Encompass Parts Distribution and Hyper Microsystems, Inc. Enters Into Strategic Partnership

Hyper Microsystems is a leader in the bulk liquidation business of buying and selling consumer electronic products. Through Hyper Microsystems vast network of resellers and international end users and its remanufacturing and repair service, Hyper Microsystems provides retailers, OEM's and institutions with the ability to monetize obsolete or unwanted consumer electronics.

"We believe our strategic partnership with Hyper Microsystems will expand our suite of services to not only offer hard to source consumer electronic and computer parts to our customer base, but also provide us with an independent channel to market repaired and refurbished products in the international markets," said Wayne I. Danson, President and Chief Executive Officer. "We are excited about this new and expanding relationship," said Danson.

"We are delighted to develop a partnership with Encompass. The combination of Encompass' expertise on consumer electronic aftermarket service and supply chain and Hyper Microsystems' global vision for growth and a capacity to supply consumer electronics and IT parts opens tremendous opportunities for both companies to benefit from each other's services and products," added Gregory Yurovsky, President and CEO of Hyper Microsystems

"This partnership represents a significant channel of hard to find brand new, original manufacturer parts for our customers that are performing service events outside of the manufacturer's warranty period. Being selected by Hyper Microsystems to provide complete management of their parts distribution responsibilities is a significant opportunity for our organization and our customers out of warranty parts needs," said Steve Miller, Chief Operating Officer of Encompass Group.

About Hyper Microsystems, Inc.

Hyper Microsystems Inc is a privately held company that specializes in asset recovery, reverse logistics, remarketing, and distribution of consumer electronics and IT equipment. Since its establishment in 1996, the company underwent rapid growth turning its primary focus from providing storage solutions to remarketing of new and refurbished aftermarket products. Having a strong network of distributors and system integrators, Hyper Microsystems fulfills service parts requirements throughout the world.

Hyper Microsystems' extensive experience with handling of returned and excess inventory from major computer and electronics manufacturers and retailers enables it to come up with solutions that minimize retailer's involvement and capitalize on profits from resale of returned or surplus inventory.

Hyper Microsystems is headquartered in the Chicago area where the main testing and distribution facility is located. Hyper Microsystems is dedicated to providing outstanding products and services by ensuring it maintains a real-time inventory system to keep track of more than 15,000 line items of various categories and brands.

Through its vast network of partners, Hyper Microsystems acts to deliver increased asset profitability and revenue for surplus and returned inventory while minimizing operational costs, improved distribution methods and remarketing of repaired assets, maximized efficiency and flexibility.

About Encompass Group Affiliates, Inc.

Encompass Group Affiliates, Inc. (OTC Bulletin Board: ECGA), a New York-based company specializing in the consumer electronic aftermarket service and supply chain, known as reverse logistics, is the nation's largest distributor of consumer electronics replacement parts. Encompass Group through its wholly-owned subsidiary, Encompass Parts Distribution, Inc. provides comprehensive consumer electronics parts distribution, asset recovery, returns management and reverse logistics services. Encompass Group addresses the full scope of this multi-billion market - including the end-user driven product support and repair industry, as well as the manufacturer-driven recovery and e-Waste industry. Through its three operating subsidiaries - Vance Baldwin, Tritronics and Cyber-Test - Encompass Group provides single-source lifecycle management services for technology products, currently in the North American market, with accelerating growth towards a global presence. The Company's market position is based on its distinctive ability to provide single-point, comprehensive lifecycle service on a competitive basis. For more information about Encompass Group Affiliates, Inc visit our website at http://www.encompass.com

Encompass Parts Distribution, Inc. is comprised of the former number two (Vance Baldwin) and number three (Tritronics) parts distributors in the U.S., to create what is now the country's largest distributor of consumer electronic parts and accessories. Most important, Encompass maintains the heritage of focused expertise and personalized service exemplified by both legacy brands. With warehouses in Florida, Georgia, Maryland and Las Vegas, Encompass distributes both new and certified reclaimed parts for more than 150 brands of consumer electronics, computers, printers and office equipment. The company also provides service aids and industrial products such as cable, tools, test equipment, cleaners and other installation equipment. For more information about Encompass Parts Distribution, Inc. visit our website at http://www.encompassparts.com

Encompass Service Solutions is comprised of a primary electronic equipment repair center in Orlando Florida, as well as a network of sophisticated repair facilities in Georgia and South Florida. With over 22 years of industry leadership, the company specializes in the repair and advanced exchange of consumer and office electronic equipment, providing parts reclamation services, sophisticated board-level and whole-unit repair to third-party warranty companies, OEMs, national retailers and national office equipment dealers. Encompass Service Solutions offers Level II and Level III call center technical support, service contract administration and support, and asset recovery programs.

This release and oral statements made from time to time by Encompass Group Affiliates, Inc.'s representatives concerning the same subject matter may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by introductory words such as "expects," "anticipate," "plans," "should," "believes," "will," or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Many factors may cause actual results to differ from forward-looking statements, as well as inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known and others of which are not. Known risks and uncertainties include those identified from time to time in the reports filed by Encompass Group Affiliates, Inc. with the Securities and Exchange Commission, which should be considered together with any forward-looking statement. No forward-looking statement is a guarantee of future results or events, and one should avoid placing undue reliance on such statements.

SOURCE: Encompass Group Affiliates, Inc.

Encompass Group Affiliates, Inc. 
Wayne I. Danson 
Chief Executive Officer 
John E. Donahue 
Chief Financial Officer 
646-227-1600