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**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **WASHINGTON,
        D.C. 20549**
  **FORM
              10-KSB**
 **(AMENDMENT
              NO. 1)**
 (Mark
        One)
 
 x
              ANNUAL
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 
 For
        the
        fiscal year ended: **August
        31, 2006**
 
 o
              TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF
                  1934
 
 For
        the
        transition period from ___________ to ___________
 
 Commission
        file number: **000-31329**
 
 **ROYAL
        SPRING WATER INC.**
 **(FORMERLY
        EASY.COM, INC.)**
 (Name
        of
        small business issuer in its charter)
 
 
 **Nevada**
              **N/A**(State
                  or other jurisdiction of incorporation or organization)
              (I.R.S.
                  Employer Identification No.)
 
 
 **14553
        Delano Street Suite 217, Van Nuys CA, 91411**
 (Address
        of principal executive offices)
 
 Issuer’s
        telephone number: (818) 902-3690
 
 **** Securities
        registered under Section 12(b) of the Exchange Act: **None**
 
 Securities
        registered under Section 12(g) of the Exchange Act: **Common
        Shares, $0.001 par value**
 
 Check
        whether the issuer is not required to file reports pursuant to Section 13
        or
        15(d) of the Exchange Act. o
 
 Check
        whether the issuer (1) filed all reports required to be filed by Section
        13 or
        15(d) of the Exchange Act during the past 12 months (or for such shorter
        period
        that the registrant was required to file such reports), and (2) has been
        subject
        to such filing requirements for the past 90 days. Yes x No o
  
 1
 Check
              if
              there is no disclosure of delinquent filers in response to Item 405
              of
              Regulation S-B 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/A
              or any
              amendment to this Form 10-KSB/A. o
 
 Indicate
              by check mark whether the registrant is a shell company (as defined
              in Rule
              12b-2 of the Exchange Act). Yes o No x
 
 State
              issuer’s revenues for its most recent fiscal year: $0
 
 State
              the
              aggregate market value of the voting and non-voting common equity held
              by
              non-affiliates computed by reference to the price at which the common
              equity was
              sold, or the average bid and asked price of such common equity, as
              of a
              specified date within the past 60 days: $69,165,600, assuming a price
              per share
              of $2.30 as of January 26, 2007. For the purpose of this disclosure,
              shares of
              common stock held by directors, officers and stockholders whose ownership
              exceeds five percent of the common stock outstanding were excluded.
              Exclusion of
              shares held by any person should not be construed to indicate that
              such person
              possesses the power, direct or indirect, to direct or cause the direction
              of
              management or policies of the issuer, or that such person is controlled
              by or
              under common control of the issuer.
 
 State
              the
              number of shares outstanding of each of the issuer’s classes of common equity,
              as of the latest practicable date. 30,072,000 as of January 31,
              2006.
 2
  **ROYAL
        SPRING** **WATER
        INC. (FORMERLY EASY.COM, INC.)**
  **Form
              10-KSB/A**
 **For
          the Fiscal Year Ended August 31, 2006**
  PagePart
                  IItem
                  1.
              
              Description
                  of Business
              
              4Item
                  2.
              
              Description
                  of Property
              
              10Item
                  3.
              
              Legal
                  Proceedings
              
              11Item
                  4.
              
              Submission
                  of Matters to a Vote of Security
                  Holders
              
              11Part
                  IIItem
                  5.
              
              Market
                  for Common Equity and Related Stockholder
                  Matters
              
              12Item
                  6.
              
              Management’s
                  Discussion and Analysis or Plan of
                  Operation
              
              12Item
                  7.
              
              Financial
                  Statements
              
              16Item
                  8.
              
              Changes
                  In and Disagreements with Accountants on Accounting and
                  Financial Disclosure
              
              16Item
                  8A.
              
              Controls
                  and Procedures
              
              16Item
                  8B.
              
              Other
                  Information
              
              16Part
                  IIIItem
                  9.
              
              Directors,
                  Executive Officers, Promoters and Control Persons;
                  Compliance with Section 16(a) of the Exchange Act
              
              17Item
                  10.
              
              Executive
                  Compensation
              
              19Item
                  11.
              
              Security
                  Ownership of Certain Beneficial Owners and Management
                  and Related Stockholder Matters
              
              19Item
                  12.
              
              Certain
                  Relationships and Related
                  Transactions
              
              19Item
                  13.
              
              Exhibits
              
              20Item
                  14.
              
              Principal
                  Accountant Fees and Services
              
              20SIGNATURES
              
              21
  3
 *Table
            of Contents*
 
 **PAR** **T
        I**
 
 **Item1.**
              **Description
                  of Business.**
  **Overview**
 
 Easy.com,
        Inc. ("Easy") was incorporated under the laws of the State of Nevada on May
        9,
        2000. On June 30, 2005, Easy acquired 100% of the common stock of Royal Spring
        Water Inc., a Nevada corporation (“Us, We, Our, or the Company”).
 
 Royal
        Spring Water Inc. was incorporated on April 20, 2005. In April 2006, the
        Company
        filed Articles of Merger in Nevada and legally combined the entities of Easy.com
        and Royal Spring Water Inc. They concurrently changed the name of the surviving
        entity to Royal Spring Water Inc. The Company was established to extract,
        process, and bottle Artesian Well water. The Company’s plant is in Hereford,
        Texas, which is also known as the “city without a tooth ache” due to its
        fluoride rich water.
 The
              Company has entered into a long-term lease agreement with T&E Consolidators
              LP for facilities and water rights, allowing for the bottling and manufacturing
              of plastic bottled drinking water providing a fully customized product
              for a
              very competitive price. The Company’s underground water source has existed for
              millions of years and is part of the “Ogallala Aquifer”, one of the country’s
              largest aquifers. The state-of-the-art facility in Hereford, Texas
              is where
              water is extracted from underground wells and then filtered and bottled
              through
              a complex filtration and bottling process. We also intend on entering
              into the
              flavored water and the alcohol rectifying and distribution sector during
              the
              year 2007, the plans of which are further detailed in the Products
              and Services
              section.
 **Risk
        Factors**
 
 We
        operate in a rapidly changing industry that involves numerous risks and
        uncertainties. The risks and uncertainties described below may not be the
        only
        ones we face. Other risks and uncertainties, including those that we do not
        currently consider material, may impair our business. If any of the risks
        discussed below actually occur, our business, financial condition, operating
        results or cash flows could be materially adversely affected. This could
        cause
        the trading price of our securities to decline, and you may lose all or part
        of
        your investment. Prospective investors should consider carefully the risk
        factors set out below.
 
 **Risks
        Related to Our Business**
 **Because
              we are a Development Stage Company with an Accumulated Deficit our
              Success may
              be Difficult to Achieve**
 
 We
              are a
              development stage company subject to all of the risks and uncertainties
              of a new
              venture. The likelihood of our success must be considered in the light
              of the
              problems, expenses, difficulties, complications, and delays frequently
              encountered in connection with the development of a business and the
              competitive
              environment in which we operate. Unanticipated delays, expenses and
              other
              problems such as setbacks in research and development or product development
              and
              market acceptance are frequently encountered in connection with the
              expansion of
              a business. As a result of the fixed nature of many of our expenses,
              we may be
              unable to adjust spending in a timely manner to compensate for any
              unexpected
              delays in the development and marketing of our products or any capital
              raising
              or revenue shortfall. Any such delays or shortfalls will have an immediate
              adverse impact on our business, operations and financial condition.
 4
 *Table
            of Contents*
 
 **Our
        Financial Statements have been Prepared Assuming we will Continue as a Going
        Concern**
 
 The
        financial statements as of and for the years ended August 31, 2006 and 2005,
        have been prepared assuming that we will continue as a going concern, which
        contemplates the realization of assets and the satisfaction of liabilities
        in
        the normal course of business. The carrying amounts of assets and liabilities
        presented in the financial statements do not purport to represent the realizable
        or settlement values if we are unable to continue as a going concern. We
        have
        suffered organizational losses and have limited working capital liquidity
        at
        August 31, 2006. As a result of these factors, our independent certified
        public
        accountants expressed substantial doubt about our ability to continue as
        a going
        concern in their August 31, 2006 and 2005 audit reports. We believe that
        our
        efforts to generate revenue will generate cash flows, although there can
        be no
        assurances that such efforts will be successful.
  **We
              Operate in a Highly**  **Competitive
              Industry Which Could Make Market Entry Difficult**
 The
        bottled water industry is highly competitive. Many of the Company’s competitors
        have more experience in the U.S. bottled water market, have greater financial
        and management resources and have more established proprietary trademarks
        and
        distribution networks than we do. We currently compete with established national
        companies such as the Perrier Group of America, Inc. (whose brands include
        Arrowhead Mountain Spring Water, Poland Spring, Ozarka Spring Water, Great
        Bear,
        Deer Park, Ice Mountain and Zephyrhills Natural Spring Water) and Great Brands
        of Europe (whose brands include Evian, Natural Spring Water and Dannon Natural
        Spring Water), as well as numerous regional bottled water companies located
        in
        the United States and Canada. We compete not only with other bottled water
        producers, but also with producers of other beverages, including, but not
        limited to, soft drinks, coffee, juices, beer, liquor and wine. The bottled
        water industry also competes for the same consumer who may, when choosing
        to
        drink water, drink tap water or use a home filtration system to filter tap
        water
        for drinking. There can be no assurance that we can compete successfully
        in this
        market.
  **Our
              Success Depends on our Ability to Achieve and Manage
              Growth**
 In
        order
        to achieve continued growth in our bottled water business, we must meet our
        strategic objectives of expanding our current capacity to produce high quality
        spring bottled water products, expanding our customer base, expanding our
        product line and adding new distribution channels. No assurance can be given
        as
        to the future growth in our business or as to our profitability. Further
        growth
        of the Company will require capital, employment and training of new personnel,
        expansion of facilities and expansion of management information systems.
        If the
        Company is unable to manage its growth effectively, the Company’s profitability
        and its ability to achieve its strategic objectives may likely be materially
        adversely affected.
  **We
        Expect to have** **Fluctuations
        in Quarterly Operating Results Which Could Affect Our
        Revenues**
 ****
 Our
        future revenues are expected to be subject to several factors which may result
        in fluctuations in our operating results. Our business is expected to be
        highly
        seasonal, with increased sales during warmer months. Inclement weather may
        negatively impact our business, particularly summers which are unusually
        cool or
        rainy. Fluctuations in retail prices and raw material prices may produce
        corresponding fluctuations in our profits. In addition, we expect to make
        significant investments from time to time in capital improvements to, among
        other things, increase capacity. Costs associated with such improvements
        may
        cause an immediate reduction in profit margins unless and until sales volume
        increases. Our product and packaging mix may change from time to time and,
        depending on certain factors, may negatively impact profit margins. We are
        subject to competitive pricing pressures which may affect its financial results.
        Due to all the foregoing factors, it is possible that in some future quarter
        or
        quarters, the Company’s operating results would likely be below the expectations
        of securities analysts and investors. In such event, the price of the Common
        Stock would likely be materially adversely affected. See “Management’s
        Discussion and Analysis or Plan of Operation.”
  **Since
              we may have Limited Ability to Raise Prices, Our Profitability Could
              be Limited**
 Due
          to
          the wide range of beverages available to consumers, including bottled water
          products, the Company has limited ability to raise prices for its products.
          From
          time to time, the Company may be affected by higher prices for raw materials
          including resin and corrugated boxes and transportation. We may be unable
          to
          pass such higher costs on to our customers and we generally would be unlikely
          to
          do so in connection with any future price increases. As a result, our future
          profitability may be adversely affected by future increases in raw material
          prices and transportation costs.
 
 **We
        will have Potential for Product Liability Which Could be Costly to
        Insure**
  The
        bottling and distribution of bottled water products entails a risk of product
        liability, including liability due to the presence of contaminants in its
        products. We maintain
        insurance coverage against
        the risk of product liability and product recall. However, the amount of
        the
        insurance carried by the Company is limited, and the insurance is subject
        to
        certain exclusions and may or may not give us adequate loss protection. In
        addition to direct losses resulting from product liability and product recall,
        we may suffer adverse publicity and damage to our reputation in the event
        of
        contamination which could have a material adverse effect on sales and
        profitability.
  **We
        will be Subject to Changes in Government Regulation Which May Affect our
        Operations**
  Our
        operations are subject to numerous federal, state and local laws and regulations
        relating to its bottling operations, including the identity, quality, packaging
        and labeling of its bottled water. These laws and regulations and their
        interpretation and enforcement are subject to change. There can be no assurance
        that additional or more stringent requirements will not be imposed on our
        operations in the future. Failure to comply with such laws and regulations
        could
        result in fines against us.
  5
 *Table
            of Contents*
  **We
        do not Expect to Pay Dividends for Some Time Which Could Result in no Return
        on
        Your Investment**
  We
              have
              never declared or paid cash dividends on our Common Stock. We currently
              intend
              to retain our earnings, if any, to provide funds for the operation
              and expansion
              of our business and, therefore, do not anticipate declaring or paying
              cash
              dividends in the foreseeable future. Any payment of future dividends
              will be at
              the discretion of the Board of Directors and will depend upon, among
              other
              things, our earnings, financial condition, capital requirements, level
              of
              indebtedness, contractual restrictions with respect to the payment
              of dividends
              and other relevant factors of our operations.
  **Risks
          Related to our Common Stock**
 
 **Our
        Stock Price May Be Highly Volatile and Subject to Wide Fluctuations Due to
        Many
        Factors, Including a Substantial Market Overhang Which Could Affect the Value
        of
        Your Shares**
 
 The
        market price of our common stock may be highly volatile and subject to wide
        fluctuations in response to quarterly variations in operating results,
        announcements of distribution agreements, or new affiliations or new products
        by
        us or our competitors, changes in financial estimates by securities analysts,
        lack of market acceptance of our products, or other events or factors, including
        the risk factors described herein. In addition, the stock market in general
        experiences significant price and volume fluctuations that are often unrelated
        to a company’s operating performance. As with any public company, we may be
        subject to securities class action litigation following periods of volatility
        in
        the market price of our securities which could result in substantial costs
        and a
        diversion of management’s attention and resources. Additionally, the sale of a
        substantial number of shares of common stock, or even the potential of sales,
        in
        the public market following this offering could deflate the market price
        for the
        common stock and make it more difficult for us to raise additional capital
        through the sale of our common stock.
 
 **Your
        Investment May Have Limited Liquidity If an Active Trading Market Does Not
        Develop or Continue Which Could Make It Difficult to Sell Your
        Shares**
 
 Your
        purchase of our common stock may not be a liquid investment because our
        securities trade on the Pink Sheets. You should consider carefully the limited
        liquidity of your investment before purchasing any shares of our common stock.
        We have no obligation to apply for quotation of our common stock on the NASDAQ
        Stock Market or for listing of our common stock on any national securities
        exchange. Factors such as our lack of earnings history, the absence of
        expectation of dividends in the near future, mean that there can be no assurance
        that an active and liquid market for our common stock will exist at any time,
        that a market can be sustained, or that investors in the common stock will
        be
        able to resell their shares. In addition, the free transferability of the
        common
        stock will depend on the securities laws of the various states in which it
        is
        proposed that a sale of the common stock be made.
 
 **We
        will be subject to certain California Corporate laws Which Could Cause
        Operational Difficulty**
 
 Section
        2115 of the California General Corporation Law subjects certain foreign
        corporations doing business in California to various substantive provisions
        of
        the California General Corporation Law in the event that the average of its
        property, payroll and sales is more than 50% in California and more than
        one-half of its outstanding voting securities are held of record by persons
        residing in the State of California. Some of the substantive provisions include
        laws relating to annual election of directors, removal of directors without
        cause, removal of directors by court proceedings, indemnification of officers
        and directors, directors standard of care and liability of directors for
        unlawful distributions. The aforesaid Section does not apply to any corporation
        which, among other things, has outstanding securities designated as qualified
        for trading as a national market security on NASDAQ if such corporation has
        at
        least eight hundred holders of its equity securities as of the record date
        of
        its most recent annual meeting of shareholders. It is currently anticipated
        that
        we may be subject to Section 2115 of the California General Corporation Law
        which, in addition to other areas of the law, will subject us to Section
        708 of
        the California General Corporation Law which mandates that shareholders have
        the
        right of cumulative voting at the election of directors.
  **Penny
              Stock Regulations May Make Buying and Selling our Shares More
              Difficult**
 
 The
        Securities and Exchange Commission (“SEC”) regulations generally define “Penny
        Stock” to be any equity security that has a market price (as defined) less than
        $5.00 per share or an exercise price of less than $5.00 per share, subject
        to
        certain exceptions. For transactions covered by these rules, the broker dealer
        must make a delivery, prior to the transaction, of a disclosure schedule
        prepared by the SEC relating to the penny stock market. The broker dealer
        also
        must disclose the commissions payable to both the broker dealer and registered
        representative, current quotations for the securities, and, if the broker
        dealer
        is the sole market maker, the broker dealer must disclose this fact and the
        broker dealer’s presumed control over the market. Finally, monthly statements
        must be sent out disclosing recent price information for the penny stock
        held in
        the customer’s account and information on a limited market in penny stocks.
        Consequently, the “Penny Stock” rules may restrict the ability of broker dealers
        to sell our securities and may affect the ability of stockholders to sell
        our
        securities in the secondary market.
 
 **The
        Industry**
 
 The
        U.S.
        consumer interest in health can be credited for the growth of the bottled
        water
        industry. Increasingly, consumers are realizing the importance of water for
        their overall well being, energy level and appearance. The 1950's - 1970's
        saw a
        large increase in soda and sugary drink consumption. Today, more and more
        people
        are looking to bottled water as their choice for natural refreshment. Consumer
        reports indicate that approximately 60% of the U.S. population today drinks
        bottled water (1) .
        The
        bottled water and value added beverage business, now approaching $9.2 billion
        annually in North America, is predicted to double within the next three to
        four
        years in the water category alone. Market analysts predict that the bottled
        water market will continue this rapid growth well into the future. At the
        same
        time, the more healthful products, including value added water products,
        have
        established an impressive foothold in the buying of mainstream shoppers.
        This
        growing demand provides for primarily two types of sales for the Company;
        contract packing and branded products.
 (1)
                http://www.bottledwater.org/public/downloads/Bev_Marketing_2004_Release_04082004.doc
 http://www.bottledwater.org/public/informat_main.htm
  6
 *Table
              of Contents*
  Bottled
          water is the fastest growing segment of the entire beverage industry. In
          fact,
          in 2006:
 
 ·
                Bottled
                    water is still the number two beverage behind soft
                    drinks
 ·
                Industry
                    wholesale dollar sales, approached $10.98 billion in
                    2006
 
 ·
                Total
                    U.S. category volume surpassed 8.267 million gallons, a 9.7%
                    annual change(1)
 ·
                The
                    polyethylene terephthalate (PET) plastic bottle segment of the
                    market
                    drove the entire category growth by representing 42% of all bottle
                    sales.
 
 (1)
                http://www.bottledwater.org/public/Stats_2005.doc
 **The
        Market**
 
 With
        little to no advertising, especially compared to other beverage types such
        as
        soft drinks and coffee, consumers are selecting bottled water as an alternative
        to other drink choices. Reports indicate the bottled water market is the
        fastest
        growing sector of the overall U.S. beverage market. Health and safety reasons
        also help to drive consumers to purchase bottled water. Some people reach
        for it
        as a healthy substitute for caffeinated or alcoholic beverages. Others are
        wary
        of tap water and are suspicious of its health effects.
 
 Although
        health and safety are foremost among water quality concerns, a significant
        reason for the increase in bottled water consumption is purely aesthetic.
        Many
        consumers object to the taste and smell of their tap water that is often
        times
        treated with chlorine and other agents used for sanitization. Some people
        also
        believe that using purified water instead of tap water ensures higher quality
        and better tasting foods and beverages. Therefore, they use bottled water
        as
        part of their ingredients to cook or make tea, coffee and ice
        cubes.
 
 Another
        reason for using bottled water is that it is convenient and easily accessible
        and transportable. Whether you’re working, playing, or traveling bottled water
        is readily available and can easily be purchased.
  7
 *Table
            of Contents*
  **Competition**
 
 When
        bottling water for other companies and retail stores (Ralph’s Market, Pathway,
        Albertson’s, Kirkland, for example), as well as the actual bottle companies
        (Poland Springs, Crystal Geyser etc.), our competitors will be other bottlers
        that are currently packing water for others. Many of these competitors have
        far
        greater capital resources than we have at this time and for the foreseeable
        future. However, we hope to have a competitive edge over these companies
        since
        our current operating plant lease includes water wells that we expect will
        meet
        our production requirements. Our plant facility only needs to have 5-10 percent
        of waste filtered to produce the quality of water desired, so that for every
        gallon of water that goes into the bottling line 90 to 95 percent is bottled
        and
        only 5 to 10 percent is waste. Additionally, our production facility includes
        a
        railroad spur which connects our loading docks to the main railroad station
        in
        Hereford which we believe will add an additional competitive advantage in
        our
        costs and product pricing. This advantage exists because there is a weight
        limit
        on truck loads of 45,000 pounds (usually 53 foot-long trucks), which in the
        case
        of a 16.9oz bottle water case, limits the truck carrier to 20 pallets, while
        on
        a rail box car we are able to ship three times the load capacity of a truck
        - 60
        pallets per box car. Thus, we believe the cost of transportation by rail
        will
        result in a lower total product cost.
 
 **Products
        and Services**
  During
            our first year of operation, we will concentrate on producing regular
            non-carbonated plain bottled water and flavored water  We
            intend
            to produce several sizes of bottled water, including 8 oz., 12 oz., 16.9
            oz., 20
            oz., 1 liter and 1.5 liter bottles. In addition to plain water, we will
            be
            bottling flavored water which has recently become a popular product since
            it has
            flavor but no sugar or caffeine. We have created nine proprietary flavor
            formulas, including cherry, cherry lime, kiwi watermelon, strawberry
            kiwi,
            orange, raspberry, wild berry, lemonade and cranberry. . After this initial
            year
            of operations, we plan to pursue a line of business in alcohol rectifying
            and
            distribution . .
 
 To
            rectify alcohol we will go through the following processes; i) receive
            in our
            warehouse 120-180 proof spirits in bulk, ii) mix the alcohol with water
            and
            other ingredients (for example the caramel is added to rum to give it
            its golden
            color) bringing the proof level to an 80 proof mix, iii) bottle, label
            pack and
            ship the finished alcohol bottle in palletized cases.
 
 Bottling
            Alcohol requires a separate filling and bottling line from the bottling
            line we
            currently own and operate. Currently, we do not own the equipment and
            supplies
            to begin production in the alcohol rectifying and distribution sector.
            We have
            received a cost estimate on November 13, 2006 which includes all the
            equipment
            needed for alcohol rectifying. The bid is for $151,920 and includes the
            installation and training, which is estimated at total of two to three
            days. In
            addition, we will need to hire new personal that can perform in this
            sector. To
            date we have not entered into discussions or contracts with distillers
            to
            provide spirits in bulk.
  For
            the
            U.S. Food and Drug Administration’s Bottled Water Regulations, visit the website
            located at http://www.cfsan.fda.gov/~dms/botwatr.html .
  8
 *Table
            of Contents*
 
 **The
        Geography of Royal Spring Water Wells**
 
 The
        Ogallala Aquifer (pronounced OH-GA-LA-LA) is one of the largest aquifer systems
        in the world, stretching across parts of eight states including South Dakota,
        Nebraska, Wyoming, Colorado, Kansas, Oklahoma, New Mexico and Texas and
        underlying about 174,000 square miles.
 
 The
        Ogallala Formation was formed about 10 million years ago, during the geologic
        time periods of late Miocene and early Pliocene by eastwardly flowing braided
        streams, which originated in the Rocky Mountains. Coarse-grained sand, gravel,
        fine clay, silt, and sand were deposited over the pre-Ogallala land surface,
        which was much like the present-day area just east of the High Plains low,
        rolling hills, valleys, and streams.
 
 **Licensing
        and Water Rights**
 Although
              we have a signed a long term lease with T&E Consolidators LP which includes
              the water rights, contract which will allow us to extract water from
              the land,
              it did not automatically give us the right to distribute the water.
              In order to
              distribute water worldwide and commence business, we obtained certain
              local
              licenses. Besides these local necessary licenses, one must pass certain
              specifications and requirements of the Food and Drug Administration
              (“FDA”).
              This includes a clean and immaculate warehouse, and the use of hygienic
              filtration, bottling and packing operation systems. We will ensure
              that all our
              operations continue to meet and surpass all government requirements.
              In June
              2006, the Company passed the water test required by the state of Texas
              Commission on Environmental Quality in order to commence production
              at the Royal
              Spring Water plant in Hereford, Texas. The test was conducted by the
              City of
              Amarillo, Environmental Laboratory No. 48103 over a period of three
              days. We
              also received a certificate from the health department certifying our
              plant for
              bottle water operations. This completed all of the testing and licensing
              requirements of the various government bodies needed to commence production
              and
              sales of our products. The lease can be found as exhibit 10.
 9
 *Table
            of Contents*
  **Product
        Research and Development**
  In
        order
        to obtain high quality products and assure customer satisfaction, we will
        be
        using fully automated state of the art machinery. For the past three years,
        we
        have spent much of our time, money and efforts into researching the water
        industry in the U.S. and overseas. As a result, we have acquired broad knowledge
        about procedures, licenses, machinery, and land. During this time, we have
        also
        built strong relationships with key individuals within the government and
        private sectors related to the water industry. We do not anticipate performing
        further research and development for any products during the next twelve
        months.
 
 **Acquisition
        or Disposition of Plant and Equipment**
  We
        have purchased a fully automated, state of the art water treatment and bottling
        system at a cost of $469,218 that is currently in place and has the capacity
        to
        bottle up to 144 million bottles per year, based on a bottle size of 16.9
        ounces. The plant facility has the water capacity to grow and supply in excess
        of one billion bottles per year. Our bottling line can handle bottle sizes
        from
        8 ounce bottles to 1.5 liter bottles. This state of the art machinery is
        fully
        automated and runs with minimal human intervention. We also purchased a bottle
        stretch blow molder which enables us to blow our own bottles from preforms. For
        the
        first three months of bottling we are using pre blown bottles from Ball Plastic.
        We estimate that by around February 2007 our Krup stretch blow molder will
        be
        fully operational. We have the tools and the staff to install and run the
        stretch blow molder.
 
 To
        date, we have spent approximately $557,000 on the purchase of machinery and
        equipment.
 
 **Employees**
 
 We
        presently have fourteen employees at our facility in Hereford, Texas. We
        may
        hire up to four additional employees over the next 12 month period. We also
        plan
        to supplement our human resource needs through consultants and contractors
        as
        needed.
  **Item
                  2.**
              **Description
                  of Property**
 
 **The
        Hereford Facility**
 On
              August
              1, 2005 the Company executed a lease with T&E Consolidators for the premises
              located at 3500 Holly Sugar Rd. in Hereford Texas. This lease includes
              1,000
              square feet of office space, a 71,000 square foot warehouse, six 25,000
              gallon
              liquid juice tanks and related equipment and the water rights from
              2 wells. This
              facility had previously been the site of a sugar beet processing facility,
              but
              at the time that we acquired the facilities, there were no active
              operations.
 
 The
              lease
              calls for an initial rental of $ 15,000 per month for six months commencing
              November 1, 2005 to April 2006 payable in advance for six months on
              November 1,
              2005. Thereafter for the next 24 years, the rent is $25,000 per month,
              adjustable annually based on the prevailing consumer price index.
 
 In
              the
              first four years, the Company has an option to purchase the facility
              at an
              amount determined as set out in the lease which is estimated to be
              approximately
              $4,590,964. The amount of the purchase price depends upon the prevailing
              lease
              rate at the time the option to purchase is exercised. The option to
              purchase
              includes the water rights.
 
 Of
              the
              70,000 square foot space, 40,000 square feet will be allocated to water
              processing and packaging space made accessible by loading bays and
              a 5.5 mile
              railroad spur leading directly from the main railroad station in Hereford
              to our
              loading dock. The railroad extension is made available to the Company
              as a term
              of the lease and, as a term of the option to purchase the property,
              will
              continue to be made available for use as an easement when the Company
              purchases
              the property. Also included in the property lease and option to purchase
              is the
              train engine needed to pull and push the train cars for our shipping
              needs which
              will enable us to keep our shipping cost very low. We have completed
              all
              necessary paperwork providing BNSF Railway Company (“BNSF”) that serves our
              facility, the data they requested so we can become an approved user
              of their
              service. We have been provided a user name, password and pin number
              so we
              can  order
              and
              schedule the box cars needed for shipment of our products to our customers
              nationwide using the Electronic Data Interchange service provided by
              BNSF. We
              estimate that initially we will need between six to eight box cars
              per month.
              The cost for each box car varies based on the shipping destination.
              As an
              example, shipping a box car from our plant in Hereford to the greater
              Los
              Angeles area is around $2,100 depending on the fuel surcharge. One
              box car can
              carry the equivalent of three 53 foot truck loads. One truck load has
              1,440
              cases of water. Each case has 24 bottles of 16.9oz.  The
              remaining 30,000 square feet of our warehouse has been allocated for
              storage of
              raw materials and finished goods.
  **Corporate
              Office**
 
 The
        Company’s corporate head office is about 2,400 square feet. The premises are
        leased over three years, ending on December 31 2008. The lease calls for
        a $2360
        per month payment from January 1 2006 to December 31 2006. From January 1
        2007
        to December 31 2007 the monthly rent is $2432. On the final year from January
        1
        2008 to December 31 2008 the monthly rent is $2504.
  10
 *Table
            of Contents*
  **Item3.**
              **Legal
                  Proceedings.**
 In
              February of 2006, our former Chief Operating Officer filed a complaint
              against
              the Company, relating to his employment with Company. The complaint
              was filed in
              the Los Angeles Superior Court, Santa Monica Division and seeks unspecified
              damages alleging breach of contract, wrongful discharge, fraud and
              violation of
              labor law. The Company filed a cross complaint against this individual
              for
              fraud, misrepresentation and breach of fiduciary duty. We recently
              made an offer
              of settlement to plaintiff, to which a response has not been received.
              The
              Company is in the process of conducting discovery. We do not believe
              that this
              litigation will be material to our financial position, operations,
              or cash
              flows. There are no proceedings in which any of our directors, officers
              or
              affiliates is an adverse party or has a material interest adverse to
              the
              interest of the Company.
 
 **Item
                  4.**
              **Submission
                  of Matters to a Vote of Security
                  Holders.**
  The
        sole
        shareholder of the registrant agreed to enter and consummate the acquisition
        of
        100% of Royal Spring Water Inc.
 
 In
        September 2004 the sole shareholder agreed to split the issued stock by
        exchanging three shares for every one share held.
  11
 *Table
            of Contents*
  **PART** **II**
 
 **Item
                  5.**
              **Market
                  for Common Equity and Related Stockholder
                  Matters.**
  **Market
        Information**
 
 The
        Company's common shares, par value $0.001 (the "Shares") are currently listed
        for trading on the over-the-counter market (Pink Sheets) under the symbol
        RSPG.PK and trades by way of unsolicited quotes.
 
 **Stockholders**
 As
              of
              January 31, 2006, there were 49 shareholders of record. We currently
              have no
              outstanding options or warrants or similar potentially dilutive securities
              for
              the purchase of our common stock and have no securities outstanding
              which are
              convertible into common stock. We have not yet adopted or developed
              any plans to
              adopt any stock option, stock purchase or similar plan for our
              employees.
 **Dividends**
 
 The
        Registrant has not paid or declared any dividends upon its common shares
        since
        its inception and, by reason of its present financial status and its
        contemplated financial requirements, does not intend to pay or declare any
        dividends upon its common shares within the foreseeable future.
 
 **Item
                  6.**
              **Management’s
                  Discussion and Analysis or Plan of
                  Operation.**
  The
        following discussion and analysis should be read in conjunction with our
        Financial Statements and notes appearing elsewhere in this report.
 
 **PLAN
        OF OPERATION**
 
 **Proposed
        Milestones to Implement Business Operations**
 
 The
        following criteria for the milestones are based on estimates derived primarily
        from research and market data accumulated by our management. They are
        approximations only and subject to adjustment based on costs and availability
        of
        cash flow.
  For
              the
              period from our inception through January 31, 2007, we have:
 ·
              Formed
                  our company and established our initial
                  structure;
 ·
              Entered
                  into a lease agreement for the water rights, land and production
                  facility;
 ·
              Performed
                  organizational and administrative
                  upgrades;
 ·
              Sought
                  and pursued investment
                  opportunities;
 ·
              Reviewed
                  and analyzed the potential market for bottled
                  water;
 ·
              Performed
                  required testing of water quality at the bottling
                  site;
 ·
              Completed
                  the development of a new web site as part of our marketing strategy;
 ·
              Purchased
                  the additional equipment needed to bottle and sell the water; (see
                  financials on www. pinksheets.com symbol
                  RSPG)
 ·
              Made
                  improvements to the plant site and water collection facilities;
                  and
 ·
              Negotiated
                  and signed contracts and letters of intent with medium to large
                  buyers
                  (see press releases)
 
 Our
        plan
        of operation and development strategy for the fiscal year 2006 and for the
        next
        four years is summarized as follows:
 Phase
                    
                    Description
                    
                    Timing1
                    
                    Completion
                        of testing and licensing with local and federal
                        authorities
                    
                    August
                        31, 20062
                    
                    Final
                        development of the plant facilities
                    
                    August
                        31 20063
                    
                    Implement
                        quality control procedures
                    
                    Q1,
                        20074
                    
                    Commence
                        operations
                    
                    Q1,
                        20075
                    
                    Close
                        additional sales of private label contracts with major retail
                        stores.
                    
                    Q1,
                        20076
                    
                    Introduction
                        of new types of beverage products, carbonated and alcohol
                    
                    Q2
                        to January 20087
                    
                    Implementation
                        of the Royal Spring Water - brand recognition
                    
                    Q2,
                        20088
                    
                    Exercise
                        the option to purchase the water rights, land and production
                        facility
                        under the lease agreement
                    
                    By
                        the end of June 2009
  Phases
              1
              through phase 4 have already been completed, the detail of which is
              exhibited in
              the accompanying financial statements for the period from inception
              to August
              31, 2006. Phase 5 through phase 7 will be financed from future revenues,
              private
              placements credit sources, and/or equity sources. Phase 5 has an estimated
              cost
              of 50,000 over a period of 12 months; Phase 6 is currently estimated
              at
              $200,000. Phase 7 is estimated at 250,000. Phase 8 is pre-negotiated
              in the
              lease. We are expecting to finance the estimated $4,590,964 purchase
              price under
              our lease agreement through future profits of the Company, credit sources,
              and/or additional sources of equity..
 12
 *Table
            of Contents*
  During
        the next twelve months, we intend to concentrate on two products;
        non-carbonated, plain and flavored bottled water.
 
 Our
        primary business strategy is focused in two main areas. The first is to offer
        existing bottled water distribution companies, major retail stores and service
        oriented businesses the ability to change their current bottled water to
        a
        private label in their business name. Additionally, for companies already
        selling under a private label, we intend to sell our water for a more
        competitive price and to help increase their bottle water capacity by providing
        them with an additional source for their water supply. In some of these
        circumstances, we intend to have the customers provide us with their labels
        or
        logo; we will fill the bottles, apply the label and ship the products to
        the
        customer. The second part of our marketing and sales strategy is to develop
        the
“Royal Spring Water” brand of bottled water and commence sales of that product
        in the US and around the world. We will be targeting our product (single
        serve
        plastic bottles of 355ml, 500ml, 1liter, 1.5liters, 1gallon) directly to
        the
        smaller end user - convenience stores, fast food establishments, gas stations,
        major clubs and popular restaurants, among others.
 
 A
        sales
        team comprised of Company representatives will be put in charge to first
        work on
        securing contracts with stores, restaurants and clubs using various promotional
        tools such as pamphlets, price lists, and samples of our bottled water.
        Sponsorship is another marketing tool that we will utilize in order to acquire
        exposure and gain recognition. We expect to be sponsoring concerts, golf
        tournaments, and dance clubs, etc. We believe that by providing free samples
        of
        our bottled water to various groups and venues, we will be able to effectively
        spread our name and popularity and obtain market penetration. We do not yet
        have
        any definitive plans or arrangements for such sponsorship events.
 
 We
        will
        also be targeting all major hotel and casino gaming companies in order to
        provide them with their private labeled bottled water and customized labels
        (specific hotel-casino names, logos and images). We have contacts in some
        of the
        major hotel-casinos in Las Vegas who have already expressed an interest in
        purchasing water from our company when it becomes available. The hotels and
        major casinos out-source 100% of their consumable bottled water
        needs.
 
 **Results
        of Operations for the Twelve Months Ended August 31, 2006**
 We
              have
              no revenue from operations as of the date of this Annual Report and
              we have
              relied on and will continue to reply on significant external financing
              to fund
              our operations. During the fiscal year ended August 31, 2006 our financing
              came
              from non-interest bearing loans from shareholders in the amount of
              $1,649,609.
              We generated a net loss of $1,445,977 during the year ended August
              31, 2006 and
              a net loss of $175,537 during the period ended August 31, 2005, for
              a cumulative
              loss of $1,621,514 since the inception of the Company.
 
 The
              comparative period presented in the annual financial statements is
              for the
              period from inception on April 20, 2005 to August 31, 2005. This includes
              approximately $40,000 in expenses of RSW from April 20, 2005 until
              the date of
              the reverse merger on June 30, 2005, which consisted mainly of rent,
              professional fees and general expenses. Subsequent to the merger on
              June 30 and
              leading up the comparative year ended August 31, 2005 the Company incurred
              significantly higher expenses which related to $50,000 in contributed
              services,
              grouped in general and administrative; $53,168 in interest on the capital
              lease
              obligation; and other expenses related to professional fees, rent,
              amortization
              and other general expenses.
 
 Our
              operations since inception in 2005 have not generated any revenue as
              the plant
              was not fully operational until December 2006. The revenues from the
              contracts
              we have negotiated are on a net 30 basis after the products are received
              by the
              customer. We now have an account receivable line of credit for $1,000,000
              with
              American Business Finance LLC out of Oklahoma which will help to speed
              up cash
              flow into our account against the payments that are pending on outstanding
              vendor invoices.
 
 **Liquidity
              and Capital Resources and Future Funding
              Requirements**
 
 The
        Company has funded its operation from loans from our officers and directors
        and
        intends to raise additional funds by way of private placements and funding
        from
        outside sources. The Company has secured a line of credit of up to $1,000,000
        with American Business Finance LLC, located in Oklahoma, to be collateralized
        by
        accounts receivable. American Business Finance LLP will purchase 80% of the
        face
        value of invoices until Royal Spring Water Inc. is paid. Borrowings will
        bear a
        base fee of 2% over base index. This will help to improve cash flows needed
        for
        working capital until profitable operations are attained.
 
 Although
        the Company has no firm commitments from other investors or lenders at this
        time, the Company believes it will be able to raise sufficient capital to
        complete assembly of its production facilities and commence production and
        distribution of its products. There can be no assurance that the Company
        will be
        able to secure additional financing or that the amount of any additional
        financing will be sufficient to accomplish its business objectives or to
        pay
        ongoing operating expenses.
 
 From
        commencement in 2005 to the fiscal year ended 2006, the shareholders of the
        Company have made loans in the amount of $1,649,609. These funds have been
        used
        to meet working capital requirements, acquire bottling equipment and further
        develop the plant.
  13
 *Table
            of Contents*
  The
        majority of the infrastructure necessary for the operation of the plant was
        already in place upon commencement of the lease. The further capital necessary
        to complete the development of the plant and acquisition of bottling equipment,
        leading up to operations to commence in November 2006, was funded through
        the
        shareholder advances described above.
 
 If
        during
        that period or thereafter, we are not successful in generating sufficient
        liquidity from operations or in raising sufficient capital resources on terms
        acceptable to us, this could have a material adverse effect on our business,
        results of operations, liquidity and financial condition.
 
 Our
        independent certified public accountants have stated in their report included
        herein that we have incurred operating losses since our inception, and that
        we
        are dependent upon management’s ability to develop profitable operations. These
        factors among others raise substantial doubt about our ability to continue
        as a
        going concern.
 
 **Off-Balance
        Sheet Arrangements**
 
 We
        do not
        have any outstanding derivative financial instruments, off-balance sheet
        guarantees, interest rate swap transactions or foreign currency contracts.
        We do
        not engage in trading activities involving non-exchange traded
        contracts.
 
 **Critical
        Accounting Policies**
 
 Our
        financial statements and accompanying notes are prepared in accordance with
        generally accepted accounting principles used in the United States. Preparing
        financial statements requires management to make estimates and assumptions
        that
        affect the reported amounts of assets, liabilities, revenue, and expenses.
        These
        estimates and assumptions are affected by management’s application of accounting
        policies. We believe that understanding the basis and nature of the estimates
        and assumptions involved with the following aspects of our financial statements
        is critical to an understanding of our financial statements. We believe the
        following critical accounting policies require us to make significant judgments
        and estimates in the preparation of our financial statements.
 
 **Going
        Concern**
 
 The
        Company's financial statements are presented on a going concern basis, which
        contemplates the realization of assets and satisfaction of liabilities in
        the
        normal course of business. The Company has experienced losses from operations
        since inception, and as of August 31, 2006 has a working capital and total
        capital deficiency, which raise substantial doubt as to its ability to continue
        as a going concern.
 The
              Company's ability to continue as a going concern is contingent upon
              its ability
              to obtain the financing and strategic alliances necessary to attain
              profitable
              operations. The Company has received letters of intent from potential
              customers,
              which management believes will produce the necessary income to attain
              profitability in the future. Since August 31, 2006, the Company’s principal
              shareholders/officers have provided approximately $1.65 million in
              short-term
              working capital advances and these individuals will continue to provide
              certain
              funding as and when required on a short-term basis. The Company has
              secured a
              line of credit of up to $1,000,000 with American Business Finance LLC,
              located
              in Oklahoma, to be collateralized by invoices signed by buyers. American
              Business Finance LLC will finance 80% of the face value of the invoice
              until
              Royal Spring Water is paid. This will help to improve cash flows needed
              for
              working capital until profitable operations are attained. In December
              2006, the
              Company signed a two year non-interest bearing convertible note for
              $1,250,000.
              Although the Company has no other firm commitments from other investors
              or
              lenders at this time, the Company believes it has raised sufficient
              capital to
              complete assembly of its production facilities and commence production
              and
              distribution of its products until profitability is reached. Additionally,
              the
              Company believes it will not be required to raise any additional funds
              in the
              next twelve months. There can be no assurance that the Company will
              be able to
              secure additional financing or that the amount of any additional financing
              will
              be sufficient to accomplish its business objectives or to pay ongoing
              operating
              expenses.
 The
        financial statements do not include any adjustments to reflect the possible
        future effects on the recoverability and classification of assets or the
        amounts
        and classification of liabilities that may result from the possible inability
        of
        the Company to continue as a going concern.
  14
 *Table
            of Contents*
 
 **Pervasiveness
        of Estimates**
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates. Significant estimates were
        used in determining the present value of our capital lease obligation and
        the
        allocation of that total cost to the various assets included in the
        lease.
 
 **Development
        Stage Enterprise**
 
 The
        Company has not earned any revenues from limited principal operations and
        accordingly, the Company's activities have been accounted for as those of
        a
        "Development Stage Enterprise" as set forth in Statement of Financial Accounting
        Standards (“SFAS”) No. 7, *Accounting
        and Reporting by Development Stage Enterprises* (“SFAS
        No. 7 “). Among the disclosures required by SFAS No. 7 are that the Company's
        financial statements be identified as those of a development stage company,
        and
        that the statements of operation, stockholders' deficit and cash flows disclose
        activity since the date of the Company's inception.
  **Impairment
        of Long-Lived Assets**
 
 Long
        lived assets are accounted for in accordance with SFAS No. 144, *Accounting
        for the Impairment or Disposal of Long-Lived Assets* .
        The
        statement requires that long-lived assets be reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amount of an
        asset
        may not be recoverable. The Company evaluates its long-lived assets for
        indicators of possible impairment by comparison of the carrying amounts to
        future net undiscounted cash flows expected to be generated by such assets
        when
        events or changes in circumstances indicate the carrying amount of an asset
        may
        not be recoverable. Should an impairment exist, the impairment loss would
        be
        measured based on the excess carrying value of the asset over the asset's
        fair
        value or estimates of future cash flows. We have not identified any such
        impairment losses to date.
 
 **Capital
        Leases**
 
 Capital
        leases represent those leases under which substantially all the risks and
        rewards of ownership of the leased assets are transferred to the Company.
        Property, plant and equipment held under capital leases are initially recorded
        at the present value of the minimum payments at the inception of the leases,
        with equivalent liabilities categorized as appropriate under current or
        non-current liabilities. Interest expense, which represents the difference
        between the minimum payments at the inception of the capital leases and the
        corresponding fair value of the assets acquired, is allocated to accounting
        periods over the period of the leases to produce a constant rate of charge
        on
        the outstanding balance.
 
 **Income
        Taxes**
 
 The
        Company accounts for income taxes pursuant to SFAS No. 109, Accounting for
        Income Taxes. Deferred tax assets and liabilities are recorded for differences
        between the financial statements and tax basis of the assets and liabilities
        that will result in taxable or deductible amounts in the future based on
        enacted
        tax laws and rates. Valuation allowances are established when necessary to
        reduce deferred tax assets to the amount expected to be realized. Income
        tax
        expense is recorded for the amount of income tax payable or refundable for
        the
        period increased or decreased by the change in deferred tax assets and
        liabilities during the period. As of August 31, 2006, a deferred tax asset
        of
        approximately $650,000 (which arises solely as a result of net operating
        losses), has been entirely offset by a valuation reserve due the uncertainty
        that this asset will be realized in the future.
  15
 *Table
            of Contents*
  **Item7****.**
              **Financial
                  Statements.**
 
 See
        Financial Statements starting on page F-1 for this information.
 
 **Item
                  8.**
              **Changes
                  In and Disagreements with Accountants on Accounting and Financial
                  Disclosure.**
  On
        March
        14, 2005 Michael Johnson & Co. LLC. was terminated as the Company’s
        independent auditor. Since its engagement on November 11 2004 to its termination
        on March 14, 2005, Michael Johnson & Co. LLC. had acted as the Registrant’s
        independent registered public accounting firm. The reports of independent
        registered public accounting firm Michael Johnson & Co. LLC. on the
        financial statements of the Registrant and its subsidiaries for the years
        ended
        August 31, 2004 and August 31, 2003 did not contain an adverse opinion or
        a
        disclaimer of opinion, nor were such reports qualified or modified as to
        uncertainty, audit scope, or accounting principles. However, such reports
        contained an explanatory paragraph regarding the substantial doubt on the
        Company’s ability to continue as a going concern relating to the reports for the
        years presented. The termination of Michael Johnson & Co. LLC. was accepted
        by our board of directors.
 
 During
        the years ended August 31, 2004 and August 31, 2003 and subsequent period
        through to March 2005, there were no disagreements with Michael Johnson &
Co. LLC. on any matter of accounting principles or practices, financial
        statement disclosure, or auditing scope or procedure, which, if not resolved
        to
        the satisfaction of Michael Johnson & Co. LLC., would have caused it to make
        reference to the subject matter of the disagreement in connection with its
        report; nor has Michael Johnson & Co. LLC. ever presented a written report,
        or otherwise communicated in writing to the Registrant or its board of directors
        the existence of any “reportable event or default” as defined in (iv) of
        Regulation S-B Item 304 (a)(1).
 
 Michael
        Johnson & Co. LLC. has provided the Registrant with a letter addressed to
        the Securities and Exchange Commission as required by Item 304(a)(3) of
        Regulation S-B, so that Registrant can file such letter with the Commission.
        The
        letter is attached as an exhibit hereto.
 
 In
        February 2006 the Company appointed, as its new independent registered public
        accounting firm, Grobstein, Horwath & Company LLP, Certified Public
        Accountants, whose address is 15233 Ventura Boulevard, Ninth Floor, Sherman
        Oaks, California 91403. The effective date of engagement agreed to by the
        parties was February 6, 2006.
 
 Prior
        to
        their appointment of the new independent registered public accounting firm,
        the
        Company did not consult with the new auditor on the application of accounting
        principles to a specific completed or contemplated transaction, or the type
        of
        audit opinion that might be rendered on the Company’s financial
        statements.
 
 **Item
                  8A.**
              **Controls
                  and Procedures.**
  As
        discussed in Note 9 to the August 31, 2006 financial statements, the Company
        has
        restated its financial statements and the quarterly reports for the quarters
        ended November 30, 2005, February 28, 2006 and May 31, 2006.  These
        restatements are the result of the Company's accounting treatment for the
        business combination of Easy.com Inc and Royal Spring Water Inc.
 As
              of the
              end of the period covered by this annual report, an evaluation was
              carried out
              under the supervision and with the participation of the Company's management,
              including our Chief Executive Officer and our Chief Financial Officer,
              of the
              effectiveness of the design and operation of our disclosure controls
              and
              procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities
              Exchange Act of 1934).  Based upon that evaluation, the Chief Executive
              Officer and the Chief Financial Officer concluded that the design and
              operation
              of these disclosure controls and procedures were not effective because
              of the
              material weakness discussed below.
 
 A
        material weakness is a control deficiency, or combination of control
        deficiencies, that results in more than a remote likelihood that a material
        misstatement of the annual or interim financial statements will not be prevented
        or detected.  As a result of the restatement described above, the following
        material weakness was identified in the Company's assessment of the
        effectiveness of disclosure controls and procedures as of August 31,
        2006:
 
 i) The
        Company did not maintain effective controls over the accounting for the business
        combination of Easy.com Inc and Royal Spring Water Inc.
 
 During
        the fourth quarter of the period covered by this report, there were no
        significant changes in internal controls or in other factors that could
        significantly affect the internal controls, including any corrective actions
        taken with regard to significant deficiencies and material
        weaknesses.
  **Item
                    8B****.**
                **Other
                    Information.**
  None.
  16
 *Table
            of Contents*
  **PART** **III**
 **Item
                    9.**
                **Directors,
                    Executive Officers, Promoters and Control Persons; Compliance
                    With Section
                    16(a) of the Exchange
                    Act.**
  All
        directors of our company, hold office until the next annual meeting of the
        stockholders or until their successors have been elected and qualified. The
        officers of our company are appointed by our board of directors and hold
        office
        until their death, resignation or removal from office **.** Our
        directors and executive officers, their ages and position held are as follows:
  **NAME**
              
              **AGE**
              
              **POSITION
                  HELD WITH COMPANY**Alex
                  Hazan
              
              45
              
              President,
                  CEO & Chairman of the Board of DirectorsHarel
                  Goldstein
              
              45
              
              Director
                  of Marketing & sales, CFO & DirectorIsaac
                  Ben Hamou
              
              45
              
              Director
  **Our
        Director and Officers Business Experience**
 
 The
        following is a brief account of the education and business experience of
        each
        director and executive officer during at least the past five years, indicating
        each person’s business experience, principal occupation during the period, and
        the name and principal business of the organization by which he or she was
        employed.
  **Mr.
        Alex Hazan**
 ***President,
        CEO and Chairman of the Board of directors***
 
 Mr.
        Hazan
        arrived to the United States in the early eighties. After his army service
        in
        one of Israel’s elite units, Alex managed and over saw one of the most
        prestige’s security outfits in the world. Shortly after his arrival in the
        United States Alex raised the financing and owned one of the first home
        improvement companies in Los Angeles with over 30 employees. Alex over saw
        the
        company's strategy, marketing and sales. Over the last few years Alex has
        become
        a real estate developer in Los Angeles and its surroundings. In 1994 Alex
        formed
        Silver Cloud productions and raised the financing as well as self-financed
        over
        $25 million for independent films. Alex produced or Executive produced these
        films for worldwide markets. In 1996 Alex founded one of Israel’s leading 3D
        animation companies - MIM TV ( http://www.mimtv.com/ )
        Alex
        funded the company entirely and produced and developed a large library of
        children DVD programming as well as CD ROM interactive games. MIMTV is currently
        selling its products to ToysRus.
 
 **Mr.
        Harel Goldstein**
 ***Director
        of Marketing & Sales, CFO and Director***
  Prior
        to
        Harel’s arrival in the United States, he produced and arranged the financing for
        over 80 hours of documentary series and specials. During his early years,
        Harel
        was in charge of manufacturing and marketing for the largest studio in Israel
        with over 25 staff members under his control. Prior to his arrival in the
        U.S.
        Harel served as an officer in the Israeli Army. Harel Goldstein graduated
        from
        the Film and Television School at San Francisco State University in 1986.
        From
        1986 to 1990 Harel produced and line-produced several feature films. His
        first
        network MOW entitled MURDER C.O.D. was made for NBC in 1990. At the world
        sales
        markets, Harel has generated sales, pre-sold and created marketing campaigns
        for
        a multitude of projects based on summary sales sheets, marketing tools and
        Talent pkg’s. During those years Harel ran the companies with 5-15 employees
        spanning from development to finance, contract negotiations and marketing
        strategies.
  17
 *Table
            of Contents*
  **Isaac
        Ben Hamou**
 ***Director***
 
 Isaac
        Ben
        Hamou is head of the transportation department of Stephen S. Wise Temple,
        one of
        the most prominent Temples in Los Angeles. His department consists of 10
        bus
        drivers and 1 bus company supervisor. Mr. Hamou oversees all of the billing
        which comes from Laidlaw Transit, charging each department accurately for
        the
        proportion of the labor they used. Mr. Hamou works opposite the parents on
        a
        daily basis answering all their needs and servicing their
        complaints.
 
 **Mr.
        Vartan Yossefian**
 ***Chief
        Engineer, Production and Plant Director***
 
 As
        an
        owner, operations manager, general manager Vartan’s experience spans over thirty
        years with consumer packaging goods in both water bottling and food industries
        and machine design. Vartan has a hands-on approach with a flair for strong
        analytical, organizational and people skills. He has track record of getting
        results through people in a highly competitive market and orchestrating
        departmental turnaround.  Over a period that spans more then 15 years
        Vartan directed multiple Plants and Distribution Centers. He has knowledge
        of
        The Workplace Hazardous Materials Information System, Health and Safety and
        regulatory issues, a strong Engineering background for plant, equipment,
        warehousing layouts and control over inventory of raw materials and finished
        goods in a just in time environment between production and warehouse logistics.
        Over the last five years Vartan owned and operated Global Machinery Repair
        and
        Engineering Inc. Under this banner he designed and managed building of water
        bottling and alcoholic beverage rectification. Vartan purchased and set-up
        state
        of the art plastic blow molding equipment and high speed filling equipment.
        He
        also installed water processing and bottling plants in Orlando, Florida and
        Santa Fe Springs, California. From 1984-2000 Vartan owned and operated Delta
        Technologies, a company specializing in design and manufacturing of - door
        and
        hood assembly systems for GM’s Cadillac plant. Vartan also designed and
        installed an entire process and packaging plant for Snack Food in Calgary
        Canada.
  18
 *Table
            of Contents*
 
 **Item
                  10****.**
              **Executive
                  Compensation.**
  At
        this
        time there is no set executive compensation package for any of the directors
        or
        officers of the Company. The Company currently has no stock option plan or
        similar plans, nor are there any immediate plans or intentions to establish
        such
        compensation arrangements. While the Company has not paid executive
        compensation, it receives services from its two key officers/shareholders,
        for
        which compensation expense is recorded with a corresponding credit to paid-in
        capital.
 
 **Item
                  11****.**
              **Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters.**
  The
        following table sets forth the name, address, number of shares beneficially
        owned, and the percentage of the Registrant’s total outstanding common stock
        shares owned by: (i) each of the Registrant’s Officers and Directors; (ii) the
        Registrant’s Officers and Directors as a group; and (iii) other shareholders of
        5% or more of the Registrant’s total outstanding common stock shares. The
        percentages have been calculated by taking into account all Shares owned
        on the
        record date as well as all such Shares with respect to which such person
        has the
        right to acquire beneficial ownership at such date or within 60 days thereafter.
        Unless otherwise indicated, all persons listed below have sole voting and
        sole
        investment power over the Shares owned.
  **Title
                  of Class**
              
              **Name
                  and Address of**
                **Beneficial
                  Owner**
              
              **Amount
                  and**
                **Nature
                  of**
                **Beneficial**
                **Ownership**
              
              **Percent**
                **of
                  Class**Common
                  Stock
              
              Alex
                  Hazan,14553 Delano
                St
                  suite 217, Van Nuys CA
                91411
              
              1,489,432
              
              4.96%Common
                  Stock
              
              Harel
                  Goldstein,14553
                Delano
                  St suite 217, Van
                Nuys
                  CA 91411
              
              1,489,432
              
              4.96%Common
                  Stock
              
              Isaac
                  Ben Hamou,14553
                Delano
                  St suite 217, Van
                Nuys
                  CA 91411
              
              1,489,428
              
              4.96%Common
                  Stock
              
              Officers
                  and Directors, as a
                Group
                  (4 people)
              
              4,468,292
              
              14.88%
 
 **Item
                  12****.**
              **Certain
                  Relationships and Related
                  Transactions.**
 Since
              the
              formation of Easy.com in the year 2000, Marvin Winick acted as the
              president. As
              part of the merger agreement, Marvin Winick retained 300,000 shares
              of common
              stock. There are no other promoters or control persons who received
              any
              compensation during the last five fiscal years other than as described
              herein.
  During
              the fiscal year ended August 31, 2006 and 2005, the Company’s financing came
              from loans from the CEO, Alex Hazan and the CFO, Harel Goldstein, in
              the amount
              of $1,649,609. The advances from these directors and shareholders of
              the
              Company, to facilitate the payment of debts, are non-interest bearing,
              unsecured
              and have no specific terms of repayment. The carrying value of the
              advances
              approximates the market value due to the short-term maturity of the
              financial
              instruments.
 
 Beginning
              in April 2005, the Company's directors and shareholders, Alex Hazen
              and Harel
              Goldstein, devoted time to the development of the Company. Compensation
              expense
              of $10,000 per month between April 2005 and August 2005 and $15,000
              per month
              between September 2005 and August 2006, totaling $170,000 has been
              recorded from
              April 2005 to the fiscal year ended August 2006. These directors and
              shareholders have waived reimbursement and have considered these services
              as a
              contribution to capital. Accordingly, the contributions have been recorded
              as
              additional paid-in capital.
  19
 *Table
            of Contents*
 
 **Item
                  13.**
              **Exhibits.**
 Reference
              is herewith made to the financial statements and notes thereto included
              herein
              and to the cover page of this 10-KSB/A with respect to documents incorporated
              by
              reference in accordance with Rule 12b-33.
 **Exhibit**
                **Number**
              
              **Description**2
                  (1)
              
              Acquisition
                  Agreement3
                  (1)
              
              Articles
                  of Merger10
                  (1)
              
              Commercial
                  Lease Agreement16
                  (1)
              
              Letter
                  on Change in Accountant31.1*
              
              Certificate
                  of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 200231.2*
              
              Certificate
                  of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley
                  Act of 200232.1*
              
              Certificate
                  of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 200232.2*
              
              Certificate
                  of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley
                  Act of 2002
 *
                Filed
                    herewith.
 (1)
                Incorporated
                    by reference from our report on form 10K-SB/A filed on June 7th,
                    2006
 
 **Item
                    14.**
                **Principal
                    Accountant Fees and
                    Services.**
  The
        following is a summary of the fees billed to the Company for professional
        services rendered for the periods ended August 31, 2006 and 2005:
  **2006**
              
              **2005**1.
                  Audit Fees (a)
              
              $
              15,000
              
              $
              40,8442.
                  Audit Related Fees
              
              
              9,089
              
              
              -3.
                  Tax Fees (b)
              
              
              -
              
              
              -4.
                  All Other Fees
              
              
              -
              
              
              -
 
 (a)
              Consists
                  of fees billed for professional services rendered for the audit
                  of the
                  Company's financial statements and review of the interim financial
                  statements included in quarterly
                  reports.
 (b)
                Consists
                    primarily of fees paid for tax compliance and tax planning
                    services.
   **Policy
        on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services
        of
        Independent Registered Public Accounting Firm**
  The
        Company currently does not have a designated Audit Committee, and accordingly,
        the Company's Board of Directors' policy is to pre-approve all audit and
        permissible non-audit services provided by the independent auditors. These
        services may include audit services, audit-related services, tax services
        and
        other services. Pre-approval is generally provided for up to one year and
        any
        pre-approval is detailed as to the particular service or category of services
        and is generally subject to a specific budget. The independent auditors and
        management are required to periodically report to the Company's Board of
        Directors regarding the extent of services provided by the independent auditors
        in accordance with this pre-approval, and the fees for the services performed
        to
        date. The Board of Directors may also pre-approve particular services on
        a
        case-by-case basis.
  20
 *Table
            of Contents*
  **SIGNA** **TURES**
 
 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
        on
        January 31, 2006 by the undersigned, thereunto authorized.
  **ROYAL
                  SPRING WATER INC.****(FORMERLY
                  EASY.COM, INC.)**By:
              /s/ 
                  Alex HazanAlex
                  Hazan, President
   Pursuant
        to the requirements of the Securities Exchange Act of 1934, this report has
        been
        signed by the following persons on behalf of the Registrant and in the
        capacities on the date(s) indicated.
  **Name**
              
              **Title**
              
              **Date**/s/ 
                  Alex Hazan
              
              Chairman of
                  the Board of
              
              January
                  31, 2006Directors
                  and ChiefAlex
                  Hazan
              
              Executive
                  Officer/s/ 
                  Harel Goldstein
              
              Director
                  and Chief
              
              January
                  31, 2006Financial
                  OfficerHarel
                  Goldstein/s/ 
                  Isaac Ben Hamou
              
              Director
              
              January
                  31, 2006Isaac
                  Ben Hamou
  21
 *Table
            of Contents*
 
 **INDEX
        TO** **FINANCIAL
        STATEMENTS**
 
 PageReport
                  of Independent Registered Public Accounting Firm
              
              F-2Balance
                  Sheets August 31, 2006 and 2005
              
              F-3Statements
                  of Operations for the Periods Ended August 31, 2006 and
                  2005
              
              F-4Statements
                  of Changes in Stockholders’ Deficit for the Periods Ended August 31, 2006
                  and 2005
              
              F-5Statements
                  of Cash Flows for the Periods Ended August 31, 2006 and
                  2005
              
              F-6Notes
                  to Financial Statements
              
              F-7
  F-1
 *Table
            of Contents*
  **Report
        of Independent Registered Public Accounting Firm**
   To
        the
        Board of Directors and Stockholders of
 Royal
        Spring Water Inc.
  We
          have
          audited the accompanying balance sheet of Royal Spring Water Inc. (formerly
          Easy.com, Inc.) (A Development Stage Company) as of August 31, 2006 and
          2005 and
          the related statements of operations, changes in stockholders’ deficit, and cash
          flows for the year ended August 31, 2006, for the period from April 20,
          2005
          (date of inception) to August 31, 2005 and for the period from April 20,
          2005
          (date of inception) to August 31, 2006. 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 the 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. The Company is
          not
          required to have, nor were we engaged to perform, an audit of its internal
          control over financial reporting. Our audits include consideration of internal
          control over financial reporting as a basis for designing audit procedures
          that
          are appropriate in the circumstance, but not for expressing an opinion
          on the
          effectiveness of the Company’s internal control over financial reporting.
          Accordingly, we express no such opinion. 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 Royal Spring Water Inc. (formerly
          Easy.com, Inc.) (A Development Stage Company) as of August 31, 2006 and
          2005,
          and the results of its operations and its cash flows for the year ended
          August
          31, 2006 and for the period from April 20, 2005 (date of inception) to
          August
          31, 2005 and for the period from April 20, 2005 (date of inception) to
          August
          31, 2006 in conformity with accounting principles generally accepted in
          the
          United States of America.
 
 The
          accompanying financial statements have been prepared assuming that the
          Company
          will continue as a going concern. As discussed in Note 1 to the financial
          statements, the Company’s significant operating losses, negative working
          capital, and total capital deficiency raise substantial doubt about its
          ability
          to continue as a going concern. Note 1 also describes management’s plans to
          address these financial matters. The financial statements do not include
          any
          adjustments that might result from the outcome of this
          uncertainty.
  As
        discussed in Note 9 to the financial statements, the Company restated its
        2005
        consolidated financial statements to correct the accounting treatment applied
        to
        a business combination.
   /s/
        Grobstein, Horwath & Company LLP
 
 Sherman
        Oaks, California
 November
        29, 2006
  F-2
 *Table
            of Contents*
  **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **BALANCE
        SHEETS**
 **AS
        AT AUGUST 31, 2006 AND 2005**
 
 **ASSETS**
              
              **2006**
              
              **2005**
                **Restated**CURRENT
                  ASSETSCash
                  and cash equivalents
              
              $
              252,197
              
              $
              12Inventory
              
              
              65,912
              
              
              -Prepaid
                  expenses
              
              
              32,722
              
              
              10,000Total
                  Current Assets
              
              
              350,831
              
              
              10,012Property,
                  plant and equipment, net
              
              
              3,768,892
              
              
              3,337,434TOTAL
                  ASSETS
              
              $
              4,119,723
              
              $
              3,347,446**LIABILITIES
                  AND STOCKHOLDERS’ DEFICIT**CURRENT
                  LIABILITIESAccounts
                  payable and accrued liabilities
              
              $
              64,398
              
              $
              -Advances
                  from shareholders
              
              
              1,649,609
              
              
              73,546Obligation
                  under capital lease - current portion
              
              
              171,083
              
              
              163,680Total
                  Current Liabilities
              
              
              1,885,090
              
              
              237,226Obligation
                  under capital lease
              
              
              3,690,442
              
              
              3,240,052TOTAL
                  LIABILITIES
              
              
              5,575,532
              
              
              3,477,278STOCKHOLDERS’
                  DEFICITPreferred
                  stock - $.001 par value; 5,000,000 shares authorized, none issued
                  or
                  outstandingCommon
                  stock - $.001 par value; 50,000,000 shares authorized, 30,072,000
                  shares
                  issued and outstanding
              
              
              30,072
              
              
              30,072Additional
                  paid-in capital
              
              
              135,633
              
              
              15,633Deficit
                  accumulated during the development stage
              
              
              (1,621,514
              )
              
              (175,537
              )TOTAL
                  STOCKHOLDERS’ DEFICIT
              
              
              (1,455,809
              )
              
              (129,832
              )TOTAL
                  LIABILITIES AND STOCKHOLDERS’ DEFICIT
              
              $
              4,119,723
              
              $
              3,347,446
 
 The
        accompanying notes are an integral part of these financial
        statements.
  F-3
 *Table
            of Contents*
 
 **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
        OF OPERATIONS**
  **Year
                  Ended**
                **August
                  31,**
                **2006**
              
              **Period**
                **From
                  April**
                **20,
                  2005**
                **(Date
                  of**
                **Inception)**
                **to
                  August**
                **31,
                  2005**
                **Restated**
              
              **Period**
                **From
                  April**
                **20,
                  2005**
                **(Date
                  of**
                **Inception)**
                **to**
                **August
                  31,**
                **2006**EXPENSESProfessional
                  fees
              
              $
              237,857
              
              $
              2,500
              
              $
              240,357General
                  and administrative
              
              
              223,844
              
              
              64,122
              
              
              287,966Vehicle
              
              
              37,222
              
              
              3,651
              
              
              40,873Salaries
                  and wages
              
              
              30,778
              
              
              -
              
              
              30,778Travel
                  and entertainment
              
              
              27,438
              
              
              4,146
              
              
              31,584Telecommunications
              
              
              21,091
              
              
              1,961
              
              
              23,052Occupancy
                  costs
              
              
              19,915
              
              
              22,447
              
              
              42,362Advertising
                  and promotion
              
              
              19,664
              
              
              3,099
              
              
              22,763Insurance
              
              
              13,104
              
              
              -
              
              
              13,104Consulting
                  fees
              
              
              7,500
              
              
              5,000
              
              
              12,500Interest
                  and bank charges
              
              
              1,577
              
              
              1,098
              
              
              2,675Depreciation
              
              
              183,194
              
              
              14,345
              
              
              197,539TOTAL
                  EXPENSES
              
              
              823,184
              
              
              122,369
              
              
              945,553LOSS
                  FROM OPERATIONS
              
              
              (823,184
              )
              
              (122,369
              )
              
              (945,553
              )OTHER
                  EXPENSESInterest
                  on capital lease obligation
              
              
              622,793
              
              
              53,168
              
              
              675,961NET
                  LOSS
              
              $
              (1,445,977
              )
              $
              (175,537
              )
              $
              (1,621,514
              )Loss
                  per common share, basic and diluted
              
              $
              (0.05
              )
              $
              (0.01
              )Weighted
                  average shares outstanding, basic and diluted
              
              
              30,072,000
              
              
              30,072,000
  The
        accompanying notes are an integral part of these financial
        statements.
  F-4
 *Table
            of Contents*
 
 **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
        OF CHANGES IN STOCKHOLDERS' DEFICIT**
 **APRIL
        20, 2005 (DATE OF INCEPTION) TO AUGUST 31, 2006**
  **Common
                  Stock**
              
              **Additional**
              
              
              
              **Total****Paid-in**
              
              **Accumulated**
              
              **Stockholders'****Shares**
              
              **Par****Value**
              
              **Capital**
              
              **Deficit**
              
              **Deficit**Acquisition
                  of Easy.com Inc., restated
              
              
              30,072,000
              
              $
              30,072
              
              $
              (34,367
              )
              
              
              
              $
              $(4,295
              )Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (175,537
              )
              
              (175,537
              )Services
                  contributed by shareholders
              
              
              -
              
              
              -
              
              
              50,000
              
              
              -
              
              
              50,000BALANCE
                  AT AUGUST 31, 2005,RESTATED
              
              
              30,072,000
              
              $
              30,072
              
              $
              15,633
              
              $
              (175,537
              )
              $
              (129,832
              )Net
                  loss
              
              
              -
              
              
              -
              
              
              -
              
              
              (1,445,977
              )
              
              (1,445,977
              )Services
                  contributed by shareholders
              
              
              -
              
              
              -
              
              
              120,000
              
              
              -
              
              
              120,000BALANCE
                  AT AUGUST 31, 2006
              
              
              30,072,000
              
              
              30,072
              
              
              135,633
              
              
              (1,621,514
              )
              
              (1,455,809
              )
 
 The
        accompanying notes are an integral part of these financial
        statements.
  F-5
 *Table
            of Contents*
 
 **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **STATEMENTS
        OF CASH FLOWS**
 
 **Year
                  Ended**
                **August
                  31,**
                **2006**
              
              **Period**
                **From
                  April**
                **20,
                  2005**
                **(Date
                  of**
                **Inception)**
                **to
                  August**
                **31,
                  2005**
                **Restated**
              
              **Period**
                **From
                  April**
                **20,
                  2005**
                **(Date
                  of**
                **Inception)**
                **to**
                **August
                  31,**
                **2006**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  Loss
              
              $
              (1,445,977
              )
              $
              (175,537
              )
              $
              (1,621,514
              )Adjustments
                  to reconcile net income to net cash provided (used) by operating
                  activities:Depreciation
              
              
              183,194
              
              
              14,345
              
              
              197,539Interest
                  accrued on obligation under capital lease
              
              
              622,793
              
              
              53,168
              
              
              675,961Acquisition
                  of the net liabilities of Easy.com Inc.
              
              
              -
              
              
              (4,295
              )
              
              (4,295
              )Services
                  contributed by shareholders
              
              
              120,000
              
              
              50,000
              
              
              170,000Changes
                  in Assets and Liabilities:Inventory
              
              
              (65,912
              )
              
              -
              
              
              (65,912
              )Prepaid
                  expenses
              
              
              (22,722
              )
              
              (10,000
              )
              
              (32,722
              )Accounts
                  payable and accrued liabilities
              
              
              64,398
              
              
              
              
              
              64,398NET
                  CASH USED IN OPERATING ACTIVITIES
              
              
              (544,226
              )
              
              (72,319
              )
              
              (616,545
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Acquisition
                  of property and equipment
              
              
              (614,652
              )
              
              (1,215
              )
              
              (615,867
              )NET
                  CASH USED IN INVESTING ACTIVITIES
              
              
              (614,652
              )
              
              (1,215
              )
              
              (615,867
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Advances
                  from shareholders
              
              
              1,576,063
              
              
              73,546
              
              
              1,649,609Repayment
                  of obligation under capital lease
              
              
              (165,000
              )
              
              
              
              
              (165,000
              )NET
                  CASH PROVIDED BY FINANCING ACTIVITES
              
              
              1,411,063
              
              
              73,546
              
              
              1,484,609NET
                  CHANGE IN CASH & CASH EQUIVALENTS
              
              
              252,185
              
              
              12
              
              
              252,197CASH
                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
              
              
              12
              
              
              -
              
              
              -CASH
                  AND CASH EQUIVALENTS AT END OF PERIOD
              
              $
              252,197
              
              $
              12
              
              $
              252,197
  The
        accompanying notes are an integral part of these financial
        statements.
  F-6
 *Table
            of Contents*
  **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **NOTE
                  1.**
              **NATURE
                  OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING
                  POLICIES**
 
 **ORGANIZATION**
 
 Easy.com,
        Inc. (“Easy”) was incorporated under the laws of the State of Nevada on May 9,
        2000. Easy was a non-operating shell corporation with nominal net assets
        prior
        to June 2005, when Easy acquired one hundred percent (100%) of the assets
        of
        Royal Spring Water Inc., a Nevada company (“RSW” or the “Company”).
 
 Royal
        Spring Water Inc. was established on April 20, 2005 with a clear mission,
        namely
        to extract, process, and bottle water of supreme quality.
 
 **BUSINESS
        COMBINATION**
 
 On
        June
        30, 2005, Easy acquired all of the outstanding stock of RSW (the "Reverse
        Merger"). Easy completed the acquisition by having the shareholders of RSW
        surrender 100% of their common stock to the company. In anticipation of the
        Reverse Merger, on September 2, 2004 the shareholders of Easy gifted stock
        to
        the shareholders of RSW, giving these shareholders and their family members
        control of Easy. For accounting purposes, pursuant to Statement of Financial
        Accounting Standards ("SFAS") No. 141, *Business
        Combinations* ,
        the
        acquisition has been treated as a recapitalization of RSW with RSW recognized
        as
        the accounting acquirer (reverse acquisition). A reverse acquisition occurs
        if a
        company other than the legal acquirer is deemed to be the “accounting acquirer”
in a business combination effected by the issuance of voting securities.
        In this
        regard, RSW is considered the accounting acquirer and Easy is considered
        the
        accounting target. The historical financial statements prior to June 30,
        2005
        are those of RSW.
  **GOING
        CONCERN**
 
 The
        Company's financial statements are presented on a going concern basis, which
        contemplates the realization of assets and satisfaction of liabilities in
        the
        normal course of business. The Company has experienced losses from operations
        since inception, and as of August 31, 2006 has a working capital and total
        capital deficiency, which raise substantial doubt as to its ability to continue
        as a going concern.
 
 The
        Company's ability to continue as a going concern is contingent upon its ability
        to obtain the financing and strategic alliances necessary to attain profitable
        operations. Management is pursuing various sources of financing and intends
        to
        raise equity financing through a private placement with a private group of
        investors in the near future. The Company has received letters of intent
        from
        potential customers, which management believes will produce the necessary
        income
        to attain profitability in the future. Since August 31, 2006, the Company’s
        principal shareholders/officers have provided approximately $1.65 million
        in
        short-term working capital advances and these individuals will continue to
        provide certain funding as and when required on a short-term basis. The Company
        has secured a line of credit of up to $1,000,000 with American Business Finance
        LLC, located in Oklahoma, to be collateralized by invoices signed by buyers.
        American Business Finance LLC will finance 80% of the face value of the invoice
        until Royal Spring Water is paid. This will help to improve cash flows needed
        for working capital until profitable operations are attained. Although the
        Company has no firm commitments from other investors or lenders at this time,
        the Company believes it will be able to raise sufficient capital to complete
        assembly of its production facilities and commence production and distribution
        of its products. There can be no assurance that the Company will be able
        to
        secure additional financing or that the amount of any additional financing
        will
        be sufficient to accomplish its business objectives or to pay ongoing operating
        expenses.
 
 The
        financial statements do not include any adjustments to reflect the possible
        future effects on the recoverability and classification of assets or the
        amounts
        and classification of liabilities that may result from the possible inability
        of
        the Company to continue as a going concern.
 
 **BASIS
        OF PRESENTATION**
 
 The
        accompanying financial statements include the accounts of the Company and
        its
        wholly owned subsidiary, Royal Spring Water Inc., a Nevada corporation and
        have
        been prepared in accordance with accounting principles generally accepted
        in the
        United States of America ("GAAP"). All significant inter-company accounts
        and
        transactions are eliminated.
  The
        Company has not earned any revenues from limited principal operations and
        accordingly, the Company's activities have been accounted for as those of
        a
        "Development Stage Enterprise" as set forth in Statement of Financial Accounting
        Standards (“SFAS”) No. 7, *Accounting
        and Reporting by Development Stage Enterprises* (“SFAS
        No. 7 “). Among the disclosures required by SFAS No. 7 are that the Company's
        financial statements be identified as those of a development stage company,
        and
        that the statements of operation, stockholders' deficit and cash flows disclose
        activity since the date of the Company's inception.
  F-7
 *Table
              of Contents*
 
 **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **PERVASIVENESS
        OF ESTIMATES**
 
 The
        preparation of financial statements in conformity with generally accepted
        accounting principles requires management to make estimates and assumptions
        that
        affect the reported amounts of assets and liabilities and disclosure of
        contingent assets and liabilities at the date of the financial statements
        and
        the reported amounts of revenues and expenses during the reporting period.
        Actual results could differ from those estimates. Significant estimates were
        used in determining the present value of our capital lease obligation and
        the
        allocation of that total cost to the various assets included in the
        lease.
 
 **CASH
        AND CASH EQUIVALENTS**
 
 Cash
        and
        cash equivalents are considered to be all highly liquid investments purchased
        with an initial maturity of three (3) months or less.
 
 **PROPERTY
        AND EQUIPMENT**
 
 Property
        and equipment are stated at cost less accumulated depreciation and amortization.
        Maintenance and repairs that neither materially add to the value of the property
        nor appreciably prolong its life are charged to operations as incurred.
        Betterments or renewals are capitalized when incurred. Depreciation, based
        on
        the estimated useful lives of the assets, is provided using the straight
        line
        method over the following useful lives:
 
 Equipment
                  under capital lease
              
              5
                  yearsLocomotive
                  under capital lease
              
              5
                  yearsBuilding
                  under capital lease
              
              25
                  yearsFurniture
                  and equipment
              
              5
                  yearsComputer
              
              2
                  yearsSoftware
              
              1
                  year
 
 **LONG
        LIVED ASSETS**
 
 Long
        lived assets are accounted for in accordance with SFAS No. 144, *Accounting
        for the Impairment or Disposal of Long-Lived Assets* .
        The
        statement requires that long-lived assets be reviewed for impairment whenever
        events or changes in circumstances indicate that the carrying amount of an
        asset
        may not be recoverable. The Company evaluates its long-lived assets for
        indicators of possible impairment by comparison of the carrying amounts to
        future net undiscounted cash flows expected to be generated by such assets
        when
        events or changes in circumstances indicate the carrying amount of an asset
        may
        not be recoverable. Should an impairment exist, the impairment loss would
        be
        measured based on the excess carrying value of the asset over the asset's
        fair
        value or estimates of future cash flows. We have not identified any such
        impairment losses to date.
  **CAPITAL
        LEASES**
 
 Capital
        leases represent those leases under which substantially all the risks and
        rewards of ownership of the leased assets are transferred to the Company.
        Property, plant and equipment held under capital leases are initially recorded
        at the present value of the minimum payments at the inception of the leases,
        with equivalent liabilities categorized as appropriate under current or
        non-current liabilities. Interest expense, which represents the difference
        between the minimum payments at the inception of the capital leases and the
        corresponding fair value of the assets acquired, is allocated to accounting
        periods over the period of the leases to produce a constant rate of charge
        on
        the outstanding balance.
 
 **INCOME
        TAXES**
 
 The
        Company accounts for income taxes pursuant to SFAS No. 109, Accounting for
        Income Taxes. Deferred tax assets and liabilities are recorded for differences
        between the financial statements and tax basis of the assets and liabilities
        that will result in taxable or deductible amounts in the future based on
        enacted
        tax laws and rates. Valuation allowances are established when necessary to
        reduce deferred tax assets to the amount expected to be realized. Income
        tax
        expense is recorded for the amount of income tax payable or refundable for
        the
        period increased or decreased by the change in deferred tax assets and
        liabilities during the period. As of August 31, 2006, a deferred tax asset
        of
        approximately $650,000 (which arises solely as a result of net operating
        losses), has been entirely offset by a valuation reserve due the uncertainty
        that this asset will be realized in the future.
 
 F-8
 *Table
              of Contents*
 
 **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **LOSS
        PER SHARE**
 
 The
        Company accounts for earnings per share pursuant to SFAS No. 128, *Earnings
        per Share* ,
        which
        requires disclosure on the financial statements of "basic" and "diluted"
        earnings (loss) per share. Basic earnings (loss) per share is computed by
        dividing net income (loss) by the weighted average number of common shares
        outstanding for the year. Diluted earnings (loss) per share is computed by
        dividing net income (loss) by the weighted average number of common shares
        outstanding plus common stock equivalents (if dilutive) related to stock
        options
        and warrants for each year.
 
 There
        were no potentially dilutive financial instruments for the period ended August
        31, 2006 and 2005.
 
 **FAIR
        VALUE OF FINANCIAL INSTRUMENTS**
 
 The
        carrying values of our financial instruments included in current assets and
        current liabilities approximated their respective fair values at each balance
        sheet date due to the immediate or short-term maturity of these financial
        instruments. The fair value of lease obligations is based on current rates
        at
        which we could borrow funds with similar remaining maturities.
 
 **RECENT
        ACCOUNTING PRONOUNCEMENTS**
  The
        Financial Accounting Standards Board ("FASB") issued FASB Interpretation
        No.
        (“FIN”) 47, *Accounting
        for Conditional Asset Retirement Obligations* in March
        2005. FIN 47 clarifies that an entity must record a liability for a conditional
        asset retirement obligation if the fair value of the obligation can be
        reasonably estimated. This interpretation also clarifies the circumstances
        under
        which an entity would have sufficient information to reasonably estimate
        the
        fair value of an asset retirement obligation. This Interpretation is effective
        no later than the end of fiscal years ending after December 15, 2005. The
        Company does not expect this guidance to have a material impact on its financial
        statements.
  In
        May
        2005, the FASB issued SFAS No. 154, *Accounting
        Changes and Error Corrections* .
        This
        statement applies to all voluntary changes in accounting principle and requires
        retrospective application to prior periods' financial statements of changes
        in
        accounting principles, unless this would be impracticable. This statement
        also
        makes a distinction between "retrospective application" of an accounting
        principles and the "restatement" of financial statements to reflect the
        correction of an error. This statement is effective for accounting changes
        and
        corrections of errors made in fiscal years beginning after 15 December 2005.
        The
        Company does not expect this guidance to have a material impact on its financial
        statements.
  On
        November 3, 2005, the FASB issued *FASB
        Staff Position on SFAS 115 and 124, The Meaning of Other-Than-Temporary
        Impairment and its Application to Certain Investments (FSP FAS 115-1 and
        124-1)* .
        This
        FSP addresses the determination as to when an investment is considered impaired,
        whether that impairment is other than temporary, and the measurement of an
        impairment loss. It is effective for reporting periods beginning after December
        15, 2005. The Company does not expect this guidance to have a material impact
        on
        its financial statements.
  On
        February 16, 2006 the FASB issued SFAS 155, *Accounting
        for Certain Hybrid Instruments* which
        amends SFAS 133, *Accounting
        for Derivative Instruments and Hedging Activities* ,
        and
        SFAS 140, *Accounting
        for Transfers and Servicing of Financial Assets and Extinguishments of
        Liabilities* .
        SFAS
        155 allows financial instruments that have embedded derivatives to be accounted
        for as a whole (eliminating the need to bifurcate the derivative from its
        host)
        if the holder elects to account for the whole instrument on a fair value
        basis.
        SFAS 155 also clarifies and amends certain other provisions of SFAS 133 and
        SFAS
        140. This statement is effective for all financial instruments acquired or
        issued in fiscal years beginning after September 15, 2006. The Company does
        not expect its adoption of this new standard to have a material impact on
        its
        financial position, results of operations or cash flows.
 
 In
        June 2006, the FASB issued FIN 48, *Accounting
        for Uncertainty in Income Taxes* ,
        which
        is an interpretation of SFAS No. 109, *Accounting
        for Income Taxes* .
        FIN 48
        clarifies the accounting for uncertainty in income taxes recognized in an
        enterprise’s financial statements in accordance with SFAS 109 and prescribes a
        recognition threshold and measurement attribute for the financial statement
        recognition and measurement of a tax position taken or expected to be taken
        in a
        tax return.  FIN 48 also provides guidance on derecognition,
        classification, interest and penalties, accounting in interim periods,
        disclosure, and transition.  FIN 48 is effective for fiscal years beginning
        after December 15, 2006. The Company is currently evaluating the effect
        that the adoption of FIN 48 may have on its financial position or results
        of
        operations.
  In
        September 2006, the FASB issued SFAS No. 157, *Fair
        Value Measurements* .
        SFAS 157 defines fair value, establishes a framework for measuring fair
        value and expands disclosure of fair value measurements. SFAS 157 applies
        under other accounting pronouncements that require or permit fair value
        measurements and accordingly, does not require any new fair value measurements.
        SFAS 157 is effective for financial statements issued for fiscal years
        beginning after November 15, 2007. The Company is currently in the process
        of assessing the impact the adoption of SFAS 157 will have on its financial
        statements.
 
 In
        September 2006, the SEC issued SAB No. 108, *Considering
        the Effects of Prior Year Misstatements when Quantifying Misstatements in
        Current Year Financial Statements* .
        SAB 108
        requires that public companies utilize a "dual-approach" to assessing the
        quantitative effects of financial misstatements. This dual approach includes
        both an income statement focused assessment and a balance sheet focused
        assessment. The guidance in SAB 108 must be applied to annual financial
        statements for fiscal years ending after November 15, 2006. Management believes
        the adoption of this pronouncement will not have a material impact on the
        Company's consolidated financial statements.
  F-9
 *Table
              of Contents*
 
 **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **NOTE
                  2.**
              **PROPERTY,
                  PLANT & EQUIPMENT**
 
 At
        August
        31, 2006 and 2005 property, plant and equipment consists of the
        following:
 
 **2006**
              
              **2005**Land
                  and water rights under capital lease
              
              $
              1,287,853
              
              $
              1,287,853Equipment
                  under capital lease
              
              
              506,555
              
              
              506,555Water
                  treatment system
              
              
              469,218
              
              
              -Locomotive
                  under capital lease
              
              
              53,661
              
              
              53,661Building
                  under capital lease
              
              
              1,502,495
              
              
              1,502,495Furniture
                  and equipment
              
              
              75,850
              
              
              1,215Computer
              
              
              67,524
              
              
              -Software
              
              
              3,275
              
              
              -3,966,431
              
              
              3,351,779Less:
                  accumulated depreciation
              
              
              (197,539
              )
              
              (14,345
              )Net
                  property, plant and equipment
              
              $
              3,768,892
              
              $
              3,337,434
 
 Depreciation
        expense was $183,194 for the year ended August 31, 2006 (2005 -
        $14,345).
 
 **NOTE
                  3.**
              **RELATED
                  PARTY TRANSACTIONS**
 
 The
        advances from shareholders of the Company, to facilitate the payment of debts,
        are non-interest bearing, unsecured and have no specific terms of repayment.
  Since
        its
        inception,, the Company's directors and shareholders have devoted time to
        the
        development of the Company. Compensation expense totaling $120,000 has been
        recorded for the year ended August 31, 2006, and $170,000 has been recorded
        since inception. These directors and shareholders have waived reimbursement
        and
        have considered these services as a contribution to capital. Accordingly,
        the
        contributions have been recorded as additional paid-in capital.
 
 **NOTE
                  4.**
              **OBLIGATION
                  UNDER CAPITAL LEASE**
 
 The
        Company leases land, building and equipment under a capital lease which contains
        a bargain purchase option which the Company intends to exercise on or before
        its
        expiration on August 1, 2009. The asset and liability under the capital lease
        are recorded at the present value of the minimum lease payments and purchase
        option price. The assets are depreciated over their useful lives as described
        in
        Note 1. Depreciation of the assets under the capital lease is included in
        depreciation expense for 2006.
 
 Future
        minimum lease payments under capital leases as of August 31, 2006 for each
        of
        the next three years and in the aggregate are as follows. Amounts for 2008
        and
        2009 are estimates since the amounts will be determined by the prevailing
        consumer price index at that time:
 
 2007
              
              $
              300,0002008
              
              
              307,0002009,
                  including bargain purchase option
              
              
              4,881,929Total
                  minimum lease payments
              
              
              5,488,929Less:
                  amount representing interest at 19%
              
              
              (1,627,404
              )Total
                  obligations under capital lease
              
              
              3,861,525Less:
                  current installments of obligations under capital lease
              
              
              (171,083
              )Long-term
                  obligation under capital lease
              
              $
              3,690,442
  **NOTE
                  5.**
              **STOCKHOLDERS'
                  DEFICIT**
 
 During
        the year ended August 31, 2001 the Company issued 30,072,000 shares to the
        founders of the corporation for services rendered.
 
 As
        indicated in Note 3, the Company’s directors and shareholders have contributed
        their services to the Company.
 
 The
        Company effected a 3-for-1 stock split in September 2004 of all outstanding
        shares of capital stock. All references to share and per share data have
        been
        retroactively adjusted to reflect the stock split.
 
 **NOTE
                  6.**
              **SUPPLEMENTAL
                  CASH FLOW INFORMATION**
 
 During
        the period ended August 31, 2006 and 2005, interest of $1,577 and $1,098,
        respectively, was paid. No income taxes were paid during either of these
        periods.
  Non
        cash
        financing and investing activities includes the acquisition of property and
        equipment under capital lease in the amount of $3,350,564 during the period
        ended August 31, 2005 and services provided by shareholders in the amount
        of
        $120,000 for the year ended August 31, 2006 (2005 - $50,000).
 
 F-10
 *Table
              of Contents*
 
 **ROYAL
        SPRING WATER INC. (FORMERLY EASY.COM, INC.)**
 **(A
        DEVELOPMENT STAGE COMPANY)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 **NOTE
                  7.**
              **COMMITMENT**
 
 In
        August
        2005, the Company entered into a land, building and equipment lease agreement
        for a facility to be used for production and head office. This four-year
        lease
        commenced August 1, 2005, and is classified as a capital lease as it contains
        a
        bargain purchase option (see note 4). As of August 31, 2006, future obligations
        under the terms of this lease aggregated $5,488,929, including $1,627,404
        in
        interest.
  **NOTE
                  8.**
              **CONTINGENT
                  LIABILITY**
 
 In
        February of 2006, our former Chief Operating Officer filed a complaint against
        the Company, for, among other things, breach of employment agreement. The
        complaint was filed in the Los Angeles Superior Court, Santa Monica Division
        and
        seeks unspecified damages. The Company filed a cross complaint against this
        individual for fraud, misrepresentation and breach of fiduciary duty. We
        recently made an offer of settlement to plaintiff, to which a response has
        not
        been received. The Company is in the process of conducting discovery. We
        do not
        believe that this litigation will be material to our financial position,
        operations, or cash flows. There are no proceedings in which any of our
        directors, officers or affiliates is an adverse party or has a material interest
        adverse to the interest of the Company.
  **NOTE
                  9.**
              **RESTATEMENT
                  OF FINANCIAL STATEMENTS**
 
 The
        Company has restated its financial statements for the period ended August
        31,
        2005 due to an error in the accounting treatment of the business combination
        of
        Easy.com Inc. and Royal Spring Water Inc. Previously the company had accounted
        for this transaction as a common control business combination and had presented
        the combined historical financial statements of both companies. The Company
        subsequently determined that, because the two companies became related through
        a
        transaction in anticipation of the Reverse Merger that accounting for the
        Reverse Merger as a common control transaction was not appropriate. The
        statements have therefore been restated to reflect the transaction as a
        recapitalization of Royal Spring Water Inc. The effect of this correction
        was a
        reduction of additional paid-in capital, cumulative loss and deficit in the
        amount of $14,319. There was no effect on reported assets or
        liabilities.
 
 As
        a
        result of the restatement of the August 31, 2005 consolidated financial
        statements, additional paid-in capital and accumulated deficit balances have
        been reclassified to include the historical financial statements of Royal
        Spring
        Water Inc. since April 20, 2005 (inception). The historical financial statements
        previously reported were those of the combined entities. The restatement
        had no
        effect on the previously reported net loss for the period ended August 31,
        2005.
 
 **NOTE
                  10.**
              **SUBSEQUENT
                  EVENT**
  On
        November 21, 2006, the Company entered into a financing agreement with a
        commercial finance company (“Finance Co.”). Under the terms of the agreement,
        the Company may sell accounts receivable to Finance Co. for a fee ranging
        from
        1.1% to 1.75% of the face value of the accounts sold. Finance Co. will advance
        the Company 80% of the face value of the accounts sold to an aggregate maximum
        of $1 million. The remaining 20% will be held by Finance Co. in a reserve
        account until the account is collected or until the funds mature, which is
        generally within 30 to 90 days. Advances will bear interest at a base index
        rate, as defined in the agreement, plus 2% per annum. The minimum aggregate
        annual borrowing rate on advances shall be 10.25%. Accounts are generally
        to be
        sold without recourse, and Finance Co. will be responsible for collection,
        assumes all credit risk (except where a dispute exists), and obtains rights
        and
        remedies against the Company’s customers. Trade accounts receivable not sold to
        Finance Co. will remain in the custody and control of the Company, and the
        Company will maintain all credit risk and collection responsibility on those
        accounts.
   F-11