Rexhall Industries Requests Hearing In Response To NASDAQ's Notice of Possible Delisting

    LANCASTER, Calif.--Aug. 28, 2002--Rexhall Industries, Inc. announced today that it has received official notification from NASDAQ that the Company has yet to comply with Martketplace Rule 4310(c)(14), which relates to the timely filing of the Company's Form 10-Q, and that its securities are, therefore, subject to delisting from the NASDAQ. The Company has requested a hearing to explain in detail what has caused the delay and what courses of action the Company is taking to remedy this situation. NASDAQ changes all symbols of companies not in compliance, which is why the ticker symbol has been temporarily changed from "REXL" to "REXLE".
    An accounting records concern was identified by Rexhall's management, who then brought it to the attention of the Audit Committee of the Board of Directors and KPMG, the Company's independent auditors. The Company also announced that the Audit Committee has retained independent legal counsel, O'Melveny & Myers LLP, and independent accountants, PM KeyPoint LLC, to evaluate accounting records for potential error in the Company's financial statements for the first and second quarters of 2002. KPMG has concurred with this course of action.
    William J. Rex, President, Chairman and CEO, stated, "Management concurs that prudent actions must be taken. We are proceeding as expeditiously as possible, but our extra efforts now are the first step in maintaining your confidence."

    Forward-looking Statements: Except for historical information contained herein, the matters discussed in this news release contain forward-looking statements that involve risks and uncertainties, including risks associated with the fact that the Company has not filed its Form 10-Q for the second quarter of 2002 in a timely basis and the other risks detailed from time to time in the Company's SEC reports, each as it may be amended from time to time. The forward-looking statements included in this release are made only as of the date of this release and the Company undertakes no obligation to update the forward-looking statements to reflect subsequent events or circumstances.