In 2006 Alcor cryopreserved a member with approximately $400,000 of
cryopreservation funding, including life insurance policies and estate
assets specifically directed to his suspension fund in his will.

During recent discussions between Alcor’s board and management
regarding disposition of these assets, the member’s will and Cryonic
Suspension Agreement (CSA) were examined. The CSA was executed in the
1980s, and contained language not in current agreements, specifically:

“After the legal death and cryonic suspension of the Patient ALCOR
shall maintain all Suspension Funds up to the minimum level of funding
in one account, undifferentiated by Patient, for the joint care and
maintenance of all suspension Patients. Suspension Funds in excess of
the minimum required amount will be maintained in separate internal
accounts for the benefit of the individual Patient who provided the
extra funding.”

Alcor does not have the separate internal accounts anticipated by this
old agreement because individual accounts are now understood to be
incompatible with Alcor’s tax-exempt status. Therefore the CSA provisions
could not literally be followed. Instead, after deducting $15,000
for the Patient Care Trust (PCT) fund, $3000 for the Comprehensive
Member Standby (CMS) fund, and case expenses, management recorded the
balance of the member’s cryopreservation funding as a bequest and used
it to help fund Alcor general operations since 2006.

Upon examining the language of the member’s CSA, the Alcor board has
determined that the intent of the agreement was that excess funding
provided by the member be used to fund patient care, even if
individual accounting was not possible. Therefore the excess funding
should have been directed to the PCT, which funds joint care and
maintenance of all Alcor patients. To address this, $130,000 has been
sent from Alcor general funds to the PCT. The remaining balance owing will be
recorded as payable to the PCT, and repaid over time. This will
strengthen the PCT and increase security of Alcor patients. However
Alcor’s operating budget will suffer as a result.

Management informed the board that procedures followed in this case
were customary. The board therefore intends to investigate past
cryopreservation cases to ensure that the PCT has received all funds
it was due according to the Cryonic Suspension Agreement of each
case. Enhanced oversight is being established to monitor funding
disposition of future cases, and to ensure that there is general
agreement on cryopreservation funding policy.