Zynex, Inc. (OTCQB: ZYXI, Target Price: $6.75)

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1 Update (May 15, 2018) Equity Healthcare / Medical Devices Zynex, Inc. (OTCQB: ZYXI, Target Price: $6.75) Based in Lone Tree, CO, Zynex, Inc. (OTCQB: ZYXI, Zynex produces medical devices that utilize electrotherapy to treat pain and rehabilitation. The company s flagship product, NexWave, is an FDA-cleared electrotherapy medical device that offers non-invasive, non-addictive treatment of chronic and acute pain. With a growing active installed base of over 50,000 devices, NexWave provides Zynex with a high margin revenue stream with recurring attributes from supplies and consumables. Beyond NexWave, Zynex offers additional solutions for pain management, neuro-monitoring and stroke recovery. Zynex is in the process of completing an impressive turnaround, and appears well-positioned for growth. Upcoming catalysts include continued execution in NexWave and possible regulatory clearance for the CM1500, a new class 2 device targeting the large unmet need for post-surgery blood volume monitoring. Zynex has also announced its intention to uplist shares to a national exchange likely the NYSE American or Nasdaq CM which has potential to raise its visibility in its industry as well as among institutional investors restricted from investing in OTC companies. Investment Highlights Zynex reports strong annual growth in 1Q18 On May 8, 2018, Zynex released positive 1Q18 results, in which the company reported strong top line growth and continued profitability in a seasonally challenging quarter. Highlights were as follows: Ø 1Q18 revenues grew by 100.1% to reach $6.88mn, versus $3.44mn in 1Q17. Results were above the midpoint of guidance and were driven by strong product supply sales, which rose to $5.29mn versus $2.05mn in 1Q17. Ø Adjusted EBITDA increased to $2.04mn in 1Q18, up 258% versus $0.57mn during the prior year quarter. Adjusted EBITDA margins expanded to 29.7% of revenues, versus 16.6% of revenues in 1Q17. Ø Ø 1Q18 GAAP EPS was $0.06, versus $0.01 in 1Q17. 1Q18 Net income increased by more than 400% annually to reach $1.92mn. Zynex generated approximately $1mn of cash from operating activities during the quarter and has repurchased $1.8mn of shares in Zynex guided to 2Q18 revenues of $7.5 $8.0mn and adjusted EBITDA of $2.5mn to $3.0mn, which suggests an annual growth rate of greater than 50% in 2Q18 and 12.7% sequential growth over 1Q18. Execution continues in 1Q18 Zynex continues to report strong momentum in the market as management reported 1Q18 results at the high end of its guidance in a quarter with seasonal headwinds due to higher patient out of pocket expenses at the beginning of the year, and issued a positive outlook for 2Q18. The company appears to be driving growth with strong sales execution, and better penetration of a growing installed base of NexWave devices. 1Q18 marked the seventh consecutive quarter of profitability for Zynex, as the company continues to benefit from demand for supplies and new device sales for its lead product NexWave as a non-invasive means to treat chronic and acute pain without side effects. We expect growth throughout the year, as the company invests resources into its direct sales force, which increased by 25 to reach 135 sales reps. Raising estimates and price target to $6.75 We are raising our price target and top line estimates following strong results. We expect Zynex to generate FY2018 revenues of $32.0mn. The company also announced an additional $2mn share buyback program after repurchasing 495,091 shares from December 2017 through March 6, Our price target increases to $6.75, which represents a fair value multiple of 22.3x our 2018E EPS estimate of $0.30, and 20.7x our fully taxed 2019E estimate of $0.33. Stock Details (5/13/18) OTCQB: Sector / Industry ZYXI Price target $6.75 Recent share price $3.05 Shares o/s (mn) 33.1 Market cap (in $mn) week high/low $5.50 / 0.26 Source: Thomson Reuters, SeeThruEquity Research Key Financial ($mn, unless specified) Healthcare / Medical Devices FY16A FY17A FY18E Revenues 13, , ,045.0 EBITDA 1, , ,271.3 EBIT , ,106.5 Net income , ,452.5 EPS ($) Source: SeeThruEquity Research Key Ratios FY16A FY17A FY18E Gross margin (%) Operating Margin (%) EBITDA margin (%) Net margin (%) P/Revenue (x) P/E (x) 1, EV/Revenue (x) Source: SeeThruEquity Research Share Price Performance ($, LTM) May-17 Aug-17 Nov-17 Feb-18 May SeeThruEquity, LLC. Important disclosures appear at the back of this report. 1 P age

2 RECENT FINANCIAL SUMMARY Figure 1. Income Statement Summary Figures in $000, unless specified 1Q18 1Q17 FY17 FY16 Product Devices 1,588 1,384 8,755 9,032 YoY growth 14.7% -3.1% Product - Supplies 5,288 2,052 14,677 4,281 YoY growth 157.7% 242.8% Total Revenue 6,876 3,436 23,432 13,313 YoY growth 100.1% 76.0% Cost of Goods 1, ,819 3,517 Gross Profit 5,640 2,513 18,613 9,796 Gross Margin (%) 82.0% 73.1% 79.4% 73.6% Selling & Administrative 3,685 2,030 9,669 9,156 Operating Expenses 3,685 2,030 9,669 9,156 YoY growth 10.2% 10.2% 5.0% Adjusted EBITDA 2, ,525 1,260 Adj. EBITDA Margin (%) 29.7% 16.6% 40.6% 9.5% Operating Income 1, , Operating Margin % 28.4% 14.1% 38.2% 4.8% Other items, net Pre-Tax Income 1, , Taxes Net income 1, , EPS, Basic EPS, Diluted Avg Basic Shares in period 32,601 31,418 32,156 31,271 Avg Diluted Shares in period 34,414 32,036 33,196 31,271 ** Source: Company results release, all data in 000s except per share Zynex pre-announces better than expected 4Q17 and FY2017 revenues Zynex reports 1Q18 at high end of guidance. Zynex announced 1Q18 results on May 8, 2018, which were at the high end of the company s guidance. Zynex has clearly completed the turnaround in its business, with 1Q18 marking the seventh consecutive quarter of profitability. We now view Zynex as a growth company in the pain management market with upcoming catalysts that could include an uplisting to a national exchange, and decisions on how best to deploy its free cash flow. 1Q18 revenues grow by 100.1% YoY. Zynex reported 1Q18 revenues of $6.88mn, which were up 100.1% versus $3.44mn in 1Q17. Results were above the midpoint of guidance and were driven by strong product supply sales, which rose to $5.29mn versus $2.05mn in 1Q17. As part of the announcement, Zynex management reported strong momentum in the market as its sales team continues to experience success marketing its flagship NexWave solution as a viable alternative for pain treatment to addictive medications such as opioids. Zynex stated that it continues to find promising new sales reps, and that it has increased SeeThruEquity, LLC. Important disclosures appear at the back of this report. 2 P age

3 its direct salesforce to 135. We also believe the company has benefitted from improved order processing, reimbursement procedures, and collections, which has allowed Zynex to better service supplies for its installed base of devices. Zynex demonstrates strong margins, cash flow. Zynex management reported a sharp rise in adjusted EBITDA. In 1Q18, adjusted EBITDA increased by 258% to reach $2.04mn, well ahead of $0.57mn during the prior year quarter. Adjusted EBITDA margins expanded to 29.7% of revenues, versus 16.6% of revenues in 1Q17. Gross margins came in at 82% versus 73.1% in 1Q17 and compared to 79.4% in FY2017. Zynex reports 1Q18 GAAP EPS of $0.06. For 1Q18, Zynex reported GAAP EPS of $0.06, an increase of 400% versus $0.01 in 1Q17. We note that this represented the seventh consecutive quarter of positive EPS at the company. Guidance calls for double-digit sequential growth, 50%+ annual growth in 2Q18. We were pleased to see Zynex guide to 2Q18 revenues to be in a range of $7.5mn - $8.0mn, which suggests that 2Q18 growth is expected to be greater than 50% over 2Q17. Zynex expects margins to remain healthy, as management called for adjusted EBITDA to be in a range of $2.5mn $3.0mn. EPS is expected to be approximately $0.08 per share, according to management. Updating estimates for higher sales staff, NeuroMove launch. Given the strong start to the year and positive outlook for 2Q18, we believe Zynex is poised to invest in driving growth. We now expect revenue of $32.0mn versus our prior estimate of $31.5mn for 2018E. We now expect Adjusted EBITDA to be $11.3mn versus $9.5mn in 2017, reflecting additional investments in sales and marketing. Re-launch of NeuroMove a possible catalyst. In addition to continued new sales execution, future growth is expected to be aided by the re-launch of NeuroMove, a non-invasive device intended to aid stroke survivors regain movement using neuro-plasticity. The device, the NeuroMove 900, has been available in clinics for multiple years but has not been sold through the company s direct sales force. Management expects the product to complement its existing sales efforts and footprint. We would expect the re-launch of NeuroMove to add to improve the growth profile of the company while requiring increased investments in sales and marketing. We expect to learn more about the timing and progress of this initiative in 2H18. Increasing Zynex price target to $6.75, raising top line estimates on strong results and guidance Raising estimates. Considering the positive pre-announcement, we are raising our full year 2018E revenue estimate to $32.0mn, versus our prior estimate of $31.5mn. Our 2018E EPS estimate is $0.30 versus $0.23 in FY2017. Price target moves to $6.75. We are raising our price target for Zynex to $6.75 following strong 1Q18 results for and a positive outlook for 2Q18. Zynex has clearly moved beyond a turnaround situation and is a growth company with apparent momentum in the market. If achieved, the target of $6.75 suggests potential upside of 121.3% from the recent price of $3.05. We expect basic EPS to grow from $0.23 in FY2017 to $0.30 in 2018E, representing 30.4% earnings growth. The new target of $6.75 implies a valuation of 22.3x our 2018E EPS estimate of $0.30 and 20.7x fully taxed 2019E GAAP EPS of $0.33. Compelling valuation. We note that Zynex shares trade an attractive valuation in light of the company s strong performance and large market opportunity. At the recent price of $3.05, shares trade at just 10.1x 2018E EPS of $0.30 despite robust profit growth exhibited and strong cash flow. Zynex extends buyback program. We see management s decisions as to how to deploy free cash flow as an intriguing item to watch as Zynex transitions to a growth company. On May 14, 2018, Zynex announced that it was increasing its share buyback program to include up to an additional $2mn worth of shares after having already repurchased 495,091 shares between December 6, 2017 and March 6, Moreover, on its earnings call, management stated that it may also explore acquisitions to accelerate growth SeeThruEquity, LLC. Important disclosures appear at the back of this report. 3 P age

4 Significant catalysts on the horizon include new products and progress made by the company towards listing shares on a national exchange such as the Nasdaq CM or NYSE American, its share purchase program, and potential acquisitions. Management Team Thomas Sandgaard, Chairman, President and Chief Executive Officer Thomas Sandgaard has been the Chairman of the Board, President and Chief Executive Officer of Zynex, Inc. since founding the company in He has previously held management positions with companies such as ITT, Siemens, GN Danavox, Dataco and Philips. Most of his work has been in the areas of international sales and distribution, technology transfers, mergers and marketing management in the semiconductor, telecommunications, data communications and medical equipment industries. Mr. Sandgaard has a degree in electronics engineering from Denmark s Odense University of Engineering and an MBA from Copenhagen Business School. Mr. Sandgaard has an in-depth knowledge of the industry and is the driving force of the Company strategies. Dan Moorhead, Chief Financial Officer Dan Moorhead is the Chief Financial Officer and responsible for all finance and accounting functions. Prior to joining Zynex, Mr. Moorhead was Chief Financial Officer of Evolving Systems, Inc. (Nasdaq: EVOL) from January 2016 until June 2017, after having served as Vice President of Finance & Administration from December 2011 through December 2015 and in other financial management roles from and Mr. Moorhead is a CPA and holds a B.B.A. in Accounting from the University of Northern Colorado. Robert Bird, VP, Marketing Robert Bird is the VP of Marketing responsible for all marketing, in-side sales and compounding products within the rehabilitation and pain management markets for the Zynex Medical division of Zynex. Mr. Bird has over 20 years of sales and management experience and holds a B.S. Degree in Business Administration from California State University, Hayward. Michael Frabotta, VP, Sales Michael Frabotta the VP of sales and is responsible for Zynex Medical s sales organization promoting electrotherapy and compound pharmacy products throughout the United States. Mr. Frabotta has over 14 years of successful sales and management experience with RS Medical and ERMI, Inc. At RS Medical, a once national competitor in the electrotherapy arena, he successfully served as a Director of Sales, National Director of Payor Contracting, Regional Manager, and Sales Representative. Mr. Frabotta received a Bachelor of Science in Nursing from the University of Pittsburgh where he specialized in Orthopaedics SeeThruEquity, LLC. Important disclosures appear at the back of this report. 4 P age

5 About Zynex, Inc. Zynex, founded in 1996, markets and sells its own design of electrotherapy medical devices used for pain management and rehabilitation; and the company's proprietary NeuroMove device designed to help recovery of stroke and spinal cord injury patients. Zynex is also developing a new blood volume monitor for use in hospitals and surgery centers. Zynex.com SeeThruEquity, LLC. Important disclosures appear at the back of this report. 5 P age

6 Contact Ajay Tandon SeeThruEquity (646) Disclosure This research report has been prepared and distributed by SeeThruEquity, LLC ( SeeThruEquity ) for informational purposes only and does not constitute an offer, solicitation or recommendation to acquire or dispose of any investment or to engage in any transaction. This report is based solely on publicly available information about the company featured in this report which SeeThruEquity considers reliable, but SeeThruEquity does not represent it is accurate or complete, and it should not be relied upon as such. All information contained in this report is subject to change without notice. This report does not constitute a personal trading recommendation or take into account the particular investment objectives, financial situation or investment decision. Readers should consider whether any information in this report is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties, many of which are beyond the company s control. Actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain industry, economic, regulatory or other factors. SeeThruEquity is not a FINRA registered broker-dealer or investment adviser. SeeThruEquity charges companies for a suite of services that may include conference presentation fees, the preparation of and distribution of initiation and/or update research reports, the issuance of press releases announcing its research reports and social media posts. SeeThruEquity reserves the right to decline to issue a research report in its sole discretion. The company discussed in this report has paid nineteen hundred fifty dollars in fees to SeeThruEquity for the distribution of this report. SeeThruEquity may receive fees in the future for similar services. On occasion, a company may pay all or a portion of its fees through the issuance of restricted shares of stock. To the extent the shares are not subject to restrictive legends, SeeThruEquity may sell these shares once unrestricted at any time including upon release of reports or articles on the subject company. SeeThruEquity and/or its affiliates may have a long equity position with respect to a non-controlling interest in the publicly traded shares of companies featured in its reports, and may sell its shares at any time, in its sole discretion and without regard to any price target in its report. SeeThruEquity s professionals may provide verbal or written market commentary that reflects opinions that are contrary to the opinions expressed in this report. This report and any such commentary belong to SeeThruEquity and are not attributable to the company featured in its reports or other communications. The price and value of a company s shares referred to in this report may fluctuate. Past performance by one company is not indicative of future results by that company or of any other company covered by a report prepared by SeeThruEquity. This report is being disseminated primarily electronically and, in some cases, in printed form. An electronic report is made simultaneously available to all recipients. Please refer to our website for additional information regarding SeeThruEquity. Copyright SeeThruEquity, LLC. No part of this material may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of SeeThruEquity, LLC SeeThruEquity, LLC. Important disclosures appear at the back of this report. 6 P age