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Echelon Capital Corporation Announces Proposed Qualifying Transaction

May 23, 2008

NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA

Echelon Capital Corporation (“Echelon”)(TSX VENTURE: ECO.P), a capital pool company, is pleased to announce that it has entered into a letter agreement to complete a business combination (the “Qualifying Transaction”) with MBVax Bioscience Inc. (“MBVax”). If completed, the business combination will constitute Echelon’s qualifying transaction pursuant to the policies of the TSX Venture Exchange (the “Exchange”).

Information Concerning Echelon

Echelon is a company existing under the laws of Ontario and is a reporting issuer in British Columbia, Alberta and Ontario. Echelon currently has 2,360,000 common shares (“Echelon Shares”) outstanding, of which 1,160,000 are currently held in escrow pursuant to the policies of the Exchange.

Echelon has granted stock options to acquire up to an aggregate of 188,800 Echelon Shares at a price of $0.25 per share (the “Echelon Options”) to directors and officers. Echelon has also issued broker warrants to acquire up to an aggregate of 100,000 Echelon Shares at a price of $0.25 per share (the “Echelon Warrants”) as part of the compensation payable to the agent in connection with Echelon’s initial public offering. Other than these Echelon Shares, Echelon Options and Echelon Warrants, no other securities of Echelon are outstanding.

Further information concerning Echelon can be found in the prospectus of Echelon dated June 14, 2007, which is available on SEDAR at www.sedar.com.

Information Concerning MBVax

MBVax is a private company existing under the laws of Canada. MBVax currently has 4,829,376 common shares (“MBVax Shares”) outstanding. MBVax has no other securities outstanding.

MBVax manufactures Coley Fluid, a bacterial immune therapy for advanced cancer developed in 1893. Coley Fluid is not an approved therapy in the United States or Canada, but is a legal therapy in many countries. Clinics and hospitals approved to use Coley Fluid are located in Austria, Bahamas, China, Germany, Ireland, Israel, Mexico, Serbia, South Africa, Switzerland and Uzbekistan. In addition, individual patients have received Coley Fluid therapy as a compassionate therapy for advanced cancer in Albania, Australia and the United States.

Patients with advanced cancer have end-stage disease that can no longer be controlled by conventional therapies. Of the more than 650,000 annual cancer deaths in the United States and Canada, all 650,000 patients have advanced cancer prior to death. In addition to progressive cancer, most advanced cancer patients also have an extremely poor quality of life due to cancer pain, depression, extreme weakness, and/or immobility. By definition, there are no current treatments that regress the disease or improve the quality of life in advanced cancer patients.

To date, 44 advanced cancer patients have received between three weeks and 10 months of MBVax Coley Fluid therapy. Generally, these patients had severely compromised immune systems due to previous therapies and all were treated on a compassionate basis rather than in connection with a controlled clinical study. Physicians reported to MBVax that 42 of 44 patients appeared to benefit from the therapy and the majority of such patients experienced tumor regression. In three cases of advanced breast cancer, patients currently show no evidence of breast cancer.

During its long history, more than twenty formulations of Coley Fluid have been administered to patients by various manufacturers. These formulations used different proportions of the bacterial ingredients used in the manufacture of Coley Fluid and employed various methodologies to grow the bacteria and to sterilize the finished product. There were significant differences in potency between the various historical formulations and there were also variations in potency between batches of identical formulations.

MBVax’s intellectual property (United States patent application 2006/0292173, published December 28, 2006) protects its proprietary methods of manufacturing MBVax Coley Fluid. These methods eliminate batch-to-batch variations and ensure equivalent potency to the best historical formulation of Coley Fluid. MBVax plans to file more patents. In addition, because Coley Fluid targets orphan indications, MBVax plans to file for marketing exclusivity with the FDA.

In 2009, MBVax plans to commence clinical trials in Denmark, Germany, Switzerland, Canada, and in the United States at Harvard Medical School. It is anticipated that the planned clinical trials will be conducted with research collaborators who will bear all or most of the clinical trial costs.

Based on unaudited financial statements for the six months ended March 31, 2008, MBVax had total assets of $141,998 (2007 – $191,900) and total liabilities of $13,998 (2007 – $15,032), revenue of $143 (2007 – $5,152) and a loss of $48,868 (2007 – $95,909).

Based on audited financial statements for the year ended September 30, 2007, MBVax had total assets of $191,900 (2006 – $354,148) and total liabilities of $15,032 (2006 – $8,776), revenue of $7,720 (2006 – $8,507) and a loss of $168,504 (2006 – $235,131).

The MBVax Shares are principally held by Donald MacAdam and Rick Durst, both residents of Ontario, and Stephen Hoption Cann, a resident of British Columbia, each of whom holds 1,300,000 (26.9%), 937,800 (19.4%) and 600,000 (12.4%) MBVax Shares, respectively. The remaining 41.3% of the shares are held by 43 people who are investors or advisors to MBVax.

Information Concerning the Proposed Qualifying Transaction

Echelon and MBVax have entered into a letter agreement dated May 23, 2008 (the “Letter Agreement”) setting out certain terms and conditions pursuant to which the proposed Qualifying Transaction will be completed. The Qualifying Transaction is subject to the parties successfully negotiating and entering into a definitive amalgamation agreement, share exchange agreement or other similar agreement such that the Qualifying Transaction may be completed on a tax preferred basis to the parties thereto.

Pursuant to the Letter Agreement, Echelon has agreed to issue 10,000,000 Echelon Shares to the current shareholders of MBVax at a deemed value of $0.33 per share in consideration for the MBVax Shares.

The completion of the Qualifying Transaction is also subject to an arm’s length financing of a minimum of $2.0 million (the “Financing”). It is anticipated that under the Financing, MBVax will issue a minimum of 5,000,000 subscription receipts at a price of $0.40 per subscription receipt, with each subscription receipt being exchangeable upon completion of the Qualifying Transaction for one common share and one-half of one common share purchase warrant of Echelon (or the resulting issuer, as the case may be). Each whole warrant will be exercisable to acquire one common share of Echelon (or the resulting issuer, as the case may be) at a price of $0.50 per share for a period of two years from closing of the Financing. The proceeds from the Financing will be placed in escrow pending the closing of the Qualifying Transaction. The final negotiated terms of the Financing will be disclosed in a subsequent press release of Echelon and in the filing statement or management information circular, as the case may be, to be prepared by Echelon in respect of the Qualifying Transaction.

Assuming the completion of the minimum Financing and the Qualifying Transaction, current Echelon shareholders, current MBVax shareholders and purchasers pursuant to the Financing would hold approximately 13.6%, 57.6% and 28.8% of the then outstanding Echelon Shares (or shares of the resulting issuer), respectively.

The proceeds of the Financing will be used to fund the production of product for the multi-center clinical trial of the MBVax Coley Fluid and for working capital purposes.

The completion of the Qualifying Transaction is subject to the approval of the Exchange and all other necessary regulatory approvals. It is also subject to additional conditions precedent, including shareholder approvals of Echelon and MBVax as required under applicable corporate or securities laws, satisfactory completion of due diligence reviews by both parties, approvals of the boards of directors of Echelon and MBVax and certain other conditions customary for transactions of this nature.

Trading in the Echelon Shares will remain halted pending the review of the proposed Qualifying Transaction by the Exchange. There can be no assurance that trading in the Echelon Shares will resume prior to the completion of the Qualifying Transaction.

Sponsor

The proposed Qualifying Transaction is subject to the sponsorship requirements of the Exchange. The parties intend to apply for an exemption from the sponsorship requirements of the Exchange on the basis that the Financing will be brokered. In the event that an exemption is not available, a sponsor will be identified at a later date and will be announced in a subsequent press release of Echelon. An agreement to sponsor should not be construed as an assurance with respect to the merits of the transaction or the likelihood of completion of the proposed Qualifying Transaction.

Management and Board of Directors of Resulting Issuer

Upon completion of the Qualifying Transaction, it is anticipated that management of the resulting issuer will consist of the persons identified below.

Donald MacAdam – President, Chief Executive Officer and Director

Mr. MacAdam has served as President and Chief Executive Officer of MBVax since October 2005. Prior to that, Mr. MacAdam was the President of A360 Inc, a private company. Mr. MacAdam has served as a director of Hammond Power Solutions Inc. (TSX: HPSA) since 2001. Mr. MacAdam has served as Chief Executive Officer and a director of several other Canadian corporations, and was President and Chief Financial Officer of CRS Robotics Corporation (TSX: ROB) from 1993 until 1996, and was President and Chief Executive Officer of Tm Bioscience Corporation (TSX: TMC) from 1996 until 1999, and was President and Chief Executive Officer of L. A. Varah Ltd. (TSX) from 1984 until 1986. He is the inventor of several patents and the author of two books: Spontaneous Regression: Cancer and the Immune System and Startup to IPO: How to Build and Finance a Technology Company. Stephen Hoption Cann, Ph.D. – Chief Scientific Officer

Mr. Hoption Cann, Ph.D., is an assistant professor in the Department of Health Care & Epidemiology at the University of British Columbia. Dr. Hoption Cann has published 23 peer-reviewed papers, is a reviewer for several medical journals, and is a member of the American Association for Cancer Research. His research interests include the epidemiology of cancer, the phenomenon of spontaneous regression of cancer, and the work of Dr. William Coley.

David Wales, CMA – Chief Financial Officer

Mr. Wales, B. Comm., CMA, has held a number of high-level positions in finance including senior roles at Tm Bioscience Corporation (TSX: TMC) and CRS Robotics Corporation (TSX: ROB). In addition to extensive financial experience, Mr. Wales is highly proficient in corporate infrastructure development and business system implementation.

John Unsworth – Director

Mr. Unsworth is president of Vasotech Corp., a medical devices company. A biotechnology entrepreneur, Mr. Unsworth was formerly president of BioFrost Inc. and Hypercube Inc., and was a founder and director of GLYCODesign Inc (formerly listed on the TSX).

Ted Mayers – Director

Mr. Mayers is the Executive Vice President, Business Development of GBS Gold International Inc. (TSX: GBS). He served on its board of directors from August 2005, as a founding director, to May 2008 and as Chair of the Audit Committee until August 2006. Immediately prior to his executive appointment at GBS Gold in October 2007, Mr. Mayers served as Chief Financial Officer of LionOre Mining International Limited, from its inception in 1996 to its sale to Norilsk Nickel for $6.9 billion in 2007. LionOre was listed on the TSX, the Australian Stock Exchange, and on the Main Market of the London Stock Exchange. From September 2000 to August 2005, Mr. Mayers served as a director of Zaruma Resources Inc. and as Chair of its Audit Committee. Zaruma is an emerging copper producer listed on the TSX. Mr. Mayers is a Chartered Accountant and obtained an MBA from the University of Western Ontario. Mr. Mayers has a BSc in biochemistry from McGill University, and on graduation, conducted research at McGill in the laboratory of Dr. Murray Fraser on enzymes that split DNA.

John Eckert – Director

Mr. Eckert is the President and Chief Executive Officer and a director of Echelon, and the co-founder of McLean Watson Capital Inc., a Canadian based venture capital firm, funding high-growth entrepreneurial ventures. He has been a Managing Partner of McLean Watson Capital Inc. since October 1993. Prior to establishing McLean Watson Capital Inc., Mr. Eckert financed and advised Softimage Inc., a Montreal based 3D animation and post-production software company that was listed on NASDAQ in 1992 and sold to Microsoft Corporation in 1994. He served as the Joint Chief Operating Officer for Softimage Inc. from 1993 to its sale. Prior to 1992, Mr. Eckert had extensive experience in corporate finance, having served as a Vice President and Director in Corporate Finance and Capital Markets of Wood Gundy Inc. and CIBC Wood Gundy in Canada. He also served as Managing Director of CIBC Wood Gundy (Australia), a merchant bank. Mr. Eckert served on the board of the Canadian Venture Capital Association for five years, having previously held the positions of President (2000-2002) and Chairman (2002-2003). He also serves on the boards of directors of several private companies, including SkyWave Mobile Communications, SiteBrand.com Inc., Activplant Corporation and Fortiva Inc. Mr. Eckert holds a B.A. and an M.B.A from the University of Western Ontario.

Immunology Expertise

In addition to the proposed management of the resulting issuer following completion of the Qualifying Transaction, it is anticipated that the following individuals will form the Scientific Advisory Board of the resulting issuer:

Eric D. Brown, Ph.D., is an associate professor and holds the Canada research chair in microbial biochemistry at McMaster University, Hamilton, Ontario, and has published 26 scientific papers in peer-reviewed journals.

Jack Gauldie, Ph.D., is chairman of pathology and molecular medicine at McMaster University. Dr. Gauldie is a fellow of the Royal Society of Canada and recipient of the Canadian Medical Association medal of honour.

Peter N. Green, Ph.D., F.I. Biol., is Curator of the National Collection of Industrial and Marine Bacteria (NCIMB), the largest public service collection of bacteria in the United Kingdom. Dr Green has 31 peer-reviewed publications.

Thomas E. Ichim, Ph.D., is Chief Executive Officer Medistem Laboratories Inc, a stem cell therapy company. Dr. Ichim is an immunologist and has been extensively published in the fields of cell therapy and immunology.

Michael J. Lane, Ph.D., is a professor at SUNY – Upstate Medical University in Syracuse, New York. Dr. Lane was a founder of Genmap, Inc., of New Haven, CT, and Tm Bioscience Corporation, Toronto, Canada.

Xiang-Dong Lei, Ph.D., is a molecular biologist. Dr Lei has published 15 peer-reviewed papers, and was head of cancer vaccine development at a leading biotechnology company.

Liping Liu, Ph.D., is a bioorganic chemist with 19 peer-reviewed papers. Dr. Liu led a team of researchers that discovered more than one thousand novel tumor associated antigens in three years.

Johannes van Netten, Ph.D., is adjunct associate professor at the University of Victoria; director of research, Special Developmental Laboratory, Royal Jubilee Hospital; and a member of the consulting staff, Vancouver Island Cancer Centre, British Columbia Cancer Agency.

In addition to the proposed Scientific Advisory Board of the resulting issuer following completion of the Qualifying Transaction, it is anticipated that the following individuals will form the Clinical Advisory Board of the resulting issuer:

Leonid Bajenov, Ph.D., M.D., is a professor at the Vakhidov Research Center, Tashkent, Republic of Uzbekistan. Dr. Bajenov has published more than 300 scientific works, and is currently conducting clinical trials of Coley Fluid.

Zuhal Butuner, O.D., MSc, MBA, is a clinical and regulatory advisor. Previously Senior Clinical Program Manager at Biogen Inc., she led and managed the team responsible for obtaining FDA approval for the drug Avonex(R).

Peter Coy, M.D., is a retired radiation oncologist and formerly clinical assistant professor at the University of British Columbia. Dr. Coy was chair of the lung cancer sub-committee of the National Cancer Institute of Canada Clinical Trials Committee.

Hal Gunn, M.D., is co-founder of InspireHealth, Vancouver. Dr. Gunn is an authority in the field of bacterial cancer vaccines, and has a clinical appointment with the University of British Columbia School of Medicine.

Kenneth Wilson, M.D., is a medical oncologist at the Vancouver Island Cancer Centre and a clinical associate professor at the University of British Columbia. Dr. Wilson has published more than 150 papers and communications.

As noted above, completion of the Qualifying Transaction is subject to a number of conditions, including, but not limited to, acceptance by the Exchange. The Qualifying Transaction cannot close until the required approvals have been obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement or management information circular of Echelon to be prepared in connection with the proposed Qualifying Transaction, any information released or received with respect to the proposed Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of Echelon should be considered to be highly speculative.

This press release contains projections and forward-looking information that involve various risks and uncertainties regarding future events. Such forward-looking information can include without limitation statements based on current expectations involving a number of risks and uncertainties and are not guarantees of future performance of Echelon or MBVax. These risks and uncertainties could cause actual results and Echelon or MBVax’s plans and objectives to differ materially from those expressed in the forward-looking information. Actual results and future events could differ materially from those anticipated in such information. These and all subsequent written and oral forward-looking information are based on estimates and opinions of management on the dates they are made and expressly qualified in their entirety by this notice. Echelon assumes no obligation to update forward-looking information should circumstances or management’s estimates or opinions change.

The Exchange has in no way passed upon the merits of the proposed Qualifying Transaction and has neither approved nor disapproved the contents of this release.

 Contacts: Echelon Capital Corporation John Eckert President and Chief Executive Officer (416) 363-2000  MBVax Bioscience Inc. Donald MacAdam President (905) 304-8680  

SOURCE: Echelon Capital Corporation




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