**UNITED        STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        D.C. 20549**

----

----

|   | [X] | ANNUAL                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                  OF                  1934 |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

|   | [  ] | TRANSITION                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT                  OF                  1934 |
|--------|----------------|---------------------------------------------------------------------------------------------------------------------------------------|

**ARTFEST        INTERNATIONAL, INC.**

| **DELAWARE**                                                                                    | **03-0390855**                                                        |
|-------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|
|  (State                  or jurisdiction ofincorporation                  or organization) | (I.R.S.                  EmployerIdentification                  No.) |

** **

----

| PART                  I                                                                                        |   |
|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                           |   |
| ITEM                  1. DESCRIPTION OF BUSINESS                                                               |   |
| ITEM                  2. DESCRIPTION OF PROPERTY                                                               |   |
| ITEM                  3. LEGAL PROCEEDINGS                                                                     |   |
| ITEM                  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY                  HOLDERS                  |   |
|                                                                                                           |   |
| PART                  II                                                                                       |   |
|                                                                                                           |   |
| ITEM                  5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER                  MATTERS             |   |
| ITEM                  6. MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF                  OPERATION           |   |
| ITEM                  7. FINANCIAL STATEMENTS                                                                  |   |
| ITEM                  8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                  ACCOUNTING          |   |
| AND                  FINANCIAL DISCLOSURE                                                                      |   |
| ITEM                  8A. CONTROLS AND PROCEDURES                                                              |   |
| ITEM                  8B. REPORTS ON FORM 8-K                                                                  |   |
|                                                                                                           |   |
|                                                                                                           |   |
| PART                  III                                                                                      |   |
|                                                                                                           |   |
| ITEM                  9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL                  PERSONS         |   |
| COMPLIANCE                  WITH SECTION 16(a) OF THE EXCHANGE                  ACT                            |   |
| ITEM                  10. EXECUTIVE COMPENSATION                                                               |   |
| ITEM                  11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                  MANAGEMENT      |   |
| AND                  RELATED STOCKHOLDER MATTERS                                                               |   |
| ITEM                  12. CERTAIN RELATIONSHIPS AND RELATED                  TRANSACTIONS                      |   |
|                                                                                                           |   |
| PART                  IV                                                                                       |   |
|                                                                                                           |   |
| ITEM                  13. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES, AND                  REPORTS ON FORM 8-K |   |
| ITEM                  14. PRINCIPAL ACCOUNTANT FEES AND                  SERVICES                              |   |
|                                                                                                           |   |
| SIGNATURES                                                                                                     |   |
|                                                                                                           |   |
| CERTIFICATIONS                                                                                                 |   |

----

**PART        I.**

**ITEM        1. DESCRIPTION OF BUSINESS.**

**Past        Business Development**

**Current        Status-Summary**

**Current        Business Plans and Pursuits**

----

**Need        for Capital and Risks**

**Galleries**

----

**Competition        and Markets**

**Definitions**

**ITEM        2. DES**
**CRIPTIO****N        OF PROPERTY.**

**ITEM        3. LEGAL**
**PROCEEDINGS****.**

**ITEM        4. SUBMISSION OF M**
**ATTE****RS        TO A VOTE OF SECURITY HOLDERS.**

----

**P**
**ART****II.**

**ITEM        5. MARKET FOR **
**COMMON        EQUITY****AND        RELATED STOCKHOLDER MATTERS.**

**Market        Information**

**Holders        of Common Equity**

**Dividends**

**Equity        Securities Sold Without Registration**

| **Period**               | **Shares                  Issued** | **Purpose**                           | **Amount                  Received** |
|--------------------------|------------------------------------|---------------------------------------|--------------------------------------|
| Q1                  2005 | 2,100,000                          | Gifts                  / Services     | *                                    |
| Q2                  2005 | *                                  | *                                     | *                                    |
| Q3                  2005 | 50,000                             | Capital                  contribution | $35,000                              |
| Q4                  2005 | 10,000                             | Capital                  Contribution | $15,000                              |
|                     | 40,000                             | Gifts                  / Services     | *                                    |
|                     |                               |                                  |                                 |
| Q1                  2006 | *                                  | *                                     | *                                    |
| Q2                  2006 | *                                  | *                                     | *                                    |
| Q3                  2006 | 332,000                            | Gifts                  / Services     | *                                    |
| Q4                  2006 | *                                  | *                                     | *                                    |

----

**General        Information**

**Item        6. Management’s Discussion and Analysis and Plan of        Operation**

----

----

----

**ITEM        7.**
**FINANCIAL****STATEMENTS        AND****S****UPPLEMENTARY        DATA**

|                                     |                                                                              |                                   |
|------------------------------------------|-----------------------------------------------------------------------------------|----------------------------------------|
|                                     |                                                                                   |
|                                |                                                                         |                              |
| DATED:                  January 15, 2007 | By:                                                                     | /s/ Larry                D. Ditto |
|                                     | Larry                  D. Ditto                                                   |
|                                     | Chairman,                  President and Chief Executive                  Officer |

----

*Internal        Control-Integrated Framework *

*Internal        Control-Integrated Framework *
*Internal        Control-Integrated Framework *

|         |                                  |                                         |
|--------------|---------------------------------------|----------------------------------------------|
|         |                                       |
|    |                             |                                    |
|              | By:                         | /s/ Thomas                Bauman C.P.A. |
|         | Thomas                  Bauman C.P.A. |
|         | January                  15, 2007     |

----

| ** **                                                                                      | ** ** | **Page** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|----------|------------|
| Financial                  Statements:                                                          |       |     |       |
| -Statements                  of Operations and Accumulated Deficit During the Development Stage |       | F-2      |       |
| -Balance                  Sheets - December 31, 2005 and 2004                                   |       | F-3      |       |
| -Statements                  of Cash Flows                                                      |       | F-4      |       |
| -Statements                  of Stockholders’ Equity                                      |       | F-5      |       |
| -Notes                  to Financial Statements                                                 |       | F-7      |       |

----

|                                                                 |   |   | **For                      the**                  | ** ** | ** ** | **February                      21, 2002** |   |
|----------------------------------------------------------------------|--------|--------|---------------------------------------------------|------------|------------|--------------------------------------------|--------|
|                                                                 |   |   | **Years                      ended **        |       |       | **(Inception)                      to**    |   |
|                                                                 |   |   | **December                      31,  ** |       |       | **December                      31, 2005** |   |
|                                                                 |   |   | **2005**                                          |       |       | **2004**                                   |   |   | **2003** |   |   |   |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Revenue                                                              |   | $      | 186,794                                           |       | $          | 44,158                                     |   | $ | 37,544 |   | $ | 320,552 |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Cost                      of Revenue                                 |   |   | 10,017                                            |       |       | 16,164                                     |   |   | 35,982 |   |   | 191,923 |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Gross                      Profit (Loss)                             |   |   | 176,777                                           |       |       | 27,994                                     |   |   | 1,562 |   |   | 128,629 |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Selling,                      General and Administrative             |   |   | 515,003                                           |       |       | 297,021                                    |   |   | 130,873 |   |   | 972,271 |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Net                      (Loss) From Operations                      |   |   | (338,226                                          | )          |       | (269,027                                   | )      |   | (129,310 | ) |   | (843,642 | ) |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Other                      Income (Expense) , Net (Notes 5 & 11) |   |   | 59,889                                            |       |       | -                                          |   |   | - |   |   | 59,889 |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| (Deficit)                      - Development Stage                   |   | $      | (278,337                                          | )          | $          | (269,027                                   | )      | $ | (129,311 | ) | $ | (785,032 | ) |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Weighted                      average number of common shares        |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| outstanding                      - basic and fully diluted           |   |   | 26,758,629                                        |       |       | 25,468,629                                 |   |   | 22,087,500 |   |   |   |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |
| Net                      (Loss) per share - basic and full diluted   |   | $      | (0.01                                             | )          | $          | (0.01                                      | )      | $ | (0.01 | ) |   |   |   |
|                                                                 |   |   |                                              |       |       |                                       |   |   |   |   |   |   |   |

----

| ASSETS                                                                   |   |   |     |       |       |     |   |
|--------------------------------------------------------------------------|--------|--------|----------|------------|------------|----------|--------|
|                                                                     |   |   | **2005** | ** ** | ** ** | **2004** |   |
| Current                        Assets:                                   |   |   |     |       |       |     |   |
| Cash                                                                     |   | $      | 878      |       | $          | -        |   |
| Inventory                                                                |   |   | 21,410   |       |       | -        |   |
| Loan                        Receivable (Notes 5 & 8)                 |   |   | -        |       |       | 50,000   |   |
| Prepaid                        Expenses                                  |   |   | -        |       |       | 1,098    |   |
|                                                                     |   |   |     |       |       |     |   |
| Total                        Current Assets                              |   |   | 22,288   |       |       | 51,098   |   |
|                                                                     |   |   |     |       |       |     |   |
| Property                        and Equipment, at cost, less accumulated |   |   |     |       |       |     |   |
| depreciation                        of $24,606 and $13,963 in 2005 and   |   |   |     |       |       |     |   |
| 2004,                        respectively (Notes 2 & 10)             |   |   | 21,039   |       |       | 31,682   |   |
| Other                        Assets                                      |   |   | 19,895   |       |       | 31,095   |   |
|                                                                     |   |   |     |       |       |     |   |
| TOTAL                        ASSETS                                      |   | $      | 63,222   |       | $          | 113,875  |   |
|                                                                     |   |   |     |       |       |     |   |
| LIABILITIES                        AND STOCKHOLDERS' EQUITY              |   |   |     |       |       |     |   |
|                                                                     |   |   |     |       |       |     |   |
| Current                        Liabilities:                              |   |   |     |       |       |     |   |
| Accounts                        Payable                                  |   | $      | 49,744   |       | $          | 110,913  |   |
| Cash                        Overdraft                                    |   |   | -        |       |       | 7,268    |   |
| Accrued                        Expenses                                  |   |   | 28,078   |       |       | 5,849    |   |
| Sales                        Tax Payable                                 |   |   | 1,989    |       |       | 1,828    |   |
| Note                        Payable - Current Portion ( Note 10)         |   |   | 8,929    |       |       | 6,363    |   |
| Loans                        Payable (Notes 9 & 10)                  |   |   | 527,216  |       |       | 299,595  |   |
|                                                                     |   |   |     |       |       |     |   |
| Total                        Current Liabilities                         |   |   | 615,956  |       |       | 431,816  |   |
|                                                                     |   |   |     |       |       |     |   |
| Long                        Term Liabilities:                            |   |   |     |       |       |     |   |
| Note                        Payable (Note 10)                            |   |   | 7,610    |       |       | 14,066   |   |
|                                                                     |   |   |     |       |       |     |   |
| TOTAL                        LIABILITIES                                 |   |   | 623,566  |       |       | 445,882  |   |
|                                                                     |   |   |     |       |       |     |   |
| Stockholders'                        Equity:                             |   |   |     |       |       |     |   |
| Common                        Stock - $.00001 par value - 40,000,000     |   |   |     |       |       |     |   |
| shares                        authorized, 27,668,629 and 25,468,629      |   |   |     |       |       |     |   |
| shares                        issued and outstanding in 2005 and         |   |   | 198      |       |       | 198      |   |
| 2004,                        respectively                                |   |   |     |       |       |     |   |
| Additional                        Paid-in Capital                        |   |   | 224,490  |       |       | 174,490  |   |
| Accumulated                        deficit                               |   |   | (785,032 | )          |       | (506,695 | )      |
|                                                                     |   |   |     |       |       |     |   |
| TOTAL                        LIABILITIES AND STOCKHOLDERS' EQUITY        |   | $      | 63,222   |       | $          | 113,875  |   |
|                                                                     |   |   |     |       |       |     |   |

----

|                                                              |   |   | **For                        the**            |   |   |                                         |   |
|-------------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|----------------------------------------------|--------|
|                                                              |   |   | **Years                        ended **  |   |   | **February                        21, 2002** |   |
|                                                              |   |   | **December                        31, ** |   |   | **(Inception)                        to**    |   |
|                                                              |   |   | **2005**                                      |   |   | **2004**                                     |   |   | **2003** |   |   | **December                        31, 2005** |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Cash                        Flows from Operating Activities:      |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Net                        (loss)                                 |   | $      | (278,337                                      | )      | $      | (269,027                                     | )      | $ | (129,311 | ) | $ | (785,032 | ) |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Adjustments                        to reconcile net (loss) to     |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| net                        cash (used) by operating activities:   |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Depreciation                                                      |   |   | 10,643                                        |   |   | 6,303                                        |   |   | 7,660 |   |   | 24,606 |   |
| (Increase)                        Decrease in Inventory           |   |   | (21,410                                       | )      |   |                                         |   |   |   |   |   |   |   |
| (Increase)                        Decrease in prepaid expenses    |   |   | 1,098                                         |   |   | 5,400                                        |   |   | (6,498 | ) |   | - |   |
| Increase                        (Decrease) in accounts payable    |   |   | (61,169                                       | )      |   | 1                                            |   |   | 3,712 |   |   | 49,744 |   |
| Increase                        (Decrease) in accrued expenses    |   |   | 22,229                                        |   |   | 5,849                                        |   |   | 0 |   |   | 28,078 |   |
| Increase                        (Decrease) in sales payable       |   |   | 160                                           |   |   | 1,828                                        |   |   | 0 |   |   | 1,988 |   |
| (Increase)                        Decrease in other assets        |   |   | 11,200                                        |   |   | (31,095                                      | )      |   | 0 |   |   | (19,895 | ) |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Net                        Cash (Used) by Operating Activities:   |   |   | (315,585                                      | )      |   | (280,741                                     | )      |   | (124,437 | ) |   | (721,920 | ) |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Cash                        Flows From Investing Activities:      |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Purchase                        of Equipment                      |   |   | 0                                             |   |   | (15,928                                      | )      |   | (29,717 | ) |   | (45,645 | ) |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Net                        Cash Used by Investing Activities:     |   |   | 0                                             |   |   | (15,928                                      | )      |   | (29,717 | ) |   | (45,645 | ) |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Cash                        Flows From Financing Activities:      |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Issuance                        of common stock                   |   |   | -                                             |   |   | 0                                            |   |   | 1 |   |   | 198 |   |
| (Increase)                        Decrease in loans receivable    |   |   | 50,000                                        |   |   | 0                                            |   |   | 0 |   |   | - |   |
| Increase                        in loans payable                  |   |   | 223,731                                       |   |   | 251,372                                      |   |   | 68,652 |   |   | 543,755 |   |
| Increase                        in contributed capital            |   |   | 50,000                                        |   |   | 45,391                                       |   |   | 78,099 |   |   | 224,490 |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Net                        Cash Provided by Financing Activities: |   |   | 323,731                                       |   |   | 296,763                                      |   |   | 146,752 |   |   | 768,443 |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Net                        Increase (Decrease) in Cash            |   |   | 8,146                                         |   |   | 94                                           |   |   | (7,402 | ) |   | 878 |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Cash                        at Beginning of Period                |   |   | (7,268                                        | )      |   | (7,362                                       | )      |   | 40 |   |   | 0 |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |
| Cash                        at End of Period                      |   | $      | 878                                           |   | $      | (7,268                                       | )      | $ | (7,362 | ) | $ | 878 |   |
|                                                              |   |   |                                          |   |   |                                         |   |   |   |   |   |   |   |

----

|                                               |       |       |                                          |       |       |           |       |       |        |       |       | **(Deficit) **   | ** ** | ** ** | ** **        | ** ** |
|----------------------------------------------------|------------|------------|-----------------------------------------------|------------|------------|----------------|------------|------------|-------------|------------|------------|-----------------------|------------|------------|-------------------|------------|
|                                               | ** ** | ** ** | ** **                                    | ** ** | ** ** | ** **     | ** ** | ** ** | ** **  | ** ** | ** ** | **Accumulated ** | ** ** | ** ** | ** **        | ** ** |
|                                               | ** ** | ** ** | **Common                        Stock ** | ** ** | ** ** | **Additional** | ** ** | ** ** | **During**  | ** ** | ** ** | **Total**             | ** ** |
|                                               | ** ** | ** ** | ** **                                    | ** ** | ** ** | ** **     | ** ** | ** ** | **Paid-in** | ** ** | ** ** | **Development**       | ** ** | ** ** | **Stockholders'** | ** ** |
|                                               | ** ** | ** ** | **Shares**                                    | ** ** | ** ** | **Amount**     | ** ** | ** ** | **Capital** | ** ** | ** ** | **Stage**             | ** ** | ** ** | **Equity**        |       |
|                                               |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| February                        2002               |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                        for Cash             |       |       | 200,000                                       |       |       | 200            |       |       |        |       |       |                  |       |       | 200               |       |
| June                        2002                   |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                        for Cash             |       |       | 19,685,000                                    |       |       | 197            |       |       |        |       |       |                  |       |       | 197               |       |
| Contributed                        Capital         |       |       |                                          |       |       |           |       |       | 50,000      |       |       |                  |       |       | 50,000            |       |
| July                        2002                   |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                        Capital         |       |       |                                          |       |       |           |       |       | 1,000       |       |       |                  |       |       | 1,000             |       |
| November                        2002               |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Relinquished                        by Shareholder |       |       | (200,000                                      | )          |       | (200           | )          |       |        |       |       |                  |       |       | (200              | )          |
| Net                        Loss                    |       |       | -                                             |       |       | -              |       |       | -           |       |       | (129,311              | )          |       | (129,311          | )          |
| Balance                        December 31, 2002   |       |       | 19,685,000                                    |       |       | 197            |       |       | 51,000      |       |       | (129,311              | )          |       | (78,114           | )          |
| April                        2003                  |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                        for Cash             |       |       | 27,000                                        |       |       |           |       |       | 33,600      |       |       |                  |       |       | 33,600            |       |
| May                        2003                    |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                        for Cash             |       |       | 120,000                                       |       |       | 1              |       |       | 36,499      |       |       |                  |       |       | 36,500            |       |
| September                        2003              |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                          |       |       | 2,155,500                                     |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                        Capital         |       |       |                                          |       |       |           |       |       | 8,000       |       |       |                  |       |       | 8,000             |       |
| December                        2003               |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                          |       |       | 100,000                                       |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Net                        Loss                    |       |       | -                                             |       |       | -              |       |       | -           |       |       | (108,357              | )          |       | (108,357          | )          |
| Balance                        December 31, 2003   |       |       | 22,087,500                                    |       |       | 198            |       |       | 129,099     |       |       | (237,668              | )          |       | (108,371          | )          |
| May                        2004                    |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                          |       |       | 495,000                                       |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                        Capital         |       |       |                                          |       |       |           |       |       | 14,691      |       |       |                  |       |       | 14,691            |       |
| July                        2004                   |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                          |       |       | 1,499,400                                     |       |       |           |       |       |        |       |       |                  |       |       | 0                 |       |
| August                        2004                 |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                          |       |       | 1,265,300                                     |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                        Capital         |       |       |                                          |       |       |           |       |       | 700         |       |       |                  |       |       | 700               |       |
| November                        2004               |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                          |       |       | 121,429                                       |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                        Capital         |       |       |                                          |       |       |           |       |       | 30,000      |       |       |                  |       |       | 30,000            |       |
| Net                        Loss                    |       |       | -                                             |       |       | -              |       |       | -           |       |       | (269,027              | )          |       | (269,027          | )          |
| Balance                        December 31,2004    |       |       | 25,468,629                                    |       |       | 198            |       |       | 174,490     |       |       | (506,695              | )          |       | (332,007          | )          |
| May                        2005                    |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                          |       |       | 2,100,000                                     |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| September                        2005              |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                        Capital         |       |       | 50,000                                        |       |       |           |       |       | 40,000      |       |       |                  |       |       | 40,000            |       |
| October                        2005                |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                        Capital         |       |       | 50,000                                        |       |       |           |       |       | 10,000      |       |       |                  |       |       | 10,000            |       |
| Net                        (loss)                  |       |       | -                                             |       |       | -              |       |       | -           |       |       | (278,337              | )          |       | (278,337          | )          |
|                                               |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Balance                        December 31, 2005   |       |       | 27,668,629                                    |       | $          | 198            |       | $          | 224,490     |       | $          | (785,032              | )          | $          | (560,344          | )          |
|                                               |       |       |                                          |       |       |           |       |       |        |       |       |                  |       |       |              |       |

----

**ITEM        8. CHANGES IN **
**AND****DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL        DISCLOSURE.**

**ITEM        8a CONTROLS **
**AND        PROCEDURES****.**

**Evaluation        of Disclosure Controls and Procedures **

**ITEM        8b REPORTS ON FORM 8-K**

----

**PART        III.**

**ITEM        9. DIRECTORS, EXECUTIVE **
**OFFICERS,****PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE        ACT.**

**Directors        and Executive Officers**

**Larry        D. Ditto, Ph. D., President, Chief Executive Officer, and        Director**
* *

**Eric        Hansen, Director**

**Mark        Gordon, Director **

----

**Loan        Obligation and Management Restructuring **

----

----

**Compliance        with Section 16(a) of the Exchange Act**

----

**ITEM        10. **
**EXECUTIVE        COMPENSATION****.**

**Summary        Compensation Table**

|                                                   |   |     |   |                                     |   |                            |   |                                     |   |                                |   | **Long-term                  compensation**           |   |
|--------------------------------------------------------|--------|----------|--------|------------------------------------------|--------|---------------------------------|--------|------------------------------------------|--------|-------------------------------------|--------|-------------------------------------------------------|--------|
|                                                   |   |     |   | **Annual                  compensation** |   |                            |   |                                     |   | **Awards**                          |   |                                                  |   | **Payouts** |   |
| **Name                  and****principal****position** |   | **Year** |   | **Salary**                               |   | **Bonus**                       |   | **Other****annual****compen-****sation** |   | **Restricted****stock****award(s)** |   | **Securities****under-****lying****options/****SARs** |   | **LTIP****payouts** |   | **All                  other****compen-****sation** |   |
|                                                   |   |     |   | **($)    **          |   | **($)    ** |   | **($)**                                  |   | **($)**                             |   | **(#)**                                               |   | **($)** |   | **($)** |   |
| **(a)**                                                |   | **(b)**  |   | **(c)    **          |   | **(d)    ** |   | **(e)**                                  |   | **(f)**                             |   | **(g)**                                               |   | **(h)** |   | **(i)** |   |
| Joseph                  Walsh                          |   |     | 2003   |                                     |   |                                 |   | $                                        | 0      |                                |   |                                                       |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   |   |   |   |
| President                  and CEO (A)                 |   |     | 2004   |                                     |   |                                 |   | $                                        | 0      |                                |   |                                                       |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   |   |   |   |
|                                                   |   |     | 2005   |                                     |   |                                 |   | $                                        | 0      |                                |   |                                                       |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   |   |   |   |
|                                                   |   |     |        |                                     |   |                                 |   |                                     |        |                                |   |                                                       |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |   |   |
|                                                   |   |     |        |                                     |   |                                 |   |                                     |        |                                |   |                                                       |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |   |   |
| Larry                  D. Ditto                        |   |     | 2003   |                                     |   |                                 |   | $                                        | 0      |                                |   |                                                       |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   |   |   |   |
| President                  and                         |   |     | 2004   |                                     |   |                                 |   | $                                        | 0      |                                |   |                                                       |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   |   |   |   |
|  CEO                  (B)                         |   |     | 2005   |                                     |   |                                 |   | $                                        | 0      |                                |   |                                                       |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   | $ | 0 |   |   |  |   | $ | 0 |   | $ | 0 |   |   |   |   |
|                                                   |   |     |        |                                     |   |                                 |   |                                     |        |                                |   |                                                       |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |   |   |

**Other        Compensation**

----

**ITEM        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL**
**OWNERS AND MANAGEMENT****AND        RELATED STOCKHOLDER MATTERS.**

|                                   |   |                        |                                                                                 |
|----------------------------------------|--------|-----------------------------|--------------------------------------------------------------------------------------|
| **Title                  of Class(4)** |   |                        | **Name                  and Address of****Beneficial                  Owner (1)(5)** |   |   |   | **Amount                  of Beneficial****Ownership** | **Percent                  of Class (2)(3)** |
|  Common                           |   |  2,3,4                 | Larry                  D. Ditto                                                      |   |   |   |   |   |   |   |   |
| Stock                                  |   |                        | 27758                  Santa Margarita Parkway, # 281 Mission Viejo CA 92691         |   |   |   | 3,000,000 | 11  |   | % |
|                                   |   |                        |                                                                                 |   |   |   |
| Common                                 |   |  2                     | Eric                  Hansen                                                         |   |   |   |   |   |   |   |   |
| Stock                                  |   |                        | 27758                  Santa Margarita Parkway, # 281 Mission Viejo CA 92691         |   |   |   | 0 | 0  |   | % |
|                                   |   |                        |                                                                                 |   |   |   |   |   |   |   |   |
|                                   |   |                        |                                                                                 |
| Common                                 |   |  2                     | Mark                  Gordon                                                         |   |   |   |
| Stock                                  |   |                        | 27758                  Santa Margarita Parkway, # 281 Mission Viejo CA 92691         |   |   |   | 0 | 0  |   | % |
|                                   |   |                        |                                                                                 |   |   |   |
|                                   |   |                        |                                                                                 |
|                                   |   |                        |                                                                                 |   |   |   |   |   |   |   |   |
|                                   |   |                        |                                                                                 |
| Common                                 |   |  6,                  7 | Joseph                  Walsh                                                        |   |   |   |
| Stock                                  |   |                        | 5200                  US 1, Key West FL 33040                                        |   |   |   | 5,000,000 | 18  |   | % |
|                                   |   |                        |                                                                                 |   |   |   |
| Common                                 |   |  2,3                   | Shares                  of all Directors and                                         |   |   |   |
| Stock                                  |   |                        | executive                  officers as a group                                       |   |   |   | 8,000,000 | 29  |   | % |
|                                   |   |                        | (3                  persons)                                                         |   |   |   |
|                                   |   |                        |                                                                                 |

**ITEM      12. **
**CERTAIN      RELATIONSHIPS****AND      RELATED TRANSACTIONS.**

----

**PART      IV.**

**ITEM      13.**
**                        **
**EXHIBITS      AND FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K**

(b)    Exhibits      

| 3.1                        3.2                         3.3                        |   Articles                of                Incorporation [1]   Articles                of                Amendment of the Articles of Incorporation [3]   Bylaws                [1]                                                                                                                                                                                                                                                                                                                                             |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1                       10.2                                                                                                          |   Agreement                and Plan                of Reorganization, Soldnet, Inc. and Artfest, Inc. [2]   Loan                Agreement                (form) with Promissory Note (form), December, 2005 [3]                                                                                                                                                                                                                                                                                                                                      |
|  23.1                ** 31                **      32                **                 |    Consent                of Thomas                Bauman C.P.A., Independent Registered Public Accountant   Certification                of                Chief Executive Officer pursuant to Section 302 Sarbanes-Oxley Act of                2002   Certifications                pursuant to Sarbanes - Oxley Act of 2002    Certification                Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to                Section 906 of the Sarbanes-Oxley Act of 2002   |

----

On      March      8, 2006 we filed a Form 8-K confirming that on March 2, 2006, the Company      completed a mutual process, with its President and a new nominee to the      Presidency, resulting in a change of officers of the Company. At that time      Joseph Walsh, Sr., resigned or retired as President, and Leonard Tambasco was      appointed the new President. Certain other actions were taken. Mr. Walsh was      confirmed to retain a position, going forward, as the Chairman of the Board      of      Directors. The Company also engaged him as a Consultant for acquisitions with      the title, Acquisition Consultant.

**ITEM      14. **
**PRINCIPAL      ACCOUNTANT****FEES      AND SERVICES**

**Audit      Fees**

| **Fee Category**             | ** ** | **Years Ended March 31,** | ** ** |
|-----------------------------------|------------|------------------------------------------|------------|
| **(in thousands)**           | ** ** | **2005**                                 | ** ** | **2004** | ** ** | **2003** | ** ** |
| Audit                fees         |       | $                                        | 11         |   | $ | 11 |   | $ | 11 |   |
| Audit-related                fees |       | —                                  |       | — |   | — |   |
| Tax                fees           |       | —                                  |       | — |   | — |   |
| All                other fees     |       | —                                  |       | — |   | — |   |
| Total                fees         |       | $                                        | 11         |   | $ | 11 |   | $ | 11 |   |

*Audit      Fees. *

*Audit-Related      Fees. *

*Tax      Fees. *

----

**SIGNATURES**

|                                       |                                                                                 |                                         |
|--------------------------------------------|--------------------------------------------------------------------------------------|----------------------------------------------|
|                                       | Artfest                International, Inc.                                           |
|                                  |                                                                            |                                    |
| Date: January                15, 2007 | By:                                                                        | /s/  Larry                D. Ditto |
|                                       |  Larry                D. Ditto                                                  |
|                                       | Chairman,                President, and Chief Executive                Officer  |

| **Signature**                                                                                                                                                                                                                                                                  | **Title**                                                                                                                                                                                                              | **Date**                                                                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|   /s/                 Larry D. Ditto Larry                D. Ditto      /s/                Eric HansenEric                Hansen      /s/                Mark GordonMark                Gordon |   Chariman,                Chief Executive Officer and President(principal                executive officer), Treasurer (principal financial officer)/Director Director    Director |   January                15, 2007   January                15, 2007   January 15,                2006  |

----

|                                                            | **PAGE** |
|-----------------------------------------------------------------|----------|
|                                                            |     |
| ACCOUNTANT'S                AUDIT REPORT                        | F-2      |
|                                                            |     |
| FINANCIAL                STATEMENTS                             |     |
|                                                            |     |
| Balance                Sheets - December 31, 2005 and 2004      | F-3      |
|                                                            |     |
| Statements                of Operations and Accumulated Deficit | F-4      |
| During                the Development Stage                     |     |
|                                                            |     |
| Statements                  of Cash Flows                       | F-5      |
|                                                            |     |
| Statement                of Changes in Stockholders' Equity     | F-6      |
|                                                            |     |
| Notes                to Financial Statements                    | F-7      |

----

| To                  the Board of Directors and Stockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Artfest                  International, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| Mission                  Viejo, California                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| INDEPENDENT                  AUDITOR'S REPORT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| I                  have audited the accompanying balance sheets of Artfest International,                  Inc. (A Development Stage Company) as of December 31, 2005 and                  2004, and                  the related Statements of Operations, Stockholders’ Equity, and Cash Flows                  for the years then ended. These financial statements are the                  responsibility of the Company’s management. My responsibility is to                  express an opinion on these financial statements based on my                  audit.                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| I                  conducted the audit in accordance with standards established by                  the Public                  Company Accounting Oversight Board. Those standards require that                  I plan                  and perform the audit to obtain reasonable assurance about whether                  the                  financial statements are free of material misstatement. An audit                  includes                  examining, on a test basis, evidence supporting the amounts and                  disclosures in the financial statements. An audit also includes                  assessing                  the accounting principles used and significant estimates made by                  management, as well as evaluating the overall financial statement                  presentation. I believe that my audit provides a reasonable basis                  for my                  opinion. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| In                  my opinion, the financial statements referred to above present                  fairly, in                  all material respects, the financial position of Artfest International,                  Inc. (A Development Stage Company) as of December 31, 2005 and                  2004, and                  the results of its operations and cash flows for the years then                  ended, in                  conformity with 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 principle 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.                                                                                               |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| Thomas                  Bauman, C.P.A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| January                  15, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

----

| ASSETS                                                             |   |   |     |       |       |     |   |
|--------------------------------------------------------------------|--------|--------|----------|------------|------------|----------|--------|
|                                                               |   |   | **2005** | ** ** | ** ** | **2004** |   |
| Current                  Assets:                                   |   |   |     |       |       |     |   |
| Cash                                                               |   | $      | 878      |       | $          | -        |   |
| Inventory                                                          |   |   | 21,410   |       |       | -        |   |
| Loan                  Receivable (Notes 5 & 8)                 |   |   | -        |       |       | 50,000   |   |
| Prepaid                  Expenses                                  |   |   | -        |       |       | 1,098    |   |
|                                                               |   |   |     |       |       |     |   |
| Total                  Current Assets                              |   |   | 22,288   |       |       | 51,098   |   |
|                                                               |   |   |     |       |       |     |   |
| Property                  and Equipment, at cost, less accumulated |   |   |     |       |       |     |   |
| depreciation                  of $24,606 and $13,963 in 2005 and   |   |   |     |       |       |     |   |
| 2004,                  respectively (Notes 2 & 10)             |   |   | 21,039   |       |       | 31,682   |   |
| Other                  Assets                                      |   |   | 19,895   |       |       | 31,095   |   |
|                                                               |   |   |     |       |       |     |   |
| TOTAL                  ASSETS                                      |   | $      | 63,222   |       | $          | 113,875  |   |
|                                                               |   |   |     |       |       |     |   |
| LIABILITIES                  AND STOCKHOLDERS' EQUITY              |   |   |     |       |       |     |   |
|                                                               |   |   |     |       |       |     |   |
| Current                  Liabilities:                              |   |   |     |       |       |     |   |
| Accounts                  Payable                                  |   | $      | 49,744   |       | $          | 110,913  |   |
| Cash                  Overdraft                                    |   |   | -        |       |       | 7,268    |   |
| Accrued                  Expenses                                  |   |   | 28,078   |       |       | 5,849    |   |
| Sales                  Tax Payable                                 |   |   | 1,989    |       |       | 1,828    |   |
| Note                  Payable - Current Portion ( Note 10)         |   |   | 8,929    |       |       | 6,363    |   |
| Loans                  Payable (Notes 9 & 10)                  |   |   | 527,216  |       |       | 299,595  |   |
|                                                               |   |   |     |       |       |     |   |
| Total                  Current Liabilities                         |   |   | 615,956  |       |       | 431,816  |   |
|                                                               |   |   |     |       |       |     |   |
| Long                  Term Liabilities:                            |   |   |     |       |       |     |   |
| Note                  Payable (Note 10)                            |   |   | 7,610    |       |       | 14,066   |   |
|                                                               |   |   |     |       |       |     |   |
| TOTAL                  LIABILITIES                                 |   |   | 623,566  |       |       | 445,882  |   |
|                                                               |   |   |     |       |       |     |   |
| Stockholders'                  Equity:                             |   |   |     |       |       |     |   |
| Common                  Stock - $.00001 par value - 40,000,000     |   |   |     |       |       |     |   |
| shares                  authorized, 27,668,629 and 25,468,629      |   |   |     |       |       |     |   |
| shares                  issued and outstanding in 2005 and         |   |   | 198      |       |       | 198      |   |
| 2004,                  respectively                                |   |   |     |       |       |     |   |
| Additional                  Paid-in Capital                        |   |   | 224,490  |       |       | 174,490  |   |
| Accumulated                  deficit                               |   |   | (785,032 | )          |       | (506,695 | )      |
|                                                               |   |   |     |       |       |     |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY        |   | $      | 63,222   |       | $          | 113,875  |   |
|                                                               |   |   |     |       |       |     |   |

----

|                                                             |   |   | **For                  the**                  | ** ** | ** ** | **February                  21, 2002** |   |
|------------------------------------------------------------------|--------|--------|-----------------------------------------------|------------|------------|----------------------------------------|--------|
|                                                             |   |   | **Years                  ended **        |       |       | **(Inception)                  to**    |   |
|                                                             |   |   | **December                  31,  ** |       |       | **December                  31, 2005** |   |
|                                                             |   |   | **2005**                                      |       |       | **2004**                               |   |   | **2003** |   |   |   |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Revenue                                                          |   | $      | 186,794                                       |       | $          | 44,158                                 |   | $ | 37,544 |   | $ | 320,552 |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Cost                  of Revenue                                 |   |   | 10,017                                        |       |       | 16,164                                 |   |   | 35,982 |   |   | 191,923 |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Gross                  Profit (Loss)                             |   |   | 176,777                                       |       |       | 27,994                                 |   |   | 1,562 |   |   | 128,629 |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Selling,                  General and Administrative             |   |   | 515,003                                       |       |       | 297,021                                |   |   | 130,873 |   |   | 972,271 |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Net                  (Loss) From Operations                      |   |   | (338,226                                      | )          |       | (269,027                               | )      |   | (129,310 | ) |   | (843,642 | ) |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Other                  Income (Expense) , Net (Notes 5 & 11) |   |   | 59,889                                        |       |       | -                                      |   |   | - |   |   | 59,889 |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| (Deficit)                  - Development Stage                   |   | $      | (278,337                                      | )          | $          | (269,027                               | )      | $ | (129,311 | ) | $ | (785,032 | ) |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Weighted                  average number of common shares        |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| outstanding                  - basic and fully diluted           |   |   | 26,758,629                                    |       |       | 25,468,629                             |   |   | 22,087,500 |   |   |   |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |
| Net                  (Loss) per share - basic and full diluted   |   | $      | (0.01                                         | )          | $          | (0.01                                  | )      | $ | (0.01 | ) |   |   |   |
|                                                             |   |   |                                          |       |       |                                   |   |   |   |   |   |   |   |

----

|                                                          |   |   | **For                    the**            |   |   |                                     |   |
|---------------------------------------------------------------|--------|--------|-------------------------------------------|--------|--------|------------------------------------------|--------|
|                                                          |   |   | **Years                    ended **  |   |   | **February                    21, 2002** |   |
|                                                          |   |   | **December                    31, ** |   |   | **(Inception)                    to**    |   |
|                                                          |   |   | **2005**                                  |   |   | **2004**                                 |   |   | **2003** |   |   | **December                    31, 2005** |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Cash                    Flows from Operating Activities:      |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Net                    (loss)                                 |   | $      | (278,337                                  | )      | $      | (269,027                                 | )      | $ | (129,311 | ) | $ | (785,032 | ) |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Adjustments                    to reconcile net (loss) to     |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| net                    cash (used) by operating activities:   |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Depreciation                                                  |   |   | 10,643                                    |   |   | 6,303                                    |   |   | 7,660 |   |   | 24,606 |   |
| (Increase)                    Decrease in Inventory           |   |   | (21,410                                   | )      |   |                                     |   |   |   |   |   |   |   |
| (Increase)                    Decrease in prepaid expenses    |   |   | 1,098                                     |   |   | 5,400                                    |   |   | (6,498 | ) |   | - |   |
| Increase                    (Decrease) in accounts payable    |   |   | (61,169                                   | )      |   | 1                                        |   |   | 3,712 |   |   | 49,744 |   |
| Increase                    (Decrease) in accrued expenses    |   |   | 22,229                                    |   |   | 5,849                                    |   |   | 0 |   |   | 28,078 |   |
| Increase                    (Decrease) in sales payable       |   |   | 160                                       |   |   | 1,828                                    |   |   | 0 |   |   | 1,988 |   |
| (Increase)                    Decrease in other assets        |   |   | 11,200                                    |   |   | (31,095                                  | )      |   | 0 |   |   | (19,895 | ) |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Net                    Cash (Used) by Operating Activities:   |   |   | (315,585                                  | )      |   | (280,741                                 | )      |   | (124,437 | ) |   | (721,920 | ) |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Cash                    Flows From Investing Activities:      |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Purchase                    of Equipment                      |   |   | 0                                         |   |   | (15,928                                  | )      |   | (29,717 | ) |   | (45,645 | ) |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Net                    Cash Used by Investing Activities:     |   |   | 0                                         |   |   | (15,928                                  | )      |   | (29,717 | ) |   | (45,645 | ) |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Cash                    Flows From Financing Activities:      |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Issuance                    of common stock                   |   |   | -                                         |   |   | 0                                        |   |   | 1 |   |   | 198 |   |
| (Increase)                    Decrease in loans receivable    |   |   | 50,000                                    |   |   | 0                                        |   |   | 0 |   |   | - |   |
| Increase                    in loans payable                  |   |   | 223,731                                   |   |   | 251,372                                  |   |   | 68,652 |   |   | 543,755 |   |
| Increase                    in contributed capital            |   |   | 50,000                                    |   |   | 45,391                                   |   |   | 78,099 |   |   | 224,490 |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Net                    Cash Provided by Financing Activities: |   |   | 323,731                                   |   |   | 296,763                                  |   |   | 146,752 |   |   | 768,443 |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Net                    Increase (Decrease) in Cash            |   |   | 8,146                                     |   |   | 94                                       |   |   | (7,402 | ) |   | 878 |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Cash                    at Beginning of Period                |   |   | (7,268                                    | )      |   | (7,362                                   | )      |   | 40 |   |   | 0 |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |
| Cash                    at End of Period                      |   | $      | 878                                       |   | $      | (7,268                                   | )      | $ | (7,362 | ) | $ | 878 |   |
|                                                          |   |   |                                      |   |   |                                     |   |   |   |   |   |   |   |

----

|                                           |       |       |                                      |       |       |           |       |       |        |       |       | **(Deficit) **   | ** ** | ** ** | ** **        | ** ** |
|------------------------------------------------|------------|------------|-------------------------------------------|------------|------------|----------------|------------|------------|-------------|------------|------------|-----------------------|------------|------------|-------------------|------------|
|                                           | ** ** | ** ** | ** **                                | ** ** | ** ** | ** **     | ** ** | ** ** | ** **  | ** ** | ** ** | **Accumulated ** | ** ** | ** ** | ** **        | ** ** |
|                                           | ** ** | ** ** | **Common                    Stock ** | ** ** | ** ** | **Additional** | ** ** | ** ** | **During**  | ** ** | ** ** | **Total**             | ** ** |
|                                           | ** ** | ** ** | ** **                                | ** ** | ** ** | ** **     | ** ** | ** ** | **Paid-in** | ** ** | ** ** | **Development**       | ** ** | ** ** | **Stockholders'** | ** ** |
|                                           | ** ** | ** ** | **Shares**                                | ** ** | ** ** | **Amount**     | ** ** | ** ** | **Capital** | ** ** | ** ** | **Stage**             | ** ** | ** ** | **Equity**        |       |
|                                           |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| February                    2002               |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                    for Cash             |       |       | 200,000                                   |       |       | 200            |       |       |        |       |       |                  |       |       | 200               |       |
| June                    2002                   |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                    for Cash             |       |       | 19,685,000                                |       |       | 197            |       |       |        |       |       |                  |       |       | 197               |       |
| Contributed                    Capital         |       |       |                                      |       |       |           |       |       | 50,000      |       |       |                  |       |       | 50,000            |       |
| July                    2002                   |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                    Capital         |       |       |                                      |       |       |           |       |       | 1,000       |       |       |                  |       |       | 1,000             |       |
| November                    2002               |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Relinquished                    by Shareholder |       |       | (200,000                                  | )          |       | (200           | )          |       |        |       |       |                  |       |       | (200              | )          |
| Net                    Loss                    |       |       | -                                         |       |       | -              |       |       | -           |       |       | (129,311              | )          |       | (129,311          | )          |
| Balance                    December 31, 2002   |       |       | 19,685,000                                |       |       | 197            |       |       | 51,000      |       |       | (129,311              | )          |       | (78,114           | )          |
| April                    2003                  |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                    for Cash             |       |       | 27,000                                    |       |       |           |       |       | 33,600      |       |       |                  |       |       | 33,600            |       |
| May                    2003                    |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Issued                    for Cash             |       |       | 120,000                                   |       |       | 1              |       |       | 36,499      |       |       |                  |       |       | 36,500            |       |
| September                    2003              |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                      |       |       | 2,155,500                                 |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                    Capital         |       |       |                                      |       |       |           |       |       | 8,000       |       |       |                  |       |       | 8,000             |       |
| December                    2003               |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                      |       |       | 100,000                                   |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Net                    Loss                    |       |       | -                                         |       |       | -              |       |       | -           |       |       | (108,357              | )          |       | (108,357          | )          |
| Balance                    December 31, 2003   |       |       | 22,087,500                                |       |       | 198            |       |       | 129,099     |       |       | (237,668              | )          |       | (108,371          | )          |
| May                    2004                    |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                      |       |       | 495,000                                   |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                    Capital         |       |       |                                      |       |       |           |       |       | 14,691      |       |       |                  |       |       | 14,691            |       |
| July                    2004                   |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                      |       |       | 1,499,400                                 |       |       |           |       |       |        |       |       |                  |       |       | 0                 |       |
| August                    2004                 |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                      |       |       | 1,265,300                                 |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                    Capital         |       |       |                                      |       |       |           |       |       | 700         |       |       |                  |       |       | 700               |       |
| November                    2004               |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                      |       |       | 121,429                                   |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                    Capital         |       |       |                                      |       |       |           |       |       | 30,000      |       |       |                  |       |       | 30,000            |       |
| Net                    Loss                    |       |       | -                                         |       |       | -              |       |       | -           |       |       | (269,027              | )          |       | (269,027          | )          |
| Balance                    December 31,2004    |       |       | 25,468,629                                |       |       | 198            |       |       | 174,490     |       |       | (506,695              | )          |       | (332,007          | )          |
| May                    2005                    |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Dividends                                      |       |       | 2,100,000                                 |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| September                    2005              |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                    Capital         |       |       | 50,000                                    |       |       |           |       |       | 40,000      |       |       |                  |       |       | 40,000            |       |
| October                    2005                |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Contributed                    Capital         |       |       | 50,000                                    |       |       |           |       |       | 10,000      |       |       |                  |       |       | 10,000            |       |
| Net                    (loss)                  |       |       | -                                         |       |       | -              |       |       | -           |       |       | (278,337              | )          |       | (278,337          | )          |
|                                           |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |
| Balance                    December 31, 2005   |       |       | 27,668,629                                |       | $          | 198            |       | $          | 224,490     |       | $          | (785,032              | )          | $          | (560,344          | )          |
|                                           |       |       |                                      |       |       |           |       |       |        |       |       |                  |       |       |              |       |

----

| **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 December 31, 2005 or                  2004.                                       |
|                                                                                                                                                 |
| 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 |
|-------------------------------------|--------------------------|
| Automobile                          | 5                  years |
| Office                  equipment   | 7                  years |

| Property                    and Equipment consist of the following as of December, |
|------------------------------------------------------------------------------------|

|                                         |   |   | **2005** |   |   | **2004** |   |
|----------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                         |   |   |     |   |   |     |   |
| Automobile                                   |   | $      | 29,717   |   | $      | 29,717   |   |
| Office                equipment              |   |   | 15,928   |   |   | 15,928   |   |
|                                         |   |   | 45,645   |   |   | 45,645   |   |
| Less:accumulated                depreciation |   |   | (24,606  | )      |   | (13,963  | )      |
|                                         |   | $      | 21,039   |   | $      | 31,682   |   |

| Depreciation                expense for the years ended December 31, 2005 and 2004 was $10,643                                    |
|-----------------------------------------------------------------------------------------------------------------------------------|
| and                $6,303, respectively.                                                                                          |
|                                                                                                                              |
| 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                December 31, 2005 or 2004.                                                                                      |

| 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                no                advertising costs      |
| included                in selling, or general and administrative expenses in 2005 or                2004.                                   |
|                                                                                                                                         |
| 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 of warrants as of December 31, 2005 or                2004.                                                  |
|                                                                                                                                         |
| 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 December 31, 2005 or 2004 respectively.                The                          |
| respective                carrying value of certain on-balance-sheet financial instruments                approximated their                 |
| fair                values. These financial instruments include cash and accounts payable.                Fair values are                    |
| assumed                to approximate carrying values for cash and payables because they                are                short term        |
| in                nature and their carrying amounts approximated fair values or they                are                payable on demand.    |
|                                                                                                                                         |

----

| Income                  Taxes                                                                                                                            |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|
| Deferred                  income tax assets and liabilities are computed annually for differences                  between the                           |
| financial                  statement and tax basis of assets and liabilities that will result                  in                  taxable or deductible |
| amounts                  in the future based on enacted tax laws and rates applicable on                  the                  periods in which          |
| the                  differences are expected to affect taxable income. Valuation allowances                  are established                            |
| when                  necessary to reduce deferred tax assets to the amount expected                  to be                  realized. Income            |
| tax                  expense is the tax payable or refundable for the period plus or                  minus the                  change during           |
| the                  period in deferred tax assets and liabilities.                                                                                      |
|                                                                                                                                                     |
| Segment                  reporting                                                                                                                       |
| The                  Company follows Statement of Financial Accounting Standards No.                  130,                  "Disclosures                 |
| About                  Segments of an Enterprise and Related Information". The Company                  operates                  as a                   |
| single                  segment and will evaluate additional segment disclosure requirements                  as it                  expands its         |
| operations.                                                                                                                                              |
|                                                                                                                                                     |
| Dividends                                                                                                                                                |
| The                  Company has not yet adopted any policy regarding payment of dividends.                  No                  dividends               |
| have                  been paid or declared since inception.                                                                                             |
|                                                                                                                                                     |
| Recent                  pronouncements                                                                                                                   |
| In                  June 2001, SFAS No. 141, "Business Combinations", and SFAS No.                  142,                  "Goodwill and                  |
| Other                  Intangible Assets", were issued. SFAS No. 141 requires that all                  business                  combinations           |
| initiated                  after June 30, 2001 be accounted for using the purchase method                  of                  accounting, and           |
| that                  identifiable intangible assets acquired in a business combination                  be                  recognized as an assets     |
| apart                  from goodwill if they meet certain criteria. The impact of the                  adoption of                  SFAS No. 141         |
| on                  our reported operating results, financial position and existing                  financial                  statements               |
| disclosure                  is not expected to be material.                                                                                              |
|                                                                                                                                                     |
| SFAS                  No. 142 applies to all goodwill and identified intangible assets                  acquired                  in a business          |
| combination.                  Under the new standard, all goodwill and indefinite-lived intangible                  assets,                              |
| include                  the acquired before initial application of the standard, will not                  be                  amortized but will       |
| be                  tested for impairment at least annually. The new standard is effective                  for                  fiscal years            |
| beginning                  after December 15, 2001. The impact of the adoption of SFAS No.                  142 on                  our                  |
| reported                  operating results, financial position and existing financial statement                  disclosure is not                      |
| expected                  to be material.                                                                                                                |
|                                                                                                                                                     |

| In                July 2001, SFAS No. 143, "Accounting for Asset Retirement Obligations",                was issued                         |
|---------------------------------------------------------------------------------------------------------------------------------------------|
| which                requires the recognition of a liability for an asset retirement obligation                in the period in             |
| which                it is incurred. When the liability is initially recorded, the carrying                amount of the related            |
| long-lived                asset is correspondingly increased. Over time, the liability is accreted                to its present            |
| value                and the related capitalized charge is depreciated over the useful                life of                the asset.     |
| SFAS                No. 143 is effective for fiscal years beginning after June 15, 2002.                The                impact of the    |
| adoption                of SFAS No. 143 on the Company's reported operating results, financial                position                      |
| and                existing financial statement disclosure is not expected to be                material.                                   |
|                                                                                                                                        |
| In                August 2001, SFAS No. 144, "Accounting for the Impairment of Disposal                of                Long-lived         |
| Assets",                was issued. This statement addresses the financial accounting and                reporting for the                  |
| impairment                of disposal of long-lived assets and broadens the definition of what                constitutes a                 |
| discontinued                operation and how results of a discontinued operation are to be measured                and                     |
| presented.                The provisions of SFAS No. 144 are effective for financial statements                issued for                   |
| fiscal                years beginning after December 15, 2001. The impact of the adoption                of                SFAS No. 144     |
| on                our reported operating results, financial position and existing financial                statement disclosure             |
| is                not expected to be material.                                                                                              |
|                                                                                                                                        |
| Stock-Based                Compensation                                                                                                     |
| The                Company accounts for stock-based awards to employees in accordance                with                Accounting         |
| Principles                Board Opinion No. 25, "Accounting for Stock Issued to Employees"                and                related        |
| interpretations                and has adopted the disclosure only alternative of SFAS No. 123,                "Accounting                  |
| for                Stock-Based Compensation". Options granted to consultants, independent                representatives                    |
| and                other non-employees are accounted for using the fair value method                as                prescribed by         |
| SFAS                No. 123.                                                                                                                |
|                                                                                                                                        |
| Year                end                                                                                                                     |
| The                Company has adopted December 31 as its fiscal year end.                                                                  |
|                                                                                                                                        |
| **Note                3 - Going concern**                                                                                                   |
|                                                                                                                                        |
| The                accompanying financial statements have been prepared assuming the                Company                will             |
| continue                as a going concern. As shown in the accompanying financial statements,                the                Company    |
| has                incurred a net loss of $785,032 for the period from February 21,                2002                (inception) to       |
| December                31, 2005. The future of the Company is dependent upon its ability                to                obtain financing |
| and                upon future profitable operations from the development of its new                business                opportunities.  |
| Management                has plans to seek additional capital through a public offering of                its                common stock. |
| The                financial statements do not include any adjustments relating to the                recoverability and                    |
| classification                of recorded assets, or the amount of the classification of liabilities                that might be           |
| necessary                in the event the Company cannot continue in                existence.                                              |

----

| **Note                  4 - Income taxes**                                                                                                            |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                  |
| The                  Company accounts for income taxes under Statement of Financial                  Accounting                  Standards            |
| No.                  109, "Accounting for Income Taxes" (SFAS No. 109), which requires                  use of                  the liability         |
| method.                  SFAS No. 109 provides that deferred tax assets and liabilities                  are                  recorded based on       |
| the                  differences between the tax bases of assets and liabilities and                  their                  carrying amounts for     |
| financial                  reporting purposes, referred to as temporary differences. Deferred                  tax                  assets and        |
| liabilities                  at the end of each period are determined using the currently enacted                  tax                  rates applied |
| to                  taxable income in the periods in which the deferred tax assets                  and                  liabilities are expected to  |
| be                  settled or realized.                                                                                                              |
|                                                                                                                                                  |
| The                  provisions for income taxes differs from the amount computed by                  applying                  the statutory         |
| federal                  income tax rate to Income before provision for income taxes. The                  source                  and tax            |
| effects                  of the differences are as follows:                                                                                           |

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

| As                      of December 31, 2005 , the Company has a net operating loss                      carryforward                      of approximately     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| $785,032                      for tax purposes, which will be available to offset future                      taxable income.                      If not used, |
| this                      carryforward will expire in 2025.                                                                                                     |
|                                                                                                                                                            |
| **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).                      The                      loan was deemed     |
| uncollectible                      in 2005 and was written off and charged to other                      expense.                                               |
|                                                                                                                                                            |
| **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.                                                                                                            |
|                                                                                                                                                            |

| On                August 17, 2004 the Company executed a Confidential Private Offering                Memorandum to                          |
|----------------------------------------------------------------------------------------------------------------------------------------------|
| accredited                investors only. In accordance with the terms of the offering, up                to                3,571,428 shares |
| of                the Company's common stock could be sold at $0.70 per share. Prospective                investors                          |
| must                subscribe for a minimum of 10,000 shares for $7,000. As of the report                date, no investors                  |
| have                purchased any stock. The offering terminated on August 31, 2005.                                                         |
|                                                                                                                                         |
| **Note                7 - Warrants and options**                                                                                             |
|                                                                                                                                         |
| As                of December 31, 2005 or 2004, there were no warrants or options                outstanding to                              |
| acquire                any additional shares of common stock.                                                                                |
|                                                                                                                                         |
| **Note                8 - Leases**                                                                                                           |
|                                                                                                                                         |
| In                May 2006 the Company terminated it's lease agreements and vacated                the                properties             |
| that                were being leased. The following summarizes the lease agreements                that were                in effect       |
| during                the reporting period.                                                                                                  |
|                                                                                                                                         |
| On                March 23, 2003 the Company executed a lease agreement that calls                for the                issuance of         |
| Company                stock to the landlord of the Centerpoint mall in Grand Rapids, Michigan,                in                            |
| exchange                for rent. The lease will expire five years from the commencement                date. The                terms       |
| of                the lease called 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 provided 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.                                                                                             |
|                                                                                                                                         |
| On                October 10, 2004, the Company executed a lease agreement for gallery                space                in                |
| Key                West, Florida. The lease called for a monthly rent payment of $6,300                for a                term of          |
| three                years commencing on October 15, 2004 and ending on October 14, 2007.                The                                 |
| lease                also called for a five percent (5%) increase in rent upon each anniversary                of the                        |
| lease                commencement, as well as a three month security                deposit.                                                 |

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| **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, was also the Principal owner Chief Operating Officer, Treasurer,                  and Chairman                           |
| of                  the Board of the Company. The note was deemed uncollectible and                  written                  off in 2005 (See Note 5). |
|                                                                                                                                                    |
| Office                  space and services have been and are provided without charge by                  the Chief                  Executive Officer   |
| during                  2005. 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**                                                                                                            |
|                                                                                                                                                    |
| During                  the year ended December 31, 2005, the Company signed a promissory                  note                  payable                |
| to                  a shareholder in the amounts of $226,100. The loan is due upon                  demand and                  bears interest at the   |
| prime                  rate. During the years ended December 31, 2004 and 2003, the Chief                  Operating Officer                            |
| of                  the Company loaned the Company $2,354 and $8,557, respectively.                  The loan                  is due upon              |
| demand                  and bears no interest rate.                                                                                                     |
|                                                                                                                                                    |
| 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. Current and long-term                  portions                                  |
| of                  the note payable are as                  follows:                                                                                   |

| **Year** | **Principal**                   | **Interest**                                    |
|----------|---------------------------------|-------------------------------------------------|
|     |                            |                                            |
| 2005     | $6,229                          | $1,040                                          |
| 2006     |                      6,606 |                         662 |
| 2007     |                      7,607 |                         264 |

| Included                      in the accompanying balance sheet under the following                      captions: |
|--------------------------------------------------------------------------------------------------------------------|

|                                                 |   |   | **2005** |   |   | **2004** |   |
|------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                                 |   |   |     |   |   |     |   |
| Note                        Payable- Current Portion |   | $      | 8,930    |   | $      | 6,363    |   |
| Note                        Payable - Long Term      |   |   | 7,609    |   |   | 14,066   |   |
|                                                 |   | $      | 16,539   |   | $      | 20,429   |   |

| At                          December 31, 2005, the Company has short term notes payable                          to                          non-shareholder and               |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| shareholder                          investors in the amount of $527,216. The notes call for                          varying interest                          rates ranging  |
| from                          1% to 8% per annum, and contain a stock payment option                          payable at the                          lender's                 |
| discretion.                          Several of the notes also call for a payment of 3.75% of                          gross sales from                          the Company's |
| coffee                          shop revenue at its Grand Rapids, Michigan mall                          location.                                                             |
|                                                                                                                                                                           |
| Included                          in the accompanying balance sheet under Loans                          Payable                                                               |

|                                                      |   |   | **2005** |   |   | **2004** |   |
|-----------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                                      |   |   |     |   |   |     |   |
| Loans                  Payable - shareholders   |   | $      | 508,184  |   | $      | 299,595  |   |
| Loans                  Payable - non shareholders         |   |   | 19,032   |   |   | -        |   |
| Total                  current loans payable              |   | $      | 527,216  |   | $      | 299,595  |   |

| **Note                      11 - Other Income (Expense), Net**                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                            |
| Included                      in this caption is a loan receivable from an affiliated company                      for                      $50,000 that was    |
| deemed                      uncollectible and written off to bad debt expense in 2005.                      Accounts                      payable consisting of |
| of                      unpaid consulting fees to an individual and the Company’s former Chief                      Operating Officer in                  |
| the                      amount of $82,000 were recorded as relief of debt income. In                      addition, a                      loan payable due    |
| a                      shareholder in the amount of $15,000 was satisfied upon completion                      of a                      sales transaction for  |
| inventory                      in 2004.                                                                                                                         |
|                                                                                                                                                            |
| **Note                      12 - Subsequent Events**                                                                                                            |
|                                                                                                                                                            |
| As                      of the report date, the Company has ceased operations and is                      seeking a                      merger. Management     |
| does                      not have a plan in place in the event that such a merger does                      not                      materialize. If a merger  |
| is                      completed, the transaction would be accounted for as a Type                      B                      Reorganization as defined in    |
| IRC                      Code Section 368.                                                                                                                      |
|                                                                                                                                                            |
| As                      of the report date, the Company is in default on all of its                      short term                      notes payable.         |
| At                      December 31, 2005 the outstanding balance of the notes payable                      is                      $527,216,                   |
| exclusive                      of accrued interest and royalties in the amount of $20,265                      and $1,962,                                      |
| respectively.                      Management estimates that the accrued interest and royalty                      expense                                      |
| related                      to the short term notes payable to date is approximately $37,000                      and                      $2,000,             |
| respectively.                      Management has not formulated a repayment plan, and no contingency                                                           |
| plan                      has been established in the event that the lenders seek legal                      remedies.                                          |
|                                                                                                                                                            |

| Lease                  termination                                                                                                            |
|-----------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                          |
| In                  May 2006 the Company terminated its lease agreements and vacated                  the                  properties leased. |
| The                  lease and security deposits were sharged to rent expense in                  2006.                                       |

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