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CONSUMAT SYSTEMS ANNOUNCES COMMENCEMENT OF ACTION TO RESTORE REVERSE STOCK SPLIT DECLARED AS OF SEPT. 30, 1992

 RICHMOND, Va., Nov. 25 ~PRNewswire~ -- The Board of Directors of Consumat Systems Inc. (NASDAQ: CSMTC), a Richmond-based waste management company (the "Company"), announced today that it had commenced action to restore the one-for-three reverse stock split declared as of Sept. 30, 1992, since the previous split has now been determined to have been ineffective.
 On Sept. 18, 1992, the Company announced a one-for-three reverse stock split of the Company's Common Stock, effective as of Sept. 30, 1992. Acting in reliance upon the advice of special legal counsel, the Board of Directors believed that the Company could effect a reverse split as of Sept. 30, 1992, without shareholder approval. As a result, shareholders of the Company were notified that the split had been declared and were instructed to surrender their old share certificates in exchange for new certificates evidencing their post-split share ownership. Cash was paid in lieu of fractional shares.
 The Company's Common Stock, which is traded under the symbol CSMTC on NASDAQ, has been trading at the post-split (higher) price since Oct. 1, 1992.
 The Company has now determined, after further consultation with its regular legal counsel and with another law firm, that the Company's shareholders must approve any reverse stock split. The Company has called a meeting for Dec. 30, 1992 to approve a one-for-three reverse split. In the meantime, although the number of outstanding shares of the Company's Common Stock will technically revert to the greater number it was prior to Sept. 30, the Company said that for trading purposes the new split will be treated as if it had occurred on Sept. 30, so that the Company's Common Stock will continue to be quoted and traded on NASDAQ on the current basis. The Company also announced that shareholders owning over 67 percent of the Company's Common Stock have indicated an intention to vote in favor of the proposed one-for-three split, which would assure passage of the proposal.
 The Company stated that the principal purpose of the Sept. 30, 1992 one-for-three split was to meet the $1.00 minimum bid price maintenance standard for continued quotation on the NASDAQ system, and that the Company still considers this an important objective to maintain liquidity in the Company's stock.
 Trading in the Company's stock on NASDAQ will continue on the same basis as at present. Transactions in the company's shares will be denominated in the post split (lower) number of shares, and quotations are expected to reflect this fact. The Company will continue to issue certificates on the post-split (lower) scales, as if the split had effectively occurred.
 The Company stated that shareholders will receive detailed instructions for exchanging their share certificates after the Dec. 30 meeting. In the meantime, the Company stated that shareholders should continue to hold their existing certificates.
 If the new split is NOT effected by year-end (which the Company considers unlikely), further corrective action will be taken at that time.
 -0- 11~25~92
 ~CONTACT: Patricia B. Bradley, Consumat Systems, Inc., 804-746-4120~
 (CSMTC)


CO: Consumat Systems, Inc. ST: Virginia IN: SU:

CM -- CH001 -- 1399 11~25~92 09:21 EST
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Publication:PR Newswire
Date:Nov 25, 1992
Words:516
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