UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K/A

Amendment No. 1

 

  X . ANNUAL REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2016

 

      .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 333-175146

 

YANEX GROUP, INC.

(Exact name of registrant as specified in its charter)

 

NEVADA		99-0363803
(State or Other Jurisdiction of Incorporation of Organization)		(I.R.S. Employer Identification No.)

 

9830 6^th Street, Suite 103

Rancho Cucamonga, California 91730

(Address of principal executive offices)

 

(855) 476-7679

(Registrant’s telephone number, including area code)

 

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

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  X . No      .

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.      .

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definition of “ large accelerated filer and “ accelerated filer” and “ smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer      .   Accelerated filer      .   Non-accelerated filer      .   Smaller reporting company  X .

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)  Yes      . No  X .

Aggregate market value of the voting and non-voting stock of the registrant held by non-affiliates of the registrant as of November 30, 2015: $47,849

As of August 17, 2016 the registrant’s outstanding stock consisted of 33,048,000 common shares.

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Explanatory Note:

This Amendment No. 1 on Form 10-K/A (this “Amendment”) amends the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2016 which the Registrant previously filed with the Securities and Commission on August 19, 2016 (the “Original Filing”).  The Registrant is filing this Amendment to make changes to the Original Filing in response to a comment letter that it has received from the Commission.  The Registrant has made the following changes:

(1)

Checked “Yes” on the cover page to indicate that it is not required to file reports pursuant to Section 13 of Section 15d of the Securities Exchange Act of 1934;

(2)

Included disclosure under Item 7 that the Management’s Discussion and Analysis of Financial Condition and Results of Operations section indicating that the financial information provided refers to the Registrant’s business prior to the merger disclosed in the Form 8-K, filed July 5, 2016; and

(3)

The Registrant revised the beneficial ownership table under Item 12 to include the 7.8% beneficial ownership of Leonardo Rodriguez.

Except as set forth above, the Original Filing has not been amended, updated or otherwise modified.  Other events occurring after the filing of the Form 10-K/A or other disclosures necessary to reflect subsequent events have been addressed in our reports filed with the Securities and Exchange Commission subsequent to the filing of this Form 10-K/A.

 

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YANEX GROUP, INC.

TABLE OF CONTENTS

 

PART I
Item 1	Description of Business	4
Item 1A	Risk Factors	8
Item 1B	Unresolved Staff Comments	8
Item 2	Properties	9
Item 3	Legal Proceedings	9
Item 4	Mine Safety Disclosures	9
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operation	10
Item 8	Financial Statements and Supplementary Data	12
Item 9	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure	13
Item 9A	Controls and Procedures	13
Item 9B	Other Information	14
PART III
Item 10	Directors, Executive Officers and Corporate Governance	15
Item 11	Executive Compensation	16
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	17
Item 13	Certain Relationships and Related Transactions and Director Independence	18
Item 14	Principal Accountant Fees and Services	18
PART I V
Item 15	Exhibits, Financial Statement Schedules	19

 

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PART I

Item 1. Description of Business

 

Forward-looking Statements

 

This annual report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

 

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable laws, including the securities laws of the United States, we do not intend to update any of the forward-looking statements so as to conform these statements to actual results.

 

As used in this annual report, the terms "we", "us", "our", “the Company”, and "Yanex" mean Yanex Group, Inc., unless otherwise indicated.

 

All dollar amounts refer to US dollars unless otherwise indicated.

 

Overview

We were founded in the State of Nevada on November 18, 2010, as an early stage company operating within the concept architectural, interior design project and related areas in Germany initially. Our plan was to operate in various architectural fields and to be responsible for the concept architectural vision of future private and public buildings as well as municipal organized public areas. Also, we intended to work with interior design view, visualization and renderings. After attempting to implement our business plan, we have determined that it would be in the best interest of the Company and our shareholders to seek out and identify potential acquisition partners, joint ventures or other strategic alliances.

Accordingly, on June 29, 2016, the Company entered into a Share Exchange Agreement (the “Share Exchange”) with Proto-Script Pharmaceuticals, Corp., a California corporation (“PSPC”), whereby the Company acquired 100% of the issued and outstanding common stock of PSPC, in exchange for Thirty Million (30,000,000) restricted shares of the Company’s common stock. Accordingly, PSPC became a wholly-owned subsidiary of the Company and the business direction of the Company has shifted to the business of PSPC.

We are a development stage company. Our independent registered public accountant has issued an audit opinion which includes a statement expressing substantial doubt as to our ability to continue as a going concern. Our common stock trades on the OTC Pink Sheets under the symbol “YNXG”.

 

We do not have any subsidiaries. Our principal office is located at 9830 6th Street, Suite 103, Rancho Cucamonga, California 91730. Our telephone number is (855) 476-7679. Our fiscal year end is May 31.

 

We have incurred losses since our inception. We rely upon the sale of our securities to fund our operations. We have not generated any revenues from November 18, 2010 (date of inception) to May 31, 2016.

We are not involved in any bankruptcy, receivership or similar proceedings.

Who We Are:

The Company was incorporated under the laws of the State of California on June 27, 2001 under the name of Proto-Script Pharmaceuticals, Corp.

The Company’s primary source of revenue comes from the repair and rental of power wheelchairs and scooters. The Company deals with federal, state and private insurance providers such as Medicare, Medi-Cal, Nevada Care and Blue Cross among several others. PSPC has very limited dealings with non-insured cash patients. We have tangible assets comprised of company delivery vehicles, loaner wheelchairs, office equipment and furniture. Inventory is purchased on an as needed basis, typically when patients/customers are approved for coverage by their insurance provider. Intangible assets comprise of its current patient list and working relationships with the various insurance providers who refer their clients to us for their repair and rental needs.

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Competitive Advantages

We qualify as a “small supplier” as defined by the Medicare competitive bidding program which we feel increases our changes of being awarded winning bids in the upcoming recompete rounds. Regulations stipulate that if 30% of winning companies do not fall under the small supplier category then more small suppliers must be added in essence making our changes one in three or better. We are able to meet our service standards by buying product only on an as needed basis. This prevents the Company from having to output cash before a purchase order is made.

All patients are pre-qualified before products are ordered and as such there is a low risk of non-payment. When the insurance provider refuses payment it is typically due to an error on the part of the staff in entering and/or submitting the claim. Upon re-entry the claim is typically successful.

Although we do a majority of our purchases from three different suppliers due to better-negotiated prices, we are able to buy the parts and products needed from various local and out of state suppliers.

Repair Sales Cycle

Our typical repair cycle is as follows:

1.

Patient lead

a.

New patient referral is sent to PSPC

b.

Current patient is called

c.

Current patient calls in

d.

New patient is obtained

2.

Patient information is gathered and insurance coverage eligibility is verified

3.

Upon verification a repair technician calls the patient for a preliminary telephone diagnosis

4.

Based on the repairs the technician believes is needed, a second eligibility check is done to confirm the patient qualifies for those specific repairs

5.

The office manager confirms a date and time range with the patient for the technician to pick up the equipment

6.

Routing information is passed on to the repair technician

7.

Repair technician sanitizes and loads a loaner wheelchair based on the patient’s specific needs and criteria

8.

Repair technician drops off the loaner chair, picks up the patient’s equipment and fills out the necessary paperwork

9.

The equipment is brought to the warehouse for a thorough diagnosis and forwarded to the office manager

a.

If is typical upon full diagnostic testing the technician finds other parts in need of replacement or repair

10.

Eligibility is ran for a third and final time to confirm insurance coverage including any new parts that may be needed

11.

The patient is contacted by the office manager to confirm the repairs that will be done and timeframe for expected delivery

12.

Upon complete repair of the equipment:

a.

Head technician does a final inspection on the equipment

b.

The paperwork is forwarded to the office manager to setup a date and time frame for equipment drop off

13.

Paperwork is forwarded to the billing department for processing

14.

The patient’s equipment is sanitized and prepared for delivery

15.

The equipment is delivered to the patient, the loaner is picked up and paperwork is filled by the patient

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16.

The loaner equipment is returned to the warehouse, sanitized and stored

Operating Systems and Controls

The Company currently uses a combination of software for the daily business operations. The main billing and patient information software is being phased out and being be replaced by a more current software. We expect the new software to help reduce paper, redundancies, man-hours, mistakes and the potential loss of data while increasing the security of patient’s information. Our billing process will also be more efficient as secondary payers will be processed automatically and triggered at the earliest possible moment.

Growth Strategy

The dollar amount and frequency companies are allowed to bill patients and their insurance providers is set by Medicare and therefore our competitors in the same product categories must charge the same price. Margins can be increased by processing more patients and decreasing costs. PSPC has the ability to process more patients without increase overhead and labor cost. Additionally, the Company intends to advertise its billing services to other medical companies around the country. Companies in the durable medical equipment industry use standard Healthcare Common Procedure Coding System (HCPCS) in order to submit their invoices electronically to the insurance providers. Other companies can benefit from not needing in-house billing by hiring PSPC to process their payments for a rate of 3-5% of the revenue.

Competitive Bidding Area (CBA)

Since the Company does not currently hold a winning bid for one of the competitive bidding (as further explained below) areas (CBAs) it has the potential to significantly increase revenues by doing so. PSPC will also benefit from lower cost of goods because of the expected increase in volume. There are several criteria used to determine a company’s qualification and more than one company can awarded an area and product. We plan to aggressively target products, such as catheters, that don’t fall under CBA in the areas currently serviced of Southern California and Las Vegas.

Current Working Relationships

We employ several strategies to increase its revenue. One approach is to increase the referrals from the insurance providers by building relationships based on positive patient feedback. Insurance providers will refer a maximum of patients at any given time equivalent to the number of loaner equipment in stock. For example, by us having 120 loaner power wheelchairs in stock each provider will refer up to 120 patients at a given time.

Current Patient Database

A patient qualifies for repairs on their power wheelchair or scooter every six months to one year depending on the part that is in need of repair or replacing and a brand new power wheelchair every five years. The patient database is constantly being contacted to arrange for repair upon a prior successful eligibility check.

Intellectual Property

We have no patents or trademarks or applications pending.

Government Regulations

Numerous federal and state privacy and security laws and regulations, including the Federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology For Economic and Clinical Health Act (collectively HIPAA), govern the collection, dissemination, security, use and disclosure of patients’ individually-identifiable health information. As part of our provision of, and billing for, health care equipment and services, we are required to collect and maintain such protected patient-identifiable health information. New health information standards, whether implemented pursuant to HIPAA, congressional action, state legislative actions or otherwise, could have a significant effect on the manner in which we handle health care related data and communicate with payers. Moreover, the cost of complying with these standards could be significant. While we believe we comply in all material respects with HIPAA, and comparable state privacy and security requirements, we cannot provide any assurance that governmental authorities will find that our business practices comply with current or future administrative or judicial interpretations of these regulations. Sanctions for failure to comply with these federal and state laws include significant civil and criminal penalties. A violation could subject us to penalties, fines or possible exclusion from the Medicare or Medicaid programs. Such sanctions could adversely impact our financial condition, revenues, profit margins, profitability, operating cash flows and results of operations.

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The federal government has made a policy decision to significantly increase the financial resources allocated to enforcing the health care fraud and abuse laws. Private insurers and various state enforcement agencies also have increased their level of scrutiny of health care claims in an effort to identify and prosecute fraudulent and abusive practices in the health care area.

Medicare and Medicaid

As part of the Social Security Amendments of 1965, Congress enacted the Medicare program, which provides for hospital, physician and other statutorily defined health benefits for qualified individuals, including persons 65 and older and the disabled. The Medicaid program, also established by Congress in 1965, is a joint federal and state program that provides certain statutorily-defined health benefits to financially needy individuals who are blind, disabled, aged or members of families with dependent children.

Under existing Medicare laws and regulations, the sale and rental of our products is generally reimbursed by the Medicare program according to prescribed fee schedule amounts calculated using statutorily-prescribed formulas. Significant legislation affecting home medical equipment (HME) reimbursement has been signed into law, including the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “PPACA”), the Medicare Improvement for Patients and Providers Act of 2008 (MIPPA), the Medicare, Medicaid and Children’s Health Insurance Program (CHIP) and changes to these programs and acts could have a material adverse effect on our financial condition, revenues, profit margins, profitability, operating cash flows and results of operations.

Competitive Bidding Area (CBA)

The Durable Medical Equipment Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bidding Program was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). The statute requires that Medicare replace the current fee schedule payment methodology for selected Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) items with a competitive bid process. The intent is to improve the effectiveness of the Medicare methodology for setting DMEPOS payment amounts, which will reduce beneficiary out-of-pocket expenses and save the Medicare program money while ensuring beneficiary access to quality items and services.

Under the program, a competition among suppliers who operate in a particular competitive bidding area is conducted. Suppliers are required to submit a bid for selected products. Not all products or items are subject to competitive bidding. Bids are submitted electronically through a web-based application process and required documents are mailed. Bids are evaluated based on the supplier’s eligibility, its financial stability and the bid price. Contracts are awarded to the Medicare suppliers who offer the best price and meet applicable quality and financial standards. Contract suppliers must agree to accept assignment on all claims for bid items and will be paid the bid price amount. The amount is derived from the median of all winning bids for an item.

The Centers for Medicare & Medicaid Services (CMS) is required by law to recompete contracts under the DMEPOS Competitive Bidding Program at least once every three years. The Round 2 and national mail-order program contract periods expire on June 30, 2016. The federal government awards contracts to companies in the durable medical equipment (DME) industry upon a successful bid to service the specific areas and products. Winners of bid reserve the right service the competitive bidding areas (CBAs) for a period of two years. After the two year period the contract holders lose their rights and the CBA all interested DME companies as requested to submit a bid.

PSPC does not currently hold a winning bid and has submitted a bid for Round 2 Recompete.

The Anti-Kickback Statute

Due to high fraud in the industry, companies such as ours that operate within the Medicare and Medicaid programs are subject to strict fraud and abuse laws often referred to as the “Anti-Kickback statute”. At the federal level, the Anti-Kickback statute prohibits any person from knowingly and willfully soliciting, receiving, offering or providing any remuneration, including a bribe, kickback or rebate, directly or indirectly, in return for or to induce the referral of patients, or the furnishing, recommending, or arranging for products or services covered by federal health care programs. Federal health care programs have been defined to include plans and programs that provide health benefits funded by the federal government, including Medicare and Medicaid, among others. Violations of the Anti-Kickback statute may result in civil and criminal penalties including fines of up to $25,000 per violation, civil monetary penalties of up to $50,000 per violation, assessments of up to three times the amount of the prohibited remuneration, imprisonment, and exclusion from participation in the federal health care programs.

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CHAP Accreditation

We are voluntarily part of the Community Health Accreditation Program (CHAP) which is an industry recognized accreditation meeting high standards covering compliance requirements as prescribed by state and federal bodies. Payers and patients appreciated CHAP as a non-biased third-party approval of the company in the industry. CHAP also keeps the Company up-to-date with regulatory changes and provides ongoing education to staff to familiarize themselves on how to stay in compliance.

Competition

We operated in a highly competitive industry with few national competitors and several local, small and medium sized businesses. Our biggest competitor is Apria Healthcare Group, Inc. which has local national offices. Local competitors include Lincoln Medical and Westview Medical. Management believes that the number of competitors will decrease over the long run because of decreasing profit margins due to the competitive bidding programs implemented by the government. The nature of the competitive bidding encourages lower prices therefore forcing some companies out of businesses.

Employees

As of January 1, 2016, we have 13 full time employees. Our employees are not currently represented by a labor union of labor organization. These employees are spread out into various departments, including management, billing, sales and repair. The billing, sales and management are headquartered out of Rancho Cucamonga, CA, while Anaheim, CA serves as repair facilities with limited staff.

The Las Vegas office is the headquarters for Nevada as well as it serves as a repair facility. Anaheim and Las Vegas each have outside sales staff. All locations are required to be staffed for a minimum number of hours a week as required by state laws.

The sales department includes outside and inside sales people. Outside sales people host fall prevention seminars in order to generate leads. The seminars are held at care facilities and during the presentation the repair technician provides equipment cleaning and onsite repair at no cost.

Subsidiaries

 

As of August 17, 2016 we do not have any subsidiaries.

 

Research and Development Expenditures

 

We have not spent any amounts on research and development activities since our inception. Our planned expenditures for our operation and exploration programs are summarized under the section of this Annual Report entitled “Management Discussion and Analysis of Financial Condition and Results of Operations.”

 

Government Regulations

We will be required to comply with all regulations, rules and directives of governmental authorities and agencies applicable to our industry in any jurisdiction which we would conduct activities.

US Regulations

Our operations are or will be subject to various types of regulation at the federal, state and local levels.

 

Item 1A. Risk Factors

Not required.

Item 1B. Unresolved Staff Comments

None.

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Item 2. Properties

We have an executive office located at 9830 6th Street, Suite 103, Rancho Cucamonga, California 91730.

Item 3. Legal Proceedings

We know of no material pending or active legal proceedings to which we are a party or concerning any of our properties. We are not aware of any legal proceedings contemplated by any governmental authority against us.

Item 4. Mine Safety Disclosures

 

Not applicable.

PART II

 

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

Market Information

 

There is a limited public market for our common shares. Our common shares are quoted on the OTC Bulletin Board under the symbol “YNXG.OB”. Our common stock became eligible for trading on November 25, 2011. Trading in stocks quoted on the OTC Bulletin Board is often thin and is characterized by wide fluctuations in trading prices due to many factors that may be unrelated to a company’s operations or business prospects. We cannot assure you that there will be a market in the future for our common stock.

 

OTC Bulletin Board securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTC Bulletin Board securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTC Bulletin Board issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange.

 

The following table shows the high and low closing prices of our common shares on the OTC Bulletin Board. The following quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions:

 

Period		High ($)				Low ($)
Three months ended August 31, 2014			151.00				151.00
Three months ended November 30, 2014			151.00				151.00
Three months ended February 29, 2015			151.00				151.00
Three months ended May 31, 2015			151.00				151.00
Three months ended August 31, 2015			151.00				151.00
Three months ended November 30, 2015			151.00				151.00
Three months ended February 28, 2016			151.00				151.00
Three months ended May 31, 2016			151.00				0.21

 

Holders

 

As of August 17, 2016, there were approximately 7 holders of record of our common stock.

 

Dividends

We did not issue any stock dividends during our fiscal year ended May 31, 2016.

Equity Compensation Plans

 

We have not implemented any equity compensation plans.

 

Recent Sales of Unregistered Securities

We did not make any sales of unregistered securities which were not previously reported in our quarterly filings for fiscal 2016.

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Use of Proceeds from Sale of Registered Securities

 

None during the fiscal year ended May 31, 2016.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

 

Safe Harbor

 

This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology including, "could" "may", "will", "should", "expect", "plan", "anticipate", "believe", "estimate", "predict", "potential" and the negative of these terms or other comparable terminology. These statements are only predictions. Actual events or results may differ materially.

 

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this Annual Report.

The following financial information relates to the Company as at the year ended May 31, 2016.

Subsequent to the date of this Report, the Company announced on July 5, 2016, on Form 8-K that the Company had entered into a Share Exchange Agreement with Proto-Script Pharmaceuticals, Corp., a California corporation. The following information, as presented, relates only to the pre-transaction Company.

 

Overview

 

Our primary source of revenue comes from the repair and rental of power wheelchairs and scooters. We y deal with federal, state and private insurance providers such as Medicare, Medi-Cal, Nevada Care and Blue Cross among several others. We have very limited dealings with non-insured cash patients. We have tangible assets comprised of company delivery vehicles, loaner wheelchairs, office equipment and furniture. Inventory is purchased on an as needed basis, typically when patients/customers are approved for coverage by their insurance provider. Intangible assets comprise of its current patient list and working relationships with the various insurance providers who refer their clients to us for their repair and rental needs.

RESULTS OF OPERATIONS

Working Capital

	May 31,	May 31,
	2016	2015
Current Assets	$11,750	$1,019
Current Liabilities	$88,812	$44,938
Working Capital (Deficit)	($77,062)	($43,919)

Cash Flows

	Year ended May 31, 2016	Year ended May 31, 2015
Cash Flows (used in) Operating Activities	($38,209)	($45,421)
Cash Flows (used in) Investing Activities	$-	$-
Cash Flows provided by Financing Activities	$48,940	$32,900
Net Increase (decrease) in Cash During Period	$10,731	($12,521)

Operating Revenues

During the years ended May 31, 2016 and 2015, we did not earn any revenues from operations.

Operating Expenses and Net Loss

During the year ended May 31, 2016, we incurred operating expenses of $33,143 compared with operating expenses of $45,180 during the year ended May 31, 2015.

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For the year ended May 31, 2016, we incurred a net loss of $33,143 compared with a net loss of $45,180 for the year ended May 31, 2015.

Liquidity and Capital Resources

As at May 31, 2016, we had a cash balance of $11,750 and total assets of $11,750 compared with $1,019 of cash and total assets of $1,019 as at May 31, 2015. The increase in cash was due to funds being raised for operations.

As at May 31, 2016, we had total liabilities of $88,812 compared with total liabilities of $44,938 at May 31, 2015. The increase in total liabilities was attributed to increased loans from related party.

As at May 31, 2016, we had a working capital deficit of $77,062 compared with a working capital deficit of $43,919 as at May 31, 2015. The increase in working capital deficit was due to an increase in current liabilities.

Cash flow from Operating Activities

During the year ended May 31, 2016, we used cash of $38,209 for operating activities as compared to use of $45,421 during the year ended May 31, 2015. The decrease in cash used for operating activities during the year was due to a decrease in payments of outstanding day-to-day obligations incurred during the year.

 

Cashflow from Investing Activities

During the year ended May 31, 2016 we used net cash of $nil in investing activities compared to $nil during the year ended May 31, 2015.

Cashflow from Financing Activities

During the year ended May 31, 2016, we received proceeds of $48,940 from financing activities compared with $32,900 during the year ended May 31, 2015.

Off-Balance Sheet Arrangements

 

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

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Item 8. Financial Statements and Supplementary Data

 

 

 

 

YANEX GROUP, INC.

Financial Statements

May 31, 2016

(Expressed in US dollars)

Report of Registered Public Accounting Firm	F-1
Balance Sheets	F-2
Statements of Operations	F-3
Statements of Stockholders’ Equity (Deficit)	F-4
Statements of Cash Flows	F-5
Notes to the Financial Statements	F-6 – F-8

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors of Yanex Group, Inc.

We have audited the accompanying balance sheets of Yanex Group, Inc. as of May 31, 2016 and 2015 and the related statements of operations, stockholders’ equity (deficit), and cash flows for the years then ended. Yanex Group, Inc. management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Yanex Group, Inc. as of May 31, 2016 and 2015, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 1 to the financial statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ KLJ & Associates, LLP

KLJ & Associates, LLP

Edina, MN

August 18, 2016

F-1

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YANEX GROUP, INC.

Balance Sheets

(Expressed in US dollars)

	May 31, 2016 $	May 31, 2015 $
ASSETS
Cash	11,750	1,019
Total Assets	11,750	1,019
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities	6,972	12,038
Loans from related party (Note 3)	81,840	32,900
Total Liabilities	88,812	44,938
Going Concern (Note 1)
STOCKHOLDERS’ EQUITY
Common Stock
Authorized: 75,000,000 common shares with a par value of $0.001
Issued and outstanding: 3,048,000 shares	3,048	3,048
Additional paid-in capital	106,251	106,251
Accumulated deficit	(186,361)	(153,218)
Total Stockholders’ Equity	(77,062)	(43,919)
Total Liabilities and Stockholders’ Equity	11,750	1,019

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

F-2

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YANEX GROUP, INC.

Statements of Operations

(Expressed in US dollars)

	Year Ended May 31, 2016 $	Year Ended May 31, 2015 $
Revenues	–	–
Expenses
General and administrative	60	2,033
Professional fees	17,083	31,763
Consulting fees	9,000	5,000
Transfer agent and filing fees	7,000	6,384
Bad debts	–	–
Total Expenses	33,143	45,180
Net Loss	(33,143)	(45,180)
Net Loss Per Share, Basic and Diluted	(0.01)	(0.01)
Weighted Average Shares Outstanding	3,048,000	3,048,000

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

F-3

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YANEX GROUP, INC.

Statements of Stockholders’ Equity (Deficit)

(Expressed in US dollars)

	Common Stock
	Number of shares	Amount	Additional Paid-in Capital	Accumulated Deficit	Total
		$	$	$	$
Balance, May 31, 2014	3,048,000	3,048	106,251	(108,038)	1,261
Net loss	–	–	–	(45,180)	(45,180)
Balance, May 31, 2015	3,048,000	3,048	106,251	(153,218)	(43,919)
Net loss	–	–	–	(33,143)	(33,143)
Balance, May 31, 2016	3,048,000	3,048	106,251	(186,361)	(77,062)

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

F-4

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YANEX GROUP, INC.

Statements of Cash Flows

(Expressed in US dollars)

	Year Ended May 31, 2016 $	Year Ended May 31, 2015 $
Operating Activities
Net loss for the period	(33,143)	(45,180)
Changes in operating assets and liabilities:
Accounts payable	(5,066)	(241)
Net Cash Used In Operating Activities	(38,209)	(45,421)
Investing Activities
Net Cash Used In Investing Activities	–	–
Financing Activities
Proceeds from related party	48,940	32,900
Proceeds from issuance of common stock	–	–
Net Cash Provided by Financing Activities	48,940	32,900
Increase (Decrease) in Cash	10,731	(12,521)
Cash, Beginning of Period	1,019	13,540
Cash, End of Period	11,750	1,019
Non-cash Investing and Financing Activities:
Forgiveness of shareholder payable recorded as contributed capital	–	–
Supplemental Disclosures
Interest paid	–	–
Income tax paid	–	–

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

F-5

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1. Nature of Operations and Continuance of Business

Yanex Group, Inc. (the “Company”) was incorporated in the State of Nevada on November 18, 2010. The Company business is to provide services in concept architecture, interior design projects and related services in Germany, and eventually expand into Europe and other countries. The Company is a start-up company.

These financial statements have been prepared on a going concern basis, which implies that the Company will continue to realize its assets and discharge its liabilities in the normal course of business. As of May 31, 2016, the Company has not recognized any revenue and has an accumulated deficit of $186,361. The continuation of the Company as a going concern is dependent upon the continued financial support from its management, and its ability to identify future investment opportunities and obtain the necessary debt or equity financing, and generating profitable operations from the Company’s future operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

2. Significant Accounting Policies

(a)

Basis of Presentation

The financial statements present the balance sheets, statements of operations, stockholders' equity (deficit) and cash flows of the Company. These financial statements are presented in United States dollars and have been prepared in accordance with accounting principles generally accepted in the United States.

(b)

Use of Estimates

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

(c)

Cash and cash equivalents

The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

(d)

Financial Instruments

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

F-8

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2. Significant Accounting Policies (continued)

(d)

Financial Instruments (continued)

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

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

Level 3

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

The Company’s financial instruments consist principally of cash, amounts due from related parties, accounts payable, and accrued liabilities. Pursuant to ASC 820 and 825, the fair value of our cash is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations.

(e)

Income Taxes

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

(f)

Comprehensive Loss

ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As of May 31, 2016 and May 31, 2015, the Company has no items that represent comprehensive income or loss and, therefore, has not included a schedule of comprehensive loss in the financial statements.

(g)

Loss per Share

The Company computes net loss per share in accordance with ASC 260, “Earnings per Share”. ASC 260 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. As of May 31, 2016, the Company did not have any potentially dilutive shares.

F-8

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2. Significant Accounting Policies (continued)

(h)

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

3. Related Party Transactions

As at May 31, 2016, $81,840 (May 31, 2015 – $32,900) is owed to a Director of the Company, which is unsecured, non-interest bearing, and due on demand.

4. Common Stock

The Company has 75,000,000 shares of $0.001 par value common stock authorized.

As of May 31, 2016 there were 3,048,000 shares of common stock issued and outstanding.

5. Subsequent Events

Subsequent to May 31, 2016, the Company received a $17,450 loan from a Director, which is unsecured, non-interest bearing, and due on demand.

F-8

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

 

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports filed under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of May 31, 2016 (the “Evaluation Date”). Based upon the evaluation of our disclosure controls and procedures as of the Evaluation Date, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective because of the identification of a material weakness in our internal control over financial reporting which is identified below, which we view as an integral part of our disclosure controls and procedures.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Rule 13a-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and our receipts and expenditures of are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of May 31, 2016. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its evaluation, our management concluded that there is a material weakness in our internal control over financial reporting and Management has concluded that the Company’s internal controls over financial reporting are ineffective as of May 31, 2016. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness relates to the lack of segregation of duties in our financial reporting process and we utilize outside third party consultants. We do not have a separately designated audit committee. This weakness is due to our lack of excess working capital to hire additional staff. To remedy this material weakness, we intend to engage an internal accountant to assist with financial reporting as soon as our finances will allow.

KLJ & Associates, LLP, our registered independent public accounting firm, was not required to and has not issued a report concerning the effectiveness of our internal control over financial reporting as of May 31, 2016.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the fourth quarter of our fiscal year ended May 31, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Limitations on the Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our Disclosure Controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management or board override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

Changes in Internal Control and Financial Reporting

During the quarter ended May 31, 2016 there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information.

 

None.

 

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PART III

 

Item 10. Directors, Executive Officers and Corporate Governance.

Directors and Officers

 

Our bylaws allow the number of directors to be fixed by the Board of Directors. Our Board of Directors has fixed the number of directors at three.

 

Our current directors and officers are as follows:

Name	Age	Position
Michelle Rico	48	Director, President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer

 

The directors will serve as directors until our next shareholder meeting or until a successor is elected who accepts the position. Officers hold their positions at the will of the Board of Directors. 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 our affairs.

Michelle Rico, President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director

Ms. Rico has been our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and Director since June 29, 2016. Ms. Rico has been the Chief Executive Officer of Proto-Script Pharmaceuticals, Corp. since 2011. She is a veteran of the medical industry, she has built a large nationwide network of clients. She has work experience with insurance companies, clinics, doctors’ offices, hospitals, pharmacies, and home medical equipment companies. She has experience in compliance, provider relations, case management, billing, marketing and sales in the HME industry. As an experienced leader, her expertise encompasses setting up and licensing DME and medical business; billing and billing software, management, logistics, policies and procedures, cost analysis, sales and marketing, finance and information technology. From start to finish, she brings a wealth of knowledge to all areas of HME. Her 20 plus years in the industry have given her extensive knowledge of the insurance industry and Medicare/Medicaid.

Our director does not currently serve on the boards of other public companies.

Significant Employees

 

There are no individuals other than our executive officer who make a significant contribution to our business.

Family Relationships

 

There are no family relationships among our officers or directors.

Legal Proceedings

 

None of our directors, executive officers, promoters or control persons has been involved in any of the following events during the past five years:

·

any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

·

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

·

being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or

·

being found by a court of competent jurisdiction (in a civil action), the SEC or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

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Section 16(a) Beneficial Ownership Compliance Reporting

Section 16(a) of the Securities Exchange Act of 1934 requires a company’s directors and officers, and persons who own more than ten-percent (10%) of the company’s common stock, to file with the Securities and Exchange Commission reports of ownership on Form 3 and reports of change in ownership on Forms 4 and 5. Such officers, directors and ten-percent stockholders are also required to furnish the company with copies of all Section 16(a) reports they file. Based solely on our review of the copies of such forms received by us and on written representations from certain reporting persons, we believe that all Section 16(a) reports applicable to our officers, directors and ten-percent stockholders with respect to the fiscal year ended May 31, 2016 were filed.

Code of Ethics

 

We have not yet adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions because we have not yet finalized the content of such a code. Companies whose equity securities are listed for trading on the OTC Markets are not currently required to implement a code of ethics.

 

Director Nominees

As of May 31, 2016 there have been no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

Audit Committee

 

The functions of the Audit Committee are currently carried out by our Board of Directors. Our Board of Directors has determined that we do not presently need an audit committee financial expert on our Board of Directors carrying out the duties of the Audit Committee. Our Board of Directors has determined that the cost of hiring a financial expert to act as one of our directors and to be a member of the Audit Committee or otherwise perform Audit Committee functions outweighs the benefits of having a financial expert on the Audit Committee.

 

Item 11. Executive Compensation.

 

The following Summary Compensation Table sets forth the total annual compensation paid or accrued by us to or for the account of the Principal Executive Officer (“PEO”) and our Principal Financial Officer (“PFO”). None of our other executive officers received compensation in excess of $100,000 during the fiscal year ended May 31, 2016.

Summary Compensation

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)	Non-Equity Incentive Plan Compensation ($)	Non-qualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Michelle Rico, President, CEO, CFO, Secretary, Treasurer and Director (1)	2015	0	0	0	0	0	0	0	0
	2016	0	0	0	0	0	0	0	0
Leonardo Correa Rodriguez, Former President, CEO, CFO, Secretary, Treasurer and Director (1)	2015	0	0	0	0	0	0	0	0
	2016	0	0	0	0	0	0	0	0

(1)

Michelle Rico is our President, CEO, CFO Secretary, Treasurer and a director.

Ms. Rico spends approximately 25% of her time on our business.

Our executive officers and directors did not receive any other compensation as directors or officers or any benefits.

16

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Outstanding Equity Awards at Fiscal Year End

As of May 31, 2016, we did not have any unexercised stock options held by any of our shareholders.

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

 

The following table sets forth the ownership, as of August 17, 2016, of our common stock by each of our directors, and by all executive officers and directors as a group, and by each person known to us who is the beneficial owner of more than 5% of any class of our securities. As of August 17, 2016, there were 3,048,000 common shares issued and outstanding. All persons named have sole voting and investment power with respect to the shares, except as otherwise noted. The number of shares described below includes shares which the beneficial owner described has the right to acquire within 60 days of the date of this Annual Report.

Name and Address of Beneficial Owner	Title of Class	Amount &Nature of Beneficial Ownership (1)	Percent of Class (%)(2)
Michelle Rico 9830 6th Street, Suite 103 Rancho Cucamonga, CA 91730	Common	30,000,000	90.77%
All Officers and Directors as a Group (1)			90.77%
Leonardo Correa Rodriguez, Hooft Graaflandstraat 21 VM Utrecht, Netherland 3525 (3)	Common	2,578,000	7.80%

 

(1)

Michelle Rico is our President CEO, CFO Secretary, Treasurer and a Director.

(2)

Calculated based on issued and outstanding shares of 33,048,000 as August 17, 2016.

(3)

As of June 29, 2016, Mr. Rodriguez resigned as an officer and director of the Company.

Pension, Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide pension, retirement or similar benefits to our directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.

Compensation Committee

We currently do not have a compensation committee of the Board of Directors or a committee performing a similar function. It is the view of the Board that it is appropriate for us not to have such a committee because of our size and because the Board as a whole determines executive compensation. Each of our directors is also is a senior officer of the company.

Compensation Committee Report

Our Board of Directors as a whole has revised and discussed the compensation discussion and analysis disclosed in this Form 10-K and based on this review and discussion, has determined that the disclosure be included in this annual report.

Compensation of Directors

 

We do not pay our directors any fees for attendance at Board meetings or similar remuneration or reimburse them for any out-of-pocket expenses incurred by them in connection with our business.

Change of Control

As of May 31, 2016 we had no pension plans or compensatory plans or other arrangements which provide compensation in the event of a termination of employment or a change in our control.

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Item 13. Certain Relationships and Related Transactions, and Director Independence

Director Independence

 

The OTC Bulletin Board on which our common shares are listed on does not have any director independence requirements. We also do not have a definition of independence as our directors also hold positions executive officer positions with us. Once we engage further directors and officers, we plan to develop a definition of independence and scrutinize our Board of Directors with regards to this definition.

 

Item 14. Principal Accounting Fees and Services

 

Audit, Audit-Related and Non-Audit Fees

 

The following table represents fees for the professional audit services and fees billed for other services rendered by our current auditors, KLJ & Associates, LLP for the audit of our annual financial statements for the years ended May 31, 2016 and May 31, 2015 and any other fees billed for other services rendered during that period.

Description of Service		Year ended May 31, 2016 ($)			Year ended May 31, 2015 ($)
Audit fees			7,600			7,600
Audit-related fees			-			-
Tax fees			-			-
All other fees			-			-
Total			7,600			7,600

Audit Committee Approval

Since our inception, our Board of Directors, performing the duties of the audit committee, has reviewed all audit and non-audit related fees at least annually. The Board, acting as the audit committee, pre-approved all audit related services for the year ended May 31, 2016

 

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PART IV

 

Item 15. Exhibits, Financial Statement Schedules

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

Exhibits

Exhibit Number	Exhibit Description
31.1	Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14 or 15d-14 of the Exchange Act pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
EX-101.INS	XBRL Instance Document
EX-101.SCH	XBRL Taxonomy Extension Schema
EX-101.CAL	XBRL Taxonomy Extension Calculation Linkbase
EX-101.LAB	XBRL Taxonomy Extension Label Linkbase
EX-101.PRE	XBRL Taxonomy Extension Presentation Linkbase
EX-101.DEF	XBRL Taxonomy Extension Definition Linkbase

SIGNATURES

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

 

	YANEX GROUP INC.
Date: November 4, 2016	By:	/s/ Michelle Rico
		Michelle Rico
		President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer and Director

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

 

Signature	Title	Date
/s/ Michelle Rico Michelle Rico	President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer and Director	November 4, 2016

 

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