5/22/2013 - Letter to SKTO Shareholders from Kevin

5/22/2013 - Letter to SKTO Shareholders from Kevin Allyn Dear SKTO Shareholders:

I wanted to take this opportunity to write about recent developments at the Company over the past few months, to advise you about certain items that are happening now, and to comment on certain conduct among our shareholders.

First, as you have seen, over the past 6-­?8 weeks we have "cleaned up" the Company’s corporate status and had OTC Markets remove the skull and crossbones. No matter what some of the amateur attorneys on the boards might think, this process does not occur overnight, is not easy, and takes real work so I commend our staff and professionals who made this happen for their good efforts. Of course, we intend to operate the business strictly within the bounds of the law; while the laws governing the business of marijuana are complex and seemingly inconsistent as between certain jurisdictions, we are doing all we can to ensure that the Company complies strictly with all forms of regulation.

Second, we have also been involved in a number of strategic acquisitions about which we have issued press releases. These acquisitions are real, involve real people, assets, and revenues, and will work positively and dramatically for the future economic health of the Company.

Third, I want to emphasize that we do not manage to the boards but we are aware of your needs as shareholders and I think you have seen that we have attempted to be responsive on certain issues and inquiries from shareholders within the bounds of the law. We will continue in that effort, but we cannot spend voluminous amounts of time dealing with investor issues and direct investor inquiries while taking away from the efforts of our lean staff to advance the business. Nonetheless, we are considering appointing an investor relations individual or firm to assist us in this regard and I hope to have more to report in this area in the near future.

Fourth, I recognize that many of our investors have very short time horizons, but management does not. We, as management, are committed to generating shareholder value in this space, which includes maximizing long-­?term cash flows. So while many of you seem interested in what is happening minute-­?to-­?minute, hour-­? to-­?hour, or day-­?to-­?day, we will continue to look at where we want the business to be monthly, annually, and on a longer horizon and we define our success on that basis. That perspective necessarily will have positive short-­?term effects, but the micro-­? short-­?term is not the vantage point from which we manage.

Fifth, I want to make clear that we continue to endeavor to build our team. We will not always make announcements about the results of that effort but we are seeking highly qualified directors and management to move the Company forward and we will continue to do so.

Finally, I want to discuss something that may be sensitive for some of our shareholders but that has frankly crossed the line from open debate into outright attempted interference. We have seen efforts by many on the SKTO boards to undermine the efforts of the Company and the value of the investments of you as shareholders, and we can demonstrate who some of these people are.

For example, we had one of our shareholders, who appears to be an active poster on the boards under the pseudonym “I-­?Glow”, contact the California Lieutenant Governor’s office and say frankly inappropriate and baseless things about SKTO in an effort to draw attention away from the fact that Gavin Newsom actually provided the quote that we made public (notice, Gavin Newsom has not retracted the statement or attempted to distance himself from it). A true and correct copy of this individual’s board post bragging about what he had done, as well as the actual email he sent to the Lieutenant Governor’s office, with his contact information, can be found by clicking HERE .

This same individual undertook weeks later to make contact with a party with whom the Company was in negotiations to finalize an announced planned acquisition, to apparently defame the Company and otherwise attempt to dissuade this person from coming fully aboard (needless to say, these efforts did not work but it speaks volumes about the lengths to which certain individuals are inclined to go to actualize their online prophecies). A true and correct copy of the email this person wrote can be found by clicking HERE .

This kind of conduct is dubious, and might well be unlawful. We ask you to please join us in shunning these people and their efforts to bring down the value of your investment and to otherwise harm the Company’s interests based on their fomenting of rumor, speculation, and innuendo. Please keep in mind that, some of which are not necessarily aligned with your interests or the interests of the Company; be mindful that the boards provide a forum for a veritable hodgepodge of competing interests, and motivations, where things are said often without basis, and seemingly hidden behind anonymity, because as the emails I reference above attest, many individuals posting are likely not looking out for anything other their own individual interests.

Of course, it goes without saying that, nothing in this letter constitutes investment advice and as an investor you should and must conduct your own diligence to determine the nature of any market risk for any investment you make. I have not provided any forward-­?looking statements in this letter

As one of the newest medical marijuana service companies with a high-­?growth and low-­?cost profile, SKTO is positioned to make you a proud shareholder in 2013. Management believes that demand in this sector will continue to be robust. Thank you for your support of the Company and I wish you continued success in your investing efforts.

Watch us as we continue to grow!