PR - NovaStar Plans to Ask Review of NYSE Plans to Delist

On September 17, 2007, NovaStar announced a decision not to declare a dividend related to its 2006 taxable income, causing the company’s status as a Real Estate Investment Trust (REIT) to terminate, retroactive to January 1, 2006. NovaStar now operates as a C corporation, and this change in corporate structure requires the Company to satisfy the criteria for original listing as a corporation. Given the current market capitalization of NovaStar and other factors, the NYSE has advised the company that it does not meet the original listing requirements for a corporation.

Under NYSE procedures, a listed company has the right to a review of a staff determination by a Committee of the Board of Directors of NYSE. The request for review must be filed in writing within 10 business days after receiving the notice of the staff’s determination. The company’s understanding is that a suspension date will be announced by the NYSE if the company fails to properly request a review within the applicable 10-day period, if the Committee’s review upholds the staff’s determination, or if the Company is approved to begin trading in another securities marketplace. The NYSE has indicated that it may, at any time, suspend a security if it believes that continued dealings in the security on the NYSE are not advisable.