**MARCH 31, 2003**

**000-49676**

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

|                                                    |                      |
|---------------------------------------------------------|---------------------------|
| 800                Duval Street, Key West, FL      | 33040                     |
| (Address                of Principal Executive Offices) | (Zip                Code) |

** 1-888-692-7833**

**None**

**Common      Stock**

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**Table      of Contents**

| PART                I.  | FINANCIAL                INFORMATION                                               |  PAGE              NO. |
|-------------------------|-----------------------------------------------------------------------------------------|-----------------------------|
|                    |                                                                                    |                        |
| Item                1.  | Financial                Statements                                                     |                        |
|                    |                                                                                    |                        |
| Item                2.  | Management's                Discussion and Analysis or 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          |                                                                                    |                        |

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**PART      I INFORMATION**

**Table      of Contents to Financial Statements**

|                                                                                                                                |   |   |   |   |   |   |   | **PAGE** |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|
|                                                                                                                                |   |   |   |   |   |   |   |     |
|                                                                                                                                |   |   |   |   |   |   |   |     |
| FINANCIAL                STATEMENTS                                                                                                 |   |   |   |   |   |
|                                                                                                                                |   |   |   |   |   |   |   |     |
|     Balance                Sheet                                                                                |        | F-1    |
|                                                                                                                                |   |   |   |   |   |   |   |     |
|     Statements                of Operations and Accumulated Deficit During the                Development Stage |   |   | F-2    |
|                                                                                                                                |   |   |   |   |   |   |   |     |
|     Statements                of Cash Flows                                                                     |   |   |   |   | F-3    |
|                                                                                                                                |   |   |   |   |   |   |   |     |
|     Notes                to Financial Statements                                                                |   |   |   |   | 4-9    |
|                                                                                                                                |   |   |   |   |   |   |   |     |
|                                                                                                                                |   |   |   |   |   |   |   |     |

----

**Artfest      International Incorporated**

| ** **                                                                                                                                                     |   | **For                the Three Monthsended March 31,** |     |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|----------|
| ** **                                                                                                                                                     |   | **2003**                                               |     | **2002** |   |
| ** ASSETS**                                                                                                                                               |   |                                                   |     |   |   |
| Current                Assets:                                                                                                                                 |   |                                                   |     |   |   |   |   |
|     Cash                                                                                                                                   |   | $                                                      | 0        |   | $ | 0 |   |
|     Loan                Receivable (Notes 5 & 8)                                                                                       |   |                                                   | 50,000   |   |   | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
|         Total                Current Assets                                                                            |   |                                                   | 50,000   |   |   | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
|  Property              and Equipment, at cost less accumulated depreciation                                                                               |   |                                                   | 27,802   |   |   | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
| TOTAL                ASSETS                                                                                                                                    |   | $                                                      | 77,802   |   | $ |   |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
| **LIABILITIES                AND STOCKHOLDERS' EQUITY**                                                                                                        |   |                                                   |     |   |   |   |   |
| Current                Liabilities:                                                                                                                            |   |                                                   |     |   |   |   |   |
|     Accounts                Payable                                                                                                        |   | $                                                      | 107,903  |   | $ | 0 |   |
|     Loans                Payable (Note 9)                                                                                                  |   |                                                   | 17,825   |   |   | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
|     Total                Current Liabilities                                                                                               |   |                                                   | 125,728  |   |   | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
| Long                Term Liabilities:                                                                                                                          |   |                                                   |     |   |   |   |   |
|     Note                Payable - Auto (Note 10)                                                                                           |   |                                                   | 29,059   |   |   | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
| TOTAL                LIABILITIES                                                                                                                               |   |                                                   | 154,787  |   |   | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
| Stockholders'                Equity:                                                                                                                           |   |                                                   |     |   |   |   |   |
|     Common                Stock - $.00001 par value - 40,000,000                                                                           |   |                                                   |     |   |   |   |   |
|     shares                authorized, 19,685,000 and 200,000                                                                          |   |                                                   |     |   |   |   |   |
|     shares                issued and outstanding at     March                31, 2003 and 2002, respectively |   |                                                   | 197      |   |   | 0 |   |
|     Additional                Paid-in Capital                                                                                              |   |                                                   | 51,000   |   |   | 200 |   |
|     (Deficit)                accumulated during developmental stage                                                                        |   |                                                   | (128,182 | ) |   | (200 | ) |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |
| TOTAL                LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                      |   | $                                                      | 77,802   |   | $ | 0 |   |
|                                                                                                                                                           |   |                                                   |     |   |   |   |   |

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*Financial          Table of Contents*

**Artfest      International Incorporated**

|                                                          |       |                             |       |       |       |
|---------------------------------------------------------------|------------|----------------------------------|------------|------------|------------|
|                                                          |       | **For                the three** |       |
|                                                          |       | **Months                ended**  | ** ** |
| ** **                                                    | ** ** | ** **                       | ** ** | ** ** | ** ** |
| ** **                                                    | ** ** | **2003**                         | ** ** | **2002**   |       |
|                                                          |       |                             |       |       |       |
| Revenues                                                      |       | $                                | 5,410      |       | $          | 0 |   |
|                                                          |       |                             |       |       |       |   |   |
| Cost                of Revenue                                |       |                             | 15,208     |       |       | 0 |   |
|                                                          |       |                             |       |       |       |   |   |
| Gross                Profit (Loss)                            |       |                             | (9,798     | )          |       | 0 |   |
|                                                          |       |                             |       |       |       |   |   |
| General                and Administrative                     |       |                             | 10,027     |       |       | 200 |   |
|                                                          |       |                             |       |       |       |   |   |
|                                                          |       |                             |       |       |       |   |   |
| (Deficit)                Accumulated - Development Stage      |       | $                                | (19,825    | )          |       | (200 | ) |
|                                                          |       |                             |       |       |       |   |   |
| Weighted                average number of common shares       |       |                             |       |       |       |   |   |
| outstanding                - basic and fully diluted          |       |                             | 19,685,000 |       |       | 200,000 |   |
|                                                          |       |                             |       |       |       |   |   |
| Net                (Loss) per share - basic and fully diluted |       | $                                | 0          |       | $          | 0 |   |

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*Financial          Table of Contents*

**Artfest      International Incorporated**

|                                                                                                          |                                                                                                             |    |   |   |
|---------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|---------|--------|--------|
|                                                                                                          |                                                                                                             |    |   |   |
|                                                                                                          | **For                the Three**                                                                                 |    |
|                                                                                                          | **Months                ended**                                                                                  |    |
|                                                                                                          | **              March                31,** |    |
|                                                                                                          | 2003                                                                                                             |    | 2002   |   |
| Cash                Flows from Operating Activities:                                                          |                                                                                                             |    |   |   |   |   |
| Net                (loss)                                                                                     | $                                                                                                                | (19,825 | )      | $      | (200 | ) |
| Adjustments                to reconcile net (loss) to                                                         |                                                                                                             |    |   |   |   |   |
| net                cash (used) by operating activities:                                                       |                                                                                                             |    |   |   |   |   |
|         Depreciation                                                  |                                                                                                             | 1,915   |   |   |   |   |
|         Increase                in                loan receivable     |                                                                                                             | 0       |   |   | 0 |   |
|         Increase                in                accounts payable    |                                                                                                             | 703     |   |   | 0 |   |
| Net                Cash (Used) by Operating Activities:                                                       |                                                                                                             | (17,207 | )      |   | 0 |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |
| Cash                Flows From Investing Activities:                                                          |                                                                                                             |    |   |   |   |   |
|     Purchase                of                Equipment                                   |                                                                                                             | (29,717 | )      |   | 0 |   |
| Net                Cash Used by Investing Activities:                                                         |                                                                                                             | (29,717 | )      |   | 0 |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |
| Cash                Flows From Financing Activities:                                                          |                                                                                                             |    |   |   |   |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |
|         Issuance                of                Common Stock        |                                                                                                             | 0       |   |   | 200 |   |
|         Increase                in                Loan Payable        |                                                                                                             | 46,884  |   |   | 0 |   |
|         Increase                in                contributed capital |                                                                                                             | 0       |   |   | 0 |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |
| Net                Cash Provided by Financing Activities:                                                     |                                                                                                             | 46,884  |   |   | 200 |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |
| Net                Increase in Cash                                                                           |                                                                                                             | (40     | )      |   | 0 |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |
| Cash                at Beginning of Period                                                                    |                                                                                                             | 40      |   |   | 0 |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |
| Cash                at End of Period                                                                          | $                                                                                                                | 0       |   | $      | 0 |   |
|                                                                                                          |                                                                                                             |    |   |   |   |   |

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*Financial          Table of Contents*

**Artfest        International Incorporated**

|                                                                                                                                          |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| **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. The                      |   |
| Company                has limited operations and in accordance with SFAS# 7, the Company                is                                   |   |
| considered                a development stage company.                                                                                        |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| **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 March 31, 2003.                                                              |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |
| 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: |   |                                    |   |
|                                                            |   |  **March                31, 2003** |   |
| Automobile                                                      |   | $                                       | 29,717 |   |
| Less-accumulated                depreciation                    |   |                                    | 1,915  |   |
|                                                            |   | $                                       | 27,802 |   |

|                                                                                                                              |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| 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                March 31, 2003.                                                                                                 |   |   |   |   |   |   |
|                                                                                                                              |   |   |   |   |   |   |   |   |
| Revenue                recognition                                                                                                |   |   |   |   |   |   |   |
| The                Company recognized revenue and gains when earned and related costs                of                sales and  |   |
| expenses                when incurred.                                                                                            |   |   |   |   |   |   |

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*Financial          Table of Contents*

|                                                                                                                                               |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| Advertising                costs                                                                                                                   |   |   |   |   |   |   |   |
| The                Company expenses all costs of advertising as incurred. There were                no                advertising costs            |
| included                in selling, or general and administrative expenses in 2003 or                2002.                                         |   |
|                                                                                                                                               |   |   |   |   |   |   |   |   |
| 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 March 31, 2003 or 2002.                                                                          |   |   |
|                                                                                                                                               |   |   |   |   |   |   |   |   |
| 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 March 31, 2003 and 2002 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.                                                                                      |   |   |   |   |

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*Financial          Table of Contents*

|                                                                                                                                           |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                           |   |   |   |   |   |   |   |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |
| 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.                                      |   |   |
|                                                                                                                                           |   |   |   |   |   |   |   |   |

----

*Financial          Table of Contents*

| 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 $128,182 for the period from February 21,                2002                (inception) to           |
| March                31, 2003. 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.                                                                                                          |   |   |   |   |   |   |
|                                                                                                                                            |   |   |   |   |   |   |   |   |

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*Financial          Table of Contents*

|                                                                                                                                 |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                 |   |   |   |   |   |   |   |   |
| 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 March 31, 2003, the Company has a net operating loss carryforward                of                approximately     |
| $128,182                for tax purposes, which will be available to offset future taxable                income.                         |   |
| This                carryforward will expire in 2023.                                                                                     |   |   |   |   |   |
|                                                                                                                                      |   |   |   |   |   |   |   |   |
| **Note                5 - Loan Receivable**                                                                                               |   |   |   |   |   |   |
|                                                                                                                                      |   |   |   |   |   |   |   |   |
| On                June 23, 2002, the Company loaned $50,000 to an affiliated company.                The                note is due       |
| upon                demand and bears no interest rate (See related party                transactions).                                    |   |   |
|                                                                                                                                      |   |   |   |   |   |   |   |   |
| **Note                6 - 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                7 - Warrants and options**                                                                                          |   |   |   |   |   |
|                                                                                                                                      |   |   |   |   |   |   |   |   |
| As                of March 31, 2003 and 2002, there were no warrants or options outstanding                to acquire any                 |
| additional                shares of common stock.                                                                                         |   |   |   |   |   |

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*Financial          Table of Contents*

|                                                                                                                                       |   |   |   |   |   |   |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                       |   |   |   |   |   |   |   |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |
| **Note                8 - Leases**                                                                                                         |   |   |   |   |   |   |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |
| On                March 23, 2003 the Company executed a lease agreement that calls                for the                issuance of       |
| Company                stock to the landlord in exchange for rent. The lease will expire                five                years from the |
| commencement                date, which is undetermined as of March 31, 2003. The terms of the                lease                        |
| call                for a base rent of $54,660 per year for the first two years in exchange                for 1,000,000                   |
| shares                of the Company's stock, and $72,880 per year for 3 through 5. The                shares                are           |
| transferrable                at the landlord's discretion and will be tendered upon landlord's                completion of                |
| leasehold                improvements. The lease also calls for additional rent of 10% of                gross                sales in     |
| excess                of $500,000 for years 1 and 2, and 5% of gross sales in excess of                $1,457,600 for                      |
| years                3 through 5.                                                                                                          |   |   |   |   |   |   |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |
| **Note                9 - Related party transactions**                                                                                     |   |   |   |   |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |
| On                June 23, 2002, the Company loaned $50,000 to an affiliated company.                The                note is due        |
| upon                demand and bears no interest rate. The loan is to a company who's                principle owner,                      |
| Joseph                Walsh, is also the Principal owner Chief Operating Officer, Treasurer,                and                Chairman    |
| of                the Board of the Company. (See Note 5)                                                                                   |   |   |   |   |
|                                                                                                                                       |   |   |   |   |   |   |   |   |
| Office                space and services are provided without charge by the Chief Operating                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                10 - Loans 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.                                                                        |   |   |   |

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*Financial          Table of Contents*

      DISCUSSION 

Forward      Looking Statements

ITEM      3.      CONTROLS AND PROCEDURES

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PART      II -      OTHER INFORMATION

**Equity          Securities Sold Without Registration**

**Equity            Securities Sold Without Registration**

| **Period**                     | **Shares                        Issued** | **Purpose**                                         | **Amount                        Received** |
|--------------------------------|------------------------------------------|-----------------------------------------------------|--------------------------------------------|
|                           |                                     |                                                |                                       |
| Q1                        2002 | 200,000                                  | Original                        incorporation       | $200                                       |
| Q2                        2002 | 19,685,000                               | Artfest                        reverse merger       | $197                                       |
| Q3                        2002 | -                                        | Capital                        contribution         | $51,000                                    |
| Q4                        2002 | (200,000)                                | Dissolution                        of Soldnet, Inc. | -$200                                      |
|                           |                                     |                                                |                                       |
| Q1                        2003 | -                                        | -                                                   | -                                          |
| Q2                        2003 | 147,000                                  | Capital                        contribution         | $70,100                                    |
| Q3                        2003 | 2,155,500                                | Gifts                        / Services             | -                                          |
|                           | -                                        | Capital                        contribution         | $8,000                                     |
| Q4                        2003 | 100,000                                  | Consulting                        services          | -                                          |
|                           |                                     |                                                |                                       |
| Q1                        2004 | *                                        | *                                                   | *                                          |
| Q2                        2004 | 495,000                                  | Gifts                        / Services             | -                                          |
|                           | -                                        | Capital                        contribution         | $14,691                                    |
| Q3                        2004 | 2,764,700                                | Gifts                        / Services             | -                                          |
|                           | -                                        | Capital                        contribution         | $700                                       |
| Q4                        2004 | -                                        | Capital                        contribution         | $30,000                                    |
|                           | 121,429                                  | Gifts                        / Services             | -                                          |
|                           |                                     |                                                |                                       |
| Q1                        2005 | *                                        | *                                                   | *                                          |
| Q2                        2005 | *                                        | *                                                   | *                                          |
| Q3                        2005 | 100,000                                  | Capital                        contribution         | $50,000                                    |
| Q4                        2005 | **                                       | **                                                  | **                                         |

**General        Information**

ITEM      3.      DEFAULTS UPON SENIOR SECURITIES.

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SIGNATURES

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EXHIBIT      INDEX

| **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]      |
| 31.1 31.2   32.1            | Certifications                Sarbanes - Oxley Act of 2002                 Certifications                Sarbanes - Oxley Act of 2002                 Certifications                Sarbanes - Oxley Act of 2002 |

[1]      Incorporated by reference to the Company’s filed Form 10SB with the SEC,      February, 2002.

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