Shiprock Inc. to Acquire Arbios Technologies Inc.; Acquisition to Advance Innovative Therapies for the Treatment of Liver Failure.

Business Editors, Health & Medical Writers

APACHE JUNCTION, Ariz.--(BUSINESS WIRE)--Oct. 18, 2002

Shiprock Inc. (OTCBB: SRKI) announced today that it has executed an agreement to acquire all of the issued and outstanding shares of Arbios Technologies Inc., a private biomedical company based in Los Angeles. Shiprock will acquire Arbios' shares through a merger in which Shiprock will issue approximately 10,670,000 shares of its unregistered common stock to the shareholders of Arbios. After the merger, Shiprock will change its name to "Arbios Systems Inc." and will continue to trade on the OTC Bulletin Board under a new trading symbol.

Arbios Technologies Inc. is a biomedical company engaged in the discovery, acquisition and development of proprietary liver assist devices and new technologies useful in the diagnosis and treatment of acute liver failure, a debilitating and fatal disease. Liver failure affects all age groups and may be caused by viruses, alcohol, ingestion of common medications, extensive liver removal for trauma or cancer and other etiologies. At the present time, no direct treatment for liver failure is available and such patients must receive a liver transplant or endure prolonged hospitalization with a significant mortality rate. While liver transplants increase the chances of survival for patients with liver failure, only a small percentage of such patients receive a transplant due to a shortage of donor livers, or suffer from conditions such as alcohol or drug abuse, infection, cancer or cardiovascular disease that make transplants impossible.

"There is an urgent need today for an artificial means of liver assistance to facilitate recovery from liver failure without a transplant," stated Thomas Gropp, president of Shiprock. "Arbios Technologies has developed innovative approaches that could help those who are not candidates for liver transplants or bridge liver failure patients until an organ becomes available."

Arbios' Liver Assist Technologies

Arbios Technologies Inc. has worldwide rights to patents issued or pending covering a portfolio of technologies, including its two extracorporeal liver assist devices, which are in preclinical development. Arbios' two lead products include SEPET(TM) a novel blood purification therapy employing selective plasma exchange and an innovative bioartificial liver ("BAL") device, LIVERAID(TM). Each of Arbios' devices is considered to be an innovative approach to the potential treatment of liver failure. Together, they may constitute an integrated approach for treating people suffering from acute liver failure of all etiologies and severity.

SEPET(TM) is a blood purification therapy, during which the plasma fraction containing substances that are toxic to the brain, the liver and other internal organs and tissues are removed from patients' blood and replaced with normal human plasma. Arbios is attempting to prove the clinical utility of SEPET(TM) as a simple, safe and potentially inexpensive blood purification therapy for patients with liver failure.

LIVERAID(TM) is a BAL to treat liver failure of all etiologies and severity, including those requiring maximum liver support. Liver cell therapy (porcine hepatocytes) and sorbent-based blood detoxification are integrated in a single module attached to a standard kidney dialysis unit.

Depending on the cause of liver disease, severity of illness and deficiency of specific liver functions, SEPET and LIVERAID can be provided individually, simultaneously or sequentially.

Acute Liver Failure in the United States

The total market opportunity for extracorporeal liver support is substantial and not presently being served. According to the American Liver Foundation and the National Center for Health Statistics, liver failure is the seventh leading cause of death in the United States. In 2001, nearly 700,000 Americans were diagnosed with liver disease and over 250,000 liver patients were hospitalized due to acute liver failure. Of those, nearly 50,000 (20%) died because no donor liver was available or because these patients had contraindications to liver transplantation. The remaining 200,000 patients are discharged from the hospital because they either received a liver transplant or their condition improved after receiving conventional care.

Acquisition Details

Shiprock anticipates that the closing of the acquisition will occur within approximately 30 to 60 days. The closing is subject to certain customary closing conditions as well as the concurrent completion of a private placement financing by Shiprock of at least $1.5 million that has not yet been affected. If the financing and merger are completed, the current stockholders of Shiprock will own approximately 8% of the then outstanding common stock.

Commenting on the proposed merger, Gropp said, "The proposed merger is expected to provide the combined companies with a public market to assist in future capital raising and the ability to more effectively compensate Arbios' future employees with stock or stock options. Also, our proposed private placement should provide us with additional proceeds to fund a portion of Arbios' research and development expenses and working capital needs."

Arbios Technologies Inc. is an early-stage company organized to develop, manufacture and market liver assist devices to meet the urgent need for therapy that facilitates recovery from liver failure.

This press release may contain forward-looking statements that involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to the pending acquisition of Arbios, the ability of Shiprock to complete the private placement and the closing of the merger with Arbios, the need for subsequent substantial additional financing to complete clinical development of Arbios' products, and the company's ability to successfully develop and market Arbios' products and technologies. These statements represent the judgment of Shiprock's management as of this date and are subject to risks and uncertainties that could materially affect the company and the proposed acquisition of Arbios Technologies Inc. by Shiprock Inc. Neither Shiprock Inc. nor Arbios Technologies Inc. undertakes any obligation to publicly release the result of any revisions to such forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

SEPET and LIVERAID are trademarks of Arbios Technologies Inc.