OLD MARKET CAPITAL Corp: Form 10-K for the period ended Mar 31, 2025

Our Company

Old Market Capital Corporation (NASDAQ:OMCC), which we refer to as "OMCC," “the Company,” “our Company,” “we,” “us,” or “our” was previously a specialized consumer finance company. After the Company announced the restructuring of its operations in November 2023, the Company now operates as a holding company which indirectly owns a controlling interest in a broadband company and which seeks to pursue additional controlling interests in other companies and sectors yet to be determined.

Former Consumer Finance Business

On November 13, 2023, the Company entered into a Master Asset Purchase Agreement (the "Westlake Purchase Agreement") with Westlake Services, LLC dba Westlake Financial, a California limited liability company ("Westlake Financial"), pursuant to which the Company agreed to sell substantially all of the finance receivables and all of the repossessed assets of the Company. In connection with entering into the Westlake Purchase Agreement, the Company ceased new loan originations of contracts and direct loans. On April 26, 2024, the transactions contemplated by the Westlake Purchase Agreement. The Company no longer originates auto loans and has been in the process of winding down previously charged off accounts and other related business activities.

Broadband Business

On June 15, 2024, the Company, through the acquisition and subsequent contributions, acquired sahres totaling 56.5% of the issued and outstanding common shares of Amplex Electric Inc, an Ohio corporation ("Amplex"), and concurrently with such closing, the Company and the remaining Amplex shareholder contributed all of their Amplex shares to newly formed holding company named Amplex Holdings, Inc., a Delaware corporation ("Amplex Holdings"), in exchange for common shares of Amplex Holdings. Immediately following such exchange the Company held 56.5% of the issued and outstanding common shares of Amplex Holdings, and Amplex Holdings held 100% of the issued and outstanding common shares of Amplex. Amplex is a provider of broadband internet, voice over internet protocol (VOIP), and video services within service areas located primarily in Northwest and North Central Ohio. As of March 31, 2025, Amplex had approximately 13,000 broadband customers (4,400 fiber subscribers) and over 12,000 fiber passings completed. Amplex's customer base includes both residential and commercial customers.

Additional Opportunities for Growth

In addition to Amplex's activities in the broadband sector, the Company is open to exploring other industries that offer the potential for stable and attractive returns on invested capital. The Company intends to continue to pursue an opportunistic approach in identifying opportunities that align with its investment criteria.

Our goal is to drive growth in intrinsic value per share at an appealing rate by retaining capital for reinvestment in the growth of our existing operating subsidiary, pursuing strategic investments, and/or funding new, long-term income-generating ventures. We will regularly evaluate each capital allocation option, and decisions will be made based on our management team's judgment of where capital is most likely to deliver the potential for strong long-term returns.

Our History

The Company started as Nicholas Financial, Inc. (“Nicholas Financial Parent”) a Canadian holding company incorporated under the laws of British Columbia in 1986. The business activities of Nicholas Financial Parent were conducted exclusively through its wholly-owned indirect subsidiary, Nicholas Financial, Inc., a Florida corporation (“NFI”). NFI was a specialized consumer finance company engaged primarily in acquiring and servicing automobile finance installment contracts (“Contracts”) for purchases of used and new automobiles and light trucks. Additionally, NFI, prior to the end of the third fiscal quarter of the fiscal year 2024, sold consumer-finance related products and, prior to the end of the third fiscal quarter of the fiscal year ended March 31, 2023, NFI originated direct consumer loans (“Direct Loans”). Nicholas Data Services, Inc., a Florida corporation (“NDS”), was a second direct wholly-owned subsidiary of Nicholas Financial Parent and it served as the intermediate holding company for NFI. NF Funding I, LLC, a Florida limited liability company (“NF Funding I”), was a wholly-owned, special purpose financing subsidiary of NFI, but that subsidiary was dissolved prior to the end of the fiscal year ended March 31, 2023 when it no longer served any purpose.

On April 18, 2024, Nicholas Financial Parent filed its Certificate of Corporate Domestication and Certificate of Incorporation in the State of Delaware in order to complete its continuation and domestication from a company incorporated under the laws of British Columbia to a corporation incorporated under the laws of the State of Delaware, as further described and set forth in its Registration Statement on Form S-4 (File No. 333-275704), as amended, filed with the Securities and Exchange Commission ("the SEC") on January 29, 2024, and its Proxy Circular/Prospectus (File No. 333-275704) filed with the SEC on March 19, 2024. As a result of the domestication, the Company's common stock par value increased from $0.00 per share to $0.01 per share.

On April 26, 2024, Nicholas Financial Parent closed upon the sale of substantially all of the finance receivables and all of the repossessed assets of Nicholas Financial Parent and NFI to Westlake Financial, as further described and set forth in its Current Report on Form 8-K filed with the SEC on May 1, 2024 (collectively, the “Loan Portfolio Sale”).

On June 15, 2024, Nicholas Financial Parent closed upon the acquisition of approximately 56.5% of the issued and outstanding common shares of Amplex, as further described and set forth in its Current Report on Form 8-K filed with the SEC on June 21, 2024 (collectively, the “Amplex Acquisition”). In conjunction with the closing of the Amplex Acquisition, Nicholas Financial Parent converted the outstanding principal and accrued interest of approximately $0.8 million in the aggregate under certain term loan advances made from February 2024 to June 2024 ("the Term Loan Advances") into 421 shares of Amplex common stock at the share purchase price of $1,792.55, per share, and Nicholas Financial Parent contributed $3.0 million for 1,674 shares of Amplex common stock, at the purchase price of $1,793.19 per share, bringing Nicholas Financial Parent's total ownership to 56.5% of the issued and outstanding common shares of Amplex.

Effective as of September 27, 2024, Nicholas Financial Parent filed a Certificate of Amendment to its Certificate of Incorporation with the Delaware Secretary of State to change its name from Nicholas Financial, Inc. to Old Market Capital Corporation. The Company is a holding company incorporated under the laws of the State of Delaware with NDS as a direct wholly-owned subsidiary, Amplex Holdings as a direct majority-owned subsidiary, and Amplex as an indirect majority controlled subsidiary wholly owned by Amplex Holdings.

In December of 2024, the Company invested an additional $4.5 million into Amplex Holdings for 2,583 shares at the purchase price of $1,742.16 per share, increasing the Company's ownership percentage to 60.9% of the issued and outstanding common shares of Amplex Holdings.

The Company’s principal executive office previously located in Clearwater, Florida was closed in January 2025. The Company's new principal executive offices are now located at 1601 Dodge Street, Suite 3350, Omaha, Nebraska, 68102.

Industry Background

Broadband Services. Amplex offers fiber optic and fixed position wireless connectivity to homes, businesses, and community organizations across Northwest and North Central Ohio. With the growing demand for higher bandwidth and faster connections for both industrial and residential needs, fiber optic technology is increasingly becoming the standard. Unlike metal cables, fiber optic cables provide much greater bandwidth, allowing a far higher volume of data to be transmitted in less time. This enhanced capacity is one of the primary advantages of fiber optics. Additionally, fiber optics experience low power loss, enabling longer transmission distances compared to other media. They are also less susceptible to electromagnetic interference, offer greater capacity, and are lighter than traditional copper wire connections. Made of glass, fiber optic cables can also offer cost benefits over copper wire.

However, fiber optic technology comes with its challenges. It can be more difficult and expensive to install than copper and requires time for engineering and permitting as well as the need for specialized equipment for installation and testing. Fiber is also more prone to damage during installation or construction activities. Despite these challenges, we believe that the demand for broadband services has surged since the COVID-19 pandemic and will continue to rise as businesses and consumers increasingly rely on remote connectivity for work, education, telehealth, and other needs. As new technologies evolve, the demand for digital information and services is expected to grow.

In addition to fiber optic technology, Amplex maintains a strong fixed position wireless network where they are able to provide a high bandwidth solution in rural areas and communities where fiber technology does not currently exist and/or it is cost prohibitive to install.

Business Overview and Strategy

General Overview. Since present management took over and restructured the Company's operations, we are actively engaged in seeking investment opportunities to add intrinsic value for shareholders. Our strategy centers on investing in companies and business sectors that have a proven track record, or that we believe have the potential to consistently generate strong earnings over time. We focus on those with attractive historical pre-tax returns on tangible equity capital, and that we believe are available at a fair price.

We intend to explore acquisitions through a variety of channels, including internal outreach such as phone calls, research, and mailings, as well as long-standing business relationships. We also plan to evaluate opportunities presented by brokers and other professionals. Our focus remains on acquisitions that align with our growth strategy. All potential acquisitions carry inherent risks and uncertainties, including the timing, likelihood, and extent of anticipated benefits or cost savings. In addition to full acquisitions, we are also exploring opportunities to acquire significant interests in existing businesses. We prioritize businesses with a track record of strong, consistent earnings and solid pre-tax returns on tangible equity, provided they are available at a reasonable valuation. While we generally prefer a controlling interest, we may consider minority positions or stock-based transactions when the economics are compelling.

Broadband. We aim to capitalize on the increasing demand for high-speed internet in rural areas, driven by the broader shift toward digital consumption and remote work. Amplex currently serves underserved communities across Northwest and North Central Ohio where existing providers often fail to deliver adequate speed and bandwidth.

Our strategy is to expand our presence in the rural broadband sector, anticipating continued growth in demand for reliable, high-capacity internet access. We believe fiber-to-the-home (FTTH) is a long-term asset that aligns with our focus on investing in durable businesses capable of delivering attractive pre-tax returns on invested capital. Studies indicate that many U.S. households, especially outside major metropolitan areas, remain unconnected to high-speed broadband due to limited all-fiber infrastructure.

By utilizing the Company’s strong balance sheet, access to a $21 million loan under the USDA’s Rural Utilities Service ("RUS") Reconnect loan program, a strong relationship with Hancock-Wood electrical cooperative, a local power utility, and alignment with the Company's management team, we believe we are well-positioned to extend FTTH service to more communities across Northwest and North Central Ohio. We view the FTTH market as one with a diversified customer base and barriers to entry that limit competition. Furthermore, the broadband space remains highly fragmented, with many small operators who may be open to acquisition, offering us continued opportunities for growth.

Competition

Broadband. Amplex's broadband business delivers high-speed internet access, primarily targeting rural and underserved communities with limited connectivity and growing bandwidth needs. As demand for faster, more reliable service continues to rise, we recognize that competition may increase. Major operators—such as Brightspeed, Charter Communications, Comcast, and Frontier—as well as telecom companies like AT&T, T-Mobile, and Verizon, may seek to expand into the markets Amplex serves.

We also anticipate potential competition for Amplex from emerging technologies, including 5G home internet and other next-generation solutions, which may disrupt traditional service models. Amplex's broadband services will continue to compete with a broad range of providers, including wireless carriers, satellite and wireline broadband operators, and companies investing in fiber-based infrastructure.

Rapid technological advancements may further challenge existing business models, and we remain focused on adapting Amplex's strategy to stay competitive in an evolving digital landscape.

Regulation

Through the Amplex Acquisition, many but not all of Amplex’s services and networks will be regulated by the Federal Communications Commission (the “FCC”), as well as by state and local governments. Whether Amplex’s networks or services are regulated or unregulated depends on numerous factors, including but not limited to whether Amplex offers telecommunications service, as defined in state and federal laws, or video service. The construction and maintenance of Amplex’s fiber optic networks may face local regulations that can adversely impact the timing or deployment of services. Certain of Amplex’s services that are provided via wireless transmission require FCC licenses. In private communities and mobile home parks, Amplex may be required to obtain the consent of the homeowners’ association or other property owners to provide services, and Amplex may have to pay a fee to obtain access to the property and provide its services. Finally, to deploy Amplex’s networks, it frequently must obtain agreements from local power utilities to use their poles and in some cases easements from landowners.

Human Capital Resources

We believe that long-term stockholder value is best achieved by business practices that support the broader interests of all stakeholders, including our employees. We are committed to fostering a workplace where employees feel engaged, empowered, and appropriately rewarded. Our culture is central to how we operate and grow, and we actively promote collaboration, creativity, inclusivity, and a sense of ownership across the organization.

As of March 31, 2025, we employed 82 individuals: 79 in broadband operations and 3 in administrative or corporate functions at the OMCC level. Over 98% of our workforce is full-time, and none of our employees are represented by collective bargaining agreements. We believe our relationship with employees is strong.

Hiring, developing, and retaining talent is a key priority. We strive to cultivate a diverse and inclusive workplace where employees feel respected and are supported in reaching their full potential. We offer competitive compensation and benefits, including fair wages, performance-based incentives, a 401(k) plan with company matching, healthcare coverage, parental leave, and other benefits designed to support overall well-being. Additionally, the Company maintains an Employee Assistance Program which is part of the standard benefits package for personal issues that arise outside of the Workers Compensation plan.

Employee safety is a core focus, and we dedicate significant resources to safety training and education. To further support a responsible and transparent work environment, we maintain an Employee Handbook which directs employee inquiries or issues to supervisors, HR, or directly to Management. We maintain an open-door policy where employees have numerous confidential communication avenues to raise concerns directly to senior management.

Available Information

The Company’s filings with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, definitive proxy statements on Schedule 14A, Current Reports on Form 8-K, and any amendments to those reports filed pursuant to Sections 13, 14 or 15(d) of the Exchange Act, are made available free of charge through the Investors section of the Company’s Internet website at https://www.oldmarketcapital.com as soon as reasonably practicable after the Company electronically files such material with, or furnishes it to, the SEC. The Company is not including the information contained on or available through its website as a part of, or incorporating such information by reference into, this Annual Report. Copies of any materials the Company files with the SEC can also be obtained free of charge through the SEC’s website at http://www.sec.gov.

The following factors, as well as other factors not set forth below, may adversely affect the business, operations, financial condition or results of operations of the Company (sometimes referred to in this section as “we” “us” or “our”). The risks described in this Annual Report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

Risks Related to Our Business and Industry

Weak economic conditions may have a negative impact on Amplex.

Weak economic conditions may have a negative impact on Amplex. A substantial portion of Amplex's revenue comes from customers whose spending patterns may be affected by prevailing economic conditions. Weak economic conditions in the United States may affect demand for Amplex products and services and have a negative impact on its results of operations. For example, weak economic conditions will likely impact Amplex customers’ discretionary spending and as a result, they may reduce the level of services to which they subscribe or may discontinue subscribing to one or more of the Amplex services altogether. This risk may be increased by the expanded availability of free or lower cost competitive services, such as certain streaming services, or substitute services for broadband and voice services, such as wireless and public Wi-Fi networks.

Amplex is subject to various federal, state and local laws and regulations.

Amplex is subject to various federal, state and local laws and regulations. In particular, the Communications Act of 1934, as amended (the “Communications Act”) and Federal Communications Commission (“FCC”) regulations and policies affect significant aspects of Amplex. Federal agencies are considering adopting new regulations for communications services, including broadband. States and localities are also increasingly proposing new regulations impacting communications services, including broader regulation of broadband networks. Any of these regulations could significantly affect the business, legal and compliance costs of Amplex. In addition, United States regulators and courts could adopt new interpretations of existing competition or antitrust laws or enact new competition or antitrust laws or regulatory tools that could negatively impact Amplex. Any future legislative, judicial, regulatory or administrative actions may adversely impact the Amplex business by increasing Amplex costs, increasing competition, or imposing additional restrictions on Amplex, some of which may be significant and/or limiting the ability of Amplex to offer services in a manner that would maximize its revenue potential.

Legislative and regulatory changes have in the past, and could in the future, include, for example, the reclassification of Internet services as regulated telecommunications services or other utility-style regulation of Internet services; restrictions on how Amplex manages its Internet access services and networks; the adoption of new customer service or service quality requirements for Amplex Internet access services; the adoption of new privacy restrictions on the collection, use and disclosure of certain customer information by Amplex; new data security and cybersecurity mandates that could result in additional network and information security and cyber incident reporting requirements for Amplex; new restraints on the discretion of Amplex over programming decisions; new restrictions on the rates Amplex charges to consumers for one or more of the services or equipment options offered by Amplex; and increases in government-administered broadband subsidies to rural areas that could result in subsidized overbuilding of Amplex facilities.

The broadband services of Amplex are subject to a number of regulations and commitments. The FCC frequently considers imposing new broadband-related regulations. States and localities also periodically consider new broadband-related regulations, including those regarding broadband affordability. New broadband regulations, if adopted, may have adverse effects on Amplex. Amplex may also become subject to additional broadband-related commitments as a condition of receiving federal or state broadband funding. The Company is unable to predict the outcome or effects of any of these potential actions or any other legislative or regulatory proposals on Amplex.

Radio spectrum, both unlicensed and licensed, is critical to the operation of Amplex's fixed wireless network. FCC or Congressionally mandated changes to the operating regulations, forced relocations of existing licensed spectrum, and other regulatory changes may result in significant cost and/or loss of customers.

We may incur losses due to asset impairment charges related to goodwill and other intangible assets.

In addition to reviewing our investment securities for potential impairment, and as a result of the Amplex Acquisition, the addition of goodwill and intangible assets to our balance sheet we plan to conduct an annual goodwill impairment test, to be performed in the Company's fourth fiscal quarter annually. The recent review and subsequent valuation work performed by a third party as part of our purchase price allocation analysis for the Amplex Acquisition did not result in any impairment charges. However, we continue to monitor events or changes in circumstances that could indicate the need for an interim impairment test before our next annual review.

For instance, a sustained period during which our market capitalization falls significantly below our book value could be an indicator that the fair value of one or more reporting units is less than its carrying amount. In such cases, we would be required to perform an impairment test under ASC 350, Goodwill and Other Intangible Assets. If impairment is confirmed and the presumption of fair value decline cannot be overcome, we would record a non-cash charge. Any such charge could materially and adversely affect our financial condition and results of operations.

We rely significantly on our executive leadership, and the loss or limited availability of key personnel could negatively impact our business.

Our success is highly dependent on the expertise, leadership, and continued service of our executive officers and senior management team, including our Chief Executive Officer (CEO), Chief Financial Officer (CFO), and the senior leadership of Amplex as our sole operating subsidiary. The unexpected departure, unavailability, or reduced involvement of any of these individuals could materially and adversely affect our operations, financial condition, and future prospects. The Company is focused on maximizing shareholder value and intentionally keeps corporate headcounts low and as efficient as possible to keep overhead costs down.

Risks Related to our Common Stock

Operating as a U.S. public company exposes us to increased costs and regulatory burdens.

As a publicly traded company in the United States, we face ongoing and significant expenses related to legal, accounting, insurance, and compliance obligations. These include costs associated with SEC reporting requirements, NASDAQ listing standards, and the Sarbanes-Oxley Act, as well as other corporate governance and regulatory frameworks. These requirements have increased steadily over time and are expected to continue doing so, resulting in higher compliance costs and more time-consuming administrative processes.

Although the exact impact is difficult to quantify, we anticipate elevated spending in areas such as legal counsel, audit services, director and officer liability insurance, and internal controls. In some cases, obtaining adequate insurance coverage may become more difficult or costly, potentially requiring us to accept lower policy limits or pay higher premiums. These regulatory demands may also hinder our ability to attract and retain qualified directors, executive officers, and committee members.

We may seek to raise additional equity capital through public or private offerings, which could significantly dilute your investment.

Future sales of our equity securities, whether through follow-on offerings, private placements, or equity awards under management’s compensation plan, could result in material dilution to existing stockholders. We may require substantial additional capital to support our acquisition strategy and ongoing operations. There is no assurance that we will be able to raise such funds on favorable terms, or at all. Failure to secure needed capital on a timely basis could have a material adverse effect on our business.

If we issue equity or convertible securities, including preferred stock, these securities may include voting rights, dividend and liquidation preferences, conversion or redemption features, and antidilution protections. Such issuances may reduce the ownership percentage of existing stockholders, negatively affect the market value of our stock, and potentially alter the rights of current holders. Additionally, the issuance or anticipated conversion of such securities could impair our ability to raise future capital on favorable terms, as holders may choose to convert when it is least advantageous for us to seek new financing.

We may incur additional debt financing, which could impose restrictive covenants and materially affect our financial condition.

As of the date of this report, aside from borrowings by Amplex under the RUS loan program, we have not engaged in significant debt financing. However, if our operations expand and we reach higher levels of revenue and cash flow, we may choose to utilize debt to support acquisitions and operational needs. Subject to market conditions and capital availability, we or our subsidiaries could incur substantial debt through various instruments, such as credit facilities (including term loans and revolving credit lines), structured financings, or public or private debt offerings.

Future debt arrangements may include restrictive covenants that limit our financial and operational flexibility. Non-compliance with these covenants could materially impact our ability to meet debt obligations and could have a significant adverse effect on our financial condition. Some of these arrangements may occur at the subsidiary level, but could also include parent-level guarantees or require pledging of substantially all assets of the Company or its subsidiaries.

The amount of leverage we may use will depend on several factors, including acquisition and investment opportunities, available capital, access to credit markets, and our and our lenders’ views on the stability of our cash flows. Our organizational documents impose no cap on the amount of debt we may incur, and we may substantially increase our leverage at any time without shareholder approval. Debt levels may vary across different assets and entities within our structure, with some subsidiaries carrying significantly higher leverage.

While leverage can amplify returns, it also increases risk. Incurring substantial debt could expose us to risks that may materially and adversely impact our business, including:

• Insufficient cash flow to meet principal and interest obligations or comply with debt covenants, potentially resulting in:
• Debt acceleration and cross-defaults under related agreements;
• Inability to access additional credit, or;
• Foreclosure or forced sale of assets;
• Heightened vulnerability to adverse economic, industry, or market conditions;
• Reduced financial flexibility, as a significant portion of operating cash flow may be allocated to debt service rather than to operations, acquisitions, distributions, or other initiatives, or:
• Inability to refinance maturing debt on favorable terms, if at all.

Our ability to access capital may be limited.

Our access to equity and debt capital is influenced by factors largely outside our control, such as:

• General economic, market, or industry conditions;
• Market perceptions of our asset quality and growth potential;
• Our current and projected earnings and shareholder distributions, and;
• The market value of our securities.

Should access to capital become constrained, we may need to rely more heavily on equity issuances, which could dilute existing shareholders, or on expensive debt financing that consumes a significant share of operating cash flow. We cannot guarantee that capital—whether equity or debt—will be available when needed or on favorable terms, if at all. A lack of access to adequate financing could negatively affect our operations, growth prospects, financial condition, and results of operations.

Risks Related to Privacy and Cybersecurity

Cybersecurity threats and IT system disruptions could significantly impact our business, financial condition, and operations.

OMCC and Amplex rely heavily on information technology systems to manage essential functions, including data management, communications, supply chain logistics, inventory, customer transactions, financial reporting, regulatory compliance, and human resources. Any disruption to these systems, whether due to internal failures, system upgrades, or transitions to new platforms could result in operational delays, transaction errors, data loss, and customer dissatisfaction. These disruptions could materially and adversely affect our business, prospects, financial results, condition, and cash flows as well as Amplex's.

Our systems and Amplex's systems are also vulnerable to damage or interruption from events beyond our control, such as natural disasters, power outages, system failures, cyberattacks, security breaches, human error, and other unforeseen incidents. The shift to remote work has further increased exposure to these risks. In the event of serious disruption, we may be forced to invest heavily in system repairs or replacements and could face prolonged service outages.

Additionally, OMCC and Amplex collect, store, and transmit confidential and personal information, including customer, employee, and vendor data. The secure transmission of this data, particularly through public networks and digital payment systems, is critical to our operations. A breach in our own systems, or those of third-party vendors who handle this data on our behalf, could result in:

• Business disruptions;
• Regulatory fines and penalties;
• Legal liabilities and litigation;
• Loss of customer trust and brand reputation; and/or
• Substantial costs to investigate, remediate, and enhance cybersecurity infrastructure.

These risks are compounded by the increasing frequency, sophistication, and evolving nature of cyber threats—including ransomware, phishing, password theft, social engineering, and malware. Attacks may go undetected for extended periods and lead to unauthorized access, disclosure, theft, or destruction of sensitive information.

Despite our efforts to maintain robust cybersecurity measures, we cannot guarantee the security of our or Amplex's IT systems or those of our service providers. A successful cyberattack or data breach could have a material adverse effect on our operations, financial condition, and overall business performance.

Amplex operates in a highly competitive market, often against companies with significantly greater resources, and its inability to compete effectively could harm its business and reduce its market share.

Amplex's broadband services face strong competition from a range of technologies, including traditional cable and satellite services. Many of its competitors, particularly established cable and wireless providers possess substantially greater financial, marketing, and human resources than Amplex or we do. These advantages may enable such competitors to offer a broader array of products and services, invest more aggressively in customer acquisition, and retain existing customers more effectively.

Additionally, emerging technologies could introduce new alternatives to the FTTH services Amplex currently offers, further intensifying competition. As Amplex pursues growth and expansion into new markets, Amplex may encounter entrenched incumbent providers with strong brand recognition and loyal customer bases. These incumbents may present significant barriers to entry, making it difficult for Amplex to gain the market share necessary to operate profitably in those areas. Failure of Amplex to compete successfully could adversely affect our business, financial performance, and long-term prospects.

Risk Management and Strategy

We are committed to maintaining the confidentiality, integrity, and availability of our information systems and data. As part of this commitment, we have implemented a comprehensive cybersecurity program to protect against unauthorized access, use, disclosure, modification, or destruction of our information assets. We are committed to ensuring the security and protection of our Company’s information assets and the personal information of our employees, and other stakeholders.

We recognize that cybersecurity threats are constantly evolving and have the potential to cause significant harm to our Company and our stakeholders. In order to address these risks, we have established a cybersecurity risk management framework that is aligned with industry best practices and regulatory requirements.

Our program includes regular risk assessments, vulnerability management, access controls, incident response planning, and employee training and awareness programs. We also work closely with third-party service providers to ensure that they are meeting our cybersecurity standards.

There can be no assurance that our cybersecurity program will prevent all incidents. In the event of a cybersecurity incident, we have established procedures for prompt investigation, containment, and remediation to minimize the impact on our operations and stakeholders. We believe that our cybersecurity program is robust and effective, and we will continue to invest in and improve our capabilities to address evolving threats. We are committed to transparency and will provide updates on any material cybersecurity incidents that may impact our Company or our stakeholders.

During the fiscal year ended March 31, 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced undetected cybersecurity incidents. For additional information about these risks, see Part I, Item 1A, “Risk Factors” in this Annual Report.

Governance

Our board of directors addresses the Company’s cybersecurity risk management as part of its general oversight function. The board of directors’ audit committee is responsible for overseeing Company’s cybersecurity risk management processes, including oversight and mitigation of risks from cybersecurity threats.

Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company personnel. The Company also utilizes an external agency with long term expertise in cybersecurity. The external agency is responsible for helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, communicating key priorities to relevant personnel, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.

Our cybersecurity incident response processes are designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including the CEO, who help the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response processes include reporting to the audit committee for certain cybersecurity incidents.

The audit committee will receive periodic reports from our management concerning cybersecurity issues, including certain threats and risks and the processes the Company has implemented to address them, as applicable. The audit committee also has access to various reports, summaries or presentations related to cybersecurity threats, risk, and mitigation.

The Company leases its corporate headquarters as well as the subsidiary's office and warehouse facilities. The Company’s headquarters, located at 1601 Dodge Street, Suite 3350, in Omaha, Nebraska, consist of approximately 1,400 square feet of office space leased at an annual rate of approximately $26.27 per square foot. The current lease relating to this space was entered into effective March 1, 2025 and expires on February 29, 2028.

As of March 31, 2023, the Company has closed each of its 47 branch offices located in Alabama, Florida, Georgia, Idaho, Illinois, Indiana, Kentucky, Michigan, Missouri, Nevada, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, and Wisconsin. The Company previously acquired Contracts in Idaho and Texas through its virtual expansion office operations based in the Charlotte, North Carolina corporate location. The lease relating to the Company's former central business operations hub, which was located in Rock Hill, South Carolina, was terminated effective January 31, 2024. The lease relating to the Company's former corporate headquarters, which was located in Clearwater, Florida, was terminated effective January 31, 2025.

See the disclosure in Note 10 - "Commitments and Contingencies" of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report, which disclosure is hereby incorporated herein by reference.

Forward- Looking Statements

Certain statements in this Annual Report, including this Management’s Discussion and Analysis of Financial Condition and Results of Operations, constitute forward-looking statements. See “Forward-Looking Statements” immediately prior to Item 1 of Part I of this Annual Report for factors relating to these statements and “Risk Factors” in Item 1A of Part I of this Annual Report for a discussion of certain risk factors applicable to our business, financial condition, results of operations, liquidity or prospects

Any forward-looking statements made by us in this document speak only as of the date on which they are made. We are under no obligation, and expressly disclaim any obligation, to update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise.

The following discussion and analysis of our results of operations and financial condition should be read in conjunction with our consolidated financial statements and accompanying notes included in this Annual Report and the audited consolidated financial statements and notes thereto as of and for the year ended March 31, 2025, and the related Management's Discussion and Analysis of Financial Condition and Results of Operations, both of which are contained in our 2025. Our results of operations for the fiscal year ended March 31, 2025, may not be indicative of our future results.

Overview

The Company was previously a specialized consumer finance company focused on subprime auto lending. After the Company announced the restructuring of operations in November 2023, the Company now operates as a holding company which owns an indirect controlling interest in Amplex, a broadband company located in northwest Ohio. The Company, which is based in Omaha, Nebraska, continues to pursue additional controlling interests in other companies and sectors yet to be determined.

Change in Operating Strategy

On November 13, 2023, the Company entered into the Westlake Purchase Agreement pursuant to which the Company has agreed to sell substantially all of the Company's finance receivables and all of its repossessed assets to Westlake Financial. On April 26, 2024, the transactions contemplated by the Westlake Purchase Agreement closed.

On June 15, 2024, the Company closed upon the acquisition of 51% of the issued and outstanding common shares of Amplex, which was placed into a newly formed entity Amplex Holdings. Amplex is a provider of broadband internet, voice over internet protocol (VOIP), and video services within service areas located primarily in Northwest and North Central Ohio. As of March 31, 2025, Amplex had approximately 13,000 broadband customers (4,400 fiber subscribers) and over 13,000 fiber passings completed.

Concurrently, on June 15, 2024, the Company converted the outstanding principal of $0.8 million under the Term Loan Advances into 421 shares of Amplex common stock at the Share Purchase Price of $1,792.55 and purchased 1,674 shares of Amplex common stock at the same Share Purchase Price for a purchase price of $3.0 million. These transactions concurrently executed at the Transaction Closing Date increased the Company's ownership in Amplex to 56.5%. During the year ended March 31, 2025, the Company entered into a Subscription Agreement whereby the Company invested an additional $4.5 million into Amplex, increasing the Company's ownership percentage to 61%.

How We Generate Revenues and Evaluate our Business

The Company generates revenues primarily its equity interest in Amplex Holdings, which derives its revenues from Amplex's operations. Amplex generates revenues through customer contracts and provides wireless internet services, fiber internet services, video, and other services including voice over internet protocol (VoIP) services. Amplex fulfills obligations and recognizes revenue under a contract with a customer by transferring products and services in exchange for consideration from the customer. Payments received or consideration billed in advance are recorded as deferred revenue. Further, Amplex records accounts receivable for services billed in advance.

Operating income (loss) is a key metric that we use to evaluate segment operating performance and to determine resource allocation between segments. We define operating income (loss) as revenues less operating expenses. Operating expenses for Amplex include the cost of wireless and fiber internet services, cost of other revenue, plant specific and nonspecific operations expenses, general and administrative expenses, and depreciation and amortization expenses.

Result of Operations

Fiscal Year Ended March 31, 2025 compared to Fiscal Year Ended March 31, 2024

Revenues of Continuing Operations

For the fiscal year ended March 31, 2025 and 2024, our revenues in dollars and as a percentage of total revenues were as follows:

(In thousands)

Revenue totaled $9.4 million for the fiscal year ended March 31, 2025, compared to $0 for the fiscal year ended March 31, 2024. The increase in revenue for the fiscal year ended March 31, 2025 is primarily due to revenue now received by the Company from additional services now now provided by Amplex that were not provided in the prior period. Through acquiring a majority interest in Amplex Holdings, which holds 100% of Amplex, the Company now indirectly through Amplex provides wireless internet services, fiber internet services, and other services including VOIP telephone and video streaming. Further, as a result of the Westlake Purchase Agreement in April of 2024 and the Amplex Acquisition in June of 2024, the Company's revenue is not comparable on a year-over-year basis.

Expenses of Continuing Operations

For the fiscal years ended March 31, 2025 and 2024, our expenses in dollars and as a percentage of total expenses were as follows:

(In thousands)

Cost of Wireless and Fiber Internet Services and Cost of Other Revenue of Continuing Operations

Cost of wireless and fiber internet services totaled $0.5 million for the fiscal year ended March 31, 2025, compared to $0 for the fiscal year ended March 31, 2024. In addition, cost of other revenue totaled $0.6 million for the fiscal year ended March 31, 2025 compared to $0 for the fiscal year ended March 31, 2024. As discussed above, the Company now indirectly through Amplex provides wireless internet, fiber internet, and other services in conjunction with its acquisition of a majority interest in Amplex Holdings, which holds 100% of Amplex. Therefore, the cost of wireless and fiber internet services and cost of other revenue increased during the fiscal year ended March 31, 2025 and when compared to the prior period. As a result of the Westlake Purchase Agreement in April of 2024 and the Amplex Acquisition in June of 2024, the Company's cost of wireless and fiber internet services and cost of other revenue is not comparable on a year-over-year basis.

Plant Specific and Plant Nonspecific Operations of Continuing Operations

Plant specific and plant nonspecific operations expenses totaled $2.0 million for the fiscal year ended March 31, 2025, compared to $0 for the fiscal year ended March 31, 2024. Due to the Amplex Acquisition, the Company began providing additional services during the fiscal year ended March 31, 2025 that were not provided in prior periods. Therefore, plant specific and nonspecific operations expenses increased for the fiscal year ended March 31, 2025 when compared to the prior period. As a result of the Westlake Purchase Agreement in April of 2024 and the Amplex Acquisition in June of 2024, the Company's plant specific and nonspecific operations expenses are not comparable on a year-over-year basis.

General and Administrative Expenses of Continuing Operations

General and administrative expenses totaled $10.8 million for the fiscal year ended March 31, 2025, compared to $6.2 million fiscal year ended March 31, 2024. The increase in general and administrative expenses for the fiscal year ended March 31, 2025 is primarily due to additional professional fees and restructuring expenses incurred in relation to the Amplex Acquisition, which was closed by the Company during the period. As a result of the Westlake Purchase Agreement in April of 2024 and the Amplex Acquisition in June of 2024, the Company's general and administrative expenses are not comparable on a year-over-year basis.

Depreciation and Amortization Expenses of Continuing Operations

Depreciation and amortization expense totaled $2.0 million for the fiscal year ended March 31, 2025, compared to $0.1 million for the fiscal year ended March 31, 2024. The increase in depreciation and amortization expense for the fiscal year ended March 31, 2025 is primarily due to an increase in property, plant, and equipment and intangible assets resulting from Amplex Acquistion. With the Westlake Purchase Agreement in April of 2024 and the Amplex Acquisition in June of 2024, the Company's depreciation and amortization expense is not comparable on a year-over-year basis.

Emigration Tax Expense of Continuing Operations

Emigration tax expense was $1.7 million for the fiscal year ended March 31, 2025 compared to $0 for the fiscal year ended March 31, 2024. The increase in emigration tax expense in the current period is due to the Company completing its continuation and domestication from a company incorporated under the laws of British Columbia to a corporation incorporated under the laws of the State of Delaware as of April 18, 2024.

Loss on Dissenting Shareholders' Liability of Continuing Operations

Loss on dissenting shareholders' liability was $1.1 million for the fiscal year ended March 31, 2025 compared to $0 for the fiscal year ended March 31, 2024. The increase in loss on dissenting shareholders' liability is a result of the change in fair value of the liability during the period that represents the amount owed to dissenting shareholders from the sale of assets to Westlake Financial. As of March 31, 2025, the Company settled the total amount owed to the dissenting shareholders.

Discontinued Operations

Income from discontinued operations was $0.5 million for the fiscal year ended March 31, 2025 compared to the loss of $14.7 million for the fiscal year ended March 31, 2024. The increase in income for the fiscal year ended March 31, 2025 is primarily attributable to a decrease in general and administrative expenses and a decrease in credit losses due to the sale of the finance receivables and repossessed assets to Westlake Financial when compared to the fiscal year ended March 31, 2024.

Liquidity and Capital Resources

During the fiscal year ended March 31, 2025, the Company closed on the Share Purchase Agreement with Amplex, in which the Company purchased 51% of the issued and outstanding common shares, no par value per share, of Amplex and to make payment to holders of options for Amplex’s common shares in consideration of cancellation of such options for total purchase consideration of $18.4 million. In conjunction with the closing of the Share Purchase Agreement, the Company converted the outstanding principal and accrued interest of approximately $0.8 million under the Term Loan Advances into 421 shares of Amplex common stock at the Share Purchase Price of $1,792.55 and purchased an additional 1,674 shares of Amplex common stock at the share purchase price of $1,792.55 per share for a purchase price of $3.0 million. During the quarter ended December 31, 2024, the Company entered into a Subscription Agreement whereby the Company invested an additional $4.5 million into Amplex, increasing the Company's ownership percentage to 61%. For further details of the Amplex Acquisition, refer to Note 3, "Business Combinations" of the Notes to Consolidated Financial Statement

The Company's cash flows are summarized as follows:

(In thousands)

Our major source of liquidity and capital is cash generated from our ongoing operations and our borrowing capacity under the RUS Loan.

Assuming business operations continue as currently structured, we believe our cash balance, expected operating cash flows, and available borrowing capacity under the RUS Loan will be sufficient to meet our cash needs and planned expenditures over the next 12 months. Our access to, and the availability of, financing on acceptable terms in the future will be affected by many factors including overall liquidity in the capital or credit markets, the state of the economy and our credit strength as viewed by potential lenders. We cannot provide assurances that we will have future access to the capital or credit markets on acceptable terms.

Net cash (used in) provided by operating activities decreased for the fiscal year ended March 31, 2025 when compared to the fiscal year ended March 31, 2024. The decrease in cash (used in) provided by operating activities was primarily due to a decrease in net loss of $15 million, noncash charge of $1.1 million for the loss on dissenting shareholders' liability, and net change in operating assets and liabilities of $0.5 million, partially offset by a decrease in cash provided by operating activities from discontinued operations of $22.6 million. Further, as a result of the Westlake Purchase Agreement in April of 2024 and the Amplex Acquisition in June of 2024, the Company's change in cash provided by operating activities is not comparable on a year-over-year basis.

Net cash provided by investing activities decreased for the fiscal year ended March 31, 2025 compared to the fiscal year ended March 31, 2024. The decrease in net cash provided by investing activities is primarily due to $18.1 million of cash paid for the Amplex Acquisition in June 2024, partially offset by an increase in net cash provided by investing activities from discontinued operations of $85.1 million for the fiscal year ended March 31, 2025 compared to the fiscal year ended March 31, 2024. As a result of the Westlake Purchase Agreement in April of 2024 and the Amplex Acquisition in June of 2024, the Company's change in cash provided by investing activities is not comparable on a year-over-year basis.

Net cash used in financing activities decreased during the fiscal year ended March 31, 2025 compared to the fiscal year ended March 31, 2024. The decrease was primarily due to the repurchase of $5.6 million worth of shares of common stock held by dissenting shareholders, offset by the proceeds of long-term debt of $0.6 million during the fiscal year ended March 31, 2025.

We have no material commitments for capital expenditures as of March 31, 2025. Part of our growth strategy, however, is to acquire businesses. We would anticipate funding such activity through cash on hand, the issuance of debt, Common Stock, restricted stock units, and warrants for our Common Stock or a combination thereof.

Off-Balance Sheet Arrangements

We currently have no off-balance sheet arrangements.

Significant Developments

None.

Critical Accounting Policies and Estimates

Note 2, “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in Part II, Item 8 of this Annual Report describes the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. Our acquisition of a controlling interest in Amplex closed June 15, 2024. Our critical accounting policies relate to business combinations.

We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of identifiable assets acquired and liabilities assumed, including any contingent consideration, to properly allocate the purchase price to the individual assets acquired and liabilities assumed and record any residual purchase price as goodwill. We identify and attribute fair values and estimated lives to the intangible assets acquired and allocate the total cost of an acquisition to the underlying net assets based on their respective estimated fair values. If the initial accounting for the business combination has not been completed by the end of the reporting period in which the business combination occurs, provisional amounts are reported to present information about facts and circumstances that existed as of the acquisition date. Once the measurement period ends, which in no case extends beyond one year from the acquisition date, revisions to the accounting for the business combination are recorded in earnings. All acquisition-related costs, other than the costs to issue debt or equity securities, are accounted for as expenses in the period in which they are incurred.

The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles (“GAAP”) and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. A critical accounting estimate is an estimate that: (i) is made in accordance with GAAP, (ii) involved a significant level of estimation uncertainty and (iii) has had or is reasonably likely to have a material impact on the Company's financial condition or results of operations. The Company’s critical accounting estimates and assumptions affecting the financial statements relate to the fair value of assets acquired and liabilities assumed. Determining the fair value of assets acquired and liabilities assumed requires management’s judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates and asset lives. We base our fair value estimates on assumptions we believe are reasonable but recognize that the assumptions are inherently uncertain.

Evaluation of Disclosure Controls and Procedures

In accordance with Rule 13a-15(b) of the Exchange Act, as of the end of the period covered by this Annual Report, the Company’s management evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act).

Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective at a reasonable level of assurance as of March 31, 2025, because of a material weakness in our internal control over financial reporting relating to non-routine transactions which lead to the correction of errors with respect to the (a) application of complex technical accounting standards related to the presentation and measurement of certain equity and liability instruments from the re-domestication and (b) initial and subsequent measurement of redeemable noncontrolling interest, certain acquired assets and deferred tax liabilities assumed in the acquisition of a controlling interest in Amplex and the consolidation of smaller leasing entities for which a variable interest did not exist and (c) post-business combination accounting for depreciation of assets recorded at fair value.; A deficiency in internal control over financial reporting with respect to management’s review of earnings-per-share calculations; Limited formal internal assessment documentation retained over the Company's evaluation of the financial reporting process; Inadequate segregation of duties and lack of documented review of journal entries and monthly close process at the Amplex subsidiary; Amplex’s Chief Executive Officer has the ability to prepare and post journal entries without independent review or approval; Limited formally documented IT policies and procedures governing system access, change management, or data security for Amplex’s general ledger application. Additionally, there is no formal process for conducting periodic user access reviews at Amplex.

The Company's management, including our Chief Executive Officer and Chief Financial Officer, does not expect that the Company's disclosure controls and procedures or internal control over financial reporting will prevent all errors and all fraud due to inherent limitations of internal controls. Because of such limitations, there is a risk that material misstatements will not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

While the Company believes that its efforts for remediation, once implemented, will improve the effectiveness of its internal control over financial reporting, these remediation efforts have been ongoing and will require more time to operate for management to be able to conclude that the design is effective to remediate the material weakness identified. The Company may conclude that additional measures will be necessary to remediate the material weakness in its internal control over financial reporting, which may necessitate additional evaluation and implementation time.

Changes in Internal Control Over Financial Reporting

In connection with the weaknesses noted above management is in the process of establishing and is refining its internal procedures and controls to ensure the accounting around future complex transactions are thoroughly reviewed with external consultants specializing in the specific transactions identified.

On June 15, 2024, the Company completed the acquisition of Amplex (Refer to Note 3 – Business Combination in our consolidated financial statements for further information on the Amplex acquisition). In accordance with the general guidance issued by the staff of the SEC, Amplex will be excluded from the scope of management’s report on internal control over financial reporting as of and for the fiscal year ending March 31, 2025. As part of the ongoing integration of Amplex, we are in the process of incorporating the controls and related procedures.

In connection with the acquisition, we have performed additional analyses and other procedures to enable management to conclude that our consolidated financial statements included in this report fairly, in all material respects, our financial condition and results of operations as of and for the fiscal year ended March 31, 2025.

Other than as described above, during the most recent fiscal quarter, there has been no change in the Company's internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

The management of OMCC is responsible for establishing and maintaining adequate internal control over financial reporting. OMCC’s internal control system was designed to provide reasonable assurance as to the integrity and reliability of the published financial statements. OMCC management assessed the effectiveness of the company’s internal control over financial reporting as of March 31, 2025. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013 framework). Based on its assessment, OMCC management believes that, as of March 31, 2025, the Company’s internal control over financial reporting is not effective based on those criteria.

Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective at a reasonable level of assurance as of March 31, 2025, because of a material weakness in our internal control over financial reporting relating to non-routine transactions which lead to the correction of errors with respect to the (a) application of complex technical accounting standards related to the presentation and measurement of certain equity and liability instruments from the re-domestication and (b) initial and subsequent measurement of redeemable noncontrolling interest, certain acquired assets and deferred tax liabilities assumed in the acquisition of a controlling interest in Amplex and the consolidation of smaller leasing entities for which a variable interest did not exist