UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


	☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2021


	☐	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 001-38804

Zynex, Inc.

(Exact name of registrant as specified in its charter)

NEVADA		90-0275169
(State or other jurisdiction of		(IRS Employer
incorporation or organization)		Identification No.)

9555 Maroon Cir.
Englewood, CO		80112
(Address of principal executive offices)		(Zip Code)

(303) 703-4906

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ☐

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

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class		Shares Outstanding as of April 28, 2021
Common Stock, par value $0.001		34,846,656

Table of Contents

ZYNEX, INC. AND SUBSIDIARIES

INDEX TO FORM 10-Q


		Page
PART I—FINANCIAL INFORMATION		3

Item 1.	Financial Statements	3

	Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020	3

	Unaudited Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020	4

	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020	5

	Unaudited Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020	6

	Unaudited Notes to Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

PART II—OTHER INFORMATION		25

Item 1.	Legal Proceedings	25

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities And Use of Proceeds	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Mine Safety Disclosures	25

Item 5.	Other Information	25

Item 6.	Exhibits	26

SIGNATURES		27

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ZYNEX, INC.

CONSOLIDATED BALANCE SHEETS

(AMOUNTS IN THOUSANDS, EXCEPT NUMBER OF SHARES)

(unaudited)


	March 31,		December 31,
	2021		2020
ASSETS
Current assets:
Cash	$	33,439	$	39,173
Accounts receivable, net		14,874		13,837
Inventory, net		10,957		8,635
Prepaid expenses and other		1,559		1,378
Total current assets		60,829		63,023

Property and equipment, net		2,299		1,925
Operating lease asset		5,380		5,993
Finance lease asset		457		321
Deposits		340		347
Deferred income taxes		931		566
Total assets	$	70,236	$	72,175

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable and accrued expenses		3,338		4,717
Operating lease liability		2,043		2,051
Finance lease liability		104		77
Income taxes payable		266		280
Accrued payroll and related taxes		3,564		2,992
Total current liabilities		9,315		10,117
Long-term liabilities:
Operating lease liability		4,371		4,920
Finance lease liability		397		283
Total liabilities		14,083		15,320

Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding as of March 31, 2021 and December 31, 2020		—		—
Common stock, $0.001 par value; 100,000,000 shares authorized; 36,143,761 issued and 34,849,790 outstanding as of March 31, 2021 and 36,126,698 issued and 34,791,931 outstanding as of December 31, 2020		37		36
Additional paid-in capital		37,313		37,235
Treasury stock 1,076,220 shares, at March 31, 2021 and 1,071,220 shares at December 31, 2020, respectively, at cost		(3,921)		(3,846)
Retained earnings		22,724		23,430
Total stockholders' equity		56,153		56,855
Total liabilities and stockholders' equity	$	70,236	$	72,175

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

Table of Contents

ZYNEX, INC.

CONSOLIDATED STATEMENTS OF INCOME

(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

(unaudited)


	For the Three Months Ended March 31,
	2021		2020
NET REVENUE
Devices	$	6,365	$	3,444
Supplies		17,762		11,784
Total net revenue		24,127		15,228

COSTS OF REVENUE AND OPERATING EXPENSES
Costs of revenue - devices and supplies		5,886		3,401
Sales and marketing		13,827		5,584
General and administrative		5,495		3,785
Total costs of revenue and operating expenses		25,208		12,770

Income/(loss) from operations		(1,081)		2,458

Other expense
Interest expense		(9)		(4)
Other expense, net		(9)		(4)

Income/(loss) from operations before income taxes		(1,090)		2,454
Income tax benefit		(384)		(483)
Net Income/(Loss)	$	(706)	$	2,937

Net income/(loss) per share:
Basic	$	(0.02)	$	0.09

Diluted	$	(0.02)	$	0.09

Weighted average basic shares outstanding		34,837		32,913
Weighted average diluted shares outstanding		34,837		34,204

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

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ZYNEX, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(AMOUNTS IN THOUSANDS)

(unaudited)


	For the Three Months Ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss)	$	(706)	$	2,937
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Depreciation		487		252
Non-cash reserve charges		2		249
Stock-based compensation		108		497
Non-cash lease expense		55		(10)
Provision for deferred income taxes		(378)		(473)
Change in operating assets and liabilities:
Accounts receivable		(1,037)		(716)
Prepaid and other assets		(182)		(819)
Accounts payable and other accrued expenses		(798)		162
Inventory		(2,863)		(1,501)
Deposits		7		54
Net cash provided by/(used in) operating activities		(5,305)		632

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(299)		(297)
Net cash used in investing activities		(299)		(297)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on finance lease obligations		(23)		(11)
Purchase of treasury stock		(75)		—
Proceeds from the issuance of common stock on stock-based compensation awards		27		221
Taxes withheld and paid on employees' equity awards		(59)
Net cash (used in)/provided by financing activities		(130)		210
Net increase/(decrease) in cash		(5,734)		545
Cash at beginning of period		39,173		14,040
Cash at end of period	$	33,439	$	14,585

Supplemental disclosure of cash flow information:
Cash paid for interest	$	(9)	$	(4)
Cash paid for rent	$	(521)	$	(328)
Supplemental disclosure of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for new operating lease liabilities	$	162	$	1,433
Inventory transferred to property and equipment under lease	$	473	$	187
Inventory transferred to property and equipment as demo devices	$	67	$	—

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

Table of Contents

ZYNEX, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

(unaudited)

SEC Form 10-Q filed by Zynex, Inc.