Artfest International, Inc (fka ARTS)

[stervc]

ARTS**The Good, The Bad, The Ugly…

I think ”The Good” is something that needs to be considered here with ARTS, but so does “The Bad” and ”The Ugly.” Right now, things are not looking as good as I had hoped here with ARTS, but that doesn’t mean that things can’t change for the better. I would like to think that here at .0002 and .0003 per share that the bottom is definitely in. The ball is in the hands of the company though. Let’s talk about ”The Good, The Bad, and The Ugly below…

The Good

http://ih.advfn.com/p.php?pid=nmona&article=44113993&symbol=NB%5EARTS
** ARTS generated $1,424,412 in operating revenue in the six months ended June 30, 2010 as compared to $167,885 for the six months ended June 30, 2009.
** An increase in revenues of 748%.


http://ih.advfn.com/p.php?pid=nmona&article=43893155&symbol=NB%5EARTS
http://ih.advfn.com/p.php?pid=nmona&article=43834212&symbol=NB%5EARTS
** ARTS wholly owned subsidiary, Art Channel TV, has moved its production, master control and broadcast operations to Maximedia Studios.
** Maximedia is one of the leading television and recording production facilities in the Dallas area.
** Art Channel TV will now be operating out of a 33,000 square foot facility, which will help meet the future demands.
** The Company plans to produce various projects such as "Thomas Kinkade's Impressions of Israel Collection" and "Rhupert TV" utilizing this facility.
** Maximedia Studios has an impressive list of clients from "American Idol" to Jonas Brothers and Mariah Carey, Kenny Chesney, Shakira, and Sister Hazel.


http://ih.advfn.com/p.php?pid=nmona&article=43706897&symbol=NB%5EARTS
** ARTS will be launching a marketing and branding campaign for its proprietary RFID chip set for the fine art and sports memorabilia industry.
** The Company's Starfest Verification System gives world renowned artists, athletes, and collectors the security and "peace of mind" that the fine art and sports memorabilia is not only authentic, but also quantifies available pieces that were produced and available in the market, hence mitigating possible fraud.
** Artfest International expects its Starfest Verification System to provide a new standard, especially for the $4 Billion global memorabilia industry.
** Artfest International's Starfest Verification System keeps all players in the art and collectibles industry "honest." For example, if a consumer bought a limited edition collectible embedded with the Company's Starfest Verification System, then the consumer would be able to connect to a database that displays all the parameters associated with the particular collectible; where it was purchased, when it was purchased, for what amount it was purchased, what number of the limited edition series they purchased, etc. In addition, the technology offers artists or athletes the ability to see how many pieces or items that were produced and/or sold. The information available through the Starfest Verification System can be read either through an iPhone, PDA, and/or with Artfest's reader package.


http://ih.advfn.com/p.php?pid=nmona&article=43497404&symbol=NB%5EARTS
http://michaeljaysolomon.com/
http://www.thomaskinkadegallery.com/store/
** ARTS subsidiary, Artfest (Starfest) Direct, signed a distribution agreement to launch exclusively on its website the nine piece collection, "Inspiration of Israel," by world renowned artist Thomas Kinkade.
** Also collaborating with Michael Jay Solomon, an accomplished producer and director, to provide a DVD about this exclusive collection with each piece purchased.
** This program is part of Artfest Direct's "Treasures from the Holy Land" collection.
** Artfest will be featuring this new High Definition, Thomas Kinkade video series on Time Warner Cable and other participating Networks this fall season.
** Kinkade sold over a Billion Dollars in art and licensing in the past decade.
** Michael Jay Solomon began his career in film distribution by loading films onto trucks for United Artists at the age of 18 in 1956. He joined United Artists' International Division in 1959 and by 1960 was selling theatrical films from Panama to Central America and later Bogotá, Colombia. At age 24, he became the youngest field manager in the history of the motion picture industry when he headed up United Artists' office in Lima, Peru. In 1964, he started up MCA's Latin American Television Division while based in Mexico and later Brazil. By age 30, Mr. Solomon became MCA's youngest vice president, and eventually had international responsibilities.
** In 1978, Michael Jay Solomon co-founded Telepictures Corporation, which went on to become the largest U.S. television syndication company and one of the largest international television distribution companies, as well as the owner and operator of six television stations in the U.S. Telepictures became a NASDQ company after only 14 months under the leadership of Mr. Solomon as Chairman and CEO.


http://ih.advfn.com/p.php?pid=nmona&article=43463997&symbol=NB%5EARTS
** ARTS instructed its SEC Attorney to file an S-1 Registration with the SEC. The registration will include the shares that were recently given as a dividend to shareholders of Artfest International.
** ARTS has already sent out restricted (unregistered) shares to eligible shareholders who held their shares in Artfest International in Certificate form. Once the registration process is complete and accepted by the SEC, the Company will issue a press release and shareholders who have received these shares will be instructed to send them in the Artfest Direct's Transfer Agent to have the restricted legend removed so they may deposit the shares that will now be free trading with their broker.

http://ih.advfn.com/p.php?pid=nmona&article=43395177&symbol=NB%5EARTS
** ARTS will offer for sale 100 "artist proof" gold edition gilcees of "Rendering of Francoise Gilot" Picasso Art Sculpture with a purchase price of $10,000 a piece.
** The Company will also offer for sale 1,000 "Artfest International textured canvas" limited edition gilcees of the Picasso art sculpture with a purchase price of $1,000 per piece.
** According to http://www.TimesOnline.com/, Picasso's pieces can range from $5 Million to $150 Million.

With the Picasso…
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=52592594
http://ih.advfn.com/p.php?pid=nmona&article=43360595&symbol=NB%5EARTS
** The starting bid for the wooden sixty-by-twenty-seven Picasso sculpture is $55 Million.
** The market value of this sculpture is estimated to be between $50 and $70 Million dollars.
** The purchase price for the Picasso Art Piece is $2,500,000.00 in cash and 50 million warrants at $1.00 per share from ARTS.


http://ih.advfn.com/p.php?pid=nmona&article=43339078&symbol=NB%5EARTS
** ARTS significant short-term goals, including key growth initiatives for the Company, in a "Letter to Shareholders" from CEO, Edward Vakser.
** The "Letter to Shareholders," now available online only at www.artfestinternational.com, provides a snapshot of the Company's activities through its various affiliates; MyArtfest.com, Charity Sports Distributor, Inc., Art Channel, Inc., and Artfest Direct.
** Details include the Company's development of the Art Channel "On-Demand" program through its distribution agreement with Time Warner Cable, the launch of a marketing campaign targeting the Hispanic Market and updates on the equity financing Artfest has received since 2009.


http://ih.advfn.com/p.php?pid=nmona&article=43321262&symbol=NB%5EARTS
** ARTS launched a marketing campaign designed specifically to target the Hispanic Market in the United States, which has become the fastest growing consumer market in the Country.
** The Artfest Direct videos and infomercials will be distributed through the Company's distribution agreement with Time Warner Cable and will be available for more viewing on Time Warner Cable "On Demand."
** According to an article in the Advertising & Marketing Review, "the U.S. Hispanic market is comprised of subcultures from over 20 countries in Central and South America, the Caribbean and Spain, with the majority (63%) of Mexican heritage." The article also states that "49% of U.S. Hispanics, who watch television during prime-time hours, watch Spanish language programming."


http://ih.advfn.com/p.php?pid=nmona&article=43305249&symbol=NB%5EARTS
** ARTS management's goal is to increase revenues to over $200,000,000 in the next 3 years as stated in the Company's most recent business plan.


http://ih.advfn.com/p.php?pid=nmona&article=42932487&symbol=NB%5EARTS
http://ih.advfn.com/p.php?pid=nmona&article=42263168&symbol=OTCBB%3AARTS
** ARTS and Time Warner Cable in Texas Will Broadcast International Women's Football League's Major Football.
** ARTS is pleased to announce that Time Warner Cable will be the distribution outlet of Artfest International's "Artfest Direct" program to 550,000 Time Warner Cable customers.
** Time Warner Cable owns and manages cable systems connected to approximately 26 million homes in 33 states. The Company has 14.7 million customers for its video, high-speed data and residential telephone services. This includes 13.3 million basic video subscribers and more than 7 million customers who purchase at least two of the Company's primary services. Time Warner Cable operates some of the most technologically advanced and best-clustered cable systems in the country, with nearly 85 percent of the Company's customers located in five geographic regions: New York, Texas, Ohio, the Carolinas and southern California. It is the largest cable provider in the nation's two largest cities, Los Angeles and New York, and the second largest cable operator in the country.

http://ih.advfn.com/p.php?pid=nmona&article=41966083&symbol=OTCBB%3AARTS
** ARTS Shareholders of Record as of April 15 will receive 1 share of Artfest Direct valued at $10 per share for every 1000 shares they own of ARTS on the record date.
** The Company will be conducting an offering of Artfest Direct shares at $10.00 per share.
** Artfest Direct, a wholly owned subsidiary of Artfest International, will be capitalized with 10 million shares outstanding.
** The Company's goal is to raise $10 million for the acquisition of additional fine art and sports memorabilia which will be offered directly to the public.


http://ih.advfn.com/p.php?pid=nmona&article=41512940&symbol=OTCBB%3AARTS
** ARTS has posted a video clip of its animated children's series "Rhupert" on YouTube's website.
** The series has started production of the initial 13 episodes featuring its lovable, loyal and elegant ostrich character Rhupert.
** ARTS marketing and distribution strategy for "Rhupert" is to emulate the hugely successful Barney the Dinosaur phenomenon which created approximately $250 million in annual licensing revenues to its owners.
** The children's book "Little Red Rhupert" recently achieved great success with its launch at Art Channel Galleries and is currently being sold through major retail outlets including Borders® and Amazon.com.
** Rhupert's image is also being licensed worldwide, setting the stage for a global rollout of the animated series and merchandising.


http://ih.advfn.com/p.php?pid=nmona&article=41013081&symbol=OTCBB%3AARTS
** ARTS launch Network Marketing Call Center for its revenue drive strategy in 2010.
** ARTS expects to grow the Network to approximately 20,000 members by year end. "Artfest Distributer averages approximately $6,500 in revenue per year.
** The call center will be operated by 30 of the best Network Marketing Producers in the industry, and managed by our CFO Chris Miner.
** IMPORTANT to know about Chris Miner:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=52618472


http://ih.advfn.com/p.php?pid=nmona&article=40816687&symbol=OTCBB%3AARTS
** ARTS has appointed Christopher Miner as its new Chief Financial Officer.
** Miner brings to Artfest a wealth of expertise in finance, operations, equity funding, and increasing corporate revenues and shareholder value.
** His vast experience includes serving on Herbalife International's Board of Directors, as well as its Audit, Finance, and Compensation Committees.
** During his tenure, between 1996 and 2002, Herbalife grew into a $1.7 billion global consumer products giant with over 100 products.
** Miner led Herbalife's successful transition into online sales.
** He also transitioned executive recruitment to Fortune 500 executives and eventually completed a private sale transaction of the company valued at $682 million.


http://ih.advfn.com/p.php?pid=nmona&article=40474784&symbol=OTCBB%3AARTS
** ARTS conservative projection for Rhubert marketing and merchandising revenues is $20 million per year, and is anticipated to become a legacy product for Artfest for many years to come.
** Our team has a track record of working with several branded children's characters including Barney.

************************************************************************************************************

OK… I think that’s enough to why I like ARTS. So with all of that good, one might ask…Why is the stock price down to some all time lows? Now let’s talk about some things that I ”DO NOT” like about ARTS. This is ”The Bad” and ”The Ugly” which is the #1 reason why ARTS is down… DILUTION!!! There are still some negative things that needs attention, but the dilution situation needs to fixed as I will explain a little more within ”The Bad” and ”The Ugly” thoughts below…

************************************************************************************************************

The Bad

** From one of the PRs above, ARTS management announced that its goal was to increase revenues to over $200,000,000 in the next 3 years as stated in the Company's most recent business plan. But then in the following sentence within the PR, they mentioned… “As a result, the Company has increased its authorized shares so it can continue to receive equity financing. …

That was subliminal to some, but very obvious to others that they were about to dump shares into the market. The price and the increases in the share structure was proof of such. I was not in ARTS then, but if I would have been, I would have considered selling on that news to buy back in cheaper.

** They recently announced that revenues increased by 748% to $1,424,412 for the past 6 months ending 30 Jun 2010. Maybe they should use the increase in revenues a bit wiser to control the dilution of shares or to pay off the convertible. The convertible is why the company can technically say that they are not diluting… it’s the convertible from the financing arrangements made. Still, it doesn’t matter to us as shareholders as it might as well be the company because we are getting smashed just the same.

** It’s good that they brought on board Thomas Kinkade and Michael Jay Solomon. Thomas Kinkade is the #1 artist alive today in sales as he has sold over $1 Billion in art and licensing in the past decade. He has some personal issues with recently filing for bankruptcy, but again, that’s personal and that has nothing to do with his sales. He simply has personally mismanaged his money made. He has proven that if he generates the material, it sells and sells very well. I think that’s what needs to be focused on with him being on board.

With Michael Jay Solomon, he has achieved some awesome things and I think he will be very instrumental for the syndication side of the house for the growth of ARTS studio/network ventures. They probably could not have hooked up with a better guy. Michael Jay Solomon founded Telepictures Corporation which went on to become the largest U.S. television syndication company (they created TV syndication) and one of the largest international television distribution companies, as well as the owner and operator of six television stations in the U.S. Telepictures became a public company trading on the NASDAQ after only 14 months under the leadership of Mr. Solomon as Chairman and CEO. This means to me that he knows what it takes to grow a company and to grow a stock. This tells me that ARTS needs to get him involved not just to help out on growing the syndication/operational side of the company, but he needs to help out on growing the stock side of the company too. Heck, or at least maybe pick his brain to see what his thoughts are. To further add, When Telepictures merged with Lorimar to form Lorimar Telepictures Corp. (American Stock Exchange), he became the new company’s President and served on its Board of Directors. Mr. Solomon, with his partners, led Lorimar Telepictures to become the largest television production and distribution company in the world, producing TV series such as Dallas, Falcon Crest, Knot’s Landing and many more at their studios (which was formally the MGM Studios and is now SONY Studios). Also, when Lorimar Telepictures was acquired by Warner Bros., Mr. Solomon became President of Warner Bros. International Television, heading up the company’s sales and marketing to television, cable and satellite companies internationally. Under his leadership, Warner Bros. became the largest (by 2.5 times) TV program distribution company in the world. They need to get this guy more involved on managing supporting the stock side of the house along with the operational side of the house.

** A little while ago, the company released that they filed an S-1 Registration with the SEC to have the dividend shares released to the ARTS shareholders from a much earlier date of record I believe was back in April. When companies do dividends, there almost always seem to be some confusion, but some do eventually get them right and do well for the company when they work. If they could get this fixed to where everything worked out with this dividend, it could be a huge show of confidence and would definitely set the stage for the release of another dividend. Until then, many will believe that the company won’t follow through.

** Having a Picasso sculpture with a market value estimated to be between $50 and $70 Million dollars is awesome, but bottom line, with being an OTCBB company too, it needs to show up on your Balance Sheet as an Asset in order to expect for the market to give any merit to the valuation. Why it’s not there… I don’t know and it wouldn’t matter even if I did know enough about such to explain why here. Again, bottom line, file it for the market to believe it.

** With Chris Miner being the CFO, I spoke to Chris and Eddie (the CEO) in person and Chris is definitely the CFO and he is a Director of the company. In the most recent filing with the SEC, it still reflected Eddie as the CFO of which we were told would be corrected. Still, within the Nevada SOS filing below, Chris is not added as a Director:
http://nvsos.gov/sosentitysearch/CorpDetails.aspx?lx8nvq=Ru%252bsMbZTOmI8E3M7Ru79NQ%253d%253d&nt7=0
I know they are very busy as I have seen firsthand from being there, but at some point in time they need to come up for air to at least take care of this issue as it would only take 5 minutes to fill out the paperwork and fax over to the Nevada SOS. This gentleman (Chris Miner) grew Herbalife into a $1.7 billion global consumer products giant. He led Herbalife's successful transition into online sales. He also transitioned executive recruitment to Fortune 500 executives and eventually completed a private sale transaction of the company valued at $682 million. I don’t know about y’all, but to me, I couldn’t botch that up… I would definitely make sure I had this guy’s name officially listed within our Articles of Incorporation and SEC filings considering the credibility it would add. Ok, it’s filed here below in an 8-K back in Dec 09, but it is not consistent with its current filings released now in 2010:
http://ih.advfn.com/p.php?pid=nmona&article=40737382&symbol=OTCBB%3AARTS

Again, I spoke to Chris and Eddie and I believe them both, but it needs to be updated ”officially” because it doesn’t matter what I say or post on the matter… it matters what is filed. Chris is going to manage the Network Marketing arm for ARTS. Given his track record, he is proven for success. ARTS expect to grow the Network to approximately 20,000 members by year end with each distributer averaging approximately $6,500 in revenue per year. Well, that’s $130,000,000.00 in revenues just from this one piece alone. Of course some might question if it happen, but I believe it can happen since Chris helped Herbalife to grow into a $1.7 billion company and later to be valued to be sold for $682 million.

************************************************************************************************************

Now let’s talk about The Ugly. I will try to keep it short to keep this post from being much longer than what it already is as I think it can be summed up in one word… DILUTION!!!

************************************************************************************************************

The Ugly

DILUTION!!! We all know that there is good dilution and bad dilution as I explained in the post below:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=52849054
However, for the dilution that has been going on here with ARTS, the verdict is still out which is which… good or bad. So far, it looks like bad dilution. You just can’t keep smashing your shareholders like this showing complete disregard. You just did a reverse split a while back and why would you think any investor would not be concerned that they are going to get smashed again. It’s no secret, just take the amount of one’s ARTS investment before the reverse split and see how much it is worth now. Now imagine what it would be worth if another reverse split was to be done. I was not in ARTS back then before the reverse split, but I do understand why those investors are not some happy campers. I’m sure they believe that the company is about to ”rinse and repeat” given the way the dumping has been transpiring as of late. The company has to show more shareholder sentiment in my opinion.

The fear of dilution has to be eliminated here with ARTS to instill investor confidence back into ARTS. I think the company should reduce their Authorized Shares (AS) down to a level near their Outstanding Shares (OS). Some might wonder why that would matter since it is the OS that is used as the key denominator for assessing fundamental valuation. This would at least be a start in the right direction to enhance investor confidence that the company maybe… just maybe… might be done diluting. Capping the AS to a number closer to the OS would lead investors to believe that they can’t dilute past the AS number just reduced down to. Right now the OS is 4.58 billion. Keeping the AS at 10 billion leaves the fear that they have about 5 billion more shares to go for dilution. However, reducing the AS down to 5 billion would lead investors to believe that they might be sincere this time in really stopping with the dilution.

Something else to note, it doesn’t make myself and other investors look good when some of us visit the company in person and are told certain things that never come to pass. It makes us look like we visited the company to be part of the share selling piece which is very very quite the contrary. Heck, the share structure had to have increased by about 2 billion shares or so since both of our visits. None of us expected that and now look stupid to some investors for defending the company. Ok, I can live with that as I have been made to look stupid before by believing in companies and what their management had told, but I must admit that I expected different from the company. Again, the ”final” verdict is still out as I am still hopeful for a positive turnaround.

Note to all, if I ever mention that I like a stock and Big Apple is in it, remind me to sell and buy back in it when they are ”officially” out. We were told that Big Apple was out, but apparently they were not quite out. I have nothing personal with Big Apple because I guess they are doing what the company hired them to do… dump shares to raise capital. I bought because I had initially heard that Big Apple was out and then I was told by the company that Big Apple was out even after I had bought. Still, it has not ”officially” happened. Bottom line… NOT GOOD!

With that said, I do think that Big Apple will be out and out soon (if not already). I do understand that the contract that was signed could not be breached. I do think that some agreement was made that was part of the dumping of shares which allowed the contract to be terminated. When it is ”officially” announced that Big Apple is gone, I think ARTS ”could” move over time very huge like another stock that many should remember that we were in that had gone from .0003 to .20+ per share over time after releasing Big Apple.

It also doesn’t look good for the motives behind having an Open House which was publicly announced by the company for shareholders to come see and visit with the company to learn more when such dumping of shares had taken place. It makes the company looks to be not so genuine.

However, whenever the dilution stops, ARTS could have a solid chance for recovery especially if they do not do another reverse split. Although I am not happy with how ARTS have been trading and how things have been unfolding (thus far), I will weather the storm as I know how things could change very quickly for the better. I’ve seen it often enough within the penny stock world. Many of you know how I am… most of the time… I will hang around to either sink with the ship or set sail with the ship. I am still hoping and expecting to see the sail raised with a huge breeze of wind to follow to get it going. Heck, believe it or not here at .0002/.0003 per share, I might even average down.

v/r
Sterling