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FFPAK

01/16/09 1:42 PM

#166 RE: Dirty O #165

Thank you for your inquiry as well as your support and patience during this developmental stage of the company. We are still in business and won't quit no matter how the economy reacts. In fact, we just featured the Adventures of the Elements at the Texas State Science Conference in Fort Worth, TX and at the Texas Gifted & Talented Conference in Dallas, TX. Last week, we showcased the Adventures of the Elements at a national educators conference in Atlanta, GA.

In the meantime, our sales team has built a solid sales pipeline and we are looking at considerable potential sales in the education sector over the next few months.

On the media side, we are working with private investors on funding the remaining production of the first one hour Adventures of the Elements animation as well as the television and DVD series. Within the next couple of months, we are working to have the first television vignette ready for broadcast. This will help to further establish brand awareness and recognition. There will be more information available on this soon.

Let me briefly explain why we are working with private investors. First and foremost, we do not want to issue more stock because it would only dilute outstanding shares, thus further lowering the value of the stock, making it more difficult for shareholders to recover.

What most of the public does not realize is that when our stock was pumped and dumped by naked short sellers, Alchemy Creative received none of that money. All of those "profits" (I hate to use that term because in my book, it is stealing) went into the pockets of the short sellers and promoters, who the SEC only "slapped on the wrist" to date.

In fact, if someone in the market currently buys ALMY stock, none of that money goes into the company. Therefore, our business model and ability to move forward as a company is not necessarily reflective of the stock price.

Currently, we are working with investors to generate the capital necessary to further develop our products including the animations, games, and derivative merchandise.

Nevertheless, we have never stopped selling product, increasing our sales team's demographic area, working on development of the animation, etc. We have met with numerous "big box" retailers and distributors and they are all interested in distributing the animated DVD's as soon as they are completed. We will be revealing those partners as soon as the first DVD is completed. Unfortunately, that date has been pushed out to late first quarter of 2009.

However, we will be promoting the animation well in advance of its release date. And, we will have news before that time. We have a marketing strategy in place and a time line for immediate release of derivative products to capitalize on the publicity and excitement generated by the release of the animations.

In a nutshell, we have not stopped operating and continue to push forward on all fronts. We do not want to release any news prematurely because we want to make sure the "new" products are poised to sustain the press release's excitement through positive sales. We do not want to witness another round of stock pounding from short sellers. Thus, we are pursuing all possible means to prevent that.

Unfortunately, I cannot ever guarantee success or predict any future stock value. Nor can I give you reason to retain or sell your current shares. I cannot predict the markets as we've seen from their current volatility. However, we are making our best efforts to generate future value for the company even though our time line has been delayed slightly on the animation side.

Again, thank you for your support. Every day brings us closer to achieving our goals.

Best wishes,
Richard James