Nevada
|
33-26787-D
|
90-0214497
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
|
Page
Number
|
|
Item
1.
|
Financial
Statements:
|
|
|
Condensed
Consolidated Balance Sheet (unaudited) - March 31, 2006 -
restated
|
3
|
|
Condensed
Consolidated Statements of Operations (unaudited) -
|
|
|
Quarters
Ended March 31, 2006 and 2005 - restated
|
4
|
|
Condensed
Consolidated Statements of Cash Flows (unaudited) -
|
|
|
Three
Months Ended March 31, 2006 and 2005 - restated
|
5
|
|
Condensed
Consolidated Statement of Stockholders'
|
6
|
|
Equity
(unaudited) - Three Months Ended March 31, 2006 - restated
|
|
|
Notes
to Condensed Consolidated Financial Statements (unaudited)
|
7
|
Item
2.
|
Management's
Discussion and Analysis or Plan of Operations
|
15
|
Item
3.
|
Controls
and Procedures
|
17
|
PART
II: OTHER INFORMATION
|
||
Item
1.
|
Legal
Proceedings
|
18
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of
|
|
|
Proceeds
|
18
|
Item
3.
|
Defaults
Upon Senior Securities
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders
|
18
|
Item
5.
|
Other
Information
|
18
|
Item
6.
|
Exhibits
|
18
|
|
||
SIGNATURES
|
19
|
Current
Assets:
|
||||
Cash
and cash equivalents
|
$
|
143,609
|
||
Receivables,
less allowance for uncollectible
|
||||
accounts
of $828,959
|
814,267
|
|||
Inventory
|
522,880
|
|||
Deferred
consulting fees and other
|
18,416
|
|||
Prepaid
expenses
|
22,463
|
|||
Other
current assets
|
1,068
|
|||
Total
current assets
|
1,522,703
|
|||
Property
and equipment, less accumulated
|
||||
depreciation
of $185,060
|
255,097
|
|||
Deposits
|
10,940
|
|||
Total
assets
|
$ |
1,788,740
|
||
Current
liabilities:
|
||||
Notes
payable
|
$ |
214,240
|
||
Capital
lease
|
14,691
|
|||
Loans
from stockholder
|
65,290
|
|||
Accounts
payable
|
239,867
|
|||
Accrued
payroll and payroll taxes
|
47,824
|
|||
Other
accrued liabilities
|
91,671
|
|||
Total
current liabilities
|
673,583
|
|||
Long
term liabilities:
|
||||
Notes
payable, less current maturities
|
415,905
|
|||
Loans
from stockholder
|
26,864
|
|||
Capital
lease, less current maturities
|
41,092
|
|||
Total
liabilities
|
1,157,444
|
|||
Stockholders'
Equity:
|
||||
Preferred
stock, $0.001 par value,
|
||||
10,000,000
shares authorized, no shares
|
||||
issued
and outstanding
|
--
|
|||
Common
stock, $0.001 par value,
|
||||
100,000,000
shares authorized,
|
||||
23,232,018
shares
|
||||
issued
and outstanding
|
23,232
|
|||
Additional
paid-in capital
|
1,484,845
|
|||
Accumulated
deficit
|
(876,781
|
)
|
||
Total
stockholders' equity
|
631,296
|
|||
|
||||
|
$ |
1,788,740
|
||
|
|
Quarter
Ended March 31,
|
||||||
|
2006
|
2005
|
|||||
|
(As
restated,
|
(As
restated,
|
|||||
|
Note
6)
|
Note
6)
|
|||||
Net
sales and rental income
|
$
|
505,091
|
$
|
544,943
|
|||
Cost
of sales and rentals
|
16,393
|
16,976
|
|||||
Gross
profit
|
488,698
|
527,967
|
|||||
Operating
expenses:
|
|||||||
Selling,
general and administrative
|
477,618
|
389,007
|
|||||
Depreciation
|
20,197
|
16,027
|
|||||
Total
operating expenses
|
497,815
|
405,034
|
|||||
Income
(loss) from operations
|
(9,117
|
)
|
122,933
|
||||
Interest
and other income (expense)
|
(13,318
|
)
|
(3,684
|
)
|
|||
Net
income (loss)
|
$ |
(22,435
|
)
|
$ |
119,249
|
||
Net
income (loss) per common and common
|
|||||||
equivalent
share
|
|||||||
Basic
|
$ |
--
|
$ |
0.01
|
|||
Diluted
|
$ |
--
|
$ |
0.01
|
|||
Weighted
average number of shares outstanding
|
|||||||
Basic
|
23,208,748
|
23,070,377
|
|||||
Diluted
|
23,208,748
|
23,136,558
|
|
Quarter
Ended March 31,
|
||||||
|
2006
|
2005
|
|||||
|
(As
restated,
|
(As
restated
|
|||||
Note
6)
|
Note
6)
|
||||||
Net
income (loss)
|
$
|
(22,435
|
)
|
$
|
119,249
|
||
Adjustments
to reconcile net income (loss) to net cash
|
|||||||
(used
in) provided by operations:
|
|||||||
Depreciation
|
20,197
|
16,027
|
|||||
Issuance
of stock for consulting services
|
15,000
|
--
|
|||||
Amortization
of deferred consulting fees and other
|
13,873
|
--
|
|||||
Employee
stock option expense
|
4,854
|
--
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Accounts
receivable
|
(119,375
|
)
|
(149,956
|
)
|
|||
Inventory
|
(33,649
|
)
|
(103,079
|
)
|
|||
Refundable
income taxes
|
7,586
|
3,847
|
|||||
Other
current assets
|
364
|
(1,359
|
)
|
||||
Prepaid
assets
|
(9,339
|
)
|
--
|
||||
Deposits
|
--
|
3,532
|
|||||
Accounts
payable
|
(42,178
|
)
|
120,322
|
||||
Accrued
liabilities
|
17,360
|
21,515
|
|||||
Net
cash (used in) provided by operating activities
|
(147,742
|
)
|
30,098
|
||||
Cash
flows from investing activities:
|
|||||||
Purchase
of equipment
|
(5,516
|
)
|
(42,800
|
)
|
|||
Net
cash (used in) investing activities
|
(5,516
|
)
|
(42,800
|
)
|
|||
Cash
flows from financing activities:
|
|||||||
Payments
on notes payable and capital lease
|
(39,040
|
)
|
(28,568
|
)
|
|||
Proceeds
from loan payable
|
240,000
|
||||||
Proceeds
from loans from stockholder
|
107,000
|
12,000
|
|||||
Repayment
of loans from stockholder
|
(29,826
|
)
|
--
|
||||
Bank overdraft | -- |
26,192
|
|||||
Net
cash provided by financing activities
|
278,134
|
9,624
|
|
||||
Increase
(decrease) in cash and cash equivalents
|
124,876
|
(3,078
|
)
|
||||
Cash
and cash equivalents at beginning of period
|
18,733
|
3,078
|
|||||
Cash
and cash equivalents at end of period
|
$ |
143,609
|
$ |
--
|
|||
Supplemental
cash flow information:
|
|||||||
Interest
paid
|
$ |
14,055
|
$ |
5,144
|
|
Additional
|
|||||||||||||||
|
Number
|
Paid
in
|
Accumulated
|
|||||||||||||
|
of
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
|||||||||||
December
31, 2005, as
|
23,199,421
|
$
|
23,199
|
$
|
1,465,024
|
$
|
(1,047,454
|
)
|
$
|
440,769
|
||||||
originally
reported
|
||||||||||||||||
Prior
period adjustment (Note 6)
|
193,108
|
193,108
|
||||||||||||||
Balances
at December 31, 2005,
|
||||||||||||||||
as
restated
|
23,199,421
|
23,199 | 1,465,024 |
(854,346
|
)
|
633,877
|
||||||||||
Issuance
of common stock for
|
||||||||||||||||
consulting
services
|
32,597
|
33
|
14,967
|
--
|
15,000
|
|||||||||||
Employee
stock
|
||||||||||||||||
option
expense
|
--
|
--
|
4,854
|
--
|
4,854
|
|||||||||||
Net
income (As restated, Note 6)
|
--
|
--
|
--
|
(22,435
|
)
|
(22,435
|
)
|
|||||||||
March
31, 2006 (As restated, Note 6)
|
23,232,018
|
$
|
23,232
|
$
|
1,484,845
|
$
|
(876,781
|
)
|
$
|
631,296
|
Expected
life
|
2
years
|
Volatility
|
139%
|
Risk-free
interest rate
|
4.95%
|
Dividend
yield
|
0
|
|
Weighed
|
||
|
Weighted
|
Average
|
|
|
Shares
|
Average
|
Remaining
|
|
Under
|
Exercise
|
Contractual
|
|
Option
|
Price
|
Life
|
Outstanding
at January 1, 2006
|
520,670
|
$
0.28
|
9
years
|
Granted
|
--
|
--
|
--
|
Exercised
|
--
|
--
|
|
Forfeited
|
(12,000)
|
0.40
|
9
years
|
Outstanding
at March 31, 2006
|
508,670
|
$
0.27
|
9
years
|
Exercisable
at March 31, 2006
|
222,000
|
$
0.23
|
9
years
|
|
Nonvested
|
Weighted
|
|
Shares
|
Average
|
|
Under
|
Grant
Date
|
Nonvested
Shares
|
Option
|
Fair
Value
|
|
||
Nonvested
at January 1, 2006
|
345,670
|
$
0.26
|
Granted
|
--
|
--
|
Vested
|
(47,000)
|
0.17
|
Forfeited
|
(12,000)
|
0.26
|
Nonvested
at March 31, 2006
|
286,670
|
$
0.26
|
|
Three
Months
|
|||
|
Ended
|
|||
|
March
31, 2005
|
|||
|
(As
restated,
|
|||
Note
6)
|
||||
Net
income as reported
|
$
|
119,249
|
||
Deduct:
Total stock-based
|
||||
employee
compensation
|
||||
expense
determined
|
||||
under
fair value based
|
||||
method
for all awards
|
1,216
|
|||
|
||||
Pro
forma net income
|
$
|
118,033
|
||
|
||||
Income
per share:
|
||||
Basic
- as reported
|
$
|
0.01
|
||
|
||||
Diluted
- as reported
|
$
|
0.01
|
||
|
||||
Basic
- pro forma
|
$
|
0.01
|
||
|
||||
Diluted
- pro forma
|
$
|
0.01
|
BASIC
|
||||
|
Three
Months Ended
|
|||
|
March
31, 2005
|
|||
(As
restated,
|
||||
Note
6)
|
||||
Net
income applicable to
|
||||
common
stockholders
|
$
|
119,249
|
||
|
||||
Weighted
average shares outstanding - basic
|
23,070,377
|
|||
|
||||
Net
income per share - basic
|
$
|
0.01
|
||
|
||||
DILUTED
|
||||
Net
income applicable to common
|
||||
stockholders
|
$
|
119,249
|
||
|
||||
Weighted
average shares outstanding - basic
|
23,070,377
|
|||
Dilutive
securities
|
66,181
|
|||
|
||||
Weighted
average shares outstanding - diluted
|
23,136,558
|
|||
|
||||
Net
income per share - diluted
|
$
|
0.01
|
As
previously
|
|||||||
reported
|
As
restated
|
||||||
Balance
Sheet
|
|||||||
Inventory
|
$
|
377,850
|
$
|
522,880
|
|||
Total
current assets
|
$
|
1,377,673
|
$
|
1,522,703
|
|||
Property
and equipment, net
|
$
|
164,629
|
$
|
255,097
|
|||
Total
assets
|
$
|
1,553,242
|
$
|
1,788,740
|
|||
Accumulated
deficit
|
$
|
(1,112,279
|
)
|
$
|
(876,781
|
)
|
|
Total
stockholders’ equity
|
$
|
395,798
|
$
|
631,296
|
|||
Statement
of Operations 2006 - Quarter ended March 31, 2006
|
|||||||
Cost
of sales and rentals
|
$
|
63,827
|
$
|
16,393
|
|||
Gross
profit
|
$
|
441,264
|
$
|
488,698
|
|||
Depreciation
|
$
|
15,153
|
$
|
20,197
|
|||
Total
operating expenses
|
$
|
492,771
|
$
|
497,815
|
|||
Income
(loss) from operations
|
$
|
(51,507
|
)
|
$
|
(9,117
|
)
|
|
Net
income (loss)
|
$
|
(64,825
|
)
|
$
|
(22,435
|
)
|
|
|
|||||||
Statement
of Operations 2005 - Quarter ended March 31, 2005
|
|||||||
Cost
of Sales and rentals
|
$
|
80,145
|
$
|
16,976
|
|||
Gross
profit
|
$
|
464,798
|
$
|
527,967
|
|||
Income
(loss) from operations
|
$
|
59,764
|
$
|
122,933
|
|||
Net
income (loss)
|
$
|
56,080
|
$
|
119,249
|
|||
Net
income (loss) per common and common equivalent share
|
|||||||
Basic
|
$
|
0.00
|
$
|
0.01
|
|||
Diluted
|
$
|
0.00
|
$
|
0.01
|
|||
Statement
of Cash Flows - Quarter ended March 31, 2006
|
|||||||
Net
income (loss)
|
$
|
(64,825
|
)
|
$
|
(22,435
|
)
|
|
Depreciation
|
$
|
15,153
|
$
|
20,197
|
|||
Inventory
|
$
|
8,269
|
$
|
(33,649
|
)
|
||
Net
cash (used in) provided by operating activities
|
$
|
(153,258
|
)
|
$
|
(147,742
|
) | |
Purchase
of equipment
|
$
|
0
|
$
|
(5,516
|
)
|
||
Net
cash (used in) investing activities
|
$
|
0
|
$
|
(5,516
|
)
|
||
Statement
of Cash Flows - Quarter ended March 31, 2005
|
|||||||
Net
income
|
$
|
56,080
|
$
|
119,249
|
|||
Inventory
|
$
|
(65,472
|
)
|
$
|
(103,079
|
)
|
|
Net
cash provided by operating activities
|
$
|
30,728
|
$
|
30,098
|
|||
Purchase
of equipment
|
$
|
(17,238
|
)
|
$
|
(42,800
|
)
|
|
Net
cash (used in) investing activities
|
$
|
(17,238
|
)
|
$
|
(42,800
|
)
|
18
|
Preferability
letter from GHP Horwath, P.C. regarding the reclassification of certain
costs.*
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to
Section
18 U.S.C. Section 1350
|
|
|
ZYNEX
MEDICAL HOLDINGS, INC.
|
Date:
December 20, 2006
|
By:
|
/s/ Thomas
Sandgaard
|
|
Thomas
Sandgaard,
|
|
|
Chief
Executive Officer, Treasurer
|
|
|
|
|
|
|
By:
|
/s/ Peter
J. Leveton
|
|
|
Peter
J. Leveton,
|
|
|
Principal
Financial Officer
|
Exhibit
Number
|
Description
|
18
|
Preferability
letter from GHP Horwath, P.C. regarding the reclassification of certain
costs.*
|
31.1
|
Certification
of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
31.2
|
Certification
of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
32
|
Certification
of Chief Executive Officer and Chief Financial Officer Pursuant to
Section
18 U.S.C. Section 1350
|