$ 100 million deli affiliated with Shell firm E-Waste, whose shares have soared regardless of the shortage of enterprise
Your deli in your hometown in Paulsboro, N.J.
We'll have what they have.
A mysterious $ 100 million corporation that owns only a small deli in New Jersey is linked in several ways to another company, E-Waste Corp.
Stocks of E-Waste, like those of deli-owner Hometown International, rose sharply over the past year, reaching a market cap of more than $ 100 million earlier this month. This surge happened even though E-Waste doesn't have a really ongoing business, as records show.
The files also indicate that Hometown International borrowed $ 150,000 for e-waste late last year. The delicatessen store was closed for more than five months last year due to the Covid pandemic.
And like the CEO of Hometown International, a school principal and head coach for wrestling in New Jersey, John Rollo, CEO of E-Waste, recently had a job unusual for running a company that is worth tens on paper Has a million dollars. He was a patient van in a northern New Jersey hospital and apparently still works in the same healthcare system.
The career story of the CEO of E-Waste is full of other surprising detours. The 66-year-old Rollo, who did not return a call for comment, previously won two Grammy awards during his long career as a sound engineer and producer on albums by artists such as The Kinks, Joe Cocker, Whitney Houston, Kool & the Gang and Quiet Riot, records condition.
He was also vice president of operations for Comus International, a New Jersey-based switch and sensor manufacturer, for nearly 18 years. Rollo was fired from Comus in 2019, according to a lawsuit he filed earlier that year in connection with his termination.
Among the ties between E-Waste and Hometown International, whose Your Hometown Deli in Paulsboro had combined sales of only about $ 35,000 over the past two years, is that the same Hong Kong company are their largest shareholders, with similar consultancy agreements Investor-controlled companies and their current use of the same New York law firm.
And just as with Hometown International's early financial filings, E-Waste's initial regulatory filings reveal the involvement of an attorney who was later sued by the Securities and Exchange Commission for engaging in fraudulent business ventures.
The lawyer for E-Waste was different from the one originally used by Hometown International – Hometown's former lawyer, unlike E-Waste, was indicted and convicted of federal related crimes.
Another similarity between the companies is that no one associated with them has returned calls or emails from CNBC.
A key figure in both companies is Peter Coker Sr., a 78-year-old North Carolina businessman whose son Peter Coker Jr. is the chairman of Hometown International.
The younger Coker is Executive Chairman of South Shore Holdings Ltd., a Hong Kong company that owns a financially troubled hotel in Macau, China: The 13.
Early investors in this extremely luxurious property included Steve Cohen's SAC Capital Advisors, Fidelity International and Omega Advisors. The website of the 13 states that it has been closed since February 15, 2020 due to the coronavirus pandemic.
Records show that Coker Sr. is an investor in Hometown International, as is one of his companies, Europa Capital.
Hometown International's largest shareholders include three separate companies in Hong Kong, all of which have the same address, and four separate companies in Macau, which also all have the same address there.
Paul Morina, the deli owner's CEO and director and wrestling trainer of the local high school, is also a major shareholder in Hometown.
A net loss and large liabilities
E-Waste, which identified itself as a Shell company on filings with the Securities and Exchange Commission, had total assets of nearly $ 183,000 and liabilities of nearly $ 412,400 as of November, according to its most recent 10-Q filing on the SEC emerges.
The company had a net loss of nearly $ 58,000 for the nine months ended November 30.
The company was founded in Florida in 2012 "to build an e-waste recycling business," but "has been unsuccessful in its endeavors and has retired that business," according to SEC filings.
Since then, the company has been a Shell company and aims to "enter into a business combination with a private company whose business offers its shareholders an opportunity," the file says.
It also emerges from this filing that there are significant doubts that E-Waste can stay in business for the next year and that the company "has suffered significant losses since its inception and has been unable to generate sufficient income", to become profitable.
"There can be no guarantee that viable operations will ever be achieved, or, if they are achieved, that they will be sustained continuously," the file states.
"If the company does not receive additional capital, the company must reduce the scope of its business development activities or cease operations."
Despite this extremely poor outlook, E-Waste stock is doing reasonably well.
The stock, which apparently traded at 2 cents a share last July – after which the shares were sold for well under $ 1 a share for weeks – has risen sharply since then.
Last week, the stock, of which 10 million common shares are outstanding, peaked at $ 10.25 per share. It gave the company a market cap of $ 100.25 million. E-Waste closed Wednesday at $ 8.26 per share, down 17.4% for a market cap of $ 82.6 million.
On April 12, E-Waste entered into a so-called "subscription agreement …" with three "accredited investors" who purchased 2.5 million units of the company's securities at a price of $ 1 per unit, representing US $ 2.5 million One dollar is the equivalent of a company filing with the SEC. Each unit consists of one common share and a warrant to purchase two additional common shares at an exercise price of $ 4.50 per share.
E-Waste stated in its filing that it intends to use the proceeds from the sale of the units for "working capital, general corporate purposes" and to seek, investigate and, if necessary, operate a business combination with a private entity whose business is a Opportunity for our shareholders. "
More connections between hometown, e-waste
E-Waste and Hometown International's inventory is traded over-the-counter. The trading volume in both companies was usually very low in the past year.
However, the volume of Hometown International stock has surged after a derisive mention of the company's valuation in a letter to clients from hedge fund manager David Einhorn on Thursday who said, "The pastrami must be amazing."
Hometown International's stock rose from $ 3.25 per share at the end of March 2020 – when the Covid-19 pandemic closed its delicatessen store for more than five months – to as high as $ 14 per share earlier this month.
E-Waste's own surge in the stock market came after a major change in ownership and management of the company, which was registered with a company on Park Avenue in Manhattan, GEM Group, prior to Fall 2020.
Early last year, four of the five largest shareholders in E-Waste were, in order of size of the shares held: the Valletta, Malta-based GEM Global Yield Fund LLC SCS, and three people whose address was that of a so-called GEM adviser in the Madison Avenue in New York.
At the time, the President, Treasurer and Secretary of E-Waste was a man named Peter de Svastich, who is the Managing Director of the GEM Group.
When CNBC called de Svastich on Wednesday, he snapped, "I don't know who you are and I don't speak to reporters" – before hanging up.
GEM, the majority shareholder of E-Waste, sold 6 million restricted shares in the company last year for $ 30,000 to Global Equity Limited – a Macau, China-based company.
Global Equity Limited is the largest single shareholder in Hometown International, the deli owner of which the son of Coker Sr. is chairman.
De Svastich resigned under this sales agreement for E-Waste shares to Global Equity Limited – and Rollo, the music producer and patient transporter, took over the sole management of E-Waste.
E-Waste's registration and phone number has also been changed to the Coker Sr. office in Carrboro, North Carolina. The company signed a one-year lease for the office there at a monthly rate of $ 250, the company said in its SEC filing.
In the same month, E-Waste received a loan of $ 255,000 from Coker Sr. This is evident from the filing that the interest on this loan is 8% per year.
E-Waste pays Tryon Capital from Coker Sr. monthly advisory fees of USD 2,500, according to an SEC filing.
Hometown International also pays Tryon Capital a monthly advisory fee of $ 15,000. This deal means Hometown pays more consulting fees over three months than the underlying deli business that's been on sale in the past two years.
The hometown lends money to e-waste
In late November, E-Waste Hometown International issued a $ 150,000 promissory note stating that Hometown provided the other company with a loan for that amount. The interest rate on this Hometown debt is listed in an obvious typo of 8% and 6% on the application.
The note was signed by Rollo and signed as accepted by Morina, President and CEO of Hometown International.
Morina, 62, is the director of Paulsboro High School, which is located near the deli that Hometown International owns. He is also the head coach of the school's renowned wrestling team, which has won numerous state championships under his leadership.
Morina's 1.5 million common shares of Hometown International are worth at least more than $ 19 million on paper. He has warrants for an additional 30 million more shares, theoretically valued at nearly $ 400 million at Hometown International's current share price.
E-Waste's promissory note to Hometown International stated the deli owner's business address as being in Woodstown, New Jersey, where Christine Lindenmuth lives.
Lindenmuth is Vice President and Secretary of Hometown International. She is also a math teacher and administrator at Paulsboro High School.
From Morristown to India
According to an SEC filing, Rollo has been working as a patient transporter for Atlantic Health Systems in New Jersey since March 2020.
A supervisor in the patient transportation office at one of the company's facilities, Morristown Medical Center, told CNBC that Rollo previously worked in that department but is currently working elsewhere at Atlantic Health Systems.
CNBC has reached out to Atlantic Health spokespersons to ask where Rollo is currently working.
According to E-Waste's SEC filings, from January 2010 to November 2019, Rollo also served as "Chairman of the Board of Directors for Switching Technologies Gunther, LTD (& # 39; STG & # 39;) in Chennai, India," a company previously owned by the BSE listed was known as the Bombay Stock Exchange.
This timeframe overlaps with Rollos work at Comus, which distinguishes itself as one of the leading switch manufacturers.
Records show that Rollo is the CEO of another company, Med Spa Vacations, whose mailing address is also the Carrboro office of Coker Sr.
Med Spa Vacations' SEC filings show that its shareholders include Global Equity Limited.
Global Equity Limited also holds 2 million common shares of Hometown International, which the company purchased from Peter Coker Jr., the company's chairman, in April 2020. Global Equity Limited has warrants for an additional 40 million shares of Hometown International.
The owners of Global Equity Limited are listed as two people, Michael Tyldesley and Ibrahima Thiam.
According to Med Spa Vacations, Tyldesley and Thiam "own 90% and 10% of the shares in Global Equity Limited and have joint voting and investment powers over the shares directly owned by Global Equity Limited."
Tyldesley is also listed as the director of VCH Limited, another Macau company that owns 500,000 common shares of Hometown International and warrants for an additional 10 million shares.
Last May, Hometown International signed a consultancy agreement with VCH Limited, which the deli owner pays $ 25,000 a month, according to the records.
That monthly payment is only about $ 10,000 less than Hometown International's delicacies sold in Italian hoagies, cheesesteaks, and french fries over the past two years.