Zynex Inc. Investor Class Action Lawsuit - 04/07/2009
May 3, 2012 (Update) -- Proposed $2,500,000 settlement in the Zynex Inc. shareholders class action.
According to the Notice:
Securities and Time Period: Zynex, Inc. ("Zynex" or the "Company") common stock purchased between May 21, 2008 and March 31, 2009, inclusive.
Settlement Fund: $2,500,000 in cash. Your recovery will depend on the amount of stock purchased on or between May 21, 2008 and March 31, 2009 and the timing of your purchases and any sales. If claims are submitted for 100% of the number of eligible shares and options (which is not expected to occur), the estimated average distribution per share of common stock will be approximately $0.308 before deduction of Court-approved fees and expenses. Historically, actual claim rates are less than 100% and result in higher distributions.
Settlement Class: The Court has certified for purposes of this settlement a Settlement Class of all Persons who purchased Zynex common stock between May 21, 2008 and March 31, 2009, inclusive ("Class"). Excluded from the Class are Defendants, members of the immediate families of the Individual Defendants, any entity in which any Defendant has or had a controlling interest, current or former directors and officers of Zynex, and the legal representatives, heirs, successors, or assigns of any such excluded person or entity. Also excluded from the Class are those Persons who timely and validly request exclusion from the Class pursuant to the Notice of Pendency and Proposed Settlement of Class Action.
Reasons for Settlement: Avoids the costs and risks associated with continued litigation, including the danger of no recovery, and provides a substantial benefit to the Class now.
April 7, 2009 -- On Tuesday, April 07, 2009, an investor in Zynex Inc. (Public, OTC:ZYXI) filed a proposed securities class action lawsuit in the United States District Court for the District of Colorado on behalf of all purchasers of Zynex, Inc. (OTC: ZYXI) formerly known as Zynex Medical Holdings, Inc. (OTC: ZYNX) securities between May 21, 2008 and March 31, 2009 inclusive over alleged violations of Securities Laws by Zynex, its CEO, and CFO.
According to the complaint the plaintiff alleges that Zynex Inc., its CEO , and CFO violated the Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 in connection with Zynex, Inc.'s issuance of allegedly materially false financial statements to the investing public between May 21, 2008 and March 31, 2009. According to the Complaint, the Defendants, in violation of the Generally Accepted Accounting Principles and Zynex's own internal polices, misstated the Company's reported net revenues and accounts receivable for the first three quarters of fiscal 2008.
On April 1, 2009 Zynex, Inc. announced that its unaudited financial statements and press releases issued on results for the first three quarters of 2008 can no longer be relied upon and would have to issue restated financial results to reflect adjustments to accounts receivable and net revenue for such periods. Zynex, Inc. announced that it believed the cumulative impact of these adjustments would be $5.1 million. This adverse news caused Zynex's stock (OTC: ZYXI) price to decline, so the lawsuit.