10-K/A: Old Market Capital Amends 10-K, Details Lease Rights and New Executive Hire

Old Market Capital Corporation filed an amendment to its annual report, clarifying disclosures and adding exhibits that include new rights of first refusal for its subsidiary Amplex Electric on two Ohio properties and the employment agreement for a new Assistant Controller.

Summary

• Old Market Capital Corporation filed an Amendment No. 2 to its Annual Report on Form 10-K for the fiscal year ended March 31, 2025, to clarify disclosures in Part IV, Item 15 and include inadvertently omitted exhibits.
• The amendment includes two First Amendments to Lease Agreements between Red Bug, LLC (Lessor) and Amplex Electric, Inc. (Lessee), both effective May 1, 2025.
• These amendments grant Amplex Electric, Inc. a Right of First Refusal to purchase the leased premises in Troy Township, Wood County, Ohio, if the Lessor decides to sell or receives an acceptable offer.
• The Right of First Refusal allows Amplex Electric, Inc. 30 days to purchase the premises on the proposed terms, with the right reapplying if the sale is not completed within 180 days or if the purchase price is reduced by more than 10%.
• Excluded transactions from the Right of First Refusal include transfers to entities under common ownership/control of Lessor or bona fide financing transactions.
• The original lease dated December 15, 2015, for 3.538 acres, had a monthly rent of $12,500.00 and a term from December 15, 2016, to December 14, 2031.
• The second lease dated March 1, 2023, for a 12,000 sq ft building and 5.73 acres, had a monthly rent of $15,000.00, commencing August 1, 2023, and ending July 31, 2038, with annual CPI-based rent adjustments.
• The filing also includes an Employment Agreement for Dylan Flott as Assistant Controller, effective November 4, 2024, for a two-year term.
• Dylan Flott's base salary is $160,000 for the first year and $170,000 for the second year, with an annual bonus of no less than 10% of base salary, 50% of which is awarded in fully vested Company shares.
• As of September 30, 2024, the aggregate market value of Common Stock held by nonaffiliates was $42.3 million.
• As of June 23, 2025, approximately 6.7 million shares of common stock were outstanding, with 5.4 million held by the principal operating subsidiary and 658 thousand by the registrant, leaving 6.7 million shares entitled to vote.
• Amplex Electric, Inc. is a 60.9% owned subsidiary of Amplex Holdings, Inc., which is also 60.9% owned by Old Market Capital Corporation.

Sentiment

Score: 6

Explanation: The document is largely administrative and contractual. The addition of a Right of First Refusal is a positive strategic development for the lessee, offering future flexibility. The new hire strengthens the financial team. No significant negative financial or operational news is present.

Positives

• Amplex Electric, Inc. secured a Right of First Refusal on two key leased properties, providing a strategic option to acquire the real estate if the Lessor decides to sell.
• The employment of Dylan Flott as Assistant Controller strengthens the company's financial reporting and control functions.
• Dylan Flott's employment agreement includes a minimum annual bonus of 10% of base salary, with 50% paid in fully vested company shares, aligning employee incentives with company performance.

Risks

• The employment agreement for Dylan Flott outlines various conditions for termination for "Cause," including gross negligence, willful misconduct, failure to comply with company policies, and acts materially injurious to the company, which could lead to forfeiture of unvested shares/options and bonus compensation.
• Forward-looking statements from the original 10-K have not been revised to reflect events that occurred or facts that became known after the filing of the original 10-K, meaning they should be read in their historical context and may not reflect current conditions.

Future Outlook

Forward-looking statements made in the Original Form 10-K have not been revised to reflect events that occurred or facts that became known after the filing of the Original Form 10-K and should be read in their historical context.

Management Comments

• I have reviewed this annual report on Form 10-K/A of Old Market Capital Corporation; and Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

Industry Context

The amendments primarily concern specific real estate lease terms and an executive employment contract, which are standard operational activities for a company. The addition of a Right of First Refusal on leased properties could be a strategic move to secure long-term operational sites, common in industries requiring stable physical infrastructure like internet and telecommunications services. The employment of an Assistant Controller is a routine step for maintaining robust financial reporting, especially for a publicly traded company.

Management Changes

Corporate Governance

Related Party Transactions

• Red Bug, LLC (Lessor) and Amplex Electric, Inc. (Lessee) are related parties, as Mark R. Radabaugh is the Managing Member of Red Bug, LLC and the President of Amplex Electric, Inc.
• Amplex Electric, Inc. is a 60.9% owned subsidiary of Amplex Holdings, Inc., which is a 60.9% owned subsidiary of Old Market Capital Corporation, making the lease agreements between Red Bug, LLC and Amplex Electric, Inc. related party transactions for Old Market Capital Corporation.
• Amplex Electric, Inc. also leases adjacent premises from a related party, which it intends to use as a single functional unit with the premises covered by the March 1, 2023 lease.

Stakeholder Impact

• Shareholders: The clarification of disclosures and inclusion of omitted exhibits in the 10-K/A enhances transparency and compliance. The Right of First Refusal on leased properties could provide long-term strategic value by offering the option to acquire key operational assets.
• Employees: The employment agreement for Dylan Flott provides a clear framework for his role, compensation, and responsibilities, including non-compete and confidentiality clauses.
• Customers/Suppliers: No direct impact mentioned, but stable operations due to secured leases and competent financial management could indirectly benefit them.
• Creditors: The lease agreements and their amendments, along with the employment contract, represent ongoing operational commitments and liabilities.

Next Steps

• Lessor and Lessee will promptly execute a purchase and sale agreement if Lessee exercises its Right of First Refusal.
• Lessee will continue to pay monthly rent for both leased premises, with annual adjustments for the 2023 lease based on the Consumer Price Index.
• Dylan Flott's employment as Assistant Controller will continue for a two-year term from November 4, 2024.
• The company will continue to comply with SEC filing requirements, with future reports incorporating the clarified disclosures.

Key Dates

Recommendation

Keywords

SEC Filing, 10-K/A Amendment, Lease Agreement, Right of First Refusal, Real Estate, Employment Agreement, Corporate Governance, Financial Reporting, Amplex Electric Inc., Old Market Capital Corporation, Subsidiary, Related Party Transaction