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): April 17,
2007
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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1050
Winter Street, Suite 1000
Waltham,
Massachusetts
(Address
of Principal Executive Offices)
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02451
(Zip
Code)
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(781)
839-7293
(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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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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o
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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
4.02. Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report or Completed
Interim Review
As
previously reported in the annual report on Form 10-KSB for the year ended
December 31, 2006, the Board of Directors of Arbios Systems, Inc. (the
“Company”, “we” or “us”), determined on April 17, 2007, that the previously
released financial statements of the Company for the periods ended March 31,
2006, June 30, 2006 and September 30, 2006, as filed with the Company’s
Quarterly Reports on Form 10-QSB for the periods ending March 31, 2006, June
30,
2006 and September 30, 2006, respectively, could not be relied upon. In January
2005 and March 2006, we closed financing transactions that included the issuance
of warrants and the grant of registration rights. The Company has been
accounting for the warrants in accordance with pronouncement EITF 00-19.
Beginning in the quarter ended March 31, 2006 for the warrants issued in the
January 2005 financing and in the quarter ended September 30, 2006 for the
warrants issued in the March 2006 financing, in accordance with EITF 00-19,
the
Company recorded the fair value of these warrants as an accrued warrant
liability and reduced additional paid-in capital by the amount of the recorded
liability. In the quarters ended June 30, and September 30, 2006 changes to
the
accrued liability were reported in the Company’s statement of operations.
However, authorized officers of the Company, in consultation with the Company’s
independent registered public accounting firm, have determined that the Company
should have included in the calculation of the fair value of the warrant the
value of the anti-dilution provisions contained in the warrant agreements.
The
calculations of the fair value of the warrants did not include the value of
the
anti-dilutions provision for the filed financial statements included in our
Form
10-QSB for the quarters ended March 31, 2006, June 30, 2006, and September
30,
2006. Therefore, we restate our financial statements for these periods as
follows: 1) for the three month period ended March 31, 2006, additional paid
in
capital is decreased by $271,000 with a corresponding increase in the
accrued warrant liability, 2) for the three and six month periods ended June
30,
2006, other expense is increased by $63,000 with a
corresponding increase in the accrued warrant liability, and 3) for the
three month period ended September 30, 2006, additional paid in capital is
decreased by $114,000 and other expense is increased by $49,000 with a
corresponding increase in the accrued warrant liability of $163,000. For the
nine month period ended September 30, 2006 additional paid-in capital is
decreased by $385,000, other expense is increased by $112,000, and the
accrued warrant liability is increased by $497,000.
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:
April
23, 2007 |
By: |
/s/ WALTER
C.
OGIER |
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Walter
C. Ogier, Chief Executive Officer |
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