Stag Arms, the Connecticut-based AR-15 manufacturer, has lost it’s federal firearms license as a result of not properly keeping track of serialized lower receivers.

New Britain-based Stag Firearms LLC pleaded guilty Tuesday to violating federal firearms laws and as part of a plea agreement company president and owner Mark Malkowski agreed to sell the company and have no further ownership or management role in a gun manufacturer.

The company, with Malkowski serving as its representative, pleaded guilty in U.S. District Court in Hartford to a single felony count of possession of a machine gun not registered to the company.

The Bureau of Alcohol, Tobacco and Firearms is also revoking Stag’s federal license to manufacture firearms.

Malkowski is also scheduled to plead guilty Wednesday in U.S. District Court in New Haven to a misdemeanor count of failure to maintain firearms records.

The federal government began its investigation of Stag in July 2014, after a routine Bureau of Alcohol, Tobacco and Firearms inspection turned up a variety of recording keeping violations, missing firearms and unregistered firearms, the government said.

The guilty plea, Stag said in a prepared statement, was in the best interest of the company and its approximately 100 employees. Malkowski is in advanced talks with a New York private equity firm to sell the company, Stag and the government said.

“For the first time in Connecticut, and there have only been a few of these prosecutions throughout the nation, a large manufacturer is pleading guilty to a felony charge relating to record keeping violations,” Connecticut U.S. Attorney Deirdre M. Daly said Tuesday. The company will pay a fine of $500,000 as part of the plea agreement.

For his guilty plea, Malkowski, 37, will pay a $100,000 fine and will not be permitted to own, operate or manage a firearms company.