UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
ENCORIUM GROUP INC.
-------------------
(formerly Covalent Group, Inc.)
-------------------------------
(Name of Issuer)
Common Stock, par value $0.001 per share
----------------------------------------
(Title of Class of Securities)
29257R109
---------
(CUSIP Number)
Jan Lilja
Residence Du Golf E8
CH-1196 Gland, Switzerland
+ 41 22 995 0670
----------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 1, 2006
----------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ]
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP No. 29257R109
1. Name of Reporting Person: Jan Lilja
I.R.S. Identification no. of Above Person (entities only):
2. Check the Appropriate Box if a Member of a Group: (a) [ ]
(b) [X]
3. SEC Use Only
4. Source of Funds: 00
5. Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e): [ ]
6. Citizenship or Place of Organization: Sweden
NUMBER OF 7. Sole Voting Power: 909,762
SHARES
BENEFICIALLY 8. Shared Voting Power: 0
OWNED BY EACH
REPORTING 9. Sole Dispositive Power: 909,762
PERSON WITH
10. Shared Dispositive Power: 0
11. Aggregate Amount Beneficially Owned by Each Reporting Person: 909,762
12. Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
13. Percent of Class Represented by Amount in Row (11): 5.2 %
14. Type of Reporting Person: IN
2
Item 1. Security and Issuer
This Schedule 13D relates to the Common Stock, $0.001 par value per share,
of Encorium Group, Inc. (formerly Covalent Group, Inc.) located at One
Glenhardie Corporate Center, 1275 Drummers Lane, Suite 100, Wayne, PA 19087.
Item 2. Identity and Background
(a) The name of the reporting person is Jan Lilja.
(b) The reporting person resides at Residence Du Golf E8, CH-1196
Gland, Switzerland.
(c) The principal occupation of the reporting person is as a private
investor, which he conducts from his residence at Residence Du Golf E8,
CH-1196 Gland, Switzerland.
(d) During the last five years, the reporting person has not been
convicted in a criminal proceeding.
(e) During the last five years, the reporting person has not been a
party to a civil proceeding of a judicial or administrative body of
competent jurisdiction of the kind described in Item 2(e).
(f) The reporting person is a citizen of Sweden.
Item 3. Source and Amount of Funds or Other Consideration.
The reporting person has acquired the securities of Encorium Group,
Inc. ("ENCORIUM") reported in this Schedule 13D as a result of the business
combination (the "Business Combination") between Encorium and Remedium Oy, a
Finnish corporation ("REMEDIUM"). The Business Combination was effected pursuant
to a combination agreement, dated March 2, 2006 and later restated on July 6,
2006 (the "COMBINATION AGREEMENT"), between Encorium and all of the stockholders
of Remedium (including the reporting person). The Business Combination closed on
November 1, 2006. In the Business Combination, Encorium purchased all of the
issued and outstanding shares of capital stock of Remedium and Remedium is now a
wholly-owned subsidiary of Encorium. In consideration for all of the outstanding
shares of Remedium capital stock, Encorium paid cash and shares of Encorium
Common Stock to Remedium stockholders. All Remedium stockholders have become
stockholders of Encorium. The reporting person was a principal stockholder of
Remedium and he surrendered all of his Remedium shares in exchange for the
shares of Common Stock of Encorium he received in the Business Combination
Item 4. Purpose of Transaction.
The reporting person acquired the Encorium Common Stock reported on
this Schedule 13D in connection with the Business Combination described in Item
3. Upon the closing of the Business Combination with Encorium on November 1,
2006, Remedium became a wholly-owned subsidiary of Encorium. The reporting
person is neither an officer nor a director of Encorium.
As described under Item 6 below, the reporting person will receive
additional shares of Encorium Common Stock pursuant to the earn-out and
hold-back provisions of the Combination Agreement. The reporting person's
ability to dispose of the shares of Encorium Common Stock beneficially owned by
him is limited pursuant to the lock up agreement described in Item 6. The
reporting person may at any time and from time to time may acquire additional
shares of Encorium Common Stock, dispose of any or all of his Encorium Common
Stock and engage in discussions with Encorium stockholders, depending upon
personal investment considerations and personal liquidity requirements of the
reporting person.
Except as described under this Item or any other Item of this Schedule
13D, the reporting person does not have any present plan or proposal that would
relate to, or result in, any of the matters set forth under subparagraphs (a)
through (j) of Item 4 of Schedule 13D.
3
Item 5. Interest in Securities of the Issuer.
(a) As of the date hereof, the reporting person beneficially owns an
aggregate of 909,762 shares of Encorium Common Stock, representing
approximately 5.2% of the outstanding Encorium Common Stock. The
reporting person's ability to sell his shares of Encorium Common Stock
is limited due to a lock-up agreement, dated November 1, 2006,
restricting sales of his shares for a period of nine months from
November 1, 2006.
(b) The reporting person has the sole power to vote or to direct the
vote, and the sole power to dispose or to direct the disposition, with
respect to all the 909,762 shares of Encorium Common Stock
beneficially owned by him.
(c) The reporting person received all of the shares of Encorium Common
Stock reported herein on November 1, 2006, in connection with the
closing of the Business Combination.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to
Securities of the Issuer
COMBINATION AGREEMENT. Pursuant to the earn-out provisions of the Combination
Agreement, on or prior to April 10, 2007 (or at a later date if the dispute
resolution provisions of the Combination Agreement are required to determine the
number of shares), the Remedium stockholders (including the reporting person)
will be entitled to receive an additional number of shares of Encorium Common
Stock - the "earn-out shares" - based on Remedium's net revenue for the fiscal
year ending December 31, 2006 as follows:
- an aggregate of approximately 1,060,071 shares of Encorium Common Stock if
Remedium net revenue exceeds EUR 10,700,000 (equal to the quotient obtained by
dividing (i) $3,000,000 by (ii) $2.83); or
- an aggregate of approximately 706,714 shares of Encorium Common Stock if
Remedium net revenue exceeds EUR 9,500,000 but is equal or less than
EUR10,700,000 (equal to the quotient obtained by dividing (i)$2,000,000 by (ii)
$2.83); or
- an aggregate of approximately 353,357 shares of Encorium Common Stock if
Remedium net revenue exceeds EUR 8,300,000 but is equal or less than EUR
9,500,000 (equal to the quotient obtained by dividing (i) $1,000,000 by (ii)
$2.83); or
- if Remedium net revenue is equal to or less than EUR 8,300,000, the Remedium
stockholders are not entitled to any earn-out shares.
The reporting person will receive 17.16% of the aggregate number of earn-out
shares to be issued, representing approximately 181,908, 121272, 60,636 or 0
additional shares of Encorium Common Stock to be received by the reporting
person, depending on which earn-out threshold will be met. The reporting person
will receive 17.16% of the aggregate number of earn-out shares issued by
Encorium.
Subject to adjustment, on November 1, 2007, Encorium will issue to the Remedium
stockholders (including the reporting person) an aggregate of approximately
706,714 shares of Encorium Common Stock (equal to the quotient obtained by
dividing (i) $2,000,000 by (ii) $2.83). The aggregate number of shares may be
subject to decrease as a result of post-closing adjustments under the
Combination Agreement, such as indemnification liabilities. The reporting person
will receive 17.16% of the aggregate number of such shares to be issued.
Assuming receipt of the maximum number of such shares without adjustments, the
reporting person would receive approximately121,272 additional shares of
Encorium Common Stock.
LOCK-UP AGREEMENT. The reporting person is subject to a lock-up agreement, dated
November 1, 2006, which
4
restricts his ability to directly or indirectly offer, sell, pledge, contract to
sell, grant any option to purchase or otherwise dispose sell his shares of
Encorium Common Stock for nine months from November1, 2006. The reporting person
may, however, (A) transfer any or all of the shares (i) by gift, will or
intestacy or (ii) to any trust for the direct or indirect benefit of the
reporting person or his immediate family, provided that any such transfer shall
not involve a disposition for value and (B) pledge his shares; provided,
however, that in any such case it shall be a condition to the transfer that the
transferee or pledgee, as applicable, execute an agreement stating that the
transferee or pledgee, as applicable, is receiving and holding the shares
subject to the provisions of the lock-up agreement, and there shall be no
further transfer or pledge, as applicable, of such shares except in accordance
with the lock-up agreement.
Item 7. Material to be Filed as Exhibits.
The following exhibits are incorporated herein by reference:
1. Amended and Restated Combination Agreement, dated July 6, 2006, incorporated
by reference to Exhibit 2.1 to Form 8-K of Encorium Group, Inc. (formerly
Covalent Group, Inc.), filed with the SEC on July 7, 2006.
2. Form of Lock-Up Agreement, incorporated by reference to the Exhibits of the
Combination Agreement which was filed as Exhibit 2.1 to Form 8-K of Encorium
Group, Inc. (formerly Covalent Group, Inc.), filed with the SEC on July 7, 2006.
5
SIGNATURE
After reasonable inquiry and to the best of our knowledge and belief,
we certify that the information set forth in this statement is true, complete
and correct.
Date: November 10, 2006
By: /s/ Jan Lilja
-------------
Name: Jan Lilja
6