The FDA sent a warning letter last month to Zynex Medical (OTC:ZYXI) flagging problems with how it handles adverse events with its NexWave and IF8000 chronic pain devices.

The federal watchdog agency said inspections conducted at Zynex’s Lone Tree, Colo., plant found that the company failed to establish adequate procedures for design inputs; failed to establish procedures for design verification; failed to establish a device master record; failed to maintain device history records with all the information required; failed to establish procedures for corrective and preventive actions and failed to establish procedures for internal audits, according to the June 27 letter.

The FDA also said Zynex failed to "establish procedures for receiving, reviewing, and evaluating complaints by a formally designated unit," including complaints received between Dec. 13, 2012 and Dec. 31, 2013, and "did not document any product complaint reports for these complaints including any investigations."

And Zynex failed to report adverse events to the FDA within the 30-day deadline required by the agency. In June and July 2009, the company sent roughly 2,978 recall letters to customers after receiving reports that a problem with the IF8000 electrical stimulator "could result in the device ceasing to operate, overheating and becoming hot to the touch," according to the warning letter.

"Between June 25, 2009, and July 9, 2009, your firm sent approximately 2,978 recall letters to customers notifying them of the defect and requesting they contact your company. You did not notify FDA, in writing, within ten days of initiating this removal," according to the letter. "We reviewed your firm’s response and conclude that it is not adequate. Although you have submitted the subject removal to FDA, you did not address how you will verify that there were no other corrections or removals required to be reported to FDA that have not been reported."