Harvey Electronics' board is looking to take the company private.
The New York metro area A/V specialty chain is asking shareholders to approve a series of stock transactions that would allow the company to be de-listed from the NASDAQ stock exchange and to de-register its common stock.
Harvey shares would then be traded in private over-the-counter transactions via the “Pink Sheets” electronic quote system for broker-dealers.
According to a filing with the U.S. Securities and Exchange Commission, the move could save the company over $500,000 in Sarbanes-Oxley compliance costs plus other reporting fees associated with being a public company.
Compliance will divert resources from a costly computer conversion planned for next year, the board argued, and will distract management from its day-to-day duties.
Harvey has not received significant benefits from being a public company and has failed to provide increased value to its shareholders, the filing stated.
The requested stock transactions — a one-for-10 reverse stock split followed by a 10-for-one forward stock split — would reduce the number of shareholder to less than 300 from the current 352. Shareholders will vote on the proposal at Harvey's annual shareholders meeting, scheduled for Oct. 21.