Zynex, Inc. (ZYXI) Securities Class Action

The litigation is focused on the propriety of Zynex’s statements about its sales and billing practices, its revenue recognition practices, and its relationship with the military health program for active-duty soldiers and their family members (“Tricare”), which represents 20 – 25% of company’s revenue.  

The complaint alleges that Zynex made false and misleading statements while failing to disclose crucial information to investors. More specifically, the suit alleges that:

•  Zynex shipped product, including electrodes, in excess of customers’ needs;
• As a result of this practice, Zynex inflated its revenues;
• Zynex’s practice of filing false claims drew scrutiny from insurers, including Tricare; and
• As a. result, it was reasonably likely that Zynex would face adverse consequences such as removal from insurer networks and penalties by the federal government.

Investors began to learn the truth on June 4, 2024, when medical journal STAAT published “How a device maker inundated pain patients with unwanted batteries and surprise bills.” This report claimed that Zynex engaged in an “oversupplying scheme” by sending inordinate amounts of monthly supplies like electrode pads and batteries in order to “bill insurers for thousands of dollars more than it otherwise could.” STAAT further revealed that, as a result of this practice, insurers were “kicking the company out of network.”

Then, on March 11, 2025, Zynex reported dismal Q4 and FY 2024 financial results. The company’s Q4 revenue implied a 2% drop from the year-earlier period and YE net income per share plummeted from $0.27 in 2023 to $0.09 in 2024. According to Zynex CEO Thomas Sandgaard “[o]ur fourth quarter revenue was less than expected[]” and “[t]he shortfall was due to slower than normal payments from certain payers and we were recently notified that Tricare has temporarily suspended payments as they review prior claims.”  

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the ZYXI investigation about?

We are concerned about potential issues with Zynex’s revenue recognition and sales practices.

WHAT SHOULD I DO?

I worked at ZYXI. What should I do?

If you were an employee of ZYXI, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or [email protected].

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in ZYXI, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any ZYXI investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.