Maryland-based Brekford Corp. and Virginia-based KeyStone Solutions Inc. announced Monday that the two companies will merge into a new company called Novume, by June 1 of this year, according to a filing with the SEC on Feb. 10.

Brekford and KeyStone shareholders will own 20 percent and 80 percent of Novume shares, respectively.

Novume preferred stock holders will receive quarterly cash dividends of 17.5 cents per share, a dividend yield of 7 percent.

The company does not expect to pay dividends on Novume common stock and expects to retain future earnings generated from operations to develop and expand its business.

“Our board of directors and management team believe that this combination is in the best interests of our customers and shareholders,” said Brekford Chief Operating Officer Rod Hillman.

Brekford will change its name to Brekford Traffic Safety Inc., and KeyStone will change its name to KeyStone Solutions Inc. under the new company.

Brekford, which sells red light and speed cameras to public agencies throughout the country, spun off 80 percent of its vehicle services business for $6 million to Columbia, MD-based LB&B in anticipation of the merger, Maryland Biz News Wire reported on Feb. 7. The deal is expected to close by Feb. 28.

The Hanover-based company’s clients include Maryland State Police, the Florida Highway Patrol, the Pentagon, Amtrak and Baltimore County.

Its common stock trades on the OTC Markets under the symbol “BFDI.”

Chantilly-based KeyStone is a holding company, formed in 2016, whose subsidiaries have won more than $150 billion in federal contracts over the past 30 years.

KeyStone’s chief executive officer, Robert Berman will take over as CEO of Novume.

Brekford’s shares rose a penny to 12 cents on Monday.