If one were to read the annual financial report of Hometown International, it would seem like an extensive joke.
In the report at the US Securities and Exchange Commission, the corporation – founded in Nevada in 2014 – spoke of its new ‘delicacy concept’, called Your Hometown Deli, with the sandwiches, food products and groceries ‘at home’ a comfortable and friendly atmosphere. And the CEO of the company is Paul Morina, a name known in New Jersey wrestling circles as the coach of a program in Paulsboro that has won championship after championship over the years.
A year after its founding, Hometown International opened only one store – a local sandwich shop in Paulsboro, a small town on the Delaware River in Gloucester County, about nine miles southwest of Philadelphia. It lost money last year.
Despite its financial problems due to the pandemic, Hometown International, with its only asset the single eatery, has an extraordinary value on paper today based on its share price. It’s worth over $ 100 million and people are starting to ask a lot of questions.
With a report earlier this week on CNBC on the company’s impossible current valuation of a million dollars, Morina and Your Hometown Deli are attracting far more attention this week than would be expected at a place that sells corn cattle on rye.
Paul Morina wrestles coach Paul Morina at a match in 2020.Al Amrhein | For NJ Advance Media
According to the CNBC report, David Einhorn, the hedge fund manager said in a letter to clients on Thursday that Hometown International is being warned about the risks to retail investors.
“The pastrami must be incredible,” Einhorn said of the company, after the stock rose from more than $ 9 per share to $ 3.25 per share from late March 2020 to early September. On Friday, the stock traded at the counter at $ 12.99.
Morina, who is also the principal of Paulsboro High School, did not respond to calls or text messages to his cell phone. The Paulsboro School District did not respond to a request for comment.
But the delicacy suddenly took on new business on Friday as news crews descended on the scene following the CNBC report of a deli valued in the millions.
The 10-K submission from Hometown International to the SEC has meanwhile raised unanswered questions about what is really playing out and who the store is offering.
On April 14 last year, the company said it had completed a private equity offering that generated $ 2.5 million in cash returns. And as the value of these shares increased, insiders were in theory suddenly very rich – among them Morina.
As a majority shareholder, it appears to be Morina more than $ 30 million.
Last May, the company entered into a consulting agreement with VCH Ltd. entered into Macau which owns more than 10% of its ordinary shares.
“VCH was engaged as a consultant to the company to create and build a high net worth presence and institutional investors,” the 10-K reported. “VCH receives $ 25,000 per month during the term.”
According to the filing, other registered major shareholders were established in Hong Kong.
However, financial experts say the whole business offers nothing that could give shareholders any reason to believe it’s a $ 100 million company. Not that there is heavy trading. According to CNBC, data shows that Hometown rarely trades more than a few hundred shares per day, and often has days on which no shares are exchanged.
__
Local journalism needs your support. Sign in to nj.com/supporter.
Ted Sherman can be reached at [email protected]. Follow him on Twitter @TedShermanSL