Zynex Inc. has secured a forbearance agreement with a lender after defaulting on a loan.
Zynex, headquartered in Lone Tree, Colorado, manufactures and sells non-invasive medical devices used for pain management, stroke rehabilitation and neurological diagnostics, as well as compound pain creams. The company is currently working to grow the Pharmazy brand of pain cream, it says.
The company announced in a filing with the U.S. Securities and Exchange Commission on Dec. 24 that on Dec. 22 it executed a forbearance agreement with lender Triumph Community Bank NA, which does business as Triumph Healthcare Finance. Under terms of the agreement, Triumph has agreed not to act on Zynex' default until March 31.
When Zynex filed its latest quarterly report with the SEC on Nov. 7, the company said it was working with Triumph to negotiate the terms of repayment for the loan it defaulted on, and that for the time being, Triumph had continued to lend Zynex money.
Zynex brought in about $4.4 million in revenue in the third quarter, compared with about $1.3 million for the second quarter and $3.2 million for the first quarter. The dip in the second quarter was due to difficulty shipping products, according to a statement with the SEC.
The company's revenue has decreased in 2014 because of fewer orders of its electronic products. Zynex's cream sales offset some of the decreases, the company says. Zynex had $8.9 million in revenue for the first three quarters of 2014, compared with $18.3 million in revenue for the thirst three quarters of 2013.
In the Nov. 7 SEC filing, Zynex says that the loan default raises substantial doubt about its ability to continue as a going concern, or without the threat of liquidation. The company is considering external financing through debt or sale of equity, but both of those routes require Triumph's approval.