Orthofix Medical Inc. (OFIX) as of March 31, 2026 presents deeply negative liquidation recovery to equity under a wind-down scenario. MFFAIS reports a cash liquidation value of approximately -$300M, a liquid liquidation value of approximately -$162M, and an operating liquidation value of approximately +$16M. The balance sheet carries $886.6M in total assets against $451.4M in total liabilities, yielding GAAP book equity of $435.2M. Under liquidation haircuts, however, asset recovery deteriorates sharply. The dominant asset impairments: (1) Goodwill of $194.9M receives zero recovery; (2) Intangible assets net of $69.3M receive zero recovery; (3) Inventory of $177.8M recovers at ~60%, implying a ~$71M haircut; (4) PP&E net of $125.3M recovers at 50-70%, implying a $38-63M haircut; (5) ROU assets ($21.6M operating, $9.5M finance) are of limited standalone value. On the liability side, $225.0M in outstanding credit facility borrowings (Initial Term Loan + Term B Loan funded January 2026) sit at face value, maturing November 2029, with an interest-only period through December 2028. The Term B Loan ($65.0M) was drawn in January 2026, materially increasing the debt stack from the prior year-end. Operating lease obligations ($27.9M combined current and noncurrent) persist at face value on windup and are extended through October 2040 per the Sixth Amendment to the Lewisville headquarters lease, signed January 15, 2026. Finance lease obligations total $13.1M. Other current liabilities of $106.2M and other noncurrent liabilities of $56.1M are substantial and opaque—the filing does not separately tag accrued compensation, litigation reserves, or deferred revenue within these buckets in XBRL, though MD&A notes accrued settlement fees increased and the Lattus Spine contingent consideration liability stands at $8.7M fair value ($4.7M current, $4.0M noncurrent). Accumulated deficit is -$389.2M, reflecting persistent losses. Q1 2026 net loss was $(20.9)M; free cash flow was $(28.3)M. Operating cash consumption remains material at $(17.6)M for the quarter despite the Term B Loan proceeds bolstering the cash balance to $120.3M. The filing discusses FDA reclassification of bone growth stimulators from Class III to Class II in risk factors—a potential headwind to the Therapeutic Solutions franchise, which contributes ~29% of net sales—but does not separately tag any impairment test conclusions or goodwill carrying value by reporting unit in XBRL for this period.
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