X-Message-Number: 681
Date: Thu, 26 Mar 92 17:11:07 -0800
From:
Subject: TRANS TIME stock offering and facility purchase
[ Note: The following message is presented FYI only. As noted in
previous messages, the cryonics mailing list cannot endorse any
particular investment method, so any investments mentioned are
not to be interpreted as solicitations. - KQB ]
March 26, 1992
TRANS TIME now has another offering of its common stock available.
You can obtain a copy of the Offering Notice by dropping a note
with you postal address to
The main use of the proceeds of this stock sale is to obtain a new
facility. Let me inform you of some important recent developments
Property
TRANS TIME and cryonicists Carmen Brewer, Dr. Richard Marsh and
about eight smaller investors, are in the process of purchasing the
building at 165 Gibraltar Court in Sunnyvale, California. This
modern three-story building, constructed in about 1977, is located
in an attractive industrial park near the NASA Ames Research
Center. Close neighbors include Atari and Lockheed. The
building's 37,000 square feet include about 8,850 square feet of
office space, 19,250 square feet of open space with a tiled floor
and a drop ceiling, and 9,600 square feet of heated warehouse space
with six roll-up doors. The lot measures 2.2 acres, with plenty of
parking.
We currently plan that the building will be owned by a limited
partnership called "Alavie" (a French toast "to life"). The
general partner of Alavie is expected to be U.S. Bio-Life Sciences.
These organizations are now being created. TRANS TIME will have a
significant voting interest in U.S. Bio-Life Sciences.
Initially both TRANS TIME and the American Cryonics Society will
occupy the building. But this empty building has far more space
than we need now. We will have about 30,000 square feet of space
available to lease to others. Naturally our preference will be to
lease to entities connected with cryonics and life extension, such
as BioTime and Apollo Genetics.
Price
The purchase price is $1,250,000, with a down payment of $500,000.
Several of the investors have obtained a five-year interest-only
loan for the remaining $750,000. This, of course, leaves a balloon
of $750,000 to be paid in five years, or else we must refinance
before then.
Reason for Purchase
We are undertaking this purchase because:
1. This attractive building, in the heart of Silicon Valley, will
help our image substantially. We will be proud to bring clients
there, and clients will feel good about this as their possible
long-term home. Our current facility is in an older, high-crime
section of Oakland.
2. We believe we are getting a very good price on the building,
because of the slump in local real estate values accompanying the
recession.
The property is valued on the tax records at about $3,000,000 --
$1,000,000 for the building and $2,000,000 for the land. These
were likely the values when the building went up in 1977.
A local real estate agent tells us that the land alone is currently
worth about $1,000,000. A fire insurance company told us that the
replacement value of the building is about $2,000,000. Thus, a
comparable building on comparable land would cost about $3,000,000
to construct today.
If we can fully rent out the building at competitive lease rates,
its market value should be even greater than that replacement cost.
Of course, that is the challenge we must meet. We need to lease
out a minimum of about 1/3 of the building at competitive rates to
establish a positive cash flow. But this area has been hit hard by
the recession, and a number of buildings in the park display space-
for-lease signs. So as an alternative, we may wind up leasing a
greater fraction of the building at sub-competitive rates. Carmen
Brewer, a real-estate agent, will be the on-site property manager
to lease the space.
In summary, we expect the market value of this building to rise
substantially over the next few years if we can get a significant
fraction of the building leased out. Until then, Alavie must
contend with a large negative cash flow.
Buyout Agreement
The Agreement we have signed with the other investors provides that
TRANS TIME may buy them out under the following terms:
TRANS TIME may buy the Gibraltar property for $2,000,000
within eighteen months from the date of close of escrow,
or from May 1, 1992, whichever is later. For the
following six months, TRANS TIME may buy the property for
$2,250,000. Then for the following three years, TRANS
TIME may buy the property for fair market value. If fair
market value is below $2,250,000, then the price shall be
halfway between fair market value and $2,250,000. TRANS
TIME may not sell or assign the option to purchase this
property.
We do hope to be able to exercise this buyout option, although it
will require substantial fund-raising over the next couple of years
to do so. One of our prospects for having this amount of money is
our investment in BioTime (see the Offering Notice). Currently our
BioTime shares are trading on the NASDAQ for about $345,000. Now
that BioTime is publicly funded, plans are underway to conduct
research that might bring its products closer to the marketplace,
and consequently increase the value of BioTime stock significantly.
Of course, there can be no assurance that this will occur.
We are also founding investors in Apollo Genetics, am embryonic
company planning to develop anti-aging therapies, which we hope may
follow the same path through public funding as did BioTime.
Near-term Financial Needs
We have undertaken a very ambitious, and even risky, project. The
investors have already paid a non-refundable $150,000 of the down
payment to the bank, including $55,000 from TRANS TIME. The
investment group currently has barely enough money to meet the
balance of the down payment of $500,000. After that we will begin
experiencing a shortfall of more than $10,000 per month in meeting
the mortgage and other expenses. We need the proceeds of this
Offering to meet these expenses, and even begin paying down the
mortgage, while we attempt to lease out most of the space.
We have also budgeted $20,000 to move our facility from Oakland to
Sunnyvale, plus another $65,000 for needed improvements to the
Gibraltar property preparing for our occupancy. We need to build
a number of rooms into the open space on the second floor. In
particular, we need an isolated surgical room for conducting
suspensions.
Stock Purchase
We believe we have justified the confidence of our current
shareholders. As you will see from the Financial Statements that
accompany the Offering Notice, the large net income we generated
last year caused our book value to more than double. Business
trends are up -- we have already participated in two cryonic
suspensions so far in 1992. Purchase of the Gibraltar property
should keep us on the same upward path.
As the only commercial cryonics firm in the world, we offer the
only investment opportunity in which cryonicists can promote their
own chances of indefinitely extended life, while at the same time
participating in the financial rewards from the success of
cryonics.
Evermore,
Art Quaife, Ph.D.
President
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