U.S.
SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

##### FORM 10-K

(Mark
One)

[X]
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009

OR

[
] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ______________ TO
______________

COMMISSION
FILE NUMBER: 000-15109



CALA
CORPORATION.

(Exact
name of Company as Specified in Its Charter)



Oklahoma73-1251800

(State
or Other Jurisdiction of Incorporation)
(I.R.S. Employer or Organization Identification No.)

1314
Texas Street, Suite 400, Houston, TX                            77002

(Address
of Principal Executive Offices)                             (Zip
Code)



Company’s
telephone number:(713)
302-8689



Securities
registered pursuant to Section 12(b) of the Act: None



Securities
registered pursuant to Section 12(g) of the Act: Common Stock, $0.005
Par Value



Indicate
by check mark whether the Company (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 Company was required to file such reports), and (2) been subject
to such filing requirements for the past 90 days.  Yes ­­NoX.



Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained,
to the best of Company’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 [   ].



Indicate
by check mark whether the Company is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See the definitions of "large accelerated filer,"
"accelerated filer," and "smaller reporting company"
in Rule 12b-2 of the Exchange Act.



|Large
				accelerated filer
				Non-accelerated
				filer | Accelerated
				filed
				Smaller
				reporting company
|----------------------------------------------------------- | ---------------------------------------------------------



Indicate
by check mark whether the Company is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes ­­NoX.



The
Company’s revenues for the fiscal year ended December 31, 2009
was zero.  The aggregate market value of the voting stock held by
non-affiliates of the Company as of March 29, 2011:$516,765.As of March 29, 2011, the Company had 320,866,147 shares of common
stock issued and outstanding.



Transitional
Small Business Disclosure Format (check one): Yes ­­NoX.

---

TABLE
OF CONTENTS



PART
I

|Item
			1.  Business                                                                                              | 3 
|----------------------------------------------------------------------------------------------------------------- | --
|Item
			1A.  Risk Factors                                                                                         | 4 
|Item
			2.  Property                                                                                              | 7 
|Item
			3.  Legal Proceedings                                                                                     | 7 
|Item
			4 [REMOVE AND RESERVED]                                                                                   | 7 
|                                                                                                                  |   
|PART
			II                                                                                                        |   
|                                                                                                                  |   
|Item
			5.  Market for Common Equity and Related Stockholder Matters and
			Issuer Purchases of Equity Securities | 7 
|Item
			6.   Selected Financial Data                                                                              | 8 
|Item
			7.  Management’s Discussion and Analysis of Financial
			Condition                                        |   
|and
			Results of Operations                                                                                      | 8 
|Item
			7A.  Quantitative and Qualitative Disclosures About Market Risk                                           | 9 
|Item
			8.  Financial Statements                                                                                  | 17
|Item
			9.  Changes in and Disagreements with Accountants on                                                      |   
|Accounting
			and Financial Disclosure                                                                            | 11
|Item
			9A. (T) Controls and Procedures                                                                           | 11
|Item
			9B.  Other Information                                                                                    | 11
|                                                                                                                  |   
|PART
			III                                                                                                       |   
|                                                                                                                  |   
|Item
			10.  Directors, Executive Officers, and Corporate
			Governance                                           | 11
|Item
			11.  Executive Compensation                                                                               | 13
|Item
			12.  Security Ownership of Certain Beneficial Owners and
			Management                                    |   
|and
			Related Stockholder Matters                                                                                | 13
|Item
			13.  Certain Relationships and Related Transactions and                                                   |   
|Director
			Independence                                                                                          | 14
|Item
			14.  Principal Accountant Fees and Services                                                               | 14
|                                                                                                                  |   
|PART
			IV                                                                                                        |   
|                                                                                                                  |   
|Item
			15.  Exhibits, Financial Statement Schedules                                                              | 15
|                                                                                                                  |   
|Signatures                                                                                                        | 16

---

PART
I.

ITEM
1.  BUSINESS.

Cala
Corporation (formerly Magnolia Foods, Inc.) was incorporated on
September 13, 1985 under the laws of the State of Oklahoma. The
Company's sole industry segment was the business of owning,
operating, licensing and joint venturing restaurants. In addition,
the Company operated restaurants under lease which were discontinued
during the year. Currently, the Company is in the development stage
of building an underwater resort and casino.



Business
Development.

The
Company has designed an undersea resort. The Company, through the
expertise of Mr. Ray Francis has solved the naval engineering
problems originally presented by the project. Mr. Francis brings to
the table over 40 years of maritime experience that is second to none
in the maritime industry. Mr. Francis talents allow for a design that
benefits the customer’s safety, maximizes the openness and
space of the facility, and maintains the primary focus of human
contact with marine life.  This coupled with Joseph Cala’s
knowledge and experience in the hospitality industry, along with
eight years of intensive study and seemingly endless trial and error,
enabled the Company to finalize two naval engineered designs for the
Undersea Resort and Residence. The Company engaged Mr. Clive Jones, a
former senior executive with Economic Research Associates, to help
with business development. Mr. Jones has over 40 years of experience
in worldwide leisure travel and tourism development, and he was the
visionary behind of many landmark resorts and theme parks. In
addition, the Company is working with prestigious maritime companies
such as Stodga of Poland and FinCantieri of Italy.



The
Company plans to build the first UnderSea Resort & Casino, the
first Undersea Residence, and the first Residence Fractional
Ownership. The development will be the residence and the fractional
ownership, and the project will be financed from pre-selling
individual units.  Management believes that the project has a great
chance of success. The Company is in discussions with members of the
timeshare and fractional unit industry to explore the possibility of
a partnership or contractual arrangement with the Company. The
undersea residences have the entire ocean available with no purchase
costs, and without the limitations of land. According to the Future
Timeshare Buyers 2004 Market Profile, 13.4 million adults are
interested in purchasing some form of timeshare during the next two
years. The next generation of owners is well educated and the highest
concentration of interest in purchasing is among GenXers. In
addition, the study documents that prospective owners are experienced
and enthusiastic travelers.

The
Company completed the design phase of development and is seeking
financing to begin the construction phase of the project. Included in
the financing stage is the concept of pre-selling the vessels prior
to the beginning of construction. As of this date the Company does
not have any commitments for financing or purchase of any units. The
Company initiated a contract with a shipyard for building the units.

Management
believes that the project has a great chance of success however;
there can be no assurance that (i) such individual unit or fractional
ownership will be sold or significant revenue will be generated, and
(ii) anticipated costs will not be significantly exceeded by actual
costs incurred.

The
Company owns no patents or trademarks, and has no employees.

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3

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ITEM
1A RISK FACTORS



Risk
Factors Connected with Plan of Operation.



(a)	Limited
Prior Operations, History of Operating Losses, and Accumulated
Deficit May Affect Ability of Company to Survive.



The
Company has had limited prior operations to date.  Since the
Company’s principal activities recently have been limited to
seeking new business ventures, it has no recent record of any
revenue-producing operations.  Consequently, there is only a limited
operating history upon which to base an assumption that the Company
will be able to achieve its business plans.  In addition, the Company
has only limited assets.  As a result, there can be no assurance that
the Company will generate significant revenues in the future; and
there can be no assurance that the Company will operate at a
profitable level.  Accordingly, the Company’s prospects must be
considered in light of the risks, expenses and difficulties
frequently encountered in connection with the establishment of a new
business.



As
a result of the fixed nature of many of the Company’s expenses,
the Company may be unable to adjust spending in a timely manner to
compensate for any unexpected delays in the development and marketing
of the Company’s products or any capital raising or revenue
shortfall.  Any such delays or shortfalls will have an immediate
adverse impact on the Company’s business, operations and
financial condition.





(b)	Need for Additional Financing
May Affect Operations and Plan of Business.



The
working capital requirements associated with any adopted plan of
business of the Company may be significant.  The Company anticipates,
based on currently proposed assumptions relating to its operations
(including with respect to costs and expenditures and projected cash
flow from operations), that it must seek financing to continue its
operations (an amount which is as yet to be determined).  However,
such financing, when needed, may not be available, or on terms
acceptable to management.  The ability of the Company to continue as
a going concern is dependent on additional sources of capital and the
success of the Company’s business plan.  The Company’s
independent accountant audit report included in this Form 10-K
includes a substantial doubt paragraph regarding the Company’s
ability to continue as a going concern.



If
funding is insufficient at any time in the future, the Company may
not be able to take advantage of business opportunities or respond to
competitive pressures, or may be required to reduce the scope of its
planned product development and marketing efforts, any of which could
have a negative impact on its business, operating results and
financial condition.  In addition, insufficient funding may have a
material adverse effect on the company’s financial condition,
which could require the company to:

Page
4

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securities
will result in dilution to existing stockholders.  If additional
funds are raised through the issuance of debt securities, these
securities may have rights, preferences and privileges senior to
holders of common stock and the terms of such debt could impose
restrictions on the Company’s operations.  Regardless of
whether the Company’s cash assets prove to be inadequate to
meet the Company’s operational needs, the Company may seek to
compensate providers of services by issuance of stock in lieu of
cash, which will also result in dilution to existing shareholders.



(c)	Loss
of Current Management Could Have Adverse Impact on Business and
Prospects for Company.

The
Company’s success is dependent upon the hiring and retention of
key personnel.  None of the officers or directors has any employment
or non-competition agreement with the Company.  Therefore, there can
be no assurance that these personnel will remain employed by the
Company.Should
any of these individuals cease to be affiliated with the Company for
any reason before qualified replacements could be found, there could
be material adverse effects on the Company’s business and
prospects.

In
addition, all decisions with respect to the management of the Company
will be made exclusively by the officers and directors of the
Company.  Investors will only have rights associated with
stockholders to make decisions which affect the Company.  The success
of the Company, to a large extent, will depend on the quality of the
directors and officers of the Company.  Accordingly, no person should
invest in the shares unless he is willing to entrust all aspects of
the management of the Company to the officers and directors.



(d)	Potential
Conflicts of Interest May Affect Ability of Officers and Directors to
Make Decisions in the Best Interests of Company.



The
officers and directors have other interests to which they devote
time, either individually or through partnerships and corporations in
which they have an interest, hold an office, or serve on boards of
directors, and each will continue to do so notwithstanding the fact
that management time may be necessary to the business of the Company.
As a result, certain conflicts of interest may exist between the
Company and its officers and/or directors which may not be
susceptible to resolution.



In
addition, conflicts of interest may arise in the area of corporate
opportunities which cannot be resolved through arm’s length
negotiations.  All of the potential conflicts of interest will be
resolved only through exercise by the directors of such judgment as
is consistent with their fiduciary duties to the Company.  It is the
intention of management, so as to minimize any potential conflicts of
interest, to present first to the board of directors to the Company,
any proposed investments for its evaluation.



(e)	Limitations
on Liability, and Indemnification, of Directors and Officers May
Result in Expenditures by Company.



The
Company’s Certificate of Incorporation contain provisions to
eliminate, to the fullest extent permitted by the Oklahoma
Corporation Law, as in effect from time to time, the personal
liability of directors of the Company for monetary damages arising
from a breach of their fiduciary duties as directors.  The
Certificate of Incorporation and the Amended and Restated By-Laws of
the Company include provisions to the effect that the Company may, to
the maximum extent permitted from time to time under applicable law,
indemnify any director, officer, or employee to the extent that such
indemnification and advancement of expense is permitted under such
law, as it may from time to time be in effect.  Any limitation on the
liability of any director, or indemnification of directors, officer,
or employees, could result in substantial expenditures being made by
the Company in covering any liability of such persons or in
indemnifying them.

Page
5

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(f)	Absence
of Cash Dividends May Affect Investment Value of Company’s
Stock.

The
board of directors does not anticipate paying cash dividends on the
common stock for the foreseeable future and intends to retain any
future earnings to finance the growth of the Company’s
business. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements and the general operating
and financial conditions of the Company as well as legal limitations
on the payment of dividends out of paid-in capital.

(g)	Non-Cumulative
Voting May Affect Ability of Some Shareholders to Influence Mangement
of Company.

Holders
of the shares of common stock of the Company are not entitled to
accumulate their votes for the election of directors or otherwise.
Accordingly, the holders of a majority of the shares present at a
meeting of shareholders will be able to elect all of the directors of
the Company, and the minority shareholders will not be able to elect
a representative to the Company’s board of directors.





There
has been only a limited public market for the common stock of the
Company.  The common stock of the Company is currently quoted on the
Pink Sheets LLC.  As a result, an investor may find it difficult to
dispose of, or to obtain accurate quotations as to the market value
of the Company’s securities. In addition, the common stock is
subject to the low-priced security or so called “penny stock”
rules that impose additional sales practice requirements on
broker-dealers who sell such securities.  The Securities Enforcement
and Penny Stock Reform Act of 1990 requires additional disclosure in
connection with any trades involving a stock defined as a penny stock
(generally, according to recent regulations adopted by the U.S.
Securities and Exchange Commission (“SEC”), any equity
security that has a market price of less than $5.00 per share,
subject to certain exceptions), including the delivery, prior to any
penny stock transaction, of a disclosure schedule explaining the
penny stock market and the risks associated therewith.   The
regulations governing low-priced or penny stocks sometimes limit the
ability of broker-dealers to sell the Company’s common stock
and thus, ultimately, the ability of the investors to sell their
securities in the secondary market.



(i)	Failure
to Maintain Market Makers May Affect Value of Company’s Stock.

If
the Company is unable to maintain a Financial Industry Regulatory
Authority member broker/dealers as market makers, the liquidity of
the common stock could be impaired, not only in the number of shares
of common stock which could be bought and sold, but also through
possible delays in the timing of transactions, and lower prices for
the common stock than might otherwise prevail.  Furthermore, the lack
of market makers could result in persons being unable to buy or sell
shares of the common stock on any secondary market.  There can be no
assurance the Company will be able to maintain such market makers.

(j)	Sale
of Shares Eligible For Future Sale Could Adversely Affect the Market
Price.

All
of the shares of common stock that are currently held, directly or
indirectly, by significant shareholders of the Company as shown in
the chart under Part III, Item 11 of this Form 10-K, have been issued
in reliance on the private placement exemption under the Securities
Act of 1933.  Such shares will not be available for sale in the open
market without separate registration except in reliance upon Rule 144
under the

Page
6

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Securities
Act of 1933.  In general, under Rule 144 a person, or persons whose
shares are aggregated, who has beneficially owned shares acquired in
a non-public transaction for at least one year, including persons who
may be deemed affiliates of the Company, as defined, would be
entitled to sell within any three-month period a number of shares
that does not exceed 1% of the then outstanding shares of common
stock, provided that current public information is then available.
If a substantial number of the shares owned by these shareholders
were sold under Rule 144 or a registered offering, the market price
of the common stock could be adversely affected.

ITEM
2. DESCRIPTION OF PROPERTY.

The
Company maintains an office at 1314 Texas Street, Suite 400, Houston,
TX 77002. It currently does not own any equipment at that location.

ITEM
3.  LEGAL PROCEEDINGS.

On
January 20, 2009, a complaint was filed against the Company in the
Superior Court of California case # CIVWS09-0049 terminating the
lease at 500 Bollinger Canyon Way, San Roman, CA due to subleasing
the premises without consent of the landlord. A judgment was entered
giving the landlord possession of the premises with no monetary
amount awarded.

On
February 18, 2009 the Company received a letter demanding payment on
the deficiencies of 2 notes totaling $125,000 the Company had issued.
Subsequent to this an action was originated in the District Court of
Jefferson County Texas (case # A-183,766). The Plaintiff contends the
Company had not paid the principal or interest on promissory notes.
Issued in 2004. In 2005 the Company issued stock of 3,400,000 and
2,500,000 shares to the plaintiff in full payment of the outstanding
notes and interest to the plaintiff.  The Company’s position is
the notes and interest were paid in full by the issuance of the stock
to the plaintiff and the Company has no liability.

ITEM
4.  [REMOVE AND RESERVE]

PART
II.

ITEM
5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market
Information.

The
Company’s common stock trades on the National Quotation
Bureaus’ Pink Sheets (now known as Pink Sheets LLC), where it
continues to trade under the symbol “CCAA”.The
range of closing prices shown below is as reported by this market.
The quotations shown reflect inter-dealer prices, without retail
mark-up, markdown or commission and may not necessarily represent
actual transactions.

Page
7

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Per
Share Common Stock Bid Prices by Quarter

For
the Fiscal Year Ended on December 31, 2009(1)

|                                      | High  | Low   
|------------------------------------- | ----- | ------
|Quarter
			Ended December 31, 2009    | 0.008 | 0.0011
|Quarter
			EndedSeptember
			30, 2009 | 0.005 | 0.0010
|Quarter
			Ended June 30, 2009        | 0.003 | 0.0010
|Quarter
			Ended March 31, 2009       | 0.004 | 0.0010

(1)
 The Company’s common stock only traded sporadically during
this fiscal year

Per
Share Common Stock Bid Prices by Quarter

For
the Fiscal Year Ended on December 31, 2008

|                                      | High  | Low   
|------------------------------------- | ----- | ------
|Quarter
			Ended December 31, 2008    | 0.006 | 0.0012
|Quarter
			EndedSeptember
			30, 2008 | 0.007 | 0.0015
|Quarter
			Ended June 30, 2008        | 0.012 | 0.0030
|Quarter
			Ended March 31, 2008       | 0.020 | 0.0010

Holders
of Common Equity.

As
of December 31, 2009, the Company had approximately 515 shareholders
of record.

Dividend Information.

The
Company has not declared or paid a cash dividend to stockholders
since it was incorporated.  The Board of Directors presently intends
to retain any earnings to finance Company operations and does not
expect to authorize cash dividends in the foreseeable future.  Any
payment of cash dividends in the future will depend upon the
Company's earnings, capital requirements and other factors.

Sales
of Unregistered Securities.

The
Company made no sales of unregistered securities (restricted stock)
during the year which have not been reported in the 10 Q’s
filed for the first three quarters for the year ending December 31,
2009.

ITEM
6. SELECTED FINANCIAL DATA

Not
Applicable

ITEM
7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATION.

When
used in this Form 10-K, the words “anticipated”,
“estimate”, “expect”, and similar expressions
are intended to identify forward-looking statements. Such statements
are subject to certain risks, uncertainties

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8

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and
assumptions including the possibility that the Company will fail to
generate projected revenues. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated,
estimated or projected.

The
following discussion of the financial condition, changes in financial
condition and results of operations of the Company for the fiscal
years ended December 31, 2009 and 2008 should be read in conjunction
with the financial statements of the Company and related notes
included therein.

The
Company incurred General and Administrative expenses of $336,182 for
the year ending 2009 and $234,762 for the year ending 2008. Stock for
services consisted of 32,000 and zero of the total general and
administrative expense for the years ending 2009 and 2008,
respectively. Officers salary of $300,000 was the major components of
G&A during the year ended 2009 while officer’s salary of
$150,000 and legal and accounting of $46,235 were the major
components for the year ending 2008.

The
Company has incurred net losses: $356,116 for the fiscal year ended
December 31, 2009 and $1,114,398 for the fiscal year ended December
31, 2008.The
Company’s current liabilities exceed its current assets by
$618,112 as of December 31, 2009 and $320,590 as of December 31,
2008.  AtDecember 31, 2009, the Company had an aggregate accumulated deficit
and accumulated deficit during the development stage of $14,078,706
($11,886,789 and $2,191,917, respectively).  This raises substantial
doubt about the Company’s ability to continue as a going
concern.

Liquidity
and Capital Resources

Since
inception, the Company’s most significant change in liquidity
or capital resources has been receipts of proceeds from debt
offerings. Further, there exist no agreements or understandings with
regard to loan agreements by or with the Officers, Directors,
principals, affiliates or shareholders of the Company.



The
net cash used in operating activities was $18,560 for the year ended
December 31, 2009 compared to net cash used of $150,590 for the year
ended December 31, 2008. This decrease is due primarily the
impairment loss of $710,205 in 2008.

Net
cash used in investing activities was zero for the year ending
December 31, 2009 and zero for the same period ending December 31,
2008.

Net
cash provided by financing activities was $18,560 for the year ended
December 31, 2009 and the net cash provided was $137,443 for the same
period ending December 31, 2008. Financing activities for the period
ending December 31, 2008 were higher due to stock sales of $76,500
and notes payable-officer of $ 64,636.

The
Company will attempt to carry out its plan of business as discussed
above. The Company cannot predict to what extent its lack of
liquidity and capital resources will hinder its business plan. The
Company will need additional capital to fund that proposed operation.

Need
for Additional Financing

The
Company’s existing capital may not be sufficient to meet the
Company’s cash needs, including the costs of compliance with
the continuing reporting requirements of the Securities Exchange Act
of 1934, as amended.

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9

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Twelve-Month
Plan of Operation.

The
Company intends to take advantage of any reasonable business proposal
presented which management believes will provide the Company and its
stockholders with a viable business opportunity.  The board of
directors will make the final approval in determining whether to
complete any acquisition, and unless required by applicable law, the
articles of incorporation or bylaws or by contract, stockholders'
approval will not be sought.

The Company designed to build the first UnderSea Resort &
Casino, the first Undersea Residence, and the first Residence
Fractional Ownership. The first development will be the residence and
the fractional ownership, and the project will be financed from
pre-selling individual units. The Company estimates that the average
residential development should generate approximately $600 million of
revenue from the sale of the units while the total development cost
should be approximately $460 million. This is based on initial
estimates of unit costs and revenue generated in the sale of the
vessels as it is the intent of the Company to build the vessels under
the Company’s design for sale to prospective buyers.  The
Company does not initially intend to own any of the vessels being
built. Therefore, the management believes that the project has a
great chance of success however there can be no assurance that (i)
such individual unit or fractional ownership will be sold or
significant revenue will be generated, and (ii) anticipated costs
will not be significantly exceeded by actual costs incurred. The
possibilities in this industry are tremendous, because demand for
oceanic properties is the highest it has ever been and the supply is
scarce. The undersea residences have the ocean available with no
purchase costs, and without the limitations of land.

The
Company plans to finalize plans for securing the financing and
construction of the resort.  The beginning of construction is
dependent on the Company completing its plan of financing and
contracting for the construction, both of which will highly impact
the Company’s ability to carry out its business plan.



The
investigation of business opportunities and the negotiation,
drafting, and execution of relevant agreements, disclosure documents,
and other instruments will require substantial management time and
attention and will require the Company to incur costs for payment of
accountants, attorneys, and others.  If a decision is made not
to participate in or complete the acquisition of a specific business
opportunity, the costs incurred in a related investigation will not
be recoverable.  Further, even if an agreement is reached for
the participation in a specific business opportunity by way of
investment or otherwise, the failure to consummate the particular
transaction may result in the loss to the Company of all related
costs incurred.

Capital
Expenditures.

None

Critical
Accounting Policies.

The
SEC has issued Financial Reporting Release No. 60, “Cautionary
Advice Regarding Disclosure About Critical Accounting Policies”
(“FRR 60”); suggesting companies provide additional
disclosure and commentary on their most critical accounting policies.
 In FRR 60, the Commission has defined the most critical accounting
policies as the ones that are most important to the portrayal of a
company’s financial condition and operating results, and
require management to make its most difficult and subjective
judgments, often as a result of the need to make estimates of matters
that are inherently uncertain.  Based on this definition,

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10

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the
Company’s most critical accounting policies include the use
of estimates in the preparation of financial statements.
The methods, estimates and judgments the Company uses in applying
these most critical accounting policies have a significant impact on
the results the company reports in its financial statements.

The
preparation of these financial statements requires the Company to
make estimates and judgments that affect the reported amounts of
assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities.  On an on-going basis, the Company
evaluates these estimates, including those related to revenue
recognition and concentration of credit risk.  The Company bases its
estimates on historical experience and on various other assumptions
that is believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the
carrying values of assets and liabilities that are not readily
apparent from other sources.  Actual results may differ from these
estimates under different assumptions or conditions.

ITEM
9A.  CONTROLS AND PROCEDURES.



Evaluation
of Disclosure Controls and Procedures.

Within
the 90 days prior to the end of the period covered by this report,
the Company carried out an evaluation of the effectiveness of the
design and operation of its disclosure controls and procedures
pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as
amended (“Exchange Act”).  This evaluation was done under
the supervision and with the participation of the Company’s
president.  Based upon that evaluation, he concluded that the
Company’s disclosure controls and procedures are not effective
in gathering, analyzing and disclosing information needed to satisfy
the Company’s disclosure obligations under the Exchange Act.

Changes
in Disclosure Controls and Procedures.

There
were no significant changes in the Company’s disclosure
controls and procedures, or in factors that could significantly
affect those controls and procedures since their most recent
evaluation.

ITEM
  9B 	OTHER INFORMATION

None

PART
III.

ITEM
10.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

On February 28, 2006, John Del Fevro resigned as a director of the
Company.  On October 1, 2006, Larry Pfautsch was elected to the board
of directors and Robert Mosley resigned.  On November 1, 2006, Ray
Francis was elected to the board of directors of the Company.

The
name, age, and respective position of the directors and executive
officer of the Company are set forth below.  The director named below
will serve until the next annual meeting of the Company’s
stockholders or until his successors are duly elected and have
qualified.  Directors are elected for a term until the next annual

Page
11

---

stockholders’
meeting.  Officers will hold their positions at the will of the board
of directors, absent any employment agreement, of which none
currently exist or are contemplated.  There are no arrangements,
agreements or understandings between non-management shareholders and
management under which non-management shareholders may directly or
indirectly participate in or influence the management of the
Company’s affairs.  There are no other promoters or control
persons of the Company.  There are no legal proceedings involving the
directors of the Company.

Director
and Executive Officer.

Joseph
Cala, 49, Director,Chairman and CEO

Mr.
Cala has been an international business owner most of his
professional life. He began his career at an early age rising to top
management positions in some of the most prestigious and luxurious
resorts in the world. Mr. Cala, as Chairman & CEO of Cala
Corporation has been involved in various ventures such as: Fila
Sportswear USA; Mondi Fashions, USA; L'Italiano Restaurants and
Weddings in California, Hawaii and Japan, Cala Hotels, Inc. dba
Undersea Resort; and Hydrogen Future, Inc.

Larry
S. Pfautsch, 61, Director

Mr.
Pfautsch is Vice President of Corporate Communications for American
Century Investments, a $100 billion asset manager based in Kansas
City, Mo. Previously, Mr. Pfautsch was a Partner and Senior Vice
President with the international communications and public relations
firm of Fleishman Hillard, Inc., where he was a member of the
financial communications, investor relations, and corporate
reputation management practice groups. He began his career as a
newspaper reporter and editor and later worked in corporate
communications for a major building materials retailer.  He is a U.S.
Army veteran and a longtime member of the International Association
of Business Communicators.

Mr.
Ray Francis, 73, Director

Mr.
Francis, President of UnderSea Resort Design, was elected to the
Board of Directors of Cala Corporation. Having completed his undersea
naval design to the strict maritime rules of Lloyds Register of
Shipping, Mr. Francis conducts his day to day operational
responsibilities at the UnderSea Resort Headquarters and will
commence his role as a director and principal in the Company’s
oceanic construction operations.

Compliance
with Section 16(a) of the Securities Exchange Act.

Section
16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors, and persons who beneficially own more than
10% of any class of the Company’s equity securities to file
initial reports of ownership and reports of changes in ownership with
the Securities and Exchange Commission (“SEC”).
Executive officers, directors and beneficial owners of more than 10%
of any class of the Company’s equity securities are required by
SEC regulations to furnish the Company with copies of all Section
16(a) forms they file.

Based
solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company under Rule 16a-3(d) during fiscal 2002, and
certain written representations from executive officers and
directors,the
Company is unaware of any required reports that have not been timely
filed.

Page
12

---

ITEM
11.  EXECUTIVE COMPENSATION.

Summary
Compensation Table

|Name
				and principal position | Year                                 | Annual
				compensation                         | Long-term
				compensation
|------------------------------- | ------------------------------------ | ----------------------------------------------- | --------------------------
|Salary($)                       | Bonus($)                             | Other
				annual compensation($)                | Awards                    
|Restrictedstockaward(s)($)      | Securitiesunder-lyingoptions/SARs(#) | LTIPpayouts($)                                 
|JosephCala,(1)
				President    | 2009
				2008
				2006               | 300,000
				(2)
				150,000
				(2)
				300,000 | -
				-
				-             



1. Mr Cala was appointed a director and president in 1999.
2. Accrued
	but not paid

There
are no annuity, pension or retirement benefits proposed to be paid to
officers, directors, or employees of theCompany
in the event of retirement at normal retirement date as there is no
existing plan provided for or contributed to by the Company.  In
addition, no
remuneration is proposed to be paid in the future, directly or
indirectly, by the Company to any officer or director since there is
no existing plan as of December 31, 2009 which provides for such
payment.

ITEM
12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The
following table sets forth information regarding the beneficial
ownership of shares of the Company’s common stock as of May 31,
2010 (320,886,147issued
and outstanding) by (i) all stockholders known to the Company to be
beneficial owners of more than 5% of the outstanding common stock;
and (ii) all officers and directors of the Company, individually and
as a group (each person has sole voting power and sole dispositive
power as to all of the shares shown as beneficially owned by them):

Page
13

---

|Title
			of Class | Name
			and Address of Beneficial Owner                                 | Amount
			and Nature of Beneficial Owner | Percent
			of Class
|----------------- | ----------------------------------------------------------------------- | ---------------------------------------- | -------------------
|Common
			Stock   | Joseph
			Cala
			1314
			Texas Street
			Houston,
			TX 77002          | 117,111,111                              | 36.5%              
|Common
			Stock   | Larry
			Pfautsch
			1314
			Texas Street
			Houston,
			TX 77002       | 15,500,000                               | 4.8%               
|Common
			Stock   | Raymond
			Francis
			1314
			Texas Street
			Houston,
			TX 77002      | 16,000,000                               | 5.0%               
|Common
			 Stock  | Shares
			of all directors and executive officers as a group (1 person) | 148,611,111                              | 46.3
			 %         

1. None
	of these security holders has the right to acquire any amount of the
	shares within sixty days from options, warrants, rights, conversion
	privilege, or similar obligations.

ITEM
13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Other
than as set forth below, during the last two fiscal years there have
not been any transaction that have occurred between the Company and
its officers, directors, and five percent or greater shareholders.

In
2005, the officer of the Company was issued 7,000,000 shares to
reduce accrued salary of $112,500. On January 2006, an officer of the
Company returned 300,000 shares of common stock and received $ 15,000
in cash.  The shares were cancelled. On August 2006, an officer of
the Company returned 7,166,425 shares to the Company for a note
payable of $ 214,993. The shares were cancelled. On November 21,
2006, the Company issued an officer of the Company 16,611,111 shares
of common stock valued at $ 352,986 for salary for the year ended
2006.  On February 2, 2007, the Company issued 15,000,000 shares of
common stock valued at $ 300,000 for salary for the year ended 2007.
On January 28, 2009 the Company issued 8,000,000 shares of common
stock valued at $16,000 to two directors of the Company and 5,000,000
shares of common stock with a value of $10,000 to reduce Note
Payable- Officer by $10,000.

ITEM
14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Audit
Fees.

The
aggregate fees billed for each of the last two fiscal years for
professional services rendered by De Joya Griffith and Company, LLC
for Form 10-K for 2008 was $27,000 and 2009 was $ 4,000.

Audit-Related
Fees.

The
aggregate fees billed in each of the last two fiscal years for
assurance and related services by De Joya Griffith: $0.

Page
14

---

Tax
Fees.

The
aggregate fees billed in each of the last two fiscal years for
professional services rendered by De Joya Griffith: $0.

All
Other Fees.

The
aggregate fees billed in each of the last two fiscal years for
products and services provided by De Joya Griffith: $0.

Audit
Committee.

The
Company does not have an audit committee.

PART
IV

ITEM
15 EXHIBITS AND REPORTS ON FORM 8-K

Exhibits.

Exhibits
included or incorporated by reference herein are set forth under the
Exhibit Index.

Reports
on Form 8-K.

On
March 10, 2008, the Company filed an 8-K announcing a contract
between the Company and Odys Shipyard for building the undersea
vessels.  Under the terms of the contract the contract becomes
effective when the Company has place a 50% deposit on the first
vessel to be built. The Company had 100 days from the date of the
contract to make the initial deposit or Odys Shipyard may
unilaterally cancel the contract. The Company has no financial
obligations until the initial payment has been completed. The Company
has not met its obligations per the contract so the contact could be
cancelled by the shipyard.

On
November 19, 2008, the Company filed an 8-K that the Company had
created a new hospitality management division. The new division
mission is to sign hospitality management contracts with independent
owners.

SIGNATURE



Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

Cala
Corporation

Dated:
 March 31, 2011		               	By:/s/
Joseph Cala

Joseph
Cala, President

Page
15

---

Pursuant
to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of
the Company and in the capacities and on the date indicated:

|Signature                                         | Title                                                               | Date              
|------------------------------------------------- | ------------------------------------------------------------------- | ------------------
|                                                  |                                                                     |                   
|/s/
				 Joseph Cala
				Joseph
				Cala          | President
				(principal financial and accounting officer)/Director | March
				31, 2011
|/s/
				  Raymond Francis
				Raymond
				Francis | Director                                                            | March
				31, 2011
|/s/
				  Larry Pfautsch
				Larry
				Pfautsch   | Director                                                            | March 31,
				2011

---

CALA
CORPORATION

FINANCIAL
STATEMENTS AND ACCOMPANYING FOOTNOTES

TABLE
OF CONTENTS



1. REPORT
	OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM .......18

1. BALANCE
	SHEETS ............................................................................
	.19

1. STATEMENTS
	OF OPERATIONS............................................................20

1. STATEMENT
	OF STOCKHOLDERS’ EQUITY (DEFICIT)..............................21

1. STATEMENTS
	OF CASH FLOWS............................................................22

1. NOTES
	TO FINANCIAL STATEMENTS....................................................
	24



Page
17

---



De
Joya Griffith & Company, LLC

CERTIFIED
PUBLIC ACCOUNTANTS & CONSULTANTS

REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To
the Board of Directors and Stockholders

Cala
Corp

We
have audited the accompanying balance sheets of Cala Corp(A Development Stage Company)as of December 31, 2009 and 2008, and the related statements of
operations, stockholders’ equity (deficit), and cash flows for
the years then ended and from January 1, 2007 through December 31,
2009.  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.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements.  An audit also includes 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, based on our audit, the financial statements referred to
above present fairly, in all material respects, the financial
position of Cala Corp(A
Development Stage Company)as of December 31, 2009 and 2008, and the results of its operations
and cash flows for the years then ended and from January 1, 2007
through December 31, 2009 in conformity with accounting principles
generally accepted in the United States.

The
accompanying financial statements have been prepared assuming that
the Company will continue as a going concern.  As discussed in Note 4
to the financial statements, the Company has suffered losses from
operations and current liabilities exceed current assets, all of
which raise substantial doubt about its ability to continue as a
going concern.  Management’s plans in regards to these matters
are also described in Note 4.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.

/s/
De Joya Griffith & Company, LLC

De
Joya Griffith & Company, LLC

Henderson,
NV

March
7, 2011

Page
18

---

CALA
CORPORATION(A
DEVELOPMENT STAGE COMPANY)BALANCE
SHEETSAS
OF DECEMBER 31, 2009 AND 2008(AUDITED)

ASSETS

|                                                                            | 2009                           | 2008                           
|--------------------------------------------------------------------------- | ------------------------------ | -------------------------------
|Current assets                                                              |                                |                                
|Cash                                                                        | $
			                       -- | $
			                        --
|Total current
			assets                                                     | --                             |                                
|                                                                            |                                |                                
|Fixed
			assets, net of accumulated depreciation of $45,307
			 and $38,712 | --                             | 6,595                          
|Total
			fixed assets                                                       | --                             | 6,595                          
|                                                                            |                                |                                
|Other
			assets                                                             |                                |                                
|Website
			development                                                      | 13,877                         | 23,877                         
|Total
			assets                                                             | $13,877                        | $
			                 30,472   
|                                                                            |                                |                                
|LIABILITIES
			ANDSTOCKHOLDERS’
			DEFICIT                                  |                               
|                                                                            |                               
|Current
			liabilities                                                      |                               
|Accounts
			payable and accrued expense                                     | $
			              48,935      | $
			                 49,973   
|Notes
			payable - officer/stockholder                                      | 71,978                         | 65,419                         
|Officer
			salary payable                                                   | 433,600                        | 133,600                        
|Taxes
			payable                                                            | 11,599                         | 11,599                         
|Notes
			payable                                                            | 62,000                         | 60,000                         
|Total current
			liabilities                                                | 628,112                        | 320,590                        
|                                                                            |                                |                                
|Total
			liabilities                                                        | 628,112                        | 320,590                        
|                                                                            |                                |                                
|Stockholders’equity(deficit)                                                |                                |                                
|Common
			stock,                                                            |                                |                                
|$0.005
			par value; 400,000,000 shares authorized                          |                                |                                
|issued
			and outstanding 320,866,147 and 304,886,147, respectively:        | 1,604,329                      | 1,524,329                      
|Additional
			paid-in capital                                               | 11,861,259                     | 11,909,259                     
|Accumulated
			deficit                                                      | (11,886,789)                   | (11,886,789)                   
|Accumulated
			deficit during development stage                             | (2,191,918)                    | (1,835,801)                    
|Treasury
			stock -56,533 shares @cost                                      | (1,116)                        | (1,116)                        
|Totalstockholders’
			deficit                                               | (614,235)                      | (290,118)                      
|Total
			liabilities andstockholders’
			deficit                            | $
			 13,877                   | $30,472                        

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

Page
19

---

CALA
CORPORATION(A
DEVELOPMENT-STAGE COMPANY)STATEMENTS
OF OPERATIONSFOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008, AND FROM JANUARY 1, 2007
TO DECMBER 31, 2009(AUDITED)



|                                                       | 2009                | 2008              | January 1, 2007 to December
31, 2009
|------------------------------------------------------ | ------------------- | ----------------- | ------------------------------------
|Income                                                 | $
			            -- | $
			          -- | $
			            --                 
|                                                       |                     |                   |                                     
|General
			and administrative expense                  | 326,182             | 234,762           | 1,255,649                           
|Depreciationand amortization                           | 16,595              | 26.724            | 67,765                              
|Total
			operating expenses                            | 342,777             | 261,486           | 1,323,414                           
|                                                       |                     |                   |                                     
|Loss
			from operations                                | (342,777)           | (261,486)         | (1,323,414)                         
|                                                       |                     |                   |                                     
|Other
			income (expense)                              |                     |                   |                                     
|Interest
			expense                                    | (13,339)            | (30,698)          | (92,481)                            
|Other
			income                                        | --                  | 23,092            | 74,007                              
|Impairment
			loss on fixed asset                      | --                  | (710,205)         | (711,817)                           
|Other
			expense                                       | --                  | (13,541)          | (16,653)                            
|Loss
			on disposal of assets                          | --                  | (121,560)         | (121,560)                           
|Total
			other income (expense)                        | (13,339)            | (852,912)         | (868,503)                           
|                                                       |                     |                   |                                     
|Net
			loss                                            | (356,116)           | $
			 (1,114,398) | $
			  (2,191,917)                  
|                                                       |                     |                   |                                     
|Earnings
			per share:                                 |                     |                   |                                     
|Net
			loss per share-basic                            | $(0.00)             | $(0.00)           |                                     
|Weighted
			average number of shares outstanding-basic | 319,638,750         | 300,554,791       |                                     

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

Page
20

---

CALA
CORPORATION(A
DEVELOPMENT-STAGE COMPANY)STATEMENT
OF STOCKHOLDERS’ EQUITY (DEFICIT) 
FOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008AND FROM JANUARY 1, 2007 TO DECMBER 31, 2009(AUDITED)

|                                                                                 | Common
			StockNumberShares | $0.005Amount   | AdditionalPaid-InCapital | AccumulatedDeficit | Development StageAccumulative Deficit | Stock
			                         Subscription | TreasuryShares | Stock    | TotalStockholders’Equity
			(Deficit)
|-------------------------------------------------------------------------------- | --------------------------- | -------------- | ------------------------ | ------------------ | ------------------------------------- | ---------------------------------------------- | -------------- | -------- | -------------------------------------
|Balance
			12/31/06                                                              | 249,251,980                 | 1,246,258      | $11,133,380              | $(11,886,789)      | $
			    --                           | $
			  (50,000)                                | (56,533)       | $(1,116) | $441,733                             
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Shares
			issued for
			cash @$0.01-.35
			   per
			share                       | 13,814,167                  | 69,071         | 133,379                  | --                 | --                                    | --                                             | --             | --       | 202,450                              
|Shares
			issuedfor services classified as a capitalized cost @  $0.02 per share | 10,600,000                  | 53,000         | 215,000                  | --                 | --                                    | --                                             | --             | --       | 268,000                              
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Shares
			issued for services
			 @$0.02-0.03
			per                             |                             |                |                          |                    |                                       |                                                |                |          |                                      
|share                                                                            | 1,250,000                   | 6,250          | 25,750                   | --                 | --                                    | --                                             | --             | --       | 32,000                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Shares
			issued forsalaries
			 @$0.02 per  share                               | 15,000,000                  | 75,000         | 225,000                  | --                 | --                                    | --                                             | --             | --       | 300,000                              
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Shares
			issued in lieu of debt @$0.01per share                                 | 5,000,000                   | 25,000         | 120,000                  | --                 | --                                    | --                                             | --             | --       | 40,000                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Allowance
			for outstanding receivable                                          | --                          | --             | --                       | --                 | --                                    | 50,000                                         | --             | --       | 50,000                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Net
			loss                                                                      | --                          | --             | --                       | --                 | (721,403)                             | --                                             | --             | --       | (721,403)                            
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Balance12/31/07                                                                  | 294,916,147                 | $
			1,474,579 | $11,852,509              | $(11,886,789)      | $
			     (721,403)                   | $
			    --                                    | (56,533)       | $(1,116) | $
			717,780                         
|                                                                                 | ======                      | ======         | ======                   | ======             | ======                                | ======                                         | ======         | ======   | ======                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Shares
			issued  for cash  $0.01per share                                       | 6,950,000                   | 34,750         | 41,750                   | --                 | --                                    | --                                             | --             | --       | 76,500                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Stock
			issued inlieu of  Accounts payable                                      | 3,000,000                   | 15,000         | 15,000                   | --                 | --                                    | --                                             | --             | --       | 30,000                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Net
			loss                                                                      | --                          | --             | --                       | --                 | (1,114,398)                           | --                                             | --             | --       | (1,114,398)                          
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Balance
			12/31/08                                                              | 304,866,147                 | $1,524,329     | $11,909,259              | $(11,886,789)      | $(1,835,801)                          | $
			             --                           | (56,533)       | $(1,116) | $
			(290,118)                       
|                                                                                 | =====                       | =====          | =====                    | =====              | =====                                 | =====                                          | =====          | =====    | =====                                
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Shares
			issued for service                                                     | 11,000,000                  | 55,000         | (33,000)                 | --                 | --                                    | --                                             | --             | --       | 22,000                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Shares
			issued for reduction of advances-officer                               | 5,000,000                   | 25,000         | (15,000)                 | --                 | --                                    | --                                             | --             | --       | 10,000                               
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Net
			loss                                                                      | --                          | --             | --                       | --                 | --                                    | --                                             | --             | --       | --                                   
|                                                                                 |                             |                |                          |                    |                                       |                                                |                |          |                                      
|Balance
			12/31/09                                                              | 320,886,147                 | $1,604,329     | $11,861,259              | $(11,886,789)      | $
			(2,191,917)                      | $
			          --                              | (56,533)       | $(1,116) | $
			(614,235)                       
|                                                                                 | =====                       | =====          | =====                    | =====              | =====                                 | =====                                          | =====          | =====    | =====                                

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

Page
21

---

CALA
CORPORATION(A
DEVELOPMENT-STAGE COMPANY)STATEMENTS
OF CASH FLOWSFOR
THE YEARS ENDED DECEMBER 31, 2009 AND 2008 AND FROM JANUARY 1, 2007
TO DECEMBER 31, 2009(AUDITED)

|                                                                                                           | 2009                  | 2008               | From January 1, 2007 to December 31, 2009(Development Stage Period)
|---------------------------------------------------------------------------------------------------------- | --------------------- | ------------------ | -------------------------------------------------------------------
|CASH
			FLOW FROM OPERATING ACTIVITIES                                                                     |                       |                    |                                                                    
|Net
			loss                                                                                                | $
			       (356,117) | $(1,114,398)       | $(2,191,918)                                                       
|Adjustments
			to reconcile net loss from continuing
			operations to net cash used in operating  activity |                       |                    |                                                                    
|Depreciation and
			amortization                                                                           | 16,595                | 26,722             | 67,762                                                             
|Impairment
			on assets                                                                                    |                       | 710,205            | 711,818                                                            
|Stock
			issued for services                                                                               | 22,000                | --                 | 354,000                                                            
|Loss
			on disposition of assets                                                                           |                       | 121,560            | 121,560                                                            
|Bad
			debt expense                                                                                        |                       | --                 | 60,500                                                             
|Financing
			cost                                                                                          |                       | --                 | 105,000                                                            
|Change
			in operating  assets and liabilities:                                                            |                       |                    |                                                                    
|(Increase)
			in accounts receivable                                                                       |                       | --                 | (10,500)                                                           
|Increase
			(decrease) accounts payable and accrued liabilities                                            | (1,038)               | (28,279)           | 43,547                                                             
|Officer
			salary payable                                                                                  | 300,000               | 133,600            | 433,600                                                            
|Increase
			(decrease) in taxes payable                                                                    |                       | --                 | (28)                                                               
|Net
			cash used in operating activities                                                                   | (18,560)              | (150,590)          | (304,659)                                                          
|                                                                                                           |                       |                    |                                                                    
|CASH
			FLOW FROM INVESTING ACTIVITIES:                                                                    |                       |                    |                                                                    
|Cash
			used on development costs                                                                          | --                    | --                 | (70,001)                                                           
|Disposal
			of fixed asset                                                                                 | --                    | --                 | 4,832                                                              
|Net
			cash used in investing activities                                                                   | --                    | --                 | (65,169)                                                           
|                                                                                                           |                       |                    |                                                                    
|CASH
			FLOW FROM FINANCING ACTIVITIES:                                                                    |                       |                    |                                                                    
|Proceed
			from note payable                                                                               | 2,000                 | --                 | 62,000                                                             
|Proceeds
			on notes payable- related party                                                                | 16,560                | 64,636             | 5,023                                                              
|Proceeds
			from issuance of common stock                                                                  | --                    | 76,500             | 278,950                                                            
|Payments
			made on mortgage payable                                                                       | --                    | (3,693)            | (12,244)                                                           
|Net
			cash provided by financing activities                                                               | 18,560                | 137,443            | 333,729                                                            
|                                                                                                           |                       |                    |                                                                    
|NET
			CHANGE IN CASH                                                                                      | --                    | (13,147)           | (36,099)                                                           
|                                                                                                           |                       |                    |                                                                    
|CASH
			AT BEGINNING OF YEAR                                                                               | --                    | 13,147             | 36,099                                                             
|                                                                                                           |                       |                    |                                                                    
|CASH
			AT END OF YEAR                                                                                     | $    --               | $
			           -- | $
			             --                                               
|                                                                                                           |                       |                   

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

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22

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Supplemental
schedule of cash flow information:

|Interest
			paid                                               | $
			      991    | $
			 22,508      | $
			 53,495              
|-------------------------------------------------------------- | ----------------- | ----------------- | --------------------------
|Income
			tax                                                  | $
			           - | $
			          -  | $
			                    -
|                                                               |                   |                   |                           
|                                                               |                   |                   |                           
|                                                               |                   |                   |                           
|Supplemental
			schedule of non-monetary transactions          |                   |                   |                           
|                                                               |                   |                   |                           
|Satisfaction
			of accounts payable with common stock          |                   |                   |                           
|3,000,000
			shares @ $0.01 per share                          | $
			        --   | $
			  30,000     | $
			   30,000            
|Satisfaction
			of note payable with common stock              | $
			        --   | $
			          -- | $
			 145,000             
|Shares
			issued for services classified as a capitalized cost | $
			         --  | $
			          -- | $
			  268,000            
|Satisfaction
			of notes payable- related party                | $
			10,000       | $
			          -- | $
			    10,000           

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

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23

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CALA
CORPORATION(A
DEVELOPMENT-STAGE COMPANY)NOTES
TO FINANCIAL STATEMENTS(AUDITED)

NOTE
1:    DESCRIPTION OF BUSINESS

Cala
Corporation (formerly Magnolia Foods, Inc.) was incorporated on June
13, 1985 under the laws of the State of Oklahoma. The Company's sole
industry segment was the business of owning, operating, licensing and
joint venturing restaurants. The Company discontinued this line of
business on December 31, 2006. The Company is in the development
stage of building an underwater resort and casino. The Company became
a Development-Stage Company as of January 1, 2007. The Company
continues to work on the development and production of the undersea
resort and casino but to date has not begun any construction.  During
the last two years (2008 & 2009) the company has had no revenue
producing business.

NOTE
2:    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis
of Presentation

The
accompanying financial statements included herein have been prepared
in accordance with accounting principles generally accepted in the
United States.

Cash
and cash equivalents

The
Company considers all short term, highly liquid investments that are
readily convertible within three months to known amounts as cash
equivalents. Currently, it has no cash equivalents.

Loss
per share

Net
loss per share is provided in accordance with Financial Accounting
Standards Board Accounting Standards Codification (FASB ASC 205)
"Earnings per Share". Basic loss per share reflects the
amount of losses for the period available to each share of common
stock outstanding during the reporting period, while giving effect to
all dilutive potential common shares that were outstanding during the
period, such as stock options and convertible securities of which the
Company has none outstanding.

Estimates

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

Policy
in Regards to Issuance of Common Stock in a Non-Cash Transaction

The
Company’s accounting policy for issuing shares in a non-cash
transaction is to issue the equivalent amount of stock equal to the
fair market value of the assets or services received.

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24

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Stock
Based Compensation

The
company adopted the provisions of ASC 718 requiring employee equity
awards to be accounted for under the fair value method. Accordingly,
share-based compensation is measured at grant date, based on the fair
value of the award and is recognized as expense over the requisite
employee service period. The Company estimates the fair value of
share-based payments using the Black-Scholes option-pricing model for
common stock options and the closing price of the company’s
common stock for common share issuances.

Revenue
recognition

The
Company’s revenue is recognized pursuant to ASC 605 “Revenue
Recognition.” The Company recognizes its revenue from services
as those services are performed. Revenue recognition is limited to
the amount that is not contingent upon delivery of any future service
or meeting other specified performance conditions. During both the
years ending December 31. 2009 and 2008 the Company had no revenue.

Shares
Returned to Treasury

In
2006, 33,333 shares were repurchased to treasury for $ 1,000.  In
2005, 23,200 shares were purchased for treasury at the cost of $ 116.
 The repurchased treasurer shares are carried at cost.

Property
and Equipment

Property
and equipment are carried at the cost of acquisition or construction
and depreciated over the estimated useful lives of the assets. Costs
associated with repair and maintenance is expensed as incurred. Costs
associated with improvements which extend the life, increase the
capacity or improve the efficiency of our property and equipment are
capitalized and depreciated over the remaining life of the related
asset. Gains and losses on dispositions of equipment are reflected in
operations. Depreciation is provided using the straight-line method
over the estimated useful lives of the assets, which are 3 to 5
years.

Impairment
of long-lived assets

The
Company reviews the carrying value of its long-lived assets annually
or whenever events or changes in circumstances indicate that the
historical-cost carrying value of an asset may no longer be
appropriate. The Company assesses recoverability of the asset by
comparing the undiscounted future net cash flows expected to result
from the asset to its carrying value. If the carrying value exceeds
the undiscounted future net cash flows of the asset, an impairment
loss is measured and recognized. An impairment loss is measured as
the difference between the net book value and the fair value of the
long-lived asset. Fair value is estimated based upon either
discounted cash flow analysis or estimated salvage value. No
impairment charge was recorded in 2009 or 2008. The Company incurred
an impairment loss of $710,205 in the year ending December 31, 2009

Basic
and diluted net income (loss) per share

Basic
and diluted net income (loss) per share calculations are calculated
on the basis of the weighted average number of common shares
outstanding during the year. They include the dilutive effect of
common stock equivalents in years with net income. Basic and diluted
net income (loss) per share is the same due to the absence of common
stock equivalents.

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25

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Income
Taxes

The
Company recognizes deferred tax assets and liabilities based on
differences between the financial reporting and tax basis of assets
and liabilities using the enacted tax rates and laws that are
expected to be in effect when the differences are expected to be
recovered. The Company provides a valuation allowance for deferred
tax assets for which it does not consider realization of such assets
to be more likely than not.

Development
Stage Company

The
accompanying consolidated financial statements have been prepared in
accordance with the FASB ASC 915-205 "Development-Stage
Entities".  A development-stage enterprise is one in which
planned principal operations have not commenced or if its operations
have commenced, there has been no significant revenue there from.
Development-stage companies report cumulative costs from the
enterprise's inception.



NOTE 3:
		RECENT ACCOUNTING PRONOUNCEMENTS

In
January 2010, the FASB issued Accounting Standards Update (ASU)
2010-6, “Improving Disclosures about Fair Value Measurements.”
This update requires additional disclosure within the roll forward of
activity for assets and liabilities measured at fair value on a
recurring basis, including transfers of assets and liabilities
between Level 1 and Level 2 of the fair value hierarchy and the
separate presentation of purchases, sales, issuances and settlements
of assets and liabilities within Level 3 of the fair value hierarchy.
In addition, the update requires enhanced disclosures of the
valuation techniques and inputs used in the fair value measurements
within Levels 2 and 3. The new disclosure requirements are effective
for interim and annual periods beginning after December 15,
2009, except for the disclosure of purchases, sales, issuances and
settlements of Level 3 measurements. Those disclosures are effective
for fiscal years beginning after December 15, 2010. As ASU
2010-6 only requires enhanced disclosures, the Company does not
expect that the adoption of this update will have a material effect
on its financial statements.

In
January 2010, the FASB issued Accounting Standards Update (ASU)
2010-01, “Equity (Topic 505-10): Accounting for Distributions
to Shareholders with Components of Stock and Cash (A Consensus of the
FASB Emerging Issues Task Force)”.  This amendment to
Topic 505 clarifies the stock portion of a distribution to
shareholders that allows them to elect to receive cash or stock with
a limit on the amount of cash that will be distributed is not a stock
dividend for purposes of applying Topics 505 and 260. Effective for
interim and annual periods ending on or after December 15, 2009, and
would be applied on a retrospective basis.  The Company does not
expect the provisions of ASU 2010-01 to have a material effect on the
financial position, results of operations or cash flows of the
Company.

NOTE
4:  GOING CONCERN

The
Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which
contemplates the realization of assets and liquidation of liabilities
in the normal course of business. The Company has an aggregate
deficit and accumulated deficit during the development stage of
$14,078,707 and has not established revenues sufficient to cover its
operating costs.  This uncertainty raises substantial doubt about the
Company's ability to continue as a going concern. The ability of the
Company to continue as a going concern is dependent on additional
sources of capital and the success of the Company's plan.  These
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts, or
amounts and classification of liabilities that might result from this
uncertainty.

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26

---

NOTE
5:  RELATED PARTY TRANSACTIONS

During
the year ended December 2008, the Company accrued $300,000 for salary
payable to an officer of the Company; resulting in an outstanding
balance of $433,600 as of December 31, 2009.

On
January 28, 2009 the Company issued 8,000,000 shares to two directors
for a value of $16,000 and 5,000,000 with a value of $10,000 to an
officer for reduction of notes payable – officer.

During
the year ended December 31, 2009, an officer advanced additional,
non-interest bearing demand note,  for $16,559 to the Company for
debt reduction and operating expenses for an outstanding Notes
payable-officer/stockholder balance of $81,978 as of December 31,
2009.

NOTE
6: COMMITMENTS & CONTINGENCIES

On
January 9, 2006, the Company entered into a lease at 3160 Danville
Blvd. Suite A, Alamo, CA consisting of 4,500 square feet for a
restaurant.  The duration of the lease is 10 years with a renewable
option for 5 more years. The monthly rent on the space is $ 8,500
plus taxes and common area charges.  Monthly rental may be adjusted
on an annual basis. On August 1, 2006, the Company assigned the lease
to a non-affiliated third party but the Company remains liable for
the lease until it terminates on January 8, 2016.



Then
following is a schedule by year of the future minimum rental payments
required under operating leases that have non-cancelable lease terms
in excess of one year as of December 31, 2009:

|2010                | 102,000
|------------------- | -------
|2011                | 102,000
|2012                | 102,000
|2013
and thereafter | 308,267
|Total               | 614,267

On
April 10, 2006, the Company entered into a lease consisting of
approximately 2,450 square feet for a restaurant at 500 Bollinger
Canyon Way, Roman CA. The duration of the lease is 10 years. On
August 1, 2006, the Company discontinued its operations in the
restaurant business.  As a result, the Company assigned the lease to
a non-affiliated third party on a sub lease basis. The Company is
still fully obligated to the terms of this lease. However, the non
affiliated party will assume all payments. Under the terms of the
agreement, the sub-lessee pays the monthly lease of $5,400 per month
for the duration of the lease plus an additional 60 equal monthly
installments of $1,500 to the Company.  The subleasee terminated
payment of the $1,500 in August 2008.A
judgment was entered giving the landlord possession of the premises
with no monetary amount awarded; however, the Company may continue to
have a contingent liability for the balance of the lease.

The
following is a schedule by year of the future minimum rental payments
required under operating leases that have non-cancelable lease terms
in excess of one year as of December 31, 2009:

|2010                | 72,396    
|------------------- | ----------
|2011                | 74,574    
|2012                | 76,812    
|2013
and thereafter | 265,680   
|Total               | $  489,462

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27

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NOTE
7- NOTE PAYABLE

In
January 2007, the Company issued a note for $60,000 bearing interest
at 10% on the principal and accrued interest compounding monthly. On
March 26, 2008, the note was amended to extend the term of the loan
to December 31, 2008 and increase the interest rate to 11%.  As of
December 31, 2009 and December 31, 2008, the outstanding principle
balance of the note was $60,000 and $60,000 and had accrued interest
of $22,480 and $13,926, respectively. On November 1, 2009 the note
holder made demand for payment by December 1, 2009. The note
including principal and interest is in default and still outstanding.

On
June 26, 2009 the Company issued a non-interest bearing demand note
for $2,000.

NOTE
8 - PROPERTY AND EQUIPMENT

Property
and equipment at December 31, 2009 and 2008 consisted of the
following:

|                                 | 12/31/09           | 12/31/08   
|-------------------------------- | ------------------ | -----------
|Vehicles                         | 45,308             | 45,308     
|                                 | ------------       | -----------
|                                 | 45,308             | 45,308     
|Less
			accumulated depreciation | (45,308)           | (38,712)   
|                                 | -------------      | -----------
|                                 | $
			           -- | $6,596     
|                                 | ========           | ========   

Depreciation
expense for the years ended December 31, 2009 and 2008 was $6,595 and
$26,724, respectively.



NOTE
9 - WEBSITE DEVELOPMENT

Website
Development at September 30, 2009 and December 31, 2008 consisted of
the following:

|                                  | 12/31/09        | 12/31/08      
|--------------------------------- | --------------- | --------------
|Website
				Development           | $
				  25,000  | $
				  25,000
|Less
				accumulated amortization | (11,123)        | (1,123)       
|                                  | -------------   | -----------   
|                                  | $
				   13,877 | $
				   3,877
|                                  | =======         | =======       

Amortization
expense for year ended December 31, 2009 and 2008 was $10,000 and
$1,123, respectively.

NOTE
10 – STOCKHOLDERS EQUITY

During
the year ending December 31, 2008 the Company issued the following
shares of common stock:

- 6,950,000
	at $0.01-$0.02 with a value of $76,500 for cash.
- 3,000,000
	shares at $0.01 with a value of 30,000 for accounts payable

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28

---

During
the year ending December 31, 2009 the Company issued the following
shares of common stock:

- 11,000,000
	at $0.02 with a value of $22,000 for service
- 5,000,000
	shares at $0.02 with a value of 10,000 for reduction of advances
	from an officer.

NOTE
11 - INCOME TAXES

The
Company accounts for income taxes using the liability method, under
which deferred tax liabilities and assets are determined based on the
difference between the financial statement carrying amounts and the
tax basis of assets and liabilities using enacted tax rates in effect
in the years in which the differences are expected to reverse.

As
of December 31, 2009, the Company had net operating loss carryforward
of $13,193,693 which expire in varying amounts between 2010 and 2029.
 Realization of this potential future tax benefit is dependent on
generating sufficient taxable income prior to expiration of the loss
carryforward. The deferred tax asset related to this potential future
tax benefit has been offset by a valuation allowance in the same
amount. The amount of the deferred tax asset ultimately realizable
could be increased in the near term if estimates of future taxable
income during the carryforward period are revised.

Deferred
income tax assets of $4,628,993 and $4,493,152 at December 31, 2009
and 2008, respectively were offset in full by a valuation allowance

The
components of the Company’s net deferred tax assets, including
a valuation allowance, are as follows:



|                                                      |  | As
			of December 31, 2009 |  | As
			of December 31, 2008
|----------------------------------------------------- |  | -------------------------- |  | --------------------------
|Deferred
			tax assets:                               |  |                            |  |                           
|Net
			operating loss carryforward                    |  | $
			 4,952,842            |  | $
			   4,493,152         
|                                                      |  | 11,200                     |  | 335,049                   
|Total
			deferred tax assets                          |  | 4,964,042                  |  | 4,828,202                 
|                                                      |  |                            |  |                           
|Net
			deferred tax assets before valuation allowance |  | 4,964,042                  |  | 4,828,202                 
|Less:
			Valuation allowance                          |  | (4,964,042)                |  | (4,828,202)               
|Net
			deferred tax assets                            |  | $
			             --       |  | $
			             --      

A
reconciliation between the amounts of income tax benefit determined
by applying the applicable U.S. and State statutory income tax rate
to pre-tax loss is as follows:

|                                                        |  | As
			of December 31, 2009 |  | As
			of December  31, 2008
|------------------------------------------------------- |  | -------------------------- |  | ---------------------------
|Statutory
			federal income tax                         |  | (35.0%)                    |  | (35.0%)                    
|Statutory
			state income tax                           |  | (6.0%)                     |  | (6.0%)                     
|Change
			in valuation allowance on deferred tax assets |  | 41.0%                      |  | 41.0%                      
|Effective
tax rate                                      |  | 0.0%                       |  | 0.0%                       

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29

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NOTE
12: LEGAL MATTERS

On
January 20, 2009, a complaint was filed against the Company in the
Superior Court of California case # CIVWS09-0049 terminating the
lease at 500 Bollinger Canyon Way, San Roman, CA due to subleasing
the premises without consent of the landlord. A judgment was entered
giving the landlord possession of the premises with no monetary
amount awarded.

On
February 18, 2009 the Company received a letter demanding payment on
the deficiencies of 2 notes totaling $125,000 the Company had issued.
Subsequent to this an action was originated in the District Court of
Jefferson County Texas (case # A-183,766). The Plaintiff contends the
Company had not paid the principal or interest on promissory notes
issued in 2004. In 2005 the Company issued stock of 3,400,000 and
2,500,000 shares to the plaintiff in full payment of the outstanding
notes and interest to the plaintiff.  The Company’s position is
the notes and interest were paid in full by the issuance of the
Company stock for payment of the notes and the Company has no further
liability. As of the end of this period there has been no activity on
this matter.

EXHIBIT
INDEX

|Number | Description                                                                    
|------ | -------------------------------------------------------------------------------
|31     | Rule
				13a-14(a)/15d-14(a) Certification of Joseph Cala (filed
				herewith).
|32     | Section
				1350 Certification of Joseph Cala (filed herewith).                

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32