MedWellAI, Inc. (MWAI) presents a deeply negative liquidation posture as of March 31, 2026. MFFAIS-computed liquidation values cluster around negative $7.7M, consistent with the balance sheet structure. Total assets of $321,787 face total liabilities of $7,845,767, yielding book equity of negative $7,523,980 on a consolidated basis (negative $7,685,890 attributable to MWAI shareholders). Under liquidation haircuts, recovery to equity is meaningfully worse than the book deficit because the asset base is overwhelmingly cash and near-cash with modest tangible fixed assets, while liabilities remain at face value. Specific asset recovery: cash of $130,028 recovers at 100% ($130K); receivables of $2,943 recover at ~90-95% ($2.6-2.8K); PP&E net of $42,490 consisting primarily of leasehold improvements recovers at perhaps 20-30 cents on the dollar given tenant-improvement-heavy composition (realistically $8-13K); intangibles of $33,617 (website) recover at 0%; ROU asset of $81,066 has no liquidation value but the corresponding lease liability of $92,482 survives at face value. Total liquidation asset recovery is approximately $145-150K against $7.85M in face-value liabilities — a shortfall exceeding $7.7M to equity, matching MFFAIS estimates. The dominant liability driver is the Series C Convertible Preferred Stock reclassified as a current liability under ASC 480 at $6.5M stated value ($6,500,000 tagged as ConvertibleDebtCurrent), which alone exceeds total assets by a factor of approximately 20x. The BHP Capital promissory note of $500,000 remains in default since maturity in January 2023; this is a senior secured claim on company assets. Accrued salary to CEO Steve Rubakh totals $558,002 as of March 31, 2026, up from $209,419 at June 30, 2025, accumulating at $62,500/quarter salary plus $100,000 quarterly bonus. Accumulated deficit stands at $89,853,514, up from $89,613,277 at December 31, 2025 (prior filing). The working capital deficit widened from $7,513,736 at December 31, 2025 to $7,612,521 at March 31, 2026, a deterioration of approximately $99K in one quarter. The company has no inventory on the balance sheet despite being a GLP medication distributor — the filing does not separately disclose inventory as an XBRL-tagged balance sheet item, which is noteworthy given $1.26M in cost of product sales YTD. The filing discusses accrued and unpaid dividends of $2,133,081 that were retired concurrent with the August 2025 preferred stock exchange, and a $241,918 loss on that exchange — both discussed in MD&A and footnotes but the dividend retirement does not appear as a separately tagged XBRL item on the balance sheet.
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