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ARTFEST INTERNATIONAL, INC.
OTCBB: ARTS
Artfest Expo Center
13342 Midway Road, Suite 250
Dallas, TX 75244
Phone: 877-278-6672 ~ Fax: 866-534-2847
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June 25, 2010 Dear Shareholders, I am very pleased to be able to communicate directly with our loyal shareholders and to give you an overview of all of the accomplishments that Artfest International achieved in 2009 and the Company’s goals for 2010. Artfest International, Inc. was created to connect the passions of galleries, artists, investors, decorators, designers and private collectors--wherever they are, on a global scale. Through its 52,000-square-foot Expo Center in Dallas, Texas, MyArtfest.com (social networking and e-commerce venue), Charity Sports Distributor, Inc., (CSD), Art Channel, Inc. (a television network avenue for art programming and marketing) and Artfest Direct (a newly created e-commerce website), Artfest is poised to serve as the leader in the art and home decor industries. Our mission is to increase our subscriber’s sales by providing top-quality marketing tools, items-of-value and relationships that expand their customer base and physical reach. Artfest Direct was created to act as the primary marketing arm of Artfest International, Inc. Its purpose is to enable consumers, through its Website, to purchase fine sports art as well as sports memorabilia and collectibles directly from their favorite teams, players, and athletes. The Company announced 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, Inc., is the second largest cable operator in the country, which will give Artfest International its base for the development of the Art Channel "On-Demand" program, which will book sales through Artfest Direct. Artfest International intends to keep a majority interest in Artfest Direct for the foreseeable future. Artfest Direct is launching this program through its call center, which is now open and available online, and directly through the Company's partnership agreements with Major Stadiums, as well as the hundreds of other professional and NCAA Division I college sports teams across the country. Artfest Direct’s call center operations are based on the direct marketing performance as operated by a number of well known companies including Herbalife, Mary Kay, Avon, and Tupperware Inc. Artfest Direct is projecting to increase its Membership base to over 300,000 over the next three years. Each member that signs up essentially creates their own business. The individuals become Independent Dealers (ID’s) and receive a Replica Website; and when their customers go to their site, they see the full inventory of products being offered. If any of an ID’s items are purchased, the item ordered is paid for, it packaged and shipped by Artfest Direct. The member gets the credit for the sale. In April of 2010, Artfest International announced that the Company agreed to purchase an original Picasso Sculpture art piece directly from the artist's personal collection. The wooden sixty inch-by-twenty-seven inch Picasso sculpture was completed in 1949 and is titled "Rendering of Francoise Gilot," which is independently valued between $50-$70 Million. Artfest International announced on June 10, 2010 that the Company has signed an addendum to the agreement for the purchase of the statue, allowing the Company up to 180 days to complete the sale and purchase of the sculpture. 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 Artfest International. Artfest International’s subsidiary, Charity Sports Distributor, Inc., (CSD), is a vertically integrated Texas-based custom framing company, which specializes in the design, production, and distribution of authentic framed autographed sports and entertainment collectibles and art pieces. CSD is in the gift, novelty, collectable and memorabilia business and operates souvenir shops and game day auctions at major league stadiums such as the Dallas Cowboys, Atlanta Falcons, The Texas Rangers, Dallas Stars, and the Dallas Mavericks and 27 college sport venues such as Auburn, Iowa, Florida State, South Carolina, and UCLA. To see merchandise, arrange for an auction at your next charitable event or receive information on the next event being held, visit the company's Web site: www.csdsportsframing.com. The Company has taken its first steps to expand our marketing to an international level by bridging the language gap. The initiative will begin domestically as the company announced on June 22, 2010 the launch of 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 Company's wholly owned subsidiary, ArtChannel Inc., has produced videos and infomercials in Spanish to complement the signing of new soccer teams and individual players by its sister company Charity Sports Distributor, which will sell the teams and players fine art and sports memorabilia. 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." In addition, Artfest plans to develop and launch programs for Russia, China, India and South America. On June 21, 2010, the Company announced that it has received over $1.5 million in equity financing since 2009. The investment capital received has provided Artfest International with the necessary funds to reduce existing indebtedness by $627,000 and increase its assets by over $2.4 million. The Company's total Assets now exceed $5.8 million and as of period ending March 31, 2010, the Company's total revenues have increased by 82% to $852,432 since March 31, 2008. Artfest management expects to continue its growth through the expansion of its call center, strategic acquisitions of Assets, and through the growth of its Artfest Direct program. As CEO, I want to reinforce that I have prioritized two key initiatives for Artfest. Number one is to continue with our plans to grow revenues through marketing and selling limited edition, signed and numbered fine art and collectibles to collectors, dealers, artists, decorators, designers, private collectors and investors. Secondly, and just as important, is to continue with our aggressive merger and acquisition campaign to expand our current portfolio. If we are successful in achieving these goals, I believe that our revenues will grow significantly and this growth will be favorably reflected in our earnings and share price, as Artfest Direct’s revenues and earnings will be reflected in the audited consolidated financial statements of Artfest International, Inc. In closing, I want to thank each of you for your continued support of Artfest International. I encourage you to contact our investment relations group, Big Apple Consulting USA, at (407) 389-5900 regarding any questions you might have about the Company, to request an Artfest International or Artfest Direct business plan, and where you can sign up to have press releases emailed directly to you right after they are released to the wire service. We encourage you to visit our Websites at www.artfestinternational.com, www.artchannel.tv to read any news or information on events that we are releasing on a regular basis. Also, please visit the company’s new Website at www.artfestdirect.com, where you can shop the Artfest Direct catalogue offering some of the finest limited edition art, sports memorabilia, family collectibles, and music and entertainment collectibles, or become an Independent Dealer and have the ability to work from home with a flexible schedule. Best Regards, Edward Vakser, CEO
Artfest International, Inc. Safe Harbor Statement:
The information posted in this release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. You can identify these statements by use of the words "may," "will," "should," "plans," "expects," "anticipates," "continue," "estimate," "project," "intend," and similar expressions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those projected or anticipated. These risks and uncertainties include, but are not limited to, general economic and business conditions, effects of continued geopolitical unrest and regional conflicts, competition, changes in technology and methods of marketing, delays in completing various engineering and manufacturing programs, changes in customer order patterns, changes in product mix, continued success in technological advances and delivering technological innovations, shortages in components, production delays due to performance quality issues with outsourced components, and various other factors beyond the Company's control.
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