BASIS OF PRESENTATION	9 Months Ended
Sep. 30, 2025
BASIS OF PRESENTATION
BASIS OF PRESENTATION	(1) BASIS OF PRESENTATION Organization Zynex, Inc. (a Nevada corporation) has its headquarters in Englewood, Colorado. The term “the Company” refers to Zynex, Inc. and its active and inactive subsidiaries. The Company operates in one primary business segment, medical devices which include electrotherapy and pain management products. As of September 30, 2025, the Company’s only active subsidiaries are Zynex Medical, Inc. (“ZMI,” a wholly-owned Colorado corporation) through which the Company conducts most of its operations, and Zynex Monitoring Solutions, Inc. (“ZMS,” a wholly-owned Colorado corporation). Nature of Business Zynex Medical Through ZMI, the Company designs, manufactures, and markets medical devices that treat chronic and acute pain, as well as activate and exercise muscles for rehabilitative purposes with electrical stimulation. The Company’s devices are intended for pain management to reduce reliance on medications and provide rehabilitation and increased mobility through the utilization of non-invasive muscle stimulation, electromyography technology, interferential current (“IFC”), neuromuscular electrical stimulation (“NMES”) and transcutaneous electrical nerve stimulation (“TENS”). All of the Company’s medical devices are designed to be patient friendly and designed for home use. The devices are small, portable, battery operated, and include an electrical pulse generator which is connected to the body via electrodes. All of the medical devices are marketed in the U.S. and are subject to FDA regulation and approval. All of the products require a physician’s prescription before they can be dispensed in the U.S. The Company’s primary product is the NexWave device. The NexWave device is marketed to physicians and therapists by the Company’s field sales representatives. The NexWave requires consumable supplies, such as electrodes and batteries, which are shipped to patients on a recurring monthly basis, as needed. The Company also distributes private labeled complementary rehabilitation products such as back, knee and wrist braces, cervical and lumbar traction, and hot/cold therapy (“private labeled rehabilitation products”). During the nine months ended September 30, 2025 and 2024, the Company generated all of its revenue in North America from sales of its devices and supplies to patients and healthcare providers. Zynex Monitoring Solutions Through ZMS, the Company has developed a laser-based, noninvasive monitoring technology (acquired through Kestrel Labs, Inc.) and previously submitted a 510(k) application for its NiCO™ CO-Oximeter (“NiCO”) to the U.S. Food and Drug Administration. In light of the Company’s revised commercialization strategy for NiCO, discussed below, the Company is seeking a commercialization partner to pursue market entry rather than commercializing the device independently. Recent Events Zynex Monitoring Solutions On October 1, 2025, the Company announced a change to the commercialization strategy for its ZMS subsidiary, which develops noninvasive, laser-based patient-monitoring technologies acquired through the December 2021 purchase of Kestrel Labs, Inc. The Company determined it would no longer independently commercialize NiCO. Instead, the Company plans to pursue commercialization through one or more strategic partners. As part of this initiative, the Company implemented a workforce reduction within ZMS on October 1, 2025, eliminating substantially all positions and ceasing most internal R&D and manufacturing activities. On November 1, 2025, the Company eliminated all remaining positions within ZMS and ceased independent operations. As a result, the Company expects to incur aggregate pre-tax cash severance charges of approximately $0.7 million in the fourth quarter of 2025. The Company recognized pre-tax non-cash asset impairment charges of $30.7 million, during the quarter ended September 30, 2025, primarily related to goodwill, definite-lived intangible assets and certain fixed assets associated with the ZMS business (See Note 7 – Impairment). Tricare and workforce reductions During the quarter ended March 31, 2025 the Company was notified that the Defense Health Agency (“DHA”) was temporarily suspending Tricare claims processing and payments to the Company pursuant to 32 C.F.R. § 199.9(h). DHA informed the Company that the suspension is based on allegations that the Company misrepresented claims for supplies and equipment billed to the Tricare program, that the Company misrepresented diagnoses to justify a requirement for TENS units, and that the Company lacked physician orders supporting the medical need for the replenishment of TENS supplies. In response to the ongoing temporary suspension of payments and the related uncertainty regarding the timing of resolution, the Company implemented a workforce reduction of approximately 15% of the Company’s total number of employees during the quarter ended March 31, 2025, to align its operating expenses with current revenue levels. In April 2025, the Company met with DHA to present evidence in opposition to the temporary Tricare payment suspension. In June 2025, DHA notified the Company that the temporary Tricare payment suspension would continue pending completion of DHA’s investigation. Also in June 2025, the Company executed a further workforce reduction affecting 86 corporate roles, representing approximately 14% of its total employees. During the quarter ended September 30, 2025, the Company determined that the prior workforce reduction had negatively impacted device orders and corresponding supplies, new patients onboarding and order completion and, as a result, rehired certain previously impacted employees to support service levels. Tricare historically represented approximately 20-25% of the Company’s annual revenue and cash collections from Tricare were $48.8 million and $38.8 million during the years ended December 31, 2024 and 2023, respectively. Because DHA informed the Company that any participation agreement with its patients remains in full force and effect, the Company continues to support both existing patients and new patients as prescriptions are received. During the nine months ended September 30, 2025, the Company received $2.2 million in payments from TriWest Healthcare Alliance (“TriWest”), the contractor for the Tricare West Region, and $0.6 million in payments from Humana Military, the contractor for the Tricare East Region. TriWest and Humana Military have sought repayment of these amounts. The Company reduced its revenue by $2.8 million during the quarter ended September 30, 2025 related to Tricare payments it received from TriWest and Humana Military during the time period of the Company’s Tricare payment suspension. During the nine months ended September 30, 2025, as a result of the adjustment, the Company did not recognize any revenue from Tricare, all other fulfillments and related revenue have been fully reserved and we have no reported receivables related to Tricare as of September 30, 2025. SEC request for documents On June 11, 2025, the Company received a voluntary (non-subpoena) request for documents from the Securities and Exchange Commission (the “SEC”) in connection with an investigation that it is conducting into the Company to determine whether violations of federal securities laws have occurred. Subsequently, on June 30, 2025 and September 4, 2025, the Company received additional voluntary requests for documents from the SEC. The Company is cooperating with the SEC in its investigation, and is, on a rolling basis, providing all responsive documents to the requests. Liquidity and Going Concern The Company has incurred net losses of $73.3 million for the nine months ended September 30, 2025 compared with net income of $3.6 million during the same period in 2024. As of September 30, 2025, the Company had $13.3 million in cash and cash equivalents and $6.7 million in accounts receivable. As discussed herein, the Company is also subject to an ongoing suspension of payments from Tricare and is subject to various refund demands from payers, which may materially impact the Company’s liquidity. During 2025 and through the third quarter of 2025, changes to certain payers’ claim submission and review practices have resulted in unanticipated denials and payment delays, which has negatively impacted our revenue. Based on the Company's cash and cash equivalents as of September 30, 2025 and the Company's current and forecasted level of operations and cash flows, management believes that our existing cash resources are not sufficient to support planned operations for the next year from the issuance of these unaudited condensed consolidated financial statements. The Company’s ability to continue as a going concern is dependent upon its ability to obtain the consent from creditors or terminating, amending or refinancing the agreements governing the Company’s $60.0 million outstanding 2023 Convertible Senior Notes (as defined herein) which mature on May 15, 2026 and to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and to generate profitable operations in the future (such alternatives, a “Restructuring”). The Company has retained Province, LLC as its financial advisor to assist the Company in preparing for, analyzing, evaluating and arranging discussions with its creditors, including the holders of our 2023 Convertible Senior Notes, and other stakeholders to explore several alternatives for a Restructuring. The Company has recently begun discussions with certain creditors holding the 2023 Convertible Senior Notes and anticipates beginning discussions with other stakeholders and investors with respect to a Restructuring. While certain discussions are ongoing, the Company has not reached an agreement with respect to such a Restructuring and there can be no assurances that an agreement with respect to a Restructuring will be reached in the future. The Company has elected to not make an interest payment in the amount of approximately $1.5 million (the “Interest Payment”) due on November 15, 2025 (and payable on November 17, 2025, as November 15, 2025 is a non-business day) with respect to the 2023 Convertible Senior Notes. Under the indenture governing 2023 Convertible Senior Notes, the Company has a 30-day grace period to make the Interest Payment before such non-payment constitutes an “event of default” with respect to the 2023 Convertible Senior Notes. The Company may elect to make the Interest Payment on or prior to the expiration of the 30-day grace period. However, the failure of the Company to make the Interest Payment on or prior to the expiration of the 30-day grace period would result in an event of default with respect to the 2023 Convertible Senior Notes which may result in the acceleration of the 2023 Convertible Senior Notes and the Company filing for bankruptcy. The Company’s unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern. The Company is subject to various demands from payers, the amount cannot be quantified and the outcome is unknown. There can be no assurance that we will be able to amend or refinance the 2023 Convertible Senior Notes and if we are able to, that the terms will be acceptable or advantageous to us or that we will satisfactorily resolve the payment suspension and refund demands referenced above. If we are unable to redeem or refinance the 2023 Convertible Senior Notes and/or resolve the payment suspension and refund demands referenced above, this could have a material adverse impact on our operations. In addition, there can be no assurance that the Company will be able to raise additional capital to fund operations with terms acceptable to the Company, or at all. Because certain elements of management’s plans to mitigate the conditions that raised substantial doubt about the Company’s ability to continue as a going concern are outside of the Company’s control, including the ability to raise capital through an equity or other financing, those elements cannot be considered probable according to ASC 205-40, and therefore cannot be considered in the evaluation of mitigating factors. As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for 12 months from the date the unaudited condensed consolidated financial statements are issued. If we are not successful in improving our liquidity position, we may be required to significantly scale back our operations or pursue the sale of our company to a third party at a price that may result in a loss on investment for our stockholders, or file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, operating results and prospects. Unaudited Condensed Consolidated Financial Statements The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. A description of the Company’s accounting policies and other financial information is included in the audited consolidated financial statements as filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (as amended, the “2024 Form 10-K”). Amounts as of December 31, 2024, are derived from those audited consolidated financial statements. These interim condensed consolidated financial statements should be read in conjunction with the annual audited financial statements, accounting policies and notes thereto, included in the Company’s 2024 Form 10-K. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2025 and the results of its operations and its cash flows for the periods presented. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be achieved for a full fiscal year and cannot be used to indicate financial performance for the entire year.

BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2025

(1) BASIS OF PRESENTATION

Organization

Zynex, Inc. (a Nevada corporation) has its headquarters in Englewood, Colorado. The term “the Company” refers to Zynex, Inc. and its active and inactive subsidiaries. The Company operates in one primary business segment, medical devices which include electrotherapy and pain management products. As of September 30, 2025, the Company’s only active subsidiaries are Zynex Medical, Inc. (“ZMI,” a wholly-owned Colorado corporation) through which the Company conducts most of its operations, and Zynex Monitoring Solutions, Inc. (“ZMS,” a wholly-owned Colorado corporation).

Nature of Business

Zynex Medical

Through ZMI, the Company designs, manufactures, and markets medical devices that treat chronic and acute pain, as well as activate and exercise muscles for rehabilitative purposes with electrical stimulation. The Company’s devices are intended for pain management to reduce reliance on medications and provide rehabilitation and increased mobility through the utilization of non-invasive muscle stimulation, electromyography technology, interferential current (“IFC”), neuromuscular electrical stimulation (“NMES”) and transcutaneous electrical nerve stimulation (“TENS”). All of the Company’s medical devices are designed to be patient friendly and designed for home use. The devices are small, portable, battery operated, and include an electrical pulse generator which is connected to the body via electrodes. All of the medical devices are marketed in the U.S. and are subject to FDA regulation and approval. All of the products require a physician’s prescription before they can be dispensed in the U.S. The Company’s primary product is the NexWave device. The NexWave device is marketed to physicians and therapists by the Company’s field sales representatives. The NexWave requires consumable supplies, such as electrodes and batteries, which are shipped to patients on a recurring monthly basis, as needed. The Company also distributes private labeled complementary rehabilitation products such as back, knee and wrist braces, cervical and lumbar traction, and hot/cold therapy (“private labeled rehabilitation products”).

During the nine months ended September 30, 2025 and 2024, the Company generated all of its revenue in North America from sales of its devices and supplies to patients and healthcare providers.

Zynex Monitoring Solutions

Through ZMS, the Company has developed a laser-based, noninvasive monitoring technology (acquired through Kestrel Labs, Inc.) and previously submitted a 510(k) application for its NiCO™ CO-Oximeter (“NiCO”) to the U.S. Food and Drug Administration. In light of the Company’s revised commercialization strategy for NiCO, discussed below, the Company is seeking a commercialization partner to pursue market entry rather than commercializing the device independently.

Recent Events

Zynex Monitoring Solutions

On October 1, 2025, the Company announced a change to the commercialization strategy for its ZMS subsidiary, which develops noninvasive, laser-based patient-monitoring technologies acquired through the December 2021 purchase of Kestrel Labs, Inc. The Company determined it would no longer independently commercialize NiCO. Instead, the Company plans to pursue commercialization through one or more strategic partners.

As part of this initiative, the Company implemented a workforce reduction within ZMS on October 1, 2025, eliminating substantially all positions and ceasing most internal R&D and manufacturing activities. On November 1, 2025, the Company eliminated all remaining positions within ZMS and ceased independent operations. As a result, the Company expects to incur aggregate pre-tax cash severance charges of approximately $0.7 million in the fourth quarter of 2025. The Company recognized pre-tax non-cash asset impairment charges of $30.7 million, during the quarter ended September 30, 2025, primarily related to goodwill, definite-lived intangible assets and certain fixed assets associated with the ZMS business (See Note 7 – Impairment).

Tricare and workforce reductions

During the quarter ended March 31, 2025 the Company was notified that the Defense Health Agency (“DHA”) was temporarily suspending Tricare claims processing and payments to the Company pursuant to 32 C.F.R. § 199.9(h). DHA informed the Company that the suspension is based on allegations that the Company misrepresented claims for supplies and equipment billed to the Tricare program, that the Company misrepresented diagnoses to justify a requirement for TENS units, and that the Company lacked physician orders supporting the medical need for the replenishment of TENS supplies.

In response to the ongoing temporary suspension of payments and the related uncertainty regarding the timing of resolution, the Company implemented a workforce reduction of approximately 15% of the Company’s total number of employees during the quarter ended March 31, 2025, to align its operating expenses with current revenue levels.

In April 2025, the Company met with DHA to present evidence in opposition to the temporary Tricare payment suspension. In June 2025, DHA notified the Company that the temporary Tricare payment suspension would continue pending completion of DHA’s investigation. Also in June 2025, the Company executed a further workforce reduction affecting 86 corporate roles, representing approximately 14% of its total employees. During the quarter ended September 30, 2025, the Company determined that the prior workforce reduction had negatively impacted device orders and corresponding supplies, new patients onboarding and order completion and, as a result, rehired certain previously impacted employees to support service levels.

Tricare historically represented approximately 20-25% of the Company’s annual revenue and cash collections from Tricare were $48.8 million and $38.8 million during the years ended December 31, 2024 and 2023, respectively. Because DHA informed the Company that any participation agreement with its patients remains in full force and effect, the Company continues to support both existing patients and new patients as prescriptions are received.

During the nine months ended September 30, 2025, the Company received $2.2 million in payments from TriWest Healthcare Alliance (“TriWest”), the contractor for the Tricare West Region, and $0.6 million in payments from Humana Military, the contractor for the Tricare East Region. TriWest and Humana Military have sought repayment of these amounts. The Company reduced its revenue by $2.8 million during the quarter ended September 30, 2025 related to Tricare payments it received from TriWest and Humana Military during the time period of the Company’s Tricare payment suspension. During the nine months ended September 30, 2025, as a result of the adjustment, the Company did not recognize any revenue from Tricare, all other fulfillments and related revenue have been fully reserved and we have no reported receivables related to Tricare as of September 30, 2025.

SEC request for documents

On June 11, 2025, the Company received a voluntary (non-subpoena) request for documents from the Securities and Exchange Commission (the “SEC”) in connection with an investigation that it is conducting into the Company to determine whether violations of federal securities laws have occurred. Subsequently, on June 30, 2025 and September 4, 2025, the Company received additional voluntary requests for documents from the SEC. The Company is cooperating with the SEC in its investigation, and is, on a rolling basis, providing all responsive documents to the requests.

Liquidity and Going Concern

The Company has incurred net losses of $73.3 million for the nine months ended September 30, 2025 compared with net income of $3.6 million during the same period in 2024. As of September 30, 2025, the Company had $13.3 million in cash and cash equivalents and $6.7 million in accounts receivable. As discussed herein, the Company is also subject to an ongoing suspension of payments from Tricare and is subject to various refund demands from payers, which may materially impact the Company’s liquidity. During 2025 and through the third quarter of 2025, changes to certain payers’ claim submission and review practices have resulted in unanticipated denials and payment delays, which has negatively impacted our revenue. Based on the Company's cash and cash equivalents as of September 30, 2025 and the Company's current and forecasted level of operations and cash flows, management believes that our existing cash resources are not sufficient to support planned operations for the next year from the issuance of these unaudited condensed consolidated financial statements.

The Company’s ability to continue as a going concern is dependent upon its ability to obtain the consent from creditors or terminating, amending or refinancing the agreements governing the Company’s $60.0 million outstanding 2023 Convertible Senior Notes (as defined herein) which mature on May 15, 2026 and to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due, and to generate profitable operations in the future (such alternatives, a

“Restructuring”). The Company has retained Province, LLC as its financial advisor to assist the Company in preparing for, analyzing, evaluating and arranging discussions with its creditors, including the holders of our 2023 Convertible Senior Notes, and other stakeholders to explore several alternatives for a Restructuring. The Company has recently begun discussions with certain creditors holding the 2023 Convertible Senior Notes and anticipates beginning discussions with other stakeholders and investors with respect to a Restructuring. While certain discussions are ongoing, the Company has not reached an agreement with respect to such a Restructuring and there can be no assurances that an agreement with respect to a Restructuring will be reached in the future.

The Company has elected to not make an interest payment in the amount of approximately $1.5 million (the “Interest Payment”) due on November 15, 2025 (and payable on November 17, 2025, as November 15, 2025 is a non-business day) with respect to the 2023 Convertible Senior Notes. Under the indenture governing 2023 Convertible Senior Notes, the Company has a 30-day grace period to make the Interest Payment before such non-payment constitutes an “event of default” with respect to the 2023 Convertible Senior Notes. The Company may elect to make the Interest Payment on or prior to the expiration of the 30-day grace period. However, the failure of the Company to make the Interest Payment on or prior to the expiration of the 30-day grace period would result in an event of default with respect to the 2023 Convertible Senior Notes which may result in the acceleration of the 2023 Convertible Senior Notes and the Company filing for bankruptcy.

The Company’s unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets and liabilities that may result in the Company not being able to continue as a going concern. The Company is subject to various demands from payers, the amount cannot be quantified and the outcome is unknown.

There can be no assurance that we will be able to amend or refinance the 2023 Convertible Senior Notes and if we are able to, that the terms will be acceptable or advantageous to us or that we will satisfactorily resolve the payment suspension and refund demands referenced above. If we are unable to redeem or refinance the 2023 Convertible Senior Notes and/or resolve the payment suspension and refund demands referenced above, this could have a material adverse impact on our operations. In addition, there can be no assurance that the Company will be able to raise additional capital to fund operations with terms acceptable to the Company, or at all. Because certain elements of management’s plans to mitigate the conditions that raised substantial doubt about the Company’s ability to continue as a going concern are outside of the Company’s control, including the ability to raise capital through an equity or other financing, those elements cannot be considered probable according to ASC 205-40, and therefore cannot be considered in the evaluation of mitigating factors. As a result, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for 12 months from the date the unaudited condensed consolidated financial statements are issued.

If we are not successful in improving our liquidity position, we may be required to significantly scale back our operations or pursue the sale of our company to a third party at a price that may result in a loss on investment for our stockholders, or file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, operating results and prospects.

Unaudited Condensed Consolidated Financial Statements

The unaudited condensed consolidated financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included herein are adequate to make the information presented not misleading. A description of the Company’s accounting policies and other financial information is included in the audited consolidated financial statements as filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (as amended, the “2024 Form 10-K”). Amounts as of December 31, 2024, are derived from those audited consolidated financial statements. These interim condensed consolidated financial statements should be read in conjunction with the annual audited financial statements, accounting policies and notes thereto, included in the Company’s 2024 Form 10-K.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company as of September 30, 2025 and the results of its operations and its cash flows for the periods presented. The results of operations for the nine months ended September 30, 2025 are not necessarily indicative of the results that may be achieved for a full fiscal year and cannot be used to indicate financial performance for the entire year.