**UNITED      STATES**

**SECURITIES        AND EXCHANGE COMMISSION**

**Washington,        D.C. 20549**

**FORM        10-KSB**

|   | [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.) |

** **

----

**TABLE        OF CONTENTS**

| PART                  I                                                                                                                                                |   |   |   | PA | GE     |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|----|--------|
|      ITEM                  1. DESCRIPTION OF BUSINESS                                                                                         |   |   |   | 3  |   |
|      ITEM                  2. DESCRIPTION OF PROPERTY                                                                                         |   |   |   | 5  |   |
|      ITEM                  3. LEGAL PROCEEDINGS                                                                                               |   |   |   | 5  |   |
|      ITEM                  4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY                  HOLDERS                                            |   |   |   | 5  |   |
| PART                  II                                                                                                                                               |   |   |   |
|      ITEM                  5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER                  MATTERS                                       |   |   |   | 6  |   |
|      ITEM                  6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF                  OPERATION                                      |   |   |   | 7  |   |
|      ITEM                  7. FINANCIAL STATEMENTS                                                                                            |   |   |   | 9  |   |
|      ITEM                  8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON                  ACCOUNTING                                    |   |   |   |
|               AND                  FINANCIAL DISCLOSURE                                          |   |   |   | 9  |   |
|      ITEM                  8A. CONTROLS AND PROCEDURES                                                                                        |   |   |   | 9  |   |
| PART                  III                                                                                                                                              |   |   |   |
|      ITEM                  9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND                  CONTROL PERSONS                                   |   |   |   |
|               COMPLIANCE                  WITH SECTION 16(a)OF THE EXCHANGE                  ACT |   |   |   | 10 |   |
|      ITEM                  10. EXECUTIVE                  COMPENSATION                                                                        |   |   |   | 13 |   |
|      ITEM                  11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND                  MANAGEMENT                                |   |   |   |
|               AND                  RELATED STOCKHOLDER                  MATTERS                  |   |   |   | 14 |   |
|      ITEM                  12. CERTAIN RELATIONSHIPS AND RELATED                  TRANSACTIONS                                                |   |   |   | 15 |   |
|      ITEM                  13. EXHIBITS                                                                                                       |   |   |   | 15 |   |
|      ITEM                  14. PRINCIPAL ACCOUNTANT FEES AND                  SERVICES                                                        |   |   |   | 16 |   |
| SIGNATURES                                                                                                                                                             |   |   |   | 17 |   |

----

**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. 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.**

**Market        Information**

**Holders        of Common Equity**

**Dividends**

**Equity          Securities Sold Without Registration**

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

**General        Information**

----

**ITEM        6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF        OPERATION.**

**Plan        of Operation**

**Critical        Accounting Policies**

**Results        of Operations**

**(a)        Revenues**

**(b)        Costs and Expenses**

**(c)        Depreciation, Depletion and Amortization**

**(e)        Other Income (Expense)**

**(f)        Net Loss**

----

**Liquidity        and Capital Resources**

**Income        Tax Matters**

**Inflation**

**Going        Concern**

**Forward        Looking Statements**

----

**ITEM        7. FINANCIAL STATEMENTS.**

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

**ITEM        8a CONTROLS AND PROCEDURES.**

----

**PART        III.**

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

**Directors        and Executive Officers**

*Current:          The following sets forth information on the current officers and Directors          of          the Company:*

* *
          AND          DIRECTOR

Joseph          Walsh

| **Name**                                        | **Age** | **Positions                      and Offices Held** |
|-------------------------------------------------|---------|-----------------------------------------------------|
|                                            |    |                                                |
| Judith                      Stahl               | 36      | President,                      Secretary, Director |
| 4719                      Quarton Rd            |    |                                                |
| Bloomfield                      Hills, MI 48301 |    |                                                |

**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                          |     |                                     | 2002      |                                     |                                |                                                  | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   |  $0 |   |
| President                  and CEO                     |     |                                     | 2003      |                                     |                                |                                                  | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   | $0 |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Roger                  Bergman                         |     |                                     | 2002      |                                     |                                |                                                  | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |
| Director                                               |     |                                     | 2003      |                                     |                                |                                                  |  $0                  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Scott                  Dyk                             |     |                                     | 2002      |                                     |                                |                                                  | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0  |   |   | $0 |   |
| Director                                               |     |                                     | 2003      |                                     |                                |                                                  |  $0  |    |   |  $0  |   |   | $0  |   |   |  $0  |   |   |  $0  |   |   |  $0  |   | $0   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                   |     |                                     |      |                                     |                                |                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

**Other        Compensation**

----

**ITEM        11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND 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                                              | Joseph                    Walsh                               |   |   |   |   |   |   |   |   |
| Stock                                    |                                                                                     |                                                     | 800                    Duval Street, Key West, FL  33040 |   |   |   | 15,859,000                                                    |   | 43.7  |   | % |
|                                     |                                                                                     |                                                     |                                                          |   |   |   |
|                                     |                                                                                     |                                                     |                                                          |   |   |   |   |   |   |   |   |
|                                     |                                                                                     |                                                     |                                                          |
| Common                                   |                                                                                     |  2                                                  | Roger                    Bergman                              |   |   |   |
| Stock                                    |                                                                                     |                                                     | 800                    Duval Street, Key West, FL  33040 |   |   |   | 100,000 |   | .2  |   | % |
|                                     |                                                                                     |                                                     |                                                          |   |   |   |
|                                     |                                                                                     |                                                     |                                                          |
|                                     |                                                                                     |                                                     |                                                          |   |   |   |   |   |   |   |   |
|                                     |                                                                                     |                                                     |                                                          |
| Common                                   |                                                                                     |  2                                                  | Scott                    Dyk                                  |   |   |   |
| Stock                                    |                                                                                     |                                                     | 800                    Duval Street, Key West, FL  33040 |   |   |   | 100,000 |   | .2  |   | % |
|                                     |                                                                                     |                                                     |                                                          |   |   |   |
|                                     |                                                                                     |                                                     |                                                          |   |   |   |   |   |   |   |   |
|                                     |                                                                                     |                                                     |                                                          |
| Common                                   |                                                                                     |  2,3                                                | Shares                    of all Directors and                |   |   |   |
| Stock                                    |                                                                                     |                                                     | executive                    officers as a group              |   |   |   | 16,059,000 |   | 44  |   | % |
|                                     |                                                                                     |                                                     | (3                    persons)                                |   |   |   |
|                                     |                                                                                     |                                                     |                                                          |

|   | (1) | Each                  person has sole voting power and sole dispositive power as to all                  of the                  shares shown as beneficially owned by them, to our                  knowledge. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Director |
|--------|-----|----------|

|   | (3) | Executive                  Officer |
|--------|-----|------------------------------------|

----

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

**ITEM        13. EXHIBITS AND REPORTS ON FORM 8-K.**

**Exhibits**

**EXHIBIT        INDEX**

| **Number**                                                                      | **Description**                                                                                                                                                                                                                                                                                                           |
|------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1    3.2    3.3                                      | Articles                  of Incorporation [1] Articles                  of Amendment of the Articles of Incorporation [3] Bylaws                  [1]                                                                                                                                                                    |
| 10.1 10.2                                                                                 | Agreement                  and Plan of Reorganization, Soldnet, Inc. and Artfest, Inc.                  [2] Loan                  Agreement (form) with Promissory Note (form), December, 2005                  [3]                                                                                                                 |
|  31.1 31.2 32            |  Certifications                    pursuant to Sarbanes                    - Oxley Act of 2002  Certifications                    pursuant to Sarbanes                    - Oxley Act of 2002  Certifications                  of Officers pursuant to Section 1350, of the Sarbanes                  - Oxley Act of 2002 |

----

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

**Audit          Fees**

**Audit-Related          Fees**

**Tax          Fees**

**All          Other Fees**

**Audit          Committee**
**Fee**

**Hours          By Others**

----

**SIGNATURES**

|                                          |                                           |                                   |
|-----------------------------------------------|------------------------------------------------|----------------------------------------|
|                                          | Artfest                    International, Inc. |
|                                     |                                      |                              |
| Date: December                  29, 2005 | By:                                  | /s/ Joseph                  Walsh |
|                                          | Joseph                  Walsh                  |
|                                          | President                                      |

| **Signature**                                                                                                                                                                                                                                            | **Title**                                                                                                                                                     | **Date**                                                                                                                                               |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|
| /s/                  Joseph WalshJoseph                  Walsh     /s/                  Roger BergmanRoger                  Bergman      /s/                  Scott DykScott                  Dyk | President(principal                  executive officer), Treasurer (principal financial officer)/Director  Director    Director | December                  29, 2005    December                  29, 2005   December                  28, 2005  |

----

**Artfest      International Incorporated**

**(A      Development Stage Company)**

**Balance      Sheets**

**as      of**

**December      31, 2003 and 2002**

**and**

**Statements      of Operations,**

**Changes      in Stockholders’ Equity, and**

**Cash      Flows**

**for      the period**

**February      21, 2002 (Date of Inception)**

**through**

**December      31, 2003**

----

**ARTFEST        INTERNATIONAL, INC.**

|                                                                                                   | PAGE   |
|--------------------------------------------------------------------------------------------------------|--------|
|                                                                                                   |        |
| ACCOUNTANT’S                AUDIT REPORT                                                         | F-1    |
|                                                                                                   |   |
| FINANCIAL                STATEMENTS                                                                    |   |
|                                                                                                   |   |
|     Balance                Sheets- December 31, 2003 and 2002                      | F-2    |
|                                                                                                   |   |
|     Statements                of Operations and Accumulated                Deficit |   |
|     During                the Development Stage                                    | F-3    |
|                                                                                                   |   |
|     Statement                of Changes in Stockholders’ Equity              | F-4    |
|                                                                                                   |   |
|     Statements                of Cash Flows                                        | F-5    |
|                                                                                                   |   |
|     Notes                to Financial Statements                                   | F-6    |
|                                                                                                   |   |

----

**ARTFEST      INTERNATIONAL, INC.**

|                  **ASSETS**                                                                                 |   |   | 2003     |   |   | 2002     |   |
|------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
| Current                  Assets:                                                                                 |   |   |     |   |   |     |   |
|     Cash                  (Note 2)                                                           |   | $      | 0        |   | $      | 40       |   |
|     Loan                  Receivable (Notes 5 & 8)                                       |   |   | 50,000   |   |   | 50,000   |   |
|     Prepaid                  Expenses                                                        |   |   | 6,498    |   |   | 0        |   |
|                                                                                                             |   |   |     |   |   |     |   |
|         Total                  Current Assets                       |   |   | 56,498   |   |   | 5,040    |   |
|                                                                                                             |   |   |     |   |   |     |   |
|     Property                  and                  Equipment, at cost, less accumulated      |   |   |     |   |   |     |   |
|     depreciation                  of                  $7,660 (Notes 2 & 10)              |   |   | 22,057   |   |   | 0        |   |
|                                                                                                             |   |   |     |   |   |     |   |
|         TOTAL                  ASSETS                                    |   | $      | 78,555   |   | $      | 50,040   |   |
|                                                                                                             |   |   |     |   |   |     |   |
| **LIABILITIES                  AND STOCKHOLDERS' EQUITY**                                                        |   |   |     |   |   |     |   |
|                                                                                                             |   |   |     |   |   |     |   |
|     Current                  Liabilities:                                                    |   | $      | 110,912  |   | $      | 107,200  |   |
|     Accounts                  Payable                                                        |   |   | 7,362    |   |   | 0        |   |
|     Cash                  Overdraft                                                          |   |   | 5,209    |   |   | 0        |   |
|     Note                  Payable - Current Portion ( Note 10)                               |   |   | 43,142   |   |   | 0        |   |
|     Loans                  Payable (Notes 9 & 10)                                        |   |   |     |   |   |     |   |
|                                                                                                             |   |   |     |   |   |     |   |
|                          Total                  Current Liabilities |   |   | 166,625  |   |   | 107,200  |   |
|                                                                                                             |   |   |     |   |   |     |   |
|     Long                  Term Liabilities:                                                  |   |   |     |   |   |     |   |
|     Note                  Payable (Note 10)                                                  |   |   | 20,301   |   |   | 0        |   |
|                                                                                                             |   |   |     |   |   |     |   |
| TOTAL                  LIABILITIES                                                                               |   |   | 186,926  |   |   | 107,200  |   |
|                                                                                                             |   |   |     |   |   |     |   |
|     Stockholders'                  Equity:                                                   |   |   |     |   |   |     |   |
|     Common                  Stock - $.00001 par value - 40,000,000                           |   |   |     |   |   |     |   |
|         shares                  authorized, 22,087,500 and 19,685,000    |   |   |     |   |   |     |   |
|         shares                  issued and outstanding in 2003 and       |   |   | 198      |   |   | 197      |   |
|         2002,                  respectively                              |   |   |     |   |   |     |   |
|     Additional                  Paid-in Capital                                              |   |   | 129,099  |   |   | 51,000   |   |
|     (Deficit)                  accumulated during developmental stage                        |   |   | (237,668 | )      |   | (108,357 | )      |
|                                                                                                             |   |   |     |   |   |     |   |
| TOTAL                  LIABILITIES AND STOCKHOLDERS' EQUITY                                                      |   | $      | 78,555   |   | $      | 50,040   |   |

----

**ARTFEST        INTERNATIONAL, INC.**

|                                                           |   | **For                  the**      |       | **February                  21, 2002** |   |
|----------------------------------------------------------------|--------|-----------------------------------|------------|----------------------------------------|--------|
|                                                           |   | **Years                  ended**  |       | **(Inception)                  to**    |   |
|                                                           |   | **December                  31,** |       | **December                  31, 2003** |   |
|                                                           |   | **2003**                          |       | **2002**                               |   |   |   |
|                                                           |   |                              |       |                                   |   |   |   |
|                                                           |   |                              |       |                                   |   |   |   |
| Revenue                                                        |   | $                                 | 37,544     |                                   | $      | 52,056 |   | $ | 89,600 |   |
|                                                           |   |                              |       |                                   |   |   |   |   |   |   |
| Cost                  of Revenue                               |   |                              | 35,982     |                                   |   | 129,760 |   |   | 165,742 |   |
|                                                           |   |                              |       |                                   |   |   |   |   |   |   |
| Gross                  Profit (Loss)                           |   |                              | 1,562      |                                   |   | (77,704 | ) |   | (76,142 | ) |
|                                                           |   |                              |       |                                   |   |   |   |   |   |   |
| General                  and Administrative                    |   |                              | 130,873    |                                   |   | 30,653 |   |   | 161,526 |   |
|                                                           |   |                              |       |                                   |   |   |   |   |   |   |
|                                                           |   |                              |       |                                   |   |   |   |   |   |   |
| (Deficit)                  Accumulated - Development Stage     |   | $                                 | (129,311   | )                                      | $      | (108,357 | ) | $ | (237,668 | ) |
|                                                           |   |                              |       |                                   |   |   |   |   |   |   |
| Weighted                  average number of common shares      |   |                              |       |                                   |   |   |   |   |   |   |
| outstanding                  - basic and fully diluted         |   |                              | 22,087,500 |                                   |   | 19,685,000 |   |   |   |   |
|                                                           |   |                              |       |                                   |   |   |   |   |   |   |
| Net                  (Loss) per share - basic and full diluted |   | $                                 | (0.01      | )                                      | $      | (0.01 | ) |   |   |   |

----

**ARTFEST        INTERNATIONAL, INC.**

|                                                                          |   |                               |             |             |             |                                       |      |                                     |         |                    |   |
|-------------------------------------------------------------------------------|--------|------------------------------------|------------------|------------------|------------------|--------------------------------------------|-----------|------------------------------------------|--------------|-------------------------|--------|
|                                                                          |   |                               |             |             |             |                                       |      | ** (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  | ) |
|                                                                          |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
| 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                                                 |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                     Gifts                                 |   |                               | 2,155,500   |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                     Contributed Capital                   |   |                               |             |             |             |                                       |      |                                     | 8,000   |                    |   |   |   |   | 8,000  |   |
|                                                                          |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|  December                2003                                            |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                     Gifts                                 |   |                               | 100,000     |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                                                                          |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
| Net                  (loss)                                                   |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                       February 21, 2002                   |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                       (Inception) to                      |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                        December 31, 2003   |   |                               |             |             |             |                                       |      |                                     |              |                    |   | (237,668 | ) |   | (237,668 | ) |
|                                                                          |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
|                                                                          |   |                               |             |             |             |                                       |      |                                     |         |                    |   |   |   |   |   |   |
| Balance                  December 31, 2003                                    |   |                               | 22,087,500  |             | $                | 198                                        |      | $                                        | 129,099      |                    | $      | (237,668 | ) | $ | (108,371 | ) |

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**ARTFEST        INTERNATIONAL, INC.**

|                                                        |   | **For                  the**      |     | **February                  21, 2002**** ** |   |
|-------------------------------------------------------------|--------|-----------------------------------|----------|--------------------------------------------------|--------|
|                                                        |   | **Years                  ended**  |     | **(Inception)                  to**** **    |   |
|                                                        |   | **December                  31,** |     | **December                  31, 2003**** ** |   |
|                                                        |   | **2003**                          |     | **2002**                                         |   |   |   |
|                                                        |   |                              |     |                                             |   |   |   |
| Cash                  Flows from Operating Activities:      |   |                              |     |                                             |   |   |   |   |   |   |
| Net                  (loss)                                 |   | $                                 | (129,311 | )                                                | $      | (108,357 | ) | $ | (237,668 | ) |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Adjustments                  to reconcile net (loss) to     |   |                              |     |                                             |   |   |   |   |   |   |
| net                  cash (used) by operating activities:   |   |                              |     |                                             |   |   |   |   |   |   |
| Depreciation                                                |   |                              | 7,660    |                                             |   |   |   |   | 7,660 |   |
| (Increase)                  in Prepaid Expenses             |   |                              | (6,498   | )                                                |   |   |   |   | (6,498 | ) |
| Increase                  in accounts payable               |   |                              | 3,712    |                                             |   | 107,200 |   |   | 110,912 |   |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Net                  Cash (Used) by Operating Activities:   |   |                              | (124,437 | )                                                |   | (1,157 | ) |   | (125,594 | ) |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Cash                  Flows From Investing Activities:      |   |                              |     |                                             |   |   |   |   |   |   |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Purchase                  of Equipment                      |   |                              | (29,717  | )                                                |   | 0 |   |   | (29,717 | ) |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Net                  Cash Used by Investing Activities:     |   |                              | (29,717  | )                                                |   | 0 |   |   | (29,717 | ) |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Cash                  Flows From Financing Activities:      |   |                              |     |                                             |   |   |   |   |   |   |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Issuance                  of Common Stock                   |   |                              | 1        |                                             |   | 197 |   |   | 198 |   |
| (Increase)                  in Loans Receivable             |   |                              | 0        |                                             |   | (50,000 | ) |   | (50,000 | ) |
| Increase                  in Loan Payable                   |   |                              | 68,652   |                                             |   | 0 |   |   | 68,652 |   |
| Increase                  in contributed capital            |   |                              | 78,099   |                                             |   | 51,000 |   |   | 129,099 |   |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Net                  Cash Provided by Financing Activities: |   |                              | 146,752  |                                             |   | 1,197 |   |   | 147,949 |   |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Net                  Increase (Decrease) in Cash            |   |                              | (7,402   | )                                                |   | 40 |   |   | (7,362 | ) |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Cash                  at Beginning of Period                |   |                              | 40       |                                             |   | 0 |   |   | 0 |   |
|                                                        |   |                              |     |                                             |   |   |   |   |   |   |
| Cash                  at End of Period                      |   | $                                 | (7,362   | )                                                | $      | 40 |   | $ | (7,362 | ) |

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**ARTFEST        INTERNATIONAL, INC.**

| **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, 2003 or                  2002. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| Fixed                  Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| Property                  and equipment are recorded at historical cost. Minor additions                  and                  renewals are expensed in the year incurred. Major additions and                  renewals                  are capitalized and depreciated over their estimated useful lives.                  Depreciation is calculated using the straight-line method over                  the                  estimated useful lives as follows:                                                            |

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

|                                                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------|
| Property                  and Equipment consist of the following as of December 31, 2003                  and                  2002: |
|                                                                                                                                 |

|                                           |   | 2003   |   | 2002   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|
|                                           |   |   |   |   |   |
| Automobile                                     |   | $      | 29,717 |   |   | 0 |   |
| Less-accumulated                  depreciation |   |   | 7,660  |   |   | 0 |   |
|                                           |   | $      | 22,057 |   |   | 0 |   |

| Depreciation                  expense for the year ended December 31, 2003 was                  $7,660.                                                                                                                                                                                                                                                                                                                          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 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                  berecoverable                  or is impaired. No such impairments have been identified by management                  at                  December 31, 2003 or 2002. |

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**ARTFEST        INTERNATIONAL, INC.**

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**ARTFEST        INTERNATIONAL, INC.**

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**ARTFEST        INTERNATIONAL, INC.**

**Note      3 - Going concern**

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**ARTFEST        INTERNATIONAL, INC.**

| **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, 2003 , the Company has a net operating loss carryforward                  of approximately $237,668 for tax purposes, which will be available                  to                  offset future taxable income. If not used, this carryforward will                  expire                  in 2023.                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **Note                  5 - Loan Receivable**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| On                  June 23, 2002, the Company loaned $50,000 to an affiliated company.                  The                  note is due upon                  demand and bears no interest rate (See related party                  transactions).                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| **Note                  6 - Stockholders' Equity**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| The                  Company is currently authorized to issue 40,000,000 shares of its                  $0.00001                  par value common                  stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| On                November 19, 2002 the Company issued 19,685,000 shares of its .00001                par                value common                stock as founders' shares to acquire 100% of the outstanding shares                of                Artfest, Inc., a Delaware Corporation for a net book value of $197.                Artfest provides sales, marketing, financial and e-commerce systems                to the                industries of Arts, Antiques, Collectibles and Luxury Goods. The                markets                are serviced by artists, dealers, galleries, and manufacturers of                reproductions and luxury goods. |

**Note      7 - Warrants and options**

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**ARTFEST        INTERNATIONAL, INC.**

**Note      8 - Leases**

**Note      9 - Related party transactions**

**Note      10 - Loans Payable**

|   | **Year** | **Principal** | **Interest** |
|--------|----------|---------------|--------------|
|   | 2004     | $5,209        | $1,286       |
|   | 2005     | 6,363         | 922          |
|   | 2006     | 6,749         | 537          |
|   | 2007     | 7,189         | 136          |
| Totals |     | $25,510       | $2,881       |

|  Note              Payable - Current Portion |   | $      | 5,209  |   |
|---------------------------------------------------|--------|--------|--------|--------|
|  Note              Payable - Long Term       |   |   | 20,301 |   |
|                                              |   | $      | 25,510 |   |

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**ARTFEST        INTERNATIONAL, INC.**

**Note      11 - Subsequent Events**

----