BACKGROUND ON OFFERING

MidFed Acquisition Corp is a newly organized entity that was formed to acquire MCHC, which owns the Bank, and to date has not engaged in any business operations. Midland Capital Holding Corporation is a public company with a listing on the OTCPK (Pink Market) with ticker symbol MCPH that owns 100% of Midland Federal Savings and Loan Association. Over-the-counter (OTC) securities are securities that are not listed on a major exchange in the United States and are instead traded via a broker-dealer network, usually because many are smaller companies that do not meet the requirements to be listed on a formal exchange. The Bank is not subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The Company intends to retain the registration status of MCHC with the SEC and, if successful, will become subject to SEC reporting requirements following the completion of the Transaction. OTC stocks have less liquidity than their exchange-traded peers, low trading volumes, larger spreads between the bid price and the ask price and limited publicly available information. This results in their being volatile investments that are usually speculative in nature. OTCPK is also known as the Open Market. There are no minimum financial standards, and companies can choose not to disclose financial information. Within the Pink Market, firms are classified as showing Current Information, Limited Information, or No Information.

The Company has prepared a FR Y-3 application (the “Application”) for the holding company formation/acquisition for filing with the Federal Reserve Board of Governors (the “FRB”) and with the Office of the Comptroller of the Currency (the “OCC”) for their approval of the Transaction and for the Company to become a savings and loan holding company. This Memorandum omits certain information, including confidential information, contained in the Application. The non-confidential portions of the Application may be inspected without charge at the Central District offices of the of the OCC at One Financial Place, Suite 2700, 440 South LaSalle Street, Chicago, IL 60605 or at the offices of the OCC at 250 E Street SW, Washington, DC 20219.