X-Message-Number: 9027 Date: Mon, 19 Jan 1998 01:09:46 -0800 From: Paul Wakfer <> Subject: Re: CryoNet #9016 Prometheus and 21CM References: <> Mike Darwin -- oops -- Joan O'Farrell, COO of 21CM wrote: > the Prometheus Project, The > Prometheus Pilot Project and the Life on Hold Trust (hereinafter referred > to as "Prometheus") I am sorry to see that you (and many others) are having trouble with the multiplicity of names which are related to the Prometheus Project and do not fit into the every-day, simpleminded mold of standard for-profit, or not-for-profit corporations.Let me elucidate these names one more time. The Prometheus Project (PP) is simply an "idea" which I began and am now continuing. There are a few other people who are doing various things for PP and I am coordinating these efforts, but there is no official or formal organizational structure attached to PP. That is probably the way it will remain -- as an "attracting idea" for cryonicists and life-extensionists. The Prometheus Pilot Project (PpP) is the body of research which will be conducted this year at a research institute associated with a major university medical center. The science plan of the PpP (reversible cryopreservation of hippocampal brain slices) is almost complete and will soon be submitted to the research institute for approval and release of their grant funds to it. The PpP is directly in the mainstream of neuroscience research and has the potential to be of major value for several areas of that field of research. In fact, the PpP had to be designed this way in order to satisfy the requirements of the establishment research institute. In addition, this fits squarely with the current positioning of the promotion of the PP towards mainstream science and medicine. On the other hand, the reversible cryopreservation of hippocampal brain slices will also be a major step on the road to the reversible cryopreservation of whole brains. Thus, Greg Fahy's brilliant research proposal for the PpP has optimally satisfied both requirements. A business trust called Life On Hold Trust (LOHT) *was* to have been the organizational vehicle which would conduct the PpP research in conjunction with the research institute. LOHT would have bought and owned the specialized equipment which will be needed and will also be able to be used for future Prometheus research (or rented/loaned to 21CM). It would also have been the entity which would have retained ownership of any intellectual property which comes from the PpP research. However, because many people have not understood, or been concerned to learn about the concept of a business trust and its ability to ultimately award distributions of assets to its beneficiaries (who can be any its Secretary/Protector choose which are not fiduciarily connected with the Trust), I have decided to abandon this idea (at least for now). Therefore LOHT (which was not yet instrumented, BTW) will not be the organizational vehicle which executes the PpP research. Instead, the Full Length Life Society (FLLS) which is an instrumented charitable trust and can issue donation receipts which may be applicable to a reduction of the donor's taxable income, will directly conduct the PpP research replacing LOHT with respect to everything stated in this paragraph. This means that no "investment" (in the technical, SEC/IRS meaning of the term) in PpP research is possible. If people have wondered why I didn't just go right off with a for-profit corporation as I originally planned, the reasons are two-fold. First, and foremost was the lack of funding (and the gross waste of what small initial funding might be available) to jump through the SEC hurdles of setting up a company and issuing a prospectus for a corporation which would have a large number of small and "unqualified" investors. The cost for this was estimated to be a minimum of $30,000 (which is almost half that which we now have available as "our" part for the whole PpP). Second, was my belief that the structure of a for-profit corporation is *not* adequate to safeguard the purpose of the Prometheus Project and hold steadfastly to its objective over the long term of its 20 year development life. I have since realized that there are some ways in which, while still not ideal, the for-profit corporate structure can perhaps be made adequate. Third, was the fact that for-profit, limited liability corporations are government created fictions which I do not believe are a proper part of reality and which I have always abhorred. However, that philosophical viewpoint is not something which I can expect to easily transfer to others and should not have let influence my thinking. Hopefully, as 1998 proceeds, there will be enough money available from contributions to the Prometheus Project to afford to pay the legal costs associated with setting up an investment vehicle, or at least a vehicle which will allow those who support the Prometheus Project with their hard earned cash, the chance of gaining a monetary reward in the far future. Thus, for the next major step in the Prometheus Project research, I anticipate that share purchases will be available as well as the continuation of donations to FLLS. > 1) There is currently no relationship between Prometheus and 21st Century > Medicine. Technically, this is correct. However, the irrefutable facts are: 1) Saul Kent (CEO of 21CM) and I jointly conspired to bring Greg Fahy out to work in Southern California full-time. Aided by the PpP research grant, this joint effort succeeded after Saul had himself failed to effect this on several occasions. 2) The understanding of the joint venture, which is still in force, is that Greg would be available to direct the research of the Prometheus Project as much as the entity executing the PP research could afford to use him. While 21CM consulting and other projects would use and pay for the rest of Greg's time as needed. 3) Both Saul Kent and then, newly hired 21CM Director of Cryopreservation Research, Brian Wowk, were very much in favor of the idea of synergistically doing and sharing the research to perfect suspended animation, so long as the ownership of intellectual property results were kept separate and distinct. Neither of them have as yet communicated to me that they are not still so in favor. This is also consistent with the fact that when I thought to terminate the Prometheus Project or merge it with 21CM after the 21CM surge in research and money influx of over a year ago, both Brian and Saul were adamant in convincing me to carry on with the Project. 4) Finally, because of some confidential technical reasons, since Greg arrived here in October, only FLLS has paid him any salary. He has received no money (except some expenses) from 21CM. So one might reasonably say that FLLS, has been generously lending Greg's consulting time to 21CM for some 3 months now. > 2) Over the past few weeks 21CM has sought legal advice from its corporate > and securities lawyers (based on the information available to us) regarding > Prometheus and the possible structure under which any cooperative effort > between Prometheus and 21CM could go forward. We have been advised by > counsel that in their opinion any interaction between 21CM and Prometheus > constitutes an unacceptable risk to 21CM due to the structure of Prometheus > and unresolved concerns regarding securities laws, the need for a > Prospectus, the need for legal review by competent securities and corporate > lawyers, and the need for a management structure which is accountable to > contributors and investors. This is, of course, all conservative lawyer talk. They can never be wrong by rejecting out-of-hand anything which isn't standard and which they don't understand. Please note, that *I* was not involved in these consultations, so I have no way of knowing what information was communicated to the lawyers nor how distorted and misunderstood it may have been. What I can say is: now that the only entity related to PP is a charitable trust and all money supporting PpP research will come in as pure donations, whatever the lawyers thought concerning securities issues can no longer be applicable. Furthermore, an unincorporated charitable trust (FLLS) is something about which *corporate* lawyers, by definition, have little if any knowledge. The IRS regulations, which it must obey and are enshrined in its trust instrument, make it totally and tightly accountable to it donors and to the IRS. Finally, what business is it of 21CM's to be attempting to look out for the interests of the Prometheus pledgers and the donors to FLLS? > 3) We note from both public and private communications that similar > conclusions have been reached by the Alcor Life Extension Foundation, the > Immortalist Society, the Cryonics Institute and the American Cryonics > Society. So what? Does this now mean that 21CM which has heretofore been suspect by, and almost feuding with both Alcor and CI are now supporting their uncooperativeness with the Prometheus Project? I note that CryoCare Foundation, which is a $10,000 per year pledger (nothing for PpP yet) is not mentioned. > 4) 21CM is a for-profit biomedical research and development company with > current research commitments in the areas of cardiopulmonary-cerebral > resuscitation, shock, and liquid and solid state preservation of the heart, > brain and kidney. At this time 21CM has substantial intellectual property > in these areas and is pursuing patent protection. It is a core objective > of 21CM to aggressively pursue commercial development, application and > profit from the intellectual property and technologies it develops. > > 5) Pursuant to 4) above, any cooperative ventures or agreements 21CM enters > into with other entities (for-profit, non-profit, corporations, > individuals, trusts, etc.) will be rigorously structured to protect the > interests of 21CM. I have no problem with that. FLLS has no desire to gain the unearned from anyone and does not wish to give anything away either. > Further, all such agreements will be subjected to > careful review by counsel. _No such agreements are in place between 21CM > and Prometheus at this time, nor are they being contemplated for the future > given the current structure and management of Prometheus._ Well, not only has the structure changed, but I have today (Sunday) written an Intellectual Property Determination, Recording, and Separation Agreement detailing the above cooperation ideas, which has been approved by Greg Fahy, accepted by Saul Kent (via telephone), and will be presented to 21CM lawyers this week. (Many people do not know that I have a flair for legal documentation and having been doing constitution, bylaws and contract agreement writing for over 20 years. In cryonics, I wrote the updates to the Cryovita corporate bylaws, the intellectual property agreement between Cryovita and 21CM, the original, very complex CryoCare bylaws, all the contracts and agreements between CryoSpan, ACS and CryoCare, some early 21CM documents, and as recently as 2 1/2 years ago a major 21CM agreement with a research contractor. This is why it annoyed me when people jumped on me over the question of legality of the original structure which I had set up.) > 6) As previously noted, 21CM is a for-profit privately held stock > corporation. Suggestions that 21CM be the recipient of donations from > Prometheus "pledgers" or "investors" are inappropriate. While it is true > that 21CM has as a core research goal the development of reversible > biopreservation methods for organs and organisms (including and especially > the mammalian brain) it is also important to understand that the company > has research commitments in other areas which promise an anticipated faster > track to commercial application and revenue generation and thus that the > priorities of the company will be influenced by these other research > activities. This reiterates what I have stated several times. 21CM does not want investments from Prometheus pledgers. > 7) Individuals wishing to support brain cryopreservation research via > directed _charitable contributions_ to a 501(c)3 tax-exempt, nonprofit > corporation should contact the Life Extension Foundation at 1(800) > FOR-LIFE. However, it looks like they will take donations (found money, free of encumbrances).I am not sure how this would work, since currently LEF funding goes into all forms of research which 21CM is pursuing. Furthermore, LEF has in the past indicated complete agreement to pass on 100% of directed donations to whatever entity is doing the research of the Prometheus Project. I again wish to make it clearly understood that when an organization is formed with clearly charitable purposes and a charter clearly containing all statements required by the IRS regulations for acceptance as a 501(c)3 tax-exempt organization, as FLLS has done, then those receiving receipts for donations to that organization are already entitled to deduct the amount from taxable income according to the rules of their tax return. Even if FLLS is *not* subsequently granted blanket official 501(c)3 sanction by the IRS, the deductibility of such donations from taxable income will only be disallowed upon audit and be subject to a simple interest penalty, and may even so, be allowed as a charitable donation. Again such action by taxpayers is not cause for any prosecution and may still be allowed even if the organization giving the receipt does not get blanket approval. (I wish everyone would stop being "afraid of their shadows" where anything to do with government is concerned.) > 8) Questions regarding the present or future status of Prometheus should > _not_ be directed to 21CM, its directors or officers, This is quite correct. They should be directed to me, to Greg Fahy, or to other trustees as they come on board. > as the company has no > current or anticipated interest in or anticipated interaction with > Prometheus. I don't know who authorized this, since it is in direct contradiction to the understanding between Saul Kent and I.However, this should at least have the benefit of finally putting to rest Bob Ettinger's constant insinuations that 21CM and Prometheus are "in bed together". -- Paul -- Voice/Fax: 909-481-9620 Page: 800-805-2870 The Prometheus Project -- http://www.prometheus-project.org Perfected Suspended Animation for Patient Stabilization until Cures for Their Terminal Diseases are Available Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=9027