Zynex Inc. (OTCPK: ZYXIQ) investors who purchased shares between February 25, 2021, and December 15, 2025, have a final deadline of April 21, 2026, to seek the role of lead plaintiff in a federal securities class action, according to Faruqi & Faruqi, LLP. The law firm is investigating potential claims against the company, alleging that Zynex and its executives violated federal securities laws by making false or misleading statements.

Allegations of Fraudulent Practices

The lawsuit, filed against Zynex, alleges that the company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that Zynex shipped products, including electrodes, in excess of need. As a result, the company allegedly inflated its revenue, leading to scrutiny from insurers, including Tricare, which is the health insurance program for the U.S. military and Zynex’s largest customer, accounting for 20-25% of revenue.

The complaint further states that Zynex faced legal action from Travelers, which filed a lawsuit in the Superior Court of California in August 2023, alleging that Zynex and its executives engaged in a fraudulent overbilling scheme. Travelers sought more than $23 million in damages and civil penalties related to hundreds of fraudulent claims between 2018 and 2023.

According to the lawsuit, Zynex’s management prioritized aggressive sales strategies over compliance with industry laws, rules, and regulations. The firm also alleges that the company was not committed to maintaining a strong internal control environment and that its order growth was a result of illegal overbilling.

Market Reactions and Leadership Changes

On March 11, 2025, Zynex reported its fourth quarter and full year 2024 financial results, revealing a significant revenue shortfall in the quarter, which it attributed to slower-than-normal payments from certain payers. Tricare also temporarily suspended payments as it reviewed prior claims. On March 12, 2025, Zynex’s stock price fell $3.59 per share, or 51.3%, to close at $3.41 per share on unusually heavy trading volume.

Then, on July 31, 2025, the full extent of Zynex’s misdeeds were revealed when the company acknowledged it had not been in compliance with industry regulations. The company also announced a transformational leadership change, appointing new CEO Steven Dyson to replace Sandgaard and announcing the departure of CFO Daniel Moorhead. The company temporarily suspended revenue and profitability guidance.

On August 1, 2025, Zynex’s stock price fell from $2.23 per share to $1.26 per share, a 45% decline in heavy trading volume. The firm’s financial disclosures and leadership changes triggered significant market uncertainty and investor concern.

Lead Plaintiff Deadline and Legal Process

The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class and is adequate and typical of class members. This investor will direct and oversee the litigation on behalf of the putative class. Any member of the putative class may move the court to serve as lead plaintiff through their chosen counsel or remain an absent class member. According to the firm, your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.

Faruqi & Faruqi, LLP, a leading national securities law firm with offices in New York, Pennsylvania, California, and Georgia, encourages anyone with information regarding Zynex’s conduct to contact the firm. This includes whistleblowers, former employees, shareholders, and others. The firm has recovered hundreds of millions of dollars for investors since its founding in 1995.

Investors interested in learning more about the Zynex, Inc. class action can visit www.faruqilaw.com/ZYXIQ or contact Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310).