Encorium Group, Inc. (Nasdaq: ENCO), a full-service multinational contract research organization (CRO) that provides design, development, and management capabilities for clinical trials and patient registries to many of the world's leading pharmaceutical companies, today announced that it has completed a private placement of 3,937,500 shares of its common stock with a private investor for an aggregate purchase price of $1,575,000, or $.40 per share.
Prior to the transaction, the Company has entered into Warrant Exchange Agreements with two investors (the "Investors") pursuant to which the Company issued to the Investors an aggregate of 1,864,000 shares of Common Stock (collectively, the "Exchange Shares") and warrants to purchase an aggregate of 874,126 shares of Common Stock, exercisable for a period of five years, at an exercise price of $.40 per share (collectively, the "Exchange Warrants"). The Exchange Shares and Exchange Warrants were issued in exchange for warrants dated as of May 9, 2007 held by the Investors to purchase an aggregate of 874,126 shares of Common Stock of the Company (collectively, the "Original Warrants").
The Company also announced that it has terminated previously announced negotiations for the sale of the Company's wholly-owned subsidiary Encorium OY to a clinical research organization based in the United States and will not pursue a sale of the Company or Encorium OY at this time. Given the Company's recent successes with respect to its strategy to grow into the world's leading vaccine franchise, including the recently announced $8.7 million of new business contract wins and the selection by a major pharmaceutical company for participation in a swine flu vaccine program, together with the investment announced today, the Company believes it is well positioned to win future contracts in the vaccine and oncology fields. As a result, the Company believes stockholder value will be maximized by moving ahead independently, while continuing to focus on clinical vaccine development.
Dr. Kai Lindevall, executive chairman stated, "We are very pleased that we were able to close this financing to shore up our balance sheet and provide the Company with additional working capital. Our experience and capabilities in the vaccine field coupled with the recent new awards in this area demonstrate the long term potential we have to grow into a leading vaccine franchise with expertise in pre-clinical support, regulatory consultancy and strategic trial planning. We believe these developments will position us to move ahead independently and are in the best interest of all stockholders."
Of the 35,000,000 authorized capital stock of the Company, 26,325,383 shares of common stock will be issued and outstanding immediately following the closing.
SOURCE Encorium Group, Inc.