Zynex Inc. (OTCMKTS:ZYXI) Is A Smart Play On The Opioid Crisis

President Trump said very recently that there is an opioid crisis in the US. He officially recognized that it is a national emergency and the Government will spend time and money on the issue.

Trump Informally Declares the Opioid Crisis a National Emergency (Source: www.theatlantic.com)As we all know that the words of Trump tend to create a large reaction on the market, thus the market is always vigilant to try to profit from any new Governmental measures. Regarding this matter, we need to talk about a company that has been featured by the team before: Zynex Inc. (OTCMKTS:ZYXI).We noted that the company was delivering fantastic returns on "Zynex Inc. (OTCMKTS:ZYXI) On A Bull Run". The good news is not only that the upward trend continues, but the company announced new efforts to address the Opioid Crisis. We will tell you everything you need to know in this article, but first of all have a look at the recent share price action: 1 year chart for ZYXI

Business

Let's review the business model of Zynex Inc. for those who had no time to read our previous report. ZYXI was founded in 1996 and is headquartered in Lone Tree, Colorado. As of December 31,2016, it employed 106 employees. It designs, manufactures and markets non-invasive medical devices for pain management, stroke rehabilitation, cardiac monitoring, and neurological diagnostics. They are FDA approved products and there are research studies that noted their benefits. We encourage readers to check the list of products sold by ZYXI on the company's website.Recent DevelopmentsOn September 6, 2017, the company noted its intention to sell stock to employees, officers, directors, and consultants. In total, 5,000,000 shares and 1,081,000 shares subject to issuance pursuant to certain non-plan stock option agreements will be offered. As of August 7, 2017, the total amount of outstanding shares is 32,048,484. This information is relevant, as the market should appreciate checking the dilution risk on this name.On September 6, 2017, the company issued a press release, wherein the opioid crisis in the US was noted. Zynex's Founder and CEO, Thomas Sandgaard, commented that the company's e-stim solution, hot/cold therapy and spinal bracing lines could be very useful in this regard. These were his words:

"We strongly believe Zynex's prescription-strength e-stim solution, hot/cold therapy, and spinal bracing lines should be used as the first line of defense rather than medication with so many negative side effects. We know that patients are less likely to start down the path toward reliance on opioids when drug-free options are available to them. " Source

Additionally, he added that the company is trying to increase access to the company's drug-free solutions, and the sales force presence is being expanded. Furthermore, the company is increasing awareness of the EZ-Prescribe program to medical professionals in the country. We appreciate these new measures, as we believe that they will have a good impact on the top of the P&L in the near future.Financials and ConclusionCurrently trading with a market cap of $50 million, ZYXI is an exciting story among small caps. Regarding the financial figures, the company showed, in its last 10-Q, approximately $2.5 million in net receivables, approximately $3.10 million in net payables, and very little long term debt. In the last annual report, the company showed approximately $13 million in revenues, and the net income reported was positive for the first time in fours years. This was a good news, as the company went from losing approximately $7.3 million in 2013 to $69,000 in 2016. How did the company transform itself?By drastically reducing the cost of revenue. Have a look at the downward trend:Period Ending (Values in 000s | USD)Dec 31, 2016Dec 31, 2015Dec 31, 2014Dec 31, 2013Total Revenue13,31311,64111,11721,684Cost of Revenue3,5174,9377,6128,140Gross Profit9,7966,7043,50513,544SourceFinally, regarding the amount of shares owned by the public, which is the float, it is 13,500,000. The total outstanding shares is 32,048,484 as of August 7, 2017. This means that the share price can show large amount of volatility, as we saw in the previous months. We noted it, as we know that some appreciate volatility plays in the OTC Markets universe. To sum up, there is a lot to like with ZYXI. It is delivering interesting news that is pushing the share price higher. This upward trend looks set to continue as the company tackles the opioid crisis head on.Be sure to check out our coverage on ZYXI!We will be updating our subscribers as soon as we know more. For the latest updates on ZYXI, sign up below!Image courtesy of djtrumpnetwork SOsos via FlickrDisclosure: We have no position in ZYXI and have not been compensated for this article.