International Stem Cell Corporation (ISCO) as of December 31, 2025 presents a deeply negative liquidation recovery posture. Total assets of $4.82M are offset by total liabilities of $4.58M carried at face value, producing GAAP book equity of negative $4.06M (accumulated deficit of $111.1M). Under liquidation haircuts, the recovery picture is materially worse. Cash of $993K recovers at 100% ($993K). Accounts receivable of $723K at 90-95% yields approximately $650-686K. Inventory (gross $2.52M, net $1.51M after a $781K reserve) at 60% yields roughly $907K on net book value, though the reserve signals quality risk. PP&E net of $160K at 50-70% yields $80-112K. Intangibles of $644K (patents $569K net, trademarks $75K) receive a 0% recovery haircut, adding nothing. Right-of-use assets of $344K are similarly $0 in liquidation. On the liability side, current notes payable of $3.34M (consisting of the related-party CEO note with a balance of approximately $2.5M at year-end plus accrued interest) plus operating lease liability of $393K (all current, expiring December 2026), accounts payable of $168K, and accrued liabilities of $428K all remain at face value. Total identifiable liquidation recovery on current assets is approximately $2.6-2.7M against current liabilities of $4.58M, implying a liquidation deficit to equity of approximately $1.9-2.0M. MFFAIS CLV is reported at negative $2.59M, consistent with this computation. The dominant drivers of the deficit are the CEO-related-party note ($2.5M principal at 5.5%, maturing September 2026, with a subsequent $150K paydown in February 2026 reducing balance to $2.35M) and the full write-off of $644K in intangibles under liquidation. The going concern qualification from the prior 10-Q persists; as of the annual filing management continues to cite insufficient cash to sustain operations without additional financing. The co-tenant lease arrangement allocating 75% of San Diego HQ costs to ISCO (up from 40% in January 2025) increases the effective liability burden on the operating lease. All lease obligations mature December 2026 with no long-term noncurrent lease liability. The $7.64M deferred tax asset is fully reserved with a valuation allowance, contributing zero to liquidation recovery. The filing discusses going concern risk in MD&A but no new separately tagged XBRL going-concern disclosure was emitted; the concern is disclosed in narrative only.
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