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, 2003

                        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.)

                      Rooms 1203-8, 12 Floor, Hang Seng Bldg.
                      77 Des Voeux Road Central,l 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.

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

There were 12,471,900 shares of the Registrant's common stock outstanding as of
December 31, 2003 and at March 31, 2004.

The aggregate  market value of the 8,771,900  shares of voting common stock held
by nonaffiliates  of the Registrant is approximately  $9,649,090 on December 31,
2003 based on the closing price of $1.10 per share.


<PAGE>



                                TABLE OF CONTENTS

PART I                                                                     Page

         Item 1. Description of Business                                      1
         Item 2. Description of Property                                      10
         Item 3. Legal Proceedings                                            10
         Item 4. Submission of Matters to a Vote of Security Holders          10

PART II

         Item 5. Market for Common Equity and Related Stockholder Matters     11
         Item 6. Management's Discussion and Analysis or Plan of Operation    11
         Item 7. Financial Statements
         Item 8. Changes in and Disagreements With Accountants on Accounting  13
                 and Financial Disclosure
         Item 8a Controls and Procedures                                      14

PART III

         Item 9. Directors, Executive Officers, Promoters and Control
                 Persons; Compliance with Section 16(a) of the Exchange Act   14
         Item 10. Executive Compensation                                      16
         Item 11. Security Ownership of Certain Beneficial Owners and
                  Management                                                  18
         Item 12. Certain Relationships and Related Transactions              19
         Item 13. Exhibits and Reports on Form 8-K                            20
         Item 14. Principal Accountant Fees and Services                      20


SIGNATURES                                                                    21




<PAGE>




                                                 PART I

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

         General

                  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 Art Boutique,  Inc.  executed its Plan of Merger and
Articles of Merger with Kearney,  Inc. At the time of the effective  date of the
merger, The Art Boutique, Inc. 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 Art Boutique,  Inc. is the surviving company
after the merger.

         The Company is a "shell" company and its only current business plan is
to seek, investigate, and, if warranted, acquire one or more properties or
businesses, and to pursue other related activities intended to enhance
shareholder value. The acquisition of a business opportunity may be made by
purchase, merger, exchange of stock, or otherwise, and may encompass assets or a
business entity, such as a corporation, joint venture, or partnership. The
Company has no capital, and it is unlikely that the Company will be able to take
advantage of more than one such business opportunity. The Company intends to
seek opportunities demonstrating the potential of long-term growth as opposed to
short-term earnings.

     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 has in 2003,  formed a new wholly  owned  subsidiary  under the
name  of  Key  Chance  International,   LTD.  a  BVI  corporation.   Key  Chance
International, LTD. will be the foreign operating subsidiary of the company.

         At the present time the Company has not identified any business
opportunity that it plans to pursue, nor has the Company reached any agreement
or definitive understanding with any person concerning an acquisition. The
Company is filing Form 10-SB on a voluntary basis in order to become a 12(g)
registered company under the Securities Exchange Act of 1934. As a "reporting
company," the Company may be more attractive to a private acquisition target
because it is  listed to trade its shares on the OTCBB under the symbol ARTB.OB.

         It is anticipated that the Company's officers and directors will
contact broker-dealers and other persons with whom they are acquainted who are
involved in corporate finance matters to advise them of the Company's existence
and to determine if any companies or businesses they represent have an interest



                                       1
<PAGE>


in considering a merger or acquisition with the Company. No assurance can be
given that the Company will be successful in finding or acquiring a desirable
business opportunity, given that no funds that are available for acquisitions,
or that any acquisition that occurs will be on terms that are favorable to the
Company or its stockholders.

         The Company's search will be directed toward small and medium-sized
enterprises which have a desire to become public corporations and which are able
to satisfy, or anticipate in the reasonably near future being able to satisfy,
the minimum asset requirements in order to qualify shares for trading on NASDAQ
or a stock exchange (See "Investigation and Selection of Business
Opportunities"). The Company anticipates that the business opportunities
presented to it will (i) be recently organized with no operating history, or a
history of losses attributable to under-capitalization or other factors; (ii) be
experiencing financial or operating difficulties; (iii) be in need of funds to
develop a new product or service or to expand into a new market; (iv) be relying
upon an untested product or marketing concept; or (v) have a combination of the
characteristics mentioned in (i) through (iv). The Company intends to
concentrate its acquisition efforts on properties or businesses that it believes
to be undervalued. Given the above factors, investors should expect that any
acquisition candidate may have a history of losses or low profitability.

         The Company does not propose to restrict its search for investment
opportunities to any particular geographical area or industry, and may,
therefore, engage in essentially any business, to the extent of its limited
resources. This includes industries such as service, finance, natural resources,
manufacturing, high technology, product development, medical, communications and
others. The Company's discretion in the selection of business opportunities is
unrestricted, subject to the availability of such opportunities, economic
conditions, and other factors.

         As a consequence of this registration of its securities, any entity
which has an interest in being acquired by, or merging into the Company, is
expected to be an entity that desires to become a public company and establish a
public trading market for its securities. In connection with such a merger or
acquisition, it is highly likely that an amount of stock constituting control of
the Company would be issued by the Company or purchased from the current
principal shareholders of the Company by the acquiring entity or its affiliates.

         If stock is purchased from the current shareholders, the transaction is
very likely to result in substantial gains to them relative to their purchase
price for such stock. In the Company's judgment, none of its officers and
directors would thereby become an "underwriter" within the meaning of the
Section 2(11) of the Securities Act of 1933, as amended. The sale of a
controlling interest by certain principal shareholders of the Company could
occur at a time when the other shareholders of the Company remain subject to
restrictions on the transfer of their shares.

         Depending upon the nature of the transaction, the current officers and
directors of the Company may resign management positions with the Company in
connection with the Company's acquisition of a business opportunity. See "Form
of Acquisition," below, and "Risk Factors - The Company - Lack of Continuity in
Management." In the event of such a resignation, the Company's current
management would not have any control over the conduct of the Company's business
following the Company's combination with a business opportunity.


                                       2
<PAGE>



         It is anticipated that business opportunities will come to the
Company's attention from various sources, including its officers and director,
its other stockholders, professional advisors such as attorneys and accountants,
securities broker-dealers, venture capitalists, members of the financial
community, and others who may present unsolicited proposals. The Company has no
plans, understandings, agreements, or commitments with any individual for such
person to act as a finder of opportunities for the Company.

         The Company does not foresee that it would enter into a merger or
acquisition transaction with any business with which its officers or directors
are currently affiliated. Should the Company determine in the future, contrary
to foregoing expectations, that a transaction with an affiliate would be in the
best interests of the Company and its stockholders, the Company is in general
permitted by Wyoming law to enter into such a transaction if:

1. The material facts as to the relationship or interest of the affiliate and as
to the contract or transaction are disclosed or are known to the Board of
Directors, and the Board in good faith authorizes the contract or transaction by
the affirmative vote of a majority of the disinterested directors, even though
the disinterested directors constitute less than a quorum; or

2. The material facts as to the relationship or interest of the affiliate and as
to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or

3. The contract or transaction is fair as to the Company as of the time it is
authorized, approved or ratified, by the Board of Directors or the stockholders.
Investigation and Selection of Business Opportunities

         To a large extent, a decision to participate in a specific business
opportunity may be made upon management's analysis of the quality of the other
company's management and personnel, the anticipated acceptability of new
products or marketing concepts, the merit of technological changes, the
perceived benefit the company will derive from becoming a publicly held entity,
and numerous other factors which are difficult, if not impossible, to analyze
through the application of any objective criteria. In many instances, it is
anticipated that the historical operations of a specific business opportunity
may not necessarily be indicative of the potential for the future because of the
possible need to shift marketing approaches substantially, expand significantly,
change product emphasis, change or substantially augment management, or make
other changes. The Company will be dependent upon the owners of a business
opportunity to identify any such problems which may exist and to implement, or
be primarily responsible for the implementation of, required changes. Because
the Company may participate in a business opportunity with a newly organized
firm or with a firm which is entering a new phase of growth, it should be
emphasized that the Company will incur further risks, because management in many
instances will not have proved its abilities or effectiveness, the eventual
market for such company's products or services will likely not be established,
and such company may not be profitable when acquired.

         It is anticipated that the Company will not be able to diversify, but
will essentially be limited to one such venture because of the Company's limited


                                       3
<PAGE>


financing. This lack of diversification will not permit the Company to offset
potential losses from one business opportunity against profits from another, and
should be considered an adverse factor affecting any decision to purchase the
Company's securities.

         It is emphasized that management of the Company may effect transactions
having a potentially adverse impact upon the Company's shareholders pursuant to
the authority and discretion of the Company's management to complete
acquisitions without submitting any proposal to the stockholders for their
consideration. Holders of the Company's securities should not anticipate that
the Company necessarily will furnish such holders, prior to any merger or
acquisition, with financial statements, or any other documentation, concerning a
target company or its business. In some instances, however, the proposed
participation in a business opportunity may be submitted to the stockholders for
their consideration, either voluntarily by such directors to seek the
stockholders' advice and consent or because state law so requires.

         The analysis of business opportunities will be undertaken by or under
the supervision of the Company's President, who is not a professional business
analyst. See "Management." Although there are no current plans to do so, Company
management might hire an outside consultant to assist in the investigation and
selection of business opportunities, and might pay a finder's fee. Since Company
management has no current plans to use any outside consultants or advisors to
assist in the investigation and selection of business opportunities, no policies
have been adopted regarding use of such consultants or advisors, the criteria to
be used in selecting such consultants or advisors, the services to be provided,
the term of service, or regarding the total amount of fees that may be paid.
However, because of the limited resources of the Company, it is likely that any
such fee the Company agrees to pay would be paid in stock and not in cash.
Otherwise, the Company anticipates that it will consider, among other things,
the following factors:

1. Potential for growth and profitability, indicated by new technology,
anticipated market expansion, or new products;

2. The Company's perception of how any particular business opportunity will be
received by the investment community and by the Company's stockholders;

3. Whether, following the business combination, the financial condition of the
business opportunity would be, or would have a significant prospect in the
foreseeable future of becoming sufficient to enable the securities of the
Company to qualify for listing on an exchange or on a national automated
securities quotation system, such as NASDAQ, so as to permit the trading of such
securities to be exempt from the requirements of Rule 15c2-6 recently adopted by
the Securities and Exchange Commission. See "Risk Factors - The Company -
Regulation of Penny Stocks."

4. Capital requirements and anticipated availability of required funds, to be
provided by the Company or from operations, through the sale of additional
securities, through joint ventures or similar arrangements, or from other
sources;

5. The extent to which the business opportunity can be advanced;


                                       4
<PAGE>


6. Competitive position as compared to other companies of similar size and
experience within the industry segment as well as within the industry as a
whole;

7. Strength and diversity of existing management, or management prospects that
are scheduled for recruitment;

8. The cost of participation by the Company as compared to the perceived
tangible and intangible values and potential; and

9. The accessibility of required management expertise, personnel, raw materials,
services, professional assistance, and other required items.

         In regard to the possibility that the shares of the Company would
qualify for listing on NASDAQ, the current standards include the requirements
that the issuer of the securities that are sought to be listed have total net
tangible assets of at least $4,000,000. Many, and perhaps most, of the business
opportunities that might be potential candidates for a combination with the
Company would not satisfy the NASDAQ listing criteria.

         No one of the factors described above will be controlling in the
selection of a business opportunity, and management will attempt to analyze all
factors appropriate to each opportunity and make a determination based upon
reasonable investigative measures and available data. Potentially available
business opportunities may occur in many different industries and at various
stages of development, all of which will make the task of comparative
investigation and analysis of such business opportunities extremely difficult
and complex. Potential investors must recognize that, because of the Company's
limited capital available for investigation and management's limited experience
in business analysis, the Company may not discover or adequately evaluate
adverse facts about the opportunity to be acquired.

         The Company is unable to predict when it may participate in a business
opportunity. It expects, however, that the analysis of specific proposals and
the selection of a business opportunity may take several months or more.

         Prior to making a decision to participate in a business opportunity,
the Company will generally request that it be provided with written materials
regarding the business opportunity containing such items as a description of
products, services and company history; management resumes; financial
information; available projections, with related assumptions upon which they are
based; an explanation of proprietary products and services; evidence of existing
patents, trademarks, or services marks, or rights thereto; present and proposed
forms of compensation to management; a description of transactions between such
company and its affiliates during relevant periods; a description of present and
required facilities; an analysis of risks and competitive conditions; a
financial plan of operation and estimated capital requirements; audited
financial statements, or if they are not available, unaudited financial
statements, together with reasonable assurances that audited financial
statements would be able to be produced within a reasonable period of time not
to exceed 60 days following completion of a merger transaction; and other
information deemed relevant.


                                       5
<PAGE>



         As part of the Company's investigation, the Company's executive
officers and directors may meet personally with management and key personnel,
may visit and inspect material facilities, obtain independent analysis or
verification of certain information provided, check references of management and
key personnel, and take other reasonable investigative measures, to the extent
of the Company's limited financial resources and management expertise.

         It is possible that the range of business opportunities that might be
available for consideration by the Company could be limited by the impact of
Securities and Exchange Commission regulations regarding purchase and sale of
"penny stocks." The regulations would affect, and possibly impair, any market
that might develop in the Company's securities until such time as they qualify
for listing on NASDAQ or on another exchange which would make them exempt from
applicability of the "penny stock" regulations. See "Risk Factors - Regulation
of Penny Stocks."

         Company management believes that various types of potential merger or
acquisition candidates might find a business combination with the Company to be
attractive. These include acquisition candidates desiring to create a public
market for their shares in order to enhance liquidity for current shareholders,
acquisition candidates which have long-term plans for raising capital through
the public sale of securities and believe that the possible prior existence of a
public market for their securities would be beneficial, and acquisition
candidates which plan to acquire additional assets through issuance of
securities rather than for cash, and believe that the possibility of development
of a public market for their securities will be of assistance in that process.
Acquisition candidates which have a need for an immediate cash infusion are not
likely to find a potential business combination with the Company to be an
attractive alternative.

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

Form of Acquisition

         It is impossible to predict the manner in which the Company may
participate in a business opportunity. Specific business opportunities will be
reviewed as well as the respective needs and desires of the Company and the
promoters of the opportunity and, upon the basis of that review and the relative
negotiating strength of the Company and such promoters, the legal structure or
method deemed by management to be suitable will be selected. Such structure may
include, but is not limited to leases, purchase and sale agreements, licenses,
joint ventures and other contractual arrangements. The Company may act directly
or indirectly through an interest in a partnership, corporation or other form of
organization. Implementing such structure may require the merger, consolidation
or reorganization of the Company with other corporations or forms of business
organization, and although it is likely, there is no assurance that the Company
would be the surviving entity. In addition, the present management and
stockholders of the Company most likely will not have control of a majority of
the voting shares of the Company following a reorganization transaction. As part
of such a transaction, the Company's existing directors may resign and new
directors may be appointed without any vote by stockholders.


                                       6
<PAGE>


         It is likely that the Company will acquire its participation in a
business opportunity through the issuance of Common Stock or other securities of
the Company. Although the terms of any such transaction cannot be predicted, it
should be noted that in certain circumstances the criteria for determining
whether or not an acquisition is a so-called "tax free" reorganization under the
Internal Revenue Code of 1986, depends upon the issuance to the stockholders of
the acquired company of a controlling interest (i.e. 80% or more) of the common
stock of the combined entities immediately following the reorganization. If a
transaction were structured to take advantage of these provisions rather than
other "tax free" provisions provided under the Internal Revenue Code, the
Company's current stockholders would retain in the aggregate 20% or less of the
total issued and outstanding shares. This could result in substantial additional
dilution in the equity of those who were stockholders of the Company prior to
such reorganization. Any such issuance of additional shares might also be done
simultaneously with a sale or transfer of shares representing a controlling
interest in the Company by the current officers, directors and principal
shareholders. (See "Description of Business - General").

         It is anticipated that any new securities issued in any reorganization
would be issued in reliance upon exemptions, if any are available, from
registration under applicable federal and state securities laws. In some
circumstances, however, as a negotiated element of the transaction, the Company
may agree to register such securities either at the time the transaction is
consummated, or under certain conditions or at specified times thereafter. The
issuance of substantial additional securities and their potential sale into any
trading market that might develop in the Company's securities may have a
depressive effect upon such market.

         The Company will participate in a business opportunity only after the
negotiation and execution of a written agreement. Although the terms of such
agreement cannot be predicted, generally such an agreement would require
specific representations and warranties by all of the parties thereto, specify
certain events of default, detail the terms of closing and the conditions which
must be satisfied by each of the parties thereto prior to such closing, outline
the manner of bearing costs if the transaction is not closed, set forth remedies
upon default, and include miscellaneous other terms.

         As a general matter, the Company anticipates that it, and/or its
officers and principal shareholders will enter into a letter of intent with the
management, principals or owners of a prospective business opportunity prior to
signing a binding agreement. Such a letter of intent will set forth the terms of
the proposed acquisition but will not bind any of the parties to consummate the
transaction. Execution of a letter of intent will by no means indicate that
consummation of an acquisition is probable. Neither the Company nor any of the
other parties to the letter of intent will be bound to consummate the
acquisition unless and until a definitive agreement concerning the acquisition
as described in the preceding paragraph is executed. Even after a definitive
agreement is executed, it is possible that the acquisition would not be
consummated should any party elect to exercise any right provided in the
agreement to terminate it on specified grounds.

         It is anticipated that the investigation of specific business
opportunities and the negotiation, drafting and execution of relevant
agreements, disclosure documents and other instruments will require substantial
management time and attention and substantial costs for accountants, attorneys



                                       7
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and others. If a decision is made not to participate in a specific business
opportunity, the costs theretofore incurred in the related investigation would
not be recoverable. Moreover, because many providers of goods and services
require compensation at the time or soon after the goods and services are
provided, the inability of the Company to pay until an indeterminate future time
may make it impossible to procure goods and services.

         In all probability, upon completion of an acquisition or merger, there
will be a change in control through issuance of substantially more shares of
common stock. Further, in conjunction with an acquisition or merger, it is
likely that management may offer to sell a controlling interest at a price not
relative to or reflective of any value of the shares sold by management, and at
a price which could not be achieved by individual shareholders at the time.

Investment Company Act and Other Regulation

         The Company may participate in a business opportunity by purchasing,
trading or selling the securities of such business. The Company does not,
however, intend to engage primarily in such activities. Specifically, the
Company intends to conduct its activities so as to avoid being classified as an
"investment company" under the Investment Company Act of 1940 (the "Investment
Act"), and therefore to avoid application of the costly and restrictive
registration and other provisions of the Investment Act, and the regulations
promulgated thereunder.

         Section 3(a) of the Investment Act contains the definition of an
"investment company," and it excludes any entity that does not engage primarily
in the business of investing, reinvesting or trading in securities, or that does
not engage in the business of investing, owning, holding or trading "investment
securities" (defined as "all securities other than government securities or
securities of majority-owned subsidiaries") the value of which exceeds 40% of
the value of its total assets (excluding government securities, cash or cash
items). The Company intends to implement its business plan in a manner which
will result in the availability of this exception from the definition of
"investment company." Consequently, the Company's participation in a business or
opportunity through the purchase and sale of investment securities will be
limited.

         The Company's plan of business may involve changes in its capital
structure, management, control and business, especially if it consummates a
reorganization as discussed above. Each of these areas is regulated by the
Investment Act, in order to protect purchasers of investment company securities.
Since the Company will not register as an investment company, stockholders will
not be afforded these protections.

         Any securities which the Company might acquire in exchange for its
Common Stock are expected to be "restricted securities" within the meaning of
the Securities Act of 1933, as amended (the "Act"). If the Company elects to
resell such securities, such sale cannot proceed unless a registration statement
has been declared effective by the Securities and Exchange Commission or an
exemption from registration is available. Section 4(1) of the Act, which exempts
sales of securities not involving a distribution, would in all likelihood be
available to permit a private sale. Although the plan of operation does not
contemplate resale of securities acquired, if such a sale were to be necessary,
the Company would be required to comply with the provisions of the Act to effect
such resale.



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<PAGE>



         An acquisition made by the Company may be in an industry which is
regulated or licensed by federal, state or local authorities. Compliance with
such regulations can be expected to be a time-consuming and expensive process.

Competition

         The Company expects to encounter substantial competition in its efforts
to locate attractive opportunities, primarily from business development
companies, venture capital partnerships and corporations, venture capital
affiliates of large industrial and financial companies, small investment
companies, and wealthy individuals. Many of these entities will have
significantly greater experience, resources and managerial capabilities than the
Company and will therefore be in a better position than the Company to obtain
access to attractive business opportunities. The Company also will possibly
experience competition from other public "blank check" companies, some of which
may have more funds available than does the Company.

No Rights of Dissenting Shareholders

         The Company does not intend to provide Company shareholders with
complete disclosure documentation including audited financial statements,
concerning a possible target company prior to acquisition, because Wyoming
Business Corporation Act vests authority in the Board of Directors to decide and
approve matters involving acquisitions within certain restrictions. A
transaction could be structured as an acquisition, not a merger, with the
Registrant being the parent company and the acquiree being merged into a wholly
owned subsidiary. Therefore, a shareholder will have no right of dissent under
Wyoming law.

Administrative Offices

     The Company  currently  maintains  a mailing  address at Rooms  1203-8,  12
Floor,  Hang Seng  Bldg.,  77 Des Voeux  Road  Central,l  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.



                                       9
<PAGE>



Employees

         The Company is a development stage company and currently has no
employees. 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. Although there is no current plan with respect to its nature or
amount, remuneration may be paid to or accrued for the benefit of, the Company's
officers prior to, or in conjunction with, the completion of a business
acquisition for services actually rendered, if for. 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,  2003,  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.



                                       10
<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

2002                    High            Low
----                    ----            ---
1st Quarter             no quote        no quote
2nd Quarter             no quote        no quote
3rd Quarter             no quote        no quote
4th Quarter             .02             .01

2003
----
1st Quarter             .02             .05
2nd Quarter             .05             .05
3rd Quarter             .09             .05
4th Quarter             1.10            .09

     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, 2003, there were 67 record holders of the Company's
common Stock.

         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  made a private  placement  of  8,000,000  shares of common stock in
December  2003  at $.05  per  shares  for  proceeds  of $  400,000  pursuant  to
Regulation S.
                                      11
<PAGE>


Results of Operations for the Year Ended December 31, 2003 Compared to Year
Ended December 31, 2002

     The  Company  had no revenues  or  operations  during 2003 or in 2002.  The
Company  incurred a net loss of  ($115,445)  in 2003  compared  to a net loss of
($12,638)  in 2002.  The  Company  incurred  expenses of $115,445 in general and
administrative  expenses in 2003  compared to $12,638 in 2002.  The net loss per
share was nominal in both 2003 and 2002.

         Liquidity and Capital Resources

     At year end,  the  Company had cash of $280,054  but no other  assets.  The
Company  had  $17,291  in  liabilities.   The  company  is  seeking  a  business
opportunity and may seek capital in relation thereto.

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

     The  Company  may not be able to  carry  out any 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  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.



                                       12
<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.

         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,  except for plans for a part time
salesperson.  It may add full or part time employees of an unknown number in the
next twelve months.

     Going concern  qualification:  The Company has incurred  significant losses
from  operations  for the year ended  December  31,  2003,  and such  losses are
expected to continue. In addition, the company has modest working capital but no
operating  business.  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-9.


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



                                       13
<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.



                                    PART III

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


The directors and executive officers of the Company as of October 20, 2003, are
as follows:

<TABLE>
<CAPTION>

 Name                        Age           Position                                    Term
- ------                      -----         ----------                                  ------
<S>                          <C>           <C>                                         <C>
Tsoi Mow Hung                62            President/Director                          Annual
Ronald Lui                   52            Secretary/Director/CEO                      Annual
</TABLE>


                                       14
<PAGE>


     Ronald Chi Ho Lui, age 52, 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 2002. 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 62, 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.

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.

     1. The  following  people were required to file reports under Section 16(a)
during the most recent fiscal year:

         a.  Tsoi Mow Hung             President
         b.  Ronald Lui                Secretary/Director/CEO



                                       15
<PAGE>



         2.       For each person, listed by subparagraph letter above:

Number of late                    Number of               Known failures
reports                           transactions not        to file forms required
                                  reported on a
                                  timely basis
- ---------------                 ----------------          --------------------

a.       1                              1                           0

b.       1                              1                           0

Item 10. EXECUTIVE COMPENSATION

         The Company accrued a total of $0 in compensation to the executive
officers as a group for services rendered to the Company in all capacities
during the fiscal year ended December 31, 2003. No one executive officer
received, or has accrued for his benefit, in excess of $100,000 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, 2002

                                    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            2003      0          0             0                       0                      0
President
- ---------------------------------------------------------------------------------------------------------------------------

                         2002      0          0             0                       0                      0
                         --------------------------------------------------------------------------------------------------

                         2001      0          0             0                       0                      0
- ---------------------------------------------------------------------------------------------------------------------------
Ronald Lui,              2003      0          0             0                       0                      0
Secretary/Director/CEO
- ---------------------------------------------------------------------------------------------------------------------------

                         2002      0          0             0                       0                      0
                         --------------------------------------------------------------------------------------------------

                         2001      0          0             0                       0                      0
----------------------------------------------------------------------------------------------------------------------------
Officers as a Group      2003      12,820     0             0                       0                      0
                         ---------------------------------------------------------------------------------------------------
                         2002      0          0             0                       0                      0
                         ---------------------------------------------------------------------------------------------------
                         2001      0          0             0                       0                      0

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

</TABLE>


                                       16
<PAGE>


Ronald Lui is employed, 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

</TABLE>




                                       17
<PAGE>




Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth information, as of December 31, 2002,
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     0                     3,700,000                        30%
(Benefically owning Capital Hero
Holdings, Ltd)
Rooms 1203-8, 12 Floor,
Hang Seng Bldg.
77 Des Voeux Road Central,l Hong Kong
- ----------------------------------------------------------------------------------------------------

Tsoi Mow Hung, President/Director       0                     0                                0
Rooms 1203-8, 12 Floor,
Hang Seng Bldg.
77 Des Voeux Road Central,l Hong Kong
- ----------------------------------------------------------------------------------------------------

Officers and Directors as a group       0                     3,700,000                        30%
</TABLE>



                                       18
<PAGE>



                                     PART IV

Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Although there is no current plan in existence, it is possible that the Company
will adopt a plan to pay or accrue compensation to its officers and directors
for services related to seeking business opportunities and completing a merger
or acquisition transaction.

Although management has no current plans to cause the Company to do so, it is
possible that the Company may enter into an agreement with an acquisition
candidate requiring the sale of all or a portion of the Common Stock held by the
Company's current stockholders to the acquisition candidate or principals
thereof, or to other individuals or business entities, or requiring some other
form of payment to the Company's current stockholders, or requiring the future
employment of specified officers and payment of salaries to them. It is more
likely than not that any sale of securities by the Company's current
stockholders to an acquisition candidate would be at a price substantially
higher than that originally paid by such stockholders. Any payment to current
stockholders in the context of an acquisition involving the Company would be
determined entirely by the largely unforeseeable terms of a future agreement
with an unidentified business entity.

Transactions with Management and Others

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.



                                       19
<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:

                                November 7, 2003
                                October 30, 2003


                  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.  Michael Johnson & Co., LLC, CPAs ("MJC") 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 MJC's
independence.

         Audit Fees. MJC 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, 2003, and review of the interim
financial statements included in quarterly reports on Form 10-QSB for the
periods ended  March 31, 2003,  June 30, 2003 and September 30, 2003. MJC billed
the Company $4,000 for the 2002 audit and $5,000 for the 2003 Audit.

         There were no "audit related" fees in 2002 or 2003. There were no tax
fees or other fees in 2002 or 2003 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 2002 and 2003.

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




                                       20
<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 27, 2004
                                            /s/ Tsoi Mow Hung
                                            ----------------------------------
                                            Tsoi Mow Hung, President




                                            DIRECTORS:


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


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




                                       21
<PAGE>



                             THE ART BOUTIQUE, INC.

                          (A DEVELOPMENT STAGE COMPANY)
                              FINANCIAL STATEMENTS

                          Year Ended December 31, 2003





<PAGE>


                           MICHAEL JOHNSON & CO., LLC
                          Certified Public Accountants
                        9175 East Kenyon Ave., Suite 100
                             Denver, Colorado 80237

Michael B. Johnson C.P.A.                             Telephone:  (303) 796-0099
Member:  A.I.C.P.A.                                         Fax:  (303) 796-0137
Colorado Society of C.P.A.s

Board of Directors
THE ART BOUTIQUE, INC.
Hong Kong


We have audited the  accompanying  balance  sheets of The Art Boutique,  Inc. (A
Development  Stage  Company)  as of  December  31, 2003 and 2002 and the related
statements of operations,  cash flows,  and  stockholders'  equity for the years
ended December 31, 2003 and 2002 and for the period May 15, 1984  (inception) to
December 31, 2003.  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.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
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 The Art  Boutique,  Inc. at
December  31, 2003 and 2002 and the results of their  operations  and their cash
flows for the year ended  December 31, 2003 and 2002, and for the period May 15,
1984  (inception) to December 31, 2003 in conformity with accounting  principles
generally accepted in 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.

Michael Johnson & Co., LLC
Denver, Colorado
May 3, 2004
/s/Michael Johnson & Co., LLC

                                      F-1

<PAGE>
<TABLE>
<CAPTION>

                             THE ART BOUTIQUE, INC.
                         (A Development Stage Company)
                                 Balance Sheets
                                  December 31,


<S>                                                                        <C>                       <C>

                                                                                 2003                      2002
                                                                                 ----                      ----
ASSETS:
Current Assets:
   Cash                                                                            $ 280,054                      $ -
                                                                           ------------------        -----------------

      Total Current Assets                                                           280,054                        -
                                                                           ------------------        -----------------

Fixed Assets:
   Office Equipment (Net)                                                              4,501                        -
                                                                           ------------------        -----------------

      Total Fixed Assets                                                               4,501                        -
                                                                           ------------------        -----------------

TOTAL ASSETS                                                                       $ 284,555                      $ -
                                                                           ==================        =================


LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
    Accounts Payable                                                                $ 17,291                 $ 17,291
                                                                           ------------------        -----------------

        Total current liabilities

Stockholders' Equity:
Common Stock, no par value; 50,000,000 shares authorized;
   12,471,900 shares issued and outstanding                                          433,095                   33,095
Deficit accumulated during the development stage                                    (165,831)                 (50,386)
                                                                           ------------------        -----------------

      Total stockholders' equity                                                     267,264                  (17,291)
                                                                           ------------------        -----------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                         $ 284,555                      $ -
                                                                           ==================        =================
</TABLE>

The accompanying notes are an integral part of these financial statements.

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

                             THE ART BOUTIQUE, INC.
                          (A Devlopment Stage Company)
                            Statements of Operations

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


                                                Year Ended                                   May 15, 1984
                                                   December, 31                              (Inception) to
                                              --------------------------------------

                                                   2003                   2002               December 31, 2003
                                              ---------------         --------------         -----------------

Revenue                                                  $ -                    $ -               $ 61,102
                                              ---------------         --------------         --------------

Expenses:

    Depreciation                                         237                      -                  3,982
    Loss from discontinued operations                      -                      -                 26,331
    Acquistion costs                                       -                      -                  2,100
    General and administrative                       115,368                 12,638                194,680
                                              ---------------         --------------         --------------

        Total Expenses                               115,605                 12,638                227,093
                                              ---------------         --------------         --------------

Other Revenue/Expense:

    Exchange Rate Gain/Loss                             (160)                     -                   (160)
                                              ---------------         --------------         --------------

Net Loss                                          $ (115,445)              $(12,638)             $(165,831)
                                              ===============         ==============         ==============

Net Loss per share common stock                      *                      *
                                              ===============         ==============

Weighted average number of
   common shares outstanding                       5,138,567              4,471,900
                                              ===============         ==============


* Less than $.01 per share

</TABLE>


The accompanying notes are an integral part of these financial statements.

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

                             THE ART BOUTIQUE, INC.
                         (A Development Stage Company)
                            Statements of Cash Flows

                                Indirect Method

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

                                                                                                     May 15, 1984
                                                              Year Ended                             (Inception) to
                                                                 December 31,                        December 31,
                                                             ---------------------------------

                                                                 2003                2002                2003
                                                             --------------       ------------       -------------

Cash Flows from Operating Activities:
Net Loss                                                         $(115,445)          $(12,638)          $(165,831)
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                                                        237                  -              18,553
   Increase (Decrease) accounts payable                                  -             12,638              17,291
                                                             --------------       ------------       -------------

Net Cash Flows Used by Operating Activities                       (115,208)                 -            (128,987)
                                                             --------------       ------------       -------------

Cash Flows from Investing Activities:
   Sale of Equipment (Net)                                               -                  -               2,902
   Acquisition of Fixed Assets                                      (4,738)                 -             (25,956)
                                                             --------------       ------------       -------------

Net Cash Flows Provided by Investing Activities                     (4,738)                 -             (23,054)
                                                             --------------       ------------       -------------

Cash Flows from Financing Activities:
   Proceeds from common stock                                      400,000                  -             402,300
   Issuance of Common Stock                                              -                  -              29,795
                                                             --------------       ------------       -------------

Net Cash Flows Provided by Financing Activities                    400,000                  -             432,095
                                                             --------------       ------------       -------------

Net Increase (Decrease) in Cash                                    280,054                  -             280,054
                                                             --------------       ------------       -------------

Cash at Beginning of Period                                              -                  -                   -
                                                             --------------       ------------       -------------

Cash at End of Period                                            $ 280,054                $ -           $ 280,054
                                                             ==============       ============       =============


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>

                             THE ART BOUTIQUE, INC.
                         (A Devleopment Stage Company)
                         Stockholders' Equity (Deficit)
                               December 31, 2003

                                                                                         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
                                             =================    ===============    ================    ================
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>
                             THE ART BOUTIQUE, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2003


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.
         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.

         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.

         Net Loss Per Share

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

                                      F-6
<PAGE>



                              THE ART BOUTIQUE, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2003


         Other Comprehensive Income

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

         The Company has in 2003, formed a new wholly owned subsidiary under the
         name of Key Chance Internatioanl, LTD. a BVI corporation.  Key Chance
         International, LTD. will be the foreign operating subsidiary of the
         company.

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.

         Deferred tax assets:
         Net operating loss carryforwards                   $ 165,831
         Valuation allowance                                ( 165,831)
                                                            -----------
         Net deferred tax assets                            $       0
                                                            =============

         At December 31, 2003, the Company had net operating loss carryforwards
         of approximately $165,831 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. During the year ended December 31, 2003,
         the Company issued 8,000,000 shares of common stock for cash.

                                      F-7

<PAGE>



                             THE ART BOUTIQUE, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2003


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

         THE 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 January 2003,  the FASB  Interpretation  No. 46  "Consolidation  of
          Variable  Interest  Entities" and  interpretation  of ARB  (Accounting
          Research Bulletin No. 51. The interpretation  addresses  consolidation
          and disclosure issues associated with variable interest  entities.  In
          October  2003,  the  effective  date of FIN 46 for  variable  interest
          entities  in  existence  prior to  February  1, 2003,  was  delayed to
          December  2003.  the FASB  issued a revised  version of FIN 46,  which
          effectively  delayed  implementation  until March 2004,  with  earlier
          adoption  permitted.  SFAS did not  materially  effect  the  financial
          statements.

          In March 2003,  the FASB issued SFAS No. 149,  "Amendment of Statement
          133  on  Derivative  Instruments  and  Hedging  Activities".  SFAS  is
          effective for contracts  entered into or modified after June 30, 2003.
          This statement amends and clarifies financial accounting and reporting
          for derivative  instruments,  including certain derivative instruments
          embedded in other contracts  (collectively referred to as derivatives)
          and for hedging activities under SFAS 133,  "Accounting for Derivative
          Instruments  and  Hedging  Activities".  SFAS  149 did not  materially
          effect the financial statements.


<PAGE>


                             THE ART BOUTIQUE, INC.
                          (A Development Stage Company)
                          Notes to Financial Statements
                                December 31, 2003



Note 6 - Financial Accounting Developments (Cont)


         In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain
Financial Instruments with Characteristics of Both Liabilities and Equity". SFAS
150 is effective for financial instruments entered into or modified after May
31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. This statement establishes new standards
for how an issuer classifies and measures certain financial instruments with
characteristics of both liabilities and equity. SFAS 150 requires that an issuer
classify a financial instrument that is within the scope of this statement as a
liability because the financial instrument embodies an obligation of the issuer.
This statement applies to certain forms of mandatorily redeemable financial
instruments including certain types of preferred stock, written put options and
forward contracts. SFAS 150 did not materially effect the financial statement.

                                      F-8