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): ~~May~~June 1518, 2008

Cyberkinetics Neurotechnology Systems, Inc.

(Exact name of registrant specified in charter)

Delaware	000-50505	13-4287300
(State of	(Commission File	(IRS Employer
Incorporation)	Number)	Identification No.)

100 Foxborough Blvd., Suite 240

Foxborough, MA 02035

(Address of principal executive offices) (Zip Code)

508-549-9981

(Registrant's telephone number, including area code)

N/A

(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):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c))

ITEM 1.01 Entry into a Material Definitive Agreement

OnIn ~~May~~March ~~15,~~ 2008, ~~Cyberkinetics Neurotechnology~~the ~~Systems,~~Compensation ~~Inc.~~Committee ~~(collectively~~of ~~with~~our ~~its~~Board ~~subsidiaries,~~of ~~the “Company”)~~Directors ~~entered into~~approved an ~~Asset Purchase Agreement (the “APA”) with I2S Micro Implantable Systems~~Employee ~~Inc.~~Retention ~~(“I2S”~~Plan orto ~~“Purchaser”),~~be aused ~~Utah~~to ~~corporation~~reward ~~located~~certain inemployees ~~Salt Lake City, Utah, that, among other things, provided~~ for ~~the~~remaining ~~sale~~with ~~of certain assets related to~~us ~~the~~and ~~Company’s~~achieving ~~research~~certain ~~products~~goals ~~business~~and ~~(the~~objectives ~~“I2S~~as ~~Transaction”),~~we ~~subject~~attempt to ~~certain closing~~work ~~conditions.~~through ~~The~~our ~~I2S Transaction subsequently closed on May 19, 2008.~~current financial difficulties. Pursuant to the ~~APA,~~Employee ~~the~~Retention ~~Company~~Plan, ~~sold~~we ~~certain tangible assets and licensed~~entered ~~certain technology related to its Research Business to I2S in exchange for~~into ~~$982,000 (the “Purchase Price”) consisting of: (i)~~ a ~~cash~~restricted ~~payment~~stock ofagreement ~~$250,000 due~~with atTimothy ~~closing~~R. ~~(which payment was received); (ii) a cash payment of $132~~Surgenor,~~000 payable~~ ~~within~~President ~~seven days of closing;~~ and ~~(iii) a promissory note (the “Note”)~~Chief ~~from~~Executive ~~I2S in the principal amount of $600~~Officer,~~000,~~ ~~which Note is due~~ and ~~payable in~~ a ~~single~~ ~~installment~~restricted onstock ~~July~~agreement 1,and ~~2008,~~a ~~plus~~retention ~~the assumption of certain liabilities.~~plan ~~The~~agreement ~~Note~~with ~~bears~~J. ~~interest~~Christopher atFlaherty, aExecutive ~~rate~~Vice ~~of 6% per annum~~President, ~~is secured by a security~~Technology ~~interest in the assets sold to I2S~~ and ~~is guaranteed by certain stakeholders~~ ~~in I2S.~~Intellectual ~~The Company retained accounts receivable related to the research products business that were outstanding at the time of the closing in an aggregate amount of approximately $570,000~~Property.

Under the terms of the ~~APA,~~restricted ~~the~~stock ~~Company~~agreements ~~sold~~made ~~the~~and ~~following~~effective ~~assets~~as ~~that~~of ~~relate~~June ~~to its research products business: (i) all inventory; (ii) all fixed assets~~18, ~~(iii)~~ ~~all rights in~~2008, ~~to and under the Company’s engineering subcontracts with Brown~~ ~~University;~~Mr. ~~and~~Surgenor ~~(iv) all rights in, to~~ and ~~under the Company’s Salt Lake City, Utah facility lease~~Mr. ~~Additionally,~~Flaherty ~~the~~will ~~Company~~receive ~~granted an exclusive royalty-free~~900,000 ~~non-sublicensable right~~ and ~~license~~250,000 toshares ~~manufacture~~of ~~and sell~~our ~~research~~Common ~~products including neural recording arrays~~Stock, ~~array~~respectively. ~~insertion~~These ~~devices and data~~shares ~~acquisition~~will ~~systems~~be toissued ~~neuroscience~~in ~~preclinical~~exchange ~~researchers~~ for ~~use in~~the ~~connection~~cancellation ~~with~~of ~~non-human~~existing ~~research~~options ~~products~~to ~~and~~purchase ~~services.~~up ~~The~~to ~~Company~~500,000 ~~retained ownership of all intellectual property~~ and ~~regulatory~~93,000 ~~approvals related to~~shares ~~the~~of ~~clinical~~the ~~application~~Company’s ofCommon ~~its~~Stock ~~neural~~held ~~interface~~by ~~technology~~Mr. ~~including~~Surgenor ~~the BrainGate~~ and ~~NeuroPort programs~~Mr. ~~The~~Flaherty, ~~Purchaser has offered employment to each of the~~respectively. ~~eighteen~~All ~~Company~~1,150,000 ~~employees~~shares ~~who~~shall ~~were~~be ~~terminated~~restricted ~~as a result of the I2S Transaction~~ and ~~assumed~~subject ~~certain liabilities related~~ to ~~the~~vesting ~~research~~upon ~~products~~approval ~~business that were outstanding at~~ by the ~~time~~FDA of ~~closing.~~our ~~The~~Andara ~~Company~~OFS ~~and~~HDE ~~the Purchaser~~application ~~have~~or ~~agreed~~upon tothe ~~enter~~sale ~~into~~of athe ~~manufacturing agreement within thirty~~Company, ~~(30) days~~provided ofin ~~the~~each ~~closing~~case, ~~which~~that ~~will~~Mr. ~~allow~~Surgenor ~~the~~and ~~Company~~Mr. toFlaherty ~~purchase~~are ~~clinical~~then ~~neural~~still ~~interface~~employed ~~devices~~by ~~for~~us. aSuch ~~period~~shares ofissued ~~three~~to ~~years~~Mr. ~~The~~Surgenor ~~Company~~ and ~~the~~Mr. ~~Purchaser have~~Flaherty ~~also~~shall ~~agreed to enter into a distribution agreement within thirty (30)~~also ~~days of~~vest ~~the~~if ~~closing~~their ~~pursuant~~employment tois ~~which~~terminated ~~the~~by ~~Purchaser~~us ~~will~~without ~~be allowed to distribute the Company’s NeuroPort products~~cause.

InThe ~~order to~~Employee ~~obtain~~Retention aPlan ~~release~~also ~~from~~provides ~~General~~for ~~Electric~~a ~~Capital~~cash ~~Corporation~~bonus ~~(“GECC”)~~pool of ~~its security~~up ~~interest in certain assets being sold and~~ to ~~obtain GECC’s consent to~~$395,000 ~~the I2S Transaction, on May 15, 2008, the Company also entered into an agreement~~to ~~with~~be ~~GECC~~paid ~~(the~~to ~~“GE~~certain ~~Agreement”).~~employees ~~Pursuant~~upon to the GEsale ~~Agreement,~~of the Company ~~purchased~~ ~~certain~~provided ~~equipment leased under that~~such ~~certain~~employees ~~Master~~are ~~Lease~~then ~~Agreement~~still ~~between~~employed ~~Cyberkinetics,~~by ~~Inc~~us. ~~and~~Mr. ~~GECC (the “Lease~~Surgenor ~~Agreement”),~~shall ~~the~~not ~~Company granted a security interest in its intellectual~~participate ~~property to GECC, GECC released it security interest~~ in ~~such equipment and~~ ~~GECC consented to~~ the ~~I2S Transaction in exchange for: (i) a~~ cash ~~payment~~bonus ofpool. ~~$202,263 plus~~Under ~~sales tax payable at~~ the ~~time~~terms of ~~closing of~~ the ~~I2S~~retention ~~Transaction~~plan ~~to fully satisfy all amounts due under the Lease Agreement; (ii) a cash payment of $152,588 due on June 1, 2008, representing the monthly payment due under the Company’s loan~~ agreement with ~~GECC (the “Loan Agreement”); and (iii) a cash~~Mr. ~~payment~~Flaherty ofmade ~~$600,000~~and ~~payable~~effective ~~upon the Company’s receipt of the proceeds from the Note due on July 1, 2008, of which $457,764 will be retained by GECC~~ as ~~payment~~ of ~~the~~June ~~monthly loan payment due on July 1~~18, 2008 ~~and prepayment of the monthly payments otherwise due on August 1~~, ~~2008 and September 1, 2008 under the Loan Agreement~~Mr. ~~The~~Flaherty ~~remaining $142,236 of proceeds from the Note~~ will be ~~returned~~eligible to ~~the~~ ~~Company~~receive ~~provided~~$100,000 itupon isa ~~not~~sale inof ~~default under~~ the ~~GE Agreement or the Loan Agreement~~Company.

~~The~~Additionally, ~~press~~the Employee Retention Plan provides for the issuance to certain employees ~~release~~of ~~announcing~~up to ~~the~~4,000,000 ~~I2S~~restricted ~~Transaction~~shares isof ~~attached~~our ~~hereto~~Common Stock. Effective as ~~Exhibit~~of 99June 18, 2008, Mr.1 Surgenor and Mr. Flaherty will receive 1,482,500 and 750,000 shares ~~The~~of ~~Company~~our ~~intends~~Common toStock, ~~file~~respectively. ~~each~~Of these shares, a total of 33.33% will vest upon the ~~APA~~recognition by us of $1 million of cumulative Andara OFS product revenue, and the GEremaining ~~Agreement~~66.67% asshares anwill ~~exhibit~~vest upon the recognition by tous of $2.5 million of cumulative Andara OFS product revenue, provided that such restricted shares will vest only if the individual is then still employed by us. In the event that the Company’s ~~Quarterly~~is ~~Report~~sold prior to the shares vesting based on revenue ~~Form~~recognition, ~~10-Q~~up ~~for~~to 1,482500 and 750,000 shares of restricted stock held by Mr. Surgenor and Mr. Flaherty, respectively, may vest, but only to the ~~quarterly~~extent that ~~period~~the ~~ending~~sum ~~June~~of the total cash bonus pool to be paid out upon the sale (a 30maximum of $395,000) ~~2008~~plus the value of all the shares to be vested (a maximum of 4,000,000 restricted shares) does not exceed ten percent (10%) of the proceeds from the sale.

ITEM 23.0102 Unregistered Sales ~~Completion~~ of ~~Acquisition~~Equity ~~or Disposition of Assets~~Securities

~~Cyberkinetics~~We ~~Neurotechnology~~have issued ~~Systems,~~an ~~Inc.~~aggregate ~~disposed~~of 2,950,000 shares of ~~certain~~our ~~assets~~Common ~~related~~Stock to ~~its~~four ~~research~~employees ~~products~~under ~~business~~our ~~pursuant~~Employee toRetention anPlan ~~Asset~~as ~~Purchase~~more ~~Agreement~~fully ~~with~~described ~~I2S~~in item 1.01. These ~~Micro~~shares were not registered under the Securities Act of 1933, as amended and ~~Implantable~~were issued ~~Systems~~to ~~Inc.~~the asfour ~~more~~employees ~~fully~~pursuant ~~discussed~~to inan ~~Item~~exemption 1from registration under Section 4(2) of the Securities Act of 1933, as amended.~~01.~~

ITEM 9.01 Financial Statements and Exhibits

99.1 Press release of the Company dated May 21, 2008.

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.

	Cyberkinetics Neurotechnology Systems, Inc.

	By:	/s/ Timothy R. Surgenor
	Name:	Timothy R. Surgenor
	Title:	President and Chief Executive Officer

Dated: ~~May~~June 2120, 2008

Filing Compare · Cyberkinetics Neurotechnology Systems, Inc.