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Organization | 9 Months Ended
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Dec. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Organization | Note 1. Organization Effective as of September 27, 2024, the Company amended its Certificate of Incorporation to change its name from Nicholas Financial, Inc. to Old Market Capital Corporation by filing a Certificate of Amendment to Certificate of Incorporation with the Delaware Secretary of State. Old Market Capital Corporation (f/k/a Nicholas Financial, Inc. (“NFI”) and now "OMCC" and together, with its wholly-owned and majority-owned subsidiary, the "Company") is a holding company incorporated under the laws of the State of Delaware with one wholly-owned United States subsidiary, Nicholas Data Services, Inc. ("NDS") and its one controlling interest in Amplex Holdings, Inc. ("Amplex"). On April 18, 2024, Old Market Capital Corporation completed its continuation and domestication from British Columbia to the State of Delaware by filing its Certificate of Corporate Domestication and Certification of Incorporation in the State of Delaware. As a result of the domestication, the Company's common stock par value increased from $0.00 to $0.01 on a one-for-one basis. NDS historically was engaged in supporting and updating industry specific computer application software for small businesses located primarily in the Southeastern United States. NDS has ceased its operations; however, it continues as the interim holding company for Old Market Capital Corporation. NFI was a specialized consumer finance company engaged primarily in acquiring and servicing automobile finance installment contracts for purchases of used and new automobiles and light trucks. NFI had also offered direct consumer loans and sold consumer finance related products. NFI and NDS are based in Florida, U.S.A. On November 13, 2023, the Company entered into a Master Asset Purchase Agreement (the "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 Old Market Capital Corporation. In connection with entering into the Purchase Agreement, the Company ceased new loan originations of contracts and direct loans. On April 26, 2024, the transactions contemplated by the Purchase Agreement closed. See Note 13 for additional information. On June 15, 2024, Old Market Capital Corporation closed upon the acquisition of 51% of the issued and outstanding common shares of Amplex Electric Inc, which was placed into a newly formed entity Amplex Holdings, Inc. ("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 December 31, 2024, Amplex had approximately 12,850 broadband customers (4,100 fiber subscribers) and over 11,000 fiber passings completed. Amplex's customer base includes residential and commercial customers. Amplex leases certain property (including an office building) and warehouse building from Red Bug, LLC and Red Bug Properties, Ltd. (collectively, the "Red Bug Entities"). The Red Bug Entities were created by, and are majority-owned by Amplex's Chief Executive Officer. The Red Bug Entities were initially treated as a variable interest entity ("VIE") for which Amplex was determined to be the primary beneficiary. See below regarding the impact of the misclassification on the current period and prior period's financial statements as well as Note 2 and Note 9. In conjunction with the closing of the Amplex Acquisition, 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. The Company also invested an additional $4.5 million into Amplex for 2,583 shares, increasing the Company's ownership percentage to 61%. Correction of Immaterial Errors in Previously Issued Financial Statements Through the Current Period During the preparation of the Company’s unaudited condensed consolidated interim financial statements for the three and nine months ended December 31, 2024, the Company’s management identified certain immaterial errors related to previously issued condensed consolidated interim financial statements within this current year. A description of the nature of the errors is discussed below: • Management determined that the Red Bug Entities were previously incorrectly reported in Form 10-Q for quarterly period ended June 30, 2024 and in Form 10-Q for the three and six months ended September 30, 2024. During these periods, the Red Bug entities were reported as consolidated VIEs as they were considered to not have sufficient equity at risk to finance its activities without additional subordinated financial support. The Company previously consolidated the Red Bug Entities (beginning on June 15, 2024 in conjunction with the Amplex acquisition) as certain obligations due from the Red Bug entities were previously determined to be subordinated debt and concluded that the Company had the power to direct the activities of the Red Bug Entities that most significantly impact the entity's economic performance. As the third-party debt and amount due from Red Bug was extinguished pursuant to the purchase agreement between the Company and Amplex, the Red Bug entities should not have been consolidated as a VIE as, upon acquisition, Amplex did not have a variable interest in the Red Bug entities. • Failure to record approximately $185 thousand of stock-based compensation expense pertaining to certain awards granted in the quarter ended September 30, 2024. In accordance with SEC Staff Accounting Bulletin No. 99, “Materiality,” and SEC Staff Accounting Bulletin No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” the Company evaluated the corrections and has determined that the related impacts were not material, individually or in the aggregate, to the previously issued financial statements that contained the errors, based on overall considerations of both quantitative and qualitative factors. The Company has concluded that prior period financial statements as of and for the three month period ended June 30, 2024 and the three and six month period ended September 30, 2024 were not materially misstated and can continue to be relied upon. Accordingly, the Company has corrected the previously reported immaterial errors in the current period financial statements by adjusting the opening balances of the affected accounts. In accordance with ASC 250, Accounting Changes and Error Corrections, the Company has recorded the impact of the prior period errors through opening retained earnings in the current period financial statements. The affected prior period balances are displayed below. Note that there was an immaterial impact on net cash provided by (used in) operating activities, net cash provided by (used in) investing activities or net cash provided by (used in) financing activities for the condensed consolidated statement of cash flows for the three months ended June 30, 2024 or the three and six months ended September 30, 2024. These corrections did not have a significant impact on the Company’s trends in financial performance or key financial ratios. Management and the Audit Committee have reviewed these adjustments and concluded that the financial statements, as corrected, present fairly, in all material respects, the balance sheet, results of operations and cash flows of the Company in accordance with U.S. GAAP. The following table represents the three months ended June 30, 2024, including the statements of operations, balance sheets, and statements of cash flows (in thousands):
| As Reported |  | As Revised |  |  |
Account Name | Q1 |  | Q1 |  | Difference |
BALANCE SHEET |  |  |  |  |  |
Assets: |  |  |  |  |  |
Cash and cash equivalents |  | 40,658 |  |  | 40,626 |  |  | (32 | )
Accounts receivable, net |  | 145 |  |  | 137 |  |  | (8 | )
Operating lease right-of-use assets |  | 553 |  |  | 3,100 |  |  | 2,547 |
Property, Plant, and equipment, net |  | 23,993 |  |  | 20,356 |  |  | (3,637 | )
Liabilities: |  |  |  |  |  |
Accounts payable |  | 1,930 |  |  | 1,922 |  |  | (8 | )
Accrued expenses and other current liabilities |  | 686 |  |  | 565 |  |  | (121 | )
Current portion of operating lease liabilities |  | 124 |  |  | 296 |  |  | 172 |
Operating lease liabilities |  | 436 |  |  | 2,811 |  |  | 2,375 |
Total Assets |  | 88,678 |  |  | 87,548 |  |  | (1,130 | )
Total Liabilities |  | 16,553 |  |  | 18,971 |  |  | 2,418 |
Total Old Market Capital Corporation shareholders' equity |  | 53,121 |  |  | 53,121 |  |  | - |
Noncontrolling interest |  | 3,550 |  |  | - |  |  | (3,550 | )
Total shareholders' equity |  | 56,671 |  |  | 53,121 |  |  | (3,550 | )
Redeemable NCI |  | 15,454 |  |  | 15,454 |  |  | - |
Total liabilities, redeemable noncontrolling interest, and shareholders' equity |  | 88,678 |  |  | 87,546 |  |  | (1,132 | )
STATEMENT OF CASH FLOWS |  |  |  |  |  |
Cash flows from operating activities |  | (437 | ) |  | (438 | ) |  | (1 | )
Cash flows from investing activities: |  | 22,113 |  |  | 22,081 |  |  | (32 | )
Cash flows from financing activities: |  | - |  |  | - |  |  | - |
STATEMENT OF OPERATIONS |  |  |  |  |  |
Revenue: |  | 489 |  |  | 489 |  |  | - |
Expenses: |  |  |  |  |  |
Depreciation and amortization |  | 94 |  |  | 91 |  |  | (3 | )
General and administrative |  | 3,764 |  |  | 3,791 |  |  | 27 |
Interest income, net |  | 411 |  |  | 411 |  |  | - |
Net (loss) |  | (3,489 | ) |  | (3,513 | ) |  | (24 | )
Loss from continuing operations |  | (5,548 | ) |  | (5,572 | ) |  | (24 | )
Net income (loss) from continuing ops attributable to common shareholders (Note 5) |  | (5,337 | ) |  | (5,361 | ) |  | (24 | )
Per share loss from continuing operations attributable to common shareholders - basic and diluted | $ | (0.79 | ) | $ | (0.79 | ) | $ | - |
Per share (loss) income available to common stockholders - basic and diluted | $ | (0.49 | ) | $ | (0.49 | ) | $ | - |
The following table represents the six months ended September 30, 2024, including the statements of operations, balance sheets, and statements of cash flows (in thousands):
| As Reported |  | As Revised |  |  |
Account Name | Q2 |  | Q2 |  | Difference |
BALANCE SHEET |  |  |  |  |  |
Assets: |  |  |  |  |  |
Cash and cash equivalents |  | 29,475 |  |  | 29,464 |  |  | (11 | )
Accounts receivable, net |  | 123 |  |  | 130 |  |  | 7 |
Operating lease right-of-use assets |  | 480 |  |  | 2,985 |  |  | 2,505 |
Property, plant, and equipment, net |  | 25,911 |  |  | 22,294 |  |  | (3,617 | )
Liabilities |  |  |  |  |  |
Accounts payable |  | 1,767 |  |  | 1,759 |  |  | (8 | )
Accrued expenses and other current liabilities |  | 665 |  |  | 644 |  |  | (21 | )
Current portion of operating lease liabilities |  | 117 |  |  | 292 |  |  | 175 |
Operating lease liabilities |  | 419 |  |  | 2,749 |  |  | 2,330 |
Total Assets |  | 80,282 |  |  | 79,165 |  |  | (1,117 | )
Total Liabilities |  | 8,331 |  |  | 10,807 |  |  | 2,476 |
Total Old Market Capital Corporation shareholders' equity |  | 52,670 |  |  | 52,670 |  |  | - |
Noncontrolling interest |  | 3,543 |  |  | - |  |  | (3,543 | )
Total shareholders' equity |  | 56,213 |  |  | 52,670 |  |  | (3,543 | )
Redeemable NCI |  | 15,738 |  |  | 15,738 |  |  | - |
Total liabilities, redeemable noncontrolling interest, and shareholders' equity |  | 80,282 |  |  | 79,215 |  |  | (1,067 | )
STATEMENT OF CASH FLOWS |  |  |  |  |  |
Cash flows from operating activities |  | (553 | ) |  | (560 | ) |  | (7 | )
Cash flows from investing activities: |  | 16,675 |  |  | 16,643 |  |  | (32 | )
Cash flows from financing activities: |  | (5,629 | ) |  | (5,629 | ) |  | - |
STATEMENT OF OPERATIONS |  |  |  |  |  |
Revenue: |  | 2,083 |  |  | 2,083 |  |  | - |
Expenses: |  |  |  |  |  |
Depreciation and amortization |  | 595 |  |  | 572 |  |  | (23 | )
General and administrative |  | 6,317 |  |  | 6,602 |  |  | 285 |
Interest income, net |  | 798 |  |  | 790 |  |  | (8 | )
Net (loss) |  | (3,663 | ) |  | (3,917 | ) |  | (254 | )
Loss from continuing operations |  | (6,523 | ) |  | (6,777 | ) |  | (254 | )
Net income (loss) from continuing ops attributable to common shareholders (Note 5) |  | (6,589 | ) |  | (6,843 | ) |  | (254 | )
Per share loss from continuing operations attributable to common shareholders - basic and diluted | $ | (0.98 | ) | $ | (1.02 | ) | $ | (0.04 | )
Per share (loss) income available to common stockholders - basic and diluted | $ | (0.56 | ) | $ | (0.59 | ) | $ | (0.03 | )
The following table represents the Statements of Operations for the three months ended September 30, 2024, (in thousands) for the Statement of Operations only:
| As Reported |  | As Revised |  |  |
Account Name | Q2 |  | Q2 |  | Difference |
STATEMENT OF OPERATIONS |  |  |  |  |  |
Revenue: |  | 2,958 |  |  | 2,958 |  |  | - |
Expenses |  |  |  |  |  |
Depreciation and amortization |  | 501 |  |  | 481 |  |  | (20 | )
General and administrative |  | 2,553 |  |  | 2,811 |  |  | 258 |
Interest income, net |  | 387 |  |  | 379 |  |  | (8 | )
Net (loss) |  | (174 | ) |  | (404 | ) |  | (230 | )
Loss from continuing operations |  | (975 | ) |  | (1,205 | ) |  | (230 | )
Net income (loss) from continuing ops attributable to common shareholders (Note 5) |  | (1,252 | ) |  | (1,482 | ) |  | (230 | )
Per share loss from continuing operations attributable to common shareholders - basic and diluted | $ | (0.19 | ) | $ | (0.22 | ) | $ | (0.03 | )
Per share (loss) income available to common stockholders - basic and diluted | $ | (0.07 | ) | $ | (0.10 | ) | $ | (0.03 | )
The following table represents Purchase Price Adjustments (within Note 3) reported as of June 30, 2024 and September 30, 2024, (in thousands):
|  | As Reported |  |  | As Revised |  |  |  |
(In thousands) |  | Q1 & Q2 |  |  | Q1 & Q2 |  |  | Difference |
Cash and cash equivalents |  | $ | 32 |  |  | $ | - |  |  | $ | (32 | )
Accounts receivable |  |  | 124 |  |  |  | 117 |  |  |  | (7 | )
Materials and supplies |  |  | 538 |  |  |  | 538 |  |  |  | - |
Operating lease right-of-use |  |  | 502 |  |  |  | 3,063 |  |  |  | 2,561 |
Prepaid expenses and other assets |  |  | 266 |  |  |  | 266 |  |  |  | - |
Property, plant, and equipment |  |  | 23,750 |  |  |  | 20,110 |  |  |  | (3,640 | )
Intangible assets |  |  | 11,130 |  |  |  | 11,130 |  |  |  | - |
Goodwill |  |  | 10,434 |  |  |  | 10,434 |  |  |  | - |
Total assets acquired |  |  | 46,776 |  |  |  | 45,658 |  |  |  | (1,118 | )
Accounts payable |  |  | 1,260 |  |  |  | 1,252 |  |  |  | (8 | )
Accrued expenses and other liabilities |  |  | 231 |  |  |  | 111 |  |  |  | (120 | )
Lease liabilities |  |  | 502 |  |  |  | 3,063 |  |  |  | 2,561 |
Deferred income taxes |  |  | 4,668 |  |  |  | 4,668 |  |  |  | - |
Deferred revenue |  |  | 556 |  |  |  | 556 |  |  |  | - |
Total liabilities assumed |  |  | 7,217 |  |  |  | 9,650 |  |  |  | 2,433 |
Total fair value of net assets acquired |  |  | 39,559 |  |  |  | 36,008 |  |  |  | (3,551 | )
Less: redeemable noncontrolling interest |  |  | (17,644 | ) |  |  | (17,644 | ) |  |  | - |
Less: noncontrolling interest |  |  | (3,551 | ) |  |  | - |  |  |  | 3,551 |
Total purchase price |  | $ | 18,364 |  |  | $ | 18,364 |  |  | $ | - |

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