UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q/A





(Mark
One)


x QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934


FOR THE
QUARTERLY PERIOD ENDED SEPTEMBER 30,
2008





OR




o TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE


SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD


FROM
______________ TO ______________








COMMISSION
FILE NUMBER: 000-49676





ARTFEST
INTERNATIONAL, INC.


(Exact
name of registrant as specified in its charter)







Delaware
            03-0390855(State
      or jurisdiction
            (IRS
      Employerof
      incorporation or organization)
            Identification
      No.)






15851
      Dallas Parkway, Suite 225
              Addison,
      TX
            75001(Address
      of Principal Executive Offices)
            (Zip
      Code)





Issuer's
telephone number: 1-972-687-7260





Securities
registered pursuant to Section 12(b) of the Act: None





Securities
registered pursuant to Section 12(g) of the Act: Common Stock





Check
whether the Issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was


required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o No x





As
of November 19, 2008, the Registrant had 168,763,003 shares
of common stock outstanding.





Transitional
Small Business Disclosure Format (Check one): Yes o No x










Table of
Contents







PAGEPART
      I.
            FINANCIAL
      INFORMATION
            3Item
      1.
            Financial
      Statements
            3Item
      2.
            Management's
      Discussion and Analysis and Plan of Operation
            4Item
      3.
            Controls
      and Procedures.PART
      II.
            OTHER
      INFORMATION
            5Item
      1.
            Legal
      Proceedings
            5Item
      2.
            Unregistered
      Sales of Securities and Use of Proceeds
            5Item
      3.
            Defaults
      Upon Senior Securities
            5Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            5Item
      5.
            Other
      Information
            5Item
      6.
            Exhibits
      and Reports on Form 8-K
            6Signatures
            
            7CERTIFICATIONS










PART I - FINANCIAL
INFORMATION





ITEM 1.FINANCIAL
STATEMENTS







PAGEACCOUNTANT'S
      REVIEW REPORT
            F-1FINANCIAL
      STATEMENTSBalance
      Sheets
            F-2Statements
      of Operations
            F-3Statements
      of Cash Flows
            F-4Notes
      to Financial Statements
            F-5











EUGENE
M. EGEBERG


CERTIFIED
PUBLIC ACCOUNTANT


834
SOUTH MILTON AVENUE


BALTIMORE,
MD 21224


Telephone
(410) 218-1711     Fax (410) 248-2811











To the
Board of Directors and Stockholders


Artfest
International, Inc.


15851 Dallas Parkway, Suite 225


Addison,
TX 75001






Report of Independent
Registered Public Accounting Firm





I have
reviewed the Balance Sheets of Artfest International, Inc. (A Development Stage
Company) as of September 30, 2007 and 2006 and the related Statements of
Operations, Stockholders' Equity, and Cash Flows for the periods then ended.
These interim financial statements are the responsibility of the company's
management.





I
conducted the review in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters.  It is substantially less in scope than an audit
conducted in accordance with the standards of the Public Company Accounting
Oversight Board (United States), the objective of which is the expression of an
opinion regarding the financial statements taken as a
whole.  Accordingly, I do not express such an opinion.




Based on
my review, I am not aware of any material modifications that should be made to
the accompanying financial statements in order for them to be in conformity with
US generally accepted accounting principles.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  As discussed in Note 3 to the
financial statements, the Company has had limited operations and has not
commenced planned principal operations.  The Company's financial
position and operating results raise substantial doubt about its ability to
continue as a going concern.  Management's plan regarding those
matters also are described in Note 3.  The financial statements do not
include any adjustments that might result from the outcome of this
uncertainty.














Eugene M.
Egeberg, C.P.A.


November
19, 2008










ARTFEST
INTERNATIONAL, INC.


(A
Development Stage Company)


BALANCE
SHEETS


(Unaudited)







September
      30,
            
            
            December
      31,2008
            
            
            2007Current
      Assets:Cash
            
            $
            (6,648)
            
            
            $
            315Prepaid
      Expenses
            
            
            -
            
            
            
            -Accounts
      Receivable
            
            
            351,000
            
            
            
            351,000Total
      Current Assets
            
            
            344,352
            
            
            
            351,315Non-Current
      AssetsInventory
            
            
            9,568Notes
      Receivable
            
            
            91,500Intangible
      Asset, net of accumulated amortization
            
            
            29,149
            
            
            
            8,000Total
      Non-current Assets
            
            
            130,217
            
            
            
            8,000Propertyand
      Equipment, at cost less accumulated depreciation
            
            
            85,287
            
            
            
            75,435TOTAL
      ASSETS
            
            
            559,856
            
            
            
            434,750Current
      Liabilities:Accounts
      Payable and Accrued Liabilities
            
            $
            407,321
            
            
            $
            159,725Note
      Payable - Current Portion (Note 8)
            
            
            460,873
            
            
            
            226,620Deferred
      Revenue
            
            
            351,000
            
            
            
            351,000Loans
      Payable (Note 8)
            
            
            475,361
            
            
            
            473,317Total
      Current Liabilities
            
            
            1,694,555
            
            
            
            1,210,662Non-current
      LiabilitiesLoans
      Payable (Note 8)
            
            
            784,497
            
            
            
            769,547TOTAL
      LIABILITIES
            
            
            2,479,052
            
            
            
            1,980,209Stockholders'
      Equity:Preferred
      stock - $.001 par value - 2,000,000 shares authorized;no
      shares issued and outstandingCommon
      Stock - $.00001 par value - 500,000,000 shares
      authorized,136,263,005
      and 36,230,629shares
      issued and outstanding
            
            
            136,263
            
            
            
            36,231Additional
      Paid-in Capital
            
            
            703,698
            
            
            
            253,243Accumulated
      deficit
            
            
            (2,759,157
            )
            
            
            (1,834,933
            )TOTAL
      SHAREHOLDERS EQUITY
            
            
            (1,919,196
            )
            
            
            (1,545,460
            )TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
            
            $
            559,856
            
            
            $
            434,750




F-2




ARTFEST
INTERNATIONAL, INC.


(A
Development Stage Company)


STATEMENT OF
OPERATIONS


(Unaudited)






For
      the Three
            
            
            For
      the NineMonths
      ended
            
            
            Months
      endedSeptember
      30,
            
            
            September
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007Revenues
            
            $
            4,000
            
            
            $
            -
            
            
            $
            28,736
            
            
            $
            -Cost
      of Revenue
            
            
            432
            
            
            
            -
            
            
            
            15,682
            
            
            
            -Gross
      Profit (Loss)
            
            
            3,568
            
            
            
            -
            
            
            
            13,054
            
            
            
            -Sales,
      General and Administrative Expenses
            
            
            33,430
            
            
            
            50,752
            
            
            
            882,790
            
            
            
            159,465Net
      (Loss) From Operations
            
            
            (29,862
            )
            
            
            (50,752
            )
            
            
            (869,736
            )
            
            
            (159,465
            )Other
      Income (Expense) , Net
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -(Deficit)
      - Development Stage
            
            $
            (29,862
            )
            
            $
            (50,752
            )
            
            $
            (869,736
            )
            
            $
            (159,465
            )Weighted
      average number of common sharesoutstanding
      - basic and fully diluted
            
            
            127,122,006
            
            
            
            28,190,629
            
            
            
            96,425,931
            
            
            
            28,063,962Net
      (Loss) per share - basic and fully diluted
            
            $
            0
            
            
            $
            0
            
            
            $
            0
            
            
            $
            0




F-3





ARTFEST
INTERNATIONAL, INC.


(A
Development Stage Company)


STATEMENT OF CASH
FLOWS


(Unaudited)






For
      the NineMonths
      endedSeptember
      30,2008
            
            
            2007Cash
      Flows from Operating Activities:Net
      Income (Loss)
            
            $
            (869,736
            )
            
            $
            (159,465
            )Adjustments
      to reconcile net (loss) tonet
      cash (used) by operating activities:Depreciation
            
            
            12,377
            
            
            
            3,525Amortization
            
            
            351(Increase)
      Decrease in other assets
            
            
            -
            
            
            
            -Increase
      in loan receivable
            
            
            (91,500)
            
            
            
            -Increase
      in Rewards Payable
            
            
            2,044
            
            
            
            -Inventory
            
            
            (9,568)
            
            
            
            -Increase
      in accounts payable and accrued expenses
            
            
            252,594
            
            
            
            51,601Increase
      in prepaid expenses
            
            
            -
            
            
            
            270Net
      Cash (Used) by Operating Activities:
            
            
            (703,438
            )
            
            
            (104,160
            )Cash
      Flows From Investing Activities:Decrease
      in Notes Receivables
            
            
            (91,500)
            
            
            
            -(Purchase)
      Disposal of Equipment
            
            
            (22,228)
            
            
            
            -Net
      Cash Used by Investing Activities:
            
            
            (113,728)
            
            
            
            -Cash
      Flows From Financing Activities:Issuance
      of Common Stock
            
            
            (30,545)
            
            
            
            -Increase
      in Notes payable
            
            
            249,203
            
            
            
            (10,492
            )Increase
      in loans payable
            
            
            115,225
            
            
            
            115,225Increase
      in contributed capital
            
            
            460,455
            
            
            
            -Net
      Cash Provided by Financing Activities:
            
            
            740,203
            
            
            
            104,733Net
      Decrease in Cash
            
            
            (6,963)
            
            
            
            574Cash
      at Beginning of Period
            
            
            315
            
            
            
            255Cash
      at End of Period
            
            $
            (6,648)
            
            
            $
            829





F-4





ARTFEST
INTERNATIONAL, INC.


(A Development Stage Company)


NOTES TO FINANCIAL
STATEMENTS


(Unaudited)






Note
1 - History and organization of the
company




The
Company was incorporated on February 21, 2002 (Date of Inception) under the laws
of the State of Delaware.  Artfest International Inc. 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.




On
December 28, 2007, pursuant to an Acquisition Agreement dated December 28, 2007,
the Company acquired 100% of The Art Channel, Inc. in exchange for 28,000,000
shares of Artfest International, Inc. stock, which were issued to the former
shareholders of The Art Channel, Inc. of which 8,000,000 shares were issued as
of December 28, 2007 and 20,000,000 shares were issued as of March 28, 2008
subsequent to the Company’s annual meeting at which time the shareholders of the
Company voted to increase the number of the authorized shares of the Company’s
common stock to 500,000,000.




In
addition, the Company agreed to issue an additional 1,500,000 shares of stock to
the Company’s former Chairman and CEO, Larry Ditto pursuant to the terms in the
Acquisition Agreement.




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, 2008.




F-5


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
      yearsOffice
      equipment
            4
      yearsProprietary
      Software
            3
      yearsFurniture
      and Fixtures
            7
      years





Property
and Equipment consist of the following:




Computer
      & Video
            
            $
            3,717Office
      equipment
            
            $
            3,240Proprietary
      software
            
            $
            60,500Furniture
      and Fixtures- Art
            
            $
            78,502Less-accumulated
      depreciation
            
            
            (60,672
            )Total
      PP&E (net of depreciation)
            
            $
            85,287





Total
Depreciation Expense for Jan-Sept. 2008 was $12,377.




Intangible
Assets




With the
acquisition of The Art Channel Inc. on December 28, 2007, the Company acquired
the subsidiary with shares of stock whose total value exceeded the net assets of
the company being purchased by $29,500.  The excess amount of $29,500
was booked to the parent company (Artfest International Inc.) as Goodwill and
listed under “Other Assets/Intangible Assets.”   This will be
amortized over a period of 40 years beginning January 1, 2008.




Total
Amortization Expense for Jan–September 2008 was $351.




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, 2008.




F-6




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
2008 and 2007.




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  June 30, 2008.




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, 2008 and 2007
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.




F-7





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.





F-8




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 $1,919,196 for the period from February
21, 2002 (inception) to September 30, 2008. 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. 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.




F-9




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, 2008, the Company has a net operating loss carryforward of
approximately $1,919,196 for tax purposes, which will be available to offset
future taxable income. This carryforward will expire in various years through
2027.




Note 5 - Stockholders'
Equity




The
Company was authorized to issue 500,000,000 shares of its $0.001 par value
common stock and 2,000,000 shares of its $0.001 par value preferred stock as of
September 30, 2008.




On
November 19, 2002 the Company issued 19,832,000 shares of its $0.001 par value
common stock as founders' shares to acquire 100% of the outstanding shares of
Artfest International, Inc., a Delaware Corporation for a net book value of
$19,832.




As of
December 28, 2007 the Company issued 8,000,000 shares of its $0.001 par value
common stock as partial payment to shareholders of The Art Channel, Inc.
pursuant to an acquisition agreement.   As of December 31, 2007,
the Company’s authorized shares were 40,000,000.




In March
2008, the Company amended its Certificate of Incorporation to increase its
authorized shares to 502,000,000, of which 500,000,000 shares are common stock,
par value $0.001 and 2,000,000 shares are preferred stock, par value
$0.001.   The Company then issued an additional 20,000,000 shares
of common stock to shareholders of The Art Channel, Inc. and 1,500,000 shares of
common stock to Larry D. Ditto pursuant to an acquisition
agreement.




In May
2008, the Company issued 4,500,000 shares of its $0.001 par value common stock
to Beryl Zyskind for consulting services.




F-10





Note 6 - Warrants and
options




As of
June 30, 2008 and 2007, there were no warrants outstanding; there are 1,600,000
options outstanding to acquire any additional shares of common
stock.




Note 7 - Related party
transactions




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 $784,497 in loans payable to shareholders and $460,873 in short-term
notes. The notes call for varying interest rates ranging from 1% to 12% per
annum, and contain a stock payment option payable at the lender's
discretion.




As of the
report date, the Company is in default on all of its short term notes payable to
shareholders and non-shareholders. Management has not formulated a repayment
plan, and no contingency plan has been established in the event that the lenders
seek legal remedies.




On July
5, 2007, the Company signed a loan payable to Brothers Realty & Investment
Group, LLC for $35,000 due on July 5, 2008.   This loan accrues
interest at 12% per annum.




On August
26, 2007, the Company signed a loan payable to Andy Haase in the amount of
$30,000 due on August 26, 2008.  The loan accrues interest at 10% per
annum.  The original amount was $35,000, with a $5,000 payment having
been made in July 2007.




On April
3, 2007, the Company signed a loan payable to Dale Bagwell for $20,000 with no
fixed due date.  The loan is non-interest bearing. The original amount
was $25,000, with a $5,000 payment having been made in July 2007.




On
December 7, 2007 the Company signed a loan payable to Patrick Haxton in the
amount of $15,000 with no fixed due date.  The loan is non-interest
bearing.




On
January 31, 2008, the Company signed a Promissory Note payable to the TBF
Charitable Trust Foundation for $50,000 due on July 31, 2008. The loan accrues
an interest at 1.5% per month, or 18% per annum.




On March
17  2008, March 24, 2008, and March 25, 2008 the Company received an
advance on a loan prior to the execution of loan agreements in the amounts of
$10,000, $7,200 and $7,800 respectively for a total of $25,000 from a third
party source (See Note 9 for further details).   On April 4,
2008, the Company received an advance on a loan prior to the execution of loan
agreements in the amount of $25,000 from a third party source. Pursuant to the
terms of a Securities Purchase Agreement, the third party has agreed to advance
the Company an aggregate of $300,000, to be paid in twelve payments of $25,000
each over a period of fifteen weeks, with each advance to be evidenced by a
Convertible Debenture.  Such payments have not been received on a timely
basis.




F-11


2.
MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION




Results
of Operations





(a)
Revenues




The
Company generated Operating revenues of $28,736 for the nine months ended
September 30, 2008 and recorded an operating loss of $(869,736). Operating
revenues for the quarter ended September 30, 2007 were $0 with an operating loss
of $159,465.




(b) Costs
and Expenses




Selling,
General and Administrative expenses of $33,430 decreased in the subject fiscal
quarter compared to $50,752 for the year preceding. The decrease is primarily
due to the reduction in expenses as the company reduced operations.





(c)
Depreciation, Depletion and Amortization




Depreciation
totaled $12,377 as of September 30, 2008 compared to $1,175 in 2007. No
depletion or amortization was charged during 2007 versus $351 in amortization
for the nine months ended September 2008.





(e) Net
Loss





The
company had a net loss of $869,736 for the nine months ended September 30, 2008
compared to a net loss of $159,465 for the prior year nine month period. The
decrease in net loss is the result of decreased operating costs.




Plan of
Operation





Our
current plan, in summary, as of September, 2008, is focused primarily on
corporate and securities law considerations in completing a process of updating
filings with both applicable state and Federal agencies, as needed, including
the SEC, and related efforts. Management believes the success of the business,
potential in the future, needs a stable foundation as a public company. The
first part is compliance with laws and regulations, primarily updating and
keeping current filings with the SEC which we have done, and next establishing
the business as a “trading” entity upon some stock exchange or similar trading
medium. At the same time, it is important to continue core business pursuits,
such as operational improvements, and become a profitable business. We
anticipate obtaining funding to address cash flow needs through private
placements, loans and similar matters. Our plan is subject to many risks. No
assurance of success can be given. We have, as of September, 2007, confirmed
terms on a loan and related arrangements. We may experience additional funding
from this source, with no guarantee, but also are subject to restrictions on
obtaining other funding, and undertaking both corporate level and operations
level actions while the agreement is in place. See Part III, Item 9, Loan
Obligation and Management Restructuring, and other information, contained in the
Company Form 10-KSB report for the fiscal year ended December 31, 2004, and
subsequent filings and amendments, if any.





Forward
Looking Statements





The
foregoing Management’s Discussion and Analysis or Plan of Operation and comments
elsewhere herein may contain “forward looking statements” within the meaning of
Rule 175 under the Securities Act of 1933, as amended, and Rule 3b-6 under the
Securities Act of 1934, as amended, or may be amended, including statements
regarding, among other items, business strategies, continued growth in markets,
projections, and anticipated trends in business and the industry in which it
operates. The words “believe,” “expect,” “anticipate,” “intends,” “forecast,”
“project,” and similar expressions identify forward-looking statements. These
forward-looking statements are based largely on expectations and are subject to
a number of risks and uncertainties, certain of which are beyond control. The
Company cautions that these statements are further qualified by important
factors that could cause actual results to differ materially from those in the
forward looking statements, including, among others, the following: reduced or
lack of increase in demand for products, competitive pricing pressures. In light
of these risks and uncertainties, there can be no assurance that the
forward-looking information contained herein will in fact transpire or prove to
be accurate. We disclaim any intent or obligation to update “forward looking
statements.”




4





PART
II - OTHER INFORMATION





ITEM
1. LEGAL PROCEEDINGS.





On July 31, 2008, we agreed to a binding
arbitration through the Fresno County Bar Association in Fresno, California with
respect to a dispute between us and our former attorney, David Kahn, Esq. with
respect to his fee for legal services rendered.





ITEM
2. UNREGISTERED SALES OF SECURITIES AND USE OF PROCEEDS




Equity
Securities Sold Without Registration





There
were no securities issued without registration during the three months ended
June 30, 2008




ITEM
3. DEFAULTS UPON SENIOR SECURITIES.





Not
Applicable.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.





None





ITEM
5. OTHER INFORMATION.





None.




5





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




Exhibits.





Exhibits
included or incorporated by reference herein are set forth in the attached
Exhibit Index.




Form
8-K




None




6





SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned thereunto duly
authorized.






Artfest
      International, Inc.Date: November
      20, 2008
            By:
            /s/ Eddie
      VakserChairman
      and CEO
              (principal
      executive officer and principal financial
  officer)





7




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







EXHIBIT INDEX





Number
            Description3.1
              
              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




** Filed
Herewith


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


[2]
Incorporated by reference to the Company’s filed Form 8K with the SEC, November,
2002.


[3]
Incorporated by reference to the Company’s filed Form 10KSB with the SEC, for
the year ended  December 31, 2002.






8