New Jersey deli owner Hometown International to merge with Makamer

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Hometown International — that odd, publicly traded company with a market capitalization of over $100 million despite owning only one small New Jersey deli — has announced plans to merge with start-up Makamer. deprived of bioplastics.

The loser Your Hometown Deli in Paulsboro, NJ, which is owned by Hometown International, will not be operated by the resulting company from the merger with Los Angeles-based Makamer. It’s unclear whether the deli will close or continue to sell sandwiches, sodas, chips and other entrees.

The announcement of the Makamer and Hometown International combination comes nearly a year after hedge fund manager David Einhorn noted in a letter to a client the odd disparity between extremely modest delicatessen sales, which were of $25,004 for all of 2021, and the top of Hometown. stock market valuation.

“The pastrami must be amazing,” Einhorn joked in the most-quoted line of that April 2021 letter.

In the aftermath of that letter, CNBC detailed the tangled business relationships and contentious history of a number of people connected to Hometown International, whose CEO at the time was Paul Morina, the high school principal and head coach. wrestling in Paulsboro.

Morina is still listed as owning 31.5 million shares of Hometown International.

In its annual report, filed with the Securities and Exchange Commission on March 18, Hometown International disclosed that “the company has identified a potential target company and is currently engaged in discussions regarding a potential business combination.”

Makamer CEO interviews CNBC

Makamer chief Alex Mond told CNBC in an interview Friday that he expects the merger with Hometown International, which was disclosed in an SEC filing on the eve of April Fool’s Day. , be completed “in a few weeks”.

After that, Mond said, he plans to transfer what will be the bioplastics company’s new ticker symbol to the Nasdaq shortly thereafter from the over-the-counter markets.

Mond said Los Angeles-based Makamer viewed Hometown as an attractive merger candidate even after headlines about the grocery store’s owner due to its publicly traded status.

“We have investors who pushed us to go public,” he said.

Mond said the IPO will make it easier for Makamer to get much-needed money to grow his business, which he launched more than three years ago, by issuing debt.

Mond said Makamer was in talks with “large companies interested in selling our product,” which is designed to replace petroleum-based plastics and reduce the amount of plastic pollution in the world’s oceans and lands.

“We’re anticipating purchase orders,” Mond said.

“We use 45 different blends, mostly hemp,” Mond said of the company’s bioplastics.

“Hemp is the best substitute” for plastics, he said, noting that it “uses the least energy and is easy to grow”, is renewable and “cleans also the soil” of pollutants.

Stock price hits $14 per share

The SEC filing announcing the proposed merger, which was made by Hometown International under the new name of Makamer Holdings, did not disclose how Hometown International and Makamer were each valued in the merger, or how Hometown’s roughly 60 shareholders International will stand out. in the case.

HWIN, the current symbol of Hometown International, is trading in very low volume, if at all, on the pink platform of OTC Markets, an over-the-counter trading service.

In April 2021, OTC Markets removed HWIN from its OTCQB platform, moved the stock to the less prestigious pink market, and issued a “buyer beware” warning to the grocery store owner “for not complying to the rules” of OTC Markets.

On Friday, Hometown International’s stock price was $14 per share, giving it a market capitalization of $109.2 million, based on outstanding shares alone.

The last trades recorded in the stock were for 100 shares on March 8. Prior to that, the last recorded trades in the stock were for the same number of shares on December 31.

“More details will follow shortly”

Peter Coker Jr., the Hong Kong-based investor who is the CEO of Hometown International, in an email response to a question about the merger, said: “Anything available for discussion has been disclosed in the SEC Form 8K.”

“More details to follow shortly,” Coker Jr wrote.

Manoj Jain, the founder of Maso Capital in Hong Kong, which is a major investor in Hometown International, declined to comment through a spokesperson.

For over a year, Maso Capital has positioned Hometown International and another publicly traded shell company, formerly known as E-Waste, as vehicles for private companies to merge and become publicly traded themselves. .

Last year, E-Waste entered into a reverse merger with EZRaider Global Inc., a private electric vehicle company. E-Waste itself before the merger had a market capitalization of $110 million despite having no business operations.

On the heels of CNBC’s reports on Hometown International and E-Waste, the two companies, in highly unusual SEC filings, have disavowed the publicly traded action process of their stock, saying they are not unaware of any basis to support the high market capitalizations of their companies.

Other major investors in Hometown International include the investment funds of two US universities, Duke and Vanderbilt, with those funds having mailing addresses in the same building as Maso Capital.

The grocery store owner’s major shareholders are a group of opaque entities in Macau, China, whose mailing addresses are on the same floor in the same office building.

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The concern of management

Mond, in the interview, said that he and his current management at Makamer will be in charge of the merged company, despite the initial desire of those currently involved in Hometown to have leadership roles in the company when talks about the merger began last year.

“They didn’t agree with that, but that was our condition,” Mond said. “It was all my management, or I don’t accept the deal.”

Mond said he was aware of the legal and regulatory controversies surrounding those involved in Hometown before being approached by two “Wall Street guys” he knew who suggested merger talks.

“I was concerned” about those controversies, Mond said. “That’s why I made sure our management took over and not the old management.”

Mond said that during the merger negotiations, he only spoke “very briefly” with Coker Jr., president of Hometown International.

“Maybe three or four minutes,” Mond said, referring to the length of his discussions with Coker Jr. over the phone.

Mond said his main point of contact in the negotiations was Hometown International’s attorneys, as well as “also James Patten.”

CNBC last year reported that Patten was at the time working as a financial analyst at Tryon Capital Ventures, a North Carolina investment firm owned by Coker Jr.’s father, Peter Coker Sr.

Patten had also struggled in high school with Morina, Hometown International’s largest shareholder and former CEO. His LinkedIn profile lists him as a director of the Mantua Creek Group, a partnership of which Morina is a member and which leases space at the Paulsboro deli.

Patten is also prohibited by FINRA, the broker-dealer regulator, from acting as a stockbroker or associating with broker-dealers, according to the regulator’s database.

He previously faced repeated disciplinary action from FINRA, including failing to comply with an arbitration award of more than $753,000 for violations of securities laws, unauthorized trading and account churning. of a customer.

Coker Jr.’s father, Peter Coker Sr., is listed as owning 1.3 million shares of Hometown International. Coker Sr. and his business partner in Tryon Capital, Peter Reichard, control another entity, Europa Capital Investments, which is listed as owning nearly 2 million shares of the grocery store owner.

Coker Sr. has previously been sued for allegedly hiding money from creditors and alleged business fraud. He has denied wrongdoing in those cases, one of which was settled out of court in recent years in North Carolina.

Photo by Peter Lee Coker of the Raleigh/Wake City-County Identification Bureau (CCBI).

Source: Raleigh/Wake City-County Identification Bureau

In August 1992, Coker Sr., then 49, was arrested in Allentown, Pennsylvania, and charged with “prostitution and other offenses after allegedly exposing himself” to three underage girls while he was driving around Central School,” The Morning Appel reported at the time. Records detailing the outcome of that case are not publicly available.

Coker Sr. was arrested in North Carolina in 2010 for soliciting a prostitute.

Reichard in 2011 pleaded in a criminal case that led to his conviction for a scheme to illegally contribute thousands of dollars to the successful 2008 campaign for North Carolina governor of Bev Perdue, a Democrat.

The scheme involved the use of a bogus advisory contract between Tryon Capital Ventures and a fast food franchisee who wanted to back Perdue. Coker Sr. has not been charged in this case.

CNBC last year detailed that Tryon Capital was being paid thousands of dollars a month for advice by both Hometown International and the associated front company, E-Waste. These two companies terminated these consultancy contracts as a result of this report.

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