UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date
of Report (Date of earliest event reported): October 3,
2008
ARBIOS
SYSTEMS, INC.
(Exact
Name of Registrant as Specified in its Charter)
Delaware
(State
or Other Jurisdiction of Incorporation)
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000-32603
(Commission
File Number)
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91-1955323
(I.R.S.
Employer Identification No.)
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200
E. Del Mar Boulevard, #320
Pasadena.
California
(Address
of Principal Executive Offices)
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91105
(Zip
Code)
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(626)
356-3105
(Registrant’s
Telephone Number, Including Area Code)
______________________________
1050
Winter Street, #1000
Waltham,
MA 02451
(Former
name or former address, if changed since last report)
______________________________
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following
provisions (See General Instruction A.2 below):
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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ITEM
1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On
October 3, 2008, Arbios Systems, Inc. (the “Company”) entered into an Asset
Purchase Agreement with HepaLife Technologies, Inc., a Florida corporation
(“HepaLife”), pursuant to which the Company agreed to sell to HepaLife all of
its assets related to the bioartificial liver device known as “HepatAssist.” For
additional information regarding the Asset Purchase Agreement, see the
discussion under Item 2.01, below, which is incorporated herein by
reference
ITEM
2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS
October
3, 2008, the Company executed an Asset Purchase Agreement with HepaLife and
concurrently therewith consummated the transactions contemplated thereby.
Pursuant to the Asset Purchase Agreement, the Company sold to HepaLife its
HepatAssist™ cell-based liver support system that the Company acquired in 2004
from Circe Biomedical, Inc. The Company had previously suspended its development
of the HepatAssist technology pending its receipt of additional funding for
this
program from a corporate marketing partner or a significant capital raise.
The
HepatAssist assets sold to HepaLife include 12 patents and patent licenses,
miscellaneous equipment, an FDA IND application including orphan drug and fast
track designation, Phase I and Phase II/III clinical protocols and clinical
data, as well as standard operating procedures for manufacturing and quality
control.
The
purchase price received by the Company for the HepatAssist assets that it sold
consisted of (i) $450,000, of which $250,000 was paid in cash at the closing
and
$200,000 has been deferred for up to 18 months, (ii) a Series D warrant to
purchase up to 750,000 shares of HepaLife’s common stock at an exercise price of
$0.35 per share for a period of five years (the “Warrant”), and (iii) the
assumption by HepaLife of the Company’s obligations under certain agreements
related to the HepatAssist licenses and related agreements. The deferred
$200,000 payment is due and payable on the earlier of (i) the date on which
HepaLife has consummated one or more debt or equity financings in which the
gross proceeds received in the aggregate equal or exceed $4,000,000, or (ii)
the
eighteen month anniversary of the closing date. HepaLife has granted the Company
piggy-back and certain other registration rights to register for public resale
the shares issuable upon the exercise of the Warrant. HepaLife is a publicly
traded company whose common stock is traded on the OTC Bulletin Board under
the
symbol “HPLF.”
The
foregoing sale did not include the Company’s principal asset, its extracorporeal
blood purification therapy known as the “SEPET™ Liver Assist Device.”
The
foregoing description of the Asset Purchase Agreement is qualified in its
entirety by the full text of the Asset Purchase Agreement which is attached
hereto as Exhibit 10.1.
ITEM
5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
On
October 6, 2008, the Company entered into a new Compensation Agreement with
Shawn Cain, the Company’s interim Chief Executive Officer and Interim President.
The Compensation Agreement is retroactively effective as of October 1, 2008.
Under the Compensation Agreement, Mr. Cain has agreed to assist the Company
until December 31, 2008 in selling, licensing or otherwise financing the
Company’s assets. In consideration for his services, the Company has agreed to
pay Mr. Cain (i) $10,000 per month plus payment of medical insurance, estimated
to be $1,500 per month, and (ii) an incentive cash bonus following the sale,
license or financing of the Company’s SEPET assets, which incentive bonus will
be determined in the sole discretion of the Board after taking into account
the
timing, size and structure of the transaction. In addition, under the
Compensation Agreement, the Company has agreed to pay Mr. Cain a cash bonus
of
$20,000 as compensation for his services in connection with the sale of the
HepatAssist assets to HepaLife described above.
The
foregoing description of the Compensation Agreement is qualified in its entirety
by the full text of that agreement which is attached hereto as Exhibit
10.2.
ITEM
7.01 REGULATION FD DISCLOSURE
On
October 7, 2008, the Company issued a press release in which it announced the
Asset Purchase Agreement and the closing of the sale of the HepatAssist assets.
A copy of the press release is attached to this Form 8-K as Exhibit
99.1.
ITEM
9.01 FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit No.
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Exhibit
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10.1
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Asset
Purchase Agreement, dated October 3, 2008, between Arbios Systems,
Inc,
and HepaLife Technologies, Inc.
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10.2
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Compensation
Agreement between Arbios Systems, Inc. and Shawn Cain
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99.1
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Press
Release dated October 7, 2008
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ARBIOS
SYSTEMS, INC.
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Date:
October 7, 2008
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By:
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/s/
SHAWN P. CAIN
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Shawn
P. Cain, Interim President and Chief
Executive
Officer
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EXHIBIT
INDEX
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Exhibit No.
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Exhibit
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10.1
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Asset
Purchase Agreement, dated October 3, 2008, between Arbios Systems,
Inc,
and HepaLife Technologies, Inc.
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10.2
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Compensation
Agreement between Arbios Systems, Inc. and Shawn Cain
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99.1
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Press
Release dated October 7, 2008
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