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<SEC-DOCUMENT>0001263279-04-000062.txt : 20040220
<SEC-HEADER>0001263279-04-000062.hdr.sgml : 20040220
<ACCEPTANCE-DATETIME>20040220162709
ACCESSION NUMBER:		0001263279-04-000062
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040211
ITEM INFORMATION:		Changes in control of registrant
ITEM INFORMATION:		Acquisition or disposition of assets
ITEM INFORMATION:		Financial statements and exhibits
FILED AS OF DATE:		20040220

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ZYNEX MEDICAL HOLDINGS   INC
		CENTRAL INDEX KEY:			0000846475
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]
		IRS NUMBER:				870403828
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	033-26787-D
		FILM NUMBER:		04619615

	BUSINESS ADDRESS:	
		STREET 1:		8100 SOUTH PARK WAY
		STREET 2:		SUITE A-9
		CITY:			LITTLETON
		STATE:			CO
		ZIP:			80120
		BUSINESS PHONE:		(303) 703-4906

	MAIL ADDRESS:	
		STREET 1:		8100 SOUTH PARK WAY
		STREET 2:		SUITE A-9
		CITY:			LITTLETON
		STATE:			CO
		ZIP:			80120

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	FOX RIVER HOLDINGS  INC
		DATE OF NAME CHANGE:	20031126

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	ARIZONA VENTURES INC
		DATE OF NAME CHANGE:	20030115

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CHINA GLOBAL DEVELOPMENT INC
		DATE OF NAME CHANGE:	20020130
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>zynex8k.txt
<DESCRIPTION>ZYNEX MEDICAL HOLDINGS 8-K
<TEXT>
                      SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C.



                                   FORM 8-K


                                CURRENT REPORT


                    Pursuant to Section 13 or 15(d) of the
                       Securities Exchange Act of 1934


                               February 11, 2004
                 ------------------------------------------------
                 Date of Report (date of earliest event reported)


                          Zynex Medical Holdings, Inc.
              ----------------------------------------------------
              Exact Name of Registrant as Specified in its Charter


          Nevada                     33-26787-D             87-0403828
- ---------------------------       ---------------     ----------------------
State or Other Jurisdiction       Commission File     IRS Employer Identifi-
      of Incorporation                 Number              cation Number



             8100 South Park Way, Suite A-9
             Littleton, Colorado                           80120
             ----------------------------------------------------
             Address of Principal Executive Offices      Zip Code


                                (303) 703-4906
                         ------------------------------
                         Registrant's Telephone Number,
                              Including Area Code


                 378 North Main, No. 124, Logan, Utah  84041
                 -------------------------------------------
                 Former Name or Former Address, if Changed
                               Since Last Report












ITEM 1.  CHANGES IN CONTROL OF REGISTRANT

     On February 11, 2004, Zynex Medical Holdings, Inc. (the "Company")
completed the acquisition of all of the outstanding common stock of Zynex
Medical, Inc., a Colorado corporation ("Zynex"), in exchange for 19,500,000
shares of the Company's Common Stock (approximately 88% of the shares now
outstanding.

     The stock issuances were made pursuant to an Acquisition Agreement
("Agreement") between the Company and Zynex.  The terms of the Agreement were
the result of negotiations between the managements of the Company and Zynex.
However, the Board of Directors did not obtain any independent "fairness"
opinion or other evaluation regarding the terms of the Agreement, due to the
cost of obtaining such opinion or evaluation.

     The foregoing summary of the Agreement is qualified by reference to the
complete text of the Agreement, which is filed as Exhibit 10 hereto, and is
incorporated herein by this reference.

     As a result of the transaction with Zynex, the issuance of the 19,500,000
shares of the Company's Common Stock to the Zynex shareholder and the
cancellation of certain shares of the Company's Common Stock, following is the
only person known by the Company to own 5% or more of the Company's Voting
Stock:

                                                     Percent of
                                   Number of         Outstanding
      Name and Address           Voting Shares      Voting Shares
      ----------------           -------------      -------------

     Thomas Sandgaard             19,500,000            88.0%
     Suite A-9
     8100 South Park Way
     Littleton, CO  80120

     All directors and            19,500,000            88.0%
     officers as a group
     (1 person)

     Effective on the closing of the acquisition, Thomas Sandgaard became the
Company's sole officer and director.  Information concerning Mr. Sandgaard's
business experience is disclosed in Item 2 of this Report.

ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS.

     As described in Item 1 of this Report, on February 11, 2004, the Company
acquired all of the issued and outstanding common stock of Zynex in exchange
for shares of the Company's Common Stock.  Following is a description of the
business of Zynex, its management and certain unaudited financial information.

Special Note Regarding Forward-Looking Statements

     This document contains forward-looking statements that involve
substantial risks and uncertainties. In some case, these statements can be
identified as forward-looking by the use of words such as "anticipate,"
"believe," "could," "estimate," "intend," "may," "should," "will," and
"would," or similar words.  Statements that contain these words should be read
carefully because they discuss Zynex's future expectations, contain

                                     2


projections of Zynex's future expected results of operations or of Zynex's
financial position, or state other forward-looking information.  Although it
is important to communicate future expectations, there may be events in the
future that cannot be accurately predicted or controlled.  The factors
enumerated in the section entitled "Risk Factors" as well as any cautionary
language in this document provide examples of risks, uncertainties, and events
that may cause Zynex's actual results to differ significantly from the
expectations derived from forward-looking statements.

                     THE BUSINESS OF ZYNEX MEDICAL, INC.

Zynex's History

     Zynex Medical, Inc. ("Zynex") was incorporated under the laws of the
state of Colorado on March 3, 1998, under the name of "Stroke Recovery
Systems, Inc." (SRSI).  On October 1, 2003, Zynex acquired, through a merger,
the assets and the liabilities of Dan Med, Inc. (DMI) and changed its name to
"Zynex Medical, Inc."

     DMI was established as a "C" corporation in 1996 with its main activities
being the importation of European made devices for electrotherapy until 1999,
when DMI began developing and manufacturing its own line of electrotherapy
devices.  Its own products now constitute over 80% of DMI sales and are
continuously growing.

     SRSI was established as a "C" corporation in 1998 with its main activity
being to provide electrotherapy devices for homecare to US patients suffering
the effects of a stroke.  Until the beginning of 2002, 95% of all SRSI
revenues were generated from an imported product, the AutoMove.  In early
2002, SRSI introduced the entire DMI product line of standard electrotherapy
products by adding a small sales force.  In 2002, standard electrotherapy
products generated over 75% of SRSI's revenues.

     In 2003, SRSI and DMI were merged in order to simplify the operating and
capital structure of both companies.

     Zynex has developed a strong product line to compete in the
electrotherapy market as well as a unique product, the NeuroMove, for the
stroke rehabilitation market segment.  Zynex currently does not face any
competition in this very attractive market segment.  All Zynex's products are
cleared by the Food and Drug Administration for sale in the US, backed up by a
significant volume of scientific evidence, and generally accepted in the
medical community.  In the US, Zynex's products require a physician's
prescription before they can be dispensed.  All Zynex's products have been
developed by its founder, Thomas Sandgaard.

     The business model is developed around the physician's prescription being
considered an "order" -- to provide the product to the patient.  Then Zynex
bills the patient's private insurance or Medicare for payment.  Zynex promotes
its standard electrotherapy products to physicians through a direct sales
force or by using various marketing tools to both consumers and specialty
physicians for Zynex's stroke rehabilitation product.  Zynex's stroke rehab
product is marketed directly to the end-users and physicians who specialize in
rehabilitation.


                                     3



Description of Therapy Devices and Techniques

     Electrotherapy is gaining acceptance in the US as its established use
continues to grow worldwide.  Electrical stimulation is not known to have any
side effects, which is a significant advantage over most medications used for
relief of pain or other therapies.  Applications for this treatment technique
are many and include: pain relief, increasing blood flow, reducing edema,
preventing venous thrombosis, increasing a patient's range-of-motion,
preventing muscle disuse atrophy, reducing urinary incontinence and stroke and
spinal cord injury rehabilitation.

     Technically, electrotherapy pain relief is accomplished by the
introduction of an electrical current applied through surface electrodes,
which "distorts" a pain signal on its way to the central nervous system and
the brain.  Applying higher levels of electricity causes muscle contractions
and, depending on the placement of electrodes, may improve any of the
conditions mentioned above.

     Zynex's NeuroMove device for stroke rehabilitation is clinically proven
to be nearly three times as effective as traditional physical therapy.  It
achieves this level by combining the electrical monitoring of muscle activity,
selecting only the signals that indicate attempts from the brain to move a
muscle, and introducing the actual movement (contracting a muscle) as a
reward, only when a strong attempt is detected.

     All Zynex units are designed to be used in a home setting, thus being
very cost effective compared to traditional therapy, easy to use and producing
outcomes such as improved mobility, less pain, and an ability to get back to
work significantly earlier than with traditional therapies.

Patient Needs and Clinical Outcomes

     Pain. Electrical stimulation has been shown to reduce most types of local
pain, such as tennis elbow, neck or low back pain, arthritis, and so forth.
The devices used to accomplish this are commonly described as TENS devices
(Transcuteanous Electrical Nerve Stimulation).  Electrical stimulation is
often chosen as an alternative to or in combination with regular pain
medication.  Both patients who suffer from pain (i.e., shortly after an
injury) and chronic pain can benefit from treatment by TENS and similar type
devices.  Numerous clinical studies have been published over several decades
showing the effectiveness of TENS for pain relief.  TENS is sometimes more
effective than medication.  We have developed two products in this category,
the TruWave, a digital TENS device and the IF8000, an interferential
stimulator which offers a deeper and more effective stimulation.   The TruWave
is a "traditional" TENS type unit whereas the IF8000 is a very sophisticated
unit with pain alleviating, biofeedback, and neuromuscular training settings.
Both these products have been approved by the FDA and are available to the
market.

     Muscle related problems. Electrical muscle stimulation is technically
achieved in the same fashion as TENS and by increasing the electrical
intensity to cause muscle contractions.  A built-in timer assures that the
muscles do not fatigue too easily.  Many modalities usually performed with
regular physical therapy can be replaced by NeuroMuscular Electrical
Stimulation (NMES) devices and be used in the home.  Common applications are
to prevent disuse atrophy, increasing strength, increasing range-of-motion,
and increasing local blood circulation.  NMES is commonly considered a
complement to physical therapy to improve overall patient outcomes.  Zynex has

                                     4


developed a specific digital device, the E-Wave, for this application.  The
IF8000 also has the capability to be programmed for NMES applications, and as
such is perceived "a deeper and more effective NMES device."  Both the IF8000
and the E-Wave are cleared by the FDA and available to the market.

     Post-op recovery: Electrical stimulation is found to be effective in
preventing deep venous thrombosis immediately after surgery, as well as for
pain relief, to improve local blood circulation and for reducing edema.  The
most common application is immediately post- orthopedic surgery.  Zynex's
management believes the IF8000 is the most effective of its products for these
applications.

     A stroke usually impacts a stroke survivor's mobility, speech, and
memory.  A stroke most often only impacts one side of the body, opposite the
part of the brain where the stroke occurred.  It is documented that 70% of all
stroke survivors have significant mobility impairments after the acute stage
and, in most cases, have to live with the disability for the rest of their
lives.

     The need to regain movement capability in their extremities exists for
nearly all of the 4 million stroke survivors in the US who suffer from
mobility impairments in upper and/or lower extremities.

     Zynex's NeuroMove device is designed to be used by the patient in his/her
home without the assistance of a caregiver.  Therapy outcomes are usually
measured in the form of increased strength, range-of-motion, and flexibility
as well as less muscle tone/spasms.  A large number of peer-reviewed clinical
studies of the technology show significant patient improvements, such as the
device having:

     *  Nearly three times effectiveness as traditional therapy (PNF).

     *  Same effectiveness 15 years post-stroke as 6 months post-stroke.

     *  Same effectiveness regardless of side affected and the nature of
        stroke as well as the age of the patient.

     *  90% of patients see significant improvements after 4 weeks and
        significant functional improvement after 6 months.

     *  139% improvement after 4 weeks of use.

     Zynex's NeuroMove NM900 serves the need for, first and foremost, a hope
that further patient improvements over their current plateau are possible.
After using the device, the patient increases mobility and can engage in more
activities, becoming more productive for himself, as well as reducing the
accident risk due to mobility impairments.  Device payers (private insurance,
Medicare and Medicaid) may, in Zynex's opinion, experience less total cost for
caring for stroke victims, due to fewer accidents and a reduction in expensive
rehabilitation when compared to traditional post-stroke treatment regimes.
Physicians can, with the NeuroMove, offer a new treatment option, specifically
for stroke patients, that will significantly improve their clinical outcomes.
The NeuroMove has been specifically approved by the FDA for stroke
rehabilitation.  Zynex has recently launched this new product into the market.

                                     5


     There are approximately 4 million stroke survivors in the United States
who have an impeded ability to move their limbs.  This number is expected to
grow more than 8% annually for the near future as the population ages.  The
annual cost to society of caring for stroke victims is approximately $45
billion, including direct costs, lost productivity, etc.  The inability to
move one's arm and/or hand and/or leg has a substantial psychological impact
on a stroke victim.  In addition, stroke victims commonly suffer additional
injuries due to their inability to protect themselves if they are falling.

     By using a device like the NeuroMove, patients' time for rehabilitation
can be significantly reduced, which can result in cost savings for payers and
society as a whole.  Dr. Kraft, of the University of Washington in Seattle,
Washington and past president of the American Academy of Physical Medicine and
Rehabilitation, showed that patients using the AutoMove device improved 42% in
comparison to those who received no treatment, while physical therapy only
showed an improvement of 18% compared to no treatment.  This study was
conducted during a three-month period.  There are other similar studies
presenting results that are even more favorable for the device.

     The cost of using a NeuroMove during a three-month period is
approximately $1,500, billed to an insurance carrier as compared to a cost of
approximately $5,000 for a total of 36 one-hour physical therapy treatments.
In order to achieve the same physical therapy outcomes as with the NeuroMove,
if possible, Zynex believes it would take significantly longer time with
substantial additional costs.

     Other cost savings come from:

     *  Less loss of productivity for society

     *  Less medication required (depression, botox injections, pain
        associated with traditional rehabilitation techniques, etc.)

     *  Fewer accidents leading to less hospitalization and rehabilitation

     *  More motivation and mobility leading to less expensive assistance
        required.

Zynex's Market

     The annual domestic market for standard electrotherapy products is
currently around $400 million and is experiencing a moderate growth rate,
while the market for stroke rehabilitation technology has only started to
develop in the opinion of Zynex.  There are over 4 million stroke survivors in
the US alone with a need for a product like Zynex's NeuroMove.  Zynex
estimates the market for its type of stroke recovery therapy equipment will
grow to in excess of $50 million annually.

                                     6


     Zynex plans to focus on developing the stroke rehab market segment with
its unique technology.  This market segment is believed to offer Zynex the
greatest potential for profitable, massive growth.  Zynex plans to increase
its penetration of the market for standard electrotherapy products by
expanding its sales organization.  These products can not only add sales
growth with high profit margins, but are a significant addition to building
manufacturing and R&D efficiency, due to the common technology platform.

     Key characteristics of the target markets are:

     *  High Gross Profit Margins, typically 60-95%.

     *  A long time is generally required to collect payment from insurance
        carriers (averages 100 to 200 days).

     *  Significant insurance "adjustments" are made by the insurance
        companies prior to payment.

     *  Management believes that a unique opportunity exists in the
        stroke and spinal cord injury rehabilitation markets, which show a
        type of demand of a large number of patients willing to privately
        pay for a product such as the NeuroMove.

     Zynex's strategy is to use its core technology to grow in two different
market segments: the market for standard electrotherapy and the market for
stroke rehabilitation equipment.  The geographical focus will continue to be
the US market.  International expansion may come only after securing a strong
position in the US.

     Marketing of Zynex's products has been accomplished through the use of
commission sales people who call on doctors and therapists.  The doctors and
therapists then write a prescription for Zynex's products, which the patient
sends to Zynex for fulfillment.  This method of sales is expected to continue
for Zynex's products other than the NeuroMove.  In January 2003, Zynex had to
cut its sales force for products other than the NeuroMove from ten people to
three.  This was necessitated by the need to improve receivables collections
so that they would cover the cost of goods sold, sales commissions, order
processing, and so forth.  As collections from standard products improve, it
is Zynex's intent to add sales force in that area, as Zynex believes it can
grow the standard product revenues significantly with more sales people in the
field.

Physical Facilities of Zynex

     Zynex presently occupies 10,000 square feet of office and warehouse space
in a modern office park setting in Littleton, Colorado.  The space is under a
five year contract expiring in February 2009.  The present configuration of
the space will accommodate 40-50 people.

Zynex's Manufacturing and Processing

     Zynex's strategy in manufacturing consists of the following elements:

     *  At all times, comply with relevant regulatory requirements and
        regulations.


                                     7


     *  Use contract manufacturers as much as possible thereby avoiding
        large capital investments and being able to respond to changes in
        volume as fast as possible. Domestically and internationally,
        there is a large pool of highly qualified contract manufacturers
        for the type of devices we manufacture, which also ensures a very
        competitive bidding process.

     *  Purchase the components itself, to ensure a consistent quality
        of the manufacturing base and to give it the ability to
        undertake the initial quality control of the components. It
        is faster to approve second sources by having the components
        come to its facility and avoiding shortcuts potentially made
        by the contract assembly company.
     *  Test all units 100% in a real-life environment to ensure the
        highest possible quality and the safety of patients. This allows
        Zynex to establish and maintain a quality image as a company and
        reduce the cost of warranty repairs.

     The process currently in place is well suited to handle volumes ten times
larger or more (supporting revenues in excess of $30M).  All assembly of units
as well as testing is accomplished in-house.  There are no contracts with
third party manufacturers.  In the Front Range region, there are many
producers of the types of subassemblies needed to manufacture Zynex's
products; Zynex's management has not found it necessary to contract with any
particular producer as a result.

Products Purchased for Resale

     Zynex distributes a number of products from other domestic and
international manufacturers in order to complement its core product line,
including electrical stimulation devices and patient supplies, such as
electrodes.  Customarily, there are not formal contracts between vendors in
the DME industry.  Replacements are easily found, either from Zynex's own
products or other manufacturers.

Potential Future Bottlenecks (and their solutions) Could Be:

     *  Receiving raw materials: would require slightly more space and a few
        more man-hours.
     *  Quality assurance on raw materials: would need more man-hours to
        inspect, count, sampling, update test-sheets.

     *  Quality assurance on assembled boards: would require more
        man-hours to inspect, count, sampling, update test-sheets, etc.

     *  Final assembly of units: would require more personnel in assembly.

     *  Testing finished units: would require more personnel in testing.

     *  Tracking batches, Serial numbers and repairs: would require more
        QA personnel.

Quality Assurance Systems

     Zynex's strategy is to integrate quality assurance throughout all parts
of the business for two main reasons:

                                     8


     *  To be compliant with all relevant regulatory requirements at all
        times.

     *  To optimize the efficiency of the operations and reduce errors to a
        minimum.

     Zynex will add personnel to the technical operations to implement and
maintain improvements to its QA systems for R&D, manufacturing and logistics
in particular.  Zynex will also slowly integrate the same principles to all
other parts of the business, including sales, accounting and billing
departments.

Regulatory Approval and Process

     All of Zynex's products are classified as Class II (Medium Risk) devices
by the Food and Drug Administration (FDA) and clinical studies with Zynex's
products are considered to be NSR (Non-Significant Risk Studies).  Zynex's
business is governed by the FDA and all products typically require 510(k)
market clearance before they can be put in commercial distribution.  Zynex is
also regulated by FDA's QSR regulation (Quality Systems Regulation), which is
similar to the ISO9000 and the European EN46000 quality control regulations.
All Zynex's products currently in production or manufactured by other vendors
are approved for marketing in the US under FDA's 510(k) regulations.

     To enter the European market, Zynex's products as well as its QA systems
will have to be approved and certified by an authorized certifying body such
as TUV, UL or BSI. Zynex plans to go through this process as a part of its
overall enhancement of the quality systems.

     Far East, Middle East, Eastern European, and Latin American markets have
different regulatory requirements.  Zynex intends to comply with applicable
requirements as we decide to enter those markets.

Government Regulation

     The delivery of health care services has become one of the most highly
regulated of professional and business endeavors in the United States.  Both
the federal government and individual state governments are responsible for
overseeing the activities of individuals and businesses engaged in the
delivery of health care services.  Federal law and regulations are based
primarily upon the Medicare and Medicaid programs.  Each of these programs is
financed, at least in part, with federal funds.  State jurisdiction is based
upon the state's interest in regulating the quality of health care in the
state, regardless of the source of payment.  Zynex believes it is materially
complying with applicable laws; however, Zynex has not received or applied for
a legal opinion from counsel or from any federal or state judicial or
regulatory authority.  Additionally, many aspects of Zynex's business have not
been the subject of state or federal regulatory interpretation.  The laws
applicable to Zynex are subject to evolving interpretations.  If Zynex's
operations are reviewed by a government authority, it may receive a
determination that could be adverse to Zynex.  Furthermore, laws that are
applicable to Zynex may be amended in a manner that could adversely affect
Zynex.

     Federal health care laws apply to Zynex when we submit a claim to
Medicare, Medicaid or any other federally funded health care program.  The
principle federal laws that Zynex must abide by in these situations include:

                                     9


     *  Those that prohibit the filing of false or improper claims for
        federal payment.

     *  Those that prohibit unlawful inducements for the referral of
        business reimbursable under federally funded health care programs.

     *  The federal government may impose criminal, civil and
        administrative penalties on anyone who files a false claim for
        reimbursement from Medicare, Medicaid or other federally funded
        programs.

     A federal law commonly known as the "anti-kickback law" prohibits the
knowing or willful solicitation, receipt, offer or payment of any remuneration
made in return for:

     *  The referral of patients covered under Medicare, Medicaid and other
        federally-funded health care programs; or

     *  The purchasing, leasing, ordering, or arranging for any goods,
        facility, items or service reimbursable under those programs.

Employees

     Zynex currently employs 14 people in the main office as well as a number
of commission sales representatives.  As revenues and cash flow increase,
Zynex plans to expand the organization organically as well as expand the sales
force.

     Alexander S. Russo, Zynex's Director of Engineering, has over 25 years
experience in designing electrical and electronic control systems for
sophisticated devices ranging from communications equipment to robotic warfare
vehicles.  His application of this knowledge to trouble-shooting Zynex's
products and manufacturing them efficiently is a valuable asset for Zynex.  It
is Zynex's intent that Mr. Russo will begin to spend some of his time
developing the next generation of Zynex's products.  Mr. Russo is signatory to
a non-disclosure and non-compete agreement with Zynex.

Zynex's Vision

     Zynex plans to establish a leading position in the homecare
electrotherapy market by developing products and services that help patients
get back to a normal life, while generating a satisfactory rate of return to
Zynex's shareholders.  Zynex seeks to be recognized as an innovator in
combining technology with services that can optimize clinical outcomes, while
minimizing overall healthcare costs.  Zynex's sought-for focuses are the
following areas:

     *  Stroke Rehabilitation
     *  Pain Management
     *  Muscle Related Problems
     *  Post-Op Recovery






                                     10


Patents

     Zynex has applied for a patent on our NeuroMove technology.  With regard
to our other products, management believes that the products contain certain
proprietary software that protects them from being copied.  In the future,
Zynex may seek patents for advances to our existing products and for new
products as they are developed.

Product Development

     The Zynex products have been developed over a period of time as market
analysis shows a need for a particular type of product.  There are no products
in development at the current time.  However, significant additions to the
product line are being planned with the intention of utilizing the existing
technology platform.

                               LEGAL PROCEEDINGS

     There are currently no material legal proceedings that involve Zynex.

                                  RISK FACTORS

     This is not a complete list of risks, since additional risks may not be
known at this time or may seem immaterial and yet may later prove to be
significant. The operating results, financial conditions, or business of Zynex
could be materially adversely affected by any of these risks.

Risks Related to the Business of Zynex

     Hospitals and clinicians may not buy or prescribe or use Zynex's products
in sufficient numbers.  Hospitals and clinicians may not accept the NeuroMove
NM900, IF8000, TruWave, or E-Wave products as effective, reliable, and
cost-effective.  Factors that could prevent such institutional customer
acceptance include:

     -  If customers conclude that the costs of these products exceed the
        cost savings associated with the use of these products;

     -  If customers are financially unable to purchase these products;

     -  If adverse patient events occur with the use of these products,
        generating adverse publicity;

     -  If we lack adequate resources to provide sufficient education and
        training to Zynex's customers, particularly small hospitals and
        alternate anesthesia sites; and

     -  If frequent product malfunctions occur, leading clinicians to
        believe that the products are unreliable.

     Zynex's revenues are dependent on the sale of Zynex's four products each
of which has competition.  NeuroMove NM900, IF8000, TruWave, and E-Wave are
all relatively new products.  Even though there is now an established market
for all these products, we may not succeed in building sufficient market share
in each market niche.  This is especially true for the TruWave and the E-Wave.
We also distribute the AM800 device and other products from several other

                                     11



manufacturers.  Too low a market share could eventually prevent profitability,
because we depend on sales of these products for a substantial part of Zynex's
revenue.

     We may incur substantial expenses and can be expected to incur losses.
We are expected to have significant research and development, sales and
marketing, and general and administrative expenses for several years.  These
amounts may be expended before any commensurate incremental revenue from these
efforts may be obtained. Thus, the losses incurred may be greater than the
losses that would be incurred should the business be developed more slowly.
Moreover, Zynex's efforts may be more expensive than anticipated, leading to
further losses.

     Cases of electrical shocks could undermine market acceptance of Zynex's
product and expose us to product liability claims.  To date, we have not
experienced any product liability cases.  We carry product liability insurance
with an aggregate limit of $2,000,000 and $1,000,000 per occurrence.  If we
were subject to a product liability claim, there is no assurance these
coverage amounts would be adequate.

     Zynex's failure to respond to rapid technological change may result in
product and technology obsolescence.  Rapid technological advances and product
development are hallmarks of the medical device industry. If Zynex's products
become obsolete, Zynex's business and results of operations may suffer.
Current or planned products are at risk of obsolescence from:

     -  new therapeutic products, based upon new or improved technologies;

     -  new products or technologies used on patients in the home or in
        hospitals;

     -  electrical or mechanical interference from new or existing products
        or technologies;

     -  alternative methods for rehabilitation; and

     -  significant changes in rehabilitation methods and standards.

     We must develop and introduce new or enhanced products.  As the market
for Zynex's products matures, new products for rehabilitation or other
applications must be developed and introduced.  This could lead to at least
the following risks:

     -  the products may not be successfully adapted to function properly
        in rehabilitation and home care for geriatric patients; and

     -  the complex technologies used in Zynex's products may not be
        developed further for applications outside of stroke rehab,
        incontinence and general electrotherapy.

     Commercialization of Zynex's products could fail if implementation of
Zynex's sales and marketing strategy is unsuccessful.  A significant sales and
marketing effort may be necessary to achieve the level of market awareness and
sales needed to achieve profitability.  We currently have only limited sales
and marketing experience, both in the US and abroad, which may limit Zynex's
ability to successfully develop and implement its sales and marketing
strategy.  We need to:

                                     12


     -  hire and train sales and clinical specialists;

     -  build a strong direct sales force;

     -  manage geographically dispersed operations;

     -  encourage customers to rent or purchase products;

     -  explore potential OEM relationships and assure that OEMs provide
        appropriate educational and technical support; and

     -  promote frequent product use to increase sales of consumables.

     OEM relationships could negatively affect Zynex's business.   Sales
through OEM channels could be less profitable than direct sales.  Product
sales could decline if customers are confused by the same product being
marketed through multiple channels.  OEM partners are not controlled by us, so
OEM partners could sell competing products or devote insufficient attention to
Zynex's products.  If OEM partners were not required to purchase minimum
quantities, it may be difficult to terminate agreements with them or enter
into alternative arrangements, despite dissatisfaction with the OEM
performance.

     Zynex's business could suffer if there is insufficient product inventory.
A third-party manufacturer assembles and manufactures a large portion of
Zynex's initial products.  Third party manufacturers may also manufacture
subsequent products in whole or in part. Business could be adversely affected
by any failure to produce enough products at either Zynex's own manufacturing
facility or at a third party manufacturing facility. We are currently
developing Zynex's own manufacturing capability and quality assurance
competence.

     Zynex's business could be adversely affected by reliance on sole
suppliers.  Certain essential product components may be supplied by separate
sole, or a limited group of, suppliers.  Some components may be purchased
through purchase orders rather than through long term supply agreements and
large volumes of inventory may not be maintained.  There may be shortages and
delays in obtaining certain product components.  Disruption of the supply or
inventory of components could result in a significant increase in the costs of
these components or could result in an inability to meet the demand for
Zynex's products.  In addition, if a change in the manufacturer of a key
component is required, qualification of a new supplier may result in delays
and additional expenses in meeting customer demand for products.

     Zynex's success depends upon its ability to protect its intellectual
property rights. Zynex's continued success partially depends upon:

     -  obtaining patent protection for Zynex's products,

     -  defending the patents obtained throughout the above process,

     -  preserving Zynex's trade secrets, and

     -  operating Zynex without infringing on upon patents and proprietary
        rights held by third parties.


                                     13



     Protection of proprietary aspects of Zynex's technology depends upon a
combination of contractual provisions; confidentiality procedures; and patent,
trademark, and trade secret laws.  These legal measures provide only partial
protection, and competitors can still gain access to Zynex's intellectual
property and proprietary information through various means.  Litigation may be
necessary to enforce intellectual property rights, to protect trade secrets,
and to determine the validity and scope of proprietary rights.  Such
litigation could result in substantial expense and diversion of resources
without a guarantee of success and seriously harm Zynex's business and
operating results.

     Substantial costs could be incurred defending against claims of
infringement.  Other companies, including competitors, may obtain patents or
other proprietary rights that would limit, interfere with, or otherwise
circumscribe Zynex's ability to make, use, or sell products.  Should there be
a successful claim of infringement against us and if we could not license the
alleged infringed technology, business and operating results could be
adversely affected.  There has been substantial litigation regarding patent
and other intellectual property rights in the medical device industry.  The
validity and breadth of claims covered in medical technology patents involve
complex legal and factual questions for which important legal principles
remain unresolved.  Any litigation claims against us, independent of their
validity, may result in substantial costs and the diversion of resources with
no assurance of success.  Intellectual property claims could cause us to:

     -  cease selling, incorporating, or using products that incorporate the
        challenged intellectual property,

     -  obtain a license from the holder of the infringed intellectual
        property right on reasonable terms, if at all, and

     -  redesign Zynex's products incorporating the infringed intellectual
        property.

     Competition could result in price reductions and decreased demand for
Zynex's products.  Substantial competition can be expected in the future in
the areas of stroke rehabilitation and incontinence treatment.  Competitors
may have substantial financial, technical, marketing, and other resources.
Competition could result in price reductions, fewer orders, reduced gross
margins, and loss of market share.  These companies may use standard or novel
signal processing techniques.  Other companies may develop rehabilitation
products that perform better and/or are less expensive than Zynex's products.
Competitors may develop products that are substantially equivalent to Zynex's
FDA approved products, thereby using Zynex's products as predicate devices to
more quickly obtain FDA approval for their own.

     Zynex's future depends upon obtaining regulatory approval of any new
products and/or manufacturing operations we develop.   Before new products can
be marketed in the US, clearance for those products must be obtained from the
Food and Drug Administration (FDA). Should the FDA conclude that any of
Zynex's products do not meet the requirements to obtain clearance with a
pre-market notification under Section 510(k) of the Food, Drug, and Cosmetics
Act, we would be required to file a pre-market approval application (PMA).
Such an application is lengthy, expensive, and typically requires extensive
clinical and pre-clinical trial data.


                                     14



     We may not be able to obtain clearance of a 510 (k) notification or
approval of a pre-market approval application with respect to any products on
a timely basis, if at all.  If timely clearance or approval of products is not
obtained, Zynex's business could be materially adversely affected.  Clearance
of a 510 (k) notification may also be required before marketing certain
previously marketed products, which have been modified after they have been
cleared. Planned enhancements to Zynex's current products are thought not to
necessitate the filing of a new 510(k) notification.  Should the FDA so
require, the filing of a new 510(k) notification for the modification of the
product may be required prior to marketing any modified devices.

     The FDA also requires adherence to Good Manufacturing Practices (GMP)
regulations, which include production design controls, testing, quality
control, storage, and documentation procedures.  To determine whether adequate
compliance has been achieved, the FDA may inspect Zynex's facilities at any
time.  Such compliance can be difficult and costly to achieve.  Zynex's
compliance status may change due to future changes in, or interpretations of,
FDA regulations or other regulatory agencies.  Such changes may result in the
FDA withdrawing marketing clearance or requiring product recall.  In addition,
any changes or modifications to a device or its intended use may require Zynex
to reassess compliance with Good Manufacturing Practices guidelines,
potentially interrupting the marketing and sale of products.  Failure to
comply with regulations could result in enforceable actions, including product
seizures, product recalls, withdrawal of clearances or approvals, and civil
and criminal penalties.

     We may be exposed to financial market risks, including changes in foreign
currency exchange rates and interest rates.  Most of Zynex's revenue,
expenses, and capital spending will be transacted in US dollars.  Zynex's
exposure to market risk for changes in interest rates relate primarily to
Zynex's cash and cash equivalent balances, marketable securities, investment
in sales-type leases, and loan agreements.  The majority of Zynex's
investments may be in short-term instruments and therefore subject to
fluctuations in US interest rates.  Due to the nature of such short-term
investments, there may be risk exposure.

     We must attract and retain key personnel.  Zynex's success is largely
dependent upon the ability, experience, and performance of Zynex's key
personnel.  At this juncture, we are particularly dependent upon Zynex's
President, Thomas Sandgaard.  While some portion of this Offering's proceeds
will be directed toward expanding the management team, there is no assurance
such a team could readily make up for the loss of Mr. Sandgaard, should that
occur.

     Loss of one or more key personnel could seriously harm Zynex's business
and operation results.  Continued success could significantly depend upon
hiring, training, motivating, and retaining additional skilled personnel,
particularly sales representatives and clinical specialists responsible for
customer training, support, and education.  Recruiting and retaining talented
personnel can be challenging, because the pools of experienced personnel are
small and Zynex may compete in them against companies with large resources.
Thus, we may not obtain the skilled personnel we need to expand Zynex's
business.

     Significant liability claims could adversely affect Zynex's business.
The manufacture and sale of Zynex's products expose us to product liability
claims and recalls, including those which may arise from misuse, malfunction,

                                     15


or design flaws.  Such claims and recalls, regardless of their ultimate
outcome, could require significant time and money be devoted to litigation or
significant damages paid. We plan to maintain insurance, but it may not
completely cover the cost of any product liability claims made against us in
the future.  It also may be impossible for us to obtain liability insurance at
satisfactory rates or in adequate amounts in the future.

     Third party reimbursement will affect Zynex's product sales.  Third party
reimbursement levels may change in the future as a result of political
changes, increased or decreased competition, or new coverage guidelines at
Medicare as well as private insurance companies. Failure to obtain adequate
reimbursement from third party payers could limit market acceptance of Zynex's
products.

                            MANAGEMENT OF ZYNEX


           Name             Age                Position
           ----             ---        ---------------------------

     Thomas Sandgaard        45        President, CEO and Director

     Thomas Sandgaard is President, Chief Executive Officer and sole Director
of Zynex.  Mr. Sandgaard has a degree in electronics engineering from the
Odense Teknikum and an MBA from the Copenhagen Business School and has worked
in many different positions in industries such as semiconductors,
telecommunications, data communications, and medical equipment.  Mr. Sandgaard
moved to the US from Denmark in 1996, where he founded DMI and Zynex Medical,
Inc. in 1996 and 1998, respectively.
                           MANAGEMENT COMPENSATION

                Summary Compensation Table - Annual Compensation

                                                             Other
Principal Position      Period       Salary     Bonus     Compensation
- ------------------      ------       ------     -----     ------------

                       Year Ended
Thomas Sandgaard    12/31/03     $51,525      0         Note 1
President and CEO       12/31/02     $99,000      0         Note 1
                        12/31/01     $91,000      0         Note 1

Note 1:   Health insurance, dental and vision plan paid for 100%.  Two
          Company vehicles are provided at Zynex's expense.  Zynex also
          pays for two home telephone lines.

     Zynex does not have any other employees who would qualify for discussion
under the terminology "Executive Compensation" or "Management Compensation."
Mr. Sandgaard was the only officer of Zynex and its predecessors during the
above years.

     Zynex has not granted any options or any other stock rights during the
past three years.  It is the intention of management to create and offer a
stock option plan to employees in the near future.

     There are no outside non-employee directors.

     There is an employment contract between Zynex and Mr. Sandgaard.

                                     16


                             CERTAIN TRANSACTIONS

     Predecessors of Zynex at various times lent OR Surgical, Inc., a company
owned by Mr. Sandgaard, various sums of money totaling $42,941.  These loans
were used by OR Surgical to fulfill various obligations and have been repaid.
There have been no similar transactions during the past two years.

                             FINANCIAL INFORMATION

     The following financial information is derived from the tax returns and
other internal financial information of Zynex Medical, Inc. and has not been
audited or reviewed by independent certified public accountants.  Further,
this financial information has not been prepared in accordance with Generally
Accepted Accounting Principles.
<TABLE>
<CAPTION>
                                                           Zynex Medical
                                                           Consolidated
                                                           Statements of
                                                             Operations
                                                            (Unaudited)

                                      Twelve months        Twelve months         Six months
                                          ended                ended               ended
                                    December 31, 2001     December 31, 2002     June 30, 2003
                                    -----------------     -----------------     -------------
<S>                                 <C>                   <C>                   <C>
Net sales and rental revenue            $1,190,363            $1,387,117          $696,002
Cost of sales and rentals                  233,138               268,838            49,667
                                        ----------            ----------          --------
     Gross profit                          957,225             1,118,279           646,335

Operating expenses:
 Selling, general and administrative       802,147             1,005,964           408,851
 Research and development                   33,173                   385             1,430
                                        ----------            ----------          --------
     Total operating expenses              835,320             1,006,349           410,281
                                        ----------            ----------          --------
Income from operations                     121,905               111,930           236,054
                                        ----------            ----------          --------
Other income (expense)
 Interest income                                                   8,522             2,659
 Interest expense                          (54,525)              (49,413)          (26,385)
 Investment gains and (losses)
 Other                                                              -                 (936)
                                        ----------            ----------          --------
     Income before income taxes             67,380                71,039           211,392
                                        ----------            ----------          --------
Income tax provision                         3,493                  -                 -
                                        ----------            ----------          --------
     Net income                         $   63,887            $   71,039          $211,392
                                        ==========            ==========          ========
</TABLE>








                                         17


<TABLE>
<CAPTION>
                                                           Zynex Medical
                                                           Balance Sheets
                                                            (Unaudited)

                                    December 31, 2001     December 31, 2002     June 30, 2003
                                    -----------------     -----------------     -------------
<S>                                 <C>                   <C>                   <C>
         Assets

Current Assets:
 Cash and cash equivalents              $                     $     -             $ 50,908
  Receivables, net                         289,134               264,177           380,053
  Inventories -
   Inventory for sale                       66,286               157,635           168,102
   Inventory for rental                                          133,117           339,195
  Prepaid expenses                                                                  20,052
  Other current assets                      21,204
                                        ----------            ----------          --------
     Total current assets                  376,624               554,930           958,309
                                        ----------            ----------          --------

  Property, plant, and equipment, net      127,190                21,587            20,886
  Other intangible assets, net                                       629               629
  Deposits/Escrow                                                  9,136             9,136
  Deferred tax assets
  Other assets                               6,692
                                        ----------            ----------          --------
     Total Assets                          510,506               586,281           988,959
                                        ==========            ==========          ========

Liabilities and Stockholder's Equity

Current Liabilities:
 Current maturities of long-term debt                             91,116            99,260
  Note payable                              32,230                37,703            37,703
  Loan instruments                         316,387               235,559           164,582
  Accrued liabilities
   Payroll                                                        79,515            72,351
   Commissions
   Income taxes                                                     -              (12,610)
   Other                                   208,779               238,993           304,083
                                        ----------            ----------          --------
     Total current liabilities             557,396               682,886           665,369
                                        ----------            ----------          --------
Long-Term Liabilities
 Long-term debt                                                                          0
 Loan from Shareholder                      80,210                50,749            53,190
 Deferred tax liabilities
                                        ----------            ----------          --------
     Total liabilities                     637,606               733,634           718,559

Stockholder's Equity:
 Capital from shareholder                      300                   300               300
 Retained earnings                        (127,400)             (147,654)          270,100
                                        ----------            ----------          --------
     Total stockholder's equity           (127,100)             (147,354)          270,400
                                        ----------            ----------          --------
     Total Liabilities and
       Stockholder's Equity             $  510,506            $  586,281          $988,959
                                        ==========            ==========          ========
</TABLE>


                                     18


               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

     The two entities, SRSI and DMI, have both been profitable for the past
four years with combined net revenues of close to $2 million.  The companies
were founded four and seven years ago, respectively, and have been financed
using Thomas Sandgaard's personal assets (approximately $4,000), and have
grown organically since then.  The costs of building an entire product
platform, building systems to bill insurance companies, etc. have come from a
combination of company profits, bank loans and equipment leases, also known as
"bootstrapping."  Zynex is in a position where the strategy can be executed
without significant costs and risks related to product development, the FDA,
billing systems, manufacturing and experimenting with sales models.

     Zynex's sales process can be described as follows:

     a)  Zynex's "Standard Products," the IF8000, TruWave, E-Wave, and a few
products from other manufacturers, all require a physician's prescription.
Sales representatives frequently visit the prescribing physicians and provide
a unit to the patient after receipt of proper paperwork, which is then
forwarded to the main office for insurance billing.  Insurance companies
decide, at their discretion, whether to rent or purchase the devices.  An
important part of the business is also the price negotiating that takes place
to obtain the approvals. The business model in this category takes advantage
of the low equipment cost to dispense the units at the time of prescription
a model that has been demonstrated to take significant market shares,
approximately at the rate we would add sales representatives. The net
collected GPM is still very profitable above 80%; however without any
financing up until now, growth has not been an option due to the average of
180 days to collect from insurance companies.

     b)  The stroke rehabilitation business is currently created through
word-of-mouth and limited Internet banner advertising to consumers. The
NeuroMove also requires a physician's prescription and Zynex does not
currently use a sales force to promote it.  With the introduction of the
NeuroMove in February of 2003, Zynex has a business model, where patients
self-pay a minimum of $495.00 before a unit is shipped.  The cost is less than
$200 and the purchase price of the unit is $4,950.00.  Close to 5% of patients
decide to purchase the unit; their insurance company is billed $495 per month
while they are using it.  With sufficient funding, Zynex expects to increase
its advertising as well as launching campaigns targeted to specialty
physicians.  Introduction of the NeuroMove has significantly improved Zynex's
cash flow.

     The following discussion of results for the years ended December 31, 2001
and 2002 and the first six months of 2003 is based on examination of the
Federal tax returns of Stroke Recovery Systems, Inc. and DMI, Inc., which were
merged in October 2003. These returns were not audited nor compiled according
to generally accepted accounting practices by outside auditors.

     Net sales and rental income increased $196,754 in 2002 over 2001, an
increase of17%.   This sales and rental income rise was associated with
Zynex's engaging a number of commissioned salesmen to handle its products.
Cost of sales and rentals increased 15% in 2002 over 2001, as Zynex continued
to build inventories of both salable and rental products.   Selling, general
and administrative expenses, reflecting the increased sales effort and
administrative staffing up to handle the increased billing volumes, rose 25%

                                     19


to $1,005,964 in 2002 over 2001's $802,147.  Overall in 2002, income from
operations declined 8%, reflecting the buildup in operating expenses as staff
was increased.  However, net profits were favorably affected by a decrease in
interest expense from $54,525 to $49,413 and interest income rising from zero
to $8,522.  Net profits before income taxes were up 11% in 2002 to $71, 039
compared to $63,887 in 2001.

     An examination of balance sheets for 2001 and 2002 shows an increase in
current assets for 2002 of $178, 307, or 47%, all of which was attributable to
a 50% increase in inventories, which took place due to a sharp increase in
rental units being placed on patients compared to purchased units being placed
on patients.  Total assets over the intervening year increased slightly, 15%,
to $586, 281.  This 15% increase in assets was financed through an increase in
current liabilities of 23% to $682,886 from $557, 396 and an increase in
long-term liabilities by 15% to $733, 634.  During this period, shareholders'
equity also decreased by 16% to a negative $147,354.

     In early 2003, management undertook a series of steps designed to improve
operating results and profitability of Zynex.  As a result, several important
improvements in finances were achieved.  Sales for the first six months of
2003 were already at 58% of all of 2002's level. Evaluation of staffing needs
resulted in lowering selling, general, and administrative expenses to
$406,851, or 41% of those for 2002.  Income from operations for the first six
months of 2003 rose to $236,054, an increase of 111% over the entire year of
2002.  Net Income, reflecting operating improvements and lower interest
expense, rose to $211, 392, a gain of 198% over the results of all of 2002.
The net to sales ratio of the first six months of 2003 was 30%, compared to 5%
for 2002 and 5% for 2001.

     Important balance sheet changes also resulted from management's actions
in the first six months of 2003.  Among these was an increase in current
assets to $958,309 (+73%) and a current ratio of 1.44:1 compared to 0.81:1 for
2002 and 0.68:1 for 2001.  Shareholder's equity rose from ($147, 354) to
$270,400.  Total assets rose 69% to $988,959 from $586,281 at year-end 2002.

ITEM 7.  FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

     (a)  FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.  The financial
statements required by Item 310(c) of Regulation S-B for Zynex are not yet
available, and will be filed by amendment on or before April 26, 2004.

     (b)  PRO FORMA FINANCIAL INFORMATION.  The pro forma financial
information required by Item 310(d) of Regulation S-B is not available, and
will be filed by amendment on or before April 26, 2004.

     (c)  EXHIBITS.

          Exhibit 10     Acquisition Agreement between Zynex Medical
                         Holdings, Inc. and Zynex Medical, Inc.








                                    20



                                  SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned, hereunto duly authorized.

                                     ZYNEX MEDICAL HOLDINGS, INC.



Dated: February 20, 2004             By:/s/ Thomas Sandgaard
                                        Thomas Sandgaard, President












































                                     21


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex-10.txt
<DESCRIPTION>EXHIBIT 10
<TEXT>
EXHIBIT 10

                             ACQUISITION AGREEMENT

     This Agreement, entered into this 27th day of January, by, between and
among Zynex Medical Holdings, Inc. (Formerly Fox River Holdings, Inc.), a
Nevada corporation (hereinafter the "Purchaser"), and Thomas Sandgaard, the
sole Shareholder (hereinafter the "Shareholder") of Zynex Medical, Inc., a
Colorado corporation (hereinafter the "Company").

                                  Witnesseth:

     WHEREAS, Purchaser wishes to acquire, and Shareholder is willing to
transfer, all of the outstanding stock of the Company in exchange for common
stock of the Purchaser;

     NOW, THEREFORE, in consideration of the mutual terms and covenants set
forth herein, Purchaser and Shareholder approve and adopt this Acquisition
Agreement and mutually covenant and agree with each other as follows:

                                   ARTICLE I
                Shares to be Transferred and Shares to be Issued

     1.01 (a)  On the closing date the Shareholder shall transfer to Purchaser
a certificate or certificates for the number of shares of the common stock of
the Company described in Schedule "A", attached hereto and incorporated
herein, which in the aggregate shall represent all of the issued and
outstanding shares of stock of the Company.  Such certificate(s) shall be duly
endorsed in blank by Shareholder or accompanied by a duly executed stock power
in blank with the signature guaranteed.  Alternatively, the Shareholder may
assign his rights to the shares if the shares have not been physically issued
in the form of stock certificates, or if the certificates have been lost.

          (b)  In exchange for the transfer of the common stock of the Company
pursuant to sub-section 1.01(a) hereof,  Purchaser shall on the closing date
and contemporaneously with such transfer of the common stock of the Company to
it by the Shareholder, or rights thereto, issue and deliver to the Shareholder
the number of shares of common stock of the Purchaser specified on Schedule
"B" hereof.

     2.02  The parties intend that this acquisition and exchange of shares is
to be a "tax free" exchange/transaction pursuant to Section 368(a)(1)(b) of
the Internal Revenue Code of the United States.

                                 ARTICLE II
                Representations and Warranties of Shareholder

     2.01  Ownership of Stock.

     Shareholder is the record owner and holder of the number of fully paid
and non-assessable shares of the Company listed in Schedule "A" hereto as of
the date hereof and will continue to own such shares of the stock of the
Company until the delivery thereof to the Purchaser on the closing date and
all such shares of stock are or will be on the closing date owned free and
clear of all liens, encumbrances, charges and assessments of every nature and
subject to no restrictions with respect to transferability.  The Shareholder
will have full power and authority to assign and transfer his shares of the
Company in accordance with the terms hereof.

                                       1



                                 ARTICLE III
      Representations and Warranties of the Company and the Shareholder


     3.01  Capitalization

     Except for this Agreement, there are no outstanding options, contracts,
calls, commitments, agreements or demands of any character relating to the
stock of the Company owned by Shareholder, except that the Company has entered
into a subscription agreement with Stalwart Investments, LLC, a copy of which
has been provided to Purchaser.

     3.02  Organization and Authority.

          (a)  The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado, with all
requisite corporate power and authority to own, operate and lease its
properties and to carry on its business as now being conducted, is duly
qualified and in good standing in every jurisdiction in which the property
owned, leased or operated by it, or the nature of the business conducted by
it, makes such qualification necessary to avoid material liability or material
interference in its business operations, and is not subject to any agreement,
commitment or understanding which restricts or may restrict the conduct of its
business in any jurisdiction or location.  The Company is presently qualified
to do business in the State of Colorado.

           (b)  The outstanding shares of the Company are legally and validly
issued, fully paid and non-assessable.

           (c)  The Company does not own five percent (5%) or more of the
outstanding stock of any corporation, except as set forth in Draft Number 8 of
the Company's Confidential Private Placement Memorandum dated September ___,
2003 (the "Disclosure Statement").

           (d)  The minute book of the Company made available to Purchaser
contains complete and accurate records of all meetings and other corporate
actions of the shareholders and the Board of Directors (and any committee
thereof) of the Company.

           (e)  The Disclosure Statement contains a list of the officers,
directors and shareholders of the Company and copies of the articles of
incorporation and by-laws currently in effect of the Company.

           (f)  The execution and delivery of this Agreement does not, and the
consummation of the transaction contemplated hereby will not, subject to the
approval and adoption by the Shareholder of the Company, violate any provision
of the certificate/articles of incorporation or bylaws of the Company, or any
provisions thereof, or result in the acceleration of any obligation under, any
mortgage, lien, lease, agreement, instrument, court order, arbitration award,
judgment or decree to which the Company is a party, or by which it is bound,
and will not violate any other restriction of any kind or character to which
it is subject.

           (g)  The authorized capital stock of the Company is one hundred
million (100,000,000) shares of common stock, $.000001 par value, of which
approximately one million  (1,000,000)  shares of such stock will be issued
and outstanding at the time of closing.

                                       2


     3.03  Financials.

           (a)  Un-audited financial statements (hereafter "financial
statements") of the Company as of  December 31, 2001 and 2002, and for the
years then ended, and as of June 30, 2003 and for the six months then ended,
have been delivered by the Company to the Purchaser.  Said financial
statements are true and correct in all material respects and present an
accurate and complete disclosure of the financial condition of the Company as
of its date and for the periods covered.

           (b)  All accounts receivable, if any, (net of reserves for doubtful
accounts) of the Company shown on the books of account on the statement date
and as incurred in the normal course of business since that date, are
collectible in the normal course of business.

           (c)  The Company has good and marketable title to all of its
assets, business and properties including, without limitation, all such
properties reflected in the balance sheet as of the statement date except as
disposed of in the normal course of business, free and clear of any mortgage,
lien, pledge, charge, claim or encumbrance, except as shown on said balance
sheet as of the statement date and, in the case of real properties except for
rights-of-way and easements which do not adversely affect the use of such
property.  Any encumbrances will be included in the attached Disclosure
Statement.

           (d)  All currently used property and assets of the Company, or in
which it has an interest, or which it has in possession, are in good operating
condition and repair subject only to ordinary wear and tear.

     3.04  Changes Since the Statement Date.  Since the financial statement
date, except as disclosed in the Disclosure Statement, there will not have
been any material negative change in the financial position or assets of the
Company.

     3.05  Liabilities.  To the best of the knowledge of management, there are
no material liabilities of the Company, whether accrued, absolute, contingent
or otherwise, which arose or relate to any transaction of the Company, its
agents or servants occurring prior to the statement date, which are not
disclosed by or reflected in said financial statements, except as disclosed in
the Disclosure Statement.  There are no such liabilities of the Company which
have arisen or relate to any transaction of the Company, its agents or
servants, occurring since the statement date, other than normal liabilities
incurred in the normal conduct of the business of the Company, and none of
which have a material adverse effect on the business or financial condition of
the Company, except as disclosed in the Disclosure Statement.  As of the date
hereof, there are no known circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may hereafter give rise to
liabilities, except in the normal course of business of the Company, except as
disclosed in the Disclosure Statement.

     3.06  Taxes.  All federal, foreign, county and local income, ad valorem,
excise, profits, franchise, occupation, property, sales, use gross receipts
and other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid and
discharged as reported by the Company, and there are no unpaid taxes which
are, or could become a lien on the properties and assets of the Company,

                                       3


except as provided for in the financial statements of their date, or have been
incurred in the normal course of business of the Company since that date.  All
tax returns of any kind required to be filed have been filed and the taxes
paid or accrued.

     3.07  Accuracy of All Statements Made by Company.  No representation or
warranty by the Company and Shareholder in this Agreement, nor any statement,
certificate, schedule or exhibit hereto furnished or to be furnished by or on
behalf of the Shareholder pursuant to this Agreement, nor any document or
certificate delivered to Purchaser pursuant to this Agreement or in connection
with actions contemplated hereby, contains or shall contain any untrue
statement of material fact or omits or shall omit a material fact necessary to
make the statement contained therein not misleading.

     3.08  Limitation of Subsequent Corporate Actions.  It is expressly
understood and agreed that the Company, and its affiliates and Shareholder,
will take all steps necessary to insure that with respect to the operations of
the Purchaser the following:

          1.  For a period of eighteen months following the Acquisition, a)
there shall be no reverse split, and b)  the assets existing Company shall
remain in place as part of the business operations; and

          2.  For a period of twelve months following the Acquisition, the
Purchaser will not undertake to register any shares pursuant to Form S-8.

                                  ARTICLE IV
                   Representations and Warranties of Purchaser

     Purchaser represents and warrants as follows:

     4.01  Capitalization

     Except for this Agreement, there are no outstanding options, contracts,
calls, commitments, agreements or demands of any character relating to the
stock of the Purchaser.

     4.02  Organization and Authority.

           (a)  The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the State of Nevada, with full
power and authority to enter into and perform the transactions contemplated by
this Agreement, and with all requisite corporate power and authority to own,
operate and lease its properties and to carry on its business as now being
conducted, is duly qualified and in good standing in every jurisdiction in
which the property owned, leased or operated by it, or the nature of the
business conducted by it, makes such qualification necessary to avoid material
liability or material interference in its business operations, and is not
subject to any agreement, commitment or understanding which restricts or may
restrict the conduct of its business in any jurisdiction or location.  The
Purchaser is presently qualified to do business Nevada.

           (b)  The outstanding shares of the Purchaser are legally and
validly issued, fully paid and non-assessable.

                                       4



           (c)  The Purchaser does not own five percent (5%) or more of the
outstanding stock of any corporation, except as listed on the Disclosure
Statement.

           (d)  The minute book of the Purchaser  made available to the
Company and Shareholder contains complete and accurate records of all meetings
and other corporate actions of the shareholders and the Board of Directors
(and any committee thereof) of the Purchaser.

           (e)  The stock records of the Purchaser made available to the
Company and Shareholder contain complete and accurate records maintained by
the Purchaser's transfer agent

           (f)  The Disclosure Statement contains a list of the officers,
directors and shareholders of the Purchaser and copies of the articles of
incorporation and by-laws currently in effect of the Purchaser.

           (g)  The execution and delivery of this Agreement does not, and the
consummation of the transaction contemplated hereby will not violate any
provision of the certificate/articles of incorporation or bylaws of the
Purchaser, or any provisions thereof, or result in the acceleration of any
obligation under, any mortgage, lien, lease, agreement, instrument, court
order, arbitration award, judgment or decree to which the Purchaser is a
party, or by which it is bound, and will not violate any other restriction of
any kind or character to which it is subject.

           (h)  The authorized capital stock of the Purchaser is one hundred
million (100,000,000) shares of common stock, $0.001 par value, of which
twenty-two million one  hundred and fifty thousand five (22,155,000) shares of
such stock will be issued and outstanding at the time of closing, and ten
million (10,000,000) shares of preferred stock, $0.001 par value, of which no
shares will be outstanding at the time of the closing.

           (i)  Purchaser represents that at the time of closing it will have
no assets or liabilities other than that which is reflected in its audited
financial statements.

           (j)  Purchaser is, and at the time of the closing will be, current
in all of its filings under the Securities Exchange Act of 1934, as amended,
and such filings fully comply with applicable requirements.

           (k)  Purchaser represents that at the time of closing it has taken
all necessary steps to comply with all applicable state and federal securities
laws and regulations and that, to the knowledge of the Purchaser, at the time
of closing, there is no litigation, arbitration, governmental or other
proceeding (formal or informal), claim or investigation pending or threatened,
with respect to the Purchasers compliance with any and all applicable
securities laws and regulations.

     4.03  Performance of This Agreement.  The execution and performance of
this Agreement and the issuance of stock contemplated hereby has been
authorized by the board of directors of Purchaser.

     4.04  Financials.

           (a)  True copies of the audited financial statements of the
Purchaser as of September 30, 2002 have been delivered by the Purchaser.

                                       5

These statements have been examined and certified by Bierwolf, Nilson and
Associates, certified public accountants.  Unaudited Interim financial
statements through June 30, 2003, which have been reviewed by Purchaser's
auditors, have also been delivered to the Company,.  Said financial statements
are true and correct in all material respects and present an accurate and
complete disclosure of the financial condition and earnings of the Purchaser
for the periods covered, in accordance with generally accepted accounting
principles applied on a consistent basis.

           (b)  All accounts receivable, if any, (net of reserves for doubtful
accounts) of the Purchaser shown on financial statement, and as incurred in
the normal course of business since that date, are collectible in the normal
course of business.

           (c)  The Purchaser has good and marketable title to all of its
assets, business and properties including, without limitation, all such
properties reflected in the aforementioned balance sheet, except as disposed
of in the normal course of business, free and clear of any mortgage, lien,
pledge, charge, claim or encumbrance, except as shown on said balance sheet,
and, in the case of real properties, except for rights-of-way and easements
which do not adversely affect the use of such property.

     4.05  Changes Since Date of Financial Statements.  Since the date of the
financial statements, except as disclosed in writing, there has not been any
material change in the financial position or assets of the Purchaser.

     4.06  Liabilities.  To the best of the knowledge of management, there are
no material liabilities of the Purchaser, whether accrued, absolute,
contingent or otherwise, which arose or relate to any transaction of the
Purchaser, its agents or servants occurring prior to the statement date, which
are not disclosed by or reflected in said financial statements, except as
disclosed in the Disclosure Statement.  There are no such liabilities of the
Purchaser which have arisen or relate to any transaction of the Purchaser, its
agents or servants, occurring since the statement date, other than normal
liabilities incurred in the normal conduct of the business of the Purchaser,
and none of which have a material adverse effect on the business or financial
condition of the Purchaser, except as disclosed in the Disclosure Statement.
As of the date hereof, there are no known circumstances, conditions,
happenings, events or arrangements, contractual or otherwise, which may
hereafter give rise to liabilities, except in the normal course of business of
the Purchaser, except as disclosed in the Disclosure Statement.

     4.07  Taxes.  All federal, foreign, county and local income, ad valorem,
excise, profits, franchise, occupation, property, sales, use gross receipts
and other taxes (including any interest or penalties relating thereto) and
assessments which are due and payable have been duly reported, fully paid and
discharged as reported by the Purchaser, and there are no unpaid taxes which
are, or could become a lien on the properties and assets of the Purchaser,
except as provided for in the financial statements of their date, or have been
incurred in the normal course of business of the Purchaser since that date.
All tax returns of any kind required to be filed have been filed and the taxes
paid or accrued.

     4.08  Accuracy of All Statements Made by Purchaser.  No representation or
warranty by the Purchaser in this Agreement, nor any statement, certificate,

                                       6



schedule or exhibit hereto furnished or to be furnished by the Purchaser
pursuant to this Agreement, nor any document or certificate delivered to the
Company or the Shareholder pursuant to this Agreement or in connection with
actions contemplated hereby, contains or shall contain any untrue statement of
material fact or omits or shall omit a material fact necessary to make the
statement contained therein not misleading.

     4.09  Legality of Shares to be Issued.  The shares of common stock of
Purchaser to be delivered pursuant to this Agreement, when so delivered, will
have been duly and validly authorized and issued by Purchaser and will be
fully paid and non-assessable.

     4.10  No Covenant as to Tax Consequences.  It is expressly understood and
agreed that neither Purchaser nor its officers or agents have made any
warranty or agreement, expressed or implied, as to the tax consequences of the
transactions contemplated by this Agreement or the tax consequences of any
action pursuant to or growing out of this Agreement.

                                  ARTICLE V
                     Covenants of Company and Shareholder

     5.01  Access to Information.  Purchaser and its authorized
representatives shall have full access during normal business hours to all
properties, books, records, contracts and documents of the Company, and the
Company shall furnish or cause to be furnished to Purchaser and its authorized
representative all information with respect to the affairs and business of the
Company as Purchaser may reasonably request.

     5.02  Actions Prior to Closing.  From and after the date of this
Agreement and until the closing date, the Company shall not materially alter
its business.

                                  ARTICLE VI
                             Covenants of Purchaser

     6.01  Access to Information.  The Company and Shareholder and their
authorized representatives shall have full access during normal business hours
to all properties, books, records, contracts and documents of the Purchaser,
and the Purchaser shall furnish or cause to be furnished to the Company and
Shareholder or their authorized representatives all information with respect
to its affairs and business of the Purchaser as the Company and Shareholder or
their representatives may reasonably request.

     6.02  Actions Prior to Closing.  From and after the date of this
Agreement and until the closing date, the Purchaser shall not materially alter
its business or incur any liabilities except as consented to by the Company
and Shareholder in writing.

                                  ARTICLE VII
                 Conditions Precedent to Purchaser's Obligations

     Each and every obligation of Purchaser to be performed on the closing
date shall be subject to the satisfaction of the Purchaser of the following
conditions:



                                       7


     7.01  Truth of Representations and Warranties.  The representations and
warranties made by the Company and Shareholder in this Agreement or given on
its behalf hereunder shall be substantially accurate in all material respects
on and as of the closing date with the same effect as though such
representations and warranties had been made or given on and as of the closing
date.

     7.02  Compliance with Covenants.  Shareholder and the Company shall have
performed and complied with all obligations under this Agreement which are to
be performed or complied with by them prior to or on the closing date,
including the delivery of the closing documents specified hereafter.

     7.03  Absence of Suit.  No action, suit or proceedings before any court
or any governmental or regulatory authority shall have been commenced or
threatened and, no investigation by any governmental or regulatory authority
shall have been commenced, against the Shareholder, the Company or any of the
affiliates, associates, officers or directors of any of them, seeking to
restrain, prevent or change the transactions contemplated hereby, or
questioning the validity or legality of any such transactions, or seeking
damages in connection with any of such transactions.

     7.04  Receipt of Approvals, Etc.  All approvals, consents and/or waivers
that are necessary to effect the transactions contemplated hereby shall have
been received.

     7.05  No Material Adverse Change.  As of the closing date there shall not
have occurred any material adverse change which materially impairs the ability
of the Company to conduct its business or the earning power thereof on the
same basis as in the past.

     7.06  Accuracy of Financial Statement.  Purchaser and its representatives
shall be satisfied as to the accuracy of all balance sheets, statements of
income and other financial statements of the Company furnished to Purchaser
herewith.

     7.07  Proceedings and Instruments Satisfactory; Certificates.  All
proceedings, corporate or otherwise, to be taken in connection with the
transactions contemplated by this Agreement shall have occurred and all
appropriate documents incident thereto as Purchaser may request shall have
been delivered to Purchaser.  The Company and the Shareholder shall have
delivered certificates in such detail as Purchaser may request as to
compliance with the conditions set forth in this Article 6.

                                 ARTICLE VIII
     Conditions Precedent to Obligations of the Company and Shareholder

     Each and every obligation of the Company and Shareholder to be performed
on the closing date shall be subject to the satisfaction prior thereto of the
following conditions:

     8.01  Truth of Representations and Warranties.  The representations and
warranties of Purchaser contained in this Agreement shall be true at and as of
the closing date as though such representations and warranties were made at
and as of the transfer date.


                                       8



     8.02  Purchaser's Compliance with Covenants.  Purchaser shall have
performed and complied with its obligations under this Agreement which are to
be performed or complied with by it prior to or on the closing date.

     8.03  Absence of Suit.  No action, suit or proceedings before any court
or any governmental or regulatory authority shall have been commenced or
threatened and, no investigation by any governmental or regulatory authority
shall have been commenced against Purchaser, or any of the affiliates,
associates, officers or directors of the Purchaser seeking to restrain,
prevent or change the transactions contemplated hereby, or questioning the
validity or legality of any such transactions, or seeking damages in
connection with any of such transactions.

     8.04  Receipt of Approvals, Etc.  All approvals, consents and/or waivers
that are necessary to effect the transactions contemplated hereby shall have
been received.

     8.05  No Material Adverse Change.  As of the closing date there shall not
have occurred any material adverse change which materially impairs the ability
of the Purchaser to conduct its business or the earning power thereof on the
same basis as in the past.

     8.06  Accuracy of Financial Statements.  The Company and the Shareholder
shall be satisfied as to the accuracy of all balance sheets, statements of
income and other financial statements of the Purchaser furnished to the
Company herewith.

     8.07  Proceedings and Instruments Satisfactory; Certificates.  All
proceedings, corporate or otherwise, to be taken in connection with the
transactions contemplated by this Agreement shall have occurred and all
appropriate documents incident thereto as the Company may request shall have
been delivered to the Company.  The Purchaser shall have delivered
certificates in such detail as the Shareholder may request as to compliance
with the conditions set forth in this Article 8.

     8.08  Cancellation of Shares.  The President of the Purchaser shall have
agreed to the cancellation of all but 5,000 shares of common stock currently
held by him effective as of the closing of the Acquisition.

     8.08  Legal Opinion.  The Company and Shareholder shall have received an
opinion of Purchaser's counsel as to certain legal matters  in form and
content acceptable to counsel to the Company and Shareholder.

                                 ARTICLE IX
                               Indemnification

     The Shareholder and the Company shall indemnify Purchaser for any loss,
cost, expense or other damage suffered by Purchaser resulting from, arising
out of, or incurred with respect to the falsity or the breach of any
representation, warranty or covenant made by the Company herein.  Purchaser
shall indemnify and hold the Shareholder and the Company harmless from and
against any loss, cost, expense or other damage (including, without
limitation, attorneys' fees and expenses) resulting from, arising out of, or
incurred with respect to, or alleged to result from, arise out of or have been
incurred with respect to, the falsity or the breach of any representation,
covenant, warranty or agreement made by Purchaser herein.

                                       9



                                 ARTICLE X
                          Security Act Provisions

     10.01  Restrictions on Disposition of Shares.  Shareholder covenants and
warrants that the shares received are acquired for his own accounts and not
with the present view towards the distribution thereof and will not dispose of
such shares except (i) pursuant to an effective registration statement under
the Securities Act of 1933, as amended, or (ii) in any other transaction
which, in the opinion of counsel, acceptable to Purchaser, is exempt from
registration under the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder.  In order to
effectuate the covenants of this sub-section, an appropriate endorsement will
be placed upon each of the certificates of common stock of the Purchaser at
the time of distribution of such shares pursuant to this Agreement, and stop
transfer instructions shall be placed with the transfer agent for the
securities.

     10.02  Notice of Limitation Upon Disposition.  The Shareholder is aware
that the shares distributed pursuant to this Agreement will not have been
registered pursuant to the Securities Act of 1933, as amended; and, therefore,
under current interpretations and applicable rules, Shareholder will probably
have to retain such shares for a period of at least one year and at the
expiration of such one year period sales may be confined to brokerage
transactions of limited amounts requiring certain notification filings with
the Securities and Exchange Commission and such disposition may be available
only if the Purchaser is current in its filings with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, or other
public disclosure requirements, and the other limitations imposed thereby on
the disposition of shares of the Purchaser.  Additionally, "affiliates" owning
shares will be subject to additional restrictions limiting sales.

     10.03  Limited Public Market for Common Shares.  The Shareholder
acknowledges that the common shares being issued pursuant to this agreement
currently have a limited public market in which the shares may be liquidated
and there is no assurance that such pubic market will grow or develop.

                                  ARTICLE XI
                                   Closing

     11.01 Time.  The closing of this transaction ("closing") shall be
effective on such date set by the parties.  Such date is referred to in this
agreement as the "closing date."

     11.02 Documents To Be Delivered by Shareholder.  At the closing
Shareholder shall deliver to Purchaser the following documents:

           (a)  Certificate(s) or assignment(s) for all shares of stock of the
Company in the manner and form required by sub-section 1.01 hereof.

           (b)  A certificate signed by the President of the Company that the
representations and warranties made by the Company in this Agreement are true
and correct on and as of the closing date with the same effect as though such
representations and warranties had been made on or given on and as of the
closing date and that Shareholder and the Company have performed and complied
with all of their obligations under this Agreement which are to be performed
or complied with by or prior to or on the closing date.

                                      10


           (c)  A copy of the by-laws of the Company certified by its
secretary and a copy of the articles of incorporation, and any amendments
thereto, of the Company.

           (d)  A certificate or letter from Shareholder evidencing the taking
of the shares in accordance with the provisions of this agreement and his
understanding of the restrictions thereunder.

           (e)  Such other documents of transfer, certificates of authority
and other documents as Purchaser may reasonably request.

           (f)  A certified copy of the duly adopted resolutions of the board
of directors of the Company authorizing or ratifying the execution and
performance of this Agreement and authorizing or ratifying the acts of its
officers and employees in carrying out the terms and provisions thereof.

     11.03 Documents To Be Delivered by Purchaser.  At the closing Purchaser
shall deliver to Shareholder the following documents:

           (a)  A Certificate for the number of shares of common stock of
Purchaser as determined in Article 1 hereof.

           (b)  A certified copy of the duly adopted resolutions of the board
of directors of Purchaser authorizing or ratifying the execution and
performance of this Agreement and authorizing or ratifying the acts of its
officers and employees in carrying out the terms and provisions thereof.

           (c)  A certificate signed by the President of the Purchaser that
the representations and warranties made by the Purchaser in  this Agreement
are true and correct on and as of the closing date with the same effect as
though such representations and warranties had been made on or given on and as
of the closing date and that the  Purchaser has performed and complied with
all of its obligations under this Agreement which are to be performed or
complied with by or prior to or on the closing date.

           (d)  Documents for the appointment of new management and the
resignation of current management.

           (e)  Duly executed documents evidencing the surrender for
cancellation of all but 5,000 shares of common stock of the Purchaser held by
the President of the Purchaser.

           (f)  The opinion of Purchaser's counsel as required by Section 8.09
of this Agreement.

                                 ARTICLE XII
                         Termination and Abandonment

     This Agreement may be terminated and the transaction provided for by this
Agreement may be abandoned without liability on the part of any part to any
other, at any time before the closing date, or on a post closing basis as
provided previously herein:

           (a)  By mutual consent of Purchaser and the Shareholder;

                                       11


           (b)  By Purchaser if any of the conditions provided for in Article
7 of this Agreement have not been met and have not been waived in writing by
Purchaser.

           (c)  By the Company if any of the conditions provided for in
Article 8 of this Agreement have not been met and have not been waived in
writing by the Company.

     In the event of termination and abandonment by any party as above
provided in this Article, written notice shall forthwith be given to the other
party, and each party shall pay its own expenses incident to preparation for
the consummation of this Agreement and the transactions contemplated
hereunder.

                                 ARTICLE XIII
                                 Miscellaneous

     1.  Notices.  All notices, requests, demands and other communications
hereunder shall be deemed to have been duly given, if delivered by hand or
mailed, certified or registered mail with postage prepaid:

         (a)  If to the Company or the Shareholder, to Thomas Sandgaard, at
8100 South Park Way, Suite A-1 Littleton, Colorado 80120, or to such other
person and place as the Company shall furnish to Purchaser in writing, with a
copy to Stanley F. Freedman , at Krys Boyle, P.C. 600 Seventeenth Street,
Suite 2700 South, Denver Colorado 80202.

         (b)  If to Purchaser, to Paul Beatty, c/o Nathan W. Drage, P.C., 4766
Holladay Blvd., Holladay, Utah 84117, or to such other person and place as
Purchaser shall furnish to Company in writing.

      2.  Announcements.  Announcements concerning the transactions provided
for in this Agreement by either the Company or Purchaser shall be subject to
the approval of the other in all essential respects, except that the approval
of the Company shall not be required as to any statements and other
information which Purchaser may submit to its shareholders.

      3.  Default.  Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by the statutes of the State of Nevada, United States of
America.

     4.  Assignment.  This Agreement may not be assigned in whole or in part
by the parties hereto without the prior written consent of the other party or
parties, which consent shall not be unreasonably withheld.

     5.  Successors and Assigns.  This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their successors and
assigns.

     6.  Holidays.  If any obligation or act required to be performed
hereunder shall fall due on a Saturday, Sunday or other day which is a legal
holiday established by the State of Nevada, such obligation or act may be
performed on the next succeeding business day with the same effect as if it
had been performed upon the day appointed.

                                       12


     7.  Computation of Time.  The time in which any obligation or act
provided by this Agreement is to be performed is computed by excluding the
first day and including the last, unless the last day is a holiday, in which
event such day shall also be excluded.

     8.  Governing Law and Venue.  This Agreement shall be governed by and
interpreted pursuant to the laws of the Sate of Nevada.  Any action to enforce
the provisions of this Agreement shall be brought in a court of competent
jurisdiction within the State of Nevada and in no other place.

     9.  Partial Invalidity.  If any term, covenant, condition or provision of
this Agreement or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.

     10. No Other Agreements.  This Agreement constitutes the entire Agreement
between the parties and there are and will be no oral representations which
will be binding upon any of the parties hereto.

     11. Rights are Cumulative.  The rights and remedies granted hereunder
shall be in addition to and cumulative of any other rights or remedies
provided under the laws of the State of Nevada.

     12. Waiver.  No delay or failure in the exercise of any power or right
shall operate as a waiver thereof or as an acquiescence in default.  No single
or partial exercise of any power or right hereunder shall preclude any other
or further exercise thereof or the exercise of any other power or right.

     13. Survival of Covenants, Etc.  All covenants, representations, and
warranties made herein to any parties or in any statement or document
delivered to any party hereto, shall survive the making of this Agreement and
shall remain in full force and effect until the obligations of such party
hereunder have been fully satisfied.

     14. Further Action.  The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may be
required to carry out fully the transaction(s) contemplated herein.

     15. Amendment.  This Agreement or any provision hereof may not be
changed, waived, terminated or discharged except by means of a written
supplemental instrument signed by the party or parties against whom
enforcement of the change, waiver, termination, or discharge is sought.

     16. Headings.  The descriptive headings of the various Sections or parts
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.

     17. Counterparts.  This agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument, provided that Purchaser shall have
no obligations hereunder until the Shareholder and the Company have become
signatories hereto.

                                       13


     IN WITNESS WHEREOF, the parties hereto executed the foregoing Acquisition
Agreement as of the day and year first above written.

PURCHASER:                         Zynex Medical Holdings, Inc.


                                   By: /s/ Paul Beatty
                                      Paul Beatty, President




COMPANY:                           Zynex Medical, Inc.


                                   By: /s/ Thomas Sandgaard
                                      Thomas Sandgaard , President


SHAREHOLDER:                          /s/ Thomas Sandgaard
                                      Thomas Sandgaard



































                                       14



                                   SCHEDULE A

            Name                         Shares To Be Purchased

      Thomas Sandgaard                         1,000,000



















                                   SCHEDULE B

            Name                         Shares To Be Issued

      Thomas Sandgaard                        19,500,000


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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