Medical Device Firm Zynex Seeks Chapter 11 Protection as Shares Plunge

Shares of medical technology company Zynex Inc. collapsed, losing more than half their value, following the firm's voluntary filing for Chapter 11 bankruptcy protection. The move was precipitated by a severe liquidity crisis triggered by a major insurer halting reimbursements.

On Tuesday, Zynex announced it had petitioned the U.S. Bankruptcy Court for the Southern District of Texas on December 15 for a court-supervised financial restructuring. The news sent the company's stock tumbling over 50%, wiping out approximately $11 million in market capitalization and leaving shares trading around $0.30.

The filing culminates a period of intensifying financial distress. The primary catalyst was the suspension of payments by Tricare, a government insurance network. Prior to the halt, Tricare accounted for 20% to 25% of Zynex's annual revenue. The insurer took this action amid ongoing investigations into the company's billing practices.

Mounting Pressures and Quarterly Loss

Further strain came from $60 million in convertible notes scheduled to mature in May 2026. The scale of the financial challenges became evident in November 2025, when Zynex reported third-quarter results. Revenue fell sharply to $13.4 million, a stark drop from $50 million in the prior-year period, accompanied by a net loss of $42.9 million. These results prompted initial discussions with bondholders regarding a potential restructuring.

Should investors sell immediately? Or is it worth buying Zynex?

To maintain operations throughout the bankruptcy process, Zynex has secured a commitment for $22.3 million in Debtor-in-Possession (DIP) financing. The company emphasized that its ongoing business, including services to patients and customers, is expected to continue without interruption.

CEO's Statement and Agreed Framework

Chief Executive Officer Steven Dyson described the restructuring as a critical step toward building a "new future for Zynex." The company has reached a restructuring agreement with holders of roughly 80% of its convertible debt. The court-supervised process will involve a competitive sale of all, or substantially all, of Zynex's assets.

Timeline and Outlook for Shareholders

The proceedings will follow a strict court-mandated schedule. Final approval of the DIP financing is targeted within 30 days, with a bid deadline set no later than 75 days after the filing date. Confirmation of the restructuring plan and emergence from Chapter 11 are projected for days 95 and 105, respectively.

While management has expressed optimism for a long-term turnaround, it explicitly warned existing shareholders that they face a significant risk of losing their entire investment. The future trajectory of the highly speculative stock is now largely dependent on the progress and outcome of the bankruptcy proceedings.