Universal Apparel and Textile Co. (DKGR)

[Skylanders]

DKGR...questions arising regarding our recent cancellation of shares.

Hello Frank,

I am glad to take time to reply to your email in regards to questions arising regarding our recent cancellation of shares. As indicated we have done this in an effort to clean up the structure of the Company. In most cases the management of small cap companies uses debt and other things as a way to issue more shares to themselves and further dilute shareholder value.

For myself, I have personally invested in shares of Drake stock both in the market and privately as well as funded all operations to date. By increasing my own holdings by acquiring the cancelled shares myself or converting debt into large quantities of stock would by all means dilute shareholder value, including my own. A lot of shares at a low price is not better then few shares at a higher price so I would only be hurting my own investment not to mention my entire shareholder base.

In several of the statements you showed me it made claims such as, "it is ridiculous to assume that the shares were retired at no cost to Drake" "may have issued preferred" and "what did the company pay for the shares bought back?"

Clearly stated, I did what I thought was best as a shareholder, not as an insider looking to maximize only benefit for myself. As an investors I wanted to maximize my value of shares and did so by cancelling the shares rather then acquiring them for myself. The exchange for the shares was based on a negotiation with the shareholders in which I offered equity in another company to them for their shares. The equity came at a substantial cost to me but I found that by just cancelling the shares I am building more value for myself. This was entirely an off book transaction for Drake and Drake personally has had no cost whatsoever. There has been no added debt or issuance of any common or preferred shares to support this transaction. The equity I traded was completely unrelated to Drake but the benefit is clear.

This is a clear example of how I am using my connections and assets and leveraging them to benefit my investment in Drake. Similar to our business model whereas I am using the expertise of my team and connections in the industry to create value for our balance sheet in the sense of ownership of asset and collecting cash from dividends developed from operations in subsidiaries.

I am available for any other questions so please feel free to email me anything.

Clayton Smith

Clayton Smith
Drake Gold Resources Inc.
Phone: [phone]
Fax: [phone]
Email: [e-mail]
One World Trade Center, Portland, OR