SECURITIES EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                FORM 10-KSB

                            Annual Report Pursuant to
                       the Securities Exchange Act of 1934

                       Fiscal Year Ended December 31, 2005

                        Commission file number 000-32099

                             THE ART BOUTIQUE, INC.
                     -------------------------------------
             (Exact name of registrant as specified in its charter)


        Wyoming                                             83-0269496
      ------------                                        --------------
(State of incorporation)                                (I.R.S. Employer
                                                        Identification No.)

        7th Floor, New Henry House, 10 Ice House St., Central, Hong Kong
                    ----------------------------------------
               (Address of principal executive offices) (Zip Code)

            Registrant's telephone number, including area code: None

          Securities registered pursuant to Section 12(g) of the Act:

                                  Common Stock
                               Title of each class

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days. Yes X No

Check if disclosure of delinquent filers pursuant to Item 405 of Regulation S-B
is not contained in this form, and no disclosure will be contained, to the best
of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X

State issuer's revenues for its most recent fiscal year. $0

There were 47,471,900 shares of the Registrant's common stock outstanding as of
December 31, 2005 and at March 31, 2006.

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Act). X Yes  __ No

The aggregate market value of the 47,471,900  shares of voting common stock held
by nonaffiliates  of the Registrant is approximately  $2,192,628 on December 31,
2005 based on the closing price of $.12 per share.


<PAGE>



                                TABLE OF CONTENTS

PART I                                                                     Page

         Item 1. Description of Business                                      1
         Item 2. Description of Property                                      3
         Item 3. Legal Proceedings                                            3
         Item 4. Submission of Matters to a Vote of Security Holders          3

PART II

         Item 5. Market for Common Equity and Related Stockholder Matters     4
         Item 6. Management's Discussion and Analysis or Plan of Operation    4
         Item 7. Financial Statements                                         7
         Item 8. Changes in and Disagreements With Accountants on Accounting  7
                 and Financial Disclosure
         Item 8a Controls and Procedures                                      8
         Item 8b Other Information                                            8

PART III

         Item 9. Directors, Executive Officers, Promoters and Control
                 Persons; Compliance with Section 16(a) of the Exchange Act   8
         Item 10. Executive Compensation                                      10
         Item 11. Security Ownership of Certain Beneficial Owners and
                  Management                                                  12
         Item 12. Certain Relationships and Related Transactions              13
         Item 13. Exhibits and Reports on Form 8-K                            14
         Item 14. Principal Accountant Fees and Services                      14


SIGNATURES                                                                    15




<PAGE>




                                                 PART I

Item 1.  DESCRIPTION OF BUSINESS
         -----------------------

         General

     The Art Boutique, Inc. (the Company) was incorporated under the laws of the
State of Wyoming on May 15, 1984 as Fred Hudson  Studios,  Inc.  Since 1996, the
Company's  activities have been  re-organizational  ones,  directed at seeking a
business.  The name was changed to The Art Boutique,  Inc. in 1996.  The Company
was formed to seek business opportunities.

     In November  2000, the Company  executed its Plan of Merger and
Articles of Merger with Kearney,  Inc. At the time of the effective  date of the
merger, the Company owned 100% of the issued and outstanding stock of
Kearney, Inc. A total of 720,000 of the outstanding shares of Kearney, Inc. were
rescinded prior to the merger.  The Company is the surviving company
after the merger.

     On October 20, 2003, Capital Hero Holdings,  LTD, a British Virgin Islands
company,  purchased  3,700,000  shares of common stock of Registrant from Elaine
Erickson and Michael R. Butler.

     The Company,  in 2003,  formed a new wholly owned subsidiary under the name
of Key Chance International,  LTD. ("Key Chance") existing under the laws of the
British  Virgin  Islands.  Since then Key Chance has been the foreign  operating
subsidiary of the Company.

     The Company has,  since the filing of its annual  report on Form 10-KSB for
the fiscal year ended 31st  December  2004,  been  engaged in pursuing  business
opportunities  for the  purpose  of  enhancing  shareholder  value.  A  business
opportunity   involving  the  potential  real  estate  redevelopment  of  landed
properties  in the  Republic  of Palau  located  within  the  Federal  States of
Micronesia  was  presented to the Company,  which has since then been engaged in
negotiations with the persons in control of Micronesian  Resort Inc. ("MRI"),  a
corporation  existing under the laws of the British Virgin Islands.  MRI was and
is the lessee under a lease  agreement  dated 25th April 2005  pursuant to which
the lessor in the capacity of a sub-lessor under such lease agreement has agreed
to grant a sub-lease to MRI as sub-lessee  of a piece of property  situated in a
location  being  adjacent  to  the  Koror   Babelthuap   Bridge,   southwest  of
Ngerebeselch  in Airai  State in the  Republic  of Palau,  with the terms of the
lease to be of 50 years commencing from 25th April 2005. It was the intention of
MRI to invest in the construction of a high end resort hotel on such property.

                                       1
<PAGE>

     Due diligence review on such proposed project was conducted by the Company.
The board of directors of the Company  considered that the  redevelopment of the
property  into a high end resort  hotel was an ideal  business  venture  for the
Company to embark on and further  realized that the acquisition of such business
opportunity  may entail a change in control of the  Company.  Subsequently,  the
terms of the acquisition by the Company of such investment opportunity have been
reached and the Company and Key Chance entered into a stock  exchange  agreement
(the "Agreement")  dated 24th May 2005 with Mr. Choy Kwok Fai ("Mr.  Choy"), who
being the then holder of 90% interest of MRI, pursuant to which Key Chance would
acquire 80% of the outstanding issued share capital of MRI then held by Mr. Choy
against  delivery by Key Chance to Mr. Choy  25,000,000  shares of the Company's
common  stock on  closing of the  transactions  contemplated  by the  Agreement.
Closing of the Agreement  took place on 26th May 2005.  Following the closing of
the Agreement,  the directors of the Company have been  negotiating with various
parties in connection with the  contribution of adequate  capital as well as the
preparation of business plans for the purposes of carrying out the redevelopment
project.  As of the  date  of  this  annual  report,  the  Company  has  already
identified  certain potential  investors who are interested in the redevelopment
of such property into a resort hotel.  It is  anticipated  that the Company will
progress to enter into definitive agreements or arrangements with such investors
in the near future.

     There are currently no loan  arrangements or arrangements for any financing
whatsoever relating to any business opportunities.

Administrative Offices

     The Company  currently  maintains a mailing address at 7th Floor, New Henry
House, 10 Ice House St., Central,  Hong Kong which is the mailing address of its
attorney in Hong Kong.  Other than this  mailing  address,  the Company does not
currently maintain any other office facilities, and does not anticipate the need
for maintaining  office  facilities at any time in the foreseeable  future.  The
Company pays no rent or other fees for the use of this mailing address.



                                       2
<PAGE>



Employees

     The Company  currently  has no  employees  apart from the  employment  of a
part-time  secretary.  Two  consultants  act as  management  of the  Company  as
officers and directors.  Management of the Company  expects to use  consultants,
attorneys and accountants as necessary, and does not anticipate a need to engage
any  full-time  employees  so  long as it is  seeking  and  evaluating  business
opportunities.  The need for employees and their  availability will be addressed
in  connection  with the decision  whether or not to acquire or  participate  in
specific business opportunities. See "Executive Compensation" and under "Certain
Relationships and Related Transactions."


Item 2.  PROPERTIES

         Facilities

     The Company has no  property.  The Company does not  currently  maintain an
office or any other facilities.

         Real Property

         None

         Mineral Properties

         None

Item 3.  LEGAL PROCEEDINGS

     As of  December  31,  2005,  the  Company  was  not a  party  to any  legal
proceedings.

Item 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        No matters were submitted during the period covered by this report to a
vote of security holders of the Company, through the solicitation of proxies or
otherwise.



                                       3
<PAGE>




                                     PART II

Item 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
         ---------------------------------------------------------------------

     As of the date of this report, Company's common stock is quoted on the OTC
Bulletin Board as ARTB.BB

2004                    High            Low
----                    ----            ---
1st Quarter             .0              .0
2nd Quarter            1.02             .60
3rd Quarter             .60             .30
4th Quarter            1.30             .20

2005
----
1st Quarter             .35             .14
2nd Quarter             .20             .07
3rd Quarter             .20             .20
4th Quarter             .39             .12

     The above quotations reflect inter-dealer  prices,  without retail mark-up,
mark-down, or commission and may not necessarily represent actual transactions.

         As of December 31, 2005, there were 97  record holders of the Company's
common Stock.

Dividends
---------

         The Company has not declared or paid any cash dividends on its common
stock and does not anticipate paying dividends for the foreseeable future.

Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


Financial Condition and Changes in Financial Condition
------------------------------------------------------

The Company  has experienced continuing losses and shortage of capital in the
past fiscal year.

                                       4

<PAGE>

The Company has,  since the filing of its annual  report on Form 10-KSB for
the fiscal year ended 31st  December  2004,  been  engaged in pursuing  business
opportunities  for the  purpose  of  enhancing  shareholder  value.  A  business
opportunity   involving  the  potential  real  estate  redevelopment  of  landed
properties  in the  Republic  of Palau  located  within  the  Federal  States of
Micronesia  was  presented to the Company,  which has since then been engaged in
negotiations with the persons in control of Micronesian  Resort Inc. ("MRI"),  a
corporation  existing under the laws of the British Virgin Islands.  MRI was and
is the lessee under a lease  agreement  dated 25th April 2005  pursuant to which
the lessor in the capacity of a sub-lessor under such lease agreement has agreed
to grant a sub-lease to MRI as sub-lessee  of a piece of property  situated in a
location  being  adjacent  to  the  Koror   Babelthuap   Bridge,   southwest  of
Ngerebeselch  in Airai  State in the  Republic  of Palau,  with the terms of the
lease to be of 50 years commencing from 25th April 2005. It was the intention of
MRI to invest in the construction of a high end resort hotel on such property.

Due diligence review on such proposed project was conducted by the Company.
The board of directors of the Company  considered that the  redevelopment of the
property  into a high end resort  hotel was an ideal  business  venture  for the
Company to embark on and further  realized that the acquisition of such business
opportunity  may entail a change in control of the  Company.  Subsequently,  the
terms of the acquisition by the Company of such investment opportunity have been
reached and the Company and Key Chance entered into a stock  exchange  agreement
(the "Agreement")  dated 24th May 2005 with Mr. Choy Kwok Fai ("Mr.  Choy"), who
being the then holder of 90% interest of MRI, pursuant to which Key Chance would
acquire 80% of the outstanding issued share capital of MRI then held by Mr. Choy
against  delivery by Key Chance to Mr. Choy  25,000,000  shares of the Company's
common  stock on  closing of the  transactions  contemplated  by the  Agreement.
Closing of the Agreement  took place on 26th May 2005.  Following the closing of
the Agreement,  the directors of the Company have been  negotiating with various
parties in connection with the  contribution of adequate  capital as well as the
preparation of business plans for the purposes of carrying out the redevelopment
project.  As of the  date  of  this  annual  report,  the  Company  has  already
identified  certain potential  investors who are interested in the redevelopment
of such property into a resort hotel.  It is  anticipated  that the Company will
progress to enter into definitive agreements or arrangements with such investors
in the near future.
                                      5
<PAGE>


RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2005 COMPARED TO YEAR
ENDED DECEMBER 31, 2004.

     The  Company  had no revenues  or  operations  during 2005 or in 2004.  The
Company incurred expenses of $697,772 in general and administrative  expenses in
2005  compared  to  $524,427 in 2004 in  connection  with its  seeking  business
opportunities and ultimately  entering into the transaction in 2005 on the Palau
Micronesia development project. The Company incurred a net loss of ($698,567) in
2005 compared to a net loss of  ($524,992)  in 2004.  The net loss per share was
($.03) in 2005 and ($.04) 2004.

Liquidity and Capital Resources
-------------------------------

     At year end, the Company had cash of $5,087 but no other liquid or tangible
assets.  The Company had  $560,664 in  liabilities  at year end. The company has
developed  a business  opportunity  in Palau and will seek  capital in  relation
thereto.

Need for Additional Funding
--------------------------

     The  Company  may not be able to  carry  out its plan of  business  without
adequate  funding.  The  Company  cannot  predict  to what  extent  its  current
liquidity and capital  resources  will allow  business  operations or whether it
will incur further operating losses.  There is no assurance that the Company can
continue as a going concern without substantial  funding,  for which there is no
committed  source.  The Company has a deficit of working  capital of  ($561,000)
approximately and no revenues or cash flow whatsoever.

         The  Company  estimates  it will  require  $25,000  to $30,000 to cover
legal, accounting, transfer and miscellaneous costs of being a reporting company
in the next fiscal  year.

     The Company may not have  capital  sufficient  to meet the  Company's  cash
needs, in the future.  The Company will have to seek loans or equity  placements
to cover such cash needs.  Lack of capital  may be a  sufficient  impediment  to
prevent it from  accomplishing  the goal of successfully  executing its business
plan of finding a business acquisition. The Company may need to raise additional
funds to conduct its business activities in the next twelve months.

         No commitments to provide additional funds have been made by management
or  other  stockholders.  Accordingly,  there  can  be  no  assurance  that  any
additional  funds  will be  available  to the  Company  to allow it to cover its
expenses as they may be incurred.



                                       6
<PAGE>


         Irrespective   of  whether  the  Company's  cash  assets  prove  to  be
inadequate to meet the Company's  operational  needs,  the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.

     Except  as  disclosed  in Item 1 above,  the  Company  has no plans for any
research and development in the next twelve months.  The Company has no plans at
this time for  purchases  or sales of fixed assets which would occur in the next
twelve months.

     The Company has no expectation or  anticipation  of significant  changes in
number of  employees  in the next  twelve  months.  It may add full or part time
employees  of an unknown  number in the next  twelve  months,  if a business  is
commenced or acquired.

     Going concern  qualification:  The Company has incurred  significant losses
from  operations  for the year ended  December  31,  2005,  and such  losses are
expected to continue.  In addition,  the company has minimal working capital but
no  operating  business,  and  $560,664 in debt which  exceeds  total  assets by
$542,000.  The foregoing raises substantial doubt about the Company's ability to
continue as a going  concern.  Management's  plans  include  seeking  additional
capital  and/or debt  financing  or the  possible  business  combination  of the
Company.  There is no guarantee  that  additional  capital and/or debt financing
will be available when and to the extent required, or that if available, it will
be on terms acceptable to the Company. The consolidated  financial statements do
not  include  any  adjustments  that  might  result  from  the  outcome  of this
uncertainty.

Item 7.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Please refer to pages F-1 through F-10.


Item 8.  CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

         In connection with audits of two most recent fiscal years and any
interim period preceding resignation, no disagreements exist with any former



                                       7
<PAGE>



accountant on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope of procedure, which disagreements if not
resolved to the satisfaction of the former accountant would have caused him to
make reference in connection with his report to the subject matter of the
disagreement(s).

         The principal accountants' reports on the financial statements for any
of the past two years contained no adverse opinion or a disclaimer of opinion
nor was qualified as to uncertainty, audit scope, or accounting principles
except for the "going concern" qualification.

Item 8a CONTROLS AND PROCEDURES
----------------------------------

Evaluation of Internal and Disclosure Controls
----------------------------------------------

     The  management  of the  company has  evaluated  the  effectiveness  of the
issuer's disclosure controls and procedures as of a date within 90 days prior to
the filing  date of the report  (evaluation  date) and have  concluded  that the
disclosure  controls and procedures are adequate and effective  based upon their
evaluation as of the evaluation date.

     There were no significant  changes in internal controls or in other factors
that could significantly  affect internal controls subsequent to the date of the
most recent evaluation of such,  including any corrective actions with regard to
significant deficiencies and material weaknesses.

Item 8b.

Other Information
-----------------

None.

                                    PART III

Item 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT AND COMPLIANCE WITH
SECTION 16(a)


The  directors  and  executive  officers  currently  serving  the Company are as
follows:

<TABLE>
<CAPTION>

 Name                        Age           Position                                    Term
- ------                      -----         ----------                                  ------
<S>                          <C>           <C>                                         <C>
Tsoi Mow Hung                63            President/Director                          Annual
Ronald Lui                   53            Secretary/Director/CEO                      Annual
Choy Kwok Fai                60            Director                                    Annual
Lam Tuen La                  54            Director                                    Annual

</TABLE>


                                       8
<PAGE>


     Ronald Chi Ho Lui, age 53, was the Chief Executive Officer, President and a
director of Minghua Group International Holdings Limited, a company listed on
NASD's Over-The-Counter Bulletin Board in the United States of America until
March 2003. For the previous years, Mr. Lui had worked for Fuller International
Development Limited, a real estate development company, as the Southeast Asia
Regional Director. Mr. Lui is also the Chairman and controlling stockholder of
Loyalty United (US), Inc., a private investment holding company that was formed
in October of 2001 and the Chairman of Loyalty United International Limited, a
consulting company.

Tsoi Mow Hung, age 63, was graduated in 1968 from Asia University,  Japan.  From
1972 to 1978, he was appointed as a director of Singapore  Hong Kong  Industrial
Company Limited, a public company listed on the Stock Exchange in Hong Kong. Mr.
Tsoi also has extensive  experience in the jewelry business.  As from 1983 until
present, Mr. Tsoi has been the managing director of Kohan Corporation, Japan and
Kobiz Corporation, Japan.

Choy Kwok Fai, age 60, was graduated  from The Hong Kong College of Language and
Commerce.  From 1971 to 1975, he was the manager of Excellent  Trading Co., Ltd.
and from 1976 to 1978,  he was the manager of Singapore  Hong Kong Industry Co.,
Ltd.,  a  public  company  listed  on the  Stock  Exchange  in Hong  Kong He was
subsequently  the general manager of P.T. Super Food  Indonesia,  Indonesia from
1979 to 1986. From 1987 to 2005, he was the managing  director of P.T.  Imperial
Utama Agung, Indonesia.

Lam Tuen La, age 54, was graduated from St. Christopher College, Hong Kong. From
1972 to 1978, she was the manager of Margurite  Thursby  Designing  House,  Hong
Kong.  From 1979 to 1986,  she was the  manager  of P.T.  Tri  Usaha  Indonesia,
Indonesia.  Following  that, she was the general manager of P.T. Aneka South Sea
Pearl Farming, Indonesia as from 1986 to 2005.

The Board of Directors acts as the Audit Committee and the Board has no separate
committee. The company has no qualified financial expert at this time because it
has not been able to hire a qualified candidate. The company intends to continue
to search for a qualified individual for hire.

The Board of Directors has not adopted a Code of Ethics.

         No appointee for a director position has been subject of any civil
regulatory proceeding or any criminal proceeding in the past five years.

         The term of office of each director and executive officer ends at, or
immediately after, the next annual meeting of shareholders of the Company.
Except as otherwise indicated, no organization by which any director or officer
has been previously employed is an affiliate, parent or subsidiary of the
Company.

Compliance with Section 16(a)

         Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and persons who
own more than 10% of a registered class of the Company's equity securities, to
file reports of ownership and changes in ownership of equity securities of the
Company with the Securities and Exchange Commission and NASDAQ. Officers,
directors and greater-than 10% shareholders are required by the Securities and
Exchange Commission regulation to furnish the Company with copies of all Section
16(a) filings.  The Company has not disclosed deliquent or late filers herein.




                                       9
<PAGE>


Item 10. EXECUTIVE COMPENSATION

     The Company  paid  compensation  to the  executive  officers  for  services
rendered to the Company in all capacities  during the fiscal year ended December
31, 2005 as shown in the table below for the year.  No cash  bonuses were or are
to be paid to such persons.

<TABLE>
<CAPTION>

                    SUMMARY COMPENSATION TABLE OF EXECUTIVES
                          Year Ended December 31, 2005

                                    Annual Compensation                         Awards
===========================================================================================================================
<S>                      <C>       <C>        <C>           <C>                     <C>                    <C>
Name and Principal                                                                                         Securities
Position                           Salary     Bonus ($)     Other Annual            Restricted Stock       Underlying
                         Year      ($)                      Compensation ($)        Award(s)($)            Options/SARs(#)
- ---------------------------------------------------------------------------------------------------------------------------

Tsoi Mow Hung            2005      0          0             153,840*                0                      0
President
- ---------------------------------------------------------------------------------------------------------------------------

                         2004      0          0             154,839                 0                      0
                         --------------------------------------------------------------------------------------------------
                         2003      0          0             0                       0                      0
- ---------------------------------------------------------------------------------------------------------------------------
Ronald Lui,              2005      153,840    0             0                       0                      0
                         ----------------------------------------------------------------------------------------------------
Secretary/Director/CEO   2004      154,839    0             0                       0                      0
                         ----------------------------------------------------------------------------------------------------
                         2003      0          0             0                       0                      0
----------------------------------------------------------------------------------------------------------------------------
Officers as a Group      2005      153,840    0             153,840*                0                      0
                         ---------------------------------------------------------------------------------------------------
                         2004      154,839    0             154,839                 0                      0
                         ---------------------------------------------------------------------------------------------------
                         2003      0          0             0                       0                      0
                         ---------------------------------------------------------------------------------------------------

===========================================================================================================================

</TABLE>
*    Mr.  Tsoi  Mow Hung is the  beneficial  owner of  Bollywood  Limited.  The
     Company has a  consulting  services  contract  with  Bollywood  Limited for
     $12,820, per month (USD) or a total of $153,840 in 2005 in (USD).

                                       10
<PAGE>


Ronald Lui is employed as a consultant,  acting as  Secretary/Director,  for the
Company, month to month, at the rate of $12,820 per month (USD).

         The Company has no employee incentive stock option plan.

         There are no plans pursuant to which cash or non-cash compensation was
paid or distributed during the last fiscal year, or is proposed to be paid or
distributed in the future, to the executive officers of the Company. No other
compensation not described above was paid or distributed during the last fiscal
year to the executive officers of the Company. There are no compensatory plans
or arrangements, with respect to any executive office of the Company, which
result or will result from the resignation, retirement or any other termination
of such individual's employment with the Company or from a change in control of
the Company or a change in the individual's responsibilities following a change
in control.

    Option/SAR Grants Table (None)

    Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
value (None)

    Long Term Incentive Plans - Awards in Last Fiscal Year (None)

<TABLE>
<CAPTION>

                   DIRECTOR COMPENSATION FOR LAST FISCAL YEAR

(Except for compensation of Officers who are also Directors which Compensation
is listed in Summary Compensation Table of Executives)

                                    Cash Compensation                  Security Grants
Name                              Annual Retainer   Meeting Fees   Consulting            Number of     Number of Securities
                                  Fees ($)          ($)            Fees/Other Fees ($)   Shares (#)    Underlying Options/SARs(#)
- --------------------------------------------------------------------------------------------------------------------------
<S>                               <C>               <C>            <C>                   <C>           <C>
A. Director                       0                 0              0                     0             0
Ronald Lui

B. Director                       0                 0              0                     0             0
Tsoi Mow Hung

C. Director                       0                 0              0                     0             0
Choy Kwok Fai

D. Director                       0                 0              0                     0             0
Lam Tuen La

</TABLE>




                                       11
<PAGE>




Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information, as of December 31, 2005,
with respect to the beneficial ownership of the Company's no par value common
stock by each person known by the Company to be the beneficial owner of more
than five percent of the outstanding common stock.

<TABLE>
<CAPTION>

                                     Beneficial              Number of                 Percentage of
                  Name               Ownership               Shares Owned                    Class
- ----------------------------------------------------------------------------------------------------
<S>                                     <C>                   <C>                              <C>

Ronald Lui, Secretary & Director/CEO    I                     3,700,000                        7.7%
(Benefically owning Capital Hero
Holdings, Ltd)(1)
7th Floor, New Henry House,
10 Ice House St.,
Central, Hong Kong
- ----------------------------------------------------------------------------------------------------

Tsoi Mow Hung, President/Director       D                     3,700,000                        7.7%
(Beneficially owning Capital Hero
HOldings, LTD) (1)
7th Floor, New Henry House,
10 Ice House St.,
Central, Hong Kong

- ----------------------------------------------------------------------------------------------------
Choy Kwok Fai, Director                 D                     25,500,000                     53.7%
7th Floor, New Henry House,
10 Ice House St.,
Central, Hong Kong
------------------------------------------------------------------------------------------------------
Officers and Directors as a group       0                     29,200,000                     61.5%
</TABLE>


(1) Ronald Lui and Tsoi Mow Hung each own 50% of Capital Hero Holdings, LTD.

                                       12
<PAGE>



                                     PART IV

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Transactions with Management and Others

Except as follows,  there were no transactions or series of transactions  during
the  Registrant's  last fiscal year or the current fiscal year, or any currently
proposed  transactions  or series of transactions of the remainder of the fiscal
year,  in  which  the  amount  involved  exceeds  $100,000  and in  which to the
knowledge of the Registrant,  any director,  executive officer,  nominee, future
director, five percent shareholder, or any member of the immediate family of the
foregoing persons, have or will have a direct or indirect material interest.


Ronald  Lui  loaned to Key  Chance a sum of  $416,269.  Mr.  Lui is an  officer,
director and received  consulting fees of $153,840 in 2005. This is carried as a
note payable on demand @ no interest. Mr. Lui owns 50% of Capital Hero Holdings,
LTD which owns 3,700,000 common shares of the Company.

Mr.  Tsoi Mow Hung,  Officer/Director,  is the  beneficial  owner of  Bollywood
Limited. The Company has consulting services contract with Bollywood Limited for
$12,820  per month or a total of  $153,840  in 2005.  Mr.  Hung also owns 50% of
Capital Hero Holdings, LTD which owns 3,700,000 common shares of the Company.

The Company issued  25,000,000 shares to Choy Kwok Fai as part of the Key Chance
acquisition of the Micronesia  Palau resort  opportunity.  The  transaction  was
exempt under Regulation S, to a non US resident in an offshore transaction.

The Company sold 10,000,000 Common Shares in a Regulation S Exempt Private
Placement for $425,000.  All shares were purchased by Non US residents in an
offshore transaction.

                                       13

<PAGE>


Item 13. EXHIBITS AND REPORTS ON FORM 8-K

                  The following documents are filed as part of this report:

                  1.       Reports on Form 8-K:

                           May 18, 2005
                           August 8, 2005
                           November 22, 2005


                  2.       Exhibits:
31.1 Certification pursuant to Section 302 of the Sarbanes Oxley Act of  2002
31.2 Certification pursuant to Section 302 of the  Sarbanes Oxley Act of 2002



Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

General.  Jaspers + Hall, PC, LLC, CPAs ("JH") is the Company's principal
auditing accountant firm. The Company's Board of Directors has considered
whether the provisions of audit services is compatible with maintaining JH's
independence.

     Audit Fees.  JH billed the Company  $6,250 for the  following  professional
services:  audit of the annual financial statement of the Company for the fiscal
year ended  December 31, 2005,  and review of the interim  financial  statements
included in  quarterly  reports on Form  10-QSB for the periods  ended March 31,
2005, June 30, 2005 and September 30, 2005. Michael Johnson & Company billed the
Company $4,000 for the 2004 audit and JH billed $4,000 for the 2005 Audit.

         There were no "audit related" fees in 2004 or 2005. There were no tax
fees or other fees in 2004 or 2005 paid to Auditors or Auditors affiliates.

         The Company's Board acts as the audit committee and had no
"pre-approval policies and procedures" in effect for the auditors' engagement
for the audit year 2004 and 2005.

         All audit work was performed by the auditors' full time employees.




                                       14
<PAGE>





                               ART BOUTIQUE, INC.

                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS

                          Year Ended December 31, 2005

<PAGE>
                             THE ART BOUTIQUE, INC.
                          INDEX OF FINANCIAL STATEMENTS



                                                                          Pages

Auditors Report                                                              F-1

Balance Sheets                                                               F-2

Statements of Operations                                                     F-3

Statements of Changes in Stockholders Deficit                                F-4

Statements of Cash Flows                                                     F-5

Notes to Financial Statements                                         F-6 - F-10







<PAGE>


JASPERS + HALL, PC
CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------------------------------------
9175 E. Kenyon Avenue, Suite 100
Denver, CO 80237
303-796-0099



             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



Board of Directors
Art Boutique, Inc.
Hong Kong


We have  audited  the  accompanying  balance  sheet  of Art  Boutique,  Inc.  (A
Development  Stage Company) as of December 31, 2005 and the related statement of
operations,  stockholders' equity, and cash flows for the year then ended. These
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audits. The December 31, 2004 financial statements of Art Boutique,  Inc. (A
Development  Stage  Company),  were  audited by another  auditor  who has ceased
operations.  That auditor  expressed an unqualified  opinion on those  financial
statements in his report dated April 18, 2005.

We conducted  our audits in  accordance  with  standards  of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and  perform  the  audits to  obtain  reasonable  assurance  about  whether  the
financial  statements  are free of  material  misstatement.  An  audit  includes
examining,  on a test basis,  evidence supporting the amounts and disclosures in
the  financial  statements.  An audit also  includes  assessing  the  accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Art  Boutique,  Inc.  (A
Development  Stage  Company) as of December 31,  2005,  and the results of their
operations  and their cash flows for the year then  ended,  in  conformity  with
generally accepted accounting principles of the United States.

The accompanying  financial  statements have been prepared  assuming the Company
will continue as a going concern.  As discussed in Note 4, condition exist which
raised  substantial  doubt  about the  Company's  ability to continue as a going
concern  unless  it is  able to  generate  sufficient  cash  flows  to meet  its
obligations  and sustain its operations.  Management's  plans in regard to these
matters are also  described in Note 4. The  financial  statements do not include
any adjustments that might result from the outcome of this uncertainty.



March 27, 2006
/s/Jaspers + Hall, PC

                                      F-1

<PAGE>
<TABLE>
<CAPTION>


                               ART BOUTIQUE, INC.
                          (A Development Stage Company)
                          Consolidated Balance Sheets




                                                                                           December 31,
                                                                                     2005                2004
                                                                                     ----                ----
<S>                                                                             <C>                  <C>

ASSETS:
Current Assets:
   Cash                                                                                 $ 4,284            $ 5,087
                                                                                ----------------     --------------

      Total Current Assets                                                                4,284              5,087
                                                                                ----------------     --------------

Fixed Assets:
   Office Equipment (Net)                                                                13,218              7,679
                                                                                ----------------     --------------
      Total Fixed Assets                                                                 13,218              7,679
                                                                                ----------------     --------------

Other Assets:
   Deposits                                                                                  65                609
   Prepaid Expenses                                                                       1,162              1,217
                                                                                ----------------     --------------

      Total Other Assets                                                                  1,227              1,826
                                                                                ----------------     --------------

TOTAL ASSETS                                                                           $ 18,729           $ 14,592
                                                                                ================     ==============


LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
    Accounts Payable                                                                   $ 91,193                $ -
    Due to Director - MRI                                                                53,202                  -
    Due to Director - Key Chance                                                        416,269            272,320
                                                                                ----------------     --------------

        Total current liabilities                                                       560,664            272,320
                                                                                ----------------     --------------

Minority Interest in Consolidated Subsidiaries                                          (10,640)                 -

Stockholders' Equity (Deficit):
Common Stock, no par value; 50,000,000 shares authorized;
   47,471,900 shares issued and outstanding December 31, 2005                           858,095            433,095
   12,471,900 shares issued and outstanding December 31, 2004
Deficit accumulated during the development stage                                     (1,389,390)          (690,823)
                                                                                ----------------     --------------

      Total stockholders' equity (deficit)                                             (531,295)          (257,728)
                                                                                ----------------     --------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                   $ 18,729           $ 14,592
                                                                                ================     ==============

</TABLE>
The accompanying notes are an integral part of these financial statements.

                                      F-2
<PAGE>
<TABLE>
<CAPTION>

                               ART BOUTIQUE, INC.
                         (A Development Stage Company)
                     Consolidated Statements of Operations




<S>                                                    <C>                 <C>                  <C>

                                                                                                 May 15, 1984
                                                                  December, 31                (Inception) to
                                                            2005                2004            December 31, 2005
                                                       ---------------     ---------------      ---------------
Revenue                                                           $ -                 $ -              $ 61,102
                                                       ---------------     ---------------      ----------------
Expenses:

    Depreciation                                                2,445               1,739                 4,144
    Loss from discontinued operations                               -                   -                26,331
    Acquisition costs                                               -                   -                 2,100
    General and administrative                                695,327             522,688             1,416,717
                                                       ---------------     ---------------      ----------------
        Total Expenses                                        697,772             524,427             1,449,292
                                                       ---------------     ---------------      ----------------
Other Revenue/Expense:

    Exchange Rate Loss                                            795                 565                 1,200
                                                       ---------------     ---------------      ----------------
Loss Before Minority Interest                                (698,567)           (524,992)           (1,389,390)
                                                       ---------------     ---------------      ----------------

Minority interest in net loss of                              (10,640)                  -               (10,640)
                                                       ---------------     ---------------      ----------------
    Consolidated Subsidiary
Net Loss                                                    $(709,207)          $(524,992)          $(1,400,030)
                                                       ===============     ===============      ================

Net Loss per share common stock                           $ (0.03)            $ (0.04)
                                                       ===============     ===============

Weighted average number of
   common shares outstanding                               27,554,092          12,471,900
                                                       ===============     ===============


* Less than $.01 per share

</TABLE>
The accompanying notes are an integral part of these financial statements.

                                      F-3
<PAGE>
<TABLE>
<CAPTION>

                                  ART BOUTIQUE
                         (A Development Stage Company)
                     Consolidated Statements of Cash Flows

                                Indirect Method

                                                                                                   May 15, 1984
                                                                                                   (Inception) to
                                                                      December 31,                December 31,
                                                               2005                2004                2005
                                                           --------------       ------------       --------------
<S>                                                        <C>                  <C>                <C>

Cash Flows from Operating Activities:
Net Loss                                                       $(709,207)         $(524,992)         $(1,400,030)
Adjustments to reconcile net loss to net cash used
   by operating activities
  Stock issued for services                                            -                  -                1,000
 Changes in operating assets and liabilities:
   Depreciation                                                    2,445              1,739                4,144
   (Increase) Decrease Deposits                                     544               (609)                 (65)
   (Increase) Decrease Prepaid Expenses                              55             (1,217)              (1,162)
   Increase (Decrease) accounts payable                           91,193            (17,291)              91,193
                                                           --------------       ------------       --------------
Net Cash Flows Used by Operating Activities                     (614,970)          (542,370)          (1,304,920)
                                                           --------------       ------------       --------------

Cash Flows from Investing Activities:
   Acquisition of Fixed Assets                                    (7,984)            (4,917)             (17,362)
                                                           --------------       ------------       --------------
Net Cash Flows Provided by Investing Activities                   (7,984)            (4,917)             (17,362)
                                                           --------------       ------------       --------------

Cash Flows from Financing Activities:
   Proceeds from Notes Payable - Stockholders                    143,949            272,320              416,269
   Proceeds from Note Payable                                     53,202                  -               53,202
   Issuance of Common Stock                                      425,000                  -              857,095
                                                           --------------       ------------       --------------
Net Cash Flows Provided by Financing Activities                  622,151            272,320            1,326,566
                                                           --------------       ------------       --------------

Net Increase (Decrease) in Cash                                     (803)          (274,967)               4,284
                                                           --------------       ------------       --------------
Cash at Beginning of Period                                        5,087            280,054                    -
                                                           --------------       ------------       --------------

Cash at End of Period                                            $ 4,284            $ 5,087              $ 4,284
                                                           ==============       ============       ==============

Supplemental Disclosure of Cash Flows Information:

    Cash paid for interest                                           $ -                $ -                  $ -
                                                           ==============       ============       ==============
    Cash paid for taxes                                              $ -                $ -                  $ -
                                                           ==============       ============       ==============
Supplemental Disclosure of Non-Cash Transactions

    Stock issued for services - 4,000,000 Shares                     $ -                $ -              $ 1,000
                                                           ==============       ============       ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.

                                      F-4


<PAGE>
<TABLE>
<CAPTION>


                               ART BOUTIQUE, INC.
                          (A Development Stage Company)
                  Consolidated Stockholders' Equity (Deficit)
                               December 31, 2005





                                                                                   Deficit
                                                                                  Accum. During
                                                     Common Stock                the Development
                                            # of Shares          Amount             Stage             Totals
                                            -----------          ------             -----             ------
<S>                                       <C>                 <C>               <C>                <C>


Balance - December 31, 1995                       471,900          $ 29,795          $ (29,842)            $ (47)
Net Profit for year                                     -                 -                 47                47
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 1996                       471,900            29,795            (29,795)                -
                                          ----------------    --------------    ---------------    --------------
Issued March 14, 1997                           4,000,000             1,000                  -             1,000
Net Loss for year                                       -                 -             (1,000)           (1,000)
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 1997                     4,471,900            30,795            (30,795)                -
                                          ----------------    --------------    ---------------    --------------
Net Profit for year                                     -                 -                  -                 -
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 1998                     4,471,900            30,795            (30,795)                -
                                          ----------------    --------------    ---------------    --------------
Net Profit for year                                     -                 -                  -                 -
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 1999                     4,471,900            30,795            (30,795)                -
                                          ----------------    --------------    ---------------    --------------
Shares for acquisition                                  -             2,300                  -             2,300
Net Loss for year                                       -                 -             (2,300)           (2,300)
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 2000                     4,471,900            33,095            (33,095)                -
                                          ----------------    --------------    ---------------    --------------
Net Loss for year                                       -                 -             (4,608)           (4,608)
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 2001                     4,471,900            33,095            (37,703)           (4,608)
                                          ----------------    --------------    ---------------    --------------
Net Loss for year                                       -                 -            (12,683)          (12,683)
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 2002                     4,471,900            33,095            (50,386)          (17,291)
                                          ----------------    --------------    ---------------    --------------
Issuance of Stock for Cash 12/03                8,000,000           400,000                  -           400,000
Net Loss for Year                                       -                 -           (115,445)         (115,445)
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 2003                    12,471,900           433,095           (165,831)          267,264
                                          ----------------    --------------    ---------------    --------------
Net Loss for Year                                       -                 -           (524,992)         (524,992)
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 2004                    12,471,900           433,095           (690,823)         (257,728)
                                          ----------------    --------------    ---------------    --------------
Issuance of stock for Acquisition              25,000,000                 -                  -                 -
Issuance of stock for cash                     10,000,000           425,000                  -           425,000
Net Loss for Year                                       -                 -           (698,567)         (698,567)
                                          ----------------    --------------    ---------------    --------------
Balance - December 31, 2005                    47,471,900         $ 858,095        $(1,389,390)        $(531,295)
                                          ================    ==============    ===============    ==============

</TABLE>
The accompanying notes are an integral part of these financial statements.

                                      F-5


<PAGE>

                               ART BOUTIQUE, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Note 1 - Organization and Summary of Significant Accounting Policies:

         Organization:

         The Company was organized in the State of Wyoming on May 15, 1984.  The
         Company  operated from the date of  organization  through  November 30,
         1996 conducting art classes, teaching painting techniques,  and selling
         supplies.  The Company closed their operation and liquidated all of its
         assets in full  settlement of its  liabilities on December 19, 1996. On
         November 10, 2003 Key Chance International, LTD became the wholly owned
         subsidiary of Art Boutique,  Inc. in a share purchase agreement. On May
         24, 2005 Art Boutique,  Inc.  entered into a stock  exchange  agreement
         with Micronesian  Resort, Inc. (MRI) to purchase 80% of the outstanding
         capital stock of Micronesian Resort, Inc. (a corporation existing under
         the laws of the British Virgin Islands.

         The Company's fiscal year end is December 31.

         Basis of Presentation - Development Stage Company

         The Company has not earned significant  revenues from limited principal
         operations.  Accordingly,  the Company's activities have been accounted
         for as  those  of a  "Development  Stage  Enterprise"  as set  forth in
         Financial  Accounting Standards Board Statement No. 7 ("SFAS 7"). Among
         the  disclosures  required by SFAS 7 are that the  Company's  financial
         statements be identified as those of an development stage company,  and
         that the statements of operations,  stockholders'  equity (deficit) and
         cash flows disclose activity since the date of the Company's inception.

         Basis of Accounting

         The accompanying financial statements have been prepared on the accrual
         basis of accounting in accordance with accounting  principles generally
         accepted in the United States.

         Basis of Consolidation

          The financial  statements  include Art  Boutique,  Inc. and its wholly
          owned subsidiary Key Chance, Inc. and Micronesian Resorts, Inc. as and
          80% owned entity.

         Cash and Cash Equivalents:

         The Company  considers  all  highly-liquid  debt  instruments,  with an
         original maturity of three months, to be cash equivalents.

         Use of Estimates:

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that affect  certain  reported  amounts of assets and
         liabilities  at the date of the financial  statements.  Actual  results
         could differ from those estimates.

                                      F-6

<PAGE>




                               ART BOUTIQUE, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005


         Net Loss Per Share

         Net loss per share is based on the  weighted  average  number of common
         shares outstanding during the period.

         Property and Equipment

         Property  and   equipment   are  stated  at  cost,   less   accumulated
         depreciation.  Depreciation  is  provided  for using the  straight-line
         method over the estimated useful life of the assets.

         Other Comprehensive Income

         Art Boutique, Inc. has no material components of other comprehensive
         income (loss), and accordingly, net loss is equal to comprehensive loss
         in all periods.

Note 2 - Federal Income Tax:

         The Company has made no provision  for income taxes  because there have
         been no  operations to date causing  income for financial  statement or
         tax purposes.

         The Financial Accounting Standards Board (FASB) has issued Statement of
         Financial Accounting Standards Number 109 ("SFAS 109"), "Accounting for
         Income Taxes",  which requires a change from the deferred method to the
         asset and liability  method of accounting  for income taxes.  Under the
         asset and liability  method,  deferred  income taxes are recognized for
         the tax  consequences of "temporary  differences"  by applying  enacted
         statutory tax rates  applicable to future years to differences  between
         the financial  statement carrying amounts and the tax basis of existing
         assets and liabilities.

                                                         2005             2004
         Deferred tax assets:
         Net operating loss carryforwards            $1,400,030       $ 690,823
         Valuation allowance                        ( 1,400,030)     (  690,823)
                                                     -----------      ----------
         Net deferred tax assets                     $        0       $       0

         At December 31, 2005, the Company had net operating loss  carryforwards
         of  approximately  $1,400,030  for federal  income tax purposes.  These
         carryforwards  if not utilized to offset  taxable income will expire in
         2010.

Note 3 - Capital Stock Transactions

         The  authorized  capital stock of the Company is  50,000,000  shares of
         common stock at no par value. The Company issued  10,000,000  shares of
         common stock for cash of $425,000 and 25,000,000 shares of common stock
         for the  acquisition  of 80% of the  authorized  outstanding  shares of
         Micronesian Resort, Inc.

                                      F-7

<PAGE>


                               ART BOUTIQUE, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005


Note 4 - Going Concern

         The Company's  financial  statements  have been  presented on the basis
         that it is a going  concern,  which  contemplated  the  realization  of
         assets and the  satisfaction  of  liabilities  in the normal  course of
         business.

         The Company is in the development stage and has not earned any revenues
         from operations.  The Company's  ability to continue as a going concern
         is dependent upon its ability to develop  additional sources of capital
         or  locate  a  merger  candidate  and  ultimately,  achieve  profitable
         operations.  The accompanying  financial  statements do not include any
         adjustments that might result from the outcome of these  uncertainties.
         Management is seeking new capital to revitalize the Company.

Note 5 - Segment Information

         Art Boutique, Inc. operates primarily in a single operating segment,
         mainly the merger and acquisition of small businesses interested in
         merging.

Note 6 - Financial Accounting Developments

         Recently Issued Accounting Pronouncements

         In December 2003,  the FASB  Interpretation  No. 146 (revised  December
         2003),  "Consolidation  of Variable  Interest  Entities" (FIN No. 146R)
         which addresses how a business  enterprise  should evaluate  whether it
         has a controlling  financial  interest in an entity through means other
         than voting rights and accordingly  should  consolidate the entity. FIN
         No.  146R  replaces  FASB  interpretation  No. 146,  "Consolidation  of
         Variable  Interest  Entities",   which  was  issued  in  January  2003.
         Companies  are required to apply FIN No. 146R to variable  interests in
         variable  interest  entities  ("VIEs") created after December 31, 2003.
         For  variable  interest in VIEs  created  before  January 1, 2004,  the
         Interpretation  is applied beginning January 1, 2005. For any VIEs that
         must be consolidated under FIN 146R that were created before January 1,
         2004, the assets,  liabilities and non-controlling  interest of the VIE
         initially are measured at their  carrying  amounts with any  difference
         between the net amount  added to the balance  sheet and any  previously
         recognized  interest being  recognized as the  cumulative  effect of an
         accounting   change.   If  determining  the  carrying  amounts  is  not
         practicable,  fair value at the date FIN No. 146R first  applies may be
         used to measure the assets, liabilities and non-controlling interest in
         the VIE. FIN 146R did not materially effect the financial statements.

                                      F-8

<PAGE>


                               ART BOUTIQUE, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2004

Note 6 - Financial Accounting Developments (Cont)


         In February 2003,  the Financial  Accounting  Standards  Board ("FASB")
         issued SFAS No. 150, "Accounting for Certain Financial Instruments with
         Characteristics of Both Liabilities and Equity". The provisions of SFAS
         No.  150  are  effective  for  financial  instruments  entered  into or
         modified  after May 31, 2003, and otherwise are effective the beginning
         of the first interim period  beginning after June 15, 2003,  except for
         mandatorily redeemable financial instruments of nonpublic entities. The
         Company   has  not  issued   any   financial   instruments   with  such
         characteristics.

         In December 2004, the FASB issued SFAS No. 123R (revised 2004),  "Share
         Based  Payment"  which  amends  FASB  Statement  No.  123  and  will be
         effective for public companies for interim or annual periods after June
         15, 2005.  The new standard will require  entities to expense  employee
         stock options and other share-based  payments.  The new standard may be
         adopted  in one of three  ways - the  modified  prospective  transition
         method, a variation of the modified  prospective  transition  method or
         the  modified  retrospective  transition  method.  The  Company  is  to
         evaluate  how it will adopt the  standard  and evaluate the effect that
         the adoption of the SFAS 123R will have on its  financial  position and
         results of operations.

         In November 2004, the FASB issued SFAS No. 151,  "Inventory  costs,  an
         amendment of ARB No. 43, Chapter 4. This statement  amends the guidance
         in ARB No. 43, Chapter 4, Inventory Pricing,  to clarify the accounting
         for abnormal amounts of idle facility expense,  freight,  handling cost
         and wasted material  (spoilage).  Paragraph 5 of ARB No. 43, Chapter 4,
         previously  stated that "under some  circumstances,  items such as idle
         facility  expense,  excessive  spoilage,  double freight and rehandling
         costs may be so  abnormal  as to require  treatment  as current  period
         charges."  SFAS No. 151  requires  that those  items be  recognized  as
         current-period charges regardless of whether they meet the criterion of
         "so abnormal".  In addition, this statement requires that allocation of
         fixed  production  overheads to the costs of conversion be based on the
         prospectively  and are effective for inventory  costs  incurred  during
         fiscal years beginning  after June 15, 2005,  with earlier  application
         permitted for inventory  costs incurred  during fiscal years  beginning
         after the date this Statement was issued.  The adoption of SFAS No. 151
         is not  expected to have  material  impact on the  Company's  financial
         position and results of operations.

         In  December  2004,  the  FASB  issued  SFAS  No.  153,  "Exchanges  of
         Non-Monetary  Assets",  an  amendment  of the APB  Opinion  No. 29. The
         guidance   in  APB  Opinion  No.  29,   Accounting   for   Non-Monetary
         Transactions,  is based on the principle that exchanges of non-monetary
         assets should be measured based on the fair value of assets  exchanged.
         The guidance in that Opinion,  however,  included certain exceptions to
         that  principle.  This  Statement  amends  Opinion 29 to eliminate  for
         non-monetary  exchanges of similar  productive  assets that do not have
         commercial substance.  A non-monetary exchange has commercial substance
         if the  future  cash  flows  of  the  entity  are  expected  to  change
         significantly  as a result of the  exchange.  SFAS No. 153 is effective
         for non-monetary  exchanges  occurring in fiscal periods after June 15,
         2005.  The  adoption of SFAS No. 153 is not expected to have a material
         impact on the Company's financial position and results of operations.

                                      F-9

<PAGE>



                               ART BOUTIQUE, INC.
                          (A Development Stage Company)
                   Notes to Consolidated Financial Statements
                                December 31, 2005



Note 7 - Due to Directors:

The Director  (Ronald Lui) is due an amount of $416,269 for advances made to the
Company to pay for Company expenses. The amount is unsecured,  interest free and
has no fixed terms of repayment.

The Director of  Micronesian  Resort (Choy Kwok Fai) is due an amount of $53,202
for  advances  made to the  Company to pay for Company  expenses.  The amount is
unsecured, interest free and has no fixed terms of repayment.

Note 8 - Ownership Interest in Affiliated Company:

On May 25, 2005, the Company  purchased an 80% interest in  Micronesian  Resort,
Inc.(MRI) for an issuance of 25,000,000  shares of common stock in Art Boutique,
Inc.  MRI is the lessee of a piece of property in the  Republic of Palau under a
lease  agreement  dated April 25, 2005 for the grant of a lease of such property
to MRI. Art  Boutique,  Inc.  will  indirectly  control MRI and will commence to
develop the property into a resort hotel.  The minority  interest held by MRI is
disclosed separately in the Company's Consolidated Financial Statements.

Note 9 - Fixed Assets:

Fixed assets consist of the following for the year ended December 31, 2005:

         Office Equipment and Furniture                        16,436
         Mobile Phone                                             926
                           Total Fixed Assets                  17,362
         Less:  Accumulated depreciation                        4,144
                           Net Fixed Assets                   $13,218

The useful lives of the fixed assets are three years.  Depreciation  expense was
$2,445 for the year ended December 31, 2005.

                                      F-10


<PAGE>
 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                            THE ART BOUTIQUE, INC.
                                            (Registrant)


Date: April 12, 2006
                                            /s/ Tsoi Mow Hung
                                            ----------------------------------
                                            Tsoi Mow Hung, President




                                            DIRECTORS:


                                            /s/ Ronald Lui
                                            ---------------------------------
                                            Ronald Lui


                                            /s/Tsoi Mow Hung
                                            ---------------------------------
                                            Tsoi Mow Hung




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