Artfest International, Inc (fka ARTS)

[JONAH 2]

interesting figures -- alot going on for a penny stock
would be something if ed got this thing to lift off and fly awhile- unless castro the convertable comes up with a sleeper

Results of Operations

Three Months Ended September 30, 2010 compared to Three Months Ended September 30, 2009

Revenues . The Company generated operating revenues of $ 380,679 for the three months ended September 30, 2010, representing an increase of $ 343,779 , or 932 %, as compared to revenues of $36,900 during the three months ended September 30, 2009. The increase in revenues is mainly attributed to those revenues as received by the Company’s wholly owned subsidiary, CSD and through the sales of its product through IAD’s.

Selling, General and Administrative Expenses (“SG&A). Our SG&A for the three months ended September 30, 2010 were $ 914,109 , an increase of $ 496,720 as compared to $417,389 for the three months ended September 30, 2009. The increase is primarily due to expenses attributed to the Company’s wholly owned subsidiary CSD as well as other expenses related to continuous business development, marketing, and other public company related operating expenses.

Net Income (Loss). The Company recorded a net loss from operations of $ 752,890 , and increase of $ 360,101 as compared to the operating net loss from operations of $392,789 during the three months ended September 30, 2009.

Nine Months Ended September 30, 2010 compared to Nine Months Ended September 30, 2009

Revenues . The Company generated operating revenues of $1, 805,091 for the nine months ended September 30, 2010, representing an increase of $1, 768,191 as compared to revenues of $ 36,900 during the nine months ended September 30 , 2009. The increase in revenues is mainly attributed to those revenues as received by the Company’s wholly owned subsidiary, CSD and through the sales of its product through IAD’s.

Selling, General and Administrative Expenses (“SG&A). Our SG&A for the nine months ended September 30 , 2010 were $ 3,782,211 , an increase of $ 3,364,822 as compared to $ 417,389 for the nine months ended September 30, 2009. The increase is primarily due to expenses attributed to the Company’s wholly owned subsidiary CSD as well as other expenses related to continuous business development, marketing, and other public company related operating expenses.

Net Income (Loss). The Company recorded a net loss from operations of $2, 786,867 , and increase of $ 2,394,078 as compared to the operating net loss of $ 392,789 during the nine months ended September 30 , 2009.

Liquidity And Capital Resources

Operating activities

Net cash used by operating activities for nine months ended September 30 , 2010 was $ 3,308,168 compared to $37,645 provided in the nine months ended September 30 , 2009. This change was mainly due to the acquisition of CSD and the expansion of Artfest’s overall business development initiatives and operations.

Investing activities

Net cash used by investing activities was $148,457 for the nine months ended September 30 , 2010 compared to $-0- used in the nine months ended September 30 , 2009. The majority of this increase in investing activities is due to the purchases of equipment for the expansion of Artfest’s overall business development initiatives and operations.