8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (date of earliest event reported): November 8, 2010

Zynex, Inc.

(Exact name of Registrant as specified in its charter)

Nevada	33-26787-D	90-0275169
(State or other jurisdiction	(Commission	(I.R.S. Employer
of incorporation)	File Number)	Identification No.)

9990 Park Meadows Drive Lone Tree, Colorado	80124
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 703-4906

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On November 8, 2010, Zynex, Inc. issued a press release reporting its results of operations for the three and nine months ended September 30, 2010.  A copy of the press release is furnished as Exhibit 99.1 to this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 99.1 Press Release of Zynex, Inc. dated November 8, 2010

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SIGNATURES

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 hereunto duly authorized.

	Zynex, Inc.
Date: November 9, 2010	By:	/s/ Anthony Scalese
		Anthony Scalese
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description of Exhibit
99.1	Press Release of Zynex, Inc. dated November 8, 2010

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EX-99.1

Exhibit 99.1

Zynex Announces 42% Increase in Third Quarter 2010 Revenue

Zynex, Inc. (OTCBB: ZYXI), a provider of pain management systems and electrotherapy products for medical patients with functional disability, announces a record number of orders and billed patients in the three months ended September 30, 2010.  The Company also generated record net revenues of $6,657,000 for the three months ended September 30, 2010, which represents a 42% increase over third quarter 2009 net revenue and a 16% increase sequentially over the second quarter of 2010.  Year to date net revenue of $17,274,000 increased 30% over the prior year to date net revenue.  Thomas Sandgaard, CEO, stated “We are excited with the continued revenue growth and outlook of the Company.  The investment in our sales team continues t o generate a significant increase in orders.”

Zynex’s third quarter 2010 gross profit of $5,231,000 is also a record and reflects a 79% gross profit margin, unchanged from the previous quarter’s gross profit margin.  SG&A expenses in the third quarter totaled $4,606,000 compared to $2,906,000 in the third quarter 2009 and increased by 5% in the third quarter of 2010 as compared to $4,390,000 in the second quarter of 2010.  SG&A expenses reported in the third quarter of 2010 included expenses of $200,000, related to the transition of the Company’s Chief Financial Officer.  The Company reported positive net income for the quarter ended September 30, 2010 of $368,000, which showed significant improvement over the second quarter of 2010, as expenditures made in prior quarters have helped drive further top-line growth.   The Company’s continued focus on strengthening its balance sheet resulted in strong cash collections from customers in the quarter, which resulted in a cash position of $593,000 as of September 30, 2010 and a net reduction of the amount outstanding under the Company’s revolving line of credit.

Zynex is providing guidance for the full year of 2010 net revenues of between $24 million and $25 million.

Thomas Sandgaard, CEO, said: "I am happy to announce that our third quarter revenue came in at the high end of our estimated range of $6.2 to $6.8 million. We continued the trend of sequentially growing our top line 16%, significantly more than our selling, general and administrative expenses which only increased 5% between the second and third quarter. Our cash position also improved by $500,000, while at the same time the use of our Line of Credit decreased. We have previously made investments in our infrastructure that we believe put us in a position to finish the year strong and prepare us for continued growth in 2011.”

Highlights from the third quarter 2010 condensed consolidated financial statements:

(unaudited, amounts in thousands, except per share amounts)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2010			2009	2010		2009
Net revenue	$	6,657	$	4,691	$	17,274	$	13,270
Gross profit		5,231		3,793		13,630		11,113
Net income		368		459		330		2,118
Net income per share - diluted	$	0.01	$	0.02	$	0.01	$	0.07
Weighted average number of common shares outstanding - diluted		30,667,064		30,282,030		30,744,764		30,223,547
Cash	$	593	$	239	$	593	$	239
Total stockholders’ equity		8,080		7,053		8,080		7,053

Exhibit 99.1 -- Page 1 of 5

About Zynex

Zynex, Inc. (founded in 1996) engineers, manufactures, markets and sells its own design of electrotherapy medical devices in two distinct markets: standard digital electrotherapy products for pain relief and pain management; and the NeuroMove(TM) for stroke and spinal cord injury rehabilitation. Zynex's product lines are fully developed, FDA-cleared, commercially sold, and have been developed to uphold the Company's mission of improving the quality of life for patients suffering from impaired mobility due to stroke, spinal cord injury, or debilitating and chronic pain. Zynex has also announced the development of two new business units, Zynex Monitoring Solutions and Zynex NeuroDiagnostic.

Safe Harbor Statement

Certain statements in this release are "forward-looking" and as such are subject to numerous risks and uncertainties. Actual results may vary significantly from the results expressed or implied in such statements. Factors that could cause actual results to materially differ from forward-looking statements include, but are not limited to, the need to obtain additional capital in order to grow our business, our ability to engage additional sales representatives, the success of such additional sales representatives, the need to obtain FDA clearance and CE marking of new products, the acceptance of new products as well as existing products by doctors and hospitals, 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, acceptance of our products by health insurance providers, our dependence on third party manufacturers to produce our goods on time and to our specifications, implementation of our sales strategy including a strong direct sales force, the uncertain outcome of pending material litigation and other risks described in our filings with the Securities and Exchange Commission including the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2009.

Contact: Zynex, Inc. Thomas Sandgaard, CEO, 303-703-4906

Exhibit 99.1 -- Page 2 of 5

ZYNEX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2010		2009		2010		2009
Net revenue:
Rental	$	2,032	$	2,548	$	6,639	$	7,797
Sales		4,625		2,143		10,635		5,473
		6,657		4,691		17,274		13,270
Cost of revenue:
Rental		169		346		702		967
Sales		1,257		552		2,942		1,190
		1,426		898		3,644		2,157
Gross profit		5,231		3,793		13,630		11,113
Selling, general and administrative expense		4,606		2,906		12,842		7,784
Income from operations		625		887		788		3,329
Other income expense:
Interest income		2		-		5		3
Interest expense and loss on extinguishment
of debt		(45)		(38)		(177)		(113)
Other expense		-		-		(16)		(1)
(Loss) gain on value of derivative liability		-		(25)		-		172
		(43)		(63)		(188)		61
Income before income tax		582		824		600		3,390
Income tax expense		214		365		270		1,272
Net income	$	368	$	459	$	330	$	2,118
Net income per share:
Basic	$	0.01	$	0.02	$	0.01	$	0.07
Diluted	$	0.01	$	0.02	$	0.01	$	0.07
Weighted average number of common
shares outstanding:
Basic		30,569,441		30,086,784		30,555,778		29,997,276
Diluted		30,667,064		30,282,030		30,744,764		30,223,547

Exhibit 99.1 -- Page 3 of 5

ZYNEX, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT NUMBER OF SHARES)
	September 30,		December 31,
	2010		2009
	(UNAUDITED)
ASSETS
Current Assets:
Cash	$	593	$	863
Accounts receivable, net		6,628		5,039
Inventory		3,425		2,034
Prepaid expenses		39		139
Deferred tax asset		1,248		864
Other current assets		76		77
Total current assets		12,009		9,016
Property and equipment, net		2,654		2,718
Deposits		174		166
Deferred financing fees, net		100		30
Total assets	$	14,937	$	11,930
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Line of credit	$	972	$	-
Current portion of capital leases and other obligations		71		95
Accounts payable		1,485		1,127
Income taxes payable		541		905
Accrued payroll and payroll taxes		651		426
Other accrued liabilities		894		788
Total current liabilities		4,614		3,341
Capital leases and other obligations, less current portion		261		20
Deferred rent liability		1,390		544
Deferred tax liability		592		539
Total liabilities		6,857		4,444
Stockholders' Equity:
Preferred stock, $.001 par value, 10,000,000 shares authorized,
no shares issued or outstanding		-		-
Common stock, $.001 par value, 100,000,000 shares authorized,
30,569,667 (2010) and 30,497,318 (2009) shares issued and outstanding		31		30
Paid-in capital		4,620		4,357
Retained earnings		3,429		3,099
Total stockholders' equity		8,080		7,486
Total liabilities and stockholders’ equity	$	14,937	$	11,930

Exhibit 99.1 -- Page 4 of 5

ZYNEX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, AMOUNTS IN THOUSANDS)
	Nine Months Ended
	September 30,
	2010			2009
Cash flows from operating activities:
Net income	$	330		$	2,118
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation expense		591			499
Provision for provider discounts		55,221			39,004
Provision for losses in accounts receivable (uncollectibility)		3,286			2,369
Amortization of financing fees		31			21
Gain on value of derivative liability		-			(172	)
Change in reserve for obsolete inventory		(2)			152
Deferred rent expense		846			-
Net loss on disposal of equipment		18			-
Issuance of common stock for consulting services		61			75
Employee stock based compensation expense		203			113
Deferred tax benefit		(331	)		(172	)
Changes in operating assets and liabilities:
Accounts receivable		(60,096	)		(41,851	)
Inventory		(1,389	)		(88	)
Prepaid expenses		100			53
Other current assets		(19	)		(108)	)
Accounts payable		358			(306	)
Accrued liabilities		331			(451	)
Income taxes payable		(364	)		506
Net cash (used in) provided by operating activities		(825	)		1,762
Cash flows from investing activities:
Proceeds received in lease termination		108			-
Purchases of equipment		(271	)		(818	)
Net cash used in investing activities		(163	)		(818	)
Cash flows from financing activities:
Decrease in bank overdraft		-			(113	)
Net borrowings from (payments on) line of credit		972			(682	)
Deferred financing fees		(90	)		-
Payments on notes payable and capital leases		(164	)		(29	)
Repayments of loans from stockholder		-			(25	)
Issuance of common stock		-			144
Net cash provided by (used in) financing activities		718			(705	)
Net (decrease) increase in cash		(270	)		239
Cash at beginning of period		863			-
Cash at end of period	$	593		$	239
Supplemental cash flow information:
Interest paid	$	75		$	113
Income taxes paid (including interest and penalties)	$	955		$	935
Supplemental disclosure of non-cash investing and financing activities:
Equipment acquired through capital lease	$	334		$	-

Exhibit 99.1 -- Page 5 of 5