Royal Spring Water (RSPG) 10QSB/A 2006 Q3 Quarterly report (small business) (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-QSB/A

(AMENDMENT NO. 1)

(Mark One)

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended: May 31, 2006

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

For the transition period from ___________ to ___________

Commission file number: 000-31329

ROYAL SPRING WATER INC.

(FORMERLY EASY.COM, INC.)

(Name of small business issuer in its charter)

Nevada	N/A
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

14553 Delano Street Suite 217, Van-Nuys CA, 91411

(Address of principal executive offices)

Issuer’s telephone number: (818) 902-3690

Securities registered under Section 12(b) of the Exchange Act:   None

Securities registered under Section 12(g) of the Exchange Act:   Common Shares, $0.001 par value

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

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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. o

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

State issuer’s revenues for its most recent fiscal year: $0

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days: $15,178, at a price per share of $0.001 as of November 16, 2006. For the purpose of this disclosure, shares of common stock held by directors, officers and stockholders whose ownership exceeds five percent of the common stock outstanding were excluded. Exclusion of shares held by any person should not be construed to indicate that such person possesses the power, direct or indirect, to direct or cause the direction of management or policies of the issuer, or that such person is controlled by or under common control of the issuer.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. 30,072,000 as of November 16, 2006.

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)

(A DEVELOPMENT STAGE COMPANY)

Form 10-QSB/A

For the Quarter Ended May 31, 2006

___________________

TABLE OF CONTENTS

___________________

		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Balance Sheets	3
	Statements of Operations	4
	Statements of Cash Flows	6
	Notes to Financial Statements	7
Item 2.	Management’s Discussion & Analysis or Plan of Operation	8
Item 3.	Controls and Procedures	13
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	13
Item 2.	Unregistered Sales of Equity securities and Use of Proceeds	13
Item 3.	Defaults Upon Senior Securities	14
Item 4.	Submission of Matters to a Vote of Security Holders	14
Item 5	Other Information	14
Item 6.	Exhibits	15

2

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)

(A DEVELOPMENT STAGE COMPANY)

BALANCE SHEETS

	May 31, 2006			August 31,
	(Unaudited)			2005
ASSETS				Restated
CURRENT ASSETS
Cash and cash equivalents	$	81,184		$	12
Prepaid expenses		32,722			10,000
Total Current Assets		113,906			10,012
Property, plant and equipment, net		3,560,176			3,337,434
TOTAL ASSETS	$	3,674,082		$	3,347,446
LIABILITIES AND STOCKHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued liabilities	$	36,649		$	-
Advances from shareholders		878,139			73,546
Obligation under capital lease - current portion		166,052			163,680
Total Current Liabilities		1,080,840			237,226
Obligation under capital lease		3,617,498			3,240,052
TOTAL LIABILITIES		4,698,338			3,477,278
STOCKHOLDERS’ DEFICIT
Preferred stock - $.001 par value; 5,000,000 shares authorized, none issued or outstanding
Common stock - $.001 par value; 50,000,000 shares authorized, 30,072,000 shares outstanding		30,072			30,072
Additional paid-in capital		105,633			15,633
Deficit accumulated during the development stage		(1,159,961	)		(175,537	)
TOTAL STOCKHOLDERS’ DEFICIT		(1,024,256	)		(129,832	)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$	3,674,082		$	3,347,446

_______________

See accompanying notes to these financial statements.

3

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MAY 31, 2006

AND FROM INCEPTION TO MAY 31, 2006

	Three Months Ended May 31, 2006 (Unaudited)			For the Period From April 20, 2005 (Date of Inception) to May 31, 2006 (Unaudited)
EXPENSES
General and administrative	$	85,164		$	253,976
Professional fees		61,014			129,349
Vehicle		11,565			29,830
Insurance		7,607			7,607
Telecommunications		6,584			15,970
Travel and entertainment		5,413			24,211
Advertising and promotion		1,182			1,940
Interest and bank charges		166			2,155
Occupancy costs		-			22,447
Consulting fees		-			5,000
Depreciation		43,636			144,490
TOTAL EXPENSES		222,331			636,975
LOSS FROM OPERATIONS		(222,331	)		(636,975	)
OTHER EXPENSES
Interest on capital lease obligation		154,826			522,986
NET LOSS	$	(377,157	)	$	(1,159,961	)
Loss per common share, basic and diluted	$	(0.01	)
Weighted average shares outstanding, basic and diluted		30,072,000

_______________

See accompanying notes to these financial statements.

4

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF OPERATIONS

FOR THE NINE MONTHS ENDED MAY 31, 2006

	Nine Months Ended May 31, 2006 (Unaudited)
EXPENSES
General and administrative	$	189,855
Professional fees		126,849
Vehicle		26,164
Travel and entertainment		16,980
Telecommunications		14,009
Insurance		7,607
Advertising and promotion		1,940
Interest and bank charges		1,057
Occupancy costs		-
Consulting fees		-
Depreciation		130,145
TOTAL EXPENSES		514,606
LOSS FROM OPERATIONS		(514,606	)
OTHER EXPENSES
Interest on capital lease obligation		469,818
NET LOSS	$	(984,424	)
Loss per common share, basic and diluted	$	(0.03	)
Weighted average shares outstanding, basic and diluted		30,072,000

_______________

See accompanying notes to these financial statements.

5

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)

(A DEVELOPMENT STAGE COMPANY)

STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MAY 31, 2006 AND 2005

AND FROM INCEPTION TO MAY 31, 2006

	Nine Months Ended May 31, 2006 (Unaudited)			For the Period From April 20, 2005 (Date of Inception) to May 31, 2006 (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(984,424	)	$	(1,159,961	)
Adjustments to reconcile net income to net cash provided (used) by operating activities:
Depreciation		130,145			144,490
Interest accrued on obligation under capital lease		469,818			522,986
Acquisition of the net liabilities of Easy.com Inc.		-			(4,295	)
Services contributed by shareholders		90,000			140,000
Changes in Assets and Liabilities:
Prepaid expenses		(22,722	)		(32,722	)
Accounts payable and accrued liabilities		36,649			36,649
NET CASH USED IN OPERATING ACTIVITIES		(280,534	)		(333,354	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(352,887	)		(354,102	)
NET CASH PROVIDED BY INVESTING ACTIVITIES		(352,887	)		(373,601	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances from shareholders		804,593			878,139
Repayment of obligation under capital lease		(90,000	)		(90,000	)
NET CASH PROVIDED BY FINANCING ACTIVITES		714,593			788,139
NET CHANGE IN CASH & CASH EQUIVALENTS		81,172			81,184
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		12			-
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	81,184		$	81,184

_______________

See accompanying notes to these financial statements.

6

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND NATURE OF OPERATIONS

ORGANIZATION

Easy.com, Inc. (“Easy”) was incorporated under the laws of the State of Nevada on May 9, 2000. Easy was a non-operating shell corporation with nominal net assets prior to June 2005, when Easy acquired one hundred percent (100%) of the assets of Royal Spring Water Inc., a Nevada company (“RSW” or the “Company”).

RSW was established on April 20, 2005 with a clear mission, namely to extract, process, and bottle Artesian Spring Well water of supreme quality.

BUSINESS COMBINATION, RESTATED

On June 30, 2005, Easy acquired all of the outstanding stock of RSW (the "Reverse Merger"). Easy completed the acquisition by having the shareholders of RSW surrender 100% of their common stock to the company. In anticipation of the Reverse Merger, on September 2, 2004 the shareholders of Easy gifted stock to the shareholders of RSW, giving these shareholders and there family members control of Easy. For accounting purposes, pursuant to Statement of Financial Accounting Standards ("SFAS") No. 141, Business Combinations, the acquisition has been treated as a recapitalization of RSW with RSW as the acquirer (reverse acquisition). A reverse acquisition occurs if a company other than the legal acquirer is deemed to be the “accounting acquirer” in a business combination effected by the issuance of voting securities. In this regard, RSW is considered the accounting acquirer and Easy is considered the accounting target. The historical financial statements prior to June 30, 2005 are those of RSW.

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

In April 2006, the Company filed Articles of Merger in Nevada and legally combined the entities of Easy.com and Royal Spring Water Inc. They concurrently changed the name of the surviving entity to Royal Spring Water Inc.

NOTE 2. PROPERTY, PLANT & EQUIPMENT

At May 31, 2006 property, plant and equipment consists of the following:

Land and water rights under capital lease	$	1,287,853
Equipment under capital lease		506,555
Locomotive under capital lease	��	53,661
Computer		3,551
Water treatment system		345,646
Building under capital lease		1,502,495
Furniture and equipment		4,905
		3,704,666
Less: accumulated depreciation		(144,490	)
Net property, plant and equipment	$	3,560,176

Depreciation expense was $43,636 and $130,145 for the three and nine months ended May 31, 2006, respectively ($Nil - 2005).

7

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)

(A DEVELOPMENT STAGE COMPANY)

NOTE 3. RELATED PARTY TRANSACTIONS

The advances from shareholders of the Company, to facilitate the payment of debts, are non-interest bearing, unsecured and have no specific terms of repayment. The carrying value of the advances approximates the market value due to the short-term maturity of the financial instruments.

For the nine months ended May 31, 2006, the Company's directors and shareholders devoted time to the development of the Company. Compensation expense totaling $30,000 and $90,000 has been recorded for the three and nine months ended May 31, 2006, respectively. These directors and shareholders have waived reimbursement and have considered these services as a contribution to capital. Accordingly, the contributions have been recorded as additional paid-in capital.

NOTE 4. OBLIGATION UNDER CAPITAL LEASE

The Company leases land, building and equipment under a capital lease which contains a bargain purchase option which the Company intends to exercise on or before its expiration on August 1, 2009. The asset and liability under the capital lease are recorded at the present value of the minimum lease payments and purchase option price.

Future minimum lease payments under capital lease as of May 31, 2006 for each of the next four years and in the aggregate are:

Year 1	$	300,000
Year 2		304,375
Year 3		315,030
Year 4, including bargain purchase option		4,644,524
Total minimum lease payments		5,563,929
Less: amount representing interest at 19%		(1,780,379	)
Total obligations under capital lease		3,783,550
Less: current installments of obligations under capital lease		(166,052	)
Long-term obligation under capital lease	$	3,617,498

NOTE 5. RESTATEMENT OF FINANCIAL STATEMENTS

The Company has restated its financial statements for the period ended August 31, 2005 and for the nine months ended May 31, 2006 due to an error in the accounting treatment of the business combination of Easy.com Inc. and Royal Spring Water Inc. Previously the company had accounted for this transaction as a common control business combination and had presented the combined historical financial statements of both companies. The Company subsequently determined that, because the two companies became related through a transaction in anticipation of the Reverse Merger that accounting for the Reverse Merger as a common control transaction was not appropriate. The statements have therefore been restated to reflect the transaction as a recapitalization of RSW.

As a result of the restatement of the August 31, 2005 and May 31, 2006 consolidated financial statements, additional paid-in capital and accumulated deficit balances have been reclassified to include the historical financial statements of RSW since April 20, 2005 (inception). The historical financial statements previously reported were those of the combined entities. The restatement had no effect on the previously reported net loss for the nine months ended May 31, 2006.

8

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

PLAN OF OPERATION

Overview

The following discussion and analysis should be read in conjunction with our Financial Statements and notes appearing elsewhere in this report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to; those discussed below and elsewhere in this report.

Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles.

On August 1, 2005 the Company entered into a lease for operating a production facility at 3500 Holly Sugar Rd. in Hereford, Texas with the intention of producing and selling artesian water. This property includes 1,000 square feet of office space, a 70,000 square foot warehouse and production facility, six 25,000 gallon liquid holding tanks and related equipment and the water rights from two artesian wells. The lease calls for an initial rent of $15,000 per month for six months commencing November 1, 2005 to April 2006 payable in advance for six months on November 1, 2005. Thereafter for the next 24 years, the annual rent is $25,000 per month, adjusted annually based on the consumer price index. In the first four years, the Company has an option to purchase the facility at an amount calculated as set forth in the terms of the lease which is estimated to be $4,590,964.

Of the 70,000 square foot space, 40,000 square feet will be allocated to water processing and packaging space made accessible by loading bays and a 5.5 mile railroad spur leading directly from the main railroad station in Hereford to our loading dock. The railroad extension is made available to the Company as a term of the lease and, as a term of the option to purchase the property, will continue to be made available for use as an easement when the Company purchases the property. Also included in the property lease and option to purchase is the train engine needed to pull and push the train cars for our shipping needs which will enable us to keep our shipping cost very low. We have completed all necessary agreements and approvals with BNSF Railway Company (“BNSF”), that serves our facility. (http://www.bnsf.com/ ) We will order and schedule the box cars needed for shipment of our products to our clients nationwide using the Electronic Data Interchange service provided by BNSF. The remaining 30,000 square feet has been allocated for storage of raw materials and finished goods.

Under our lease agreement, we are allowed to pump 400,000 gallons of water per day, which equates to approximately 2,909,000bottles of water (16.9 oz) per day. We believe this will be sufficient to meet the demands of any large orders in the foreseeable future.

During the next twelve months, we intend to concentrate on two products; plain, non-carbonated bottled water and flavored water.

Our primary business strategy is focused in two main areas. The first is to offer existing bottled water distribution companies, major retail stores and service oriented businesses the ability to change their current bottled water to a private label in their business name. Additionally, for companies already selling under a private label, we intend to sell our water for a more competitive price and to help increase their bottle water capacity by providing them with an additional source for their water supply. Our research has shown that these manufacturing and distribution companies are at their production capacity and cannot meet their customers’ demands and that it may be more cost effective for them to have us provide them with water rather than to develop or expand existing water bottling facilities. In these circumstances, we intend to have the customers provide us with their labels or logo, and we will fill the bottles, apply the label and ship the products to the customer. The second part of our marketing and sales strategy is to develop the “Royal Spring Water” brand of bottled water and commence sales of that product in the US and around the world. We will be targeting our product (single serve plastic bottles of 355ml, 500ml, 1liter, 1.5liters, 1gallon) directly to the smaller end user - convenience stores, fast food establishments, gas stations, major clubs and popular restaurants, among others.

A sales team comprised of Company representatives will be put in charge to first work on securing contracts with stores, restaurants and clubs using various promotional tools such as pamphlets, price lists, and samples of our bottled water. Sponsorship is another marketing tool that we will utilize in order to acquire exposure and gain recognition. We expect to be sponsoring concerts, golf tournaments, and dance clubs, etc. We believe that by providing free samples of our bottled water to various groups and venues, we will be able to effectively spread our name and popularity and obtain market penetration. We will also be targeting all major hotel and casino gaming companies in order to provide them with their private labeled bottled water and customized labels (specific hotel-casino names, logos and images). We have contacts in some of the major hotel-casinos in Las Vegas who have already expressed an interest in purchasing water from our company when it becomes available. The hotels and major casinos out-source 100% of their consumable bottled water.

9

Our production and bottling facility at the wells is a highly automated plant with an operationally flexible system with high production capacity. The processing and bottling of the water to be captured at the artesian well water facility is divided into various main steps:

Initial capture at the artesian well water where the water is pumped from a depth of approximately 300 to 400 feet then transferred to the storage location by a system of pipes.

1. From the point of capture, a network of underground pipes transfers the water to our treatment plant where the water is first filtered through sand traps and stored in indoor holding tanks (one of six 25,000 gallon tanks) subsequent to the filtration and treatment process to prepare water for the bottling process.

2. After the primary storage, water is pumped to a Multi-Media Filter to an Activated Carbon Pre-Filter to a 5-Micron Sediment Filter to Reverse Osmosis to Ozone Disinfection treated water pumped in two 6,000 gallon Stainless Steel Production Water Storage Tanks. The water is then transferred to the bottling zone via stainless steel pipes and Post Activated Carbon Filter and a Ultra-Violet Sterilization system.

3. The water is then moved to the bottling room which is pressurized and air conditioned (filtered air) to avoid all possible contamination during the bottle filling process. These operations consist of rinsing of the bottle prior to filling with specially treated water using both UV light and ozonation and media filters and then filling of the bottle with the treated water, capping it, labeling it, assigning it with a batch number, year, time of bottling and expiration date.

4. The bottles are then moved to the packing and shipping area where a bundling machine groups the various forms into packs of 6, 12, 24 and 32 bottles, wrapping them in printed film. The packs are then transferred to the robotic pallet- forming area where they are palletized for shipment.

5. Our in house laboratory staff maintains a constant control on the quality of the water. Weekly water samples are sent out to a certified lab in order to maintain our certification by the EPA, TCEQ and Texas Department of Health authorities. To further guarantee a superior quality product, the laboratory has to process daily chemical and bacteriological analyses on the entire production chain. We are using polyethylene Terephthalate (known as PET) bottles in various sizes - 12oz, 16.9oz 1L and 1.5L. Our current system can also manufacture flavored water and carbonated water. Our capping machines can handle both a regular flat cap as well as a sportscap. We have purchased a Krup stretch blow molder which we will use to blow our PET bottles. The PET bottles are blown from what is called a preform. This is supplied to us by the Ball Corporation, one of the leading PET manufacturers. We have made a decision to buy all of our raw materials from US based companies instead of China made products. (see details of our current existing production capacity and potential capacity in the paragraph below entitled “Acquisition or Disposition of Plant and Equipment”)

Results of Operations for the Three Months and Nine Months Ended May 31, 2006

We have no revenue from operations as of the date of this report and we have relied on and will continue to reply on significant external financing to fund our operations. During the nine months ended May 31, 2006, our financing came from non-interest bearing loans from shareholders in the amount of $878,139. Our operations since inception in 2000 have not generated any revenue. We generated a net loss of $984,424 for the nine months ended May 31, 2006, for a cumulative loss of $1,159,961 since the inception of the Company.

Licensing and Water Rights:

Although we have a contract which will allow us to extract water from the land, it doesn’t did not automatically give us the right to distribute it. In order to distribute water worldwide and commence business, we obtained certain local licenses. Besides these local necessary licenses, one must pass certain specifications and requirements of the Food and Drug Administration (FDA). This includes a clean and immaculate warehouse, and the use of hygienic filtration, bottling and packing operation systems. We will assure that all our operations meet and surpass all government requirements. In June 2006, the Company passed the water test required by the state of Texas Commission on Environmental Quality, in order to commence production at the Royal Spring Water plant in Hereford, Texas. The test was conducted by the City of Amarillo, Environmental Laboratory No. 48103 over a period of three days. This completed all of the testing and licensing requirements of the various government bodies needed to commence production and sales of our products.

10

Product Research and Development:

In order to obtain high quality products and assure customer satisfaction, we will be using fully automated state of the art machinery. For the past three years, we have spent much of our time, money and efforts into researching the water industry in the U.S. and overseas. As a result, we have acquired broad knowledge about procedures, licenses, machinery, and land. During this time, we have also built strong relationships with key individuals within the government and private sectors related to the water industry. We do not anticipate performing further research and development for any products during the next twelve months.

Acquisition or Disposition of Plant and Equipment:

We have purchased a fully automated, state of the art water treatment and bottling system at a cost of $331,700 that is currently in place and has the capacity to bottle up to 144 million bottles per year, based on a bottle size of 16.9 ounces. The plant facility has the water capacity to grow and supply in excess of one billion bottles per year. Our bottling line can handle bottle sizes from 8 ounce bottles to 1.5 liter bottles. This state of the art machinery is fully automated and runs with minimal human intervention. We also purchased a bottle stretch blow molder which enables us to blow our own bottles from preforms.

To date, we have spent approximately $330,000 on the purchase of machinery and equipment.

Liquidity and Capital Resources and Future Funding Requirements

The Company has funded its operation from loans from our officers and directors and intends to raise additional funds by way of private placements and funding from outside sources. The Company has secured a line of credit for $1,000,000 with American Business Finance LLC, located in Oklahoma, which will help to improve cash flows needed for working capital until profitable operations are attained.

Although the Company has no firm commitments from other investors or lenders at this time, the Company believes it will be able to raise sufficient capital to complete assembly of its production facilities and commence production and distribution of its products. There can be no assurance that the Company will be able to secure additional financing or that the amount of any additional financing will be sufficient to accomplish its business objectives or to pay ongoing operating expenses.

During the current fiscal year (2006), the shareholders of the Company have made loans in the amount of $878,139. These funds have been used to meet working capital requirements, acquire bottling equipment and further develop the plant.

The majority of the infrastructure necessary for the operation of the plant was already in place upon commencement of the lease. This is the key capital resource that will enable the Company to quickly commence production and obtain revenues to assist in meeting its working capital requirements.

The following assets are currently in use at our plant:

· Building - 20,000 square feet three story building attached to the warehouse

· Warehouse - 15,000 square feet adjacent to the three story building

· Warehouse - additional 36,000 square feet space, added April 2006

· Equipment - six 25,000 gallon liquid holding tanks (4 tanks are inside the building and 2 outside) related water pumps and pipes connecting wells and tanks, motors and agitators

· Land and Water Rights - Well #11 and Well #12 located on the real Property

· Waste water ponds

· Paved parking

· Access to existing rail

11

The Company’s scheduled lease payments from inception of the lease and leading up the purchase date are as follows:

December 1, 2005 - May 31, 2006	$	90,000
June 1, 2006 - December 31, 2006		175,000
January 1, 2007 - December 31, 2007		300,000
January 1, 2008 - December 31, 2008*		310,500
January 1, 2009 - July 31, 2009*		187,464
	$	1,062,964

*CPI is estimated at 3.5% as per most recent full year information available as posted in The Wall Street Journal.

At the end of the first four year period of the lease, the Company intends to purchase, through an available option, the assets at an estimated price of $4,590,964. The actual purchase price will depend upon the prevailing lease rate in effect at the time we exercise our purchase option.

Determination of the classification of the lease:

The Company has determined that the Lease meets the criteria set forth in paragraph 7 (b) of Statement of Financial Accounting Standards ("SFAS") No. 13, Accounting for leases, requiring it to be classified as a capital lease. To meet this requirement the lease must meet one of four specific criteria, one of which is the existence of a bargain purchase option, defined as a provision in the lease allowing the lessee, at our option, to purchase the leased property for a price which is sufficiently lower than the expected fair value of the property at the date the option becomes exercisable, and that exercise of the option appears, at the inception of the lease, to be reasonably assured.

Off-Balance Sheet Arrangements

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency contracts. We do not engage in trading activities involving non-exchange traded contracts.

Going Concern

Due to the uncertainty of our ability to meet our current operating and capital expenses, in their report on our audited financial statements for the period ended August 31, 2005, our independent registered accountants 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.

12

ITEM 3. CONTROL AND PROCEDURES

As discussed in note 5 to the May 31, 2006 consolidated financial statements, the Company has restated its consolidated financial statements for the period ended August 31, 2005 and will restate the quarterly reports for the quarter ended May 31, 2006.  These restatements are the result of the Company's accounting treatment for the business combination of Easy.com Inc and Royal Spring Water Inc.

As of the end of the period covered by this annual report, an evaluation was carried out under the supervision and with the participation of the Company's management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934).  Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were not effective because of the material weakness discussed below.  Notwithstanding the material weakness discussed below, the Company's management has concluded that the consolidated financial statements included in this Annual Report on Form 10-QSB/A fairly present in all material respects the Company's financial condition, results of operations and cash flows for the periods presented in conformity with accounting principles generally accepted in the United States of America.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.  As a result of the restatement described above, the following material weakness was identified in the Company's assessment of the effectiveness of disclosure controls and procedures as of May 31, 2006:

i)            The Company did not maintain effective controls over the accounting for the business combination of Easy.com Inc and Royal Spring Water Inc.

During the quarter of the period covered by this report, there were no significant changes in internal controls or in other factors that could significantly affect the internal controls, including any corrective actions taken with regard to significant deficiencies and material weaknesses.

PART II - OTHER INFORMATION

ITEM 1 LEGAL PROCEEDINGS

Royal Spring Water Inc. is involved in litigation with a former employee. The Company has filed a Cross-Complaint against this former employee, which we believe has merit and will result in either a recovery for Royal Spring Water or an offset in excess of any claim by the former employee.

Management and legal counsel for the Company are of the opinion that the employee’s claim is without merit. Accordingly, the financial statements do not include any adjustments to reflect the possible outcome of this claim. This matter is currently not being contested in any court of law.

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

This item is not applicable.

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ITEM 3 DEFAULTS UPON SENIOR SECURITIES

This item is not applicable.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

This item is not applicable.

ITEM 5 OTHER INFORMATION

This item is not applicable.

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ITEM 6 EXHIBITS

The following exhibits are being filed as part of this quarterly report:

Exhibit No.	Description
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

ROYAL SPRING WATER INC. (FORMERLY EASY.COM, INC.)
By:	/s/ Alex Hazan
	Name: Alex Hazan
	Title: Chief Executive Officer
Date: November 22, 2006
By:	/s/ Harel Goldstein
	Name: Harel Goldstein
	Title: Chief Financial Officer
Date: November 22, 2006

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