The $ 100 million delicatessen retailer in New Jersey bought simply $ 5,305 value of groceries within the first quarter of 2021
Sales at this mysterious $ 100 million deli in New Jersey rose nearly a whopping 50% in the first quarter of 2021 – but that was just measly sandwiches, sodas, and fries valued at $ 5,305, a new financial file revealed on Monday.
Losses at deli owner Hometown International also skyrocketed, rising to $ 173,658 in the first three months of this year. That's about $ 97,000 more in losses than in the same period last year.
The recent filing from Hometown International also highlights a number of previously unreported developments at this strange company.
The moves, like the recent ones, appear to be geared towards cleaning the house and making the company an attractive takeover candidate for a private company. This seems to be the real reason investors in Hong Kong and Macau have taken large stakes in Hometown International as opposed to the love of selling cheesesteaks.
These developments include the decision not to renew a $ 25,000 per month advisory contract with a Macau-based company that is a major investor in Hometown International. This resulted in the company's quarterly filing with the Securities and Exchange Commission.
This includes the full repayment of two curious $ 150,000 loans to Shell companies made to Shell companies closely linked to the father of Hometown International Chairman and new President Peter Coker Jr.
Hometown International attracted attention in mid-April when hedge fund manager David Einhorn stated in a letter to customers that the company recently had a market capitalization of more than $ 100 million, despite sales of less in 2019 and 2020 combined than had made $ 37,000 at his Paulsboro restaurant.
CNBC has since detailed the criminal history and government penalties of a number of people linked to the company, as well as other strange details about the deli owner.
Following these articles, Hometown International's controlling shareholders announced a $ 15,000 monthly advisory agreement with Tryon Capital, a North Carolina company controlled by Peter Coker Sr. who is a major investor in the deli owner.
Hometown International then fired its President Paul Morina, who is daytime principal and head wrestling coach at the nearby Paulsboro High School. The company has also canned its only other senior executive, Christine Lindenmuth, who is an administrator at the same high school.
Both Hometown International and an affiliate Shell company, E-Waste, have declined their sky-high market caps, claiming their stock prices in the over-the-counter market were unfounded on financial grounds.
The 10-Q, which like other filings from the deli owner was delayed by about a week, contains details that are inconsistent for most companies with nearly 8 million common shares outstanding.
The company's stock closed at $ 12.10 per share on Monday, down 40 cents per share. Only 423 shares changed hands. On paper at least, Hometown International's market capitalization based on common stock alone is more than $ 97 million, while its intrinsic value, including tens of millions of stocks available through stock warrants, is a whopping $ 1.8 billion .
Among the odd details in the new filing is the fact that the deli had a labor cost of $ 126 in the first quarter.
In the same period a year ago, no labor costs were reported at all.
Revenue, which was just $ 3,577 in the first quarter of 2020, rose to $ 5,305.
"The increase in sales is mainly due to an increase in customer visits following the reopening of our delicatessen as a result of the easing of restrictions related to the COVID-19 pandemic," the 10-Q file reads.
This filing also shows that Hometown International's advisory agreement with VCH Limited, an investor in the company, expired on April 30th and was "not renewed".
That deal had paid VCH Limited $ 25,000 a month.
VCH Limited is one of four companies that are major shareholders of Hometown International and whose postal addresses are in Macau, a special administrative region in China.
The 10-Q announcement notes that $ 120,000 of the $ 178,963 in operating expenses for the first quarter was chewed through Hometown International's advisory agreements with VCH Limited and Tryon Capital.
Filing indicates that by April 14, Hometown International had received full principal payments and more than $ 1,000 accrued interest on a $ 150,000 loan to Shell company E-Waste, which works closely with Coker Sr. is connected. The loan was only issued in November.
In a move that reflected Molina's layoff, John Rollo, president of E-Waste, recently left the company after CNBC published articles on E-Waste, which has no business operations but a market cap of over $ 112 million.
Hometown International loaned $ 150,000 in February to another company affiliated with Coker Sr. – Med Spa Vacations Inc. – which Rollo remains in charge of.
The deli owner's 10-Q filing reveals that on May 12, "the full principal of the bond and related accrued interest claims of $ 2,250 were paid in full by the debtor," Med Spa Vacations.
Both loans had an interest rate of 6%.