Artfest International, Inc (fka ARTS)

[EDWARD STEVENSON]

Key notes with the inclusion of Artfest’s Q1 2009 filing.

Unbiased, free from emotion or any other binding/attachment, and merely based on events occurring up until and including Artfest's first quarter fiscal results.
All materials incorporated (below) are publicly available per Q1 report, http://pinksheets.com/edgar/GetFilingHtml?FilingID=6608870, or as otherwise stated.


Pros - events that have occurred in favor of investors.

(1)Shareholder value was established with increase in Q1 revenues to $469,000. Indeed the company beat earlier projections of revenues at $450,000 for Q1.

(2)Net income for Q1 came out to $280,775, as opposed to a net loss of $745,876 in the same period in 2008.
The difference being, some companies plan, hope, or otherwise assume they will record a net income, Artfest has actually recorded these figures. From these figures, valuation is derived.

(3)Book value also increased as the company's assets doubled from Q1 of 2008. Assets per Q1 2009 amount to $1,086,502, primarily due to the increase in inventory (stock, supplies, merchandise, etc.) amounting to $555,210.

(4)New corporate location in the heart of a prominent Dallas design district:

Artfest Expo Center
13342 Midway Road, Suite 250
Dallas, TX 75244
Phone: [phone]
Fax: [phone]

The pros of this relocation have already been well-publicized, including the company having access to a massive facility as gallery or showcase room to display their art.

(5)Launch of RFID technology on all Artfest products in an effort to avoid fraud. (located under the heading, "Description of Our Products and Services", in Q1 filing).


Cons - events that have occurred not in favor of investors.

(1)Issuance of common stock. As of May 14, 2009, the Registrant had 261,763,003 shares of common stock outstanding. This represents an increase of 48,500,000 shares since 10K, year-end fiscal results filing: http://pinksheets.com/edgar/GetFilingHtml?FilingID=6541833
Ultimately, the more common stock is issued, the more it hurts per share valuation.

(2)Liabilities increase to $2,921,419 in Q1 2009 as opposed to $2,747,571 in Q1 of 2008. This should not be taken into stern consideration as Total Shareholder Deficit decreased from $(3,050,047) in Q1 of 2008 to $(2,767,772) in Q1 of 2009 due to the increase in assets.

(3)Conversion of debt into common stock. During the quarter ending March 31, 2009 the Company has initiated discussions to convert approximately $700,000 of notes into common shares of the Company at an average price of $.10 per share. (Located under the header, "Noteholder Discussions" in Q1 filing).
As long as this process is non-toxic, whereby notes are converted into common shares at a discount to the market price, this will not be something of major concern (it’s inclusion as an item “not in favor of investors” is based on the lacking explanation to this note’s conversion).

(4)Hiring of an awful Investor Relations Firm:

Big Apple Consulting USA, Inc.
2101 West State Road 434
Suite 100
Longwood, FL 32779
United States

Big Apple Consulting are a group that often dilute the market with shares received from their large contract(s). Principally a waste of the company's resources, whether that be cash, shares, or a consideration of both, they offer virtually no relations services. They are grossly overpaid and produce poor releases upon request.
Hopefully Artfest has not signed a long-term & dilutive contract with this party. They may be responsible for the large issuance of common stock in Q1 2009.

(5)Unresponsive Transfer Agent.
The company has requested that the Transfer Agent not release up-to-date share structure information to the public (perhaps Big Apple Consulting's classic doing).

Island Stock Transfer
100 Second Avenue South, Suite 300N
St. Petersburg, FL 33701
Phone: [phone]
Fax: [phone]
http://www.islandstocktransfer.com