MDI Announces That NASDAQ Temporarily Suspends Minimum Bid Price Requirement

Business Wire, Oct 23, 2008

SAN ANTONIO -- MDI, Inc. (NASDAQ:MDII), today announced that it received a letter dated October 22, 2008 from The Nasdaq Stock Market confirming that in light of the turmoil in the world financial markets the NASDAQ has temporarily suspended enforcement of its rules requiring listed companies to maintain a minimum bid price of $1.00. As a result, MDI will have until February 5, 2009 to regain compliance by achieving a $1.00 closing bid price for a minimum of 10 consecutive trading days. MDI is in compliance with all other NASDAQ listing requirements.

The NASDAQ letter states that the temporary suspension will allow companies to focus on running their business, rather than satisfying market-based requirements that are largely beyond their control in the current environment.

The letter further states that in the coming months, NASDAQ will continue to monitor the affect that market conditions are having on the operation of its rules.

November 13, 2008 Annual Shareholder Meeting Reverse Split Proposal

The Company intends to proceed with its planned November 13, 2008 Annual Shareholders Meeting to seek shareholder approval to effectuate a reverse stock, should the Company need it.

The Company believes that a reverse stock split, which will result in a higher per share price and corresponding lower number of total shares issued and outstanding at the time of implementation, should help increase the marketability of its stock to a broader range of potential new investors and enable the Company to attain the minimum $1.00 per share bid price for its common stock.

The reverse split will affect all outstanding shares of MDI's common and preferred stock as well as the number of shares of common stock underlying stock options, warrants and other exercisable or convertible instruments outstanding at the effective time of the reverse split.

A reverse stock split would not have any impact on the voting and other rights of stockholders. The Company believes that a reverse stock split will have no impact on its business operations or any of its credit facilities.

J. Collier Sparks, MDI's CEO and President stated: "We believe the reverse stock split is in the best interest of the Company and its shareholders and will improve the trading liquidity in MDI's common stock. We are proud of the Company's significant financial progress in reaching profitability in the third quarter of this year and believe the reverse stock split is one more step in our process of delivering long-term shareholder value."

Forward-Looking and Cautionary Statements

Except for historical information and discussions contained herein, certain statements included in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included in this document, other than statements of historical fact, that address activities, events or developments that management expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements represent our reasonable judgment on the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "project," "forecast," "plan," "may," "will," "should," "expect" and other words of similar meaning. Investors should not rely on forward-looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the Company's expectation. Additional information concerning risk factors is contained from time to time in the Company's SEC filings. The Company expressly disclaims any obligation to update the information contained in this release.