Encorium Reports Third Quarter 2009 Financial Results; Announces Date of Annual Stockholder Meeting

Encorium Reports Third Quarter 2009 Financial Results; Announces Date of
Annual Stockholder Meeting

BERWYN, Pa., Nov. 16 /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 its financial
results for the third quarter ended September 30, 2009.

As previously announced, on July 16, 2009 the Company sold substantially all
of the assets relating to its US line of business to Pierrel Research USA,
Inc., the result of which the Company no longer has any employees or
significant operations in the United States. Due to this sale, for the three
and nine months ended September 30, 2009 and 2008, the results of the U.S.
business have been presented as discontinued operations in the Company's
consolidated financial statements.

Net revenue for the third quarter of 2009 was $4.5 million, a decrease of
17.6% from $5.4 million for the third quarter of 2008. The decrease in net
revenues was primarily attributable to unfavorable foreign currency
fluctuations of $200,000 for the three months ended September 30, 2009.
Approximately $650,000 was attributable to revenue recognized on a contract
that completed in 2008. The Company had a consolidated backlog at September
30, 2009 from continuing operations of $19.9 million which included
approximately $8.3 million of new business wins in the first nine months of
2009 compared to a backlog of $27.0 million at September 30, 2008.

Direct expenses for the third quarter of 2009 were $2.9 million, or 56.9% of
net revenues, compared to $3.5 million, or 54.0% of net revenues, for the
comparable prior year period. The decrease in direct expenses was primarily
the result of approximately $156,000 of favorable foreign currency
fluctuations combined with reductions in staff and subcontractors utilized on
active clinical studies being conducted, net of severance and other costs.

Selling, general, and administrative expenses (SG&A) was $2.1 million, or
40.3% of net revenue, for the three months ended September 30, 2009, compared
to $2.0 million, or 31.3% of net revenue, for the three months ended September
30, 2008.

Depreciation and amortization expense decreased 75.6% to $98,563 for the three
months ended September 30, 2009 from $403,406 for the three months ended
September 30, 2009 primarily as a result of certain intangible assets acquired
as part of the Encorium Oy (formerly Remedium) acquisition being fully
amortized. During the three months ended September 30, 2008, the Company took
a non-cash impairment charge of $1.86 million in connection with its analysis
of the carrying value of goodwill acquired in connection with the acquisition
of Encorium Oy.

Loss from continuing operations decreased to $643,389 or $(0.04) per diluted
share for the third quarter of 2009, from a net loss of $2.4 million, or
$(0.12) per diluted share, in the third quarter of 2008.

Financial Position
Encorium's balance sheet at September 30, 2009 reflected cash and cash
equivalents of $318,243 and stockholders' equity of $925,423. Our net cash
used in operations for the nine months ended September 30, 2009 was $5.4
million. The Company's latest financials have been prepared on a going
concern basis. As previously disclosed, Encorium's independent registered
public accounting firm reported that the Company's audited consolidated
financial statements for the fiscal year ended December 31, 2008, included in
the Company's Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 27, 2009, contains a paragraph that indicates
that, while the Company's financial statements have been prepared on a going
concern basis, there is substantial doubt about its ability to continue as a
going concern, and that no adjustments have been made to the financial
statements that might result from the outcome of this uncertainty.
On October 19, 2009, the Company completed a private placement of 3,937,500
shares of our 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
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"). Except as described
above, the terms of the Exchange Warrants, including anti-dilution
adjustments, are substantially similar to those of the Original Warrants.

The Company also announced on October 19, 2009, 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.
The Company anticipates that will meet its cash requirements at least into the
second quarter of 2010, assuming it is able to fully implement its current
costs cutting initiatives, it is able to win additional contracts during
fiscal 2009 and it is able to maintain current customer contracts. We will
continue to seek strategic alternatives, including, but not limited to
attempting to secure additional financing. The Company's ability to obtain
additional financing in the future will depend in part upon prevailing capital
market conditions, as well as conditions in its business and its operating
results; and those factors may affect the Company's efforts to arrange
additional financing on terms that are satisfactory to it or at all. If
Encorium is unable to secure additional financing on terms acceptable to it
and on a timely basis, it may significantly reduce its operating costs, which
may include the cessation of operations in some countries. The Company's
consolidated financial statements do not include any adjustment to reflect the
possible future effects on the recoverability or classification of assets or
the amounts and classification of liabilities that may result from the outcome
of its ability to continue as a going concern.

Dr. Kai Lindevall, executive chairman stated, "We are very pleased that we
were recently able to shore up our balance sheet. While additional financing
is likely necessary, we believe 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."

Annual Meeting of Stockholders

The Board of Directors of Encorium Group, Inc. has set January 8, 2010 as the
date of the Annual Meeting of Stockholders. A proxy statement, which will
discuss in detail matters that will be presented at the Annual Meeting, and an
Annual Report will be sent to all Stockholders prior to the date of the Annual
Meeting.

Conference Call
Encorium has elected to not hold a quarterly conference call at this time.

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; and (xiv) uncertainties regarding the
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, 2008, the Company's Quarterly Report on Form 10-Q for the
period ended June 30, 2009; and the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 2009 for a more complete discussion of
factors which could cause our actual results and financial position to change.

--financial tables to follow--

ENCORIUM GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
---- ---- ---- ----

Net revenue $4,446,606 $5,396,894 $13,468,042 $16,716,964
Reimbursement
revenue 661,176 1,116,818 2,576,542 3,085,554
------- --------- --------- ---------
Total Revenue 5,107,782 6,513,712 16,044,584 19,802,518
--------- --------- ---------- ----------
Operating Expenses
Direct 2,905,878 3,519,946 9,270,853 11,026,826
Reimbursement
out-of-pocket
expenses 661,176 1,116,818 2,576,542 3,085,554
Selling, general
and administrative 2,058,878 2,035,638 6,379,746 6,836,465
Depreciation
and amortization 98,563 403,406 281,938 1,183,681
Impairment loss - 1,856,183 - 1,856,183
--- --------- --- ---------
Total Operating
Expenses 5,724,495 8,931,991 18,509,079 23,988,709
--------- --------- ---------- ----------

Loss from
Operations (616,713) (2,418,279) (2,464,495) (4,186,191)

Interest Income - 1,071 - 13,756
Interest Expense (26,676) (17,129) (31,132) (24,044)
------- ------- ------- -------
Net Interest (Expense)
Income (26,676) (16,058) (31,132) (10,288)

Other expense - - - -

Net Loss from continuing
operations before
Income Taxes (643,389) (2,434,337) (2,495,627) (4,196,479)
--------- ----------- ---------- -----------

Income Tax Expense
(Benefit) 98,826 (8,627) 90,899 60,269
------ ------ ------ ------

Net Loss from
continuing
operations $(742,215) $(2,425,710) $(2,586,526) $(4,256,748)
========= =========== =========== ===========

Net loss from
discontinued
operations (258,436) (1,455,642) (554,016) (3,077,435)

Income Tax Expense
(Benefit) - - - -
--- --- --- ---

Net Loss $(1,000,651) $(3,881,352) $(3,140,542) $(7,334,183)
=========== =========== =========== ===========

Weighted Average
Common and Common
Equivalent Shares
Outstanding

Basic 20,523,883 20,603,140 20,523,883 20,603,140
Diluted 20,523,883 20,603,140 20,523,883 20,603,140

Net Loss per Common
Share
Continuing Operations $(0.04) $(0.12) $(0.13) $(0.21)
Discontinued Operations $(0.01) $(0.07) $(0.02) $(0.15)
------ ------ ------ ------

Net Loss per Common
Share $(0.05) $(0.19) $(0.15) $(0.36)
====== ====== ====== ======

See accompanying notes to the consolidated financial statements

ENCORIUM GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)

September 30, December 31,
2009 2008
---- ----
Assets
Current Assets
Cash and cash equivalents $318,243 $5,705,818
Investigator advances 29,289 1,088,768
Accounts receivable, less allowance of
$220,000 and $97,000 for September 30,
2009 and December 31, 2008, respectively 3,137,422 4,624,161
Prepaid expenses and other 1,133,838 1,206,088
Prepaid taxes 40,670 28,290
Costs and estimated earnings in
excess of related billings on
uncompleted contracts 1,311,739 1,443,427
--------- ---------
Total Current Assets 5,971,201 14,096,552
--------- ----------

Property and Equipment, Net 303,940 1,211,929

Intangible Assets
Goodwill 1,414,244 1,366,269
Other intangibles, Net 3,613,698 3,733,517
Other assets 314,992 684,666

Total Assets $11,618,075 $21,092,933
=========== ===========

Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $2,684,547 $3,624,071
Notes payable 701,335 -
Accrued expenses 2,671,716 3,004,627
Deferred taxes 612,987 206,173
Obligations under capital leases 48,154 72,542
Billings in excess of related costs
and estimated earnings on
uncompleted contracts 1,418,607 3,307,347
Customer advances 1,409,074 5,297,000
--------- ---------
Total Current Liabilities 9,546,420 15,511,760
--------- ----------

Long Term Liabilities
Obligations under capital leases 79,268 189,680
Deferred taxes 842,250 897,204
Other liabilities 224,714 316,516
------- -------
Total Long Term Liabilities 1,146,232 1,403,400
--------- ---------
Total Liabilities 10,692,652 16,915,160
---------- ----------

Stockholders' Equity
Common stock, $.001 par value
35,000,000 shares authorized,
20,834,004 shares issued and
20,523,883 shares outstanding,
respectively 20,834 20,834
Additional paid-in capital 32,716,837 32,417,250
Additional paid-in capital warrants 905,699 905,699
Accumulated deficit (32,877,972) (29,737,430)
Accumulated other comprehensive income 886,714 1,298,109
------- ---------
Less: 1,652,112 4,904,462
Treasury stock, at cost, 310,121
shares (726,689) (726,689)
-------- --------
Total Stockholders' Equity 925,423 4,177,773
------- ---------

Total Liabilities and Stockholders'
Equity $11,618,075 $21,092,933
=========== ===========

See accompanying notes to the consolidated financial statements.

SOURCE Encorium Group, Inc.

Philip L. Calamia, Chief Financial Officer, Encorium Group, Inc.,
+1-610-989-4208