Intellinetics, Inc. Liquidation Value

INTELLINETICS, INC. (INLX) presents a negative liquidation recovery position as of March 31, 2026, consistent with prior periods. MFFAIS calculates a cash liquidation value of approximately -$2.2M, a liquid liquidation value of approximately -$0.98M, and an operating liquidation value of approximately -$0.81M. The TAG_CONTEXT is empty — no XBRL tags were provided for this filing — so all quantitative analysis is derived solely from the filing narrative and tables.

Balance sheet as reconstructed from the filing: total assets of $16.5M (down from $17.3M at December 31, 2025), of which the largest components are goodwill ($5.8M, unchanged QoQ), net intangibles ($2.8M, down from $2.9M via routine amortization), net PP&E ($1.0M), capitalized internal-use software in other long-term assets ($0.78M), accounts receivable billed ($1.2M) and unbilled ($0.82M), and cash of approximately $2.1M per MD&A. The company states a net working capital deficit of $0.5M, including $2.9M in deferred revenue (a face-value liability under the liquidation lens).

Applying liquidation haircuts: cash at $2.1M receives 100% recovery; billed AR of ~$1.2M at 90-95% yields ~$1.1-1.1M; unbilled AR of ~$0.82M carries higher collection risk and would likely be discounted more heavily; PP&E gross of $2.9M with accumulated depreciation of $1.9M yields $1.0M book — at a 50-70% haircut on gross, tangible recovery is low. Goodwill ($5.8M) and net finite-lived intangibles ($2.8M, comprising trade names, proprietary technology, and customer relationships) carry zero recovery under the liquidation lens. Capitalized internal-use software ($0.78M) similarly recovers zero. These three categories alone represent $9.4M in book value that liquidation assigns no value to — this is the primary driver of the negative recovery.

On the liability side, deferred revenue of $2.9M represents a performance obligation that does not extinguish on windup without a contractual settlement; it is carried at face value. Operating lease liabilities are present (disclosed in prior filings) but the specific balance is not separately quantifiable from the current filing narrative. No funded debt is outstanding as of March 31, 2026 — all notes payable to related and unrelated parties were prepaid in full on June 18, 2025, which removes a prior meaningful liability. A $1M JPMorgan Chase revolving line of credit was established February 16, 2026 with no draws outstanding at period end.

Change versus prior period (December 31, 2025): total assets declined by ~$0.85M, primarily from working capital consumption (net cash used in operations of $0.23M) and capital expenditures of $0.20M. Goodwill is unchanged. Intangibles declined by $0.11M (routine amortization). The debt elimination completed in mid-2025 remains the most significant positive change to the liability stack. A CEO transition during Q1 2026 generated one-time severance and recruiting costs embedded in G&A, inflating Q1 2026 operating losses to $1.18M versus $0.68M in Q1 2025. The 100% deferred tax asset valuation allowance maintained against an estimated $19.6M federal NOL carryforward confirms management's own assessment that taxable income is not reliably foreseeable. Filing discusses operating lease right-of-use assets and liabilities in the context of its leased facilities (Graphic Sciences) in the MD&A but does not separately disclose lease liability balances in the current filing body; these would add to face-value liabilities under the liquidation lens.