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<SEC-DOCUMENT>0001079974-06-000310.txt : 20060818
<SEC-HEADER>0001079974-06-000310.hdr.sgml : 20060818
<ACCEPTANCE-DATETIME>20060817190944
ACCESSION NUMBER:		0001079974-06-000310
CONFORMED SUBMISSION TYPE:	10QSB
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20060630
FILED AS OF DATE:		20060818
DATE AS OF CHANGE:		20060817

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:			1231

	FILING VALUES:
		FORM TYPE:		10QSB
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	033-26787-D
		FILM NUMBER:		061041976

	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:	ZYNEX MEDICAL HOLDINGS   INC
		DATE OF NAME CHANGE:	20040120

	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
</SEC-HEADER>
<DOCUMENT>
<TYPE>10QSB
<SEQUENCE>1
<FILENAME>zynex10qsb_8142006.htm
<DESCRIPTION>QUARTERLY REPORT FOR PERIOD ENDED 6/30/2006
<TEXT>
<html>
  <head>
    <title>
      Quarterly Report for Period Ended 6/30/2006
</title>
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                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>U.S.
                              SECURITIES AND EXCHANGE COMMISSION</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>Washington,
                              D.C. 20549</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 16pt; FONT-FAMILY: Times New Roman"><strong>FORM
                              10-QSB</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">QUARTERLY
                              REPORT UNDER SECTION 13 OR 15(d) OF</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">THE
                              SECURITIES EXCHANGE ACT OF 1934</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">For
                              the
                              quarterly period ended </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>June
                              30, 2006</u></strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Commission
                              File Number: </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>33-26787-D</u></strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 18pt; FONT-FAMILY: Times New Roman"><strong><u>Zynex
                              Medical Holdings, Inc.</u></strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(Exact
                              name of small business issuer as specified in its charter)</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div>
                              <table cellpadding="0" cellspacing="0" width="100%">

                                  <tr>
                                    <td valign="top" width="20%" style="border-bottom: medium none;">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><u><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Nevada</strong></font></u></div>
                                    </td>
                                    <td valign="top" width="20%" style="border-bottom: medium none;">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>33-26787-D</u></strong></font></div>
                                    </td>
                                    <td valign="top" width="20%" style="border-bottom: medium none;">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>90-0214497</u></strong></font></div>
                                    </td>
                                  </tr>
                                  <tr>
                                    <td valign="top" width="20%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(State
                                        or other jurisdiction of incorporation)</font></div>
                                    </td>
                                    <td valign="top" width="20%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(Commission
                                        File Number)</font></div>
                                    </td>
                                    <td valign="top" width="20%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(IRS
                                        Employer Identification No.)</font></div>
                                    </td>
                                  </tr>

                              </table>
                            </div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>8100
                              Southpark Way, Suite A-9</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>Littleton,
                              Colorado 80120</u></strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Address
                              of Principal Executive Offices Zip Code</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>(303)
                              703-4906</u></strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Registrant's
                              Telephone Number,</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Including
                              Area Code</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Check
                              whether the issuer (1) filed all reports required to
                              be filed by Section 13 or
                              15(d) of the Exchange Act during the preceding 12 months
                              (or for such shorter
                              period that the Registrant was required to file such
                              reports), and (2) has been
                              subject to such filing requirements for the past 90
                              days. <strong>Yes
                              [X]</strong>&#160;&#160;&#160; No [ ]</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Indicate
                              by check mark whether the registrant is a shell company
                              (as defined in Rule
                              12b-2 of the Exchange Act). Yes [ ] <strong>No [X]</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">As
                                of
                                June 30, 2006, 23,690,993 shares of common stock
                                were outstanding. Subsequently
                                326,666 shares were issued. (see Note 7 to the Financial
                                Statement). As of
                                August 10, 2006 24,017,659 shares of common stock
                                were
                                outstanding.</font></div><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Transitional
                              Small Business Disclosure Format (check one): Yes [
                              ]&#160;&#160; <strong>No
                              [X]</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                              <div id="FTR">
                                <div id="GLFTR" style="WIDTH: 100%" align="left">
                                </div>
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                              <div id="PN" style="PAGE-BREAK-AFTER: always">
                                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                </div>
                                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                  <hr style="COLOR: black" noshade size="2">
                                </div>
                              </div>
                              <div id="HDR">
                                <div id="GLHDR" style="WIDTH: 100%" align="right">
                                </div>
                              </div>
                            </div>
                            <div id="lockwidth" style="LEFT: -33px; WIDTH: 800px; TOP: -271px"><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
                                MEDICAL HOLDINGS, INC.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>FORM
                                10-QSB</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>INDEX</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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                                    <tr>
                                      <td align="left" valign="top" width="72%">&#160;</td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Page
                                          No</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.</font></div>
                                      </td>
                                    </tr>
                                    <tr>
                                      <td align="left" valign="top" width="72%">&#160;</td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">&#160;</td>
                                    </tr>
                                    <tr>
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Item
                                          1. Financial Statements:</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Condensed
                                          Consolidated Balance Sheet - June 30, 2006</font></div>
                                      </td>
                                      <td valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">3</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Condensed
                                          Consolidated Statements of Operations -
</font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Three
                                          Months Ended June 30, 2006 and 2005 and
                                          Six</font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Months
                                          ended June 30, 2006 and 2005</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="bottom" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Condensed
                                          Consolidated Statements of Cash Flows -</font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Six
                                          Months Ended June 30, 2006 and 2005</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="bottom" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Condensed
                                          Consolidated Statement of Stockholders'
                                          Equity-</font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Six
                                          Months Ended June 30, 2006</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="bottom" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">6</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Notes
                                          to Condensed Consolidated Financial Statements</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">7</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">&#160;</td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Item
                                          2. Management's Discussion and Analysis
                                          or Plan of
                                          Operations</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">13</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Item
                                          3. Controls and Procedures </font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="bottom" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">15</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">&#160;</td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">PART
                                          II: OTHER INFORMATION</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">&#160;</td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Item
                                          1.
                                          Legal Proceedings</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">16</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Item
                                          2.
                                          Unregistered Sales of Equity Securities
                                          and Use of
                                          Proceeds</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">16</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Item
                                          3.
                                          Defaults Upon Senior Securities</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">16</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Item
                                          4.
                                          Submission of Matters to a Vote of Security
                                          Holders</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">16</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Item
                                          5.
                                          Other Information</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">16</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Item
                                          6.
                                          Exhibits</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">17</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="72%">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="72%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">SIGNATURES</font></div>
                                      </td>
                                      <td align="left" valign="top" width="3%">&#160;</td>
                                      <td valign="top" width="15%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">18</font></div>
                                      </td>
                                    </tr>

                                </table>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                  </div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Zynex
                                Medical Holdings, Inc.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Condensed
                                Consolidated Balance Sheet</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>June
                                30, 2006</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><strong>(unadited)</strong></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br>
                                <div>
                                  <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                                      <tr>
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">ASSETS&#160;</div>
                                        </td>
                                        <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%">Current
                                          Assets:</td>
                                        <td width="2%">&#160;</td>
                                        <td align="left" valign="bottom" width="1%">&#160;</td>
                                        <td align="right" valign="bottom" width="11%">&#160;</td>
                                        <td align="left" valign="bottom" width="1%">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                            and cash equivalents</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,823</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Receivables,
                                            less allowance for uncollectible accounts
                                            of $977,986</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">958,454
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Inventory</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">476,875
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Deferred
                                            consulting fees and other</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,575
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Prepaid
                                            expenses</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">27,314
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Other</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,000
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">Total
                                          Current Assets</td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,557,041
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Property
                                            and equipment, less accumulated depreciation
                                            of $195,223</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">150,063
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Deposits</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">10,940
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,718,044</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">LIABILITIES
                                            AND STOCKHOLDER'S EQUITY</div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%">Current
                                          Liabilities:</td>
                                        <td width="2%">&#160;</td>
                                        <td align="left" valign="bottom" width="1%">&#160;</td>
                                        <td align="right" valign="bottom" width="11%">&#160;</td>
                                        <td align="left" valign="bottom" width="1%">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Notes
                                            payable</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">216,147</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Capital
                                            lease</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,112
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Loans
                                            from stockholder</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">63,398
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Accounts
                                            payable</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">360,118
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Accrued
                                            payroll and payroll taxes</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">43,395
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Other</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">81,770
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">Total
                                          Current Liabilities</td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">779,940
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%">&#160;</td>
                                        <td width="2%">&#160;</td>
                                        <td align="left" valign="bottom" width="1%">&#160;</td>
                                        <td align="right" valign="bottom" width="11%">&#160;</td>
                                        <td align="left" valign="bottom" width="1%">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Notes
                                            payable, less current maturities</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">360,216
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Capital
                                            lease, less current maturities</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">35,911
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Loans
                                            from stockholder, less current maturties</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">20,850
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">416,977
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">Stockholder's
                                          Equity:</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Preferred
                                              stock, $0.001 par value, 10,000,000
<font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">authorized,
                                              no shares issued or outstanding</font></font></div>
                                          </div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Common
                                            stock, $0.001 par value, 100,000,000
                                            authorized, 23,690,993 issued and
                                            outstanding</font></font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,691
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Additional
                                            paid-in capital</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,607,805
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Accumulated
                                            deficit</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,110,369</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">521,127
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: white solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="85%" style="border-bottom: #cceeff solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,718,044</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      </tr>

                                  </table>
                                </div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">See
                                accompanying notes to financial statements.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">3</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Zynex
                                Medical Holdings, Inc.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Condensed
                                Consolidated Statements of Operations</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><strong>(unaudited)</strong></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
                                <div>
                                  <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                                      <tr>
                                        <td valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                                        <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                      </tr>
                                      <tr>
                                        <td valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                                        <td align="right" colspan="5" valign="bottom" width="26%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Three
                                            Months Ended June 30, </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                                        <td align="right" colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Six
                                            Months Ended June 30, </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                                      </tr>
                                      <tr>
                                        <td valign="bottom" width="43%" style="border-bottom: #ffffff solid;">&#160;</td>
                                        <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2006
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2005
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2006
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2005
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                      </tr>
                                      <tr>
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">&#160;</td>
                                        <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                      </tr>
                                      <tr>
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                            sales and rental income</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">560,860</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">589,483</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,065,951</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: medium none;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,134,426</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cost
                                            of sales and rentals</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,323
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">73,250
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">83,150
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">160,362
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Gross
                                            Profit</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">541,537
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">516,233
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">982,801
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">974,064
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Operating
                                            expenses:</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                            Selling, general and administrative</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">506,686
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">417,784
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">984,304
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">799,824
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                            Depreciation</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,206
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,801
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30,359
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">32,828
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">521,892
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">434,585
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,014,663
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">832,652
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Income
                                            (loss) from operations</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,645
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">81,648
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(31,862</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">141,412
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff solid;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Interest
                                            and other expense</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(17,735</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(6,232</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(31,053</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(9,916</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white solid;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Net
                                            income (loss)</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,910</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">75,416</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(62,915</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">131,496</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                            income (loss) per common and common </font></div>
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                            <font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">equivalent
                                            share</font></font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;
                                            Basic</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                          </div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px">&#160;</div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                          </div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;
                                            Diluted</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                          </div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px">&#160;</div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                          </div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Weighted
                                            average number of shares outstanding</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;
                                            Basic</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,277,197
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,074,024
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,244,065
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,072,210
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">&#160;</td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;
                                            Diluted</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,616,412
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,237,948
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,244,065
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,230,567
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>

                                  </table>
                                </div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">See
                                accompanying notes to financial statements.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">4</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Zynex
                                Medical Holdings, Inc.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Condensed
                                Consolidated Statements of Cash Flow</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><strong>(unaudited)</strong></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                  <div>
                                    <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                                        <tr>
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
                                          <td width="2%" style="border-bottom: #ffffff solid;">&#160;</td>
                                          <td align="right" colspan="5" valign="bottom" width="25%" style="border-bottom: black thin solid;">
                                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Six
                                              Months Ended June 30,</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff solid;">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
                                          <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                          <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2006</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                          <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2005</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                                          <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                              flows from operating activities:</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="right" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="right" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                              income (loss)</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                          </td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(62,915</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                          </td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">131,496</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Adjustments
                                              to reconcile net income (loss) to net
                                              cash (used in) provided by
                                              operations:</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                              Depreciation</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30,359
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">16,801
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                              Issuance of stock for consulting services</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">12,500
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                              Amortization of deferred consulting
                                              fees and other</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">15,714
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left">
                                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                                Employee stock compensation expense</font></div>
                                            </div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,710
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                              Changes in operating assets and liabilities:</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Accounts receivable</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(263,562</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(285,820</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Inventory</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(90,756</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(76,861</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Refundable income taxes</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,586
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">4,105
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Other current assets</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">432
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,071
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Prepaid expenses</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(14,190</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Deposits</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,532
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Bank overdraft</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">19,116
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Accounts payable</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">78,073
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">193,666
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;&#160;&#160;
                                              Accrued liabilities</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,029
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">7,981
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">&#160;</td>
                                          <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                              cash (used in) provided by operating
                                              activities</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(261,520</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">33,587
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                              flows from investing activities:</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Purchase
                                              of equipment</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(640</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(11,408</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">&#160;</td>
                                          <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                              cash used in investing activities</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(640</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(11,408</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                              flows from financing activities:</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Payments
                                              of notes payable and capital leases</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(97,581</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(50,557</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Proceeds
                                              from note payable</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">240,000
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Proceeds
                                              from loans from stockholder</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">126,900
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,300
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Payments
                                              of loans from stockholder</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(57,632</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Issuance
                                              of common stock</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108,563
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">&#160;</td>
                                          <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                              cash provided by (used in) financing
                                              activities</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">320,250
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(25,257</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Increase
                                              (decrease) in cash and cash equivalents</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">58,090
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(3,078</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                              and cash equivalents at beginning of
                                              period</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">18,733
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,078
                                              </font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white solid;">&#160;</td>
                                          <td width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                              and cash equivalents at end of period</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                          </td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">76,823</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                          </td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">-</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Supplemental
                                              cash flow information:</font></div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: white;">
                                            <div align="left">&#160;</div>
                                          </td>
                                          <td width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                            <div align="left">
                                              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Interest
                                                paid, including interest paid to
                                                stockholder </font>of $3,735 in
                                                2006</div>
                                            </div>
                                          </td>
                                          <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                          </td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">30,282</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                          </td>
                                          <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                            <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">13,212</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        </tr>

                                    </table>
                                  </div><br></div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">See
                                accompanying notes to financial statements.</font></div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">5</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Zynex
                                Medical Holdings, Inc.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Condensed
                                Consolidated Statement of Stockholders' Equity</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Six
                                Months Ended June 30, 2006</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>(unaudited)</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
                                <div align="left">
                                  <table border="0" cellpadding="0" cellspacing="0" id="ftable" width="100%">

                                      <tr>
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: #ffffff solid;">&#160;</td>
                                        <td width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Number
                                            of Shares</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #ffffff thin solid;">
                                          <div>&#160;</div>
                                        </td>
                                        <td align="right" colspan="2" valign="bottom" width="9%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Amount</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #ffffff thin solid;">
                                          <div>&#160;</div>
                                        </td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Additional
                                            Paid in Capital</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #ffffff thin solid;">
                                          <div>&#160;</div>
                                        </td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Accumulated
                                            Deficit</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #ffffff thin solid;">
                                          <div>&#160;</div>
                                        </td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: black thin solid;">
                                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Total</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                      </tr>
                                      <tr>
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: medium none;">&#160;</td>
                                        <td width="1%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="9%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="right" colspan="2" valign="bottom" width="10%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">December
                                            31, 2005</font></div>
                                        </td>
                                        <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,199,421
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,199</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,465,024</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,047,454</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">440,769</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: white;">&#160;</td>
                                        <td width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Issuance
                                            of common stock for </font></div>
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;consulting
                                            services</font></div>
                                        </td>
                                        <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">55,613
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">56
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">24,944
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">25,000
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: white;">&#160;</td>
                                        <td width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Issuance
                                            of common stock in private </font></div>
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;placement
                                            offering</font></div>
                                        </td>
                                        <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">435,959
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">436</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px">&#160;</div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">108,127&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">108,563
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: white;">&#160;</td>
                                        <td width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                                          <div align="left">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Employee
                                              stock compensation expense</font></div>
                                          </div>
                                        </td>
                                        <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,710
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">9,710
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: white;">&#160;</td>
                                        <td width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                            loss</font></div>
                                        </td>
                                        <td width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(62,915</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(62,915</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: white solid;">&#160;</td>
                                        <td width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: white thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white thin solid;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="37%" style="border-bottom: #cceeff solid;">
                                          <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">June
                                            30, 2006</font></div>
                                        </td>
                                        <td width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,690,993
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;$</td>
                                        <td align="right" valign="bottom" width="8%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,691
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;$</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,607,805
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff solid;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;$</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(1,110,369</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="3%" style="border-bottom: #cceeff solid;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">&#160;$</td>
                                        <td align="right" valign="bottom" width="9%" style="border-bottom: black double;">
                                          <div style="MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">521,127
                                            </font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      </tr>

                                  </table>
                                </div><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">See
                                accompanying notes to financial statements.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">6</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
                                MEDICAL HOLDINGS, INC.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>NOTES
                                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>(unaudited)</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">1.&#160;
                                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Nature
                                of
                                Business</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Zynex
                                Medical Holdings, Inc. ("Zynex" or the "Company")
                                engineers, manufactures,
                                markets and sells its own design of FDA cleared (1)
                                standard electrotherapy
                                medical devices for pain relief / pain management,
                                and (2) the NeuroMove(TM)
                                medical device for stroke and spinal cord injury
                                ("SCI") rehabilitation.
</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2.&#160;
                                </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Basis
                                of
                                Presentation</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                accompanying condensed consolidated financial statements
                                are unaudited pursuant
                                to the rules and regulations of the Securities and
                                Exchange Commission and in
                                accordance with accounting principles for interim
                                financial information. In the
                                opinion of management, these condensed consolidated
                                financial statements contain
                                all adjustments (consisting only of normal recurring
                                adjustments) necessary to
                                fairly state the financial position of the Company
                                as of June 30, 2006 and the
                                results of its operations for the quarters and six
                                months ended June 30, 2006
                                and 2005, and its cash flows for the six months ended
                                June 30, 2006 and
                                2005.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certain
                                information and footnote disclosures normally included
                                in financial statements
                                prepared in accordance with generally accepted accounting
                                principles have been
                                condensed or omitted. Furthermore, these financial
                                statements should be read in
                                conjunction with Zynex Medical Holdings, Inc.'s audited
                                financial statements at
                                December 31, 2005 included in the Company's Form
                                10-KSB filed April 18,
                                2006.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                preparation of financial statements in conformity
                                with accounting principles
                                generally accepted in the United States requires
                                management to make estimates
                                and assumptions. Such estimates and assumptions affect
                                the reported amounts of
                                assets and liabilities as well as disclosure of contingent
                                assets and
                                liabilities at the date of the financial statements
                                and the reported amounts of
                                revenue and expense during the reporting period.
                                Actual results could differ
                                from those estimates.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certain
                                reclassifications have been made to conform previously
                                reported data to the
                                current presentation. These reclassifications have
                                no effect on net income
                                (loss), financial position or cash flows as previously
                                reported. During the
                                quarter ended March 31, 2006 the Company changed
                                its classification of freight
                                out costs from cost of sales and rentals to selling,
                                general and administrative
                                expenses as management considers these costs to be
                                part of its marketing program
                                and thus they believe it is preferable to classify
                                these costs as a component of
                                selling, general and administrative expenses. Freight
                                costs included in selling,
                                general and administrative expenses <br></font>
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">during
                                  the three months ended June 30, 2006 and 2005 are
                                  $11,419 and $6,220
                                  respectively, and for the six months ended June
                                  30, 2006 and 2005 are $20,361and
                                  $13,187 respectively.</font><br></div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Recent
                                Accounting Pronouncements</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">3.
                                  Recent
                                  Accounting Pronouncements</font></div>
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
                                December 2004, the Financial Accounting Standards
                                Board ("FASB") issued SFAS No.
                                123 (revised 2004), "Share-Based Payment" ("SFAS
                                123R"), which is a revision of
                                SFAS No. 123, "Accounting for Stock-Based Compensation".
                                SFAS 123R supersedes
                                APB Opinion No. 25, "Accounting for Stock Issued
                                to Employees" and amends SFAS
                                No. 95, "Statement of Cash Flows". SFAS 123R focuses
                                primarily on accounting for
                                transactions in which an entity obtains employee
                                services in share-based payment
                                transactions and requires all share-based payments
                                to employees, including
                                grants of employee stock options, to be recognized
                                as additional compensation
                                expense in the financial statements based on the
                                calculated fair value of the
                                awards. SFAS 123R also requires the benefits of tax
                                deductions in excess of
                                recognized compensation costs to be reported as a
                                financing cash flow. This
                                requirement will reduce net operating cash flows
                                and increase net financing cash
                                flows in periods after adoption. We adopted this
                                statement effective for our
                                fiscal year beginning January 1, 2006. We have described
                                the impact of adopting
                                SFAS 123R in our condensed consolidated financial
                                statements below.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">7</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
                                MEDICAL HOLDINGS, INC.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>NOTES
                                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>(unaudited)</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.&#160;
                                Stock Based Compensation</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                Company has a 2005 Stock Option Plan (the "Option
                                Plan") and has reserved
                                3,000,000 shares of common stock for issuance under
                                the Option Plan. Vesting
                                provisions are determined by the Board of Directors.
                                All stock options expire no
                                later than ten (10) years from the date of grant.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Effective
                                January 1, 2006, the Company adopted Statement of
                                Financial Accounting Standards
                                ("SFAS") No. 123 (revised 2004), "Share-Based Payment"
                                ("SFAS 123R"), using the
                                modified prospective method. SFAS 123R requires the
                                recognition of the cost of
                                employee services received in exchange for an award
                                of equity instruments in the
                                financial statements and is measured based on the
                                grant date fair value of the
                                award. SFAS 123R also requires the stock option compensation
                                expense to be
                                recognized over the period during which an employee
                                is required to provide
                                service in exchange for the award (the vesting period).
                                Prior to our adopting
                                SFAS 123R, we accounted for our stock-based compensation
                                plans under Accounting
                                Principles Board Opinion ("APB") No. 25, Accounting
                                for Stock Issued to
                                Employees" ("APB 25"). Under APB 25, generally no
                                compensation expense is
                                recorded when the terms of the award are fixed and
                                the exercise price of the
                                employee stock option equals or exceeds the fair
                                value of the underlying stock
                                on the date of grant. We adopted the disclosure-only
                                provision of SFAS No. 123,
                                "Accounting for Stock-Based Compensation" ("SFAS
                                123"). </font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
                                the
                                second quarter of 2006, the Company recorded compensation
                                expense related to
                                stock options that decreased the net income from
                                operations by $4,855 and its
                                net income by $4,855. The stock option compensation
                                expense was included in
                                selling, general and administrative expenses in the
                                accompanying condensed
                                consolidated statement of operations. </font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">For
                                  the
                                  three months and six months ended June 30, 2006,
                                  the Company recorded
                                  compensation expense related to stock options that
                                  decreased&#160;both
                                  net&#160;income from operations and&#160;net income by $4,855 and $9,710,
                                  respectively. The stock option compensation expense
                                  was included in selling,
                                  general and administrative expenses in the accompanying
                                  condensed consolidated
                                  statement of operations. </font></div>
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">There
                                were no options granted during the three months ended,
                                June 30, 2006. The fair
                                value of stock options at the date of grant during
                                the three months ended June
                                30, 2006 and June 30, 2005 was $0.00 and $51,147.
                                The Company used the following
                                assumptions to determine the fair value of stock
                                option grants during the three
                                months ended June 30, 2005: </font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                                <table cellpadding="0" cellspacing="0" width="75%">

                                    <tr>
                                      <td align="left" valign="top" width="49%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Expected
                                          life</font></div>
                                      </td>
                                      <td align="left" valign="top" width="16%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2
                                          years</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="49%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Volatility</font></div>
                                      </td>
                                      <td align="left" valign="top" width="16%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">125%</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="top" width="49%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Risk-free
                                          interest rate</font></div>
                                      </td>
                                      <td align="left" valign="top" width="16%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.95</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="top" width="49%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dividend
                                          yield</font></div>
                                      </td>
                                      <td align="left" valign="top" width="16%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">0</font></div>
                                      </td>
                                    </tr>

                                </table>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                expected life of stock options represents the period
                                of time that the stock
                                options granted are expected to be outstanding based
                                on historical exercise
                                trends. The expected volatility is based on the historical
                                price volatility of
                                our common stock. The risk-free interest rate represents
                                the U.S. Treasury bill
                                rate for the expected life of the related stock options.
                                The dividend yield
                                represents our anticipated cash dividend over the
                                expected life of the stock
                                options.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">A
                                summary
                                of stock option activity for the&#160;six months ended June 30, 2006 is
                                presented below:</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">8</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
                                MEDICAL HOLDINGS, INC.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>NOTES
                                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>(unaudited)</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">
                                <div id="lockwidth" style="WIDTH: 800px"><br>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div>
                                    <table cellpadding="0" cellspacing="0" width="100%">

                                        <tr>
                                          <td align="left" valign="bottom" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td valign="bottom" width="9%" style="border-bottom: black thin solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Shares
                                              Under Option</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td valign="bottom" width="9%" style="border-bottom: black thin solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Weighted
                                              Average Exercise Price</font></div>
                                          </td>
                                          <td align="left" valign="bottom" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td valign="bottom" width="9%" style="border-bottom: black thin solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Weighed
                                              Average Remaining Contractual Life</font></div>
                                          </td>
                                          <td valign="bottom" width="9%" style="border-bottom: black thin solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Aggregate</font></div>
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Intrinsic</font></div>
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Value</font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Outstanding
                                              at&#160;January 1, 2006</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">&#160;</div>
                                          </td>
                                          <td valign="top" width="9%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;
                                              Stock option plan</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">176,670</font></div>
                                          </td>
                                          <td align="right" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$0.40&#160;</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Granted</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">--</font></div>
                                          </td>
                                          <td align="right" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">--</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exercised</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">--</font></div>
                                          </td>
                                          <td align="right" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">--</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Forfeited
                                              </font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: black thin solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(28,000</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">)&#160;</font></div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: #cceeff thin solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$0.38</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                          <td align="left" valign="top" width="9%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="top" width="31%" style="border-bottom: #cceeff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Outstanding
                                              at June 30, 2006</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%" style="border-bottom: #cceeff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: black double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">148,670</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%" style="border-bottom: #cceeff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: #cceeff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$0.40</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%" style="border-bottom: #cceeff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td valign="top" width="9%" style="border-bottom: #cceeff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8.95
                                              Years</font></div>
                                          </td>
                                          <td valign="top" width="9%" style="border-bottom: #cceeff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$980</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="top" width="31%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: #ffffff solid;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%" style="border-bottom: #cceeff double;">&#160;</td>
                                        </tr>
                                        <tr bgcolor="#cceeff">
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exercisable
                                              at June 30, 2006</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: black double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">24,500</font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="right" valign="top" width="9%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$0.29
                                              </font></div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td valign="top" width="9%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8.65
                                              Years</font></div>
                                          </td>
                                          <td valign="top" width="9%" style="border-bottom: #cceeff double;">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$245</font></div>
                                          </td>
                                        </tr>
                                        <tr bgcolor="white">
                                          <td align="left" valign="top" width="31%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="1%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                          </td>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                        </tr>

                                    </table>
                                  </div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">A
                                    summary
                                    of the status of the Company's non-vested shares
                                    as of and for the six months
                                    ended June 30, 2006,&#160;is presented below.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                </div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;</font></div>
                              <div>
                                <table cellpadding="0" cellspacing="0" width="100%">

                                    <tr>
                                      <td align="left" valign="bottom" width="51%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      </td>
                                      <td valign="bottom" width="17%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Nonvested&#160;Shares
                                          </font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Under
                                          Option</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="4%">&#160;</td>
                                      <td valign="bottom" width="17%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Weighted
                                          Average </font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center">Grant
                                          Date Fair Value</div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="51%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Nonvested
                                          at&#160;January 1, 2006</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="17%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">176,670</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="4%">&#160;</td>
                                      <td align="right" valign="bottom" width="17%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$0.26
                                          </font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="51%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Granted</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="17%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">--</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="4%">&#160;</td>
                                      <td align="right" valign="bottom" width="17%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">--</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="51%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Vested</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="17%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(24,500</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="4%">)</td>
                                      <td align="right" valign="bottom" width="17%">0.20</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="51%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Forfeited</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="17%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(28,000</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="4%">)</td>
                                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff thin solid;">0.25</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="51%">&#160;</td>
                                      <td align="right" valign="bottom" width="17%">&#160;</td>
                                      <td align="left" valign="bottom" width="4%">&#160;</td>
                                      <td align="left" valign="bottom" width="17%">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="51%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Nonvested
                                          at June 30, 2006</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="17%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">124,170</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="4%">&#160;</td>
                                      <td align="right" valign="bottom" width="17%" style="border-bottom: #cceeff solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">$0.27</font></div>
                                      </td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="51%">&#160;</td>
                                      <td align="left" valign="bottom" width="17%">&#160;</td>
                                      <td align="left" valign="bottom" width="4%">&#160;</td>
                                      <td align="left" valign="bottom" width="17%">&#160;</td>
                                    </tr>

                                </table>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">As
                                  of
                                  June 30, 2006, we had $29,510 of unrecognized compensation
                                  cost related to stock
                                  options that will be recognized over a weighted
                                  average period of approximately
                                  2 years.</font></div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Prior
                                to
                                January 1, 2006, we accounted for stock-based compensation
                                plans under APB 25.
                                We adopted the disclosure-only provision of SFAS
                                123. Had compensation expense
                                for stock option grants been determined based on
                                the fair value at the grant
                                dates consistent with the method prescribed by SFAS
                                123, our net income and net
                                income per share would have been adjusted to the
                                pro forma amounts for the three
                                and six months ended June 30, 2005, as indicated
                                below:</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">9</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
                                MEDICAL HOLDINGS, INC.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>NOTES
                                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>(unaudited)</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div>
                                <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                                    <tr>
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #ffffff solid;">&#160;</td>
                                      <td width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                      <td colspan="2" valign="bottom" width="12%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Three
                                          Months Ended </font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">June
                                          30, 2005</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                      <td colspan="2" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Six</font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Months</font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Ended
                                          </font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">June
                                          30,</font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2005</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #ffffff thin solid;">&#160;</td>
                                    </tr>
                                    <tr>
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: medium none;">&#160;</td>
                                      <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                      <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">&#160;</td>
                                      <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                          income as reported</font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">75,416</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;$</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">131,496</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                      <td width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Deduct:
                                          total stock-based employee </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">compensation
                                          expense determined </font></div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                          under fair value based method for </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">all
                                          awards</font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,796</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black thin solid;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                                        </div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                                        </div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px">
                                        </div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">3,593</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                      <td width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Pro
                                          forma net income</font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">73,620</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">127,903</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                      <td width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Income
                                          per share:</font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                      <td width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Basic
                                          - as reported</font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                      <td width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Diluted
                                          - as reported</font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                      <td width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Basic
                                          - pro forma </font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="white">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: white;">&#160;</td>
                                      <td width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                    </tr>
                                    <tr bgcolor="#cceeff">
                                      <td align="left" valign="bottom" width="71%" style="border-bottom: #cceeff solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Diluted
                                          - pro forma</font></div>
                                      </td>
                                      <td width="2%" style="border-bottom: #cceeff thin solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff solid;">&#160;</td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                      </td>
                                      <td align="right" valign="bottom" width="11%" style="border-bottom: black double;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                      </td>
                                      <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff solid;">&#160;</td>
                                    </tr>

                                </table>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5.&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;Earnings
                                Per Share</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                Company computes net earnings (loss) per share in
                                accordance with SFAS No. 128,
                                "Earnings per Share", which establishes standards
                                for computing and presenting
                                net earnings (loss) per share. Basic earnings (loss)
                                per share is computed by
                                dividing net income (loss) by the weighted average
                                number of common shares
                                outstanding during the period. Diluted earnings per
                                share is computed by
                                dividing net income (loss) by the weighted average
                                number of common shares
                                outstanding and the number of dilutive potential
                                common share equivalents during
                                the period. For the six months ended June 30, 2006,
                                the basic and diluted loss
                                per share is the same, as the impact of potential
                                dilutive common shares is
                                anti-dilutive.</font></div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">10</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
                                MEDICAL HOLDINGS, INC.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>NOTES
                                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>(unaudited)</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                  calculation of basic and diluted earnings (loss)
                                  per share for the three and six
                                  months ended June 30, 2006 and 2005 is as follows:</font></div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div>
                                  <table cellpadding="0" cellspacing="0" id="ftable" width="100%">

                                      <tr>
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: medium none;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Basic</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: medium none;">&#160;</td>
                                        <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Three
                                            Months Ended June 30, 2006</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                                          <div>&#160;</div>
                                        </td>
                                        <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Three
                                            Months Ended June 30, 2005</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                                          <div>&#160;</div>
                                        </td>
                                        <td align="left" colspan="2" valign="bottom" width="12%" style="border-bottom: medium none;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Six
                                            Months Ended June 30, 2006</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: medium none;">
                                          <div>&#160;</div>
                                        </td>
                                        <td align="left" colspan="2" valign="bottom" width="11%" style="border-bottom: medium none;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Six
                                            Months Ended June 30, 2005</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: medium none;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net&#160;
                                            income (loss) applicable to common stockholders
                                            -</font></div>
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;&#160;
                                            basic</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,910</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">75,416</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(62,915</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">131,496</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Weighted
                                            average shares outstanding - basic</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,277,197</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,074,024</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,444,065</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,072,210</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                            income (loss) per share</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Basic</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Diluted</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net&#160;income
                                            (loss) applicable to common stockholders
                                            - </font></div>
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;&#160;
                                            diluted</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">1,910</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">75,416</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">(62,915</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">)</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">131,496</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Weighted
                                            average shares outstanding - basic</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,277,197</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,074,024</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,444,065</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,072,210</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dilutive
                                            securities, treasury stock method</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">339,215</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">163,924</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">0.00&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">158,357</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="white">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Weighted
                                            average shares outstanding - diluted</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,616,412</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,237,948</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,244,065</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: white;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: white;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">23,230,567</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: white;">&#160;</td>
                                      </tr>
                                      <tr bgcolor="#cceeff">
                                        <td align="left" valign="bottom" width="43%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Net
                                            income (loss) per share - diluted</font></div>
                                        </td>
                                        <td width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.00</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">$</td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">0.00&#160;</td>
                                        <td align="left" valign="bottom" width="2%" style="border-bottom: #cceeff;">&#160;</td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">$</font></div>
                                        </td>
                                        <td align="right" valign="bottom" width="11%" style="border-bottom: #cceeff;">
                                          <div style="DISPLAY: block; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0px"><font style="DISPLAY: inline; FONT-SIZE: 12pt; MARGIN-LEFT: 0px; TEXT-INDENT: 0px; MARGIN-RIGHT: 0px; FONT-FAMILY: Times New Roman">0.01</font></div>
                                        </td>
                                        <td align="left" valign="bottom" width="1%" style="border-bottom: #cceeff;">&#160;</td>
                                      </tr>

                                  </table>
                                </div>
                                <div>&#160;</div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">6.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 18pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Loans
                                  from stockholder</font></div><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Loans
                                from stockholder:</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Effective
                                March 1, 2006, a previously non interest bearing
                                loan from Thomas Sandgaard in
                                the amount of $14,476 was converted to a 15 month,
                                8.25% term loan of $14,980,
                                including accrued interest, with equal monthly payments
                                of principal and
                                interest commencing March 31, 2006. Payments were
                                made for March, April and May,
                                2006. The June 2006 payment has not been made.</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">11</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div>
                              <div>&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
                                MEDICAL HOLDINGS, INC.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>NOTES
                                TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>(unaudited)</strong></font></div>
                              <div>&#160;</div>
                              <div>&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">During
                                the six months ended June 30, 2006, Mr. Sandgaard
                                loaned the Company $126,900,
                                of which $50,000 was converted to a 24 month, 8.25%
                                term loan of $50,454,
                                including accrued interest, with equal monthly payments
                                of principal and
                                interest commencing March 31, 2006. </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Payments
                                were made for March, April, and May 2006. The June
                                payment has not been made.
                                The balance of $76,900 was represented by 8.25% demand
                                notes, of which $54,636
                                has been repaid. The remaining $22,264 plus $739
                                accrued interest will be repaid
                                as the Company&#8217;s cash position and its bank covenants allow.&#160; </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">At
                                June
                                30, 2006, $84,248 in loans from Mr. Sandgaard remained
                                outstanding.
</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">At
                                  January 1, 2006 the Company owed Mr. Sandgaard
                                  $2,845 as an account payable for
                                  monies advanced by Mr. Sandgaard on the Company&#8217;s behalf for operating expenses
                                  incurred by the Company. During the six months
                                  ended June 30, 2006 Mr. Sandgaard
                                  advanced an additional $34,593 for operating expenses
                                  incurred by the Company
                                  and was paid back $10,579, leaving a June 30, 2006
                                  accounts payable balance
                                  owing to Mr. Sandgaard of $26,859.</font></div><br><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">7.
                                </font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Stockholders'
                                Equity</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">For
                                the
                                quarter ended June 30, 2006, the Company issued 23,016
                                shares of common stock to
                                investor relations consultants for services performed
                                at prices ranging from
                                $0.42 to $0.45 per share.&#160; In addition, 390,625 shares of common stock were
                                sold in a non public offering to accredited investors
                                at $0.32 a share. The
                                Company also issued warrants to purchase 312,500
                                shares to the investors in the
                                non-public offering; these warrants have an exercise
                                price of $0.39 per share
                                and a term expiring June 30, 2011. </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Additionally,
                                the Company issued 45,351 shares of common stock
                                to the broker-dealer and an
                                investment banker responsible for the non public
                                offering. Subsequent to the
                                quartered ended June 30, 2006 the company issued
                                326,666 shares of common stock
                                to investor relations consultants for services to
                                be performed at $0.30 per
                                share.</font></div>
                              <div>&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">At
                                  December 31, 2005, the Company had outstanding
                                  warrants and non-employee options
                                  to purchase 3,245,121 shares of common stock&#160;at a weighted average exercise
                                  price of $0.83. During the six months ended June
                                  30, 2006, the Company issued
                                  warrants and non-employee options&#160;to purchase 312,500 shares of common
                                  stock&#160;with a weighted average exercise price of $0.39.
                                  At June 30, 2006,
                                  the Company had outstanding warrants and non-employee
                                  options to
                                  purchase3,557,621&#160;shares of common stock at a weighted average exercise
                                  price of $0.78.</font></div>
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">Additionally,
                                  at&#160;June 30, 2006, the Company had outstanding
                                  350,000 options to an employee, granted in 2005,
                                  which were not issued pursuant
                                  to the Option Plan.&#160; The options h&#160; ave an exercise price of $0.22,
                                  have a remaining term at June 30, 2006 of

                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8&#160;&#190;
                                    y</font>ears and have an intrinsic value of $28,000.</div>
                                </div><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div id="lockwidth" style="WIDTH: 800px"><br>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                </div>
                              </div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">12</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div><br>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div id="lockwidth" style="LEFT: -21px; WIDTH: 800px; TOP: 107px"><br>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                    2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
                                    OF
                                    OPERATIONS</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                    following information should be read in conjunction
                                    with the Company's condensed
                                    consolidated financial statements and related
                                    footnotes contained in this
                                    report.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Results
                                    of Operations</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Net
                                      Sales and Rental Income.</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
                                      Net
                                      sales and rental income for the quarters and
                                      six months ended June 30, 2006 and
                                      2005 were $560,860 and $589,483 and $1,065,951
                                      and $1,134,426 respectively, a
                                      decrease of $28,623 or 4.9% and $68,475 or
                                      6.0%. The decrease in net revenue for
                                      the quarter and six months ended June 30, 2006
                                      compared to the quarter and six
                                      months ended June 30, 2005 was primarily due
                                      to a $221,099 second quarter and
                                      $290,252 six month increase in the reserve
                                      for contractual adjustments (i.e.,
                                      estimated insurance company adjustments) and
                                      bad debt for the quarter and six
                                      months ended June 30, 2006, coupled with a
                                      second quarter 2005 reduction of
                                      $69,000 to an accounts receivable reserve for
                                      NeuroMove Medicare accounts.
                                      Following a practice throughout the healthcare
                                      industry, insurance companies
                                      regularly adjust unilaterally the amounts which
                                      they will pay for our products
                                      instead of rentals or prices charged by us.
</font></div>
                                  </div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Subsequent
                                    to the end of the second quarter and as part
                                    of our effort to grow our business
                                    we engaged 16 additional independent contractor
                                    sales representatives more than
                                    doubling our sales force.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Gross
                                      Profit</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
                                      Gross
                                      profit for the quarter and six months ended
                                      June 30, 2006 were $541,537 or 96.6%
                                      and $982,800 or 92.2% of net revenue. For the
                                      quarter and six months ended June
                                      30, 2006 this represents an increase of $25,304
                                      or 4.9% and $8,736 or 0.9% from
                                      the gross profit of $516,233 or 87.5% of net
                                      revenue and $974,064 or 85.9% of
                                      net revenue for the quarter and six months
                                      ended June 30, 2005 respectively. The
                                      increase in gross profit for the quarter and
                                      six months ended June 30, 2006 as
                                      compared with the same periods in 2005 is primarily
                                      because rental revenue,
                                      which maintains a higher profit margin than
                                      sales revenue, represents a larger
                                      percentage of total revenue than in the prior
                                      periods and because of a second
                                      quarter 2006 update to our inventory costing
                                      procedures, including development
                                      of a comprehensive bill of materials for all
                                      major finished goods inventory
                                      components.</font></div>
                                  </div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Selling,
                                      General and Administrative.</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
                                      Selling,
                                      general and administrative expenses for the
                                      quarter and six months ended June
                                      30, 2006 were $506,686, an increase of $88,902
                                      or 21.3%, and $984,304, an
                                      increase of 184,480 or 23.1% respectively compared
                                      to $417,784 and $799,824 for
                                      the same periods in 2005.&#160; The quarterly increase was primarily due to
                                      increases in commissions, advertising and marketing,
                                      audit and accounting fees,
                                      office and manufacturing supplies and design,
                                      utilities (primarily because the
                                      local utility billed incorrectly in 2004 and
                                      2005 and recovered their billing
                                      shortfall in 2006), rent and a small payroll
                                      increase. The increases were in
                                      part offset by lower insurance premiums, consulting
                                      fees, travel &amp;
entertainment, depreciation and service charges.
                                      The six-month increase was
                                      primarily due to increases in the above items
                                      plus legal fees, property taxes,
                                      and research &amp; development, and offset by the above decreases
                                      plus finance
                                      charges, bank service fees, and car allowances.</font></div>
                                  </div>
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                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Interest
                                    and other income (expense).</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;
                                    </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Interest
                                    and other income (expense) was ($17,735) for
                                    the quarter ended June 30, 2006, an
                                    increase of $11,503 compared to ($6,232) for
                                    the same period last year, and
                                    ($31,053) for the six months ended June 30,2006,
                                    an increase of $21,137 compared
                                    to ($9,916) for the same period last year. The
                                    increases resulted primarily from
                                    the Company's September 2005 and March 2006 increases
                                    in commercial bank
                                    debt&#160;as well as&#160;loans from stockholder, which is&#160;described in
                                    Note&#160;6 to the unaudited consolidated financial statements
                                    in this
                                    Report.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><u>Liquidity
                                    and Capital Resources.</u><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
                                    We have
                                    limited liquidity. During the second quarter
                                    of 2006, we sold in a non-public
                                    offering through a broker dealer&#160;435,959 shares of common stock resulting
                                    in net proceeds to us of $108,563; this offering
                                    is on-going.&#160;We expect
                                    that our cash requirements will increase as our
                                    operations expand and to
                                    implement our Business Plan, and in order to
                                    continue as a going concern we will
                                    need to raise additional debt or equity financing
                                    in 2006 and future periods. To
                                    achieve this objective we are in discussions
                                    with potential investors and
                                    investment bankers that may provide short and
                                    long term funding to further
                                    assist in executing our business plan. There
                                    can be no assurance that we will be
                                    able to raise such additional financing or do
                                    so on terms that are acceptable to
                                    the Company.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Our
                                    limited liquidity is primarily a result of (a)
                                    the required high levels of
                                    consignment inventory, (b) the payment of commissions
                                    to salespersons based on
                                    sales or rentals prior to receipt of funds, (c)
                                    the high level of accounts
                                    receivable outstanding because of the deferred
                                    payment practices of third party
                                    health payers, and (d) the delayed cost recovery
                                    inherent in rental
                                    transactions. </font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Contingencies
                                    such as unanticipated shortfalls in revenues
                                    or increases in expenses could
                                    affect our projected revenue, cash resulting
                                    from operations and
                                    liquidity.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                      used
                                      in operating activities was $261,520 for the
                                      six months ended June 30, 2006
                                      compared to $33,587 cash provided by operating
                                      activities for the six months
                                      ended June 30, 2005. The primary reasons for
                                      the decrease in cash flow was the
                                      net loss in 2006 compared to net income in
                                      2005, an increase in inventory to
                                      accommodate increased sales and rentals, and
                                      a slower build up in accounts
                                      payable made possible by additional bank loans
                                      and loans from our largest
                                      shareholder. </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>&#160;</strong></font></div>
                                  </div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                    used
                                    in investing activities for the six months ended
                                    June 30, 2006 was $640 compared
                                    to cash used in investing activities of $11,408
                                    for the same period in 2005.
                                    Cash used in investing activities represents
                                    the purchase of equipment and
                                    inventory currently rented to customers. </font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Cash
                                      provided by financing activities was $320,250
                                      for the six months ended June 30,
                                      2006 compared with cash used in financing activities
                                      of $25,257 for the six
                                      months ended June 30, 2005. During the six
                                      months ended June 30, 2006 the
                                      Company received&#160; working capital of $240,000 in bank financing
                                      and $22,264
                                      in net loans from Thomas Sandgaard.</font></div>
                                  </div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Our
                                    primary sources of capital for the quarter and
                                    six months ended June 30, 2006
                                    have been collections from our sale and rental
                                    activities, borrowings from
                                    Silicon Valley Bank and from Thomas Sandgaard,
                                    and the non public offering
                                    described in the Liquidity and Capital Resources
                                    Section. For information
                                    regarding these borrowings from Silicon Valley
                                    Bank and Mr. Sandgaard, see Note
                                    4 to our unaudited consolidated financial statements
                                    in this Report and Item 6
                                    in our Form 10-KSB for the year ended December
                                    31, 2005. </font></div>
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                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>Recently
                                    issued accounting pronouncements:</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
                                    December 2004, the Financial Accounting Standards
                                    Board ("FASB") issued SFAS No.
                                    123 (revised 2004), "Share-Based Payment" ("SFAS
                                    123R"), which is a revision of
                                    SFAS No. 123, "Accounting for Stock-Based Compensation".
                                    SFAS 123R supersedes
                                    APB Opinion No. 25, "Accounting for Stock Issued
                                    to Employees" and amends SFAS
                                    No. 95, "Statement of Cash Flows". SFAS 123R
                                    focuses primarily on accounting for
                                    transactions in which an entity obtains employee
                                    services in share-based
                                    payment</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">transactions
                                    and requires all share-based payments to employees,
                                    including grants of employee
                                    stock options, to be recognized as additional
                                    compensation expense in the
                                    financial statements based on the calculated
                                    fair value of the awards. SFAS 123R
                                    also requires the benefits of tax deductions
                                    in excess of recognized
                                    compensation costs to be reported as a financing
                                    cash flow. This requirement
                                    will reduce net operating cash flows and increase
                                    net financing cash flows in
                                    periods after adoption. We adopted this statement
                                    effective for our fiscal year
                                    beginning January 1, 2006. We have described
                                    the impact of adopting SFAS 123R in
                                    our condensed consolidated financial statements
                                    in Note 2, Stock Based
                                    Compensation.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SPECIAL
                                    CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certain
                                    information included in this quarterly report
                                    contains statements that are
                                    forward-looking, such as statements relating
                                    to plans for future expansion and
                                    other business development activities, as well
                                    as other capital spending and
                                    financing sources. Such forward-looking information
                                    involves important risks and
                                    uncertainties that could significantly affect
                                    anticipated results in the future
                                    and, accordingly, such results may differ from
                                    those expressed in any
                                    forward-looking statements made by or on behalf
                                    of the Company. These risks
                                    include the need to obtain additional capital
                                    in order to grow our business,
                                    larger competitors with greater financial resources,
                                    the need to keep pace with
                                    technological changes, our dependence on the
                                    reimbursement from insurance
                                    companies for products sold or rented to our
                                    customers, our dependence on third
                                    party manufacturers to produce our goods on time
                                    and to our specifications, the
                                    acceptance of our products by hospitals and clinicians,
                                    implementation of our
                                    sales strategy including a strong direct sales
                                    force and other risks described
                                    in our 10-KSB Report for the year ended December
                                    31, 2005.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                    3. CONTROLS AND PROCEDURES</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">As
                                    of the
                                    end of the period covered by this quarterly report,
                                    an evaluation was performed
                                    under the supervision and with the participation
                                    of the Company's management
                                    including the Company's Chief Executive Officer
                                    and Chief Financial Officer, of
                                    the effectiveness of the design and operation
                                    of the Company's disclosure
                                    controls and procedures. Based on that evaluation,
                                    the Chief</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Executive
                                    Officer and Chief Financial Officer concluded
                                    that the Company's disclosure
                                    controls and procedures were effective as of
                                    June 30, 2006.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">There
                                    have been no changes in internal control over
                                    financial reporting that occurred
                                    during the quarter that have materially affected,
                                    or are reasonably likely to
                                    affect, the Company's internal control over financial
                                    reporting. </font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
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                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>PART
                                    II - OTHER INFORMATION</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                    1. LEGAL PROCEEDINGS.</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">None.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                    2. UNREGISTERED SALES OF EQUITY SECURITIES AND
                                    USE OF
                                    PROCEEDS.</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
                                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">See
                                      Note
                                      5 to the Notes to the Condensed Consolidated
                                      Financial Statements for
                                      Information regarding the issuance of common
                                      stock to investor relations
                                      consultants and sales of our common stock to
                                      new investors during the second
                                      quarter of 2006. In the issuances, we made
                                      no general solicitation, and we
                                      believe that the investor relations consultants
                                      and investors met the standards
                                      for a purchaser in a non-public offering. We
                                      relied upon an exemption from
                                      securities registration for a non-public offering
                                      in issuing these securities to
                                      the investor relations consultants and investors.</font></div>
                                    <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                                      sale
                                      to investors in the non-public offering pursuant
                                      to Section 4(2) of the
                                      Securities Act of 1933, as amended, and Rule
                                      506 of Regulation D promulgated
                                      there under, was a sale to accredited investors
                                      of 390,625 shares of common
                                      stock at $.032 per share in cash. Such sales
                                      occurred on June 23, 2006. The
                                      shares were accompanied by warrants to purchase
                                      312,500 shares of common stock.
                                      See Note 5 of Notes to Condensed Consolidated
                                      Financial Statements for
                                      additional information. The shares were offered
                                      through a broker-dealer who
                                      received commissions of $12,500 and 35,156
                                      shares of our common stock
                                      (representing 9% of the number of shares of
                                      common stock sold by the broker).
                                      Additionally, an investment banker who introduced
                                      us to the broker dealer
                                      received a finder&#8217;s fee of $3,938 and 10,195 shares of common
                                      stock.
</font></div>
                                  </div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                    3. DEFAULTS UPON SENIOR SECURITIES.</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">None</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                    4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
                                    HOLDERS.</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">None.</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                    5. OTHER INFORMATION.</strong></font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">None</font></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div><br>
                                  <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                    <div id="FTR">
                                      <div id="GLFTR" style="WIDTH: 100%" align="left">
                                      </div>
                                    </div>
                                    <div id="PN" style="PAGE-BREAK-AFTER: always">
                                      <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">16</font></div>
                                      <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                        <hr style="COLOR: black" noshade size="2">
                                      </div>
                                    </div>
                                    <div id="HDR">
                                      <div id="GLHDR" style="WIDTH: 100%" align="right">
                                      </div>
                                    </div>
                                  </div><br>
                                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                                </div><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ITEM
                                6. EXHIBITS.</strong></font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)
                                Exhibits</font></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
                                  <div>
                                    <table cellpadding="0" cellspacing="0" width="100%">

                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10.1</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Promissory
                                              Note <font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">dated
                                              March 1, 2006 to Thomas Sandgaard</font></font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10.2</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Promissory
                                              Note <font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">dated
                                              March 1, 2006 to Thomas Sandgaard</font></font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10.3</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">Promissory
                                            Note dated June 30, 2006
                                            to Thomas Sandgaard</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;10.4</div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">Form
                                            of Warrant, Non-Public
                                            Offering</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">31.1</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certification
                                              of Chief Executive Officer Pursuant
                                              to Section 302 of the Sarbanes-Oxley
                                              Act of 2002</font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">31.2</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certification
                                              of Chief Financial Officer Pursuant
                                              to Section 302 of the Sarbanes-Oxley
                                              Act of 2002</font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">32</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certification
                                              of Chief Executive Officer and Chief
                                              Financial Officer Pursuant to Section
                                              18 U.S.C. Section
                                              1350</font></div>
                                          </td>
                                        </tr>

                                    </table>
                                  </div><br></div>
                              </div><br>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
                                </div>
                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">17</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            </div><br>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SIGNATURES</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">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 thereunto
                              duly authorized.</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                              <table cellpadding="0" cellspacing="0" width="100%">

                                  <tr>
                                    <td align="left" valign="top" width="45%">
                                    </td>
                                    <td align="left" valign="top" width="1%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                    </td>
                                    <td align="left" valign="top" width="44%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">ZYNEX
                                        MEDICAL HOLDINGS, INC.</font></div>
                                    </td>
                                  </tr>
                                  <tr>
                                    <td align="left" valign="top" width="45%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dated&#160;August
                                        17, 2006</font></div>
                                    </td>
                                    <td align="left" valign="top" width="1%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                    </td>
                                    <td align="left" valign="top" width="44%" style="border-bottom: black thin solid;">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;Thomas
                                        Sandgaard</font></div>
                                    </td>
                                  </tr>
                                  <tr>
                                    <td align="left" colspan="2" valign="top" width="46%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                    </td>
                                    <td align="left" valign="top" width="44%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Thomas
                                        Sandgaard,</font></div>
                                    </td>
                                  </tr>
                                  <tr>
                                    <td align="left" colspan="2" valign="top" width="46%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                    </td>
                                    <td align="left" valign="top" width="44%">
                                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">President,
                                        Chief Executive Officer and Treasurer </font></div>
                                    </td>
                                  </tr>

                              </table>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><br></div>
                              <div>
                                <table cellpadding="0" cellspacing="0" width="100%">

                                    <tr>
                                      <td align="left" valign="top" width="44%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      </td>
                                      <td align="left" colspan="2" valign="top" width="46%">&#160;</td>
                                    </tr>
                                    <tr>
                                      <td align="left" valign="top" width="44%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      </td>
                                      <td align="left" valign="top" width="1%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      </td>
                                      <td align="left" valign="top" width="44%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      </td>
                                    </tr>
                                    <tr>
                                      <td align="left" valign="top" width="44%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dated&#160;August
                                          17, 2006</font></div>
                                      </td>
                                      <td align="left" valign="top" width="1%">&#160;</td>
                                      <td align="left" valign="top" width="44%" style="border-bottom: black thin solid;">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;Peter
                                          J. Leveton</font></div>
                                      </td>
                                    </tr>
                                    <tr>
                                      <td align="left" colspan="2" valign="top" width="45%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      </td>
                                      <td align="left" valign="top" width="44%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Peter
                                          J. Leveton,</font></div>
                                      </td>
                                    </tr>
                                    <tr>
                                      <td align="left" colspan="2" valign="top" width="45%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                                      </td>
                                      <td align="left" valign="top" width="44%">
                                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Chief
                                          Financial Officer</font></div>
                                      </td>
                                    </tr>

                                </table>
                              </div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                              <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
                                <div id="FTR">
                                  <div id="GLFTR" style="WIDTH: 100%" align="left">
                                  </div>
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                                <div id="PN" style="PAGE-BREAK-AFTER: always">
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">18</font></div>
                                  <div style="WIDTH: 100%; TEXT-ALIGN: center">
                                    <hr style="COLOR: black" noshade size="2">
                                  </div>
                                </div>
                                <div id="HDR">
                                  <div id="GLHDR" style="WIDTH: 100%" align="right">
                                  </div>
                                </div>
                              </div>
                            </div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>INDEX
                              TO EXHIBITS</strong></font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br>
                                  <div>
                                    <table cellpadding="0" cellspacing="0" width="100%">

                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;Exhibit
<u>Number</u></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="bottom" width="77%">&#160;<u>Description</u></td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10.1</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Promissory
                                              Note <font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">dated
                                              March 1, 2006 to Thomas Sandgaard</font></font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10.2</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Promissory
                                              Note <font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">dated
                                              March 1, 2006 to Thomas Sandgaard</font></font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10.3</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">Promissory
                                            Note dated June 30, 2006
                                            to Thomas Sandgaard</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">&#160;10.4</div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">Form
                                            of Warrant, Non-Public
                                            Offering</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">31.1</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certification
                                              of Chief Executive Officer Pursuant
                                              to Section 302 of the Sarbanes-Oxley
                                              Act of 2002</font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">31.2</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certification
                                              of Chief Financial Officer Pursuant
                                              to Section 302 of the Sarbanes-Oxley
                                              Act of 2002</font></div>
                                          </td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">&#160;</td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">&#160;</td>
                                        </tr>
                                        <tr>
                                          <td align="left" valign="top" width="9%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">32</font></div>
                                          </td>
                                          <td align="left" valign="top" width="2%">&#160;</td>
                                          <td align="left" valign="top" width="77%">
                                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Certification
                                              of Chief Executive Officer and Chief
                                              Financial Officer Pursuant to Section
                                              18 U.S.C. Section
                                              1350</font></div>
                                          </td>
                                        </tr>

                                    </table>
                                  </div><br><br></div>
                              </div>
                            </div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 8pt; FONT-FAMILY: Times New Roman">19</font></div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                            <div>
                              <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="1">
                              <hr style="MARGIN-TOP: -13px; COLOR: #000000" noshade size="4">
                            </div>
                            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
                          </div>
                        </div>
                      </div>
                    </div>
                  </div>
                </div>
              </div>
            </div>
          </div>
        </div>
      </div>
    </div>
  </body>
</html>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>zynex10qsbex101_8142006.htm
<DESCRIPTION>PROMISSORY NOTE
<TEXT>
<html>
  <head>
    <title>
      Promissory Note
</title>
<!-- Licensed to: EdgarTech Filing Services-->
<!-- Document Created using EDGARizer HTML 3.0.4.0 -->
<!-- Copyright 2006 EDGARfilings, Ltd., an IEC company.-->
<!-- All rights reserved EDGARfilings.com -->
</head>
  <body bgcolor="#ffffff"><div id="lockwidth" style="width: 800px">
    <div id="lockwidth" style="WIDTH: 800px">
      <div id="lockwidth" style="WIDTH: 800px"><br>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div>
          <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
          <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exhibit
          10.1</font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;$
          14,980</strong>&#160;&#160;&#160;&#160;<strong>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;March
          1,
          2006</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>PROMISSORY
          NOTE</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
          MEDICAL HOLDINGS, INC.</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">For
          value
          received, Zynex Medical Holdings, Inc. (&#8220;Zynex&#8221;) promises to pay to the order of
          Thomas Sandgaard (hereinafter "Holder"), in legal tender, the sum of $14,980
          (which includes principal of $14,476 plus accrued interest of $504 at 8.25%
          per
          annum from October 1, 2005 through February 28, 2006) with interest on
          the
          outstanding balance at the annual rate of 8.25%. This Note commences March
          1,
          2006 (hereinafter "Commencement Date"), and all obligations set forth herein
          are
          measured from this date. This Note will be repaid in equal monthly payments
          of
          principal and interest of $1,079.03, with the first payment due March 31,
          2006,
          and each additional payment due on the last day of the next following month
          until paid in full; all principal and interest shall be fully repaid no
          later
          than 15 months after the Commencement Date. The note may be prepaid without
          penalty at Zynex&#8217;s option at any time. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
          the
          event of a default under the terms of this Note, upon ten days following
          written
          demand by Holder of this Note to cure such default, and such default having
          not
          been cured, Holder may, at Holder's sole and absolute discretion, declare
          all
          remaining principal and interest immediately due and payable. Waiver by
          Holder
          hereof to enforce any provisions of this Note shall not operate to bar
          Holder's
          rights to enforce any provisions of this Note at any later time or for
          any later
          default. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">All
          notices, payments and performance of the obligations under this Note shall
          be
          made at 1175 Castle Pointe Road, Castle Rock, CO 80104 or such other location
          as
          the holder may notify Zynex in writing. All notices or demands to the Company
          shall be given in writing to the Company&#8217;s principal office location at 8100
          Southpark Way ,Suite A-9, Littleton, Colorado 80120. Notices to all parties
          will
          be deemed provided when actually received by the other party. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">This
          Note
          shall be governed and interpreted under the laws of the State of Colorado.
          </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">
          <table align="center" bgcolor="#ffffff" border="0" cellpadding="0" cellspacing="0" width="100%">

              <tr valign="top" bgcolor="#ffffff">
                <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;<font size="3">Zynex
                  Medical Holdings, Inc.</font></font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td width="40%">&#160;</td>
                <td width="5%">&#160;</td>
                <td width="5%">&#160;</td>
                <td width="40%">&#160;</td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">/s/&#160;<font size="3">Peter
                  J. Leveton</font></font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td width="40%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td align="left" width="40%">
                  <hr style="COLOR: black" align="left" noshade size="2" width="80%">
                </td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td align="left" width="40%">
                </td>
              </tr>
              <tr valign="top" bgcolor="#ffffff">
                <td width="40%">
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">By:<font size="3">Peter
                    J. Leveton</font></font></div>
                  <div><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: " size="3">Chief
                    Financial Officer</font></div>
                </td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td width="5%"><font style="DISPLAY: inline; FONT-SIZE: 10pt; FONT-FAMILY: ">&#160;</font></td>
                <td width="40%">&#160;</td>
              </tr>

          </table>
        </div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;

          <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="1">
          <hr style="MARGIN-TOP: -13px; COLOR: #000000" noshade size="4">
        </div>
      </div>
    </div>
  </div></body>
</html>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>zynex10qsbex102_8142006.htm
<DESCRIPTION>PROMISSORY NOTE
<TEXT>
<html>
  <head>
    <title>
      Promissory Note
</title>
<!-- Licensed to: EdgarTech Filing Services-->
<!-- Document Created using EDGARizer HTML 3.0.4.0 -->
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  <body bgcolor="#ffffff"><div id="lockwidth" style="width: 800px">
    <div id="lockwidth" style="WIDTH: 800px">
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;$
          50,454</strong></font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;March
          1,
          2006</strong></font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>PROMISSORY
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 14pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
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        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">For
          value
          received, Zynex Medical Holdings, Inc. (&#8220;Zynex&#8221;) promises to pay to the order of
          Thomas Sandgaard (hereinafter "Holder"), in legal tender, the sum of $50,454
          (which includes principal of $50,000 plus accrued interest of $454 at 8.25%
          per
          annum from January 20, 2006 through February 28, 2006) with interest on
          the
          outstanding balance at the annual rate of 8.25%. This Note commences March
          1,
          2006 (hereinafter "Commencement Date"), and all obligations set forth herein
          are
          measured from this date. This Note will be repaid in equal monthly payments
          of
          principal and interest of $2,287.65, with the first payment due March 31,
          2006,
          and each additional payment due on the last day of the next following month
          until paid in full; all principal and interest shall be fully repaid no
          later
          than 24 months after the Commencement Date. The note may be prepaid without
          penalty at Zynex&#8217;s option at any time. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">In
          the
          event of a default under the terms of this Note, upon ten days following
          written
          demand by Holder of this Note to cure such default, and such default having
          not
          been cured, Holder may, at Holder's sole and absolute discretion, declare
          all
          remaining principal and interest immediately due and payable. Waiver by
          Holder
          hereof to enforce any provisions of this Note shall not operate to bar
          Holder's
          rights to enforce any provisions of this Note at any later time or for
          any later
          default. </font></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">All
          notices, payments and performance of the obligations under this Note shall
          be
          made at 1175 Castle Pointe Road, Castle Rock, CO 80104 or such other location
          as
          the holder may notify Zynex in writing. All notices or demands to the Company
          shall be given in writing to the Company&#8217;s principal office location at 8100
          Southpark Way ,Suite A-9, Littleton, Colorado 80120. Notices to all parties
          will
          be deemed provided when actually received by the other party. </font></div>
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          Note
          shall be governed and interpreted under the laws of the State of Colorado.
          </font></div>
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              <tr>
                <td align="left" valign="top" width="32%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#160;Zynex
                    Medical Holdings, Inc.</font></div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="32%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="32%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="32%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="32%" style="border-bottom: black thin solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;Peter
                    J. Leveton</font></div>
                </td>
                <td align="left" valign="top" width="4%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="32%" style="border-bottom: #ffffff solid;">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
              </tr>
              <tr>
                <td align="left" valign="top" width="32%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Zynex
                    Medical Holdings, Inc.</font></div>
                </td>
                <td align="left" valign="top" width="4%">&#160;</td>
                <td align="left" valign="top" width="4%">&#160;</td>
                <td align="left" valign="top" width="32%">&#160;</td>
              </tr>
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                <td align="left" valign="top" width="32%">
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                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Chief
                    Financial Officer</font></div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="4%">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </td>
                <td align="left" valign="top" width="32%">&#160;</td>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>zynex10qsbex103_8142006.htm
<DESCRIPTION>PROMISSORY NOTE
<TEXT>
<html>
  <head>
    <title>
      Promissory Note
</title>
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  <body bgcolor="#ffffff"><div id="lockwidth" style="width: 800px">
    <div id="lockwidth" style="WIDTH: 800px"><br>
      <div>
        <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
        <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
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      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exhibit
        10.3</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>DEMAND
        PROMISSORY NOTE</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
        MEDICAL HOLDINGS, INC.</strong></font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><strong><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;$23,003.84</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roma
n">&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;Date:
        June 30,
        2006</font></strong></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">FOR
        VALUE
        RECEIVED, the undersigned promises to pay within ten (10) days of demand
        to the
        order of Thomas Sandgaard or any holder thereof the sum of twenty three
        thousand, three dollars and eighty four cents ($23,003.84), together with
        interest of 8.25% per annum from July 1, 2006 until paid. .</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Upon
        default in making payment within 10 days of demand, and providing this note
        is
        turned over for collection, Zynex agrees to pay all reasonable legal fees
        and
        costs of collection to the extent permitted by law. This note shall be enforced
        in accordance with the laws of the State of Colorado. All parties to this
        note
        waive presentment, notice of non-payment, protest and notice of protest,
        and
        agree to remain fully bound notwithstanding extension or modification of
        terms.</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">All
        notices, payments and performance of the obligations under this Note shall
        be
        made at 1175 Castle Pointe Road, Castle Rock, CO 80104 or such other location
        as
        the holder may notify Zynex in writing. All notices or demands to the Company
        shall be given in writing to the Company&#8217;s principal office location at 8100
        Southpark Way ,Suite A-9, Littleton, Colorado 80120. Notices to all parties
        will
        be deemed provided when actually received by the other party. </font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
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              </td>
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              <td align="left" valign="top" width="4%">
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              </td>
              <td align="left" valign="top" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="4%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="32%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="32%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;Peter
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                  J. Leveton</font></div>
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              </td>
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<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>zynex10qsbex104_8162006.htm
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<html>
  <head>
    <title>
      Exhibit 10.4
</title>
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  <body bgcolor="#ffffff"><div id="lockwidth" style="width: 800px">
    <div id="lockwidth" style="WIDTH: 800px">
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            <div>
              <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
              <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exhibit
              10.4</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>FORM
              OF WARRANT</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 36pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">THESE
              SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
              AS
              AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR
              OFFERED FOR
              SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE
              SECURITIES OR
              AN OPINION OF COUNSEL OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT
              SUCH
              REGISTRATION IS NOT REQUIRED.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
              MEDICAL HOLDINGS, INC.</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">COMMON
              STOCK PURCHASE WARRANT</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">1.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Issuance;
              Certain Definitions</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              In
              consideration of good and valuable consideration, the receipt of which
              is hereby
              acknowledged by </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
              MEDICAL HOLDINGS, INC.</strong></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">,
              a
              Nevada corporation (the &#8220;Company&#8221;),&#160;_________ or registered assigns (the
&#8220;Holder&#8221;) is hereby granted the right to purchase at any time until 5:00 p.m.,
              New York City time, on&#160; _____(the &#8220;Expiration Date&#8221;), _________ X 0.80
              OR&#160;______ fully paid and nonassessable shares of the Company&#8217;s Common
              Stock, $0.001 par value per share (the &#8220;Common Stock&#8221;), at an initial exercise
              price per share (the &#8220;Exercise Price&#8221;) of $0.39 per share, subject to further
              adjustment as set forth herein. Capitalized terms not otherwise herein
              defined
              shall have the meanings ascribed to them in the Securities Purchase
              Agreement
              between the Company and the original Holder dated _______, as amended
              from time
              to time (the &#8220;Agreement&#8221;).</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Exercise
              of Warrant</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              </font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Method
              of Exercise</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              </font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">&#160;</td>
                    <td style="width: 36pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">This
                        Warrant is exercisable in whole or in part at any time and
                        from time to
                        time. Such exercise shall be effectuated by submitting to
                        the Company
                        (either by delivery to the Company or by facsimile transmission
                        as
                        provided in Section 9 hereof) a completed and duly executed
                        Notice of
                        Exercise (substantially in the form attached to this Warrant)
                        as provided
                        in this paragraph. The date such Notice of Exercise is faxed
                        to the
                        Company shall be the &#8220;Exercise Date,&#8221; provided that the Holder of this
                        Warrant tenders this Warrant Certificate to the Company within
                        five (5)
                        business days thereafter. The Notice of Exercise shall be
                        executed by the
                        Holder of this Warrant and shall indicate the number of shares
                        then being
                        purchased pursuant to such exercise. Upon surrender of this
                        Warrant
                        Certificate, together with appropriate payment of the Exercise
                        Price for
                        the shares of Common Stock purchased, the Holder shall be
                        entitled to
                        receive a certificate or certificates for the shares of Common
                        Stock so
                        purchased.</font></div>
                    </td>
                  </tr>

              </table>
            </div><br>
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              <div id="FTR">
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                </div>
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                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                </div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div><br>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
                    <td style="width: 36pt;">&#160;</td>
                    <td style="width: 36pt;">
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                        Holder shall be deemed to be the holder of the shares issuable
                        to it in
                        accordance with the provisions of this Section 2.1 on the
                        Exercise
                        Date</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Limitation
              on Exercise</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              Notwithstanding the provisions of this Warrant, the Agreement or of
              the other
              Transaction Agreements, in no event (except (i) as specifically provided
              in this
              Warrant as an exception to this provision, (ii) while there is outstanding
              a
              tender offer for any or all of the shares of the Company&#8217;s Common Stock, or
              (iii) at the Holder&#8217;s option, on at least sixty-five (65) days&#8217; advance written
              notice from the Holder) shall the Holder be entitled to exercise this
              Warrant,
              or shall the Company have the obligation to issue shares upon such
              exercise of
              all or any portion of this Warrant to the extent that, after such exercise
              the
              sum of (1) the number of shares of Common Stock beneficially owned
              by the Holder
              and its affiliates (other than shares of Common Stock which may be
              deemed
              beneficially owned through the ownership of the unexercised portion
              of the
              Warrants or other rights to purchase Common Stock), and (2) the number
              of shares
              of Common Stock issuable upon the exercise of the Warrants with respect
              to which
              the determination of this proviso is being made, would result in beneficial
              ownership by the Holder and its affiliates of more than 4.99% of the
              outstanding
              shares of Common Stock (after taking into account the shares to be
              issued to the
              Holder upon such exercise). For purposes of the proviso to the immediately
              preceding sentence, beneficial ownership shall be determined in accordance
              with
              Section 13(d) of the Securities Exchange Act of 1934, as amended (the
&#8220;1934
              Act&#8221;), except as otherwise provided in clause (1) of such sentence. The
              Holder,
              by its acceptance of this Warrant, further agrees that if the Holder
              transfers
              or assigns any of the Warrants, such assignment shall be made subject
              to the
              transferee&#8217;s or assignee&#8217;s specific agreement to be bound by the provisions of
              this Section 2.2 as if such transferee or assignee were the original
              Holder
              hereof.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">3.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Reservation
              of Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              The
              Company hereby agrees that at all times during the term of this Warrant
              there
              shall be reserved for issuance upon exercise of this Warrant such number
              of
              shares of its Common Stock as shall be required for issuance upon exercise
              of
              this Warrant (the &#8220;Warrant Shares&#8221;).</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Mutilation
              or Loss of Warrant</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              Upon
              receipt by the Company of evidence satisfactory to it of the loss,
              theft,
              destruction or mutilation of this Warrant, and (in the case of loss,
              theft or
              destruction) receipt of reasonably satisfactory indemnification, and
              (in the
              case of mutilation) upon surrender and cancellation of this Warrant,
              the Company
              will execute and deliver a duplicate Warrant and any such lost, stolen,
              destroyed or mutilated Warrant shall thereupon become void.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Rights
              of the Holder</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              The
              Holder shall not, by virtue hereof, be entitled to any rights of a
              stockholder
              in the Company, either at law or equity, and the rights of the Holder
              are
              limited to those expressed in this Warrant and are not enforceable
              against the
              Company except to the extent set forth herein.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">6.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Protection
              Against Dilution and Other Adjustments</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">6.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Adjustment
              Mechanism</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              Any
              adjustment of the Exercise Price required pursuant to this Section
              6 shall
              affect only the Exercise Price and shall not result in any change in
              the</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">number
              of
              shares of Common Stock which may be purchased upon the exercise of
              the Warrant
              after any such adjustment, except as provided in Section 6.2.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                </div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div><br>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">6.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Capital
              Adjustments</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              In case
              of any stock split or reverse stock split, stock dividend, reclassification
              of
              the Common Stock, recapitalization, or like capital adjustment affecting
              the
              Common Stock of the Company prior to the exercise of this Warrant or
              its
              applicable portion, the provisions of this Section 6 shall be applied
              as if such
              capital adjustment event had occurred immediately prior to the exercise
              date of
              this Warrant and the original Exercise Price had been fairly allocated
              to the
              stock resulting from such capital adjustment; and in other respects
              the
              provisions of this Section shall be applied in a fair, equitable and
              reasonable
              manner so as to give effect, as nearly as may be, to the purposes
              hereof.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">7.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Transfer
              to Comply with the Securities Act; Registration Rights</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">7.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Transfer</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              This
              Warrant has not been registered under the Securities Act of 1933, as
              amended,
              (the &#8220;Act&#8221;) and has been issued to the Holder for investment and not with a view
              to the distribution of either the Warrant or the Warrant Shares. Neither
              this
              Warrant nor any of the Warrant Shares or any other security issued
              or issuable
              upon exercise of this Warrant may be sold, transferred, pledged or
              hypothecated
              in the absence of an effective registration statement under the Act
              relating to
              such security or an opinion of counsel satisfactory to the Company
              that
              registration is not required under the Act. Each certificate for the
              Warrant,
              the Warrant Shares and any other security issued or issuable upon exercise
              of
              this Warrant shall contain a legend on the face thereof, in form and
              substance
              satisfactory to counsel for the Company, setting forth the restrictions
              on
              transfer contained in this Section.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">7.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Registration
              Rights</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              Reference is made to the Registration Rights Agreement. The Company&#8217;s
              obligations under the Registration Rights Agreement and the other terms
              and
              conditions thereof with respect to the Warrant Shares, including, but
              not
              necessarily limited to, the Company&#8217;s commitment to file a registration
              statement including the Warrant Shares, to have the registration of
              the Warrant
              Shares completed and effective, and to maintain such registration,
              are
              incorporated herein by reference.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Early
              Termination</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8.1</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Change
              of Control</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              In the
              event of, at any time prior to the Expiration Date, the consolidation
              or merger
              of the Company with or into another corporation (other than a merger
              or other
              transaction solely to effect a reincorporation of the Company into
              another
              state), a transaction or series of transactions to which the Company
              is party
              and in which is in excess of fifty percent of the voting power of the
              Company is
              transferred, or the sale or other disposition of all or substantially
              all the
              properties and assets of the Company in its entirety to any other person
              occurs
              (a &#8220;Change of Control&#8221;), the Company shall provide to the Holder twenty (20)
              days advance written notice of such consolidation, merger or sale or
              other
              disposition of the Company&#8217;s assets, and this Warrant shall terminate and have
              no further force and effect unless exercised upon the occurrence of
              such
              consolidation, merger, or similar transaction, or sale or other disposition
              of
              the Company&#8217;s assets.</font></div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                </div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div><br>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8.2</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Trading
              Price</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              In the
              event that the Company&#8217;s Common Stock trades on the Company&#8217;s Principal Trading
              Market at a price equal to or greater than 200% of the Exercise Price
              for any
              ten consecutive trading days prior to the Expiration Date, the Company
              shall
              provide the Holder with written notice of such event and the Holder
              shall have
              30 days from the date of the notice to exercise this Warrant. If the
              Holder
              shall fail to exercise this Warrant prior to the expiration of the
              30 day time
              period, the Warrant shall terminate and have no further force and
              effect.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">9.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Notices</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              Any
              notice or other communication required or permitted hereunder shall
              be in
              writing and shall be delivered personally, telegraphed, sent by facsimile
              transmission or sent by certified, registered or express mail, postage
              pre-paid.
              Any such notice shall be deemed given when so delivered personally,
              telegraphed,
              telexed or sent by facsimile transmission, or, if mailed, four days
              after the
              date of deposit in the United States mails, as follows:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">If
              to the
              Company, to:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">ZYNEX
              MEDICAL HOLDINGS, INC.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8100
              Southpark, Suite A-9</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Littleton,
              CO 80120</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Attention:
              Peter J. Leveton</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Facsimile:
              (800) 495-6695</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">with
              a
              copy to:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Holland
              &amp; Hart LLP</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">555
              Seventeenth Street</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Suite
              3200</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Denver,
              CO 80202</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Attn:
              Mark R. Levy</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Fax:
              (303) 295-8261</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">If
              to the
              Holder, to the address listed in the Purchase Agreement. </font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Any
              party
              may give notice in accordance with this Section to designate to another
              address
              or person for receipt of notices hereunder.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">10.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Supplements
              and Amendments; Whole Agreement</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              This
              Warrant may be amended or supplemented only by an instrument in writing
              signed
              by the parties hereto. This Warrant contains the full understanding
              of the
              parties with respect to the subject matter hereof and thereof and there
              are no
              representations, warranties, agreements or understandings other than
              expressly
              contained herein and therein.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div><br>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; WIDTH: 100%; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
              </div>
              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                </div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div><br>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">11.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Governing
              Law</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              This
              Warrant shall be deemed to be a contract made under the laws of the
              State of
              Tennessee. The Company and each Holder hereby submit to the jurisdiction
              of any
              state court of competent jurisdiction in and for Denver, Colorado,
              or in the
              United States District</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Court
              for
              the Colorado District sitting at Arapahoe County, Colorado in any action
              or
              proceeding arising out of or relating to this Agreement and agree that
              all
              claims in respect of the action or proceeding may be heard and determined
              in any
              such court; agree not to bring any action or proceeding arising out
              of or
              relating to this Agreement in any other court; waive any defense of
              inconvenient
              forum to the maintenance of any action or proceeding so brought and
              waive any
              bond, surety, or other security that might be required of any other
              Party with
              respect thereto; and agree that a final judgment in any action or proceeding
              so
              brought shall be conclusive and may be enforced by suit on the judgment
              or in
              any other manner provided by law or in equity.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">12.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Jury
              Trial Waiver</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              The
              Company and the Holder hereby waive a trial by jury in any action,
              proceeding or
              counterclaim brought by either of the parties hereto against the other
              in
              respect of any matter arising out or in connection with this
              Warrant.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">13.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Counterparts</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              This
              Warrant may be executed in any number of counterparts and each of such
              counterparts shall for all purposes be deemed to be an original, and
              all such
              counterparts shall together constitute but one and the same
              instrument.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">14.</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Descriptive
              Headings</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">.
              Descriptive headings of the several Sections of this Warrant are inserted
              for
              convenience only and shall not control or affect the meaning or construction
              of
              any of the provisions hereof.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">IN
              WITNESS WHEREOF, the Company has executed this Warrant as of the _____day
              of
              ______, 2006.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>ZYNEX
              MEDICAL HOLDINGS, INC.</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 216pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">By:&#160;
              ___________________________</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>&#160;</u></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Name:&#160;
              _________________________</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;&#160;
Title:&#160;
              __________________________&#160;<br></div>
            <div id="PGBRK" style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt">
              <div id="FTR">
                <div id="GLFTR" style="WIDTH: 100%" align="left">
                </div>
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              <div id="PN" style="PAGE-BREAK-AFTER: always">
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                </div>
                <div style="WIDTH: 100%; TEXT-ALIGN: center">
                  <hr style="COLOR: black" noshade size="2">
                </div>
              </div>
              <div id="HDR">
                <div id="GLHDR" style="WIDTH: 100%" align="right">
                </div>
              </div>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong><u>NOTICE
              OF EXERCISE</u></strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">TO:</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">ZYNEX
              MEDICAL HOLDINGS, INC.</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">8100
              Southpark, Suite A-9</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Littleton,
              CO 80120</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify"><font id="TAB1" style="MARGIN-LEFT: 36pt"></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Attention:
              Peter J. Leveton</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
            <div>
              <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                  <tr valign="top" style="line-height: 1.25;">
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                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">1.</font></div>
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                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                        undersigned hereby elects to purchase ______________ shares
                        (the
                        &#8220;</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><u>Shares</u></font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">&#8221;)
                        of the _________________ Stock of Zynex Medical Holdings,
                        Inc. pursuant to
                        the terms of the attached Warrant, and tenders herewith payment
                        of the
                        purchase price in full.</font></div>
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                  <tr valign="top" style="line-height: 1.25;">
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                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Please
                        issue a certificate or certificates representing the Shares
                        in the name of
                        the undersigned or in such other name as is specified
                        below:</font></div>
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              Name)</font></div>
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              __________________________________________&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font><font id="TAB2" style="COLOR: black; LETTER-SPACING: 27pt">&#160;</font></div>
            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="center">___________________________________________</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
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                  <tr valign="top" style="line-height: 1.25;">
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                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">3.</font></div>
                    </td>
                    <td>
                      <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="justify"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                        undersigned confirms that the Shares are being acquired for
                        the account of
                        the undersigned for investment only and not with a view to,
                        or for resale
                        in connection with, the distribution thereof and that the
                        undersigned has
                        no present intention of distributing or selling the
                        Shares.</font></div>
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            <div>__________________________<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;________________________________________________</div>
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oman">(Signature)</font></div>
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            <div><font style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;</font>&#160;<font id="TAB2" style="LETTER-SPACING: 9pt">&#160;&#160;&#160;
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<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>6
<FILENAME>zynex10qsbex311_8142006.htm
<DESCRIPTION>EXHIBIT 31.1
<TEXT>
<html>
  <head>
    <title>
      Exhibit 31.1
</title>
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  <body bgcolor="#ffffff"><div id="lockwidth" style="width: 800px">
    <div id="lockwidth" style="WIDTH: 800px">
      <div id="lockwidth" style="WIDTH: 800px">
        <div id="lockwidth" style="WIDTH: 800px">
          <div id="lockwidth" style="WIDTH: 800px">
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
            <div>
              <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
              <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exhibit
              31.1</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>CERTIFICATION
              PURSUANT TO</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>SECTION
              302 OF THE SARBANES-OXLEY ACT OF 2002</strong></font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman">I,
              Thomas
              Sandgaard, President, Chief Executive Officer and Treasurer of Zynex
              Medical
              Holdings, Inc, certify that:</font></div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
            <div>
              <div>
                <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                    <tr valign="top" style="line-height: 1.25;">
                      <td style="width: 36pt;">
                        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">1.</font></div>
                      </td>
                      <td>
                        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">I
                          have reviewed this quarterly report on Form 10-QSB of Zynex
                          Medical
                          Holdings, Inc;</font></div>
                      </td>
                    </tr>

                </table>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                  <div>
                    <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                        <tr valign="top" style="line-height: 1.25;">
                          <td style="width: 36pt;">
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2.</font></div>
                          </td>
                          <td>
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Based
                                on my knowledge, this report does not contain any
                                untrue statement of a
                                material fact or omit to state a material fact necessary
                                to make the
                                statements made, in light of the circumstances under
                                which such statements
                                were made, not misleading with respect to the period
                                covered by this
                                report;</font></div>
                            </div>
                          </td>
                        </tr>

                    </table><br></div>
                </div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">3.</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Based
                            on my knowledge, the financial statements, and other
                            financial information
                            included in this report, fairly present in all material
                            respects the
                            financial condition, results of operations and cash flows
                            of the small
                            business issuer as of, and for, the periods presented
                            in this
                            report;</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                  <div>
                    <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                        <tr valign="top" style="line-height: 1.25;">
                          <td style="width: 36pt;">
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.</font></div>
                          </td>
                          <td>
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                              small business issuer's other certifying officer(s)
                              and I are responsible
                              for establishing and maintaining disclosure controls
                              and procedures (as
                              defined in Exchange Act Rules 13a-15(e) and 15d-15(d))
                              for the small
                              business issuer and have:</font></div>
                          </td>
                        </tr>

                    </table>
                  </div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">designed
                            such disclosure controls and procedures, or caused such
                            disclosure
                            controls and procedures to be designed under our supervision,
                            to ensure
                            that material information relating to the small business
                            issuer, including
                            its consolidated subsidiaries, is made known to us by
                            others within those
                            entities, particularly during the period in which this
                            report is being
                            prepared;</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">evaluated
                            the effectiveness of the small business issuer's disclosure
                            controls and
                            procedures and presented in this report our conclusions
                            about the
                            effectiveness of the disclosure controls and procedures,
                            as of the end of
                            the period covered by this report based on such evaluation;
                            and</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(c)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">disclosed
                            in this report any change in the small business issuer's
                            internal control
                            over financial reporting that occurred during the small
                            business issuer's
                            most recent fiscal quarter (the small business issuer's
                            fourth fiscal
                            quarter in the case of an annual report) that has materially
                            affected, or
                            is reasonably likely to materially affect, the small
                            business issuer's
                            internal control over financial reporting;
                            and</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                    <div>
                      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                          <tr valign="top" style="line-height: 1.25;">
                            <td style="width: 36pt;">
                              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5.</font></div>
                            </td>
                            <td>
                              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">The
                                small business issuer's other certifying officer(s)
                                and I
                                have disclosed, based on our most recent evaluation
                                of internal control
                                over financial reporting, to the small business issuer's
                                auditors and the
                                audit committee of the small business issuer's board
                                of directors (or
                                persons performing the equivalent
                                functions):</div>
                            </td>
                          </tr>

                      </table>
                    </div>
                  </div>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">all
                            significant deficiencies and material weaknesses in the
                            design or
                            operation of internal control over financial reporting
                            which are
                            reasonably likely to adversely affect the small business
                            issuer's ability
                            to record, process, summarize and report financial information;
                            and</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">any
                            fraud, whether or not material, that involves management
                            or other
                            employees who have a significant role in the small business
                            issuer's
                            internal control over financial
                            reporting.</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
              </div>
              <div>&#160;</div>
            </div>
            <div>
              <table cellpadding="0" cellspacing="0" width="100%">

                  <tr>
                    <td align="left" valign="top" width="45%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="top" width="1%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="top" width="44%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr>
                    <td align="left" valign="top" width="45%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="top" width="1%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="top" width="44%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                  </tr>
                  <tr>
                    <td align="left" valign="top" width="45%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dated&#160;August
                        17, 2006</font></div>
                    </td>
                    <td align="left" valign="top" width="1%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="top" width="44%" style="border-bottom: black thin solid;">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;Thomas
                        Sandgaard</font></div>
                    </td>
                  </tr>
                  <tr>
                    <td align="left" colspan="2" valign="top" width="46%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="top" width="44%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Thomas
                        Sandgaard,</font></div>
                    </td>
                  </tr>
                  <tr>
                    <td align="left" colspan="2" valign="top" width="46%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                    </td>
                    <td align="left" valign="top" width="44%">
                      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">President
                        and Chief Executive Officer,
                        Treasurer</font></div>
                    </td>
                  </tr>

              </table>
            </div>
            <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>7
<FILENAME>zynex10qsbex312_8142006.htm
<DESCRIPTION>EXHIBIT 31.2
<TEXT>
<html>
  <head>
    <title>
      Exhibit 31.2
</title>
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    <div id="lockwidth" style="WIDTH: 800px">
      <div id="lockwidth" style="WIDTH: 800px">
        <div id="lockwidth" style="WIDTH: 800px">
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            <div id="lockwidth" style="LEFT: 168px; WIDTH: 800px; TOP: 609px"><br>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
              <div>
                <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
                <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
              </div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right">&#160;</div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exhibit
                31.2</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman"><strong>CERTIFICATION
                PURSUANT TO</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman"><strong>SECTION
                302 OF THE SARBANES-OXLEY ACT OF 2002</strong></font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 11pt; FONT-FAMILY: Times New Roman">I,
                Peter
                J. Leveton, Chief Financial Officer of Zynex Medical Holdings, Inc,
                certify
                that:</font></div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="justify">&#160;</div>
              <div>
                <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                    <tr valign="top" style="line-height: 1.25;">
                      <td style="width: 36pt;">
                        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">1.</font></div>
                      </td>
                      <td>
                        <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">I
                          have reviewed this quarterly report on Form 10-QSB of Zynex
                          Medical
                          Holdings, Inc;</font></div>
                      </td>
                    </tr>

                </table>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                  <div>
                    <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                        <tr valign="top" style="line-height: 1.25;">
                          <td style="width: 36pt;">
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2.</font></div>
                          </td>
                          <td>
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">
                              <div align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Based
                                on my knowledge, this report does not contain any
                                untrue statement of a
                                material fact or omit to state a material fact necessary
                                to make the
                                statements made, in light of the circumstances under
                                which such statements
                                were made, not misleading with respect to the period
                                covered by this
                                report;</font></div>
                            </div>
                          </td>
                        </tr>

                    </table><br></div>
                </div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">3.</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Based
                            on my knowledge, the financial statements, and other
                            financial information
                            included in this report, fairly present in all material
                            respects the
                            financial condition, results of operations and cash flows
                            of the small
                            business issuer as of, and for, the periods presented
                            in this
                            report;</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                  <div>
                    <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                        <tr valign="top" style="line-height: 1.25;">
                          <td style="width: 36pt;">
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">4.</font></div>
                          </td>
                          <td>
                            <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
                              small business issuer's other certifying officer(s)
                              and I are responsible
                              for establishing and maintaining disclosure controls
                              and procedures (as
                              defined in Exchange Act Rules 13a-15(e) and 15d-15(d))
                              for the small
                              business issuer and have:</font></div>
                          </td>
                        </tr>

                    </table>
                  </div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                </div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">designed
                            such disclosure controls and procedures, or caused such
                            disclosure
                            controls and procedures to be designed under our supervision,
                            to ensure
                            that material information relating to the small business
                            issuer, including
                            its consolidated subsidiaries, is made known to us by
                            others within those
                            entities, particularly during the period in which this
                            report is being
                            prepared;</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">evaluated
                            the effectiveness of the small business issuer's disclosure
                            controls and
                            procedures and presented in this report our conclusions
                            about the
                            effectiveness of the disclosure controls and procedures,
                            as of the end of
                            the period covered by this report based on such evaluation;
                            and</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 72pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(c)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">disclosed
                            in this report any change in the small business issuer's
                            internal control
                            over financial reporting that occurred during the small
                            business issuer's
                            most recent fiscal quarter (the small business issuer's
                            fourth fiscal
                            quarter in the case of an annual report) that has materially
                            affected, or
                            is reasonably likely to materially affect, the small
                            business issuer's
                            internal control over financial reporting;
                            and</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                  <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">
                    <div>
                      <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                          <tr valign="top" style="line-height: 1.25;">
                            <td style="width: 36pt;">
                              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">5.</font></div>
                            </td>
                            <td>
                              <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left">The
                                small business issuer's other certifying officer(s)
                                and I
                                have disclosed, based on our most recent evaluation
                                of internal control
                                over financial reporting, to the small business issuer's
                                auditors and the
                                audit committee of the small business issuer's board
                                of directors (or
                                persons performing the equivalent
                                functions):</div>
                            </td>
                          </tr>

                      </table>
                    </div>
                  </div>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(a)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">all
                            significant deficiencies and material weaknesses in the
                            design or
                            operation of internal control over financial reporting
                            which are
                            reasonably likely to adversely affect the small business
                            issuer's ability
                            to record, process, summarize and report financial information;
                            and</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
                <div>
                  <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

                      <tr valign="top" style="line-height: 1.25;">
                        <td style="width: 36pt;">&#160;</td>
                        <td style="width: 36pt;">
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">(b)</font></div>
                        </td>
                        <td>
                          <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">any
                            fraud, whether or not material, that involves management
                            or other
                            employees who have a significant role in the small business
                            issuer's
                            internal control over financial
                            reporting.</font></div>
                        </td>
                      </tr>

                  </table>
                </div>
              </div>
              <div>&#160;</div>
              <div>&#160;</div>
              <div>
                <table cellpadding="0" cellspacing="0" width="100%">

                    <tr>
                      <td align="left" valign="top" width="45%">&#160;</td>
                      <td align="left" valign="top" width="1%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                      <td align="left" valign="top" width="44%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                    </tr>
                    <tr>
                      <td align="left" valign="top" width="45%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                      <td align="left" colspan="2" valign="top" width="45%">&#160;</td>
                    </tr>
                    <tr>
                      <td align="left" valign="top" width="45%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                      <td align="left" valign="top" width="1%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                      <td align="left" valign="top" width="44%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                    </tr>
                    <tr>
                      <td align="left" valign="top" width="45%" style="border-bottom: #ffffff solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dated&#160;August
                          17, 2006</font></div>
                      </td>
                      <td align="left" valign="top" width="1%" style="border-bottom: #ffffff solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                      <td align="left" valign="top" width="44%" style="border-bottom: black thin solid;">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;
                          Peter J. Leveton</font></div>
                      </td>
                    </tr>
                    <tr>
                      <td align="left" colspan="2" valign="top" width="46%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                      <td align="left" valign="top" width="44%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Peter
                          J. Leveton,</font></div>
                      </td>
                    </tr>
                    <tr>
                      <td align="left" colspan="2" valign="top" width="46%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                      </td>
                      <td align="left" valign="top" width="44%">
                        <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Chief
                          Financial Officer</font></div>
                      </td>
                    </tr>

                </table>
              </div>
              <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
              <div>
                <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="1">
                <hr style="MARGIN-TOP: -13px; COLOR: #000000" noshade size="4">
              </div>
            </div>
          </div>
        </div>
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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32
<SEQUENCE>8
<FILENAME>zynex10qsbex32_8142006.htm
<DESCRIPTION>EXHIBIT 32
<TEXT>
<html>
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    <title>
      Exhibit 32
</title>
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  <body bgcolor="#ffffff"><div id="lockwidth" style="width: 800px">
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      <div>&#160;</div>
      <div>&#160;</div>
      <div>
        <hr style="MARGIN-TOP: -5px; COLOR: #000000" noshade size="4">
        <hr style="MARGIN-TOP: -10px; COLOR: #000000" noshade size="1">
      </div>
      <div><br>&#160;</div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Exhibit
        32</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">CERTIFICATION
        PURSUANT TO</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">18
        U.S.C.
        SECTION 1350, AS ADOPTED PURSUANT TO</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="center"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">SECTION
        906 OF THE SARBANES-OXLEY ACT OF 2002</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">The
        undersigned, Thomas Sandgaard, President, Chief Executive Officer and Treasurer,
        and Peter J. Leveton, </font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Chief
        Financial Officer</font><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">
        of Zynex
        Medical Holdings, Inc., hereby certifies, pursuant to 18 U.S.C. Section 1350,
        as
        adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
        that:</font></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
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            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">1.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">the
                  quarterly report on Form 10-QSB of Zynex Medical Holdings, Inc.,
                  for the
                  period ended June 30, 2006 (the &#8220;Report&#8221;) fully complies with the
                  requirements of Section 13(a) or 15(d) of the Securities Exchange
                  Act of
                  1934; and</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 36pt; TEXT-INDENT: -36pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table align="center" border="0" cellpadding="0" cellspacing="0" id="hangingindent" width="100%">

            <tr valign="top" style="line-height: 1.25;">
              <td style="width: 36pt;">
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">2.</font></div>
              </td>
              <td>
                <div style="MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">the
                  information contained in the Report fairly presents, in all material
                  respects, the financial condition and results of operations of
                  Zynex
                  Medical Holdings, Inc.</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="45%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="45%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" colspan="2" valign="top" width="45%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="45%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="45%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dated&#160;August
                  17, 2006</font></div>
              </td>
              <td align="left" valign="top" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;Thomas
                  Sandgaard</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="top" width="46%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Thomas
                  Sandgaard,</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="top" width="46%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">President,
                  Chief Executive Officer and Treasurer
</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="right"><br></div>
      <div>
        <table cellpadding="0" cellspacing="0" width="100%">

            <tr>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" colspan="2" valign="top" width="46%">&#160;</td>
            </tr>
            <tr>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="1%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
            </tr>
            <tr>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Dated&#160;August&#160;17,
                  2006</font></div>
              </td>
              <td align="left" valign="top" width="1%">&#160;</td>
              <td align="left" valign="top" width="44%" style="border-bottom: black thin solid;">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">/s/&#160;Peter
                  J. Leveton</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="top" width="45%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Peter
                  J. Leveton,</font></div>
              </td>
            </tr>
            <tr>
              <td align="left" colspan="2" valign="top" width="45%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left">&#160;</div>
              </td>
              <td align="left" valign="top" width="44%">
                <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><font style="DISPLAY: inline; FONT-SIZE: 12pt; FONT-FAMILY: Times New Roman">Chief
                  Financial Officer</font></div>
              </td>
            </tr>

        </table>
      </div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
      <div style="DISPLAY: block; MARGIN-LEFT: 0pt; TEXT-INDENT: 0pt; LINE-HEIGHT: 1.25; MARGIN-RIGHT: 0pt" align="left"><br></div>
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