SOURCE: Midland Baring Financial Group

November 09, 2006 09:00 ET

Midland Baring AVC Files Equity Ownership Report of AvalonWorks Corp.

MONTREAL -- (MARKET WIRE) -- November 9, 2006 -- The following is a statement by Midland Baring Financial Group on its relationship with AvalonWorks Corporation:

Midland Baring Financial Group (PINKSHEETS: MDBF) (FRANKFURT: M4U) announced today that Midland Baring Asset Value Corporation currently owns 4,700,000 common shares of AvalonWorks Corporation (TSX Venture: AWB) representing 23.5% of the total issued and outstanding common shares of the company.

According to the company's regulatory disclosure statement, Midland Baring Asset Value Corporation acquired and/or owned a total of 4,700,000 common shares on October 27, 2006. The regulatory bodies were advised in writing of the ownership and the electronic filing is expected by November 15.

AvalonWorks Corporation (TSX Venture: AWB) announced on October 23, 2006, a special dividend of $0.05 per common share payable on November 17, 2006 to shareholders of record on October 29, 2006.

According to this special dividend record date, Midland Baring Asset Value Corporation would be entitled to CND $235,000 in dividend, however, Midland Baring Asset Value Corporation is disputing the decision by the board of directors of AvalonWorks as it appears that the company, its board of directors and officers are in violation of several sections of the Canadian Business Corporation Act, Ontario Securities Act as well as TSX Venture Exchange rules and by-laws.

Midland Baring has sent several notices to the board of directors and officers of AvalonWorks Corp.; however, they continue to ignore requests to terminate the special dividend and to rectify the deficiencies with its filings, board of directors constitution, annual meetings, annual reports and other TSX requirements.

"According to our information, Midland Baring is the single largest shareholder of AvalonWorks and we have not only been denied representation on the board of directors, we have been wrongfully misled by the board of directors and now all shareholders are being prejudiced by the negligence of AvalonWorks' board of directors and their officers," said Jean-Francois Amyot, President of Midland Baring Asset Value Corporation. "The decision by the board of directors to pay a special dividend while the company is losing money and deciding to sell its only remaining asset is a disguised liquidation and shareholders will be left with virtually nothing unless we the minority holders fight together and stop this dividend and remove the board of directors and appoint new officers with responsible, ethical and experienced individuals who will turn this company around," further added Mr. Amyot.

Midland Baring has the objective of leading the turn-around of AvalonWorks by growing the company with new acquisitions and by organizing financing to assure the creation of sustainable shareholder value.

About Midland Baring Financial Group

Midland Baring Financing Group is one of North America's few financial services organization created for the benefit of micro and small-cap companies. We operate three division and investment funds specifically tailored to the growth-oriented micro and small-cap, Canadian and U.S. publicly traded companies.

Midland Baring offers a unique turnkey solution, whereby our services provides small-cap companies a complete services offering from initial public offering services, corporate finance advisory, reverse merger, PIPE financing and mergers and acquisition services. Our teams of advisors create customized solutions to offer our clients a rapid, flexible and cost-effective funding alternative, which will enable them to grow, build cash reserves and ultimately enhance shareholder value.

Important Information About Forward-Looking Statements

All statements in this news release that are other than statements of historical facts are forward-looking statements, which contain our current expectations about our future results. Forward-looking statements involve numerous risks and uncertainties. We have attempted to identify any forward-looking statements by using words such as "anticipates," "believes," "could," "expects," "intends," "may," "should" and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.

A number of factors may affect our future results and may cause those results to differ materially from those indicated in any forward-looking statements made by us or on our behalf. Such factors include our limited operating history; our need for significant capital to finance internal growth as well as strategic acquisitions; our ability to attract and retain key employees and strategic partners; our ability to achieve and maintain profitability; fluctuations in the trading price and volume of our stock; competition from other providers of similar products and services; and other unanticipated future events and conditions.

Contact Information