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| MIDDLEFIELD BANCORP ANNOUNCES AMALGAMATION
WITH 2M ENERGY CORP. AND CHANGE TO AN INVESTMENT FUND |
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| MIDDLEFIELD BANCORP LIMITED ("MBN") is
pleased to announce that it has amalgamated with its wholly-owned subsidiary,
2M Energy Corp. ("2M"), effective October 12, 2011. The amalgamation was
implemented to reduce general and administrative costs. |
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| In addition, MBN is conducting a
strategic review of its entire business in order to seek to further reduce
costs and maximize shareholder value. The outcome of this process is expected
to be presented to shareholders for approval, if necessary, at the upcoming
Annual General Meeting scheduled for March 6, 2012 (the "AGM"). |
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| As a first step toward further cost
reduction, MBN will become an investment fund governed by National Instrument
81-106 effective on or about November 1, 2011. Cost savings will result for
several reasons, including MBN's not having to adopt the IFRS accounting regime
until such time as investment funds are required to do so. In addition, further
cost savings will result from using Middlefield's existing Independent Review
Committee for conflict matters under National Instrument 81-107 in place of
MBN's current board of directors. |
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| Becoming an investment fund is a
natural evolution of MBN's business, since MBN is currently primarily engaged
in the business of investing in equity and equity-related securities. This
change is not expected to constrain the strategic alternatives under
consideration for presentation to shareholders at the AGM. |
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| MBN trades on the Toronto Stock
Exchange under the symbol "MBN". |
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| For further information visit our
website at www.middlefield.com or contact: |
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| W. Garth Jestley |
| President and Chief Executive
Officer |
| (416) 847-5346 |
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