Robbins LLP is Investigating Allegations that Zynex, Inc. (ZYKIQ) Filed False Claims and Failed to Comply with Industry Regulations

Robbins LLP informs stockholders that a class action was filed on behalf of all investors who purchased or otherwise acquired Zynex, Inc. (OTC: ZYKIQ) securities between February 25, 2021 and December 15, 2025. Zynex is a medical device manufacturer that produces and markets electrotherapy devices for use in pain management, physical rehabilitation, neurological diagnosis, and cardiac monitoring.

The Allegations:

According to the complaint, during the class period defendants failed to disclose to investors: (a) that Zynex shipped products, including electrodes, in excess of need; (b) that, as a result of this practice, the Company inflated its revenue; (c) that the Company’s practice of filing false claims drew scrutiny from insurers, including Tricare; (d) that on August 21, 2023, Travelers commenced an action against Zynex, Sandgaard, Lucsok and Fox in the Superior Court of California alleging that Zynex and the defendants had embarked on a fraudulent overbilling scheme and seeking more than $23 million in damages and civil penalties relating to hundreds of fraudulent claims between 2018 and 2023; (e) that management had prioritized aggressive sales strategies to drive orders over compliance with industry laws, rules and regulations; (f) that the Company was not committed to maintaining a strong internal control environment; (g) that the Company’s order growth was a result of illegal overbilling; and (h) that, as a result, it was reasonably likely that Zynex would face adverse consequences, including removal from insurer networks and penalties from the federal government.

Plaintiff alleges that on March 11, 2025, after the market closed, Zynex reported its fourth quarter and full year 2024 financial results, revealing a significant revenue “shortfall” in the quarter “due to slower than normal payments from certain payers.” Zynex further revealed “Tricare has temporarily suspended payments as they review prior claims.” Tricare is the health insurance program for the U.S. military, and Zynex’s largest customer, accounting for 20-25% of revenue. On this news, Zynex’s stock price fell $3.59 per share, or 51.3%, to close at $3.41 per share on March 12, 2025, on unusually heavy trading volume. Then, on July 31, 2025, defendants’ misdeeds were revealed when the Company acknowledged that it had not been in compliance with industry regulations. Also that day, the Company remarked on the “transformational” leadership change during the quarter with the appointment of new Chief Executive Officer (“CEO”) Steven Dyson (“Dyson”) to replace Sandgaard, and the announced departure of the Company’s Chief Financial Officer (“CFO”) Daniel Moorhead (“Moorhead”). The Company also temporarily suspended revenue and profitability guidance. In response, on August 1, 2025, the stock fell from the previous day’s $2.23 per share to $1.26 per share, a 45% decline in heavy trading volume.

What Now: You may be eligible to participate in the class action against Zynex, Inc. Shareholders who wish to serve as lead plaintiff for the class must submit their papers to the court by April 21, 2026. The lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation.  You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member.

All representation is on a contingency fee basis. Shareholders pay no fees or expenses.