on Form 8-K filed with the SEC on January 14, 2019.

Item 9A. Controls and Procedures

(a) Evaluation of disclosure controls and procedures. Our Chief Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Annual Report on Form 10-K (the "Evaluation Date"), concluded that as of the Evaluation Date, our disclosure controls and procedures were not effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

(b) Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting during our most recent fiscal quarter that materially affected, or were reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Internal Controls

Disclosure controls and procedures, no matter how well designed and implemented, can provide only reasonable assurance of achieving an entity's disclosure objectives. The likelihood of achieving such objectives is affected by limitations inherent in disclosure controls and procedures. These include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures such as simple errors or mistakes or intentional circumvention of the established process.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission ("2013 COSO Framework").

A material weakness is a deficiency or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Our management concluded we have a material weakness due to lack of segregation of duties and accounting for complex debt and equity transactions. Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. There is mainly one person involved in processing of transactions. Therefore, it is difficult to effectively segregate accounting duties. We have hired an additional administrative person and retained an outside professional firm to assist in the separation of duties on an ongoing basis. The use of the outside firm has proven successful in assisting in the separation of duties. During the year the Company had several audit adjustments related to accounting for complex debt and equity that were deemed material. Management did not have sufficient experience to review these complex debt and equity transactions. As such, we believe this deficiency to have been a material weakness.

However, additional people are not needed to do the administrative work therefore segregation of duties will continue to be an ongoing weakness.

Based on this evaluation and because of the material weaknesses, management has concluded that our internal control over financial reporting was not effective as of November 30, ~~2017~~2018.

This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to rules of the SEC that permit the company to provide only management's report on internal control in this annual report.

Item 9B. Other Information.

None.

1113

PART III

Item 10. Directors, Executive Officers, Promoters and Control Persons; Compliance With Section 16(a) of the Exchange Act

Directors, Executive Officers and Key Employees

The following table sets forth certain information regarding our directors, executive officers and key employees as of November 30, ~~2017~~2018 and as of the date of the filing of this report:

Name and Address	Age	Position(s) Held
Maqsood Rehman	4142	CEO and Director
Romina Martinez	27	Director
Reiner Hoogenraad	60	Director
Allison Hess	27	Secretary, Treasurer, and Director

Background of Directors and Executive Officers

Dr. Maqsood Rehman, is currently CEO of Gala Pharmaceutical, Inc., (“GLPH”) where he was the CEO since June 2017. Prior to GLPH, Dr. Rehman was the Global Soybean Breeding Leader for Dow Agrosciences at Indianapolis, Indiana for six years. Previously, he worked as a soybean breeder for Monsanto Company at Oxford, Indiana for five years. Dr. Rehman has Masters and PhD degrees in Plant Science from University of Idaho, U.S.A. and Post Doctorate from University of Missouri-Columbia, Missouri. Dr. Rehman also has a diversified scientific background with training, and 10 plus years of practical experience in plant breeding, quantitative and molecular genetics and cytogenetics and project management. Dr. Rehman’s experience ranges from providing leadership to the breeding organization to developing breeding strategies and budgets needed to accomplish breeding goals. He fills in the gaps by bringing key stakeholders together and aligns breeding goals with global commercial needs through effective communication. Dr. Rehman is also an expert at developing teams and providing effective and transparent communication process to achieve deliverables.

~~Allison~~Reiner ~~Hess~~Hoogenraad, is currently a ~~Board~~director ~~member and officer~~ of Gala Pharmaceutical, Inc. MsMr. ~~Hess,~~Hoogenraad ~~for the past two years~~ is also the President of ~~Hssy~~American Custom Golf Cars, Inc., ana ~~international~~ business ~~finance~~started ~~and~~over 25 ~~operations~~years ~~consulting~~ago ~~firm~~(also ~~based~~known ~~out~~as ~~of San Diego~~ACG, ~~CA. Prior to Hssy~~ Inc.,). MsMr. ~~Hess~~Hoogenraad ~~worked~~was born in ~~the~~1959 ~~legal field~~in ~~for~~Holland ~~more~~and ~~than~~graduated ~~seven years having been with two local firms~~ from ~~2010~~Maerland upLyceum toin ~~2014~~Holland. Mr. ~~She~~Hoogenraad isbegan ~~knowledgeable~~his ~~with~~career ~~regard~~in ~~to all levels of~~ the ~~courts~~automotive ~~from~~industry ~~local~~in ~~Small~~1980. ~~Claims~~He ~~actions~~has tobeen ~~federal~~a ~~district~~successful ~~Court~~entrepreneur ~~matters~~for ~~and~~over is30 ~~experienced~~years, ~~in a number of commercial~~and ~~practice~~has ~~areas~~20 ~~including~~years’ ~~corporate~~experience ~~finance,~~as ~~real~~an ~~estate,~~Internal ~~licensing~~Combustion Engine and ~~contracts.~~Electric ~~She~~Vehicle ~~has~~designer/developer ~~helped~~including: ~~numerous~~car ~~companies with their~~suspension ~~creation~~development of(later aused ~~new~~by ~~business~~the ~~and~~Shelby ~~the~~Ultimate ~~issues~~Aero ~~that~~supercar); ~~arise~~drive ~~therefrom~~train ~~such~~engineering asand ~~public~~assembly; ~~relations,~~electric ~~government~~motor ~~permitting~~design and ~~legislation,~~ ~~interacting~~modification; ~~with~~automotive ~~suppliers~~parts ~~and~~procurement; ~~vendors,~~ and ~~the~~vehicle ~~public~~assembly ~~company~~line ~~markets.~~and ~~For~~factory ~~the~~developer ~~last~~and ~~several years Ms~~owner. ~~Hess'~~He ~~efforts~~is ~~have~~both ~~been focused~~a onsole ~~the legal medicinal~~ and ~~recreational~~multiple current ~~cannabis~~automotive ~~and~~patent ~~Industrial Hemp markets~~holder.

Romina Martinez is currently a Board member of Gala Pharmaceutical, Inc. Ms. Martinez for the past two years is also the Vice President of Hssy Inc., an international business finance and operations consulting firm based out of San Diego, CA. She has a well-rounded commercial outlook to solving legal issues practically and is an expert at advising on new areas of law or changes to the law. Prior to Hssy Inc., Romina Martinez worked in the legal field for more than five years having been with several San Diego firms from 2011 up to 2016. For the last several years, Romina Martinez has established work with the legal medicinal and recreational cannabis and Industrial Hemp markets. She is experienced in regards to many levels of the courts including family law, relevant regulations and depositions, to federal district Court matters. She is well versed in a number of commercial practice areas including corporate finance, public company markets, real estate, translations, licensing and contracts, research and development, and has helped formulate numerous companies as well as handling the social media marketing platforms for their businesses. Romina is a bilingual speaker who is proficient in both fluent Spanish and English.

Term of Office of Directors

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board of Directors and hold office until the officer dies or resigns or the Board elects a successor or removes the officer.

Key Employees

None.

Family Relationships

None.

Involvement in Certain Legal Proceedings

None.

Audit Committee Financial Expert

No determination has been made as to whether any member of the audit committee qualified as an audit committee financial expert as defined in Item 401 of Regulation S-K.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who beneficially own more than 10% of a registered class of our equity securities, to file reports of beneficial ownership and changes in the beneficial ownership of our securities with the SEC of Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities). Directors, executive officers and beneficial owners of more than 10% of our Common Stock are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file. The required filings have been made.

Code of Ethics

We have adopted an informal Code of Ethics that applies to our officers, directors, which we feel is sufficient at this time, given that we ~~are still in the start-up, development stage and~~ have no employees, other than our officers and directors.

Item 11. Executive and Director Compensation.

SUMMARY COMPENSATION TABLE

Name and Principal Position (a)				Year (b)				Salary ($) (c)		Bonus ($) (d)		Stock Awards ($) (e)		Option Awards ($) (f)		Non-Equity Incentive Plan Compensation ($) (g)		Change in Pension Value Nonqualified Deferred Compensation Earnings ($) (h)		All Other Compensation ($) (i)		Total ($) (j)
Name and Principal Position	Year	Salary	Bonus	Stock	Option	Non-Equity	Change in Pension Value	All Other	Total
	Allison Hess, Secretary, Treasurer				2017				0		0		20,219		0		0		0		0		20,219
(a)	(b)	($)	($)	Awards	Awards	Incentive	Nonqualified	Compensation	($)
	2016								0		0		12,812		0		0		0		0		12,812
		(c)	(d)	($)	($)	Plan	Deferred	($)	(j)
	2015								0		0		31,875		0		0		0		0		31,875
				(e)	(f)	Compensation	Compensation	(i)
	Maqsood Rehman, CEO				2017				90,000		0		14,118		0		0		0		0		104,118
						($)	Earnings
	2016								0		0		0		0		0		0		0		0
						(g)	($)
	2015								0		0		0		0		0		0		0		0
							(h)
	Romina Martinez, Director				2017				0		0		20,219		0		0		0		0		20,219
* Allison Hess,Secretary, Treasurer	2018	0	0	30,000	0	0	0	0	30,000
	2016								0		0		0		0		0		0		0		0
	2017	0	0	20,219	0	0	0	0	20,219
	2015								0		0		0		0		0		0		0		0
Maqsood Rehman, CEO	2018	90,000	0	130,000	0	0	0	0	220,000
	Calvin Frye, Former Chairman and CEO				2017				0		0		0		0		0		0		0		0
	2017	90.000	0	14,118	0	0	0	0	104,118
	2016								0		0		13,542		0		0		0		0		13,542
**Romina Martinez, Director	2018	0	0	30,000	0	0	0	0	30,000
	2015								0		0		35,833		0		0		0		0		35,833
	2017	0	0	20,209	0	0	0	0	20,219
	Harold Milburn, Former CEO, CFO, President, and Treasurer				2017				0		0		0		0		0		0		0		0
	2016								0		0		0		0		0		0		0		0
	2015								0		0		51,617		0		0		0		49,883		101,500
	George Lefevre, Former CEO, CFO, Chairman, and Treasurer				2017				0		0		0		0		0		0		0		0
	2016								0		0		0		0		0		0		0		0
	2015								0		0		0		0		0		0		0		0

14• Resigned as an Officer and Director on November 30, 2018

~~OUTSTANDING~~** ~~EQUITY~~Resigned ~~AWARDS~~as ATDirector ~~FISCAL YEAR-END~~on ~~TABLE~~September 26, 2018

	OPTION AWARDS						STOCK AWARDS
Name and Principal Positions (s) (a)		Number of Securities Underlying Unexercised Options (#) (Exercisable) (b)	Number of Securities Underlying Unexercised Options (#) (Unexercisable) (c)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price ($) (e)	Option Expiration Date (f)	Number of Shares or Units of Stock That Have Not Vested (#) (g)	Market Value of Shares or Units of Stock That Have Not Vested ($) (h)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)
Maqsood Rehman, CEO		0	0	0	0	0	0	0	0	0
Allison Hess, Secretary, Treasurer, Director		0	0	0	0	0	0	0	0	0
Romina Martinez Director		0	0	0	0	0	0	0	0	0
Calvin Frye, Former Chairman and CEO		0	0	0	0	0	0	0	0	0
Harold Milburn, Former President, CEO, CFO, and Treasurer		0	0	0	0	0	0	0	0	0
George Lefevre, Former Chairman, CEO, Treasurer, and CFO		0	0	0	0	0	0	0	0	0

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE

	OPTION AWARDS						STOCK AWARDS
Name and Principal Positions (s) (a)		Number of Securities Underlying Unexercised Options (#) (Exercisable) (b)	Number of Securities Underlying Unexercised Options (#) (Unexercisable) (c)	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price ($) (e)	Option Expiration Date (f)	Number of Shares or Units of Stock That Have Not Vested (#) (g)	Market Value of Shares or Units of Stock That Have Not Vested ($) (h)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (i)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)
Maqsood Rehman, CEO		0	0	0	0	0	0	0	0	0

Option Grants

No options were granted during the fiscal years ended November 30, ~~2017~~2018 and ~~2016~~2017.

Director Compensation

(a) On ~~June~~February 2912, ~~2015~~2017, the Company entered into aan ~~consulting~~ agreement with ~~the~~a ~~former~~Director ~~Chief Executive Officer~~ of the Company ~~for consulting services relating to the cannabis industry~~. Pursuant to the agreement, the Company shall issue 61,~~250~~000,000 ~~shares of~~ common ~~stock~~shares ~~to the consultant~~ upon execution. ofThe ~~the~~ agreement ~~(issued)~~shall ~~and~~terminate ~~every~~upon ~~six~~mutual ~~months~~agreement ~~thereafter~~between ~~as compensation. Either party may terminate~~ the ~~agreement by providing written thirty days notice~~parties.

(b) On ~~September~~March 130, ~~2015~~2017, the Company entered into an agreement with the ~~Chief~~Secretary, ~~Financial~~Treasurer, ~~Officer~~and a Director of the Company. Pursuant to the agreement, the Company shall issue 121,500,000 ~~shares of~~ common ~~stock to the Chief Financial Officer upon execution and every twelve months to compensation for being the Chief Financial Officer. The Company shall also issue an additional 6,250~~ shares ~~of common stock to the Chief Financial Officer~~ upon execution ~~and every six months as compensation for being a director~~. The agreement shall be ~~terminated~~terminate upon mutual agreement ~~with~~between the ~~Company and the Chief Financial Officer~~parties.

(c) On September 1, ~~2015~~2017, the Company entered into an employment agreement with the ~~former~~ Chief Executive Officer of the Company. ~~for~~Pursuant ~~assuming~~to the ~~role~~agreement, asthe Company will compensate the Chief Executive Officer. ~~Pursuant~~a tobase ~~the~~salary ~~agreement~~of $15,000 ~~the~~per ~~Company~~month, ~~shall~~living ~~issue~~and ~~12,500~~housing ~~shares~~expense of ~~common~~no ~~stock~~more tothan $3,000 per month, and the ~~Chief~~issuance ~~Executive~~of ~~Officer~~1,500,000 ~~upon~~common ~~execution~~shares ~~and~~of ~~every~~the ~~twelve~~Company ~~months~~on an annual basis. The agreement shall be terminated ~~upon~~when ~~mutual~~the ~~agreement~~Company ~~with~~provides ~~the~~10 ~~Company~~days ~~and~~notice or the ~~former~~ Chief Executive Officer provides 30 days notice to terminate the agreement.

(d) On February 12, 2017, the Company entered into an agreement with a Director of the Company. Pursuant to the agreement, the Company shall issue 1,000,000 common shares upon execution. The agreement shall terminate upon mutual agreement between the parties.

(e) On March 30, 2017, the Company entered into an agreement with the Secretary, Treasurer, and a Director of the Company. Pursuant to the agreement, the Company shall issue 1,500,000 common shares upon execution. The agreement shall be terminate upon mutual agreement between the parties.

Employment Agreements

(a)

On September 1, 2017, the Company entered into an employment agreement with Chief Executive Officer of the Company. Pursuant to the agreement, the Company will compensate the Chief Executive Officer a base salary of $15,000 per month, living and housing expense of no more than $3,000 per month, and the issuance of 1,500,000 common shares of the Company on an annual basis. The agreement shall be terminated when the Company provides 10 days notice or the Chief Executive Officer provides 30 days notice to terminate the agreement.

Report on Repricing of Options

None.

16Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

~~Item~~The ~~12.~~following ~~Security~~table ~~Ownership~~provides certain information regarding the ownership of ~~Certain~~our ~~Beneficial~~common ~~Owners~~stock, ~~and~~as ~~Management~~of November 30, 2018 and ~~Related~~as ~~Stockholder~~of ~~Matters~~the date of the filing of this annual report by:

~~The~~• ~~following~~each ~~table provides certain information regarding the ownership~~ of our ~~common~~executive ~~stock, as of November 30, 2017 and as of the date of the filing of this annual report by:~~officers;

·• each ~~of our executive officers~~director;

·• each ~~director~~person known to us to own more than 5% of our outstanding common stock; and

·• ~~each~~all ~~person~~of ~~known~~our toexecutive usofficers toand ~~own~~directors ~~more~~act ~~than~~as 5%a ~~of our outstanding common stock; and~~group.

·As ~~all~~of November 30, 2018, we had a total of ~~our~~92,011,666 ~~executive~~shares ~~officers~~of ~~and~~common ~~directors~~stock issued and outstanding. Except as aindicated ~~group~~in footnotes to this table, the persons named in this table have sole voting and investment power with respect to all shares of common stock indicated below. Except where noted, the address of all listed beneficial owners is in care of our office address.

As of November 30, 2017, we had a total of 35,701,561 shares of common stock issued and outstanding. Except as indicated in footnotes to this table, the persons named in this table have sole voting and investment power with respect to all shares of common stock indicated below. Except where noted, the address of all listed beneficial owners is in care of our office address.

Name and Address of Beneficial Owner	Title of Class	Amount and Nature of Beneficial Ownership (1) (#)		Percent of Class (2) (%)
Maqsood Rehman, Principal Executive Officer	Common Shares		8,000,000		8.7%
Mohar Singh Makkar, Significant shareholder	Common Shares		12,000,000		13.0%
James Haas, Significant shareholder	Common Shares		11,849,100		12.5%
Mario Castro, significant shareholder	Common Shares		8,250,000		9.0%
Owen Naccarato, Significant shareholder	Common Shares		11,852,131		12.9%
All Officers and Directors as a Group	Common Shares		8,000,000		8.7%

Name and Address of Beneficial Owner	Title of Class		Amount and Nature of Beneficial Ownership (1) (#)		Percent of Class (2) (%)
Maqsood Rehman, Principal Executive Officer		Common Shares		1,500,000		4.2%
Allison Hess, Secretary, Treasurer Director		Common Shares		1,525,000		4.3%
James Haas, Significant shareholder		Common Shares		10,047,600		28.1%
Romina Martinez, Director		Common Shares		1,500,000		4.2%
Owen Naccarato, Significant shareholder		Common Shares		10,352,131		29.0%
All Officers and Directors as a Group		Common Shares		4,525,000		12.7%

Year Ended November 30, ~~2017~~2018

(a) As atof November 30, ~~2017~~2018, the Company owed $48203,~~367~~688 (~~2016~~2017 - $~~249~~48,~~835~~367) to a company controlled by a significant shareholder of the Company to fund payment of operating expenditures. During the year ended November 30, ~~2017~~2018, the Company ~~settled~~received an additional $~~249~~75,~~835~~000 of ~~related party debt with the issuance of 1,387,970 common shares~~financing. ~~Refer to Note 9(c).~~ The ~~remaining~~ amount owed is unsecured, non-interest bearing, and due on demand.

(b) As at November 30, 2017, the Company owed $17,000 (2016 - $nil) to the former Chief Executive Officer of the Company for compensation and consulting services, which has been recorded in accounts payable and accrued liabilities – related parties. The amounts owing are unsecured, non-interest bearing, and due on demand.

(cb) As atof November 30, ~~2017~~2018, the Company owed $2543,000 (~~2016~~2017 - $7925,~~333~~000) to a significant shareholder of the Company, which has been recorded in accounts payable and accrued liabilities - related parties. The amount owed is unsecured, non-interest bearing, and due on demand. During the year ended November 30, ~~2017~~2018, the Company incurred $~~177~~103,~~295~~405 (~~2016~~2017 - $36177,~~000~~295) of consulting expense relating to services provided to the Company. ~~In August 2017, the Company settled $88,333 of related party debt with the issuance of 490,742 common shares.~~

(dc) As atof November 30, ~~2017~~2018, the Company owed $5,625 (~~2016~~2017 - $5,625) to an officer of the Company, which has been recorded in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.

(ed) As atof November 30, ~~2017~~2018, the Company owed $182,~~500~~064 (~~November~~2017 ~~30, 2016~~ - $102,~~000~~064) to a ~~company controlled by a~~ significant shareholder of the Company. The amount ~~owed~~ is unsecured, ~~non-~~bears interest ~~bearing~~at 3% per annum, and due on180 ~~demand~~days from the date of issuance. As of November 30, 2018, accrued interest of $129 (2017 - $82) has been included in accounts payable and accrued liabilities, related parties.

(fe) As atof November 30, ~~2017~~2018, the Company owed $23,~~064~~500 (~~2016~~2017 - $218,~~064~~500) to a company controlled by a significant shareholder of the Company. The amount owed is unsecured, ~~bears~~ non-interest ~~at 3% per annum~~bearing, and due ~~180~~on ~~days from the date of issuance~~demand. ~~As at November 30, 2017, accrued interest of $82 (November 30, 2016 - $15) has been included in accounts payable and accrued liabilities, related parties.~~

(gf) As atof November 30, ~~2017~~2018, the Company owed $126,~~500~~560 (~~2016~~2017 -$ ~~nil~~$1,195) to the Chief ~~Operating~~Executive Officer of the Company. ~~for~~During ~~consulting~~the ~~services,~~year ~~which~~ended ~~has~~November ~~been~~30, ~~recorded~~2018, inthe ~~accounts~~Company ~~payable~~incurred ~~and~~$476,429 ~~accrued~~(2017 ~~liabilities~~- –$nil) ~~related~~of ~~parties~~compensation costs. ~~The~~During ~~amounts~~the ~~owing~~year ~~are~~ended ~~unsecured~~November 30, ~~non-interest~~2018, ~~bearing~~the Company issued 5,000,000 common shares with a fair value of $200,000 as bonus compensation, and ~~due~~1,500,000 oncommon ~~demand~~shares with a fair value of $112,500 as part of his management agreement.

(hg) As atof November 30, ~~2017~~2018, the Company ~~owed~~prepaid $127,~~195~~000 (~~2016~~2017 - $nil) ~~to the Chief Executive Officer~~ of ~~the~~prepaid ~~Company~~rent ~~for~~to ~~services,~~a ~~which~~shareholder ~~has~~that ~~been~~holds ~~recorded~~49% ininterest ~~accounts~~of ~~payable~~Gala ~~and accrued liabilities – related parties~~California. The amounts ~~owing~~owed are unsecured, non-interest bearing, and due on demand.

(ih) AsDuring atthe year ended November 30, ~~2017~~2018, the Company ~~owed~~issued ~~$nil~~6,000,000 (~~2016~~2017 - ~~$10~~24,500,000) tocommon ~~the~~shares ~~spouse~~with of a ~~former~~fair ~~significant~~value ~~shareholder~~ of ~~the~~$232,500 ~~Company~~(2017 ~~for~~- ~~a note issued on September 21~~$490,000) ~~2016.~~to ~~Under~~officers ~~the~~and ~~terms~~directors of the ~~note,~~Company ~~the~~as ~~amount~~compensation ~~due~~for ~~was~~services ~~unsecured,~~for ~~bore~~a ~~interest~~period atof 3%one ~~per~~year. ~~annum,~~As ~~and~~of ~~was~~November ~~due~~30, ~~180~~2018, ~~days from~~ the ~~date~~Company ofrecorded ~~issuance.~~$117,020 In(2017 ~~July~~- ~~2017~~$165,853) ~~the~~as ~~Company~~deferred ~~issued~~compensation ~~128,750~~within ~~common~~shareholders’ ~~shares~~equity. ~~with~~During athe ~~fair~~year ~~value~~ended ofNovember ~~$38~~30,~~625~~ to2018, ~~settle~~the Company recorded $10281,~~000~~334 of(2017 ~~principal~~- ~~balance and~~ $~~254~~324,147) of ~~accrued~~compensation ~~interest~~expense.

~~(j)~~Year On May 8, 2017, the Company entered into an agreement whereby the Company agreed to acquire 80% of the issued and outstanding common stock of Controlled Environment Genomics Inc ("CEG Inc"), in exchange for a new series of the Company’s preferred shares, and issue 5,000,000 restricted common shares in exchange for CEG's intellectual property. In the event that CEG, Inc. becomes its own public entity, the executive shall receive 51% ownership of the new entity, and the Company will retain the remaining 49%. As at Ended November 30, 2017~~, the agreement to acquire the common stock of CEG Inc. was cancelled and costs of $53,297 relating to the proposed acquisition was expensed as incurred.~~

(ka) ~~During~~As ~~the~~of ~~year ended~~ November 30, 2017, the Company ~~issued~~owed 24$48,~~500,000~~367 ~~common~~(2016 ~~shares~~- ~~with~~$249,835) to a ~~fair~~company ~~value~~controlled ofby ~~$490,000~~a tosignificant ~~officers~~shareholder ~~and directors~~ of the Company asto ~~compensation~~fund ~~for~~payment ~~services~~of ~~for~~operating aexpenditures. ~~period~~During ofthe ~~one~~ year. Asended at November 30, 2017, the Company ~~recorded~~settled $~~165~~249,~~853~~835 asof ~~deferred~~related ~~compensation~~party ~~within~~debt ~~shareholders’~~with ~~equity. During~~ the ~~year~~issuance ~~ended~~of ~~November 30~~1, ~~2017~~387,970 ~~the~~common ~~Company~~shares. ~~recorded~~Refer ~~$324,147~~to Note 9(~~2016~~c). -The ~~$nil)~~remaining ofamount ~~share~~owed ~~based~~is ~~compensation~~unsecured, ~~expense~~non-interest bearing, and due on demand.

(lb) ~~During~~As ~~the~~of ~~year ended~~ November 30, 2017, the Company ~~loaned~~owed $2017,000 (2016 - $nil) to ~~a company controlled by~~ the former Chief Executive Officer of the Company for ~~day-to-day~~compensation ~~expenses.~~and ~~The~~consulting ~~amount owing is unsecured~~services, ~~non-interest~~which ~~bearing,~~has ~~and~~been ~~due~~recorded onin ~~demand.~~accounts Aspayable atand ~~November~~accrued ~~30,~~liabilities ~~2017,~~– ~~the~~related ~~Company~~parties. ~~recorded~~The anamounts ~~impairment~~owing ~~charge~~are ~~of $20~~unsecured,~~000~~ ~~due~~non-interest tobearing, ~~the~~and ~~unlikelihood~~due ofon ~~collecting outstanding amounts owed to the Company~~demand.

(c)

As of November 30, 2017, the Company owed $25,000 (2016 - $79,333) to a significant shareholder of the Company, which has been recorded in accounts payable and accrued liabilities - related parties. The amount owed is unsecured, non-interest bearing, and due on demand. During the year ended November 30, 2017, the Company incurred $177,295 (2016 - $36,000) of consulting expense relating to services provided to the Company. In August 2017, the Company settled $88,333 of related party debt with the issuance of 490,742 common shares.

(d)	As of November 30, 2017, the Company owed $5,625 (2016 - $5,625) to an officer of the Company, which has been recorded in accounts payable and accrued liabilities – related parties. The amount owing is unsecured, non-interest bearing, and due on demand.

~~Year Ended~~(e) As of November 30, 2017, the Company owed $18,500 (November 30, 2016 - $10,000) to a company controlled by a significant shareholder of the Company. The amount owed is unsecured, non-interest bearing, and due on demand.

a(f) ~~During~~As ~~the~~of ~~year ended~~ November 30, ~~2016~~2017, the Company ~~issued~~owed 6$2,~~250~~064 ~~shares~~(2016 of- ~~common stock with a fair value of~~ $102,~~625~~064) to ~~the~~a ~~former~~significant ~~Chief~~shareholder ~~Executive Officer~~ of the Company. ~~for~~The ~~services~~amount asis aunsecured, ~~director~~bears ofinterest ~~the~~at ~~Company.~~3% ~~During~~per ~~the~~annum, ~~year~~and ~~ended~~due ~~November~~180 ~~30,~~days ~~2016,~~from the ~~Company~~date ~~incurred consulting services~~ of ~~$13,540 (2015 - $21,250)~~issuance. As atof November 30, ~~2016~~2017, ~~the~~accrued ~~Company~~interest ~~had a prepaid expense balance~~ of $~~nil~~82 (~~2015~~November 30, 2016 - $~~2,917~~15) tohas ~~the~~been ~~former~~included ~~Chief~~in ~~Executive~~accounts ~~Officer~~payable ofand ~~the~~accrued ~~Company~~liabilities, related ~~to these services~~parties.

b(g) ~~During~~As ~~the~~of ~~year ended~~ November 30, ~~2016~~2017, the Company ~~issued~~owed 6$12,~~250~~500 ~~shares~~(2016 ~~of common stock with a fair value of~~ -$~~7,187~~ nil) to the Chief ~~Financial~~Operating Officer ~~for~~of ~~consulting services. During~~ the ~~year ended November 30, 2016, the~~ Company ~~incurred~~for consulting services ~~of $25~~,~~936~~ ~~(2015~~which -has ~~$31,875).~~been Asrecorded atin ~~November~~accounts ~~30,~~payable ~~2016,~~and ~~the~~accrued ~~Company~~liabilities ~~owed~~– ~~$18,750~~related toparties. ~~the~~The ~~Chief~~amounts ~~Financial~~owing ~~Officer~~are unsecured, ~~which~~non-interest ~~has~~bearing, ~~been recorded in accounts payable~~ and ~~accrued~~due ~~liabilities~~on ~~- related party~~demand.

c(h) As atof November 30, ~~2016~~2017, the Company owed $~~249~~1,~~835~~195 (~~2015~~2016 - $~~255,295~~nil) to athe ~~company~~Chief ~~controlled~~Executive byOfficer ~~a significant shareholder~~ of the Company tofor ~~fund~~services, ~~payment~~which ofhas ~~operating~~been ~~expenditures~~recorded in accounts payable and accrued liabilities – related parties. The ~~amount~~amounts owing isare unsecured, non-interest bearing, and due on demand.

d(i) As atof November 30, ~~2016~~2017, the Company owed $~~10,000~~nil (~~2015~~2016 - $10,000) to athe ~~company~~spouse ~~controlled~~of by a former significant shareholder of the Company for a note issued on September 21, 2016. ~~The~~Under the terms of the note, the amount ~~owing~~due iswas unsecured, ~~non-~~bore interest ~~bearing~~at 3% per annum, and was due on180 ~~demand~~days from the date of issuance. In July 2017, the Company issued 128,750 common shares with a fair value of $38,625 to settle $10,000 of principal balance and $254 of accrued interest.

e(j) AsOn atMay ~~November 30~~8, ~~2016~~2017, the Company ~~owed~~entered ~~$2,064~~into ~~(2015~~an -agreement ~~$nil)~~whereby the Company agreed to acquire 80% of the issued and outstanding common stock of Controlled Environment Genomics Inc ("CEG Inc"), in exchange for a ~~significant~~new ~~shareholder~~series of the Company’s preferred shares, and issue 5,000,000 restricted common shares in exchange for CEG's intellectual property. ~~The~~In ~~amount~~the isevent ~~unsecured~~that CEG, ~~bears~~Inc. ~~interest~~becomes atits 3own public entity, the executive shall receive 51% ~~per~~ownership ~~annum~~of the new entity, and ~~due~~the ~~180~~Company ~~days~~will ~~from~~retain the ~~date~~remaining ~~of issuance~~49%. As atof November 30, ~~2016~~2017, ~~accrued~~the ~~interest~~agreement to acquire the common stock of ~~$20~~CEG ~~(2015~~Inc. -was ~~$nil)~~cancelled ~~has~~and ~~been~~costs ~~included~~of in$53,297 ~~accounts~~relating ~~payable~~to ~~and~~the ~~accrued~~proposed ~~liabilities~~acquisition -was ~~related~~expensed ~~party~~as incurred.

f(k) OnDuring ~~September~~the 21year ended November 30, ~~2016~~2017, the Company ~~owed~~issued ~~$10~~24,500,000 ~~(2015~~common -shares ~~$nil)~~with toa ~~the~~fair ~~former~~value ~~spouse~~ of a$490,000 ~~significant~~to ~~shareholder~~officers and directors of the Company. ~~Under~~as ~~the~~compensation ~~terms~~for ofservices ~~the~~for ~~note,~~a ~~the~~period ~~amount~~of ~~due~~one isyear. ~~unsecured,~~As ~~bears~~of ~~interest~~November at30, ~~3% per annum~~2017, ~~and~~the isCompany ~~due~~recorded ~~180~~$165,853 ~~days~~as ~~from~~deferred ~~the~~compensation ~~date~~within ofshareholders’ ~~issuance~~equity. AsDuring atthe year ended November 30, ~~2016~~2017, ~~accrued~~the ~~interest~~Company ofrecorded $58324,147 (~~2015~~2016 - $nil) ~~has~~of ~~been~~share ~~included~~based incompensation ~~accounts payable and accrued liabilities - related party~~expense.

g(l) AsDuring atthe year ended November 30, ~~2016~~2017, the Company ~~owed~~loaned $~~200~~20,000 (~~2015~~ 2016- $~~200~~nil) to a company controlled by the former Chief Executive Officer of the Company for day-to-day expenses. The amount owing is unsecured, ~~bears~~ non-interest ~~at 1% per annum~~bearing, and due ~~180~~on ~~days from the date of issuance~~demand. As atof November 30, ~~2016~~2017, ~~accrued~~the ~~interest~~Company ofrecorded $3an ~~(2015~~impairment -charge of $~~nil)~~20,000 ~~has~~due ~~been~~to ~~included~~the inunlikelihood ~~accounts~~of ~~payable~~collecting ~~and~~outstanding ~~accrued~~amounts ~~liabilities~~owed -to ~~related~~the ~~party~~Company.

h) As at November 30, 2016, the Company owed $nil (2015 - $42,000) to a significant shareholder of the Company. The amount is unsecured, bears interest at 3% per annum, and due 180 days from the date of issuance. As at November 30, 2016, accrued interest of $nil (2015 - $435) has been included in accounts payable and accrued liabilities - related party.

i) As at November 30, 2016, the Company owed $nil (2015 - $5,000) to a significant shareholder of the Company. The amount is unsecured, bears interest at 1% per annum, and due 180 days from the date of issuance. As at November, 2016, accrued interest of $nil (2015 - $1) has been included in accounts payable and accrued liabilities - related party.

j) As at November 30, 2016, the Company owed $nil (2015 - $805) to a significant shareholder of the Company. The amount is unsecured, bears interest at 1% per annum, and due 180 days from the date of issuance. On January 27, 2016, the Company issued 333,334 shares of preferred stock to the loan holder as part of settling all of the outstanding debt and accrued interest.

k) As at November 30, 2016, the Company owed $79,333 (2015 - $76,500) to a significant shareholder of the Company, which has been recorded in accounts payable and accrued liabilities - related party. The amount is unsecured, non-interest bearing, and due on demand. During the year ended November 30, 2016, the Company incurred legal fees of $27,000 (2015 - $76,500) to this significant shareholder. On January 27, 2016, the Company issued 166,666 shares of preferred stock to settle outstanding debt owed to related parties of $24,167.

l) During the year ended November 30, 2016, the Company recognized revenue of $nil (2015 - $1,592) from a Company controlled by significant shareholders of the Company.

m) During the year ended November 30, 2016, the Company incurred $nil (2015 - $101,500) in consulting fees to the former President of the Company. During the year ended November 30, 2015, the Company issued 21,324 shares of common stock with a fair value of $51,617 to settle the amount owing in addition to paying $8,300 to settle debt owed to the former President of the Company. During the year ended November 30, 2015, $33,000 of the amount owing was paid by a significant shareholder and the remainder of $8,583 has been forgiven and recorded as additional paid-in capital.

Director Independence

The OTC Bulletin Board does not have a requirement that a majority of our Board of Directors be independent. However, with respect to the definition of independence utilized by NASDAQ, our officers and directors would be deemed to be independent.

Our Audit Committee is comprised of our officers and directors. NASDAQ requires at least three members on the Audit Committee, each of whom must be independent. NASDAQ also requires that, if its Chief Executive Officer’s compensation is determined by its Compensation Committee, the Compensation Committee must be comprised solely of independent directors. The Company currently does not meet either of these requirements.

The NASDAQ rules have both objective tests and a subjective test for determining who is an “independent director.” The objective tests state, for example, that a director is not considered independent if he or she is an employee of the Company or is a partner, executive officer or controlling stockholder of an entity to which the company made, or from which the Company received, payments in the current or any of the past three fiscal years that exceed the greater of $200,000 or 5% of the recipient’s consolidated gross revenue for that year or a family member serves in the current fiscal year or has served at any time during the last three fiscal years as an executive officer of the Company. The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Item 14. Principal Accountant Fees and Services

The Company paid or accrued the following fees in each of the prior two fiscal years to its independent certified public accountants, ~~Haynie~~RBSM &LLC ~~Co. and Pritchett, Siler and Hardy PC combined~~ for the year ended November 30, ~~2017~~2018: and Haynie & Co. and Pritchett, Siler and Hardy PC combined for the year ended November 30, ~~2016:~~2017.

	For the Year Ended November 30,
	2017		2016
	2018		2017
Audit Fees	$	1822,~~250~~000	$	1318,~~500~~250
Audit-Related Fees	$	0	$	0
Tax Fees	$	0	$	0
All Other Fees	$	0	$	0
Total Fees	$	1822,~~250~~000	$	1318,~~500~~250

"Audit Fees" consisted of fees billed for services rendered for the audit of the Company’s annual financial statements and audit related fees are for review of the financial statements included in the Company’s quarterly reports on Form 10-Q.

Item 15.

Exhibits

The financial statement schedules are omitted because they are inapplicable or the requested information is shown in our financial statements or related notes thereto.

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

~~Item 16. Form 10-K Summary~~20

Not applicable.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

	GALA PHARMACEUTICAL INC.
	By: /s/ Maqsood Rehman
Date: April 6, 2018	Maqsood Rehman
Date: April 15, 2019	Maqsood Rehman
	Principal Executive Officer

Pursuant to the requirements of the Exchange Act this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Maqsood Rehman	Principal Executive Officer	April 615, ~~2018~~2019
Maqsood Rehman	and Director

2221

Filing Compare · Gala Pharmaceutical Inc.