Middlefield Mutual Funds Ltd. and MRF 2001 II Limited Partnership, in connection with the planned dissolution of the Partnership, are proposing to exchange the assets of the Partnership for shares in the Growth Class of Middlefield Mutual Funds Ltd.

Middlefield says appropriate elections under applicable income tax legislation will be made to effect the transfers on a tax-deferred basis.

The transfer is conditional upon approval being obtained from the partners of the partnership, and the receipt of all necessary regulatory approvals.

The transfer of assets to the Growth Class and the subsequent dissolution of the Partnership is expected to occur on or about Dec. 15, 2003 and Jan. 30, 2004, respectively.

Middlefield says the proposed transfer benefits both the partners of the Partnership and the shareholders of the Growth Class by enabling them to participate in a larger, more diversified and liquid mutual fund.

As well, the shares of the Growth Class are exchangeable on a tax-free basis into other Middlefield mutual funds. Investors may switch into other types of funds and continue to defer capital gains taxes until they actually redeem their mutual fund shares.

Other funds currently offered are Income Plus Class, Equity Index Plus Class, U.S. Equity Class, Canadian Balanced Class, Global Technology Class, Index Income Class and Resource Class.