Hometown International, parent company of delicatessen, merges with California-based Makamer

Your Hometown Deli’s parent company, the Paulsboro, NJ restaurant, which made headlines last year with a valuation of $100 million, is merging with a small private company that manufactures hemp-based plastics.

Los Angeles-based Makamer Holdings is the new name, according to filings with regulators, and the operating business is biodegradable plastics.

Neither of the two companies has a lucrative activity. The end result is the merger of two weird companies that mom and pop investors should probably avoid, financial experts have said. Makamer did not respond to emails or requests for comment.

READ MORE: SEC questioned Paulsboro’s Hometown deli as it lines up stock sale

Hometown International, (ticker: HWIN) claimed working-class Paulsboro deli meats as its core business, raking in some $25,000 in sales last year.

For those unfamiliar with Your Hometown Deli, or its parent company Hometown International, a group of Hong Kong investors apparently aimed to use the public company as an informal SPAC. These special purpose acquisition companies are the blank check companies that bring another company into the public markets through a merger or acquisition, a process that bypasses the traditional IPO process and cost.

SPACs became extremely popular in 2020 and 2021 when they accounted for the majority of IPOs in the United States, including 59% of all new listings in 2021 according to Nasdaq.

Hometown Deli appeared to be an attempt by its major shareholders to gain access to public markets without the expense, hassle or regulatory oversight of an IPO or even a SPAC. In an interview with the Financial Times, Manoj Jain, co-chief investment officer of Maso Capital Investments Ltd., a Hong Kong fund that was among the biggest investors in Hometown, explained that the idea was to merge a Chinese company with delicatessen.

READ MORE: Paulsboro’s Your Hometown Deli stock gains may look like GameStop

Hometown Deli caught the eye when its stock price rose from $1.25 in November 2019 to $14.50 two years later, earning the company its outsized valuation on paper. Regulators have taken no public enforcement action against the company.

Hometown’s shocking $100 million valuation “was just part of a new wave of stock manipulation,” claims accounting expert Francine McKenna, who writes TheDigan investigative bulletin and is expected to teach accounting at the Wharton School this year.

Among those listed as executives was Paulsboro High School wrestling coach Paul Morina, known for winning state championships, and the owner of the deli.

Reached by phone at the deli, Morina said, “I’m not really involved in this anymore,” and did not confirm whether he was still a shareholder. Then he hung up.

With Morina as CEO of the front company, Makamer CEO Alex Mond takes over, according to documents filed last month with the Securities and Exchange Commission. Morina is still listed as a shareholder, according to the latest annual report.

And in a twist unique to Philadelphia, Makamer has a three-member board that includes Najee Goode, a former Philadelphia Eagles linebacker.

In a press release last year announce the obtaining of a scholarship from another company, Makamer said it “developed a proprietary modification of hemp that allows the fibers to be more resistant to heat and humidity.” The company adds that it “specializes in creating 100% biodegradable plastics using hemp polymers that are fully compostable within days to months, leaving no trace of toxins or microplastics.”

International hometown lost money in 2021 after accounting for all fees and expenses paid to its advisers. It generated revenue of $25,004 and $13,976 for the years ended Dec. 31, 2021 and 2020, respectively, but lost $486,219 and $624,438 for those years, according to SEC filings.

“The tactics are the same ones we’ve seen used by penny stock company promoters,” McKenna argued. “These are fictitious companies that morph from company to company, looking for trends.”

The company has “used the press to gain notoriety as a small company struggling with the constraints of COVID-19 that has a market capitalization of sorts of $100 million,” McKenna said. “Now he’s saying he’s going to merge with a bioplastics company and change his name.”

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