NVE Corporation (NVEC) as of March 31, 2026 presents an unusually favorable liquidation posture relative to most going concerns, driven by an asset base that is overwhelmingly liquid and marked to fair value. Total assets of $60.4M are composed predominantly of cash and marketable securities: cash of $1.7M plus total available-for-sale securities of $42.9M (fair value, per XBRL) represent roughly 73% of total assets at near-100% recovery rates under liquidation assumptions. The securities portfolio consists of money market funds ($1.1M, Level 1), U.S. Treasury securities ($4.7M, Level 2), and investment-grade corporate bonds ($37.1M, Level 2), with aggregate unrealized losses of only $72,393 on a $42.9M portfolio — immaterial. AR of $3.4M at 90-95% haircut yields approximately $3.1-3.2M. Inventory of $7.1M at 60% haircut yields approximately $4.2M. PP&E gross of $13.8M against accumulated depreciation of $12.2M gives net book value of $1.7M; at 50-70% recovery the contribution is $0.8-1.2M. Operating ROU asset of $0.8M has no liquidation value. No goodwill or significant intangibles are reported. Total liabilities are minimal at $2.1M, comprising current liabilities of $1.1M (AP $279K, accrued liabilities $698K, current lease $165K) and non-current liabilities of $989K (non-current operating lease liability $740K, net deferred tax liability $248K). Operating lease total undiscounted obligations of $1.1M (present value $906K) survive liquidation at face value. The net deferred tax liability of $248K (up from net deferred tax asset of $1.87M at March 31, 2025) reflects a significant swing driven by the $2.1M deferred federal tax expense, largely attributable to Section 174 R&D amortization reversal following federal tax law changes. Equity is $58.2M. Under the liquidation lens, estimated recovery to equity is comfortably positive — the liquid asset base alone ($1.7M cash + $42.9M securities at fair value) more than covers all liabilities ($2.1M) with substantial residual. The primary risk factors to recovery are: (1) the $37.1M corporate bond portfolio is Level 2 with $72K gross unrealized loss — concentration in investment-grade corporates is manageable; (2) $7.1M inventory at 60% haircut introduces approximately $2.8M of value destruction versus book; (3) single-customer concentration — Customer A represents 37% of revenue and 27% of AR — creates AR quality risk on a portion of the $3.4M balance. Compared to the prior Q3 FY2026 10-Q (period ending December 31, 2025), the annual filing shows the Section 174 deferred tax asset of $1.4M at March 31, 2025 largely reversed to $65K by fiscal year-end, consistent with the accelerated R&D deduction taken under the July 2025 federal budget reconciliation act. Total marketable securities declined from $47.9M at March 31, 2025 to $42.9M at March 31, 2026, reflecting net outflows from the $19.3M in annual dividends funded partly by maturing securities. Filing discusses the Section 174 R&D expense deduction impact in MD&A but the balance sheet impact is captured in tagged deferred tax items.
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