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As a result, our revenue growth outlook for Zynex is largely based on the general guidance
that management has offered in press releases and presentations (
Insider Control - Zynex s CEO owns approximately 60% of the company s outstanding common stock and therefore
essentially has complete control over all decision-making (at the management and director levels). The relatively low float
also makes the stock that much less liquid.
Claims by Anthem Anthem accounts for 23% of Zynex s revenue and recently filed a second claim seeking a large ($1.3
million) refund from the company. Zynex claims they have re-billings to Anthem that should more than offset this amount.
Again, we have no visibility on the likely outcome of this so our model does not include any direct negative impact (i.e.
payment from Zynex to Anthem) for this claim. There is also a possibility that there could be more claims in the future and
that claims from Anthem could damage Zynex s relationship with the insurer, thereby potentially putting at risk the large
ongoing revenue stream from Anthem.
Our concerns .
Outstanding lawsuit - The aforementioned class action lawsuit names Zynex as well as the CEO and former CFO as
defendants. Zynex is awaiting a ruling on their motion to dismiss which they filed in May 2010. The lawsuit contends that
the CEO and former CFO intentionally inflated earnings and revenue for their own gain (benefitting from resultant increases
in Zynex s stock price). Some very serious allegations are made in the complaint including that, no less than seven former
Zynex employees have come forward to describe, in great detail, the improper and (sometimes) illegal methods employed
by the Defendants to improperly drive orders and recognize excessive revenue We have no visibility on the likely
outcome of this lawsuit or the validity of the claims being made but until there is more clarity on both, they will remain a
significant concern as they could seriously negatively affect Zynex s future. In the meantime, these will almost certainly
continue to hang over Zynex s head and limit upside in the stock price
This was ruled on and as seen on the the April 8, 2011 Zynex lost the Mishkin vs Zynex case.
Posted on April 8, 2011 by William M. Regan
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Co-authored by Gregory C. Johnson
Allegations that a medical device manufacturer knowingly overbilled insurance companies and reported these unrecoverable accounts as income were sufficient to support security fraud claims.
Katten Muchin Rosenman LLP
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Revision of Earnings Due to Overbilling Supports Fraud Claims
Posted on April 8, 2011 by William M. Regan
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Co-authored by Gregory C. Johnson
Allegations that a medical device manufacturer knowingly overbilled insurance companies and reported these unrecoverable accounts as income were sufficient to support security fraud claims.
According to plaintiffs, Zynex Inc. deliberately overbilled insurance companies and reported this inflated income on its financial statements even though top officers knew that the company would not be able to collect this amount. Zynex announced on April 1, 2009, that it was revising its financial reports for the first three quarters of 2008, telling investors that the reduction in earnings was based on "provider discounts" that should have been recognized during that period. Zynex's stock price dropped 56% following the announcement, and plaintiffs sued the company and two officers for securities fraud under Section 10(b) of the Securities Exchange Act of 1934
and Rule 10(b)(5) promulgated thereunder.
The defendants moved to dismiss, arguing that plaintiffs' allegations at most showed that accounting mistakes occurred, and that the alleged over-billing did not give rise to a strong inference that the company intended to mislead investors. The U.S. District Court for the District of Colorado disagreed, holding that the alleged insistence of Zynex officers to continue the practice of overbilling—despite being aware that collection was impossible— demonstrated an intent to deceive. The Court also noted that the amount of the earnings reduction was "substantial," which also supported the federal fraud claims. (Mishkin v. Zynex Inc., Civil Action No. 09–cv–00780–REB–KLM, 2011 WL 1158715 (D. Colo.))
Tags: Litigation
Initiating Coverage on Zynex Inc. (ZYXI)
By Zacks Investment Research Feb 14, 2011, 11:58 AM Author's Website
Zynex Inc.’s (ZYXI) stock was seriously punished with the April 2009 restatement announcement and, despite revenue growth of almost 60% in 2009 and 30% through the first nine months of 2010, has yet to fully recover. Until there is resolution on what we would characterize as “significant” lingering concerns (most notably the outstanding lawsuit and ongoing refund claims by Anthem), we believe Zynex’s stock will continue to trade at a significant discount. Complete insider control and thin float also generally penalizes valuation – as Zynex’s CEO owns 60% of the outstanding shares, we also expect this to continue to weigh on the share price.
We are also concerned about the current absence of a definitive and significant catalyst to propel long-term revenue growth. Zynex’s recent strategy of recruiting competitors’ sales reps may not be sustainable for more than a few more years, especially if larger competitors increase commissions to their reps in order to stem their sales force attrition and the resultant market share losses to Zynex. The new businesses (Monitoring and NeuroDiagnostics) may indeed evolve into very meaningful contributors to and drivers of long-term revenue growth. But until there are more specifics on the products expected to be developed through these businesses and plans relative to R&D strategies and efforts, it is impossible to comfortably gauge the viability of management’s expectations for these units or their potential financial contribution.
GOOGLE--Zynex Revision Of Earnings Due To Overbilling Supports Fraud Claims
"Zynex revision of earning statements due to overbilling supports fraud claims". What did Zynex do? How come we never heard this? What does this mean?
Thank you for educating me. Why hasn't there been any activity with ZYXI all week?
What is the Div & Yield for 37.50 and 0.02? I can't ever find this because it's always N/A.
I think ZXYI can be viable enough without the fabricated story about EMSI being bought by Zynex. Why lie penn33c? That's beneath you. What are you afraid of?
Post 4843 was leading the investors to believe something that was never going to happen. Nice little rebound for the stock today. Was reading rep posts on Cafepharma about Zynex. What's going on? The report wasn't exactly a winner.
UNBELIEVEABLE. 30%? VERY UNREALISTIC!
NOT A HEALTHY REPORT AT ALL. WHAT GIVES? I HEAR TAPS PLAYING IN THE BACKGROUND. IM INTERESTED IN THE NUMBERS THIS WEEK. NOT COOL AT ALL.
Very nice especially after the 5 year low of 30 cents in the autumn.
The small cap is just in time. Interesting reading in Cafepharma Zynex Messages. The field perspective is vastly different than the investors. What does this mean in the long haul? Stock is holding strong so far at 70+. I'm feeling shakey on ZYXI but enlighten me. Is it time to rally or pay attention to the signs? Whats real? The ZYXI sales pitch or the folks in the trenches?
Isn't that mid Apriel?
What does zynex get attention on cafapharma? Thought that was pharma only?
Uh huh, sure. Anything you say Mike.
Great post Camerlo888. Your analysis is "Spot on".
You're correct! Good observations
Please read post #4837
#4837
#4837 #4837
#4837
#4837 #4837
#4837
#4837
Best post all year! Love it! Merry Christmas
Please read Penn33c's comments when the stock price was high, medium, low and super low over the pat year. his is a problem because he got people to listen and lose their ass. Please read the following posts and the stock price at the time of Penn33c's posts. Very interesting!
#4247-Hilarious!!! You need to read and take notice of the stock price!
#4280-Penn33c "bought a little at 1.54!!!
#4295-11-22-09-laughable!!! A must read!!!
#4295-11-28-09-Penn33c states,"I want to hawk my house to buy more stock" (could you imagine if he did?!!)
#4322-Penn33c-12-24-09-"Merry Christmas BUY BUY BUY" (If you did this you wouldn't have a Christmas this year!)
#4339-01-09-10-Penn33c is predicting the stock will be at $3.00!!!
#4334-A MUST READ!!!
#4354-01-23-09 "The stock should take off now"
#4356-01-23-09 "I predict the stock will go over $1.75 this week"
STOCK HAS FALLEN $1 PER SHARE BETWEEN POST #4247 AND POST #4356
3 MONTHS TIME---NOVEMBER 2009 AND END OF JANUARY 2010.
#4376-MESSAGE BY RAWNOC REINDEER-MUST READ!!!!!!
#4376-Penn33c is begging everyone to BUY BUY BUY
#4381-02-19-10-Penn33c "BUY BUY BUY!!!"
#4385-Penn33c-02-21-10-"I CAN FEEL SOMETHING GREAT!!!"
#4386-Penn33c-02-22-10-"TRUST ME" (Are you kidding???)
#4391-Penn33c-03-06-10-"STOCK SHOULD GO STRAIGHT UP"
#4399-Penn33c-03-19-10-"I PREDICT $2.00 A SHARE BY END OF MARCH!!"
Penn33c FAILED TO POST AGAIN UNTIL 04-27-10
#4422-04-27-10-P L E A S E R E A D A N D S H U T T E R
#4429-05-04-10-Penn33c"Everyone BUY .75"
#4460-06-25-10-STOCK IS .62 NO VOLUME
IT'S DECEMBER 22...WHAT IS THE STOCK? WHAT ABOUT THE GREAT SMALL CAP MEETING IN SAN DIEGO??? WHAT ABOUT THE 3RD QUARTER FINANCIALS THAT WERE GOING TO BLOW OUR DOORS OFF...BUY BUY BUY??????? LOL, GIVE ME A BREAK.
WHY IS THE VOLUME ONLY 300????? THIS HAS BEEN GOING ON FOR WEEKS NOW
What was your timeline when ZYXI stock fell from $1.78 to 33 cents? You were probably saying the stock was going to $6.00 and ZYXI was the next Microsoft, THAT'S WHAT I CALL A GOOD LAUGH!!!
I agree camerlot888. Although 500 is below average. I predict the stock will fall back to 40 cents again.
Same old story with boring Zynex Medical. Penn33c, Buccaneer1961 and Potatosauce (who is potatoflake on other sites) are busy and desperatly luring everyone they can to buy this stock. The 3rd quarter report came and gone and the fact remains after all the posturing....Zynex stock is still down $1.25 from this time last year. The financials are a joke. Look at the operational costs, ZYXI is in serious trouble, it's laughable. The worst equipment in the business according to published reports and need to write off what??? $5,000,000 in bad paper, wow...this is not a profitable business. Let's hope Zynex Medical Solutions can get the Blood Monitoring up to speed like they've been pitching, zero revenue there as well but it's the only possible money maker here. I challenge everybody to do their homework on ZYXI.
Penn33c, Potatosauce, Buccaneer1961 will cry until the cows come home with this post but everyone else, DO YOUR HOMEWORK.
I simply look at thngs with an even perspective. Camelot888 has the same outlook...see her post. Potatohead, you and Penn33c obviously are either very heavily invested or are upper management for ZYXI. Your agenda is clear and past history with investors suing ZYXI make people wary when you cheerlead. Camelot888 brings up value and balance. There has been no volume the past 3 days.
I guess that would mean that we all win, Potatohead. No volume the last 3 days
So you have been reduced to ripping my caps (didn't know they were on)lol. Calling me JR....I like it. Appearantly you need to digress. No volume fo the 3rd day in a row. 888 Had a onderful post, thanks again for a well written, well thought perspective and not a cheerleading diatribe.
CAMERLOT888, FINALLY FINALLY FINALLY A WELL WRITTEN POST. THIS IS WHAT I HAVE BEEN SAYING FOR THE PAST 6 MONTHS. THANK YOU! THIS ISN'T A CHEERLEADER BOARD, IT SHOULD BE A STOCK ANALYSIS BOARD. PEOPLE LIKE POTATOSAUCE ARE THREATENED BY ANYTHING THAT ISN'T CHEERLEADING ZYXI.
jkatz, Ive mentioned Tony in several posts since he was hired in ae August replacing Fritz. I errored that's all. I meant BOD and said investor, my bad. He did get a large volume of stock though...
I guess his name is Mats Wahlstrom so hopefully this cat can help
The stock went down to 30 cents yesterday. It's bothersome that it hit a 4 year low after reaching $1.76 just 10 months ago. I realize there is a new CFO but in my conversation yesterday I was told that ZYXI hustled to get another investor to help. Looks bleak
Nov 18th is firm
I called Zynex Friday and he told me Nov.18th. It pays to be nosey
When does the quarterly report come out? I really want to pay close attention to the operational costs. Will they be record setting? Did Zynex settle the 1.4 million with Anthem? What happend to the volume?
I think you are a "friendly"...Go Blackhawks, lol