8-K: Zynex Ousts Chair Amid Fraud Indictment, Nasdaq Delisting

Zynex, Inc. removed its Chair, Thomas Sandgaard, following his federal indictment for healthcare and securities fraud, as the company navigates Chapter 11 bankruptcy and Nasdaq delisting.

Summary

• Zynex, Inc. (ZYXIQ) removed Thomas Sandgaard from all positions, including Chair of the Board, effective January 22, 2026.
• This action followed Mr. Sandgaard's federal grand jury indictment on January 21, 2026, for alleged healthcare and securities fraud.
• All unvested equity awards and cash compensation arrangements with Mr. Sandgaard were terminated and canceled.
• Steven Dyson, CEO and current Board member, was appointed Chair of the Board, effective January 22, 2026.
• The Board also approved a decrease in the number of directors from seven to six.
• The company commenced voluntary Chapter 11 bankruptcy cases on December 15, 2025.
• Nasdaq delisted the company's common stock, effective 10 calendar days after Form 25 filing, with trading suspended on December 24, 2025, and moved to the Pink Limited Market under ZYXIQ.
• The company expects its equity holders to experience a significant loss on their investment if the Restructuring Transactions are implemented.

Sentiment

Score: 1

Explanation: The company is in Chapter 11 bankruptcy, has been delisted from Nasdaq, and its former Chair was indicted for federal fraud. Equity holders are explicitly warned of significant loss. These are extremely negative developments.

Positives

• The company itself has not been charged in any criminal or civil enforcement matters.
• Zynex has executed a complete overhaul of its leadership, compliance program, billing practices, and operational controls over the last six months.
• The company is cooperating extensively with the Department of Justice and other regulators.
• New leadership is committed to building trust through transparency, integrity, and compliance.

Negatives

• The company and certain subsidiaries commenced voluntary Chapter 11 bankruptcy cases on December 15, 2025.
• Nasdaq delisted the company's common stock due to the Chapter 11 filing, with trading suspended on December 24, 2025, and moved to the Pink Limited Market (ZYXIQ).
• Former Chair, Thomas Sandgaard, was indicted by a federal grand jury on January 21, 2026, for alleged healthcare and securities fraud.
• The company expects its equity holders to experience a significant loss on their investment if the Restructuring Transactions are implemented.

Risks

• Risks and uncertainties relating to the Chapter 11 Cases, including obtaining Court approval for motions and confirmation of the Plan.
• Potential adverse effects of the Chapter 11 Cases on the company's liquidity.
• The likelihood of the cancellation of the company's common stock in the Chapter 11 Cases.
• Uncertainty regarding the company's ability to retain key personnel and management.
• Uncertainty and continuing risks associated with the company's ability to achieve its goals and continue as a going concern.
• Trading in the company's securities during the pendency of the Chapter 11 Cases is highly speculative and poses substantial risks.
• Trading prices for the company's securities may bear little or no relationship to the actual recovery, if any, by the holders of the company's securities in the Chapter 11 Cases.
• Risks related to the company's ability to complete the Restructuring Transactions on contemplated terms or timeline.

Future Outlook

The company expects its equity holders will experience a significant loss on their investment if the Restructuring Transactions are implemented. The company is seeking a long-term resolution of ongoing investigations while reorganizing under Chapter 11.

Management Comments

• "The individuals named in the indictment are no longer employed by Zynex and play no role in Zynexs current operations." John Bibb, Chief Legal Officer.
• "Over the last six months, Zynex has executed a complete overhaul of its leadership, compliance program, billing practices, and operational controls." John Bibb, Chief Legal Officer.
• "Under entirely new leadership, we have delivered on our commitment to the highest integrity in our business practices and implemented rigorous compliance oversight." John Bibb, Chief Legal Officer.
• "As we create a new future for Zynex, we are committed to building trust through transparency, integrity, and compliance while we fulfill our mission to improve the quality of life for patients suffering from debilitating pain and other conditions." John Bibb, Chief Legal Officer.

Industry Context

Zynex operates in the medical technology sector, specializing in non-invasive medical devices for pain management and rehabilitation. The current events, including bankruptcy and fraud allegations against a former executive, are company-specific and do not reflect broader industry trends, though they highlight the importance of robust corporate governance and compliance within the healthcare device industry.

Management Changes

Corporate Governance

Legal Proceedings

• The company and certain subsidiaries commenced voluntary cases under Chapter 11 of title 11 of the United States Code on December 15, 2025.
• Thomas Sandgaard was indicted by a federal grand jury on January 21, 2026, for alleged healthcare and securities fraud related offenses.
• The company is cooperating extensively with the Department of Justice and other regulators and continues to seek a long-term resolution of ongoing investigations.

Stakeholder Impact

• Shareholders: Expected to experience a significant loss on their investment; common stock delisted from Nasdaq and now trades on the Pink Limited Market (ZYXIQ); trading is highly speculative.
• Employees: Uncertainty regarding the company's ability to retain key personnel and management during Chapter 11.
• Regulators: Company is cooperating extensively with the Department of Justice and other regulators regarding ongoing investigations.
• Customers/Patients: The company states its mission is to improve the quality of life for patients, implying continued service, but the bankruptcy and leadership changes could introduce operational uncertainties.

Next Steps

• Nasdaq delisting will become effective 10 calendar days after Nasdaq files a Form 25 with the SEC.
• Deregistration of common stock under Section 12(b) of the Exchange Act will be effective 90 days, or shorter, after the filing of Form 25.
• The company continues to seek a long-term resolution of ongoing investigations.
• The company is reorganizing under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.

Key Dates

Recommendation

The company is in Chapter 11 bankruptcy, has been delisted from Nasdaq, and its former Chair was indicted for federal fraud. The company explicitly states that equity holders are expected to experience a significant loss on their investment. These factors indicate severe financial distress and significant risk, making the stock a strong sell.

Keywords

Zynex, ZYXIQ, Chapter 11, Bankruptcy, Nasdaq Delisting, Healthcare Fraud, Securities Fraud, Corporate Governance, Board Changes, Medical Devices, Pain Management, Rehabilitation