Pharma-Bio Serv, Inc. (PBSV) is a pharma compliance consulting firm operating in Puerto Rico, the US, Spain, and Brazil. At January 31, 2026, reported book equity is $10.2M against total assets of $13.5M and total liabilities of $3.3M (all current). Under liquidation lens, the asset mix is highly favorable: cash and cash equivalents of $5.8M (100% recovery), marketable securities of $4.8M in US Treasuries held-to-maturity (Level 1, effectively 100% recovery), and net accounts receivable of $2.7M gross before a $5.3M allowance for credit losses — the gross AR carrying value is therefore approximately $7.95M with the allowance largely specific to the Romark litigation judgment ($6.7M awarded, zero assets identified for collection). The net AR of $2.7M is primarily current trade receivables from pharma industry clients; at 90-95% recovery, liquidation value is approximately $2.4-$2.5M. PP&E net is $104K; at 50-70% haircut, recovery is $31-$52K. Other noncurrent assets of $121K include a membership interest and option in an AI company (related-party transaction from FY2025) plus other items; liquidation value is uncertain but likely de minimis. Intangibles: the AI dashboard tool ($150K cost, partially amortized) would be assigned zero recovery under the lens. Liability stack is entirely current at $3.3M: accounts payable and accrued liabilities $870K, accrued income taxes $722K, and dividends payable $1.72M (declared January 28, 2026, payable March 20, 2026 — a hard cash obligation at face value). No long-term debt. No pension. Operating lease liability is zero following termination of the only contractual long-term lease on December 31, 2025 — a meaningful reduction from the prior filing, which showed $29K remaining. Estimated liquidation recovery to equity: cash $5.8M + Treasuries $4.8M + net AR $2.4M + PP&E $0.05M = ~$13.0M recoverable assets versus liabilities at face $3.3M = net recovery of approximately $9.7M. MFFAIS shows OLV/LLV at ~$5.1M, substantially below this estimate, likely reflecting haircuts applied to AR and Treasuries in their model. The key change versus the prior 10-K (October 31, 2025): the lease liability has been extinguished (saving ~$29K in current obligations), cash increased $2.4M from marketable securities net redemptions of $2.76M offset by operating cash burn of $390K, and retained earnings dropped $1.7M from the dividend declaration. The Romark bad debt ($5.3M allowance, mostly against the $6.7M judgment) continues to represent the largest qualitative risk: the gross AR figure is inflated by this non-recoverable balance, but the net figure used above ($2.7M) is after the allowance and represents collectible client trade receivables. Filing discusses the OBBBA GILTI rate increase (from 10.5% to ~12.6% effective FY2027) in MD&A but does not separately tag the incremental tax liability in XBRL.
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