Zynex - Chapter 11 Bidding Procedures Summary

Bidding Procedures / Asset Purchase Agreement Summary

Parties Involved

• Debtors: Zynex, Inc. and its debtor affiliates.
• Stalking Horse Bidder: One or more entities to be formed by the DIP Lenders pursuant to the Restructuring Support Agreement (RSA).
• Advisors: Province LLC, engaged by the Debtors to explore value-maximization alternatives.
• Other Parties: An Ad Hoc Group of Convertible Noteholders, whose proposal was determined by the Special Committee to be the most value-maximizing.

Assets Being Sold

• The transaction contemplates an "Equity Transaction," structured as either:
  • The conveyance of Zynex, Inc.'s equity interests in Zynex Medical, Inc. (ZMI), the Debtors' operating entity; or
  • The issuance of equity interests in the Reorganized Debtors.
• The final transaction structure will be determined by the Required DIP Lenders.
• The Debtors will only solicit bids for an Equity Transaction, having determined that an alternative asset sale structure is incompatible with their financial position and need for an expeditious exit.

Stalking Horse Bid

• The Stalking Horse Bid is based on the terms of the RSA and provides for a confirmable Chapter 11 plan.
• Material Plan Terms include:
  • DIP Claims: Full and final satisfaction of the DIP Loan.
  • Administrative & Priority Claims: Full payment or treatment consistent with the Bankruptcy Code.
  • Convertible Notes & GUCs: Pro rata share of Excess Sale Proceeds.
  • Existing Equity Interests: Canceled, with a pro rata share of remaining Excess Sale Proceeds after full payment of Allowed Claims.
  • Management Incentive Program (MIP): Up to 10% of New Common Shares on a fully diluted basis.
  • Releases: Customary Debtor releases, third-party consensual releases, exculpations, and injunctions.

Credit Bid

• The Stalking Horse Bidder is authorized to credit bid up to the full amount of the DIP Loan.
• The credit bid amount shall be no less than $49.6 million, inclusive of principal, the Back-Stop Fee, and the Minimum Return Payment.

Bid Requirements

• Bid Deadline: February 9, 2026, at 5:00 P.M. (CT).
• To be considered a Qualified Bid, an "Alternative Bid" must:
  • Provide for payment in full in cash of the DIP Loan by the effective date;
  • Contain closing conditions no less favorable than those in the RSA; and
  • Include terms materially consistent with the RSA.
• Submission requirements include:
  • Bid Letter: Identifying the bidder and confirming the bid is irrevocable until 20 days after plan confirmation.
  • No Contingencies: The bid must not be conditioned on financing, internal approvals, or due diligence.
  • Adequate Assurance: Evidence of financial capacity, including tax returns, financial statements, and proof of available cash or committed financing.
  • Plan Term Sheet: Addressing, at a minimum, the Plan Terms contained in the Stalking Horse Bid.

Good Faith Deposit

• Amount: 10% of the total cash and non-cash consideration, payable via certified check or wire transfer.
• The Successful Bidder must supplement the deposit within one business day of the Auction's close to maintain the 10% threshold based on the final purchase price.
• Deposits will be returned to non-successful bidders within five business days after the Auction concludes.
• The deposit is subject to forfeiture if a Qualified Bid is withdrawn.

Overbid

• Minimum Cash Component: Sufficient cash to pay the DIP Loan in full (approx. $49.6 million) plus $250,000.
• Total Commitment: Must equal or exceed $49.85 million.
• Minimum Overbid Increment: To be announced by the Debtors at the outset of the Auction.

Bid Protections

• No expense reimbursement, break-up fees, or termination fees are available to any party other than the Stalking Horse Bidder.
• Bidders must expressly waive any right to substantial contribution administrative expense claims under section 503(b) of the Bankruptcy Code.

Auction Details

• Date & Location: February 13, 2026, conducted telephonically, by videoconference, or at the offices of Simpson Thacher & Bartlett LLP in New York.
• Process:
  • The Debtors will designate a "Baseline Bid" (highest/best Qualified Bid) to start the auction.
  • Bidding will proceed in rounds, with the Debtors announcing the "Leading Bid" between rounds.
  • A "Subsequent Bid" must improve upon the bidder's prior bid and be deemed higher or better than the Leading Bid.
• Evaluation Criteria: The Debtors will consider aggregate consideration, net economic benefit, plan confirmability, proposed governance, and impact on employees.

Key Dates

• Bid Deadline: February 9, 2026, at 5:00 P.M. (CT)
• Bid Qualification Deadline: February 10, 2026
• Auction Date: February 13, 2026, at 10:00 A.M. (ET)