Procyon Corp (PCYN) is a micro-cap pharmaceutical preparations company operating primarily through AMERX Health Care Corp, a wound and skin care products manufacturer. Under a liquidation lens at June 30, 2024, the balance sheet shows total assets of $3.2M against total liabilities of $917K, with GAAP book equity of $2.29M. However, applying standard liquidation haircuts materially compresses recoverable value. Cash of $326K recovers at 100%. CDs of $583K recover at 100%. Net AR of $513K haircuts to roughly $460-487K at 90-95%. Current inventory net of $510K and noncurrent inventory of $217K (total gross $727K) recover at approximately 60%, or ~$436K. PP&E net of $262K recovers at 50-70%, or $131-183K. The $17K intangible (care lotion formulation, indefinite life) receives zero recovery. ROU asset of $338K receives zero recovery as it represents a contractual right, not a transferable asset. On the liability side, current liabilities total $769K at face, including $428K in accrued expenses (dominated by $147K accrued payroll, $107K accrued lease liability, $59K professional fees, $50K accrued PTO, $47K accrued incentive) and $161K accounts payable. Operating lease liabilities of $319K ($181K current, $139K noncurrent) remain at face on wind-up; total undiscounted lease payments of $329K due FY2025-2026 must be settled. Estimated liquidation recovery to equity: cash+CDs+AR haircut+inventory haircut+PP&E haircut less all liabilities at face = approximately $326K+$583K+$474K+$436K+$157K minus $917K = roughly $1.06M, well below GAAP book equity of $2.29M. MFFAIS shows CLV of -$256K (cash insufficient to cover liabilities), LLV of $257K, OLV of $767K, consistent with a low but positive recovery range under the operating or liquid scenario but negative under a strict cash-only test. Key deterioration since the prior 10-Q (March 31, 2024): net loss for the full year was $341K versus $50K in FY2023, a 6x increase. Cash declined from $451K to $326K. Accrued expenses jumped from $277K to $428K, a 54% increase year-over-year, primarily driven by accrued payroll doubling from $70K to $147K and accrued incentive plan nearly doubling from $24K to $47K. A new full-valuation allowance of $209K was established against deferred tax assets, up from $0 at June 30, 2023, signaling management's reassessment of recoverability. NOL carryforwards are $825K. The line of credit ($250K facility, zero drawn) provides a modest contingent buffer. Preferred stock carries $422K of cumulative undeclared dividends ($2.72/share on 154,900 shares after conversions), which would rank ahead of common in any wind-up. Filing discusses concentration of supply risk with a single pharmaceutical manufacturer in MD&A but does not separately XBRL-tag this as a quantified contingent liability.
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