Aldila Inc.'s Board of Directors unanimously approved a plan to
voluntarily delist its common stock from the NASDAQ Stock Market and to
move its common stock listing to OTCQX U.S. Premier over-the-counter
market, operated by Pink OTC Markets Inc.

The Board of Directors also approved the appointment of B. Riley &
Co., LLC (“B. Riley”) as the company's designated advisor for
disclosure, a requirement of the OTCQX. The company also intends to
subsequently deregister its common stock with the SEC and suspend its
reporting obligations under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). The company expects that its shares will
continue to trade under the “ALDA” ticker symbol (OTCQX: ALDA).

The move to list on the OTCQX is consistent with the company's ongoing
efforts to reduce expenses and improve financial results. The company
has worked hard to reduce its selling, general and administrative
expenses (“SG&A”) and continues to focus its efforts to control
costs. Pink OTC Markets reports that small companies typically save
$500,000 to $750,000 annually by moving their listing from a national
exchange and deregistering under the Exchange Act. Aldila anticipates
realizing annual savings at the low end of this range. The company also
expects that this change will free up considerable time for management
to focus on Aldila's strategy and operating performance. In light of
this change, the company will review the composition of its Board of
Directors in the near future given the different requirements for
listing on the OTCQX.

Following deregistration, the company will no longer bear the
significant financial burden of complying with the Sarbanes-Oxley Act
of 2002, which would otherwise be increasing in the current fiscal
year. Current regulations now require smaller reporting companies to
obtain auditor attestation on the effectiveness of the company's
internal controls for fiscal years ending after June 15, 2010.
Notwithstanding the estimated impact on costs, the company will
continue to maintain a strong system of internal controls over
financial reporting to ensure the continuing accuracy and reliability
of results of operations reported to our stakeholders. The company also
expects significant savings related to legal and auditor reviews of SEC
disclosures, as well as accounting and other administrative fees
related to the company's NASDAQ listing and SEC reporting requirements.

The company chose the OTCQX marketplace because it will provide
shareholders a liquid market and requires member companies to adhere to
a rigorous set of financial disclosures. Specifically, OTCQX-listed
issuers are required to publicly disclose annual audited financial
statements, unaudited quarterly financial statements and current
information pertaining to material events. The company believes that
these disclosures, which will be reviewed by B. Riley, will provide its
shareholders with the ability to monitor the company's progress and
make informed investment decisions. The company currently intends to
continue to hold annual shareholders' meetings.

“Aldila has been looking closely at all aspects of its operations over
the past year, and has made many changes to create the most efficient
business possible during these difficult economic times. We have
reduced our SG&A by 24% during the nine months ended September 30,
2009 as compared to 2008, we have announced the closure of our Mexico
manufacturing facility and have completed that during the fourth
quarter of 2009. Although 2009 has been challenging, we are encouraged
that our facilities in Vietnam and China are running at near capacity
and that our ending backlog for 2009 is 23% higher compared to ending
backlog of 2008,” commented Peter R. Mathewson, Chairman of the Board
and CEO.

“We're taking this important step with our shareholders'
interests in mind. It is consistent with our past decisions of
generating returns to our shareholders via dividends or stock buyback
programs. Although the company terminated its quarterly dividends in
2008 due to the challenging economic times, the company has paid
dividends in the past totaling $9.10 per share from 2004 – 2008. The
burden of reporting under the Exchange Act and in recent years the
added burden of Sarbanes-Oxley has become too expensive for many small
companies such as Aldila. After careful consideration, the company
believes that by moving its stock listing to OTCQX, it can re-invest
significant resources to help drive growth and profitability. This move
is consistent with the company's history of attempting to maximize
returns for its shareholders. We believe that by utilizing the OTCQX
platform, material savings can be achieved while still providing
reliable information to our shareholders,” said Mathewson.


PROCEDURAL DETAILS

The company intends to file a Form 25 with the Securities and Exchange
Commission (the “SEC”) on or about January 29, 2010, to effect the
voluntary delisting of its common stock from the NASDAQ Global Market,
with the delisting of its common stock taking effect no earlier than 10
days thereafter, on February 08, 2010. As a result, the company expects
that the last day of trading of its common stock on the NASDAQ Global
Market will be on or about February 05, 2010. The company is currently
taking the necessary steps so that the common stock may be listed on
the OTCQX, and expects to be listed on or about February 08, 2010.

Following the effectiveness of the Form 25 filing, the company's common
stock will not be eligible for trading on any national exchange or the
OTC Bulletin Board, although the company intends to comply with rules
permitting its common stock to be quoted on OTCQX immediately upon
delisting from NASDAQ. These rules require at least one market maker to
quote the company's common stock after complying with certain filing
and disclosure rules or by complying with the unsolicited customer
order rule. Currently the company has multiple market makers for its
common stock that are active on Pink OTC Markets trading platform. In
addition, OTCQX requires companies to engage an approved dedicated
advisor for disclosure, to advise them on proper disclosure under the
OTCQX Alternate Reporting Standard, and to certify that listing and
disclosure requirements have been met.

To this end, the Board of
Directors has approved the company and the company has engaged B. Riley
as its designated advisor for disclosure. Given that the company is in
good standing with NASDAQ and current in all its filings, it does not
anticipate any difficulties in meeting all requirements to list its
common stock on OTCQX, although there can be no assurances that it will
be able to do so.

Additionally, after the Form 25 becomes effective, the company intends
to file a Form 15 with the SEC to voluntarily deregister its common
stock and suspend its reporting obligations under the Exchange Act. As
a result of the filing of the Form 15, the company's obligation to file
reports and forms with the SEC, including Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, will be
suspended immediately and will terminate when the deregistration
becomes effective 90 days after the Form 15 is filed.

The company
intends to immediately begin reporting under OTCQX requirements,
including annual audited financial statements, unaudited quarterly
financial statements and current information. The company is eligible
to deregister its common stock under the Exchange Act because it has
fewer than 300 stockholders of record. As of December 31, 2009 the
company had 293 registered shareholders, 55 of whom held restricted
shares under the company's 2009 Equity Incentive Plan.
The unanimous decision by the company's Board of Directors to
voluntarily delist and deregister its common stock is a cost savings
step that will significantly reduce annual expenses associated with the
company's NASDAQ listing and compliance with SEC reporting
requirements, which include legal, accounting and other administrative
fees, and compliance with the Sarbanes-Oxley Act of 2002. Given the
limited public trading volume and liquidity of the company's common
stock, the company does not believe the benefits of having its common
stock listed on a national exchange and registered under the Exchange
Act outweigh the associated annual costs.

The Board of Directors
believe that the company's stockholders will be better served if the
company spends more of its financial resources and management's time on
the company's business without the substantial cost and time associated
with having to comply with NASDAQ rules and SEC reporting obligations.
The Board determined to delist, deregister and suspend public reporting
obligations after extensive deliberations, and careful consideration of
the advice of the company's legal counsel and other outside advisors,
the advantages and disadvantages of no longer being a public reporting
company. The Board of Directors and management believe that the expense
reductions inherent in delisting and deregistering the common stock
will benefit the company and its stockholders, and ultimately will
serve to maximize the value of the company.

The Board of Directors do not believe that delisting from NASDAQ and
deregistering under the Exchange Act will materially impact the
company's current operations, current relationships with employees,
customers or suppliers, or its existing financing arrangements.