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): March 16,
2009
ARBIOS
SYSTEMS, INC.
(Exact
Name of Registrant as Specified in its Charter)
Delaware
(State
or Other Jurisdiction of Incorporation)
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)
______________________________
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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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
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¨
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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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¨
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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 March
9, 2009, (the “Effective Date") Arbios Systems, Inc. (the “Company”) entered
into a Term Sheet (the “Term Sheet”) with Arbios Acquisitions Partners, LLC
(“AAP”), a limited liability company formed for the purpose of effecting the
transaction contemplated by the Term Sheet. On March 16, 2009, the
initial $100,000 deposit was received. Since January 9, 2009, the Company has
been in a proceeding under Chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy
Court”). Pursuant to the Term Sheet, the Company agreed to enter into
a transaction pursuant to a plan of reorganization (the “Plan”) that is subject
to the approval of the Bankruptcy Court and all of the Company’s relevant
classes, whereby the Company will (i) cancel
all of its currently existing equity (including, but not limited to, any and all
outstanding common and preferred shares of stock, warrants, and options), and
(ii) issue new shares of its common stock to AAP representing 90% of the newly
issued shares of the Company in exchange for a $1,000,000 cash
payment. The existing shareholders of the Company would receive the
remaining 10% of the newly issued shares of the Company.
The
$1,000,000 cash purchase price to be paid by AAP for 90% of the Company’s shares
of common stock is required to be paid as follows: 1) $100,000 was paid to the
Company concurrently with the execution and delivery of the Term Sheet (the
“Initial Deposit”), 2) $100,000 is due upon the later of (i) April 8,
2009 or (ii) the filing of the Plan and the disclosure statement (the
“Subsequent Deposit”), and 3) $800,000 (the “Remaining Funds”) is due within 10
days following the confirmation of the Plan (the “Funding Date”).
If AAP
has not provided the Remaining Funds by the Funding Date, the Company will
retain both the Initial Deposit and the Subsequent Deposit, and can then either
adjourn the Funding Date, withdraw the Plan, terminate the Plan, and/or enter
into an alternative transaction or proceeding. If the Plan has not
been confirmed by June 15, 2009, AAP will be entitled to a return of (i) the
Initial Deposit, and (ii) the Subsequent Deposit minus costs and expenses,
(including, without limitation, administrative expenses) incurred by the Company
in pursuing the Plan.
AAP will
be entitled to a break up fee of 3% of the funds deposited by AAP if the Company
elects to enter into an alternative transaction, including, but not limited to,
signing a letter of intent or term sheet with a third party, for some or all of
its assets prior to confirmation of the Plan (the “Company Withdrawal Option”),
provided that the Debtor Withdrawal Option is not caused by AAP’s inability to
provide funding by the Funding Date. In addition, if the Company
exercises the Debtor Withdrawal Option, AAP would also be entitled to a return
of the funded portion of the deposit.
The
Company intends to continue to comply with all of its regulatory filings with
the Securities and Exchange Commission and expects that its shares of common
stock will continue to be listed on the OTC Bulletin
Board. Accordingly, after the completion of the transaction
contemplated by the Term Sheet, the Company is expected to emerge from
bankruptcy as a publicly traded company that has no liabilities (other than
ordinary operating expenses), has a new capital structure (AAP will own 90% of
the common stock, the public stockholders will own a pro rata share of the 10%,
and all options and warrants will be cancelled), and has some operating capital
(the amount of the $1,000,000 purchase price that is not used to settle existing
liabilities and pay for administrative expenses). The Term Sheet provides that
the confirmation of the Plan should occur on or before May 15,
2009.
A copy of
the Term Sheet is attached hereto as Exhibit 10.1.
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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Term
Sheet for Purchase of Newly Issued Shares of Common Stock of Arbios
Systems, Inc., dated March 9, 2009, between Arbios Systems, Inc, and
Arbios Acquisition Partners, LLC
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99.1
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Press
Release dated March 16, 2009
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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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By:
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/s/ SHAWN
P. CAIN
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Walt 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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Term
Sheet for Purchase of Newly Issued Shares of Common Stock of Arbios
Systems, Inc., dated March 9, 2009, between Arbios Systems, Inc, and
Arbios Acquisition Partners, LLC
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99.1
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Press
Release dated March 16, 2009
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