Hometown International, which has a bizarre market capitalization of $ 100 million despite owning only one small deli in New Jersey, rejected that rating in a new financial report on Friday that had no basis to justify it.
The unusual move came after two weeks of coverage of the seemingly unjustified valuation of Hometown International and detailed legal questions from CNBC regarding several people related to the company.
It also took more than a week for the company’s thinly traded shares to be downgraded for over-the-counter trading by the more prestigious OTCQB trading platform and marked with a “Buyers Attention” warning of irregularities in filing financial data.
“The management of Hometown International, Inc. … is declining to price its publicly traded shares in the OTC markets under the trading symbol ‘HWIN’,” the company said in an 8-K filing with the Securities and Exchange Commission late Friday afternoon.
“Management is not aware of any basis to support the company’s share price based on its earnings or assets,” the filing stated.
The document was signed by the Hong Kong-based Chairman of Hometown International, Peter Coker Jr.
Additional SEC filings recently filed by Hometown International have been signed by its CEO and President Paul Morina.
Morina, 62, is the principal at Paulsboro, New Jersey high school, where he also trains the school’s renowned wrestling team. Christine Lindenmuth, the only other executive in her hometown, is the administrator at Paulsboro HS.
HWIN closed trading on the Pink Market on Friday at $ 12.55 per share, down 3.46%. Only 852 of the nearly 8 million common shares outstanding have changed hands.
At that price, Hometown International had a market capitalization of at least $ 101 million. Given the number of stock warrants issued by the company, Hometown International has a market capitalization of up to $ 2 billion.
However, with 60 or fewer actual shareholders, minimal trading volume, and so little actual revenue, there is probably no chance anyone could sell significant blocks of stock at nearly $ 12 per share to someone who is not yet affiliated with the company.
The new SEC filing found that Hometown International has repeatedly stated in previous filings that its Paulsboro deli, located across from Philadelphia on the Delaware River, “is not generating significant revenue.”
In fact, the Hometown Deli had reported combined sales of less than $ 37,000 for the past two full years.
“The company’s shares have been listed on the OTC markets since 2019, and there has not yet been any significant trading volume in the company’s shares,” the message said.
“Management is consistently filing its public filings with the SEC and is up to date. It intends to maintain its business plan as indicated in these filings.”
This business plan shows efforts to use Hometown International as a vehicle for merger or acquisition by another company, possibly a private company, that could effectively be publicly traded in the US stock markets.
“In April 2020, the company raised $ 2,500,000 from several institutional investors and issued warrants to all shareholders in the company,” the file said.
“Management announced that the proceeds from this private placement would be used to seek other business opportunities and, if approved by the company’s Board of Directors, to enter into a business combination with a private company whose business provides the opportunity to generate value for the Business to create. ” Company shareholders. “
The Financial Times and CNBC on Friday detailed how the investment armies Vanderbilt and Duke are major shareholders in Hometown International. The universities’ investments are overseen by Maso Capital, a Hong Kong company.
Another group of companies in Macau, China, is the other largest shareholder in Hometown International alongside Morina.
E-Waste, a Shell company with multiple connections to Hometown International, didn’t release its own SEC filing on Friday that refutes its sky-high market capitalization despite having no actual business.
E-Waste closed trading at $ 8.50 per share with no stock selling during the day. With 12.5 million common shares outstanding, E-Waste has a market capitalization of more than $ 106 million.
E-Waste, which recently announced it was selling $ 2.5 million worth of shares, is known to be marketed – like Hometown International – as a vehicle for a reverse merger, or special-purpose acquisition company, which the existing listing on the US market.
If either Hometown International or E-Waste underwent such a transformation, their stocks would likely be bought for much less than their current trading prices or liquidated in a way that also earned their current owners much less than their over-the-counter prices.
E-waste is currently traded on the Pink over-the-counter platform like the deli owner.
On Monday, both companies announced in SEC filings that they were terminating advisory agreements in which they would make monthly payments to Tryon Capital, a North Carolina-based company that partners with Peter Coker Sr., the father of Hometown’s chairman.
Tryon Capital received $ 15,000 a month from Hometown International, of which senior Coker is a major investor, while E-Waste paid the company $ 2,500 a month.
Coker Sr. has personally loaned more than $ 200,000 to E-Waste, the current chairman of which recently worked as a patient truck at a New Jersey hospital and whose mailing address is that of another company affiliated with the older Coker.
Both Hometown International and E-Waste had noted the “recent negative press” about Tryon Capital and “the Tryon Principles”.
CNBC recently announced that Coker Sr. has been sued in the past for allegedly hiding money from creditors and business fraud. He has denied these allegations.
In August 1992, Coker Sr. was arrested in Allentown, Pennsylvania on multiple criminal charges after allegedly exposing himself to three girls while driving around near a school in the middle of the night, according to the then-newspaper The Morning Call.
In 2011, Peter Reichard, Coker Sr.’s partner at Tryon Capital, was convicted of illegally donating thousands of dollars to the successful 2008 campaign for the governor of Bev Perdue, a Democrat in North Carolina.
The program involved the use of a fake advisory contract between Tryon Capital Ventures and a fast food franchisee who wanted to endorse Perdue. Coker Sr. was not charged in this case.
James Patten, a financial analyst at Tryon Capital, was a high school wrestling teammate of Morina, the CEO of Hometown International.
Records show that Patten was prevented by FINRA, the broker-dealer regulator, from acting as a stockbroker or associating with broker-dealers after being the target of several disciplinary measures.
Other records show that Patten signed leases on behalf of Mantua Creek Group, the owner of a property in Paulsboro that partners with Morina.
Hometown International pays Mantua Creek $ 500 per month to use the deli store.
Rutgers University, a public university in New Jersey, is paying Mantua Creek $ 1,100 per month to rent office space adjacent to the deli. This office will be used for a study of Paulsboro water supplies that is being conducted with the Rutgers’ School of Public Health and two federal agencies: the Centers for Disease Control and Prevention and the Toxic Substances and Disease Register Agency.