Hubilu Venture Corp (HBUV) is a Los Angeles-based residential rental property operator with 35 properties concentrated near the USC campus. As of December 31, 2025, MFFAIS reports a cash liquidation value of approximately -$25.4M and liquid/operating liquidation value of approximately -$25.3M, confirming deeply negative recovery to equity under a wind-down scenario. The primary driver is a $22.9M gross mortgage stack ($22.5M net of discounts) carried at full face value on liquidation, set against real estate assets that under a 50-70% haircut on the $23.4M net PP&E book value would recover $11.7M-$16.4M — leaving a shortfall of roughly $8.9M-$13.5M on mortgages alone before addressing $2.6M in current liabilities, $751,849 in Series 1 preferred settlement obligation, and $2.9M in accumulated deficit. Total recorded liabilities are $25.3M versus total assets of $23.5M, producing a book stockholders' deficit of -$1.78M; the liquidation deficit is materially wider due to real estate haircuts. Mortgage debt grew $2.35M year-over-year (from $20.5M to $22.9M gross), driven by new property acquisitions and five property refinancings executed during 2025 at rates ranging from 6.35% to 7.45%. The Hubilu general loan increased from $75K to $275K. $4.1M of principal matures in 2029 and $16.5M thereafter, but $1.36M is due in 2026. Annual interest expense rose to $1.48M (from $1.21M in 2024), exceeding net operating income of $931K and producing a net loss of $551K. Accrued interest payable grew sharply from $87K to $257K, a 194% increase, indicating cash interest coverage stress. The Series 1 convertible preferred stock ($520,400 par, scoped as a liability under ASC 480-10 due to variable-share settlement) carries cumulative undeclared dividends of $231,449 at year-end, total settlement obligation $751,849 maturing September 30, 2029. Management has disclosed four persisting material weaknesses in internal controls, including failure to catch journal entry errors identified by the external auditor and absence of a formal related-party transaction approval process. The filing does not disclose an independent appraised value for the real estate portfolio; the liquidation recovery estimate relies on the balance-sheet carrying values subject to standard haircuts. No goodwill or separately identified intangibles are present. Deferred tax assets of $653K are fully reserved.
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