**SEPTEMBER      30, 2007**

**000-49676**

**ARTFEST      INTERNATIONAL, INC.**

| Delaware                                         |  03-0390855                   |
|--------------------------------------------------|------------------------------------|
| (State                or jurisdiction            | (IRS                Employer       |
| of                incorporation or organization) | Identification                No.) |

|                                                                 |                      |
|----------------------------------------------------------------------|---------------------------|
| 27758                Santa Margarita Parkway, # 281 Mission Viejo CA | 92691                     |
| (Address                of Principal Executive Offices)              | (Zip                Code) |

** 1-888-692-7833**

**None**

**Common      Stock**

----

| PART                I.    | FINANCIAL                INFORMATION                            |
|--------------------------------|---------------------------------------------------------------------------|
|       |                                                                      |
| Item                1.         | Financial                Statements                                       |
|       |                                                                      |
| Item                2.    | Management's                Discussion and Analysis and Plan of Operation |
|       |                                                                      |
| Item                3.    | Controls                and Procedures.                                   |
|       |                                                                      |
| PART                II.        | OTHER                INFORMATION                                          |
|       |                                                                      |
| Item                1.         | Legal                Proceedings                                          |
|       |                                                                      |
| Item                2.         | Unregistered                Sales of Securities and Use of Proceeds       |
|       |                                                                      |
| Item                3.         | Defaults                Upon Senior Securities                            |
|       |                                                                      |
| Item                4.    | Submission                of Matters to a Vote of Security Holders        |
|       |                                                                      |
| Item                5.         | Other                Information                                          |
|       |                                                                      |
| Item                6.         | Exhibits                and Reports on Form 8-K                           |
|       |                                                                      |
| Signatures                     |                                                                      |
|       |                                                                      |
| CERTIFICATIONS                 |                                                                      |

----

**PART      **
**I      - FINANCIAL INFORMATION**

ITEM      1. FINANCIAL      STATEMENTS

|                                           | PAGE      |
|------------------------------------------------|-----------|
|                                           |      |
|                                           |      |
| ACCOUNTANT'S                  REVIEW REPORT    | F-1  |
|                                           |      |
| FINANCIAL                  STATEMENTS          |      |
|                                           |      |
| Balance                  Sheets                | F-2       |
|                                           |      |
| Statements                  of Operations      | F-3       |
|                                           |      |
| Statements                  of Cash Flows      | F-4       |
|                                           |      |
| Notes                  to Financial Statements | F-5       |
|                                           |      |

----

**THOMAS      BAUMAN**

**CERTIFIED      PUBLIC ACCOUNTANT**

**4      SCHAEFFER STREET**

**HUNTINGTON      STATION, NY 11746**

**Telephone      (631) 427-4789     Fax (631)      424-3649**

----

BALANCE

|                                                           |   | **September                  30,** |       |   | **December                  31,** |   |
|----------------------------------------------------------------|--------|------------------------------------|------------|--------|-----------------------------------|--------|
|                                                           |   | **2007**                           |       |   | **2006**                          |   |
| Current                  Assets:                               |   |                               |       |   |                              |   |
| Cash                                                           |   | $                                  | 829        |   |                              | $      | 255 |   |
| Prepaid                  Expenses                              |   |                               | 291        |   |                              |   | 561 |   |
|                                                           |   |                               |       |   |                              |   |   |   |
| Total                  Current Assets                          |   |                               | 1,120      |   |                              |   | 816 |   |
|                                                           |   |                               |       |   |                              |   |   |   |
| Property                  and Equipment, at cost less          |   |                               |       |   |                              |   |   |   |
| accumulated                  depreciation                      |   |                               | 1,600      |   |                              |   | 5,125 |   |
|                                                           |   |                               |       |   |                              |   |   |   |
| TOTAL                  ASSETS                                  |   |                               | 2,720      |   |                              |   | 5,941 |   |
|                                                           |   |                               |       |   |                              |   |   |   |
|                                                           |   |                               |       |   |                              |   |   |   |
| Current                  Liabilities:                          |   |                               |       |   |                              |   |   |   |
| Accounts                  Payable and Accrued Liabilities      |   | $                                  | 162,483    |   |                              | $      | 110,882 |   |
| Note                  Payable - Current Portion (Note 8)       |   |                               | 8,315      |   |                              |   | 18,806 |   |
| Loans                  Payable (Note 8)                        |   |                               | 739,332    |   |                              |   | 624,107 |   |
|                                                           |   |                               |       |   |                              |   |   |   |
| TOTAL                  LIABILITIES                             |   |                               | 910,130    |   |                              |   | 753,795 |   |
|                                                           |   |                               |            |   |                              |   |   |   |
| Stockholders'                  Equity:                         |   |                               |       |   |                              |   |   |   |
| Common                  Stock - $.00001 par value - 40,000,000 |   |                               |       |   |                              |   |   |   |
| shares                  authorized, 28,190,629 and 28,000,629  |   |                               |       |   |                              |   |   |   |
| shares                    issued and outstanding               |   |                               | 198        |   |                              |   | 198 |   |
| Additional                  Paid-in Capital                    |   |                               | 264,490    |   |                              |   | 264,490 |   |
| Accumulated                  deficit                           |   |                               | (1,172,098 | )      |                              |   | (1,012,542 | ) |
|                                                           |   |                               |       |   |                              |   |   |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY    |   | $                                  | 2,720      |   |                              | $      | 5,941 |   |
|                                                           |   |                               |       |   |                              |   |   |   |

----

STATEMENT

|                                                              |   | **For                    the Three** |       |   | **For                    the Nine**  |   |
|-------------------------------------------------------------------|--------|--------------------------------------|------------|--------|--------------------------------------|--------|
|                                                              |   | **Months                    ended**  |       |   | **Months                    ended**  |   |
|                                                              |   | **September                    30,** |       |   | **September                    30,** |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |
|                                                              |   | **2007**                             |       |   | **2006**                             |   |   | **2007** |   |   | **2006** |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |
| Revenues                                                          |   | $                                    | -          |   |                                 | $      | - |   |   | $ | - |   |   | $ | 91,257 |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Cost                    of Revenue                                |   |                                 | -          |   |                                 |   | - |   |   |   | - |   |   |   | 69,929 |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Gross                    Profit (Loss)                            |   |                                 | -          |   |                                 |   | - |   |   |   | - |   |   |   | 21,328 |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Sales,                    General and Administrative Expenses     |   |                                 | 50,752     |   |                                 |   | 19,315 |   |   |   | 159,465 |   |   |   | 180,921 |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                    (Loss) From Operations                     |   |                                 | (50,752    | )      |                                 |   | (19,315 | ) |   |   | (159,465 | ) |   |   | (159,593 | ) |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Other                    Income (Expense) , Net                   |   |                                 | -          |   |                                 |   | - |   |   |   | - |   |   |   | (17,573 | ) |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| (Deficit)                    - Development Stage                  |   | $                                    | (50,752    | )      |                                 | $      | (19,315 | ) |   | $ | (159,465 | ) |   | $ | (177,166 | ) |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                    average number of common shares       |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| outstanding                    - basic and fully diluted          |   |                                 | 28,190,629 |   |                                 |   | 27,910,629 |   |   |   | 28,063,962 |   |   |   | 27,222,296 |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Net                    (Loss) per share - basic and fully diluted |   | $                                    | 0          |   |                                 | $      | 0 |   |   | $ | 0 |   |   | $ | 0 |   |
|                                                              |   |                                 |       |   |                                 |   |   |   |   |   |   |   |   |   |   |   |

----

STATEMENT

|                                                               |   | **For                    the Nine**  |     |
|--------------------------------------------------------------------|--------|--------------------------------------|----------|
|                                                               |   | **Months                    ended**  |     |
|                                                               |   | **September                    30,** |     |
|                                                               |   |                                 |     |   |   |   |
|                                                               |   | **2007**                             |     |   | **2006** |   |
|                                                               |   |                                 |     |   |   |   |
| Cash                    Flows from Operating Activities:           |   |                                 |     |   |   |   |
| Net                    Income (Loss)                               |   | $                                    | (159,465 | ) |   | $ | (177,166 | ) |
| Adjustments                    to reconcile net (loss) to          |   |                                 |     |   |   |   |   |   |
| net                    cash (used) by operating activities:        |   |                                 |     |   |   |   |   |   |
| Depreciation                                                       |   |                                 | 3,525    |   |   |   | 3,525 |   |
| (Increase)                    Decrease in other assets             |   |                                 | -        |   |   |   | 21,410 |   |
| Increase                    in loan receivable                     |   |                                 | -        |   |   |   | 995 |   |
| Increase                  in accounts payable and accrued expenses |   |                                 | 51,601   |   |   |   | 15,613 |   |
| Increase                    in prepaid expenses                    |   |                                 | 270      |   |   |   | (561 | ) |
| Net                    Cash (Used) by Operating Activities:        |   |                                 | (104,160 | ) |   |   | (136,184 | ) |
|                                                               |   |                                 |     |   |   |   |   |   |
| Cash                    Flows From Investing Activities:           |   |                                 |     |   |   |   |   |   |
| (Purchase                    ) Disposal of Equipment               |   |                                 | -        |   |   |   | 30,114 |   |
| Net                    Cash Used by Investing Activities:          |   |                                 | -        |   |   |   | 30,114 |   |
|                                                               |   |                                 |     |   |   |   |   |   |
| Cash                    Flows From Financing Activities:           |   |                                 |     |   |   |   |   |   |
|                                                               |   |                                 |     |   |   |   |   |   |
| Issuance                    of Common Stock                        |   |                                 | -        |   |   |   | - |   |
| Decrease                    in Notes payable                       |   |                                 | (10,492  | )  |   |   | 2,267 |   |
| Increase                    in loans payable                       |   |                                 | 115,225  |   |   |   | 64,615 |   |
| Increase                    in contributed capital                 |   |                                 | -        |   |   |   | 40,000 |   |
|                                                               |   |                                 |     |   |   |   |   |   |
| Net                    Cash Provided by Financing Activities:      |   |                                 | 104,733  |   |   |   | 106,882 |   |
|                                                               |   |                                 |     |   |   |   |   |   |
| Net                    Increase in Cash                            |   |                                 | 574      |   |   |   | 812 |   |
|                                                               |   |                                 |     |   |   |   |   |   |
| Cash                    at Beginning of Period                     |   |                                 | 255      |   |   |   | 878 |   |
|                                                               |   |                                 |     |   |   |   |   |   |
| Cash                    at End of Period                           |   | $                                    | 829      |   |   | $ | 1,690 |   |
|                                                               |   |                                 |     |   |   |   |   |   |

----

NOTES

| **Note                  1 - History and organization of the company**                                                                                |
|------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                 |
| The                  Company was organized February 21, 2002 (Date of Inception) under                  the laws                  of the             |
| state                  of Delaware to operate a retailing business through its wholly-owned                  subsidiary.                             |
|                                                                                                                                                 |
| **Note                  2 - Accounting policies and procedures**                                                                                     |
|                                                                                                                                                 |
| Cash                  and cash equivalents                                                                                                           |
| The                  Company maintains a cash balance in a non-interest-bearing account                  that                  currently does        |
| not                  exceed federally insured limits. For the purpose of the statements                  of cash                  flows, all highly  |
| liquid                  investments with an original maturity of three months or less are                  considered to be cash                     |
| equivalents.                  There were no cash equivalents as of September 30,                  2007.                                              |
|                                                                                                                                                 |
| Fixed                  Assets                                                                                                                        |
| Property                  and equipment are recorded at historical cost. Minor additions                  and                  renewals are          |
| expensed                  in the year incurred. Major additions and renewals are capitalized                  and                  depreciated       |
| over                  their estimated useful lives. Depreciation is calculated using                  the                  straight-line method over |
| the                  estimated useful lives as                  follows:                                                                             |

| Computer                  equipment | 3                  years |
|-------------------------------------|--------------------------|
| Office                  equipment   | 4                  years |

| Property                  and Equipment consist of the                  following: |
|------------------------------------------------------------------------------------|

| Office                    equipment              |   | $      | 15,928  |   |
|--------------------------------------------------|--------|--------|---------|--------|
| Less-accumulated                    depreciation |   |   | (14,328 | )      |
|                                             |   | $      | 1,600   |   |

| Impairment                      of long-lived assets                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|
| Long-lived                      assets held and used by the Company are reviewed for possible                      impairment                       |
| whenever                      events or circumstances indicate the carrying amount of an                      asset may not                      be |
| recoverable                      or is impaired. No such impairments have been identified by                      management                        |
| at                      September 30, 2007.                                                                                                         |
|                                                                                                                                                |
| Revenue                      recognition                                                                                                            |
| The                      Company recognized revenue and gains when earned and related                      costs of                      sales and  |
| expenses                      when incurred.                                                                                                        |

| Advertising                  costs                                                                                                                       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| The                  Company expenses all costs of advertising as incurred. There were                  nominal                  advertising costs       |
| included                  in selling, or general and administrative expenses in 2007 or                  2006.                                           |
|                                                                                                                                                     |
| Loss                  per share                                                                                                                          |
| Net                  loss per share is provided in accordance with Statement of Financial                  Accounting Standards                          |
| No.                  128 (SFAS # 128) "Earnings Per Share". Basic loss per share is                  computed by                  dividing losses        |
| available                  to common stockholders by the weighted average number of common                  shares                                       |
| outstanding                  during the period. The Company had no dilutive common stock equivalents,                  such                              |
| as                  stock options or warrants as of September 30, 2007 or                  2006.                                                         |
|                                                                                                                                                     |
| Reporting                  on the costs of start-up activities                                                                                           |
| Statement                  of Position 98-5 (SOP 98-5), "Reporting on the Costs of Start-Up                  Activities", which                          |
| provides                  guidance on the financial reporting of start-up costs and organizational                  costs, requires                      |
| most                  costs of start-up activities and organizational costs to be expensed                  as                  incurred. SOP-98-5       |
| is                  effective for fiscal years beginning after December 15, 1998. With                  the                  adoption of SOP-98,         |
| there                  has been little or no effect on the Company's financial                  statements.                                              |
|                                                                                                                                                     |
| Estimates                                                                                                                                                |
| The                  preparation of financial statements in conformity with generally                  accepted                  accounting              |
| principles                  requires management to make estimates and assumptions that affect                  the                  reported             |
| amounts                  of assets and liabilities and disclosure of contingent assets and                  liabilities at the date of                   |
| the                  financial statements, and the reported amounts of revenue and expenses                  during the reporting                        |
| period.                  Actual results could differ from those estimates.                                                                               |
|                                                                                                                                                     |
| Fair                  value of financial instruments                                                                                                     |
| Fair                  value estimates discussed herein are based upon certain market                  assumptions                  and pertinent         |
| information                  available to management as of September 30, 2007 and 2006 respectively.                  The                                |
| respective                  carrying value of certain on-balance-sheet financial instruments                  approximated their                         |
| fair                  values. These financial instruments include cash and accounts payable.                  Fair values are                            |
| assumed                  to approximate carrying values for cash and payables because they                  are                  short term              |
| in                  nature and their carrying amounts approximated fair values or they                  are                  payable on demand.          |
|                                                                                                                                                     |
| Income                  Taxes                                                                                                                            |
| Deferred                  income tax assets and liabilities are computed annually for differences                  between the                           |
| financial                  statement and tax basis of assets and liabilities that will result                  in                  taxable or deductible |
| amounts                  in the future based on enacted tax laws and rates applicable on                  the                  periods in which the      |
| differences                  are expected to affect taxable income. Valuation allowances are                  established when                           |
| necessary                  to reduce deferred tax assets to the amount expected to be realized.                  Income tax                              |
| expense                  is the tax payable or refundable for the period plus or minus the                  change                  during the           |
| period                  in deferred tax assets and liabilities.                                                                                          |
|                                                                                                                                                     |

----

| Segment                  reporting                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| The                  Company follows Statement of Financial Accounting Standards No.                  130,                  "Disclosures              |
| About                  Segments of an Enterprise and Related Information". The Company                  operates                  as a                |
| single                  segment and will evaluate additional segment disclosure requirements                  as it                  expands its      |
| operations.                                                                                                                                           |
|                                                                                                                                                  |
| Dividends                                                                                                                                             |
| The                  Company has not yet adopted any policy regarding payment of dividends.                  No                  dividends            |
| have                  been paid or declared since inception.                                                                                          |
|                                                                                                                                                  |
| Recent                  pronouncements                                                                                                                |
| In                  June 2001, SFAS No. 141, "Business Combinations", and SFAS No.                  142,                  "Goodwill and               |
| Other                  Intangible Assets", were issued. SFAS No. 141 requires that all                  business                  combinations        |
| initiated                  after June 30, 2001 be accounted for using the purchase method                  of                  accounting, and        |
| that                  identifiable intangible assets acquired in a business combination                  be                  recognized as an assets  |
| apart                  from goodwill if they meet certain criteria. The impact of the                  adoption of                  SFAS No. 141      |
| on                  our reported operating results, financial position and existing                  financial                  statements            |
| disclosure                  is not expected to be material.                                                                                           |
|                                                                                                                                                  |
| SFAS                  No. 142 applies to all goodwill and identified intangible assets                  acquired                  in a business       |
| combination.                  Under the new standard, all goodwill and indefinite-lived intangible                  assets,                           |
| include                  the acquired before initial application of the standard, will not                  be                  amortized but will    |
| be                  tested for impairment at least annually. The new standard is effective                  for                  fiscal years         |
| beginning                  after December 15, 2001. The impact of the adoption of SFAS No.                  142 on                  our               |
| reported                  operating results, financial position and existing financial statement                  disclosure is not                   |
| expected                  to be material.                                                                                                             |
|                                                                                                                                                  |
| In                  July 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations",                  was issued                               |
| which                  requires the recognition of a liability for an asset retirement                  obligation                  in the period in  |
| which                  it is incurred. When the liability is initially recorded, the carrying                  amount of the related                  |
| long-lived                  asset is correspondingly increased. Over time, the liability is                  accreted                  to its present |
| value                  and the related capitalized charge is depreciated over the useful                  life of                  the asset.         |
| SFAS                  No. 143 is effective for fiscal years beginning after June 15,                  2002. The                  impact of the        |
| adoption                  of SFAS No. 143 on the Company's reported operating results, financial                  position                            |
| and                  existing financial statement disclosure is not expected to be                  material.                                         |
|                                                                                                                                                  |

| In                  August 2001, SFAS No. 144, "Accounting for the Impairment of Disposal                  of                  Long-lived             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| Assets",                  was issued. This statement addresses the financial accounting and                  reporting for the                        |
| impairment                  of disposal of long-lived assets and broadens the definition of                  what                  constitutes a      |
| discontinued                  operation and how results of a discontinued operation are to be                  measured                  and          |
| presented.                  The provisions of SFAS No. 144 are effective for financial statements                  issued for                         |
| fiscal                  years beginning after December 15, 2001. The impact of the adoption                  of                  SFAS No. 144         |
| on                  our reported operating results, financial position and existing                  financial                  statement disclosure  |
| is                  not expected to be material.                                                                                                      |
|                                                                                                                                                  |
| Stock-Based                  Compensation                                                                                                             |
| The                  Company accounts for stock-based awards to employees in accordance                  with                  Accounting             |
| Principles                  Board Opinion No. 25, "Accounting for Stock Issued to Employees"                  and                  related            |
| interpretations                  and has adopted the disclosure only alternative of SFAS No. 123,                  "Accounting                        |
| for                  Stock-Based Compensation". Options granted to consultants, independent                  representatives                          |
| and                  other non-employees are accounted for using the fair value method                  as                  prescribed by             |
| SFAS                  No. 123.                                                                                                                        |
|                                                                                                                                                  |
| Year                  end                                                                                                                             |
| The                  Company has adopted December 31 as its fiscal year end.                                                                          |
|                                                                                                                                                  |
| **Note                  3 - Going concern**                                                                                                           |
|                                                                                                                                                  |
| The                  accompanying financial statements have been prepared assuming the                  Company                  will                 |
| continue                  as a going concern. As shown in the accompanying financial statements,                  the                  Company        |
| has                  incurred a net loss of $1,172,098 for the period from February                  21, 2002                  (inception) to         |
| September                  30, 2007. The future of the Company is dependent upon its ability                  to                  obtain financing    |
| and                  upon future profitable operations from the development of its new                  business                  opportunities.      |
| Management                  has plans to seek additional capital through a public offering                  of its                  common stock.     |
| The                  financial statements do not include any adjustments relating to                  the                  recoverability and         |
| classification                  of recorded assets, or the amount of the classification of liabilities                  that might be                 |
| necessary                  in the event the Company cannot continue in existence.                                                                     |
|                                                                                                                                                  |
| **Note                  4 - Income taxes**                                                                                                            |
|                                                                                                                                                  |
| The                  Company accounts for income taxes under Statement of Financial                  Accounting                  Standards            |
| No.                  109, "Accounting for Income Taxes" (SFAS No. 109), which requires                  use of                  the liability         |
| method.                  SFAS No. 109 provides that deferred tax assets and liabilities                  are                  recorded based on       |
| the                  differences between the tax bases of assets and liabilities and                  their                  carrying amounts for     |
| financial                  reporting purposes, referred to as temporary differences. Deferred                  tax                  assets and        |
| liabilities                  at the end of each period are determined using the currently enacted                  tax                  rates applied |
| to                  taxable income in the periods in which the deferred tax assets and                  liabilities are expected to                   |
| be                  settled or realized.                                                                                                              |
|                                                                                                                                                  |

----

| The                  provisions for income taxes differs from the amount computed by                  applying                  the statutory |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
| federal                  income tax rate to Income before provision for income taxes. The                  source                  and tax    |
| effects                  of the differences are as                  follows:                                                                  |

| U.S.                  federal statutory rate |   |   | 34.00  | %      |
|----------------------------------------------|--------|--------|--------|--------|
|                                         |   |   |   |   |
| Valuation                  reserve           |   |   | 34.00  | %      |
|                                         |   |   |   |   |
| Total                                        |   |   | 0.00   | %      |

| As                    of September 30, 2007, the Company has a net operating loss carryforward                    of approximately                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| $1,131,000                    for tax purposes, which will be available to offset future taxable                    income.                           |
| This                    carryforward will expire in 2027.                                                                                             |
|                                                                                                                                                  |
| **Note                    5 - Stockholders' Equity**                                                                                                  |
|                                                                                                                                                  |
| The                    Company is currently authorized to issue 40,000,000 shares of                    its $0.00001                    par value     |
| common                    stock.                                                                                                                      |
|                                                                                                                                                  |
| On                    November 19, 2002 the Company issued 19,685,000 shares of its                    .00001 par                    value            |
| common                    stock as founders' shares to acquire 100% of the outstanding                    shares of                    Artfest, Inc., |
| a                    Delaware Corporation for a net book value of $197. Artfest provides                    sales,                    marketing,      |
| financial                    and e-commerce systems to the industries of Arts, Antiques, Collectibles                    and                          |
| Luxury                    Goods. The markets are serviced by artists, dealers, galleries,                    and                    manufacturers of  |
| reproductions                    and luxury goods.                                                                                                    |
|                                                                                                                                                  |
| **Note 6                    - Warrants and options**                                                                                             |
|                                                                                                                                                  |
| As                    of September 30, 2007 and 2006, there were no warrants or options                    outstanding to acquire                     |
| any                    additional shares of common stock.                                                                                             |
|                                                                                                                                                  |

| **Note 7                  - Related party transactions**                                                                                      |
|----------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                               |
| Office                  space and services were provided without charge by the Chief Executive                  Officer.                           |
| Such                  costs are immaterial to the financial statements and, accordingly,                  have                  not been reflected |
| therein.                                                                                                                                           |
|                                                                                                                                               |
| The                  officers and directors of the Company are involved in other business                  activities and may, in                  |
| the                  future become involved in other business opportunities. If a specific                  business opportunity                   |
| becomes                  available, such person may face a conflict in selecting between                  the                  Company and         |
| their                  other business interest. The Company has not formulated a policy                  for the                  resolution       |
| of                  such conflicts.                                                                                                                |
|                                                                                                                                               |
| **Note 8                  - Loans and Notes Payable**                                                                                    |
|                                                                                                                                               |
| On                  January 5, 2003, the Company purchased a 2002 Chevrolet Avalanche                  through                  GMAC               |
| for                  $29,717. The note calls for a term of 5 years at a rate of 5.9%                  beginning                  on                |
| February                  24, 2003, and maturing on December 24, 2007.  As of the report date,                  the Company had               |

| defaulted                      on the note and the vehicle was returned to GMAC for sale. GMAC                      has                      |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
| sold                    the vehicle and credited the company with $10,491 leaving a balance                    due of                    $ 8,315. |

| The                  Company has $739,332 short term notes and loans payable to                  shareholders. The notes                 |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
| call                  for varying interest rates ranging from 1% to 8% per annum, and                  contain a                  stock       |
| payment                  option payable to the lender's discretion.                                                                           |
|                                                                                                                                          |
| As                  of the report date, the Company is in default on all of its short                  term                  notes payable to |
| non-shareholder                  investors. Management has not formulated a repayment plan, and                  no                           |
| contingency                  plan has been established in the event that the lenders seek legal                  remedies.                    |
|                                                                                                                                          |
|                                                                                                                                          |

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**Equity          Securities Sold          Without Registration**

| **Period**                 | **Shares                    Issued** | **Purpose**                                               | **Amount                    Received**      |
|----------------------------|--------------------------------------|-----------------------------------------------------------|---------------------------------------------|
|                       |                                 |                                                      |                                        |
| Q1                    2005 | 2,100,000                            | Gifts                    / Services                       | -                    0                    - |
| Q2                    2005 | *                                    | *                                                         | *                                           |
| Q3                    2005 | 50,000                               | Capital                    Contribution                   | $35,000                                     |
| Q4                    2005 | 10,000                               | Capital                    Contribution                   | $15,000                                     |
|                       | 40,000                               | Gifts                    / Services                       | *                                           |
|                       |                                 |                                                      |                                        |
|                       |                                 |                                                      |                                        |
| Q1                    2006 | 132,000                              | Capital                    Contribution                   | $40,000                                     |
| Q2                    2006 | *                                    | *                                                         | *                                           |
| Q3                    2006 | 200,000                              | Services                                                  | -                    0                    - |
| Q4                    2006 | 900,000                              | Prior                      Capital Contributions/Services | -                    0                    - |
|                       |                                 |                                                      |                                        |
| Q1                    2007 | *                                    | *                                                         | *                                           |
| Q2                    2007 | *                                    | *                                                         | *                                           |
| Q3                    2007 | 190,000                              | Services                                                  | -  0                    -         |

**General          Information**

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ITEM          6. EXHIBITS AND REPORTS ON FORM 8-K.

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SIGNATURES

|                                           |                                                                                                  |                                 |
|------------------------------------------------|-------------------------------------------------------------------------------------------------------|--------------------------------------|
|                                           | **Artfest              International,              Inc.**                                             |
|                                      |                                                                                             |                            |
| Date: November              19, 2007 | By:                                                                                         | /s/ Larry D.              Ditto |
|                                           |                                                                                                       |
|                                           | President (principal                executive officer and principal financial                officer) |

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**ITEM      6. EXHIBITS AND **
**REPORTS      ON FORM 8-K.**

**EXHIBITINDEX**

| **Number**                                                                            | **Description**                                                                                                                                                                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1    3.2    3.3                                            | Articles                of Incorporation [1] Articles                of Amendment of the Articles of Incorporation [3] Bylaws                [1]                                                                                                                                                                                         |
| 10.1 10.2                                                                                       | Agreement                and Plan of Reorganization, Soldnet, Inc. and Artfest, Inc.                [2] Loan                Agreement (form) with Promissory Note (form), December, 2005                [3]                                                                                                                                        |
|  23.1** 31                ** 32                **       | Consent                  of Thomas Bauman C.P.A., Independent Registered Public                  Accountant Certifications                pursuant to Sarbanes - Oxley Act of                2002  Certifications                of Officers pursuant to Section 1350, of                the Sarbanes - Oxley Act of                2002 |

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