WAYNE, Pa., Sept. 13 /PRNewswire-FirstCall/ -- Encorium Group, Inc. (Nasdaq: ENCO), a full service multinational clinical research organization (CRO) conducting studies in over 30 countries for many of the world's leading pharmaceutical and biotechnology companies, today announced that its largest stockholder, Ilari Koskelo, has exercised his basic subscription right to purchase common stock of the Company for an aggregate subscription price of $861,329, pursuant to the Company's previously announced rights offering.
In addition, in the event other holders do not fully exercise their basic subscription rights, Mr. Koskelo has exercised his oversubscription privilege to purchase up to an additional 522,812 shares of the Company's common stock for an aggregate subscription price of $914,921, subject to proration with other holders who exercise their oversubscription privilege. Mr. Koskelo and the Company have agreed to cancel the promissory notes outstanding in favor of Mr. Koskelo, in lieu of cash consideration.
Dr. Kai Lindevall, Chief Executive Officer stated, "We are extremely pleased to have received this tangible evidence of our largest stockholder's continuing confidence in the Company and in the Company's strategy."
Conference Call and Webcast
To help address investor questions relating to the rights offering and the Company' strategy moving forward, Encorium will hold a conference call and webcast on Tuesday, September 21, 2010, at 11:00 a.m. EDT. Interested parties are invited to listen to the call live over the Internet at http://www.encorium.com under News and Events or http://investor.shareholder.com/media/eventdetail.cfm?eventid=86068&CompanyID=ENCO&e=1&mediaKey=A4E03E01141AA57691994DA67BE1BDE6. The call is also available by dialing (888) 889-2220 or for international callers (973) 409-9641 and by using the passcode 10939615.
An audio replay of the teleconference will be available until September 28, 2010 by dialing (800) 642-1687 or (706) 645-9291, and using passcode 10939615. The replay will also be accessible on the Company's website at http://www.encorium.com under News and Events.
About the Rights Offering
Under the rights offering, each stockholder of record as of August 11, 2010 has received, at no charge, one non-transferable subscription right for each share of the Company's common stock owned on August 11, 2010. In addition, a holder one of the Company's warrants had received rights on a substantially similar basis. Each right entitles the holder to purchase one share of the Company's common stock at the subscription price of $1.75 per share, which is referred to as the basic subscription right. If a holder fully exercises all of its basic subscription rights, and other holders do not fully exercise their basic subscription rights, such holder will be entitled to exercise an oversubscription privilege to purchase a portion of the unsubscribed shares at the same price of $1.75 per share, subject to proration and subject, further, to reduction under certain circumstances.
Assuming full participation in the rights offering, Encorium estimates that the net proceeds from the offering would be approximately $5.9 million. Encorium intends to use the proceeds to repay outstanding indebtedness and to support working capital.
Rights offering materials, including a Prospectus and other items necessary to exercise the rights, were mailed on or about August 25, 2010 to eligible stockholders. The Prospectus contains important information about the rights offering, and stockholders are urged to read the Prospectus carefully. Any questions about the rights offering may be directed to Alliance Advisors, LLC, our information agent for the rights offering, at 866-458-9858.
The subscription rights will be exercisable until 5:00 p.m. New York City time on September 30, 2010, unless Encorium extends the rights offering. Encorium reserves the right to cancel or terminate the rights offering at any time prior to the expiration date of the rights offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
About Encorium Group, Inc.
Encorium Group, Inc. is a global clinical research organization specializing in the design and management of complex clinical trials and Patient Registries for the pharmaceutical, biotechnology and medical device industries. The Company's mission is to provide its clients with high quality, full-service support for their biopharmaceutical and medical device development programs. Encorium offers therapeutic expertise, experienced team management and advanced technologies. The Company has drug and biologics development as well as clinical trial experience across a wide variety of therapeutic areas such as infectious diseases, cardiovascular, vaccines, oncology, diabetes endocrinology/metabolism, gene therapy, immunology, neurology, gastroenterology, dermatology, hepatology, women's health and respiratory medicine. Encorium believes that its expertise in the design of complex clinical trials, its therapeutic experience and commitment to excellence, and its application of innovative technologies, offer its clients a means to more quickly and cost effectively move products through the clinical development process.
This press release contains forward-looking statements identified by words such as "estimate," "project," "expect," "intend," "believe," "anticipate" and similar expressions. Those statements involve risks and uncertainties, and actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to: (i) the risk that we may not have sufficient funds to operate our business; (ii) our success in attracting new business and retaining existing clients and projects; (iii) the size, duration and timing of clinical trials we are currently managing may change unexpectedly; (iv) the termination, delay or cancellation of clinical trials we are currently managing could cause revenues and cash-on-hand to decline unexpectedly; (v) the timing difference between our receipt of contract milestone or scheduled payments and our incurring costs to manage these trials; (vi) outsourcing trends in the pharmaceutical, biotechnology and medical device industries; (vii) the ability to maintain profit margins in a competitive marketplace; (viii) our ability to attract and retain qualified personnel; (ix) the sensitivity of our business to general economic conditions; (x) other economic, competitive, governmental and technological factors affecting our operations, markets, products, services and prices; (xi) announced awards received from existing and potential customers are not definitive until fully negotiated contracts are executed by the parties; (xii) our backlog may not be indicative of future results and may not generate the revenues expected; (xiii) uncertainties regarding the availability of additional capital; (xiv) uncertainties regarding the execution of change orders by our clients for work already performed; and (xv) uncertainties regarding continued listing of our common stock on Nasdaq. You should not place undue reliance on any forward-looking statement. We undertake no obligation to publicly release the result of any revision of these forward-looking statements to reflect events or circumstances after the date they are made or to reflect the occurrence of unanticipated events. Please refer to the section entitled "Risk Factors" in the Company Annual Report on Form 10-K for the year ended December 31, 2009 and the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.
|SOURCE Encorium Group, Inc.|
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