Vicon Industries Inc. has filed to terminate the registration of its common stock, exempting the Hauppauge company from reporting requirements of the Securities and Exchange Commission.
In a news release this week, Vicon, a maker of video security equipment and software, said it expects the deregistration will result in "significant cost savings" because it no longer will have to file periodic reports and meet SEC auditing requirements.
The board of directors judged that the costs "far exceed the associated benefits" to Vicon, according to the news release.
Vicon chairman and chief executive Saagar Govil did not respond to requests for comment.
Shares of Vicon rose 2 cents to close Wednesday at 8 cents on the OTCQB Venture Market. Twelve months ago the stock was trading at 42 cents.
Alon Kapen, a securities lawyer with Farrell Fritz in Uniondale, said a deregistered stock cannot be listed on a major stock exchange, but it could continue to be traded on over-the-counter markets.
"For them and their shareholders, the consequences won't be so severe," he said. "They'll still be publicly traded. There will just be less information about them."
Kapen said the costs of SEC reporting requirements can put a company at a "competitive disadvantage."
Vicon moved its stock to the OTCQB Venture Market on July 12 after receiving a delisting notice from the NYSE American exchange.
Vicon, whose systems are being used by police in Sinaloa, Mexico, the heartland of that country's drug cartels, is Long Island's 42nd largest public company based on 2017 revenue of $26.7 million.
The company, which reported a net loss of $7 million for the fiscal year ended Sept. 30, 2017, narrowed that loss to $5.4 million in the 2018 fiscal year.
Kapen said securities laws allow companies with fewer than 300 stockholders of record to deregister their stock. As of Jan. 7, Vicon reported having 137 shareholders of record.
In March 2018, Cemtrex Inc., another Long Island company headed by Govil, acquired a controlling investment in Vicon.
After amassing the 46 percent equity stake, Govil joined the Vicon board and was named CEO.
Cemtrex, whose signature product is a motorized standing SmartDesk that incorporates a computer, a three-panel display and hand-gesture controls, lists Long Island City, Queens, as its headquarters on a Jan. 11 government filing and a Jan. 17 news release from the Consumer Electronics Show in Las Vegas.
The company, which did not announce a move, previously listed Farmingdale as its headquarters.