ZYXIQ Shareholders - Lead Plaintiff Deadline: April 21, 2026

Zynex, Inc. Class Action Lawsuit – ZYXI

Introduction to Zynex, Inc. (ZYXI) Securities Class Action Lawsuit

A federal securities fraud class action has been filed against certain Zynex, Inc. (NASDAQ: ZYXI) officers and directors for violations occurring between February 25, 2021 and December 15, 2025. Investors allege that defendants misrepresented the legitimacy of the company's order growth and sales force productivity, concealing that revenue was inflated through a fraudulent overbilling scheme targeting insurers involving excessive shipment of medical supplies to patients. In reality, the company was systematically billing insurers for thousands of dollars more than justified by patient needs, drawing scrutiny from government and private insurers, including Tricare and Travelers Insurance, that ultimately resulted in payment suspensions, federal criminal indictments, and bankruptcy, and a Nasdaq delisting. As a result of these revelations, Zynex shareholders suffered significant losses as the stock collapsed from over $10 per share to 34 cents and now trades on the OTC as ZYXIQ.

Zynex, Inc. (ZYXI) Securities Lawsuit Case Details

Case Name: Kent Beidel v. Thomas Sandgaard, et al.

Case No.: 1:26-cv-00714-DDD-KAS

Jurisdiction: U.S. District Court, District of Colorado

Filed on: February 20, 2026

Zynex, Inc. (ZYXI) Company Profile

Zynex is a Colorado-based medical device manufacturer in the medical device manufacturing industry that produces and markets electrotherapy devices for use in pain management, physical rehabilitation, neurological diagnosis, and cardiac monitoring. The company's products are small, battery-powered electronic devices which deliver electric pulses via wires and electrode pads, often billed as electrode pairs, generating $184.3 million in revenue for the year ended December 31, 2023, with payors including private insurers and government programs such as Tricare.

Zynex, Inc. (ZYXI) Securities Lawsuit Class Period

February 25, 2021 - December 15, 2025, inclusive.

The class includes all persons and entities that purchased or otherwise acquired Zynex securities, including common stock on Nasdaq under the ticker ZYXI and later OTCMKTS: ZYXIQ, during the Class Period and were damaged thereby. Excluded are the defendants, officers and directors of the company, members of their immediate families, and any entity in which defendants have or had a controlling interest.

Allegations in the Zynex, Inc. (ZYXI) Securities Class Action Lawsuit

The lawsuit targets CEO and founder Thomas Sandgaard, COO Anna Lucsok, CFO Daniel Moorhead, and three members of the company's Audit Committee: Chairman Barry D. Michaels, Michael Cress, and Joshua R. Disbrow, asserting violations of the Securities Exchange Act. According to the complaint, these defendants repeatedly touted the company's strong order growth and sales force productivity as evidence of legitimate business success while concealing a systematic fraud that prioritized sales over compliance.

On February 25, 2021, Sandgaard spoke of "good order flow" that "speak volumes to the relationships that our salesforce has with many prescribers and the need for them to prescribe non-opioid, non-addictive prescription strength solutions for the patients in pain." On July 28, 2022, Lucsok attributed "a consistent increase in order growth and revenue over the past several quarters in large part due to productivity of our sales force." By March 13, 2023, Sandgaard was celebrating "increased sales rep productivity" and "the highest number of prescriptions in the company's history in the fourth quarter." On April 30, 2024, Lucsok praised sales reps who were able meet strict targets and the strong pipeline to prescribers to see patients in pain and in need of rehab. As recently as October 24, 2024, Sandgaard promoted the company's mission to provide "better pain management and monitoring solutions for patients and doctors as well as hospitals."

Investors allege that behind these optimistic statements, Zynex was engaged in a fraudulent overbilling scheme aimed at inflating revenue. The complaint alleges that the company shipped products, including electrodes, in excess of patient need, including volumes as high as 128 electrode pairs per month, inflating revenue by filing false claims with insurers, including government payor Tricare and private insurers. Management allegedly prioritized aggressive sales strategies to drive orders over compliance with industry laws and regulations, while the company failed to maintain proper oversight (i.e., weak internal controls). As a result, investors allege it was reasonably likely that Zynex would face adverse consequences, including removal from insurer networks and penalties from the federal government, a Tricare payment suspension, and insurer litigation by Travelers.

The Truth Emerges

The truth began to surface on June 4, 2024, when the medical journal STAT published an investigative report entitled "How a device maker inundated pain patients with unwanted batteries and surprise bills," detailing a systematic overbilling pattern. The report revealed that Zynex engaged in an "oversupplying scheme" by sending inordinate amounts of supplies like electrode pads and batteries, often through automatic monthly shipments in order to "bill insurers for thousands of dollars more than it otherwise could." The complaint also notes that on August 23, 2023, Travelers Insurance had commenced an action against Zynex, Sandgaard, Lucsok, and another executive in California Superior Court seeking $23 million in damages alleging a fraudulent overbilling scheme.

The situation deteriorated sharply on March 11, 2025, when Zynex reported a significant revenue "shortfall" for the quarter "due to slower than normal payments from certain payers." The company revealed that "Tricare has temporarily suspended payments as they review prior claims," with Tricare a government payor representing roughly 20-25% of revenue. On July 31, 2025, Lucsok admitted that "we revamped our sales compensation model to drive a performance-focused culture that meets the company's objectives for good patient care and experience and regulatory compliance." By November 18, 2025, new CEO Steven Dyson acknowledged that the company had been "tirelessly focused on addressing the business and compliance challenges at Zynex" and was "proactively engaging with government agencies and investigators in a collaborative way to deliver a new future for Zynex that is focused on compliance and integrity."

On December 15, 2025, Zynex filed for Chapter 11 bankruptcy protection, and its Nasdaq listing was subsequently suspended, with the stock moving to OTC markets under the symbol ZYXIQ. On January 21, 2026, a federal grand jury indictment was unsealed charging Sandgaard and Lucsok with conspiracy to commit health care fraud, mail fraud, and securities fraud.

Market Reaction

The stock price collapsed in stages as the truth emerged, producing substantial investor losses. On June 4, 2024, following the STAT investigation, Zynex's stock fell $0.50 per share, or 5%, to close at $9.35 per share on unusually heavy trading volume. On March 12, 2025, after the company disclosed the government payor Tricare payment suspension, the stock plummeted $3.59 per share, or 51.3%, to close at $3.41 per share on unusually heavy trading volume. On August 1, 2025, following management's admission of compliance problems and sales force realignment, the stock fell from $2.23 per share to $1.26 per share, a 45% decline in heavy trading volume. On December 16, 2025, after the bankruptcy filing, the stock declined by roughly 50% to close at 34 cents, a near-total loss for common equity holders.

Next Steps

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.

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Certification of Plaintiff Pursuant to Federal Securities Laws

I, duly certify and say, as to the claims asserted under the federal securities laws, that:

  1. I have reviewed a complaint filed in the action.
  2. I did not purchase the security that is the subject of this action at the direction of plaintiff's counsel or in order to participate in this action.
  3. I am willing to serve as a representative party on behalf of the class, including providing testimony at deposition and trial, if necessary.
  4. My transaction(s) in Zynex, Inc. which are the subject of this litigation during the class period set forth in the complaint are set forth in the chart attached hereto.
  5. Within the last 3 years,
  6. I will not accept any payment for serving as a representative party on behalf of the class beyond the Plaintiff's pro rata share of any recovery, except as ordered or approved by the court, including any award for reasonable costs and expenses (including lost wages) directly relating to the representation of the class.

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Signed pursuant to California Civil Code Section 1633.1, et seq. - and the Uniform Electronic Transactions Act as adopted by the various states and territories of the United States.

By your signature above, you confirm that have retained Levi & Korsinsky, LLP to represent you and the shareholder class as a lead plaintiff in the pending class action against Zynex, Inc. This representation will be on a contingency basis, meaning that Levi & Korsinsky will advance all expenses in the litigation and will only seek compensation and/or reimbursement of expenses if the firm obtains a recovery. Regardless of the result, we will never ask you to directly pay for any attorneys’ fees, expenses, or costs. Should we obtain a favorable result, we may ask the court to award us compensation and reimbursement of expenses to be paid by the defendants or as a portion of any class recovery. In exchange for our representation, you agree to cooperate as our client by providing, for example, relevant documents and deposition testimony, if necessary. During the course of this litigation, we may employ and/or work with other law firms, experts, and third-parties to successfully prosecute this action. If you are not appointed as the lead plaintiff or Levi & Korsinsky is not appointed as lead counsel, we will notify you of such decision at which time this representation will end unless otherwise extended by you and the firm. We look forward to working with you towards a successful resolution of this action.

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