Hometown deli, Paulsboro, NJ
Mike Calia | CNBC
The mysterious $ 100 million corporation, which as of Monday owns a single delicatessen store in New Jersey, killed the advisory deal that has been paying $ 15,000 a month to a company controlled by its chairman’s father since last May.
Hometown International’s move to terminate the consultancy agreement with Tryon Capital LLC by mutual agreement came after articles from CNBC detailing the close relationships between Tryon Capital partner Peter Coker Sr. and the deli owner, chairman Peter Coker Jr from Hong Kong.
The elder Coker is also a shareholder in Hometown International, whose combined revenue for the past two years has been about $ 10,000 less than what the Tryon Capital company paid in consulting fees.
“Given the recent negative press against the company and Tryon’s clients, the parties determined that it was in the best interests of the company and its shareholders to terminate the advisory agreement at this point,” Hometown International said in its 8-K Filing with the Securities and Exchange Commission.
“The parties believe such termination will reduce distractions and allow the company to advance its proposed acquisition strategy,” the file said.
The registration was signed by Paul Morina, CEO of Hometown International, who is also a Principal and Head Wrestling Coach at Paulsboro High School in Paulsboro, New Jersey, where the deli is located.
At the same time, E-Waste – a Shell company affiliated with both Coker Sr. and Hometown International – terminated its own consultancy agreement on Monday that paid Tryon Capital $ 2,500 a month.
Hometown deli in Paulsboro, NJ
In E-Waste’s own 8-K report, which announced the end of the consulting contract, “the recent negative press” regarding this company “and Tryon’s clients” was also mentioned.
The end of the contracts was praised by Manoj Jain, founder of Maso Capital in Hong Kong, a major investor in Hometown International. Maso Capital uses Hometown International and E-Waste as vehicles for acquisitions.
Jain made a statement referring to CNBC’s coverage last week of controversy surrounding Peter Coker Sr., others associated with Tryon Capital, and E-Waste.
“We are very concerned about these serious allegations and are pleased that the relationship between the two companies and Tryon Consulting has now ended,” Jain said in a statement to CNBC.
“We look forward to both public companies advancing their stated acquisition plans,” said Jain.
Jain owns sole voting rights over approximately 2.5 million common shares of Hometown International, or more than 20% of the nearly 8 million common shares outstanding. The stock closed at $ 13.29 per share on Monday, up 0.38%.
An SEC filing by Hometown International in April 2020 and a similar filing by E-Waste earlier this month suggest that both companies intend to raise investments from Jain and others to fund efforts to evaluate potential merger candidates with other companies, particularly private companies, to use.
The filings of the individual companies almost exactly one year apart show that they have either sold or sold 2.5 million shares apiece as part of these efforts.
While Hometown International has combined sales of around $ 36,000 in its Paulsboro delicatessen store in the past two years and E-Waste has no significant business, both companies could be attractive to private companies looking to become US public companies through the use of reverse merger or other means.
Tryon Capital’s advisory agreements expire days after Hometown International was delisted from the more prestigious OTCQB and relegated to the less prestigious Pink market for “public interest reasons”.
Hometown International has also been given a “Buyers Attention” warning sign by the OTC Markets Group, which operates these marketplaces.
OTC Markets executives said the downgrade was due to “irregularities” in Hometown International’s public statements.
OTC Markets executives also said they were watching filings from E-Waste, whose mailing address is that of another North Carolina company affiliated with Coker Sr. that has borrowed more than $ 200,000 from E-Waste.
E-waste also owes Hometown International $ 150,000, according to a promissory note filed with the SEC.
E-waste, which trades on the Pink market, saw no stock sales on Monday and ended the day at $ 8.41 per share, a staggering $ 105 million market cap.
CNBC has detailed how Peter Coker Sr., who holds more than 63,000 common shares of Hometown, has been sued in the past for allegedly hiding money from creditors and corporate-related fraud. He has denied these allegations.
In August 1992, Coker Sr. was arrested in Allentown, Pennsylvania, and “charged with prostitution and other crimes after allegedly exposing himself to three girls while driving around a school one night,” The Morning Call reported at the time . Coker Sr. and his son did not respond to repeated requests for comment.
CNBC has also detailed Coker Sr.’s links with E-Waste.
Coker Sr.’s partner in Tryon Capital, Peter Reichard, stepped in in 2011 on a criminal case that resulted in his conviction of an illegal donation program of thousands of dollars to the successful 2008 campaign for the governor of North Carolina at Bev Perdue , a Democrat.
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.
Reichard is also a managing director with Coker Sr. of a company called Europa Capital Investments, which owns 90,400 common shares of Hometown International and has warrants for an additional 1.9 million shares.
James Patten, a financial analyst at Tryon Capital, wrestled with Morina, CEO of Hometown International, in high school.
Patten is banned from working as a stockbroker or working with broker-dealers by FINRA, the broker-dealer regulator, according to the regulator’s database, which lists several disciplinary actions taken against Patten over the course of his career.
Hometown International conducted a full audit for nearly two weeks after hedge fund manager David Einhorn found the company’s market cap exceeded $ 100 million despite only owning a tiny deli.
A major investor in both Hometown and E-Waste is a Macau, China-based company called Global Equity Limited.
An owner of Global Equity, Michael Tyldesley, is listed in the financial statements as the director of another Macau company, VCH Limited, which also has interests in Hometown International.
VCH Limited has entered into an advisory agreement with Hometown International which, according to SEC filings, pays $ 25,000 per month.
That agreement was not mentioned in the filings filed on Monday announcing the termination of Tryon Capital’s advisory agreements with Hometown International and E-Waste.