Dror Ortho-Design, Inc. (DROR) is a pre-revenue orthodontic device developer carrying a deeply negative liquidation posture as of March 31, 2026. Total assets of $253,781 sit against total liabilities of $3,566,158, producing a GAAP stockholders' deficit of $(3,312,377). Under the liquidation lens, the asset side is essentially all cash and near-cash: $23,802 in cash (recoverable at 100%) and $211,131 in receivables and prepaid expenses, of which $200,000 is a prepayment of stock issued to AAFE for marketing services not yet commenced — this item has no cash recovery value on liquidation and should be written to zero. PP&E of $18,848 might recover $9,000-$13,000 at 50-70%. Adjusted liquidation asset recovery is therefore approximately $23,802 (cash) plus $11,131 (residual prepaid/receivables at 90-95%, excluding the AAFE prepayment) plus $9,000-$13,000 (PP&E) — total approximately $44,000-$48,000. Against this, liabilities at face value total $3,566,158, consisting of: accounts payable $101,747; accrued expenses $383,584 (including $153,380 of accrued executive salaries); convertible promissory notes at carrying value $1,584,358 (principal $1,950,000 net of $365,642 discount — under liquidation, the full principal face value of $1,950,000 applies, not the discounted carrying value, materially worsening recovery); derivative liability $789,788; Registration Rights Agreement liability $520,000 (no stated repayment date, non-interest-bearing, but face-value obligation on wind-up); and accrued severance $186,681. Using face principal on the debentures, liquidation liabilities are approximately $3,182,000 current plus $186,681 non-current, totaling roughly $3.93 million. Equity recovery to common is deeply negative at approximately $(3.88) million on an adjusted basis. The MFFAIS CLV/LLV/OLV are all reported at $(2,499,474), consistent directionally but understating the severity because they do not appear to gross up the convertible debt discount to face principal. Cash of $23,802 as of March 31, 2026 covers less than two weeks of operating cash burn ($404,268 for Q1 2026). The company is wholly dependent on continued bridge financing — $275,000 in additional debentures closed April 28, 2026 (subsequent event). Accumulated deficit is $22,690,209. Going concern language is explicit. The filing does not separately tag the IIA contingent royalty obligation of approximately $1.25 million in XBRL; this contingent liability appears only in Note 7 narrative — it is sales-contingent and would not crystallize in a wind-up absent prior revenues. The $200,000 AAFE prepayment is tagged as PrepaidExpenseAndOtherAssetsCurrent but is economically a sunk cost under liquidation (services not yet rendered, no cash recovery path). Comparison to the prior 10-K (December 31, 2025): total liabilities increased from $3,132,647 to $3,566,158 (+$433,511) in a single quarter, driven by convertible note principal growth ($1.75M to $1.95M), accrued expense accretion, and derivative liability increase, while assets declined marginally ($258,936 to $253,781). The deterioration in liquidity is the dominant change from the prior period.
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