---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

Form 10-KSB

(Mark One)

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2007

[ ]TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from
______________to________________

Commission file number 000-52716

ROYALTECH CORP.(Name of
small business issuer in its charter)

|Delaware                                         | 98-0445019                     
|------------------------------------------------ | -------------------------------
|(State or other jurisdiction of incorporation or | (I.R.S. Employer Identification
|organization)                                    | No.)                           
|                                                 |                                
|1855 Talleyrand, Suite 203A, Brossard, QC Canada | J4W 2Y9                        
|(Address of principal executive offices)         | (Zip Code)                     

Issuers telephone number (514) 867-9829

Securities registered under Section 12(b) of the Exchange
Act:

|None                | N/A                                      
|------------------- | -----------------------------------------
|Title of each class | Name of each exchange on which registered

Securities registered under Section 12(g) of the Exchange
Act:

Common Stock, $.0001 par value(Title of
class)

Check whether the issuer is not required to file reports
pursuant to Section 13 or 15(d) of the Exchange Act.[ ]

Note  Checking the box above will not relieve any registrant
required to file reports pursuant to Section 13 or 15(d) of the Exchange Act
from their obligations under those Sections.

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[ ]No[ ]

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
or any amendment to this Form 10-KSB. Yes[ ]No[ ]

---

ii

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

State issuers revenues for its most recent fiscal year.
$Nil

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 January 11, 2008.8,302,425 common shares @ $0.12(1)= $996,291(1) Closing Price paid
by purchasers on January 11, 2008

(ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS)

Check whether the issuer has filed all documents and reports
required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. Yes[ ]No[
]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

State the number of shares outstanding of each of the issuers
classes of common equity, as of the latest practicable date. 17,252,425
common shares as of January 11, 2008

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference,
briefly describe them and identify the part of the Form 10-KSB (e.g., Part I,
Part II, etc.) into which the document is incorporated: (1) any annual report to
security holders; (2) any proxy or information statement; and (3) any prospectus
filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (Securities
Act). The listed documents should be clearly described for identification
purposes (e.g., annual report to security holders for fiscal year ended December
24, 1990). N/A

Transitional Small Business Disclosure Format (Check one): Yes[
] No[X]

---

ANNUAL REPORT ON FORM 10-KSB FOR THE YEAR ENDED SEPTEMBER
30, 2007

TABLE OF CONTENTS

|                                                                                                                                | Page
|------------------------------------------------------------------------------------------------------------------------------- | ----
|Part
      I                                                                                                                    | 5   
|ITEM
      1. DESCRIPTION OF BUSINESS                                                                                           | 5   
|Product
      Overview                                                                                                          | 6   
|Compliance
      with Government Regulation                                                                                     | 7   
|Research
      and Development Expenditures                                                                                     | 7   
|Employees                                                                                                                       | 7   
|Subsidiaries                                                                                                                    | 7   
|Intellectual
      Property                                                                                                     | 8   
|ITEM
      2. DESCRIPTION OF PROPERTY.                                                                                          | 8   
|Executive
      Offices                                                                                                         | 8   
|ITEM
      3. LEGAL PROCEEDINGS.                                                                                                | 8   
|ITEM
      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                                                              | 8   
|Part
      II                                                                                                                   | 8   
|ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
      MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES | 8   
|Market
      for Securities                                                                                                     | 8   
|Holders
      of our Common Stock                                                                                               | 9   
|Dividend
      Policy                                                                                                           | 9   
|Recent
      Sales of Unregistered Securities                                                                                   | 9   
|ITEM
      6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION                                                         | 9   
|Plan
      of Operation                                                                                                         | 9   
|Cash
      Requirements                                                                                                         | 10  
|RESULTS
      OF OPERATIONS                                                                                                     | 10  
|Liquidity
      and Financial Condition                                                                                         | 11  
|Off-Balance
      Sheet Arrangements                                                                                            | 11  
|RISK
      FACTORS                                                                                                              | 12  
|Risks
      Relating to Our Business                                                                                            | 12  
|Risks
      Related to our Company                                                                                              | 13  
|Risks
      Relating to the Peoples Republic of China                                                                          | 17  
|Risks
      Related to Our Common Stock                                                                                         | 19  

---

- 4 

|ITEM 7. FINANCIAL STATEMENTS.                                                                                                                                   | 22
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | --
|ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
        ACCOUNTING AND FINANCIAL DISCLOSURE.                                                           | 23
|Item 8A. Controls and Procedures                                                                                                                                | 23
|Item 8B. Other Information.                                                                                                                                     | 23
|PART III                                                                                                                                                        | 23
|ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS , CONTROL
        PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE
        EXCHANGE ACT. | 23
|Directors and Executive Officers, Promoters and Control
        Persons                                                                                         | 23
|Compliance with Section 16(a) of the Securities Exchange
        Act of 1934                                                                                    | 26
|ITEM 10. EXECUTIVE COMPENSATION.                                                                                                                                | 26
|ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
        AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS                                                 | 28
|Securities Authorized for Issuance Under Equity Compensation
        Plans                                                                                      | 29
|Equity Compensation Plan Information as at September 30,
        2007                                                                                           | 29
|ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
        AND DIRECTOR INDEPENDENCE.                                                                     | 29
|Director Independence                                                                                                                                           | 29
|ITEM 13. EXHIBITS                                                                                                                                               | 29
|Audit Fees                                                                                                                                                      | 30
|SIGNATURES                                                                                                                                                      | 32

---

- 5 

PART I

ITEM 1. DESCRIPTION OF BUSINESS

Forward Looking Statements.

This report contains certain forward-looking statements that
involve risks and uncertainties relating to, among other things, our future
financial performance or future events. Forward-looking statements give
managements current expectations, plans, objectives, assumptions or forecasts
of future events. All statements other than statements of current or historical
fact contained in this Form 10-KSB, including statements regarding our future
financial position, business strategy, budgets, projected costs and plans and
objectives of management for future operations, are forward-looking statements.
In some cases, you can identify forward-looking statements by terminology such
as anticipate, estimate, plans, potential, projects, ongoing,
expects, management believes, we believe, we intend, and similar
expressions. These statements involve known and unknown risks, estimates,
assumptions and uncertainties that could cause actual results to differ
materially from the results set forth in this Form 10-KSB. You should not place
undue reliance on these forward-looking statements. You should be aware that our
actual results could differ materially from those contained in the
forward-looking statements due to a number of factors such as:

- limited operating history
- lack of product revenues
- limited marketing experience to develop customers
- ability to raise additional financing
- ability to generate positive cash flow
- uncertainty in regulatory and legal environment in China
- dependence on key personnel
- competitive factor; and
- general economic conditions.

These factors should be considered carefully and readers are
cautioned not to place undue reliance on such forward looking statements. These
forward-looking statements speak only as of the date on which they are made, and
except to the extent required by federal securities laws, we undertake no
obligation to update any forward-looking statements to reflect events or
circumstances after the date on which the statement is made or to reflect the
occurrence of unanticipated events. In addition, we cannot assess the impact of
each factor on our business or the extent to which any factor, or combination of
factors, may cause actual results to differ materially from those contained in
any forward-looking statements

As used in this annual report, the terms we, us, our
company, and Royaltech means Royaltech Corp. and its subsidiaries unless
otherwise indicated. All dollar amounts in this annual report are expressed in
US dollars unless otherwise indicated.

Introduction

We are a Delaware Corporation established to capitalize on the
emerging biomedical industry in the Peoples Republic of China by developing
clinical diagnostic techniques/kits for application in the diagnosis of common
diseases such hepatocarcinoma, gastrocarcinoma, diabetes and hepatobiliary
disorders.

---

- 6 

Corporate History

We were incorporated in the State of Delaware on April 13,
2004. Royaltech is based in Montreal, QC, Canada and our principal business is
the developing, manufacturing and marketing of innovative biotech products that
are applied in medical diagnosis. We have obtained the rights to manufacture and
distribute several proprietary product lines of clinical diagnostic
techniques/kits for hepatocacinoma, diabetes, gastrocacinoma and hepatobliary
disorders. Our company is in the development stage with management devoting most
of its activities to developing a market for our products and services. We have
not manufactured or distributed any of the proprietary products we intend to
market.

Product Overview

We have obtained the non-exclusive right to manufacture and
market four clinical diagnostic techniques/kits which were developed by Mr. Kang
Zhang after years of research and development. These techniques/kits have been
approved by the Chinese government after a series of clinical testing and meet
the regulations of various Chinese State agencies. We also have the first right
to manufacture and market any future products that are currently under
development. We have not manufactured or marketed these products. We anticipate
that all of our products may become available for sale in the fiscal year ending
December 31, 2008.

We have entered into a licensing agreement with Mr. Kang Zhang
pursuant to which we have a license to distribute, promote, market and sell the
clinical diagnostic technique/kits in exchange for a fee of 12.5% of the factory
unit price on the kits produced. Mr. Zhang has previously licensed the right of
manufacture and marketing of the four kits to a small private biotech firm in
Zhejiang, China. Currently, the clinical diagnostic kits are manufactured and
marketed in two regions in China.

The following is a brief description of the four proprietary
clinical diagnostic techniques/kits:

|Clinical   |                                                                                                                                                                                                                                                                                                                           
|---------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Diagnostic |                                                                                                                                                                                                                                                                                                                           
|Kit        | Application                                                                                                                                                                                                                                                                                                               
|           |                                                                                                                                                                                                                                                                                                                           
|AFU        | Developed under a Chinese patent in 2001, the AFU
      Clinical Diagnostic Kit is complimentary to the AFP in the diagnosis of
      Primary hepatocellular carcinoma. It also differentiates primary
      hepatocellular carcinoma with acute chronic hepatitis and cirrhosis.                                         
|           |                                                                                                                                                                                                                                                                                                                           
|1,5-AG     | Developed in 2003, the 1,5-AG Clinical Diagnostic Kit
      monitors diabetic management and glucose excursion and as an indicator for
      diabetic kidney complications and liver cirrhotic kidney problems. It is
      highly sensitive and we believe it has the potential to become an
      automatic lab routine.
|           |                                                                                                                                                                                                                                                                                                                           
|Bc-True   | The Bc-True Clinical Diagnostic Kit was developed 2003 as
      an early, sensitive indicator of conjugated bilirubin in impaired
      hepatobiliary excretion which reflects the true value of Bc.                                                                                                                      
|           |                                                                                                                                                                                                                                                                                                                           
|GPDA       | The GPDA Clinical Diagnostic Kit, which was developed
      under a Chinese Patent in 2001, assists in the diagnosis of PHC/MHC and
      gastric cancer.                                                                                                                                                                 

---

- 7 

Compliance with Government Regulation

The manufacture and sale of biomedical products, including our
clinical diagnostic techniques/kits, in China are subject to regulations of
several government ministries and state agencies including the State Food and
Drug Administration, the Ministry of Public Health, State Administration of
Traditional Medicine, and China Healthcare Science and Technology Society.
Currently, our four clinical diagnostic techniques/kits are approved for
manufacture and sale in China by these Chinese agencies and the kits are
currently manufactured by a small private biotech firm for market in two regions
in China. Our business strategy is to license or form joint ventures with other
local companies to manufacture and market these diagnostic kits. Under such
joint ventures, we will ask the local company partner to apply for approval for
manufacture and sale of our products in China.

Our future expansion into new markets, if any, will be subject
to the regulatory regimes specific to such other jurisdictions. For instance,
the research and development, manufacture, marketing and sales of biomedical
products are subject to the regulations of the Food and Drug Administration in
the United States, Health Canada in Canada, and various national, state, and
provincial authorities in various jurisdictions. In North America, compliance
with the standards of current Good Manufacture Practice, Good Laboratory
Practice and Good Clinical Practice are important prerequisites.

To comply with the regulations, we may face a variety of
regulatory difficulties that may add extra financial burden. We are aware of
those regulations and has expert in the management team to deal with such issues
in due time.

Research and Development Expenditures

Mr. Zhang is currently conducting research on these diagnostic
  kits and techniques in order to improve the clinical diagnostic techniques/kits.
  The improvements are aimed at enhancing the current sensitivity and specificity
  and will make the techniques/kits easier to use for consumers, particularly
  for in-home use. Mr. Zhang is also developing improved diagnostic kits for use
  in hospital and clinical practices. We support Mr. Zhang and his technical and
  scientific connections with Canada (e.g., McGill University, to which some of
  our scientific directors are also associated with) and the biotech advantages
  available in Montreal. We are also taking part in technology design and material
  supply in order to find the best experimental equipment, material and bio-reagents
  (at the minimal requirements of cost, time and labour) needed for Mr. Zhangs
  research and development work.

Employees

As of September 30, 2007, we have no full time employees. Our
directors and officers handle all of the responsibilities in the area of
corporate administration, business development and research.

We expect that we may need to add two to three new
administrative employees within the next three to six months, and we expect this
to increase the amount of money our company spends on salaries. We are also
presently searching to contract for technical consulting services and technical
support with and from McGill University and various biotechnology firms located
in Montreal.

Subsidiaries

None.

---

- 8 

Intellectual Property

Mr. Zhang has been granted patents for two of the four clinical
diagnostic kits. Neither our company nor Mr. Zhang holds a patent for the other
two clinical diagnostic kits. We are not currently considering applying for
patents for the two techniques and clinical diagnostic kits. We instead want to
maintain our proprietary technology and formulas and protect public disclosure
that would be detrimental to our business.

Currently, only Mr. Zhang and our technical executives have the
knowledge of such proprietary techniques and formulas from which our clinical
diagnostic kits are made. We support Mr. Zhang in undertaking improvements of
our current kits, and his ongoing work in the research and development pipeline.
We anticipate being able to commercialize Mr. Zhangs efforts over the ensuing
two to three years.

ITEM 2. DESCRIPTION OF PROPERTY.

Executive Offices

Our executive and head offices are located at 1855 Talleyrand,
  Suite 203A, Brossard, Quebec, Canada. The offices are provided to us at no charge
  by Mr. Chenxi Shi. We also have a main business address at 201 Terry Fox, Verdun,
  Quebec, Canada. These 500 square foot premises are provided to us at a cost
  of CDN $1,100 per month, with the term expiring on August 31, 2006. The lease
  was not renewed, but we will remain in the premises without charge for the time
  being. We believe our current premises are adequate for our current operations
  and we do not anticipate that we will require any additional premises in the
  foreseeable future

ITEM 3. LEGAL PROCEEDINGS.

We know of no material, existing or pending legal proceedings
against our company, nor are we involved as a plaintiff in any material
proceeding or pending litigation. There are no proceedings in which any of our
directors, officers or affiliates, or any registered or beneficial shareholder,
is an adverse party or has a material interest adverse to our interest.

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

None

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES.

Market for Securities

Our common shares are approved for quotation on the OTC
Bulletin Board under the symbol RYTE. Our CUSIP number is 780766 10 4. The
transfer agent and registrar for our common stock is Intercontinental Registrar
& Transfer Agency Inc. of Boulder City, Nevada, located at Suite 1, 900
Buchanan Blvd, Boulder City, Nevada 89005, telephone: 702.293.6717.

Our common stock recently received approval on June 21, 2007 to
be quoted on the National Association of Securities Dealers Inc.s OTC Bulletin
Board with the symbol of RYTE. The following table

---

- 9 

reflects the high and low bid information for our common stock
for each fiscal quarter during the fiscal year ended September 30, 2007. The bid
information was obtained from the OTC Bulletin Board and reflects inter-dealer
prices, without retail mark-up, markdown or commission, and may not necessarily
represent actual transactions.

Quarter Ended
    Bid High*
    Bid Low*June 30, 2007
    <>
    <>September 30, 2007
    0.51
    0.06


Holders of our Common Stock

As of January 14, 2008, there were 102 registered stockholders
holding 17,252,425 shares of our issued and outstanding common stock.

Dividend Policy

During the year ended September 30, 2007, we did not pay any
cash dividends to any holders of our equity securities. We have not paid any
cash dividends on our common stock and have no present intention of paying any
dividends on the shares of our common stock. Our current policy is to retain
earnings, if any, for use in our operations and in the development of our
business. Our future dividend policy will be determined from time to time by our
board of directors.

Recent Sales of Unregistered Securities

Since our last quarter ended September 30, 2007, we have
completed the following unregistered sales of our securities:

|1. | On September 30, 2007, we issued an aggregate of
      2,228,625 shares of our common stock to 33 individuals, in exchange for an
      aggregate of 2,971,500 shares of common stock in Ville Mobile Technologies
      Corp., a company incorporated under the laws of Delaware. The 2,971,500
      shares of common stock in Ville Mobile Technologies Corp. we acquired
      represent 16.53% of the issued and outstanding shares of Ville Mobile
      Technologies Corp. We issued 2,228,625 shares of our common stock to 33
      non-U.S. persons (as that term is defined in Regulation S of the
      Securities Act of 1933), in an offshore transaction relying on Regulation
      S and/or Section 4(2) of the Securities Act of
1933.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION.

Plan of Operation

From the date of our incorporation on April 13, 2004 to
September 30, 2007, we have been a development stage company that has not
generated any revenues. We anticipate that we may generate revenue from
operations by the end of 2007.

Our operating expenses are classified primarily into three
major categories:

- professional fees, consists primarily of legal fees and accounting
  and auditing fees for the year end audit;
- management/consulting fees, consist primarily of fees paid by us to
  Aventech Capital Inc., a company controlled by Chenxi Shi, our President and
  director; and

---

- 10 

- rent, general and administrative, consist primarily of the expenses
  incurred for rent and other administrative expenses.

With the filing of our Amended Form SB-2 on July 14, 2006 which
became effective on November 3, 2006, we are taking the initial steps in going
public and accessing the public markets. We are doing this both from an
investor relations standpoint, so that our shareholders may have some liquidity
in their investment in the event that a public market develops for our
securities; and from a desire to make our company more readily able to attract
future financing. We received approval for our common stock to be quoted on the
National Association of Securities Dealers Inc.s OTC Bulletin Board on June 29,
2007 with the symbol of RYTE.

On a going-forward basis, we anticipate that our annual legal
and accounting/audit expenses as a result of going public will be
approximately $70,000 annually, which will primarily consist of the costs
associated with our continuous disclosure and financial reporting
obligations.

Cash Requirements

Our estimated expenses for the next 12 months are as follows:

|Expense                    |   | Cost              | 
|-------------------------- | - | ----------------- | 
|Marketing                  | $ | 100,000  200,000 | 
|General and Administrative | $ | 75,000  100,000  | 
|Research and Development   | $ | 20,000  50,000   | 
|Working Capital            | $ | 50,000  50,000   | 
|                           |   |                   | 
|Total                      | $ | 245,000  400,000 | 

We recorded a net loss of $98,996 for the year ended September
  30, 2007 and have an accumulated deficit of $316,746 since inception. As at
  the date of this Annual Report we had cash of approximately $42,507 and for
  the next 12 months, management anticipates that the minimum cash requirements
  to fund our proposed exploration program and our continued operations will be
  $400,000. Accordingly we do not have sufficient funds to meet our planned expenditures
  over the next 12 months and will need to obtain further financing to fund our
  operations. See Future Financings, below.

RESULTS OF OPERATIONS

Summary of Year End Results

|         |   | Year Ended September 30 |  
|-------- | - | ----------------------- | -
|         |   |                         |  
|         |   | 2007                    |  
|         |   |                         |  
|Revenue  | $ | Nil                     |  
|Expenses |   | 70,441                  |  
|Net Loss | $ | (98,996                 | )

RevenueWe are a development stage company that from
inception to September 30, 2007 has not generated any revenue.

Expenses

The major components of our expenses for the year are outlined
in the table below:

---

- 11 

|                           |   | Year Ended September 30 | 
|-------------------------- | - | ----------------------- | 
|                           |   |                         | 
|                           |   | 2007                    | 
|                           |   |                         | 
|Consulting                 | $ | 15,000                  | 
|Donated services           |   | 15,000                  | 
|General and administrative |   | 3,687                   | 
|Professional fees          |   | 37,519                  | 
|Rent                       |   | 3,000                   | 
|Total Expenses             | $ | 70,411                  | 

We incurred a net loss of $98,996 for the 12-month period ended
September 30, 2007, compared to a net loss of $87,623 for the 12-month period
ended September 30, 2006. The decrease in the loss was primarily a result of
reductions in our rent expenses and professional fees.

Liquidity and Financial Condition

Working Capital

|                                  |   |                       |  |  |                       |  |  | Percentage            |  
|--------------------------------- | - | --------------------- |  |  | --------------------- |  |  | --------------------- | -
|                                  |   | At September 30, 2007 |  |  | At September 30, 2006 |  |  | Increase / (Decrease) |  
|Current Assets                    | $ | 44,297                |  |  | 84,441                |  |  | (47.54%               | )
|Current Liabilities               |   | 8,032                 |  |  | 5,726                 |  |  | 40.27%                |  
|Working Capital Surplus (Deficit) | $ | 36,265                |  |  | 78,715                |  |  | (53.93%               | )

As at September 30, 2007, we had working capital of $58,560
compared to working capital of $78,715 as of September 30, 2006. We did not
generate any revenue in the 12-month period ended September 30, 2007 and we have
not generated any revenue since inception to September 30, 2007. We do not
expect to purchase or sell any significant equipment. We do not expect any
significant changes in the number of our employees.

Some of our expenses are denominated in the Chinese Renminbi.
The value of the Renminbi fluctuates and is subject to changes in value caused
by changes in the Peoples Republic of Chinas political and economic
conditions. Since 1994, the conversion of Renminbi into foreign currencies,
including United States dollars, has been based on rates set by the Peoples
Bank of China, which are set daily based upon the previous days interbank
foreign exchange market rates and current exchange rates on the world financial
markets. Since July 2005, the conversion of Renminbi to foreign currencies,
including the U.S. dollar, has been pegged against the inter-bank exchange rates
or current market rate of a basket of foreign currencies including the United
States dollars. As of September 30, 2007, the exchange rate between the Renminbi
and the United States dollar was approximately $0.1334 United States dollars to
every one Renminbi.

There is no assurance that exchange rates between the Renminbi
and the U.S. dollar will remain stable. A devaluation of the Renminbi relative
to the U.S. dollar could adversely affect our business, financial condition and
results of operations. We do not engage in currency hedging. Inflation has not
had a material impact on our business.

Off-Balance Sheet Arrangements

Our company has no outstanding derivative financial
instruments, off-balance sheet guarantees, interest rate swap transactions or
foreign currency contracts. We do not engages in trading activities involving
non-exchange traded contracts.

---

- 12 

RISK FACTORS

Our common shares are considered speculative during the
development of our new business operations. Prospective investors should
consider carefully the risk factors set out below.

Risks Relating to Our Business

Because we plan to market our products mainly in China, our
success depends upon the development of Chinas biomedical industry.

China is currently the worlds most populous country and one of
the largest producers and consumers of biomedical products. The industry has
been under tight state and provincial government controls until recent years.
Although China hopes to further increase biomedical industry development and
production, industry research, development and production are stagnating, due
mainly to immature regulatory policies, local protection, and a shortage of
state and provincial funding. Despite the Chinese governments continued
emphasis on industry self-sufficiency, the industry continues to be impeded by
inadequate research and development facilities, a lack of innovative product
lines due to long history of practice of free-copying of foreign intellectual
properties and a lack of financial and political incentives to attract talented
persons into the industry. Since we will rely on the local facilities and our
subsidiary to manufacture and market our diagnostic test kits, and since our
potential customer are mainly hospitals and clinics, which are largely state
owned, our ability to increase sales and revenues may be delayed and hindered by
any of these factors.

We face competition from larger and stronger companies that
have the resources and/or technological know how to utilize our techniques/kits
and undercut our prices.

The Chinese markets in which we plan to market our products are
intensely competitive. We anticipate additional competition to come from the
increasing number of new market entrants who have developed, or are developing
potentially, competitive products. We anticipate that we will face increasing
competition from numerous sources, including, large state owned companies and
other entities with the technical capabilities and expertise, which would
encourage them to develop and commercialize competitive products.

Similar products to our AFU Clinical Diagnostic Kit and our
GPDA Clinical Diagnostic Kit are currently being sold and used as routine
diagnostic tests nationwide in China. There are several biotech firms and drug
manufacturers producing similar products, including Quark Biotech Ltd, Shanghai
Wantai Biopharmaceuticals, Zhongshan Biotech and major multinational
pharmaceutical firms such as Abbott Labs, Bayer, Biosystems, Ortho Clinical
Diagnostics and Johnson & Johnson. Among these competitors, only Quark
Biotech Ltd. is producing the same products as ours and is directly in
competition with our diagnostic test kits. However, Quark is currently only
operating in Shanghai and Zhejiang Province in China, covering approximately 5%
of the population of China.

We are not aware of any similar products currently on the
market which compete directly with our 1,5-AG and Bc-True Clinical Diagnostic
Kit, although several new companies are developing technologies aimed at the
same market niche as the 1,5-AG Clinical Diagnostic Kit and the Bc-True
Clinical Diagnostic Kit. We may have other competitors to the 1,5-AG and
Bc-True Clinical Diagnostic Kit that we are presently unaware.

Our potential competitors may succeed in developing products
that are more effective or less costly (or both) than our products, and such
competitors may also prove to be more successful than us in manufacturing,
marketing and sales. Some of our potential competitors may be large,
well-financed and

---

- 13 

established companies that have greater resources and,
therefore, may be better able than us to compete for a share of the market even
in areas in which we may have superior technology.

Some of our competitors have certain advantages including,
substantially greater financial, technical and marketing resources, greater name
recognition, and more established relationships in China.

Our competitors may be able to utilize these advantages to
expand their product offerings more quickly, adapt to new or emerging
technologies and changes in customer requirements more quickly, take advantage
of acquisitions and other financing opportunities more readily, and devote
greater resources to the marketing and sale of their products.

The markets for our proposed products are characterized by
changing technology in laboratory diagnosis, and awareness of new medical
development associated to the disease diagnosis. Accordingly, our ability to
compete will depend upon our ability to continually enhance and improve our
products, and to increase the awareness of the newly developed and reported
techniques that our clinical diagnostic kits are based on. There can be no
assurance that we will be able to compete successfully, that competitors will
not develop products that render our products obsolete or less marketable or
that we will be able to successfully enhance its products or develop new
products.

Risks Related to our Company

We have only commenced our business operations in April,
2004 and we have a limited operating history. If we cannot successfully manage
the risks normally faced by start-up companies, we may not achieve profitable
operations and ultimately our business may fail.

We have a limited operating history. We currently anticipate
that we may introduce our first four products to the Chinese marketplace in the
fiscal year ending December 31, 2008. Accordingly, we have a very limited
operating history and we face all of the risks and uncertainties encountered by
such early development-stage companies. Therefore, our prospects must be
considered in light of the risks, expenses and difficulties associated with any
start-up company. Due to our limited history, predictions of our future
performance are very difficult.

As at September 30, 2007, we had an accumulated net loss of
$316,746 since inception. We anticipate incurring further significant losses
until, at the earliest, we generate sufficient revenues to offset the
substantial up-front expenditures and operating costs associated with developing
and commercializing products utilizing our technology. There can be no assurance
that we will ever operate profitably.

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on the annual financial
statements for the year ended September 30, 2007, our independent auditors
included an explanatory paragraph regarding substantial doubt about our ability
to continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that lead to this disclosure by our
independent auditors.

Our business plan involves that we will not only offer products
for sale, but also supply customers with updated technology that will be
incorporated into the improvement of the clinical diagnostic techniques/kits.
This approach will rely substantially on our ability to keep up with the rapid
advances in the technology related to our products and to us any technology
improvements to improve our products. There can be no assurance that our
strategy will result in successful product commercialization or that our efforts
will result in initial or continued market acceptance for our proposed products
and services.

---

- 14 

Our independent auditors have expressed substantial doubt
about our ability to continue as a going concern, which may hinder our ability
to obtain future financing.

In their report dated January 9, 2007, our independent auditors
stated that our financial statements for the year ended September 30, 2007 were
prepared assuming that we would continue as a going concern. Our ability to
continue as a going concern is an issue raised as a result of recurring losses
from operations. We continue to experience net operating losses. Our ability to
continue as a going concern is subject to our ability to obtain necessary
funding from outside sources, including obtaining additional funding from the
sale of our securities. Our continued net operating losses increases the
difficulty in meeting such goals and there can be no assurances that such
methods will prove successful.

Our future is dependent upon our ability to obtain
financing. If we do not obtain such financing, we may have to cease our
operations activities and investors could lose their entire investment.

There is no assurance that we will operate profitably or will
generate positive cash flow in the future. We believe that we will require
additional financing in order to proceed beyond the first three months of our
business plan and to pay the fees and expenses necessary to become and operate
as a public company. Although we plan to obtain additional financing, we
currently do not have any arrangements for further financing. We may not be able
to obtain additional equity or debt financing on acceptable terms when we need
it. Even if financing is available it may not be available on terms that are
favorable to us or in sufficient amounts to satisfy our requirements. Our future
is dependent upon our ability to obtain financing. If we do not obtain such
financing, our business could fail and investors could lose their entire
investment.

We have no customers and generate no revenues and have only
limited marketing experience to develop customers.

We have not entered into any agreements to sell our products to
any customers, as yet. We do not believe that we will generate significant
revenues in the immediate future. We will not generate any meaningful revenues
unless we obtain contracts with a significant number of distributors or general
hospitals/clinics as one of the major buyers. There can be no assurance that we
will ever be able to obtain contracts with a significant number of customers to
generate meaningful revenues or achieve profitable operations.

We have only limited experience in developing and
commercializing new products based on innovative biomedical technologies, and
there is limited information available concerning the potential performance or
market acceptance of our proposed products in China. There can be no assurance
that unanticipated expenses, problems or technical difficulties will not occur
which would result in material delays in commercialization of our products or
that our efforts will result in successful commercialization.

We need substantial additional financing and a failure to
obtain such required financing will inhibit our ability to grow or we may have
to curtail or cease operations.

Our capital requirements relating to the manufacture and sale
of our products have been, and will continue to be, significant. We are
dependent on the proceeds of future financing in order to continue in business
and to develop and commercialize additional products. We anticipate requiring
approximately $1,000,000 to $2,000,000 in additional financing for our longer
term growth. There can be no assurance that we will be able to raise the
substantial additional capital resources necessary to permit us to pursue our
business plan. We have no current arrangements with respect to, or sources of,
additional financing and there can be no assurance that any such financing will
be available to us on commercially reasonable terms, or at all. Any inability to
obtain additional financing will have a material adverse effect on us, such as
requiring us to significantly curtail or cease operations. In that case, you may
lose your entire investment.

---

- 15 

The continued growth of our business will require additional
funding from time to time which would be used for general corporate purposes.
General corporate purposes may include acquisitions, investments, repayment of
debt, capital expenditures, repurchase of our capital stock and any other
purposes that we may specify in any prospectus supplement. Obtaining additional
funding would be subject to a number of factors including market conditions,
operational performance and investor sentiment. These factors may make the
timing, amount, terms and conditions of additional funding unattractive, or
unavailable, to us.

The terms of any future financing may adversely affect your
interest as stockholders.

If we require additional financing in the future, we may be
required to incur indebtedness or issue equity securities, the terms of which
may adversely affect your interests in the Company. For example, the issuance of
additional indebtedness may be senior in right of payment to your shares upon
our liquidation. In addition, indebtedness may be under terms that make the
operation of our business more difficult because the lenders consent will be
required before we take certain actions. Similarly the terms of any equity
securities we issue may be senior in right of payment of dividends to your
common stock and may contain superior rights and other rights as compared to
your common stock. Further, any such issuance of equity securities may dilute
your interest in our company, which may reduce the value of your investment.

We could lose our competitive advantages if we are not able
to protect any proprietary technology and intellectual property rights against
infringement, and any related litigation could be time-consuming and
costly.

Our success and ability to compete depends to a significant
degree on our proprietary technology incorporated in our clinical diagnostic
techniques/kits. We have not taken any action to protect some of our proprietary
technology. If any of our competitors copy or otherwise gain access to our
proprietary technology or develop similar technologies independently, our
ability to compete with these companies may be impaired.

We may be not be able protect our proprietary rights thus
permitting our competitors to duplicate our products and services, and such a
state of affairs could negatively impact our business and operations. If we are
unable to license any technology or products that we may need in the future, our
business and operations may also be materially and adversely impacted.

We may face regulatory difficulties for our
products.

The manufacture and sale of biomedical products, including
clinical diagnostic techniques/kits, in China are subject to regulation by
several government ministries and state agencies including the State Food and
Drug Administration, Ministry of Public Health, State Administration of
Traditional Medicine and China Healthcare Science and Technology Society.
Bureaucratic corruption existing in China may have adverse effects on our
operations and financial condition.

Although we have obtained the right by way of license to
manufacture and market the four clinical diagnostic techniques/test kits from
the inventor, Mr. Zhang, we have not yet obtained the required regulatory
authorization to manufacture and sell these products. Before we can commence
manufacturing, marketing and selling our products, we must obtain authorization
from various Chinese authorities (Ministry of Public Health, State Food and Drug
Administration and the provincial branches of the two ministries) or joint
venture with a local Chinese firm that can help us obtain such authorization
from the Chinese regulators. As of the date hereof, we do not have a timetable
for obtaining such regulatory approval to manufacture and market our products.

---

- 16 

We have not employed anyone in China as of yet to obtain these
regulatory approvals on behalf of our company.

The legal environment in China remains uncertain and our
industry may be vulnerable to local government agencies that have ongoing
bureaucratic control thereover.

Our Certificate of Incorporation and Bylaws contain
limitations on the liability of our directors and officers, which may discourage
suits against directors and executive officers for breaches of fiduciary
duties.

Our Certificate of Incorporation, as amended, and our Bylaws
contain provisions limiting the liability of our directors for monetary damages
to the fullest extent permissible under Delaware law. This is intended to
eliminate the personal liability of a director for monetary damages on an action
for breach of a directors duties to our company or by our stockholders (except
in certain limited circumstances). In addition, our Certificate of
Incorporation, as amended, and our Bylaws contain provisions requiring us to
indemnify our directors, officers, employees and agents serving at our request,
against expenses, judgments (including derivative actions), fines and amounts
paid in settlement. This indemnification is limited to actions taken in good
faith in the reasonable belief that the conduct was lawful and in, or not
opposed to our best interests. The Certificate of Incorporation and the Bylaws
provide for the indemnification of directors and officers in connection with
civil, criminal, administrative or investigative proceedings when acting in
their capacities as agents for us. These provisions may reduce the likelihood of
derivative litigation against directors and executive officers and may
discourage or deter stockholders or management from suing directors or executive
officers for breaches of their fiduciary duties, even though such an action, if
successful, might otherwise benefit our stockholders and directors and
officers.

Our success depends on our management team and other key
personnel, the loss of any of whom could disrupt our business
operations.

Our future success will depend in substantial part on the
continual services of our senior management. As an early stage development
company, currently none of our senior management team receives any monetary
remuneration from our company. We do not carry key person life insurance on any
of our officers or employees. The loss of the services of one or more of our key
personnel could impede implementation of our business plan and result in reduced
profitability.

Our future success also depends on our continuing ability to
attract, retain and motivate highly qualified technical sales and marketing
customer support. Because of the rapid growth of the Chinese economy,
competition for qualified personnel is intense. We cannot guarantee that we will
be able to retain our key personnel or that we will be able to attract or retain
qualified personnel in the future. Our inability to hire and retain qualified
personnel or the loss of the services of our key personnel could have a material
adverse effect upon our business, financial condition and operations.

Because our officers, directors and principal shareholders
control a majority of our common stock, investors will have little or no control
over our management or other matters requiring shareholder approval.

Our officers and directors (and their affiliates) and principal
shareholders, in aggregate, beneficially own approximately 57.76% of the issued
and outstanding shares of our common stock. As a result, our officers and
directors have the ability to control matters affecting minority shareholders,
including the election of our directors, the acquisition or disposition of our
assets, and the future issuance of our shares. Because our officers, directors
and principal shareholders control the company, investors will not be able to
replace our management if they disagree with the way our business is being run.
Because control by these

---

- 17 

insiders could result in management making decisions that are
in the best interest of those insiders and not in the best interest of the
investors, you may lose some or all of the value of your investment in our
common stock.

Because we do not have sufficient insurance to cover our
business losses, we might have uninsured losses, increasing the possibility that
you would lose your investment.

We may incur uninsured liabilities and losses as a result of
the conduct of our business. We do not currently maintain any comprehensive
liability or property insurance. Even if we obtain such insurance in the future,
we may not carry sufficient insurance coverage to satisfy potential claims. We
do not carry any business interruption insurance. Should uninsured losses occur,
any purchasers of our common stock could lose their entire investment.

Risks Relating to the Peoples Republic of China

The economic policies of the Peoples Republic of China
could affect our business.

Substantially all of the our assets are located in the Peoples
Republic of China (hereinafter referred to as China) and substantially all of
our revenue will be derived from operations in China. Accordingly, our
operations and future prospects are subject, to a significant extent, to the
economic, political and legal developments in China.

While Chinas economy has experienced significant growth in the
past 20 years, such growth has been uneven, both geographically and across
various sectors of the economy. The Chinese government has implemented various
measures to encourage economic growth and guide the allocation of resources.
Some of these measures may benefit the overall Chinese economy, but such
measures may also have a negative effect on us. For example, operating results
and financial condition may be adversely affected by government control over
capital investments or changes in tax regulations.

The Chinese economy has been transitioning away from a planned
economy to a more market-oriented economy. In recent years, the Chinese
government has implemented measures emphasizing the utilization of market forces
for economic reform and the reduction of state ownership of productive assets,
and the establishment of corporate governance in business enterprises; however,
a substantial portion of productive assets in China are still owned by the
Chinese government. In addition, the Chinese government continues to play a
significant role in regulating industrial development by imposing industrial
policies. It also exercises significant control over Chinas economic growth
through the allocation of resources, the control of payment of foreign
currency-denominated obligations, the setting of monetary policy and the
provision of preferential treatment to particular industries or companies.

Capital outflow policies in China may hamper our ability to
expand our business and/or operations internationally. China has adopted
currency and capital transfer regulations. These regulations may require us to
comply with complex regulations for the movement of capital. Although our
management believes that it is currently in compliance with these regulations,
should these regulations or the interpretation of them by courts or regulatory
agencies change, we may not be able to remit income earned and proceeds received
in connection with any off-shore operations or from other financial or strategic
transactions the Company may consummate in the future.

Fluctuation of the Renminbi could materially affect our
financial condition and results of operations.

Fluctuation of the Renminbi, the Chinese currency, could
materially affect our financial condition and results of operations. The value
of the Renminbi fluctuates and is subject to changes in Chinas political

---

- 18 

and economic conditions. Since July, 2005, exchange of the
Renminbi into foreign currencies, including United States dollars, has been
pegged against the inter-bank foreign exchange market rates or current exchange
rates of a basket of currencies on the world financial markets. At September 30,
2007, the exchange rate between the Renminbi and the United States dollar was
$0.1334 United States dollar to every one Renminbi. There is substantial
pressure on the government of China to appreciate the value of the Renminbi
against the United States dollar. If the Reminbi appreciates against the US
dollar (i.e the amount of Renmimbi required to purchase one US dollar
increases), then repatriation of our earnings, if any, into US dollars will be a
positive addition provide our company with more US currency.

We may face obstacles from the communist system in
China.

Foreign companies conducting operations in China face
significant political, economic and legal risks. The political regime in China,
including its bureaucracy unfamiliar with western forms of business management
and organization, may hinder investment by western originating companies. We may
have difficulty establishing adequate management, legal and financial controls
in the China.

We may have difficulty establishing adequate management,
legal and financial controls in China.

China, historically, has not adopted western style management
and financial reporting concepts and practices nor has it adopted modern
banking, computer and other control system principles. We may have difficulty in
hiring and retaining a sufficient number of qualified local employees to work in
our China operations. As a result of these factors, we may experience difficulty
in establishing management, legal and financial controls, collecting financial
data and preparing financial statements, books of account and corporate records
and instituting business practices that meet western standards.

It will be extremely difficult to acquire jurisdiction and
enforce liability against our officers, directors and assets based in
China.

Because some of our executive officers and current directors,
including, the inventor of our proprietary technology, are Chinese citizens, it
may be difficult, if not impossible, to acquire jurisdiction over these persons
in the event a lawsuit is initiated against us and/or our officers and directors
by a stockholder or group of stockholders in the United States. Also, because
the majority of our assets are located in China, it would also be extremely
difficult to access those assets to satisfy an award entered against us in a
court in the United States.

The Company may not be able to obtain regulatory approvals
for its products.

The manufacture and sale of biopharmaceuticals products in
China is regulated by the federal State Food and Drug Administration and by
local State Food and Drug Administration offices within the appropriate
provincial government. Although our licenses and regulatory filings are current,
such licenses may be vulnerable due to the uncertain legal environment in China
and the biopharmaceutical industry because of local government agencies or other
parties that may try to renegotiate the terms and conditions of, or terminate
their agreements or other understandings with our company.

We may face Political, Judicial and/or Ministerial
Corruption Risk in China.

Another obstacle to foreign investment in China is corruption.
We may face judicial and ministerial corruption in China. There is no assurance
that we will be able to obtain recourse, if desired, through Chinas poorly
developed legal systems. In addition, many of the regulatory and business
authorities with whom we normally conduct our business, are state employees or
affiliated state-enterprise employees.

---

- 19 

These officials may engage in corrupt activities which may
negatively impact our ability to conduct business.

Risks Related to Our Common Stock

There is no active trading market for our common stock and
if a market for our common stock does not develop, our investors will be unable
to sell their shares.

There is currently no active trading market for our common
stock and such a market may not develop or be sustained. Our common stock
recently received approval to be quoted on the National Association of
Securities Dealers Inc.s OTC Bulletin Board with the symbol of RYTE. The OTC
Bulletin Board is not a listing service or exchange, but is instead a dealer
quotation service for subscribing members. Even though our common stock is
quoted on the OTC Bulletin Board, a public market for our common stock may not
develop, then investors will not be able to resell the shares of our common
stock that they have purchased and may lose all of their investment. If we
establish a trading market for our common stock, the market price of our common
stock may be significantly affected by factors such as actual or anticipated
fluctuations in our operation results, general market conditions and other
factors. In addition, the stock market has from time to time experienced
significant price and volume fluctuations that have particularly affected the
market prices for the shares of developmental stage companies. As we are a
development stage company such fluctuations may negatively affect the market
price of our common stock.

Our stock price will likely be volatile.

The trading price for our common stock is likely to be highly
volatile. The market prices for securities of drug delivery, biotechnology and
pharmaceutical companies have historically been highly volatile. Factors that
could adversely affect our stock price include:

- fluctuations in our operating results; announcements of partnerships or
  technological collaborations,
- innovations or new products by us or our competitors;
- changes in government regulations;
- developments in patent or other proprietary rights;
- public concern as to the safety of drugs developed by us or others;
- the results of clinical studies or trials by us, any partners we may have
  or our competitors;
- litigation;
- general stock market and economic conditions;
- number of shares available for trading (float);
- inclusion in or dropping from stock indexes.

Future sales of common stock or warrants, or the prospect of
future sales, may depress our stock price.

Sales of a substantial number of shares of our common stock, or
the perception that sales could occur, could adversely affect the market price
of our common stock.

We do not intend to pay dividends and there will be less
ways in which you can make a gain on any investment in our company.

We have never paid any cash dividends and currently do not
intend to pay any dividends for the foreseeable future. Because we do not intend
to declare dividends, any gain on an investment in our

---

- 20 

company will need to come through appreciation of the price of
our common stock. There can be no assurance that the price of our common stock
will increase.

Trading on the OTC Bulletin Board may be volatile and
sporadic, which could depress the market price of our common stock and make it
difficult for our stockholders to resell their shares.

Our common stock is quoted on the OTC Bulletin Board service of
the Financial Industry Regulatory Authority (FINRA). Trading in stock quoted
on the OTC Bulletin Board is often thin and characterized by wide fluctuations
in trading prices due to many factors that may have little to do with our
operations or business prospects. This volatility could depress the market price
of our common stock for reasons unrelated to operating performance. Moreover,
the OTC Bulletin Board is not a stock exchange, and trading of securities on the
OTC Bulletin Board is often more sporadic than the trading of securities listed
on a quotation system like Nasdaq or a stock exchange like the American Stock
Exchange. Accordingly, our shareholders may have difficulty reselling any of
their shares.

Our stock is a penny stock. Trading of our stock may be
restricted by the SECs penny stock regulations and FINRAs sales practice
requirements, which may limit a stockholders ability to buy and sell our
stock.

Our stock is a penny stock. The Securities and Exchange
Commission has adopted Rule 15g-9 which generally defines 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. Our securities are covered by the penny stock rules, which impose
additional sales practice requirements on broker-dealers who sell to persons
other than established customers and accredited investors. The term
accredited investor refers generally to institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of $1,000,000 or annual
income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock
rules require a broker-dealer, prior to a transaction in a penny stock not
otherwise exempt from the rules, to deliver a standardized risk disclosure
document in a form prepared by the SEC which provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer also must provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction and monthly account statements showing the market
value of each penny stock held in the customers account. The bid and offer
quotations, and the broker-dealer and salesperson compensation information, must
be given to the customer orally or in writing prior to effecting the transaction
and must be given to the customer in writing before or with the customers
confirmation. In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from these rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in the secondary market for the stock
that is subject to these penny stock rules. Consequently, these penny stock
rules may affect the ability of broker-dealers to trade our securities. We
believe that the penny stock rules discourage investor interest in, and limit
the marketability of, our common stock.

Financial Industry Regulatory Authority (FINRA) sales
practice requirements may also limit a stockholders ability to buy and sell our
stock.

In addition to the penny stock rules promulgated by the
Securities and Exchange Commission (see above for a discussion of penny stock
rules), FINRA rules require that in recommending an investment to a customer, a
broker-dealer must have reasonable grounds for believing that the investment is
suitable for that customer. Prior to recommending speculative low priced
securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customers

---

- 21 

financial status, tax status, investment objectives and other
information. Under interpretations of these rules, FINRA believes that there is
a high probability that speculative low priced securities will not be suitable
for at least some customers. FINRA requirements make it more difficult for
broker-dealers to recommend that their customers buy our common stock, which may
limit your ability to buy and sell our stock and have an adverse effect on the
market for our shares.

A decline in the price of our common stock could affect our
ability to raise further working capital, it may adversely impact our ability to
continue operations and we may go out of business.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because we may attempt to acquire a significant
portion of the funds we need in order to conduct our planned operations through
the sale of equity securities, a decline in the price of our common stock could
be detrimental to our liquidity and our operations because the decline may cause
investors to not choose to invest in our stock. If we are unable to raise the
funds we require for all of our planned operations, we may force us to
reallocate funds from other planned uses and may have a significant negative
effect on our business plan and operations, including our ability to develop new
products and continue our current operations. As a result, our business may
suffer and not be successful and we may go out of business. We also might not be
able to meet our financial obligations if we cannot raise enough funds through
the sale of our common stock and we may be forced to go out of business.

If we issue additional shares in the future, it will result
in the dilution of our existing shareholders.

Our certificate of incorporation authorizes the issuance of up
to 50,000,000 shares of common stock with a par value of $0.0001. Our board of
directors may choose to issue some or all of such shares to acquire one or more
businesses or to provide additional financing in the future. The issuance of any
such shares will result in a reduction of the book value and market price of the
outstanding shares of our common stock. If we issue any such additional shares,
such issuance will cause a reduction in the proportionate ownership and voting
power of all current shareholders. Further, such issuance may result in a change
of control of our corporation.

---

- 22 -

ITEM 7. FINANCIAL STATEMENTS.

|                                                              | Index
|------------------------------------------------------------- | -----
|Report of Independent Registered
      Public Accounting Firm | F1  
|Balance Sheets                                                | F2  
|Statements of Operations                                      | F3  
|Statements of Cash Flows                                      | F4  
|Statements of Stockholders
      Equity                      | F5  
|Notes to the Financial Statements                             | F7  

---



Report of Independent Registered Public Accounting
Firm

To the Stockholders and Board of Directors of Royaltech
Corp.(A Development Stage Company)

We have audited the accompanying balance sheets of Royaltech
Corp. (A Development Stage Company) as of September 30, 2007 and 2006 and the
related statements of operations, cash flows and stockholders equity for the
years then ended and accumulated from April 13, 2004 (Date of Inception) to
September 30, 2007. 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 audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above,
present fairly, in all material respects, the financial position of Royaltech
Corp. (A Development Stage Company) as of September 30, 2007 and 2006 and the
results of its operations and its cash flows for the years then ended and
accumulated from April 13, 2004 (Date of Inception) to September 30, 2007, in
conformity with accounting principles generally accepted in the United
States.

The accompanying financial statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 1 to
the financial statements, the Company has not generated revenue and has
accumulated losses since inception. These factors raise substantial doubt about
the Companys ability to continue as a going concern. Managements plans in
regard to these matters are also discussed in Note 1. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.

/s/ Manning Elliott LLP

CHARTERED ACCOUNTANTS

Vancouver, Canada

January 9, 2008

F-1

---

|Royaltech Corp.              
|-----------------------------
|(A Development Stage Company)
|Balance Sheets               
|(Expressed in U.S. dollars)  

|                                                              |  | September 30, |   |  | September 30, |  
|------------------------------------------------------------- |  | ------------- | - |  | ------------- | -
|                                                              |  | 2007          |   |  | 2006          |  
|                                                              |  | $             |   |  | $             |  
|ASSETS                                                        |  |               |   |  |               |  
|Current Assets                                                |  |               |   |  |               |  
|Cash and cash equivalents                                     |  | 42,507        |   |  | 19,051        |  
|Due from related party                                        |  |              |   |  | 75            |  
|Short-term investments (Note 3(e))                            |  |              |   |  | 65,315        |  
|Other
      receivables                                       |  | 1,790         |   |  |              |  
|Total Current Assets                                          |  | 44,297        |   |  | 84,441        |  
|Long-Term Investments (Note 3(e))                             |  | 22,286        |   |  |              |  
|Property
      and Equipment (Note 4)                         |  | 77            |   |  | 624           |  
|Total Assets                                                  |  | 66,660        |   |  | 85,065        |  
|                                                              |  |               |   |  |               |  
|LIABILITIES AND STOCKHOLDERS EQUITY                          |  |               |   |  |               |  
|Current Liabilities                                           |  |               |   |  |               |  
|Accounts payable                                              |  | 5,320         |   |  | 4,054         |  
|Accrued liabilities                                           |  | 184           |   |  | 1,672         |  
|Due to
      related party (Note 6(c))                        |  | 2,528         |   |  |              |  
|Total Liabilities                                             |  | 8,032         |   |  | 5,726         |  
|Commitments and Contingencies (Notes 1 and 8)                 |  |               |   |  |               |  
|Stockholders Equity                                          |  |               |   |  |               |  
|Common Stock:                                                 |  |               |   |  |               |  
|Authorized: 50,000,000 common shares, par value
      $0.0001 |  |               |   |  |               |  
|Issued and outstanding: 17,252,425 common shares              |  |               |   |  |               |  
|(2006 - 13,023,800 common shares)                             |  | 1,725         |   |  | 1,302         |  
|Additional Paid-in Capital                                    |  | 308,399       |   |  | 266,536       |  
|Donated Capital (Notes 6(a) and (b))                          |  | 65,250        |   |  | 47,250        |  
|Accumulated Other Comprehensive Loss                          |  |              |   |  | (17,999       | )
|Deficit Accumulated
      During the Development Stage        |  | (316,746      | ) |  | (217,750      | )
|Total Stockholders
      Equity                              |  | 58,628        |   |  | 79,339        |  
|Total Liabilities
      and Stockholders Equity              |  | 66,660        |   |  | 85,065        |  

(The accompanying notes are an integral part of these financial
statements)

F-2

---

|Royaltech Corp.              
|-----------------------------
|(A Development Stage Company)
|Statements of Operations     
|(Expressed in U.S. dollars)  

|                                               |  | Accumulated         |   |  |               |   |  |               |  
|---------------------------------------------- |  | ------------------- | - |  | ------------- | - |  | ------------- | -
|                                               |  | from                |   |  |               |   |  |               |  
|                                               |  | April 13, 2004      |   |  | For the       |   |  | For the       |  
|                                               |  | (Date of Inception) |   |  | Year Ended    |   |  | Year Ended    |  
|                                               |  | to September 30,    |   |  | September 30, |   |  | September 30, |  
|                                               |  | 2007                |   |  | 2007          |   |  | 2006          |  
|                                               |  | $                   |   |  | $             |   |  | $             |  
|                                               |  |                     |   |  |               |   |  |               |  
|                                               |  |                     |   |  |               |   |  |               |  
|Revenue                                        |  |                    |   |  |              |   |  |              |  
|                                               |  |                     |   |  |               |   |  |               |  
|                                               |  |                     |   |  |               |   |  |               |  
|Expenses                                       |  |                     |   |  |               |   |  |               |  
|                                               |  |                     |   |  |               |   |  |               |  
|Consulting                                     |  | 81,500              |   |  | 15,000        |   |  | 12,500        |  
|Donated services (Note 6(a))                   |  | 55,000              |   |  | 15,000        |   |  | 18,000        |  
|Foreign exchange loss                          |  | (4,715              | ) |  | (3,765        | ) |  | (763          | )
|General and administrative                     |  | 35,921              |   |  | 3,687         |   |  | 3,269         |  
|Professional fees                              |  | 88,494              |   |  | 37,519        |   |  | 39,475        |  
|Rent (Note 6(b))                               |  | 32,250              |   |  | 3,000         |   |  | 15,100        |  
|                                               |  |                     |   |  |               |   |  |               |  
|Total Expenses                                 |  | 288,450             |   |  | 70,441        |   |  | 87,581        |  
|                                               |  |                     |   |  |               |   |  |               |  
|Loss before other Income (Expenses)            |  | (288,450            | ) |  | (70,441       | ) |  | (87,581       | )
|                                               |  |                     |   |  |               |   |  |               |  
|Other Income (Expense)                         |  |                     |   |  |               |   |  |               |  
|                                               |  |                     |   |  |               |   |  |               |  
|Interest income (Expense)                      |  | 1,888               |   |  | (660          | ) |  | 2,247         |  
|Loss on sale of investment securities          |  | (3,384              | ) |  | (1,095        | ) |  | (2,289        | )
|Impairment loss on investment securities       |  | (26,800             | ) |  | (26,800       | ) |  |              |  
|                                               |  |                     |   |  |               |   |  |               |  
|Net Loss                                       |  | (316,746            | ) |  | (98,996       | ) |  | (87,623       | )
|                                               |  |                     |   |  |               |   |  |               |  
|Other Comprehensive Loss                       |  |                     |   |  |               |   |  |               |  
|                                               |  |                     |   |  |               |   |  |               |  
|Unrealized loss on investment
      securities |  |                    |   |  |              |   |  | (17,999       | )
|                                               |  |                     |   |  |               |   |  |               |  
|Comprehensive Loss                             |  | (316,746            | ) |  | (98,996       | ) |  | (105,622      | )
|                                               |  |                     |   |  |               |   |  |               |  
|Net Loss Per Share  Basic and Diluted         |  |                     |   |  | (0.01         | ) |  | (0.01         | )
|                                               |  |                     |   |  |               |   |  |               |  
|Weighted Average Shares Outstanding            |  |                     |   |  | 15,081,000    |   |  | 13,024,000    |  

(The accompanying notes are an integral part of these financial
statements)

F-3

---

|Royaltech Corp.              
|-----------------------------
|(A Development Stage Company)
|Statements of Cash Flows     
|(Expressed in U.S. dollars)  

|                                                                |  | Accumulated         |   |  |               |   |  |               |  
|--------------------------------------------------------------- |  | ------------------- | - |  | ------------- | - |  | ------------- | -
|                                                                |  | from                |   |  |               |   |  |               |  
|                                                                |  | April 13, 2004      |   |  | For the       |   |  | For the       |  
|                                                                |  | (Date of Inception) |   |  | Year Ended    |   |  | Year Ended    |  
|                                                                |  | to September 30,    |   |  | September 30, |   |  | September 30, |  
|                                                                |  | 2007                |   |  | 2007          |   |  | 2006          |  
|                                                                |  | $                   |   |  | $             |   |  | $             |  
|                                                                |  |                     |   |  |               |   |  |               |  
|                                                                |  |                     |   |  |               |   |  |               |  
|Operating Activities                                            |  |                     |   |  |               |   |  |               |  
|Net loss for the period                                         |  | (316,746            | ) |  | (98,996       | ) |  | (87,623       | )
|Adjustments to reconcile net
      loss to net cash used in     |  |                     |   |  |               |   |  |               |  
|operating activities:                                           |  |                     |   |  |               |   |  |               |  
|Amortization                                                    |  | 1,018               |   |  | 547           |   |  | 471           |  
|Donated services and rent                                       |  | 65,250              |   |  | 18,000        |   |  | 21,000        |  
|Loss on sale of
      investment securities                     |  | 3,384               |   |  | 1,095         |   |  | 2,289         |  
|Impairment loss on investment
      securities                  |  | 26,800              |   |  | 26,800        |   |  |              |  
|Issuance of
      common shares for services                    |  | 130,403             |   |  | 12,500        |   |  |              |  
|Changes in operating assets and liabilities:                    |  |                     |   |  |               |   |  |               |  
|Other
      receivables                                         |  | (1,790              | ) |  | (1,790        | ) |  |              |  
|Accounts payable and accrued
      liabilities                  |  | 5,504               |   |  | (222          | ) |  | (6,374        | )
|Accrued interest                                                |  |                    |   |  | 642           |   |  | (460          | )
|Due from related party                                          |  | 2,528               |   |  | 2,603         |   |  | (75           | )
|Prepaid expenses                                                |  |                    |   |  |              |   |  | 24,600        |  
|Net Cash Flows
      Used in Operating Activities               |  | (83,649             | ) |  | (38,821       | ) |  | (46,172       | )
|Investing Activities                                            |  |                     |   |  |               |   |  |               |  
|Purchase of property and
      equipment                        |  | (1,095              | ) |  |              |   |  | (1,095        | )
|Purchase of
      short-term investments                        |  | (148,371            | ) |  |              |   |  | (99,829       | )
|Proceeds from sale of short-term investments                    |  | 118,187             |   |  | 54,777        |   |  | 63,410        |  
|                                                                |  |                     |   |  |               |   |  |               |  
|Net Cash Flows
      Provided by (Used in) Investing Activities |  | (31,279             | ) |  | 54,777        |   |  | (37,514       | )
|Financing Activities                                            |  |                     |   |  |               |   |  |               |  
|Proceeds from issuance of common stock                          |  | 157,435             |   |  | 7,500         |   |  |              |  
|Net Cash Provided by financing activities                       |  | 157,435             |   |  | 7,500         |   |  |              |  
|Increase (Decrease) in Cash and Cash Equivalents                |  | 42,507              |   |  | 23,456        |   |  | (83,686       | )
|Cash and Cash Equivalents  Beginning of Period                 |  |                    |   |  | 19,051        |   |  | 102,737       |  
|Cash and Cash
      Equivalents  End of Period                 |  | 42,507              |   |  | 42,507        |   |  | 19,051        |  
|Supplemental Disclosures                                        |  |                     |   |  |               |   |  |               |  
|Interest paid                                                   |  |                    |   |  |              |   |  |              |  
|Income taxes paid                                               |  |                    |   |  |              |   |  |              |  
|Non-Cash Investing and Financing Activities                     |  |                     |   |  |               |   |  |               |  
|Issuance of common shares for
      short-term investment       |  | 22,286              |   |  | 22,286        |   |  |              |  
|Issuance of common shares for services                          |  | 12,500              |   |  | 12,500        |   |  |              |  

(The accompanying notes are an integral part of these financial
statements)

F-4

---

|Royaltech Corp.                                                    
|-------------------------------------------------------------------
|(A Development Stage Company)                                      
|Statement of Stockholders Equity                                  
|From April 13, 2004 (Date of Inception) to September 30,
      2007
|(Expressed in U.S. dollars)                                        

|                                    |            |  |        |  |            |   |              |   |               |  |         |  | Deficit     |   |          |  
|----------------------------------- | ---------- |  | ------ |  | ---------- | - | ------------ | - | ------------- |  | ------- |  | ----------- | - | -------- | -
|                                    |            |  |        |  |            |   |              |   | Accumulated   |  |         |  | Accumulated |   |          |  
|                                    |            |  |        |  | Additional |   |              |   | Other         |  |         |  | During      |   |          |  
|                                    | Common     |  |        |  | Paid-In    |   | Subscription |   | Comprehensive |  | Donated |  | Development |   |          |  
|                                    | Stock      |  | Amount |  | Capital    |   | Receivable   |   | Loss          |  | Capital |  | Stage       |   | Total    |  
|                                    | #          |  | $      |  | $          |   | $            |   | $             |  | $       |  | $           |   | $        |  
|Balance  April 13, 2004 (Date of   |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|Inception)                          |           |  |       |  |           |   |             |   |              |  |        |  |            |   |         |  
|Common stock issued for cash at     |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|$0.0001 per share                   | 9,500,000  |  | 950    |  |           |   | (270         | ) |              |  |        |  |            |   | 680      |  
|Common stock issued for cash at     |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|$0.10 per share                     | 276,300    |  | 28     |  | 27,602     |   | (1,000       | ) |              |  |        |  |            |   | 26,630   |  
|Common stock issued for bonus at    |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|$0.10 per share                     | 9,300      |  | 1      |  | 929        |   |             |   |              |  |        |  |            |   | 930      |  
|Share issue costs                   |           |  |       |  | (7,196     | ) |             |   |              |  |        |  |            |   | (7,196   | )
|Donated services and rent           |           |  |       |  |           |   |             |   |              |  | 6,250   |  |            |   | 6,250    |  
|Net loss for the period             |           |  |       |  |           |   |             |   |              |  |        |  | (10,846     | ) | (10,846  | )
|Balance  September 30, 2004        | 9,785,600  |  | 979    |  | 21,335     |   | (1,270       | ) |              |  | 6,250   |  | (10,846     | ) | 16,448   |  
|Common stock issued for market      |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|research at $0.07 per share         | 350,000    |  | 35     |  | 24,965     |   |             |   |              |  |        |  |            |   | 25,000   |  
|Common stock issued for consulting  |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|services at $0.07 per share         | 250,000    |  | 25     |  | 17,475     |   |             |   |              |  |        |  |            |   | 17,500   |  
|Common stock issued for consulting  |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|services at $0.08 per share         | 320,000    |  | 32     |  | 23,968     |   |             |   |              |  |        |  |            |   | 24,000   |  
|Common stock issued for consulting  |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|services at $0.07 per share         | 350,000    |  | 35     |  | 24,965     |   |             |   |              |  |        |  |            |   | 25,000   |  
|Common stock issued for rent at     |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|$0.07 per share                     | 300,000    |  | 30     |  | 21,970     |   |             |   |              |  |        |  |            |   | 22,000   |  
|Common stock issued for a bonus     |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|at $0.10 per share                  | 154,650    |  | 15     |  | 15,450     |   |             |   |              |  |        |  |            |   | 15,465   |  
|Common stock issued for cash at     |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|$0.10 per share                     | 1,478,550  |  | 148    |  | 147,707    |   |             |   |              |  |        |  |            |   | 147,855  |  
|Common stock issued for services at |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|$0.10 per share                     | 30,000     |  | 3      |  | 2,997      |   |             |   |              |  |        |  |            |   | 3,000    |  
|Common stock issued for office      |            |  |        |  |            |   |              |   |               |  |         |  |             |   |          |  
|supplies at $0.09 per share         | 5,000      |  |       |  | 472        |   |             |   |              |  |        |  |            |   | 472      |  
|Share issue costs                   |           |  |       |  | (34,768    | ) |             |   |              |  |        |  |            |   | (34,768  | )
|Subscriptions received              |           |  |       |  |           |   | 1,270        |   |              |  |        |  |            |   | 1,270    |  
|Donated services and rent           |           |  |       |  |           |   |             |   |              |  | 20,000  |  |            |   | 20,000   |  
|Net loss for the
      year         |           |  |       |  |           |   |             |   |              |  |        |  | (119,281    | ) | (119,281 | )
|Balance  September 30, 2005        | 13,023,800 |  | 1,302  |  | 266,536    |   |             |   |              |  | 26,250  |  | (130,127    | ) | 163,961  |  

(The accompanying notes are an integral part of these financial
statements)

F-5

---

|Royaltech Corp.                                                    
|-------------------------------------------------------------------
|(A Development Stage Company)                                      
|Statement of Stockholders Equity                                  
|From April 13, 2004 (Date of Inception) to September 30,
      2007
|(Expressed in U.S. dollars)                                        

|                                     |            |  |        |  |            |  |              |  |               |   |         |  | Deficit     |   |         |  
|------------------------------------ | ---------- |  | ------ |  | ---------- |  | ------------ |  | ------------- | - | ------- |  | ----------- | - | ------- | -
|                                     |            |  |        |  |            |  |              |  | Accumulated   |   |         |  | Accumulated |   |         |  
|                                     |            |  |        |  | Additional |  |              |  | Other         |   |         |  | During      |   |         |  
|                                     | Common     |  |        |  | Paid-In    |  | Subscription |  | Comprehensive |   | Donated |  | Development |   |         |  
|                                     | Stock      |  | Amount |  | Capital    |  | Receivable   |  | Loss          |   | Capital |  | Stage       |   | Total   |  
|                                     | #          |  | $      |  | $          |  | $            |  | $             |   | $       |  | $           |   | $       |  
|Balance  September 30, 2005         | 13,023,800 |  | 1,302  |  | 266,536    |  |             |  |              |   | 26,250  |  | (130,127    | ) | 163,961 |  
|Donated services and rent            |           |  |       |  |           |  |             |  |              |   | 21,000  |  |            |   | 21,000  |  
|Unrealized loss on short-term        |            |  |        |  |            |  |              |  |               |   |         |  |             |   |         |  
|investments                          |           |  |       |  |           |  |             |  | (17,999       | ) |        |  |            |   | (17,999 | )
|Net loss for the year                |           |  |       |  |           |  |             |  |              |   |        |  | (87,623     | ) | (87,623 | )
|Balance  September 30, 2006         | 13,023,800 |  | 1,302  |  | 266,536    |  |             |  | (17,999       | ) | 47,250  |  | (217,750    | ) | 79,339  |  
|Shares issued for cash at $0.01 per  |            |  |        |  |            |  |              |  |               |   |         |  |             |   |         |  
|share                                | 750,000    |  | 75     |  | 7,425      |  |             |  |              |   |        |  |            |   | 7,500   |  
|Shares issued for services at $0.01  |            |  |        |  |            |  |              |  |               |   |         |  |             |   |         |  
|per share                            | 1,250,000  |  | 125    |  | 12,375     |  |             |  |              |   |        |  |            |   | 12,500  |  
|Shares issued to acquire shares of a |            |  |        |  |            |  |              |  |               |   |         |  |             |   |         |  
|private company at $0.01 per share   | 2,228,625  |  | 223    |  | 22,063     |  |             |  |              |   |        |  |            |   | 22,286  |  
|Donated services and rent            |           |  |       |  |           |  |             |  |              |   | 18,000  |  |            |   | 18,000  |  
|Unrealized loss on short-term        |            |  |        |  |            |  |              |  |               |   |         |  |             |   |         |  
|investments recognized as an         |            |  |        |  |            |  |              |  |               |   |         |  |             |   |         |  
|impairment loss                      |           |  |       |  |           |  |             |  | 17,999        |   |        |  |            |   | 17,999  |  
|Net loss for the year                |           |  |       |  |           |  |             |  |              |   |        |  | (98,996     | ) | (98,996 | )
|Balance  September 30, 2007         | 17,252,425 |  | 1,725  |  | 308,399    |  |             |  |              |   | 65,250  |  | (316,746    | ) | 58,628  |  

(The accompanying notes are an integral part of these financial
statements)

F-6

---

|Royaltech Corp.                  
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|(Expressed in U.S. dollars)      

|1. | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | Royaltech Corp. (the Company) was incorporated in the
      State of Delaware on April 13, 2004. The Company is based in Montreal,
      Quebec, Canada and its principal business is the developing,
      manufacturing, and marketing of innovative biotech products that are
      applied in medical diagnosis. The Company has obtained the rights to
      manufacture and distribute several proprietary product lines of clinical
      diagnostic techniques/kits for hepatocacinoma, diabetes, gastrocacinoma
      and hepatobliary disorders.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company is in the development stage with management
      devoting most of its activities to developing a market for its products
      and services. These financial statements have been prepared on a going
      concern basis, which implies the Company will continue to realize its
      assets and discharge its liabilities in the normal course of business. The
      Company has not generated any revenue and has never paid any dividends.
      The Company is unlikely to pay dividends or generate significant earnings
      in the immediate or foreseeable future. The continuation of the Company as
      a going concern and the ability of the Company to emerge from the
      development stage is dependent upon the continued financial support from
      its shareholders, the ability of the Company to obtain necessary equity
      financing to continue operations and to generate sustainable significant
      revenue. There is no guarantee that the Company will be able to raise any
      equity financing or generate profitable operations. As at September 30,
      2007, the Company has accumulated losses of $316,746 since inception.
      These factors raise substantial doubt regarding the Companys ability to
      continue as a going concern. These financial statements do not include any
      adjustments to the recoverability and classification of recorded asset
      amounts and classification of liabilities that might be necessary should
      the Company be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Companys plans for the next twelve months are
        to focus on the development of a market for its products and services
        and estimates that cash requirements of approximately $400,000 will be
        required for development and administration costs and to fund working
        capital. There can be no assurance that the Company will be able to raise
        sufficient funds to pay the expected expenses for the next twelve months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | Summary of Significant Accounting Principles                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | d)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

F-7

---

|Royaltech Corp.                  
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|(Expressed in U.S. dollars)      

|2. | Summary of Significant Accounting Principles
      (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | e)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | f)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | g)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | h)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | i)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | j)                                                            
|   |                                                               
|   |                                                               

F-8

---

|Royaltech Corp.                  
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|(Expressed in U.S. dollars)      

|2. | Summary of Significant Accounting Principles
      (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | k)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | l)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | m)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | n)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   | o)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               

F-9

---

|Royaltech Corp.                  
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|(Expressed in U.S. dollars)      

|2. | Summary of Significant Accounting Principles
      (continued)
|-- | --------------------------------------------------------------
|   |                                                               
|   | o)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   | p)                                                            
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|   |                                                               
|3. | Short-Term Investments                                        
|   |                                                               
|   | a)                                                            
|   |                                                               
|   | b)                                                            
|   |                                                               
|   | c)                                                            
|   |                                                               
|   | d)                                                            

F-10

---

|Royaltech Corp.                  
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|(Expressed in U.S. dollars)      

|3. | Short-Term Investments (continued)
|-- | ----------------------------------
|   |                                   
|   | e)                                
|   |                                   
|4. | Property and Equipment            

| |                    |  | Cost  |  |  | Accumulated  |  |  | September 30, |  |  | September 30, | 
| | ------------------ |  | ----- |  |  | ------------ |  |  | ------------- |  |  | ------------- | 
| |                    |  | $     |  |  | Amortization |  |  | 2007          |  |  | 2006          | 
| |                    |  |       |  |  | $            |  |  | Net Book      |  |  | Net Book      | 
| |                    |  |       |  |  |              |  |  | Value         |  |  | Value         | 
| |                    |  |       |  |  |              |  |  | $             |  |  | $             | 
| | Computer Equipment |  | 1,095 |  |  | 1,018        |  |  | 77            |  |  | 624           | 

|5. | Accrued Liabilities                                                                               
|-- | --------------------------------------------------------------------------------------------------
|   |                                                                                                   
|   | Accrued liabilities consists of amounts owing for
      professional fees of $184 (2006 - $1,672).
|   |                                                                                                   
|6. | Related Party Transactions                                                                        
|   |                                                                                                   
|   | a)                                                                                                
|   |                                                                                                   
|   | b)                                                                                                
|   |                                                                                                   
|   | c)                                                                                                
|   |                                                                                                   
|   | d)                                                                                                
|   |                                                                                                   
|   | e)                                                                                                
|   |                                                                                                   
|7. | Common Stock                                                                                      
|   |                                                                                                   
|   | a)                                                                                                
|   |                                                                                                   
|   | b)                                                                                                
|   |                                                                                                   
|   | c)                                                                                                

F-11

---

|Royaltech Corp.                  
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|(Expressed in U.S. dollars)      

|8. | Commitment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | During the year ended September 30, 2005, the Company
      entered into a licensing agreement with Mr. Kang Zhang (Zhang) that
      granted the Company a license to distribute, promote, market and sell
      diagnostic test kits and assay techniques for 5 years in exchange for a
      fee of 12.5% of the factory unit price on kits produced. The factory unit
      price is the unit price charged for the product to distributors and
      dealers. The factory unit price consists of the costs of the product, the
      royalty fee and the Companys profit and will be agreed upon by the two
      parties Fees are due within two months subsequent to production. As at
      September 30, 2007, the Company has not earned any revenues from the test
      kits.                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | Zhang previously licensed the right to manufacture and
      market the test kits to a small private biotech firm, Quark Biotech Ltd.,
      in Zhejiang, China. The Company and Quark Biotech Ltd. will have
      concurrent world-wide rights to manufacture and market the test kits and
      assay techniques that continue into the future. Neither the Company nor
      Quark Biotech Ltd. have regional or any other restrictions on the rights
      to manufacture and market the products.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The agreement also provides for certain rights and
      responsibilities to be shared among the Company and Zhang for improvements
      to existing kits and the development of additional products. The Company
      is responsible for providing (i) high quality chemical reagents
      (manufactured by U.S. and Canadian manufacturers) and (ii) expert opinions
      via connections with biotech firms and academic institutions in Canada and
      the U.S., when necessary as well as the cost/expenses in obtaining the
      expert consulting assistance. Zhang is responsible for technology design
      and product testing. In addition, Zhang holds the proprietary rights over
      his current technology and products including any technology improvements
      resulting from the Companys assistance. These technology improvements may
      be subject to future licensing agreements between Zhang and the Company.
      The licensing agreement does not have any terms of renewal.                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|9. | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company accounts for income taxes under SFAS No. 109,
      "Accounting for Income Taxes." Deferred income tax assets and
      liabilities are determined based upon differences between financial
      reporting and tax bases of assets and liabilities and are measured using
      the enacted tax rates and laws that will be in effect when the differences
      are expected to reverse. Income tax expense differs from the amount that
      would result from applying the U.S federal and state income tax rates to
      earnings before income taxes. The Company has a net operating loss
      carryforward of approximately $251,400 available to offset taxable income
      in future years which expire through fiscal 2027. Pursuant to SFAS 109,
      the potential benefit of the net operating loss carryforward has not been
      recognized in the financial statements since the Company cannot be assured
      that it is more likely than not that such benefit will be utilized in
      future years.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company is subject to United States federal and state
      income taxes at an approximate rate of 35%. The reconciliation of the
      provision for income taxes at the United States federal statutory rate
      compared to the Companys income tax expense as reported is as
    follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                                        |  | September 30, |   |  | September 30, |  
| | -------------------------------------- |  | ------------- | - |  | ------------- | -
| |                                        |  | 2007          |   |  | 2006          |  
| |                                        |  | $             |   |  | $             |  
| | Income tax recovery at statutory rate  |  | (34,600       | ) |  | (29,800       | )
| | Permanent differences                  |  | 6,500         |   |  | 7,000         |  
| | Temporary difference - impairment loss |  | 7,360         |   |  |               |  
| | Capital losses                         |  | 200           |   |  | 800           |  
| | Valuation
      allowance change       |  | 20,540        |   |  | 22,000        |  
| | Provision for income
      taxes       |  |              |   |  |              |  

Deferred income taxes reflect the net
tax effects of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for income tax
purposes. Deferred income taxes arise from temporary differences in the
recognition of income and expenses for financial reporting and tax purposes. The
significant components of deferred income tax assets and liabilities are as
follows:

| |                                 |  | September 30, |   |  | September 30, |  
| | ------------------------------- |  | ------------- | - |  | ------------- | -
| |                                 |  | 2007          |   |  | 2006          |  
| |                                 |  | $             |   |  | $             |  
| | Net operating loss carryforward |  | 77,540        |   |  | 57,000        |  
| | Valuation
      allowance       |  | (77,540       | ) |  | (57,000       | )
| | Net deferred income tax asset   |  |              |   |  |              |  

F-12

---

|Royaltech Corp.                  
|---------------------------------
|(A Development Stage Company)    
|Notes to the Financial Statements
|(Expressed in U.S. dollars)      

|9. | Income Taxes (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company has recognized a valuation allowance for the
      deferred income tax asset since the Company cannot be assured that it is
      more likely than not that such benefit will be utilized in future years.
      The valuation allowance is reviewed annually. When circumstances change
      and which cause a change in management's judgment about the realizability
      of deferred income tax assets, the impact of the change on the valuation
      allowance is generally reflected in current
income.

F-13

---

- 23 -

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.

Manning Elliott LLP, Certified Public Accountants, has been
engaged as the principal independent accountants. There has been no change in
our certifying accountant for the past two most recent fiscal years or interim
period.

Item 8A. Controls and Procedures.

As required by Rule 13a-15 under the Exchange Act, we have
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as at September 30, 2007, which is the end of the period
covered by this report. This evaluation was carried out under the supervision
and with the participation of our chief executive officer and chief financial
officer, Chenxi Shi. Based on this evaluation, Mr. Shi has concluded that the
design and operation of our disclosure controls and procedures are effective as
at the end of the period covered by this report. There were no changes in our
internal control over financial reporting or in other factors that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting in our most recent fiscal quarter.

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by our company in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported, within the time periods specified
in the SEC's rules and forms. Disclosure controls and procedures include,
without limitation, controls and procedures designed to ensure that information
required to be disclosed by our company in the reports that we file or submit
under the Exchange Act is accumulated and communicated to our management,
including our principal executive officer and principal financial officer, as
appropriate, to allow timely decisions regarding required disclosure.

Item 8B. Other Information.

None

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS , CONTROL
PERSONS AND CORPORATE GOVERNANCE; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE
ACT.

Directors and Executive Officers, Promoters and Control
Persons

As at September 30, 2007, our directors and executive officers,
their ages, positions held, and duration of such, are as follows:

Name
    Position
    Age
    Date of AppointmentChenxi Shi
    President and Chief Executive Officer and Director
    40
    April
      2004Chun Xu
    Vice-President and Director
    47
    April
      2004Louis H. Ladouceur
    Corporate Development and Public Affair Officer
      and Director
    64
    April 2004Kang Zhang
    Biomedical Technology Officer
    66
    April
      2004John B. Richardson
    Medical Officer
    68
    April 2004


---

- 24 -

Name
    Position
    Age
    Date of AppointmentEdward Beshlian
    Marketing Officer
    68
    April
      2004


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 principal occupation during the period, and the
name and principal business of the organization by which he was employed.

Chenxi Shi, President, Chief Executive Officer and
Director

Mr. Shi is one of the founding directors and has served as the
Chairman of the Board of the Directors since founding our company in April,
2004. Mr. Shi has over 10 years of work experience in computer technology and
business management. Mr. Shi has held various technical and managerial positions
from entry level to the corporate senior. Mr. Shi has worked in Northern
Jiaotong University, Beijing Jiada Technologies Company, Legend Computer Group
Co. (Lenovo) and Investors Group of Canada. Mr. Shi received his Bsc in computer
sciences from Northern Jiaotong University and MBA from Peking University. Mr.
Shi is also the President, Treasury and Director of News of China, Inc., a
Delaware company whose common stock is quoted on the Over the Counter Bulletin
Board.

Chun Xu, Vice President and Director

Dr. Xu is one of our co-founders and has over 20 years of
clinical and medical research experiences. He started an academic career in
Canada with the Jeanne Timmins Fellowship from Montreal Neurological Institute,
and since, received a Ph.D in neuropathology from McGill University, and
postdoctoral training on brain aging and Alzheimers disease from Montreal
General Hospital. Dr. Xu has been invited by and given seminars at several
Chinese medical authorities, China Society of Neurology and Psychiatrics, China
SFDA, SATM, and CHSTS over the past 8 years, on medical issues, and US FDA
regulations. Before joining our company, Dr. Xu was involved in the development
and marketing of biomedical products at a Canadian firm, and worked at an US
medical consulting firm, Innovative Science Solutions, LLC (NJ, USA) where he
was responsible for the regulatory, scientific and litigation supports to the
drug and biotech manufacturers.

Louis H. Ladouceur, Corporate Development and Public Affair
Officer and Director

Mr. Ladouceur joined the company in April, 2004 as the
Corporate Development and Public Affairs Officer and director. He is currently
the President and CEO of Delta Placement, a private investment company in the
hospitality and related consulting business. He is also a director of East Delta
Resources Corp. East Delta Resources Corp. is a publicly held Delaware
corporation whose common shares are quoted on the OTC BB under the symbol EDLT
and are also listed on the Frankfurt Exchange under the symbol EJK.

Mr. Ladouceur has held various executive and senior management
positions in Lafarge and was the former Director of Lafarge Consultant
Automation, being responsible for the overall operation and business
development, providing automation advice, consulting services and turn-key
systems to all Lafarges North American plants and outside clients. His
experience in the engineering, financing and management practice has helped him
develop many approaches to running a company. Mr. Ladouceur was the President
and CEO of Sino-Canadian Resources Inc., a NASDAQ OTC company and sold the
business in late 1997 due to the drastic drop in gold prices.

---

- 25 -

Kang Zhang, Biomedical Technology Officer

Mr. Zhang joined the company in April, 2004 as Biomedical
Technology Officer and has over 40 years of experiences in clinical laboratory
diagnostic practice and researches. He has held technical positions in hospitals
and research labs during his 30 some year clinical practice, including such as
director of the central laboratory and director of the clinical laboratory
diagnostic department of Shanghai Sailors Hospital. Mr. Zhang has also been
appointed as a member of the editorial boards of China Journal of Clinical
Diagnosis, China Journal of Navigation Medicine, and The Journal of Contemporary
Clinical Chemistry, and has been publications in more than 20 books and
periodicals. Retired from his hospital practice, Mr. Zhang over the past 7-8
years has been involved in the development of laboratory diagnostic techniques
and kits, including some of the first in the China market and remain in the
frontier of the field worldwide, in particular, those for hepatocacinoma and or
gastrocacinoma (AFU, Patent No. CN 1428435A, and GPDA, Patent No. CN 1428436A);
for diabetic management (1,5-AG) and for hepatobiliary hyperbilirubinemia
(Bc-True TM ).

John B. Richardson, Medical Officer

Dr. Richardson joined the company in April, 2004 a Medical
Officer. Dr. Richardson received his MD, and PhD from McGill University and has
40 yrs of clinical practice in pathology and CNS research. Dr. Richardson has
been serving as a senior pathologist at Montreal General Hospital and Director
of the Neuropathology Department at Montreal Neurological Institute/Hospital. He
has extraordinary academic and teaching experiences, being a Professor of
Pathology, Professor of Pharmacology, and Professor of Neurology and
Neurosurgery at McGill and previously serving as the Chairman of McGill
Pathology Department, Director of Research Advisory Committee, Montreal General
Hospital Research Institute. His clinical practice and research achievement on
pulmonary and CNS disorders, in particular, the brain aging and Alzheimer
disease, have brought him numerous awards and the reputation of being a renowned
physician and scientist.

Edward Beshlian, Marketing Officer

Mr. Beshlian joined the company in April, 2004 a the Marketing
Officer and brings over 30 years of experience in international marketing, sales
and outsourcing and offshore manufacturing. His academic background is
multinational, having obtained a French Baccalaureate in Business Administration
from Beirut and a Marketing Management diploma from Turin, Italy, as well as
several corporate management trainings in Europe, the Middle East, and North
America. Mr. Beshlian is fluent in 5 languages including French and English. He
has previously held senor executive positions in Xerox Corp, AES Data Ltd. and
Eastman Kodak Company. Mr. Beshlian founded EB Intermark Inc. Canada in 1985,
and has successfully developed markets in Canada, Latin America, South-East
Asian, Japan, Europe and Middle East for both companies in Canadian and US and
clients from Asian and European countries.

Term of Office

Our directors are appointed indefinitely unless revoked by
notice in writing to our corporation or they are removed from the board of
directors by a general meeting of stockholders.

Family Relationships

There are no family relationships among our directors or
executive officers.

---

- 26-

Committees of the Board of Directors

All proceedings of the board of directors for the year from
inception to September 30, 2007, were conducted by resolutions consented to in
writing by the board of directors and filed with the minutes of the proceedings
of the directors. Our company currently does not have nominating, compensation
or audit committees or committees performing similar functions nor does our
company have a written nominating, compensation or audit committee charter. Our
board of directors does not believe that it is necessary to have such committees
because it believes that the functions of such committees can be adequately
performed by the board of directors.

Our company does not have any defined policy or procedural
requirements for shareholders to submit recommendations or nominations for
directors. The board of directors believes that, given the stage of our
development, a specific nominating policy would be premature and of little
assistance until our business operations develop to a more advanced level. Our
company does not currently have any specific or minimum criteria for the
election of nominees to the board of directors and we do not have any specific
process or procedure for evaluating such nominees. The board of directors will
assess all candidates, whether submitted by management or shareholders, and make
recommendations for election or appointment.

A shareholder who wishes to communicate with our board of
directors may do so by directing a written request addressed to our President,
Chenxi Shi, at the address appearing on the first page of this annual
report.

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Exchange Act requires our executive
officers and directors and persons who own more than 10% of a registered class
of our equity securities to file with the SEC initial statements of beneficial
ownership, reports of changes in ownership and annual reports concerning their
ownership of our common stock and other equity securities, on Forms 3, 4 and 5
respectively. Executive officers, directors and greater than 10% shareholders
are required by the SEC regulations to furnish us with copies of all Section
16(a) reports that they file.

Based solely on our review of the copies of such forms received
by us, or written representations from certain reporting persons, we believe
that all filing requirements applicable to our officers, directors and greater
than 10% beneficial owners were complied with, with the exception of the
following:

Name
    Number of Late Reports
    Number of Transactions Not
      Reported on a Timely Basis
    Failure to File Requested
      FormsChenxi Shi
    2
    4
    N/AChun Xu
    2
    2
    N/AVictor Sun
    2
    2
    N/A


ITEM 10. EXECUTIVE COMPENSATION.

The particulars of compensation paid to the following
persons:

| | (a) | our principal executive officer;                                                                                                                                  
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                   
| | (b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the year
      ended September 30, 2007; and

---

- 27-

| | (c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the most recently
      completed financial year,
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

who we will collectively refer to as the named executive
officers, of our years ended September 30, 2007 and 2006, are set out in the
following summary compensation table:

SUMMARY COMPENSATION TABLEName and Principal Position
      Year
      Salary ($)
      Bonus($)
      Stock Awards ($)
      Option Awards ($)
      Non-Equity Incentive Plan Compensation ($)
      Change in Pension Value and Nonqualified
        Deferred Compensation Earnings($)
      All Other Compensation ($)
      Total($)Chenxi Shi 
        President & CEO
      2007 
        2006
      Nil 
        12,500
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        12,500Chun Xu 
        VP
      2007 
        2006
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilVictor Sun 
        Former VP(1)
      2007 
        2006
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilLouis H. Ladouceur 
        Corp Development & 
        PR
      2007 
        2006
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilKang Zhang 
        Biomedical Tech 
        Officer
      2007 
        2006
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilJohn B. Richardson 
        Medical Officer
      2007 
        2006
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        NilEdward Beshlian 
        Marketing Officer
      2007 
        2006
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil
      Nil 
        Nil


(1)Victor Sun resigned as Vice President and
Director on August 8, 2007

As at September 30, 2007, we had not adopted any equity
compensation plan and no stock, options, or other equity securities were awarded
to our executive officers.

Director Compensation

Directors of our company may be paid for their expenses
incurred in attending each meeting of the directors. In addition to expenses,
directors may be paid a sum for attending each meeting of the directors or may
receive a stated salary as director. No payment precludes any director from
serving our company in any other capacity and being compensated for such
service. During the year ended August 31, 2007, we did not pay any compensation
or grant any stock options to our directors.

Employment Contracts

Other than as described below, we are not party to any
employment contracts with our directors and officers.

| | 1. | During the 12-month period ended September 30, 2007,
      consulting services with a fair value of $15,000 (September 30, 2006 -
      $18,000) was contributed by the President, Vice-President, and a Director
      of the Company. The amounts were charged to operations and treated as
      donated capital.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                     
| | 2. | During the 12-month period ended September 30, 2007, rent
      with a fair value of $3,000 (September 30, 2006 - $3,000) was provided at
      no cost by the President for the use of the Companys head office. These
      amounts were charged to operations and treated as donated
  capital.                 

---

- 28-

| | 3. | At September 30, 2007, the Company was indebted to the
      President of the Company for $2,528 (September 30, 2006  $Nil) for
      general and administrative expenses incurred on behalf of the
    Company.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                  
| | 4. | On March 31, 2007, the Company issued an aggregate of
      1,750,000 shares of common stock to three directors of the Company, at a
      price of $0.01 per share for cash proceeds of
$17,500.                

There are no arrangements or plans in which we provide pension,
retirement or similar benefits for directors or executive officers. Our
directors and executive officers may receive stock options at the discretion of
our board of directors in the future. We do not have any material bonus or
profit sharing plans pursuant to which cash or non-cash compensation is or may
be paid to our directors or executive officers, except that stock options may be
granted at the discretion of our board of directors.

We have no plans or arrangements in respect of remuneration
received or that may be received by our executive officers to compensate such
officers in the event of termination of employment (as a result of resignation,
retirement, change of control) or a change of responsibilities following a
change of control, where the value of such compensation exceeds $60,000 per
executive officer.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

As of January 11, 2008, there were 17,252,425 shares of our
common stock outstanding. The following table sets forth certain information
known to us with respect to the beneficial ownership of our common stock as of
that date by (i) each of our directors, (ii) each of our executive officers, and
(iii) all of our directors and executive officers as a group. Except as set
forth in the table below, there is no person known to us who beneficially owns
more than 5% of our common stock. Unless otherwise noted, we believe that each
person has sole investment and voting power (or shares such powers with his or
her spouse) with respect to the shares set forth in the following table:

Title of Class of Shares
    Name and Address of beneficial
      owner
    Amount and Nature of
      Beneficial Ownership
    Percentage of
      Class(1)(2)Directors and Officerscommon shares
    Chenxi Shi 1855 Talleyrand #203A
      Brossard, QC, Canada
    6,150,000(1)
    35.65%common shares
    Chun Xu 105 Rue Terry Fox, Ile des
      Soeurs Montreal, QC, Canada
    2,800,000
    16.23%common
      shares
    Directors and Executive Officers as a Group
    8,950,000
    51.88%


|(1) | Regulation S-B under the Exchange Act, defines a
      beneficial owner of a security as any person who, directly or indirectly,
      through any contract, arrangement, understanding, relationship, or
      otherwise, has or shares: (i) voting power, which includes the power to
      vote, or to direct the voting of shares; and (ii) investment power, which
      includes the power to dispose or direct the disposition of shares. Certain
      shares may be deemed to be beneficially owned by more than one person (if,
      for example, persons share the power to vote or the power to dispose of
      the shares). In addition, shares are deemed to be beneficially owned by a
      person if the person has the right to acquire the shares (for example,
      upon exercise of an option) within 60 days of the date as of which the
      information is provided. In computing the percentage ownership of any
      person, the amount of shares outstanding is deemed to include the amount
      of shares beneficially owned by such person (and only such person) by
      reason of these acquisition rights. As a result, the percentage of
      outstanding shares of any person as shown in this table does not
      necessarily reflect the persons actual ownership or voting power with
      respect to the number of shares of common stock actually outstanding on
      January 11, 2008.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(2) | Based on 17,252,425 shares outstanding as of January 11,
      2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(3) | Of these, 350,000 are held by Aventech Capital Inc., a
      company owned by Mr. Shi.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

---

- 29 -

Securities Authorized for Issuance Under Equity Compensation
Plans

We have not adopted a stock option plan and have not granted
any stock options. Accordingly, no stock based compensation has been recorded to
date.

Equity Compensation Plan Information as at September 30,
2007

Plan Category
    Number of securities to
      be issued upon exercise of outstanding options,
      warrants and rights (a)
    Weighted-average
      exercise price of outstanding options,
      warrants and rights (b)
    Number of securities remaining
      available for issuance under equity compensation
      plans (excluding securities reflected in column
      (a)) (c)Equity Compensation Plans approved by security holders
    Nil
    N/A
    NilEquity Compensation Plans not approved by security
      holders
    Nil
    N/A
    NilTotal
    Nil
    N/A
    Nil


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE.

Except as disclosed herein, there have been no transactions or
proposed transactions in which the amount involved exceeds the lesser of
$120,000 or 1% of the average of our total assets at year-end for the last three
completed fiscal years in which any of our directors, executive officers or
beneficial holders of more than 5% of the outstanding shares of our common
stock, or any of their respective relatives, spouses, associates or affiliates,
has had or will have any direct or material indirect interest.

Director Independence

Our common stock is listed on the OTC Bulletin Board
inter-dealer quotation system, which does not have director independence
requirements. For purposes of determining director independence, we have applied
the definitions set out in NASDAQ Rule 4200(a)(15). Under NASDAQ Rule
4200(a)(15), a director is not considered to be independent if he or she is also
an executive officer or employee of the company. The members of our board of
directors also act as executive officers so we currently do not have any
independent directors.

ITEM 13. EXHIBITS

Exhibits required by Item 601 of Regulation S-B

Item Number
    Description(3)
    Articles of Incorporation and By-laws3.1
    Certificate of Incorporation (incorporated by reference
      from our Registration Statement on Form SB-2, filed on February 13, 2006)3.2
    Bylaws (incorporated by reference from our Registration
      Statement on Form SB-2 filed on February 13, 2006)(10)
    Material Contracts10.1
    Licensing Agreement dated October 2004 between Royaltech
      Corp. and Mr. Kang Zhang (incorporated by reference from our Registration
      Statement on Form SB-2 filed on February 13, 2006)


---

- 30 -

10.2
      Investment Agreement dated January 10, 2006 between
        Royaltech Corp. and Aventech Capital Inc. for 350,000 shares (incorporated
        by reference from our Registration Statement on Form SB-2 filed on February
        13, 2006)10.3
      Investment Agreement dated January 10, 2006 between
        Royaltech Corp. and Alliance PKU Management Consultants Ltd for 350,000
        shares (incorporated by reference from our Registration Statement on Form
        SB-2 filed on February 13, 2006)10.4
      Investment Agreement dated January 10, 2006 between
        Royaltech Corp. and Hong Sheng for 30,000 shares (incorporated by reference
        from our Registration Statement on Form SB-2 filed on February 13, 2006)10.5
      Form of Subscription Agreement (incorporated
        by reference from our Registration Statement on Form SB-2 filed on February
        13, 2006)10.6
      Pro-Forma Invoice dated December 22, 2004 from
        China Westerprises Canada Holdings to Royaltech Corp. (incorporated by
        reference from our Registration Statement on Form SB-2 filed on February
        13, 2006)10.7
      Pro-Forma Invoice dated August 11, 2005 from
        China Westerprises Canada Holdings to Royaltech Corp. (incorporated by
        reference from our Registration Statement on Form SB- 2 filed on February
        13, 2006)(21)
      Subsidiaries of the registrant - none(31)
      Section 302 Certification31.1*
      Certification of Chief
        Executive Officer and Chief Financial Officer as adopted pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002(32)
      Section 906 Certification32.1*
      Certification of Chief
        Executive Officer and Chief Financial Officer as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002


*Filed herewithITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES

Audit Fees

The aggregate fees billed for the two most recently completed
fiscal years ended September 30, 2007 and 2006 for professional services
rendered by the principal accountant for the audit of our annual financial
statements and review of the financial statements included our annual report on
Form 10-KSB and services that are normally provided by the accountant in
connection with statutory and regulatory filings or engagements for these fiscal
periods were as follows:

| |                                   |   | Year Ended         |  |   | Year Ended         | 
| | --------------------------------- | - | ------------------ |  | - | ------------------ | 
| |                                   |   | September 30, 2007 |  |   | September 30, 2006 | 
| | Audit Fees and Audit Related Fees | $ | 14,665             |  | $ | 12,250             | 
| | Tax Fees                          |   | 165.90             |  |   | Nil                | 
| | All Other Fees                    |   | Nil                |  |   | Nil                | 
| | Total                             | $ | 14,830.90          |  | $ | 12,250             | 

Policy on Pre-Approval by the Board of Services Performed by
Independent Auditors

We do not use Manning Elliott LLP (Manning Elliott) for
financial information system design and implementation. These services, which
include designing or implementing a system that aggregates source data
underlying the financial statements or generates information that is significant
to our financial statements, are provided internally or by other service
providers. We do not engage Manning Elliott to provide compliance outsourcing
services.

---

- 31 -

Effective May 6, 2003, the Securities and Exchange Commission
adopted rules that require that before Manning Elliott is engaged by us to
render any auditing or permitted non-audit related service, the engagement
be:

- approved by our board of directors; or,
- entered into pursuant to pre-approval policies and procedures established
  by the board of directors, provided the policies and procedures are detailed
  as to the particular service, the board of directors is informed of each
  service, and such policies and procedures do not include delegation of the
  board of directors' responsibilities to management.

The board of directors pre-approves all services provided by
our independent auditors. All of the above services and fees were reviewed and
approved by the board of directors either before or after the respective
services were rendered.

The board of directors has considered the nature and amount of
fees billed by Manning Elliott and believes that the provision of services for
activities unrelated to the audit is compatible with maintaining our
independence.

---

- 32 -

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

ROYALTECH CORP.

|By                                                                | */s/ Chenxi Shi* | 
|----------------------------------------------------------------- | ---------------- | 
|Chenxi Shi                                                       
|President, Chief Executive Officer and Director                  
|Principal Executive Officer and Principal
      Financial Officer
|January 15, 2008                                                 

---