X-Message-Number: 6568
From: (Olaf Henny)
Newsgroups: sci.cryonics
Subject: Re: Prometheus Project - Latest Total
Date: 20 Jul 1996 20:00:02 GMT
Message-ID: <4srds2$>
References: <4sq337$>
In article <4sq337$>,
<> says:
> It really would be nice to see some more people pledging in the $5K to
>$10K range. I *know* that lots of you are making well over $50K per year and
>should be able to afford that. Isn't a much improved chance at hundreds of
>years of extra life worth that to you? If this project gets funded, it truly
>*does* make sense to compare the exchange of a bit of lost value in this life
>cycle for the enormous gain in value from the vast number of extra years of a
>second life cycle, discounted by the chance, of course. If you really think
>about it correctly, and understand that it can actually happen, you have no
>rational choice but to pledge a major portion of your present income as I and
>several others have done.
Hi Paul:
I hope the follow through on the suggesions below will lead to improved
response to your request for contributions.
It may take some financial 'engineering' to adapt my now partially obsolete
Canadian information to the requirements of the IRS, but I am sure it is
worthwhile exploring.
Incentives to contributors:
Research Contributions and Tax Write-Offs:
An area to be explored, which may help accumulating contributions
considerably, is the opportunity for tax write-offs for R&D
contributions.
As a Canadian I am not familiar with tax incentives as they may
exist in the states. Here in Canada they were during their prime
popularity quite considerable:
Tax write-offs for 100% of research and development cost
including lease of premises and purchase of plant and equipment,
*plus* a tax credit of 10% of that amount. An example for a
$1000.- contribution at a tax bracket of 40% follows:
Contribution: $1,000.-
Minus tax write-off @ 40% Tax bracket $ 400.-
Minus tax credit (10% of $1,000.-) $ 100.-
--------
Total cost per $ 1,000.- share: $ 500.-
It is of course quite unlikely, that we can find today a deal,
which is that advantageous. The above programme has been
severely abused and subsequently curtailed by the government, but
the last time I checked you could still write off all costs of
developing a prototype minus recapture, if and when the prototype
is disposed. It is unlikely, that a previously frozen and
slightly used dog brain will render a whole lot of value.
While Canadian tax law is of no consequence for research projects
financed and executed in the States, I am positive that similar
programs exist in at least some of the states and should be worth
exploring.
Here in Canada such tax schemes are usually the preserve of
"sophisticated investors", who have to make a minimum
contribution of C$ 25,000.- (the fact, that they have C$25,000.-
to throw into the pot makes them "sophisticated", I guess (-; ).
In case similar provisions exist in the States, a front end lump
sum payment yielding 10 payments of $1,000.- annually if invested
at 5% would be $8,107.82 plus whatever administrative costs such
as service charges may be incurred.
The advantages of any levering through tax incentives are
obvious: Contributors can for the same net dollar commitment
acquire a larger share of the "benefits" and thereby generate
more funds for the project. Others will find it simply easier to
contribute $500.-, 600.-, or 700.- then the full 1000.- and
therefore be able to come "on-board".
Since tax considerations only take effect, when the money is
actually delivered to the project, there is no revision of
procedure, which may be disadvantageous to those who have already
pledged. I.e.: the goal post would be moved, but to everybody's
advantage.
----------------------------------------
*Are there any accountants out there,?*
----------------------------------------
As a further incentive for contributions to this Prometheus
Project would be the issue of one right per $100.- contributed to
the programme.
The reason why I suggest $100.- per right rather than $1,000.- is
that some of the above proposed exploration into tax write-off
programmes may lead to some fracturing of the $1,000.- units,
which are now proposed.
The value of the rights can be determined at a later date, when
success and commercial viability have taken on a more definite
shape and could include one or all of the following:
- The issuing of x number of share(s) in the yet to be
formed company (x could be a fraction of one or a
number of shares in depending on the share structure of
the company).
- The entitlement to purchase y number further shares
- Priority privileges with associated service
providers, such as Alcor, F.W.A etc.
I understand, that a long journey starts with a first step and it
will be first priority to get the Prometheus Project underway.
The funding of this first step (Prometheus) is however the most
difficult one. Once this project shows some fruits of success,
interest in further cryonics research and thereby contributions
may well snowball. It may therefore be reasonable and an added
incentive to limit the offer of the above rights at least for the
time being to the contributors of the first $1mio/year.
I hope the above helps.
Best regards,
Olaf
Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=6568