July 4, 2008

Dear Friends, Customers and Neighbors:

As you have undoubtedly noticed the Phinney Market has been struggling as a business over the past 12 months. The responsibility for the decline in quality and operating performance lies squarely with the author of this letter. I must thank and apologize to our customers and employees who have been so loyal and supportive during some very difficult times.

Originally, Lauretta and I envisioned a small market with a bit of a European flair, a community gathering place where neighbors were recognized and treated as friends while enjoying the company of each other, a place where one could purchase fresh, quality and unique products on a daily basis. I honestly think, at least to some degree, that we did achieve that goal. I know I have truly enjoyed this experience regardless of the eventual outcome. Unfortunately when I began to focus my attention on a second location in mid-2006, and turned over responsibility to others, the business began to deteriorate in nearly every area.

Since January of this year, Janice E. Chapman has acted as General Manager of the Phinney Market. In six months, with little industry or management experience, she has accomplished ten-times as much as her experienced predecessors. She and her dedicated staff, despite dwindling resources and external pressures, have succeeded in curing much of the operating failures of the past two years. In addition, we have also developed a turnaround plan under which the market would re-capture the quality necessary for success, operate profitably, and re-kindle the community spirit we sought to create in the beginning.

Unfortunately, past performance has put the business in a very deep hole, financially speaking, and caused us to fall behind in some payments. Ironically, as we begin to execute our turnaround plan, our landlord, which is his right, has taken legal action to have the business removed from the premises.

We have a very narrow time frame to act but we do not plan to go down without a fight. At this time we are having discussions with neighbors who have come forward and expressed interest in investing capital that would allow us stay in business, and execute a turnaround. I do not know what the outcome of those discussions will be but we will continue to solicit non-institutional financial support.

If you know of anyone who would be interested in making a slightly risky, but very rewarding investment I would love to meet them and discuss our plans for the future. Thank you again for all of your loyalty and support during the past four years.

Warmest Regards Wallace and Lauretta Wright