SecProbe.io

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Mail Stop 0306

      May 10, 2005

Via U.S. Mail and Facsimile to (310) 657-4879

Scott Hayashi
Chief Financial Officer
Arbios Systems, Inc.
8797 Beverly Boulevard, #206
Los Angeles, California 90048

	Re:	Arbios Systems, Inc.
		Form 10-KSB for the year ended December 31, 2004
		Filed March 30, 2005
      File No. 000-32603

Dear Mr. Hayashi:

      We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and will make no further review of your
documents.  Where indicated, we think you should revise your
documents in response to these comments.  If you disagree, we will
consider your explanation as to why our comment is inapplicable or
a
revision is unnecessary.  Please be as detailed as necessary in
your
explanation.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may or may not
raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-KSB for the year ended December 31, 2004

Item 8A.  Controls and Procedures - Page 34

1. We see that management, including the Chief Executive Officer
and
Chief Financial Officer, concluded that Arbios Systems` disclosure
controls and procedures are effective to ensure that the
information
required to be disclosed by Arbios Systems in reports that it
files
or submits under the Exchange Act is recorded, processed,
summarized
and reported within the time periods specified in the rules and
forms
of the SEC.  Revise to clarify, if true, that your officers
concluded
that your disclosure controls and procedures are also effective to
ensure that information required to be disclosed in the reports
that
you file or submit under the Exchange Act is "accumulated" and
"communicated" to management, including the chief executive
officer
and chief financial officer, to allow timely decisions regarding
required disclosure.  Refer to Exchange Act Rule 13a-15(e).  Apply
in
future filings.

Financial Statements

Consolidated Statements of Operations - Page F-3

2. The measure of cumulative loss per share is not meaningful and
should be deleted from future filings.

Note 1.  Summary of Significant Accounting Policies

General - Page F-9

3. We note from page F-15 of your financial statements of Arbios
Technologies, Inc included in the Form 8-K/A filed on January 12,
2004 that you entered into a Collaboration Agreement with CeMines
Biologics, LLC on June 1, 2003.  You state that you expect to
recognize fees over a three year period under this contract.  We
do
not see reference to this agreement is mentioned in your current
filing.  Please tell us the status of the Agreement and whether
any
of the fees were recognized into income.

Stock-Based Compensation - Page F-11

4. Expand future filings to present policy disclosure describing
how
you value and account for non-employee stock-based compensation.

Recent Accounting Pronouncements - Page F-13

5. Please note that it is not necessary to make disclosure about
pending or recent accounting standards that are clearly not
relevant
to your business.  For instance, we see disclosure about real
estate
time sharing transactions under SFAS 152.

Note 3.  Patent Rights - Page F-15

6. We see that you capitalized patent rights that were received in
June 2001 because you believe that they have future economic
benefit.
We see that you are solely engaged in research and development,
and
the related disclosures about the status of the products and
technology.  Tell us why the cost of the patents, upon
acquisition,
should not have been expensed as research and development.  Refer
to
FAS 2 and FIN 4 for guidance on research and development
accounting.
Tell us why your accounting conforms to GAAP.

7. In a supplemental response tell us how the $400,000 assigned to
the patent was determined.  Also disclose in future filings.

8. In a supplemental response, describe and quantify the ownership
interest of the shareholder(s) from whom you acquired the patents
in
June 2001 both before and after the transactions.  Show us that
historical basis accounting is not required under SAB Topic 5-G.
For
purposes of applying that guidance, a holder of 10% or more of the
outstanding common shares after consummation of a share for assets
transaction associated with formation of a business would
generally
be considered a promoter.

Note 4.  Deferred Employee Loan-Out Costs - Page F-16

9. You state that you entered into the employee loan out agreement
in
June 2001.  If so, why is compensation expense under the agreement
limited to 2003 and 2004?  The sum of the amounts for those years
is
equal to the amount you disclose as the cumulative total.  Was
there
no expense during fiscal 2001 or 2002?  Advise supplementally and
clarify in future filings.

10. Tell us whether you issued any stock or other compensation for
the extension of the employee loan-out agreement.  If so, tell us
how
you accounted for the additional compensation.

  Note 5.  Convertible Promissory Notes - Page F-16

11. Expand future filings to disclose how you determined the fair
values of the warrants.  You should identify the model applied and
related assumptions.

12. You disclose that for each share issued upon conversion, each
noteholder would receive additional warrants for the purchase of
common stock.  Tell us how those additional warrants were
accounted
for upon conversion of the notes.  Show us that your accounting
conforms to GAAP.

Note 7.  Stockholders` Equity - Page F-18

13. We see numerous transactions where shares or warrants were
issued
for non-cash consideration, such as services.  For each non-cash
transaction, future filings should separately identify the
assigned
fair value and describe how that fair value was measured. You
should
also separately identify amounts of compensation recognized and/or
deferred, including disclosure of the amortization period for
amounts
deferred.  As appropriate, you should identify the model applied
and
significant assumptions.  Refer to SFAS 7 and SFAS 123 for
guidance
on disclosure.

14. Future filings should also present a roll-forward of
outstanding
warrants in a format similar to that provided for stock options.

15. With respect to the 4 million shares sold in September and
October 2003, future filings should describe the $519,230
identified
as stock issuance expense in more detail. Clarify the nature of
the
costs and the underlying accounting.  Stock issuance costs are
normally charged against the related equity.  If these costs were
accounted for in operations, the expanded disclosure should
explain
the basis for that accounting.  Refer to SAB Topic 5-A for
guidance
on accounting for stock issuance costs.

Note 8.  Research Costs - Page F-22

16. We see that you amended the research agreement in 2002 to
fully
vest the 362,669 shares issued in 2001.  From the statement of
shareholders` equity it appears that the amendment was accounted
for
by reversing deferred compensation against paid in capital.
Deferred
compensation is normally expensed when vesting is accelerated.  In
a
supplemental narrative, tell us how you accounted for the
amendment
and show us how the event was recorded in your books and records.
If
the deferred compensation was not charged to expense, explain your
basis in GAAP.  You should identify the literature considered,
including how you interpreted and applied that guidance.  We may
have
further comment on your accounting once we better understand how
the
amendment was recorded and your rationale therefore.

Section 302 Certification - Exhibits 31.1 and 31.2

17. We note that the certifications filed as Exhibits 31.1 and
31.2
were not in the proper form. The required certifications must be
in
the exact form prescribed; and the wording of the required
certifications may not be changed in any respect, except for the
modifications temporarily permitted to be made to the fourth
paragraph of the certification as outlined in Part III.E of
Release
No. 8238. Accordingly, please file an amendment to your Form10-KSB
that includes the entire filing together with the certifications
of
each of your current CEO and CFO in the form currently set forth
in
Item 601(b)(31) of Regulation S-B.

18. Based on the changes you made to the certifications, it is
unclear whether you identified any material weaknesses based on
the
most recent evaluation.  If you in fact identified any material
weaknesses, please revise Item 8A (Controls and Procedures) to
make
full disclosure about those matters.

*    *    *    *

      As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please furnish a cover letter with your amendment that keys your
responses to our comments and provides any requested supplemental
information.  Detailed cover letters greatly facilitate our
review.
Please file your cover letter on EDGAR.  Please understand that we
may have additional comments after reviewing your responses to our
comments.

	We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

	In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Traci Hornfeck, Staff Accountant, at (202)
824-
5565 or me at (202) 942-2862 if you have questions regarding these
comments.  In this regard, do not hesitate to contact Brian
Cascio,
Branch Chief, at (202) 942-1791.

							Sincerely,

							Gary Todd
							Reviewing Accountant

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Mr. Scott Hayashi
Arbios Systems, Inc.
May 10, 2005
Page 6

Mr. Scott Hayashi
Arbios Systems, Inc.
May 10, 2005
Page 2

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