8-K: Zynex Announces Change in Independent Registered Accounting Firm

Zynex, Inc. reports that Marcum LLP resigned as their independent registered accounting firm and CBIZ CPAs P.C. was engaged as the new firm, effective immediately on March 26, 2025.

Summary

• On March 26, 2025, Marcum LLP resigned as Zynex, Inc.'s independent registered accounting firm.
• CBIZ CPAs P.C. was engaged as the new independent registered public accounting firm, effective immediately on March 26, 2025, following approval by the Audit Committee.
• Marcum's reports on the company's financial statements for 2023 and 2024 did not contain any adverse opinions or disclaimers.
• There were no disagreements with Marcum on accounting principles, financial statement disclosure, or auditing scope, except for previously reported material weaknesses in internal control over financial reporting.
• These material weaknesses related to Information Technology General Controls (ITGCs) and the valuation of certain accounts receivables.
• The company redesigned controls over the valuation of certain accounts receivable in 2024, and concluded that the redesigned control was designed and operated as intended for the year ended December 31, 2024.
• Zynex provided Marcum with a copy of the Form 8-K and requested a letter stating whether Marcum agrees with the statements made in response to Item 304(a) of Regulation S-K.
• Marcum provided a letter, dated March 27, 2025, agreeing with the statements concerning their firm in the Form 8-K.

Sentiment

Score: 7

Explanation: The announcement is fairly neutral. While there's a change in auditors and a mention of past material weaknesses, the transition appears orderly and the company has addressed some of the previous issues.

Positives

• Marcum's reports on the company's financial statements for 2023 and 2024 did not contain any adverse opinions or disclaimers.
• The company redesigned controls over the valuation of certain accounts receivable in 2024, and concluded that the redesigned control was designed and operated as intended for the year ended December 31, 2024.
• Marcum agreed with the statements made by Zynex in the Form 8-K regarding their resignation.

Negatives

• The company disclosed previously reported material weaknesses in internal control over financial reporting related to Information Technology General Controls (ITGCs).
• A material weakness in the design and operating effectiveness around the valuation of certain accounts receivables was initially reported in 2023.

Risks

• The material weakness in internal control over financial reporting related to ITGCs could indicate ongoing challenges in maintaining effective internal controls.
• Although the company redesigned controls over the valuation of certain accounts receivable, the effectiveness of these controls needs to be continuously monitored.

Future Outlook

The company will be working with CBIZ CPAs P.C. for the year ended December 31, 2025.

Industry Context

Changes in accounting firms are not uncommon, especially following acquisitions. Companies often seek to align their auditing services with firms that best suit their needs and strategic direction.

Stakeholder Impact

• Shareholders should be aware of the change in accounting firm and the previously reported material weaknesses in internal control.
• The Audit Committee's approval of the new accounting firm suggests a focus on maintaining strong financial oversight.

Key Dates

Keywords

accounting firm, CBIZ, Marcum, independent auditor, internal control, financial reporting, resignation, Zynex