420 Property Mgmt. Inc. (FTPM)

[The Whale]

Regarding the FTPM $35.4 Million Tax NOL Benefit 

First and foremost… I believe that a company generally won’t file their financials and OTC Basic Disclosure document to obtainOTC Markets Pink Current Information Status unless they truly have what they believe is some sort of a sound plan to positively move forward. Right now, the plan is unknown, but I believe that it will start to become more known to us shareholders soon given the timing of them now going current and the elections on Tuesday.

FTPM has $35,412,165 listed on their Balance Sheet as anAccumulated Deficit: 
http://www.otcmarkets.com/financialReportViewer?symbol=FTPM&id=160282 ;

This is very attractive for a huge positive Net Income generating company wanting to merge intoFTPM. This greatly enhances the company’s position as a huge merger candidate. This is because of the $35,412,165being available to be used as a 2 year carry back and 20 year carry forward Tax Net Operating Loss (NOL) to reduce the taxable income for a merging company’s future tax years. That’s an average of roughly $1.77 Millionin the reduction of its taxable income per year over a 20 year time frame. This is basically like adding $1.77 Million back into a merging company’s Net Incomethat will be derived for any substantial amount of Net Income that would be generated. Merging into FTPM would be better versus registering as a new entity or IPO-ing because you won’t have such tax shelter otherwise as a huge benefit. Please let me further explain. 

For what I am going to explain next, I will refer to the roughly$1.77 Million that I explained above as Derivative Net Incomefor the purpose of deriving an understanding of what this $1.77 Million tax benefit would be worth over the next 20 yearsconsidering if FTPM was to acquire/merge into a company generating significant Net Income. Considering theOutstanding Shares (OS) of191,872,649 shares for FTPM as what has been recently reported, we can derive what I will call aDerivative Earnings Per Share (EPS) to determine what the value of what this tax benefit is worth to a company coming intoFTPM generating significant Net Income considering the formula below: 

Net Income ÷ Outstanding Shares (OS) = EPS 

$1,770,000 ÷ 191,872,649 shares = .0092 Derivative EPS 

Considering a fair Price to Earnings (P/E) Ratio of 15 for the Marijuana Industry, conservatively speaking, this makes the Accumulated Deficitof $35,412,165 from being approximately worth $1.77 Million (rounded) per year over the next 20 years to be worth.138 per share as derived below: 

.0092 Derivative EPS x 15 P/E Ratio = .138 Per Share of Added Value 

Please understand, as of today, I am not saying that FTPM is worth .138 per share… because it is not. Do not read the thoughts above and think such. That is not what I am saying. I’m not saying that FTPM is worth anything because it is too premature to tell exactly what it’s worth as we don’t even know what is coming into FTPM. They haven’t even started telling the story yet. I think I need to reiterate to make sure it is understood that currently, FTPM is not proven to be worth any value for now, if anything, as nothing has been acquired or merged into it as of yet. Those of us buying shares now are simply doing so because of one word… risk. 

I am simply saying that if something of a huge magnitude merges into or is acquired byFTPM and is profitable with having Net Income equal to or more than the $1.77M per year, then the amount of value ”to be added” for worth from the NOLwill be .138 per share as ”added valuation” over the next 20 years. 

If the OS is double than what I posted than cut the valuation in half from the per year NOL and still FTPM is undervalued at these levels. 

Below are some good videos to listen and understand the logic regarding Net Operating Losses (NOL): 

http://www.investopedia.com/video/play/net-operating-loss-nol/?ad=dirN&qo=serpSearchTopBox&qsrc=1&o=40186 ;

http://www.investopedia.com/terms/l/losscarryforward.asp ;

http://www.investopedia.com/terms/n/netoperatingloss.asp ;

Net Operating Losses (NOLs) on the 3 Financial Statements 

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