UNITED STATES


SECURITIES AND EXCHANGE
COMMISSION


Washington, D.C.
20549







FORM 10-QSB





x
            QUARTERLY REPORT UNDER SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY
      PERIOD ENDED SEPTEMBER 30,
2008




o
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from
  ______to______.


Commission
File Number: 000-27739




Royal Quantum Group,
Inc.


(Exact
name of small business issuer as specified in its charter)





Nevada
            77-0517966(State
      or other jurisdictionof
              incorporation
      or organization)
            (I.R.S.
      Employer
              Identification
      No.)





Suite #145, 251 MidPark Blvd
      S.E. Calgary, AB Canada T2X 1S3(Address
      of principal executive offices)





(403)
      288-4321(Issuer’s
      Telephone Number)





Indicate
by check mark whether the issuer (1) has 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. xYes  oNo
 
 Indicate
by check mark whether the registrant is a large accelerated file, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the
definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
  Large
      accelerated filer
              o
              Accelerated
      filer
              oNon-accelerated
      filer (Do not check if a smaller reporting company)
              o
              Smaller
      reporting company
              x
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  o Yes  xNo
 
 APPLICABLE
ONLY TO CORPORATE ISSUERS
  State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practical date.  As of October 31, 2008 there were
48,020,338 shares of the issuer's $.001 par value common stock issued and
outstanding.




PART
I - FINANCIAL INFORMATION
 
 Item 1.  Financial
Statements
 ROYAL QUANTUM GROUP, INC. (A Development Stage Company) CONSOLIDATED  BALANCE
SHEETS
 (Unaudited)
                  
                  
                  (Audited)September
      30,
                  
                  
                  December
      31,2008
                  
                  
                  2007ASSETSCurrent
      Assets:Cash
      & Cash Equivalents
                  
                  $
                  164,452
                  
                  
                  $
                  3,448Loan
      receivable
                  
                  
                  -
                  
                  
                  
                  -Total
      Current Assets
                  
                  
                  164,452
                  
                  
                  
                  3,448Fixed
      Assets:Furniture
      & Fixtures
                  
                  
                  1,851
                  
                  
                  
                  1,851Less:
      Accumulated Depreciation
                  
                  
                  (833
                  )
                  
                  
                  (555
                  )Total
      Fixed Assets
                  
                  
                  1,018
                  
                  
                  
                  1,296Other
      Assets:Intangible
      Assets
                  
                  
                  1
                  
                  
                  
                  1Mineral
      Property & Deferred Expenditures
                  
                  
                  10,000
                  
                  
                  
                  10,000Oil
      Property & Deferred Expenditures
                  
                  
                  477,477
                  
                  
                  
                  0Total
      Other Assets
                  
                  
                  487,478
                  
                  
                  
                  10,001Total
      Assets
                  
                  $
                  652,948
                  
                  
                  $
                  14,745LIABILITIES
      & STOCKHOLDERS' EQUITYCurrent
      Liabilities:Accounts
      Payable
                  
                  $
                  141,230
                  
                  
                  $
                  184,342Notes
      Payable
                  
                  
                  264,307
                  
                  
                  
                  259,157Related
      Party Payables
                  
                  
                  83,853
                  
                  
                  
                  120,088Total
      Current Liabilities
                  
                  
                  489,390
                  
                  
                  
                  563,587Shareholder
      Loans
                  
                  
                  19,845
                  
                  
                  
                  25,845Total
      Liabilities
                  
                  
                  509,235
                  
                  
                  
                  589,432Stockholders'
      Equity:Common
      Stock, Par value $.001Authorized
      500,000,000 sharesIssued
      48,020,338 and 39,095,338Shares
      at September 30, 2008 and Dec 31, 2007
                  
                  
                  48,020
                  
                  
                  
                  39,095Paid-in
      Capital
                  
                  
                  4,105,442
                  
                  
                  
                  3,046,117Deficit
      Accumulated During theDevelopment
      Stage
                  
                  
                  (4,009,749
                  )
                  
                  
                  (3,659,899
                  )Total
      Stockholders' Equity
                  
                  
                  143,713
                  
                  
                  
                  (574,687
                  )Total
      Liabilities and Stockholders' Equity
                  
                  $
                  652,948
                  
                  
                  $
                  14,745
  The
accompanying notes are an integral part of these financial
statements.
  1
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company) STATEMENTS OF
OPERATIONS (Unaudited)
 CumulativesinceAugust
      23,2002For
      the three months ended
                  
                  
                  For
      the nine months ended
                  
                  
                  inception
      ofSeptember
      30,
                  
                  
                  September
      30,
                  
                  
                  development2008
                  
                  
                  2007
                  
                  
                  2008
                  
                  
                  2007
                  
                  
                  stageRevenues
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  --
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -ExpensesConsulting
      Fees
                  
                  
                  35,130
                  
                  
                  
                  25,937
                  
                  
                  
                  185,938
                  
                  
                  
                  105,590
                  
                  
                  
                  995,515Compensation
      Expense
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  145,000
                  
                  
                  
                  273,790General
      & Administrative
                  
                  
                  16,370
                  
                  
                  
                  33,017
                  
                  
                  
                  51,262
                  
                  
                  
                  76,104
                  
                  
                  
                  465,984Loss
      from Operations
                  
                  
                  (51,500
                  )
                  
                  
                  (58,954
                  )
                  
                  
                  (237,200
                  )
                  
                  
                  (326,694
                  )
                  
                  
                  (1,735,289
                  )Other
      Income (Expenses)Write-down
      of Assets
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (147,986
                  )Foreign
      currency exchange gain (loss)
                  
                  
                  10,599
                  
                  
                  
                  -
                  
                  
                  
                  18,499
                  
                  
                  
                  -
                  
                  
                  
                  (19,428
                  )Interest
      (Expense)
                  
                  
                  (58,016
                  )
                  
                  
                  (6,347
                  )
                  
                  
                  (148,649
                  )
                  
                  
                  (20,146
                  )
                  
                  
                  (290,770
                  )Interest
      Income
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  263Forgiveness
      of debt
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  17,500
                  
                  
                  
                  -
                  
                  
                  
                  17,500Total
      Other Income (Expense)
                  
                  
                  (47,417
                  )
                  
                  
                  (6,347
                  )
                  
                  
                  (112,650
                  )
                  
                  
                  (20,146
                  )
                  
                  
                  (440,421
                  )Net
      Loss from Continuing Operations
                  
                  $
                  (98,917
                  )
                  
                  $
                  (65,301
                  )
                  
                  $
                  (349,850
                  )
                  
                  $
                  (346,840
                  )
                  
                  $
                  (2,175,710
                  )Discontinued
      OperationsLoss
      from operation of discontinued component
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,967,294
                  )Gain
      pn disposal net of tax effect of $0
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  133,255Net
      Income (Loss) from Discontinued Operations
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,834,039
                  )Net
      Loss
                  
                  $
                  (98,917
                  )
                  
                  $
                  (65,301
                  )
                  
                  $
                  (349,850
                  )
                  
                  $
                  (346,840
                  )
                  
                  $
                  (4,009,749
                  )Basic
      and Diluted Loss Per ShareContinuing
      Operations
                  
                  
                  0.00
                  
                  
                  
                  0.00
                  
                  
                  
                  (0.01
                  )
                  
                  
                  (0.01
                  )Discontinued
      Operations
                  
                  
                  0.00
                  
                  
                  
                  0.00
                  
                  
                  
                  0.00
                  
                  
                  
                  0.00Loss
      per share
                  
                  
                  0.00
                  
                  
                  
                  (0.01
                  )
                  
                  
                  (0.01
                  )
                  
                  
                  (0.01
                  )Weighted
      Average Shares Outstanding
                  
                  
                  44,487,729
                  
                  
                  
                  38,762,005
                  
                  
                  
                  41,737,291
                  
                  
                  
                  37,767,558
  The
accompanying notes are an integral part of these financial
statements.
  2
  ROYAL QUANTUM GROUP,
INC. (A Development Stage
Company)
 STATEMENTS OF CASH
FLOWS (Unaudited)
  CumulativesinceAugust
      23,2002For
      the nine months ended
                  
                  
                  inception
      ofSeptember
      30,
                  
                  
                  development2008
                  
                  
                  2007
                  
                  
                  stageCASH FLOWS FROM
      OPERATING ACTIVITIES:Net
      Loss
                  
                  $
                  (349,850
                  )
                  
                  $
                  (346,840
                  )
                  
                  $
                  (4,009,749
                  )Net
      Income/(Loss)from Discontinued Operations
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,578,681Adjustments
      to reconcile net income (loss) tonet
      cash provided (used in) operating activities:Depreciation
                  
                  
                  278
                  
                  
                  
                  278
                  
                  
                  
                  833Stock
      issued for interest
                  
                  
                  125,000
                  
                  
                  
                  -
                  
                  
                  
                  100,000Stock
      issued for start up costs
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  12,600Stock
      issued for services
                  
                  
                  -
                  
                  
                  
                  145,000
                  
                  
                  
                  644,390Forgiveness
      of debt
                  
                  
                  (17,500
                  )
                  
                  
                  -
                  
                  
                  
                  (17,500
                  )Foreign
      currency exchange loss (gain)
                  
                  
                  (18,499
                  )
                  
                  
                  -
                  
                  
                  
                  19,428Increase
      (decrease) in interest on notes payable
                  
                  
                  23,649
                  
                  
                  
                  19,464
                  
                  
                  
                  184,084Increase
      (decrease) in accounts payable
                  
                  
                  6,888
                  
                  
                  
                  60,114
                  
                  
                  
                  354,409Increase
      (decrease) in related party accounts payable
                  
                  
                  (36,235
                  )
                  
                  
                  15,858
                  
                  
                  
                  53,775Net
      cash provided (used in) continuing activities
                  
                  
                  (266,269
                  )
                  
                  
                  (106,126
                  )
                  
                  
                  (1,079,049
                  )Net
      cash provided (used in) discontinuing activities
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  386,515Net
      cash provided by (used in) operating activities
                  
                  
                  (266,269
                  )
                  
                  
                  (106,126
                  )
                  
                  
                  (692,534
                  )CASH FLOWS FROM
      INVESTING ACTIVITIES:Investment
      in Mineral Property
                  
                  
                  -
                  
                  
                  
                  (10,000
                  )
                  
                  
                  (10,000
                  )Investment
      in Oil Property
                  
                  
                  (418,727
                  )
                  
                  
                  -
                  
                  
                  
                  (418,727
                  )Purchase
      of fixed assets
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  (1,851
                  )Net
      cash provided by (used in) investing activities
                  
                  
                  (418,727
                  )
                  
                  
                  (10,000
                  )
                  
                  
                  (430,578
                  )CASH FLOWS FROM
      FINANCING ACTIVITIES:Proceeds
      from shareholder loans
                  
                  
                  -
                  
                  
                  
                  8,625
                  
                  
                  
                  136,027Payment
      on shareholder loans
                  
                  
                  (6,000
                  )
                  
                  
                  (21,682
                  )
                  
                  
                  (88,182
                  )Proceeds
      from notes payable
                  
                  
                  500,000
                  
                  
                  
                  -
                  
                  
                  
                  685,795Contributed
      capital
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  2,842Stock
      issued in exchange for cash
                  
                  
                  352,000
                  
                  
                  
                  132,682
                  
                  
                  
                  551,082Net
      cash provided by (used in) financing activities
                  
                  
                  846,000
                  
                  
                  
                  119,625
                  
                  
                  
                  1,287,564Net
      (Decrease) increase in Cash and Cash Equivalents
                  
                  
                  161,004
                  
                  
                  
                  3,499
                  
                  
                  
                  164,452Cash
      and Cash Equivalents at Beginning of Period
                  
                  
                  3,448
                  
                  
                  
                  340
                  
                  
                  
                  -Cash
      and Cash Equivalents at End of Period
                  
                  $
                  164,452
                  
                  
                  $
                  3,839
                  
                  
                  $
                  164,452SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the year for:Interest
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  12Income
      taxes
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INVESTING AND FINANCING
      ACTIVITIESStock
      issued in plan of reorganization
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  858Stock
      issued in asset acquisition
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  2,243,000Stock
      issued for services
                  
                  $
                  -
                  
                  
                  $
                  145,000
                  
                  
                  $
                  653,140Stock
      issued for investment in oil property
                  
                  $
                  58,750
                  
                  
                  $
                  -
                  
                  
                  $
                  58,750Stock
      issued for cancellation of debt
                  
                  $
                  500,000
                  
                  
                  $
                  -
                  
                  
                  $
                  799,700Shareholder
      loans converted to paid in capital
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  3,000Stock
      issued for Accounts Payable
                  
                  $
                  32,500
                  
                  
                  $
                  20,000
                  
                  
                  $
                  70,000
  The
accompanying notes are an integral part of these financial
statements.
  3
  ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
   NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 This
summary of accounting policies for Royal Quantum Group, Inc. (the “Company”) is
presented to assist in understanding the Company's financial
statements.  The accounting policies conform to generally accepted
accounting principles and have been consistently applied in the preparation of
the financial statements.
 
 Interim Financial
Statements
 
 The unaudited financial statements as
of September 30, 2008 and the three and nine months then ended, reflect, in the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to fairly state the financial position and results of the
operations for the three and nine months then ended.  Operating
results for interim periods are not necessarily indicative of the results which
can be expected for full years.
 
 Nature of Operations and
Going Concern
 
 The accompanying financial statements
have been prepared on the basis of accounting principles applicable to a “going
concern”, which assume that the Company will continue in operation for at least
one year and will be able to realize its assets and discharge its liabilities in
the normal course of operations.
 
 Several conditions and events cast
doubt about the Company’s ability to continue as a “going
concern”.  The Company has incurred net losses of approximately
$4,009,749 for the period from August 23, 2002 (inception of development stage)
to September 30, 2008 has a liquidity problem, and as of September 30, 2008 has
no sources of revenue.  In the interim, shareholders of the Company
have committed to meeting any shortfall of operational cash
flow.   In addition the company may require increasing equity and
debt financing in order to finance its business activities on an ongoing
basis.
 
 These financial statements do not
reflect adjustments that would be necessary if the Company were unable to
continue as a “going concern”.  While management believes that the
actions already taken or planned, will mitigate the adverse conditions and
events which raise doubt about the validity of the “going concern” assumption
used in preparing these financial statements, there can be no assurance that
these actions will be successful.
 
 If the
Company were unable to continue as a “going concern”, then substantial
adjustments would be necessary to the carrying values of assets, the reported
amounts of its liabilities, the reported expenses, and the balance sheet
classifications used.
  4
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
   NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Organization and Basis of
Presentation
 
 The Company was incorporated under the
laws of the State of Nevada on October 22, 1996 under the name PSM
Corp.  The Company ceased all operating activities during the period
from October 22, 1996 to July 9, 1999 and was considered dormant. On July 9,
1999, the Company obtained a Certificate of renewal from the State of
Nevada.
 
 On October 3, 2002, the Company changed
its name to Platinum SuperYachts, Inc. in anticipation of a merger with
SuperYachts Holdings, Inc. (a Nevada Corporation that was incorporated on August
23, 2002).  On November 15, 2002, the shareholders of the Platinum
SuperYachts, Inc. completed a stock exchange agreement with SuperYachts
Holdings, Inc. dated August 8, 2002.  The merger was accounted for as
a reverse merger, with SuperYachts Holdings being treated as the acquiring
entity for financial reporting purposes.
 
 For financial reporting purposes,
Platinum SuperYachts, Inc. was considered a new reporting entity on November 15,
2002
 
 On November 23, 2005 holders of a
majority of the Company’s common stock approved an Amendment to change the name
of the Company to Royal Quantum Group, Inc., to increase the number of shares of
common stock the Company is authorized to issue to 500,000,000 and to authorize
the Company to issue up to 10,000,000 shares of preferred stock.
 
 The
Company has been in the development stagesince August 23,
2002.
 
 Nature of
Business
 
 Royal Quantum Group Inc. is a public
company trading on the OTCBB market under the symbol RYQG.  Royal
Quantum is focused on the acquisition, exploration and development of mineral
and resource properties located within favorable geo-political
climates.
  5
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Cash and Cash
Equivalents
 
 For purposes of the statement of cash
flows, the Company considers all highly liquid debt instruments purchased with a
maturity of three months or less to be cash equivalents to the extent the funds
are not being held for investment purposes.
 
 Depreciation and
Amortization
 
 Fixed
assets are recorded at cost and depreciated using the straight-line method over
the estimated useful lives of the assets which range from three to five
years.  Fixed assets consisted of the following at September 30, 2008
and December 31, 2007:
 
 September
      30,
                  
                  
                  December
      31,2008
                  
                  
                  2007Furniture
      & Fixtures
                  
                  $
                  1,851
                  
                  
                  $
                  1,851Less
      accumulated depreciation
                  
                  
                  (833
                  )
                  
                  
                  (555
                  )Total
                  
                  $
                  1,018
                  
                  
                  $
                  1,296
 
 Maintenance
and repairs are charged to operations; betterments are
capitalized.  The cost of property sold or otherwise disposed of and
the accumulated depreciation thereon are eliminated from the property and
related accumulated depreciation accounts, and any resulting gain or loss is
credited or charged to income.
 
 Total depreciation expense for the nine
months ended September 30, 2008 and the year end December 31 2007 was $278 and
$370 respectively.
  6
  ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Intangible
Assets
 
 The
Company has adopted the Financial Accounting Standards Board SFAS No., 142,
“Goodwill and Other Intangible Assets.”  SFAS 142 requires, among
other things, that companies no longer amortize goodwill, but instead test
goodwill for impairment at least annually.  In addition, SFAS 142
requires that the Company identify reporting units for the purposes of assessing
potential future impairments of goodwill, reassess the useful lives of other
existing recognized intangible assets, and cease amortization of intangible
assets with an indefinite useful life.  An intangible asset with an
indefinite useful life should be tested for impairment in accordance with the
guidance in SFAS 142.
 
 Intangible
Assets consisted of the following at September 30, 2008 and December 31,
2007:
 
 September
      30,
                  
                  
                  December
      31,Intangible
      Asset
                  
                  2008
                  
                  
                  2007
                  
                  Amortization
      PeriodE-Learning
      System
                  
                  $
                  1 1
                  
                  
                  $
                  1
                  
                  IndefiniteLess
      accumulated amortization
                  
                  
                  -
                  
                  
                  
                  -Total
                  
                  $
                  1
                  
                  
                  $
                  1
 
 Total amortization expense for the six
months ended September 30, 2008 and December 31, 2007 was $0 and $0
respectively.
 
 Pervasiveness of
Estimates
 
 The preparation of financial statements
in conformity with generally accepted accounting principles required management
to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those
estimates.
 
 Foreign Currency
Translation
 
 The Company's primary functional
currency is the U.S. dollar.  However, the Company has a few
transactions in Canada. Transaction gains and losses are included in
income.
  7
  ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Concentrations of Credit
Risk
 
 The Company has no significant
off-balance-sheet concentrations of credit risk such as foreign exchange
contracts, options contracts or other foreign hedging arrangements. The Company
had cash and cash equivalents in the amount of $164,452 and $3,448 as of
September 30, 2008 and December 31, 2007.
 
 Earnings (Loss) per
Share
 
 Basic loss per share has been computed
by dividing the loss for the period applicable to the common stockholders by the
weighted average number of common shares outstanding during the
years.  There were no common equivalent shares outstanding at
September 30, 2008 and 2007.
 
 Stock Compensation for
Non-Employees
 
 Effective June 1, 2006, the company
adopted the provisions of SFAS No. 123 (R) requiring employee equity awards to
be accounted for under the fair value method. Accordingly, share-based
compensation is measured at grant date, based on the fair value of the award.
Prior to June 1, 2006, the company accounted for awards granted to employees
under its equity incentive plans under the intrinsic value method prescribed by
Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued
to Employees” (APB 25), and related interpretations, and provided the required
pro forma disclosures prescribed by SFAS No. 123, “Accounting for Stock-Based
Compensation” (SFAS No. 123), as amended. No stock options were granted to
employees during the years ended December 31, 2006, and 2005 and accordingly, no
compensation expense was recognized under APB No. 25 for the years ended
December 31, 2007, and 2006. In addition, no compensation expense is required to
be recognized under provisions of SFAS No. 123 (R) with respect to
employees.  Under the modified prospective method of adoption for SFAS
No. 123 (R), the compensation cost recognized by the company beginning on June
1, 2006 includes (a) compensation cost for all equity incentive awards granted
prior to, but not vested as of June 1, 2006, based on the grant-dated fair value
estimated in accordance with the original provisions of SFAS No. 123, and (b)
compensation cost for all equity incentive awards granted subsequent to June 1,
2006, based on the grant-date fair value estimated in accordance with the
provisions of SFAS No, 123 (R). The company uses the straight-line attribution
method to recognize share-based compensation costs over the service period of
the award. Upon exercise, cancellation, forfeiture, or expiration of stock
options, or upon vesting or forfeiture of restricted stock units, deferred tax
assets for options and restricted stock units with
  8
  ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Stock Compensation for
Non-Employees (Continued)
 
 multiple
vesting dates are eliminated for each vesting period on a first-in, first-out
basis as if each vesting period was a separate award. To calculate the excess
tax benefits available for use in offsetting future tax shortfalls as of the
dated of implementation, the company followed the alternative transition method
discussed in FASB Staff Position No. 123 (R)-3.  During the periods
ended December 31, 2007 and 2006, no stock options were granted to
non-employees. Accordingly, no stock-based compensation expense was recognized
for new stock option grants in the Statement of Operations and Comprehensive
Loss at December 31, 2007 and 2006.
 
 Financial
Instruments
 
 The Company’s financial instruments, as
defined under SFAS No. 107, Disclosure about Fair Value of Financial
Instruments, include its cash and cash equivalents, accounts payable and accrued
liabilities. Except as otherwise noted, it is management’s opinion that the
Company is not exposed to significant interest or credit risks arising from
these financial instruments.  The fair value of these financial
instruments approximates their carrying values due to the short-term maturities
of these instruments.
 
 Income
Taxes
 
 The Company accounts for income taxes
under the provisions of SFAS No.109, “Accounting for Income
Taxes.”  SFAS No.109 requires recognition of deferred income tax
assets and liabilities for the expected future income tax consequences, based on
enacted tax laws, of temporary differences between the financial reporting and
tax bases of assets and liabilities.
 
 Recent Accounting
Standards
 
 In
February 2007, the FASB issued SFAS no, 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” (“SFAS 159”).  SFAS 159
provides companies with an option to report selected financials assets and
liabilities at fair value.  The objective of SFAS 159 is to reduce
both complexity in accounting for financial instruments and the volatility in
earnings caused by measuring related assets and liabilities
differently.  Generally accepted accounting principles have required
different measurement attributes for different assets and liabilities that can
create artificial volatility in earnings.  The FASB has indicated it
believes that SFAS 159 helps to mitigate this type of accounting-induced
volatility by enabling companies to report related assets and liabilities at
fair value, which would likely reduce the need for companies to comply with
detailed rules for hedge accounting.  SFAS 159 also
  9
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent Accounting Standards
(Continued)
  establishes
presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types
of assets and liabilities.  SFAS 159 does not eliminate disclosure
requirements included in other accounting standards, including requirements for
disclosures about fair value measurements included in SFAS 157 and SFA No. 107,
“Disclosures about Fair Value of Financial Instruments.” SFAS 159 is effective
for the Company as of the beginning of fiscal year 2009.  The adoption
of this pronouncement is not expected to have an impact on the Company’s
financial position, results of operations or cash flows.
 
 In
December 2007, the FASB issued No. 160, “Noncontrolling Interests in Financial
Statements, an amendment of ARB No. 51" (“SFAS 160").  SFAS 160 amends
ARB 51 to establish accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a
subsidiary.  It clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements.  This
Statement is effective for fiscal years beginning on or after December 15,
2008.  Early adoption is not permitted. Management is currently
evaluating the effects of this statement, but it is not expected to have any
impact on the Company’s financial statements.
 
 In December 2007, the FASB issued No.
141(R),  “Business Combinations” (“SFAS 141(R)”.  SFAS
141(R) provides companies with principles and requirements on how an acquirer
recognizes and measures in its financial statements the identifiable assets
acquired, liabilities assumed, and any noncontrolling interest in the acquiree
as well as the recognition and measurement of goodwill acquired in a business
combination. SFAS 141(R) also requires certain disclosures to enable users of
the financial statements to evaluate the nature and financial effects of the
business combination. Acquisition costs associated with the business combination
will generally be expensed as incurred. SFAS 141(R) is effective for business
combinations occurring in fiscal years beginning after December 15, 2008, which
will require the Company to adopt these provisions for business combinations
occurring in fiscal 2009 and thereafter. Early adoption of SFAS 141(R) is not
permitted.  Management is currently evaluating the effects of this
statement, but it is not expected to have any impact on the Company’s financial
statements.
  10
  ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
   NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent Accounting Standards
(Continued)
 
 In March 2008, the FASB issued No. 161,
“Disclosures about Derivative Instruments and Hedging Activities, an amendment
of FASB Statement No. 133.  (“SFAS 161").  SFAS 161 requires
enhanced disclosures about an entity's derivative and hedging activities and
thereby improves the transparency of financial reporting.  This
Statement is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. This Statement encourages, but does not require, comparative
disclosures for earlier periods at initial adoption.  Management is
currently evaluating the effects of this statement, but it is not expected to
have any impact on the Company’s financial statements.
 
 NOTE 2 - INCOME
TAXES
 
 2007
                  
                  
                  2006Net
      Operating Losses
                  
                  $
                  3,967,923
                  
                  
                  $
                  3,832,138Accrued
      Consulting Fees
                  
                  
                  39,251
                  
                  
                  
                  29,881Valuation
      Allowance
                  
                  
                  (4,007,174
                  )
                  
                  
                  (3,862,019
                  )$
                  -
                  
                  
                  $
                  -
  As of
December 31, 2007, the Company had a net operating loss carry forward for income
tax reporting purposes of approximately $11,670,364 that may be offset against
future taxable income through 2025.  Current tax laws limit the amount
of loss available to be offset against future taxable income when a substantial
change in ownership occurs.  Therefore, the amount available to offset
future taxable income may be limited.  No tax benefit has been
reported in the financial statements, because the Company believes there is a
50% or greater chance the carryforwards will expire
unused.  Accordingly, the potential tax benefits of the loss
carryforwards are offset by a valuation allowance of the same
amount.
  11
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 2 - INCOME TAXES
(Continued)
 
 The
provision for income taxes differ from the amount computed using the federal US
statutory income tax rate as follows:
  2007
                  
                  
                  2006Provision
      (Benefit) at US Statutory Rate
                  
                  $
                  (145,081
                  )
                  
                  $
                  (135,630
                  )Excess
      Capital Losses over Capital Gains
                  
                  
                  -
                  
                  
                  
                  50,315Accrued
      Consulting Fees
                  
                  
                  -
                  
                  
                  
                  (20,454
                  )Depreciation
                  
                  
                  (74
                  )
                  
                  
                  (62
                  )Increase
      (Decrease) in Valuation Allowance
                  
                  
                  145,155
                  
                  
                  
                  105,831$
                  -
                  
                  
                  $
                  -
 
 The
Company evaluates its valuation allowance requirements based on projected future
operations.  When circumstances change and causes a change in
management’s judgment about the recoverability of deferred tax assets, the
impact of the change on the valuation is reflected in current
income.
 
 NOTE 3 - DEVELOPMENT STAGE
COMPANY/GOING CONCERN
 
 The Company has not commenced its
intended principal operations and as is common with a development stage company,
the Company has had recurring losses.  Continuation of the Company as
a going concern is dependent upon obtaining the additional working capital
necessary to be successful in its planned activity, and the management of the
Company has developed a strategy, which it believes will accomplish this
objective through additional equity funding and long term financing, which will
enable the Company to operate for the coming year.
 
 
 NOTE 4- INVESTMENT IN OIL
& GAS PROPERTY
 
 The company has acquired an option to
purchase a 6,000 acre Oil & Gas property located in the state
of Ohio.  As at September 30, 2008 expenditures on the property
total approximately $477,000. As of September 30, 2008 the company issued notice to the
landowner of its intent to not pursue the acquisition of the
project.  The company has also issued a demand letter to the land
owner for the return of the $300,000 paid in June for the
extension.  No response has been received from the land owner to
date.
 
 In February of 2008 the company signed
an agreement with First Diversified Financial Services (FDFS) and Launchpad
Capital to assist the company in securing the necessary capital for the Anderson
Oil and Gas project acquisition.  The agreement requires payment of
USD $100,000 to FDFS as well as 3% of any cash received and 2% of any debt
financing completed as a result of FDFS efforts.  Launchpad Capital is
to receive a fee of 3.5% of the debt and/or equity portion of the funding
received by the company as a result of their efforts.
  12
  ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 5 – INVESTMENT IN
MINERAL PROPERTY
 
 In May 2007, we entered into a Purchase
Agreement (“Agreement”) with U3, LLC (“U3”) to acquire a 100% interest in 1,540
acres that consist of 77 claims of prospective uranium property located adjacent
to the Sheep Mountain Mine in Fremont County, Central Wyoming, approximately 90
miles southwest of Casper, Wyoming.  We paid $10,000 to U3 when we
executed the Agreement on May 28, 2007. However, we later agreed with U3 not to
continue to acquire the claims, due to delays in receiving WMC numbers on the
claims, and we have requested U3 return the $10,000 as per the agreement
terms.  We did not issue any shares pursuant to this Agreement and as
of the date of this report have not received the $10,000.
 
 NOTE 6 - LEASE
AGREEMENT
 
 The Company has entered into a
month-to-month lease agreement for an office in Calgary, Alberta,
Canada.  This lease can be canceled on one month’s written notice. The
current lease requires rental payments of approximately $250 ($250 Canadian
Dollars) per month plus applicable taxes. For the nine months ended September
30, 2008 the Company had $1500 in rent expense.
 
 NOTE 7 - UNCERTAIN TAX
POSITIONS
 
 Effective January 1, 2007, the Company
adopted the provisions of FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (“FIN
48”). FIN 48 prescribes a recognition threshold and a measurement attribute for
the financial statement recognition and measurement of tax positions taken or
expected to be taken in a tax return. For those benefits to be recognized, a tax
position must be more-likely-than-not to be sustained upon examination by taxing
authorities. The adoption of the provisions of FIN 48 did not have a material
impact on the company’s condensed consolidated financial position and results of
operations. At January 1, 2007, the company had no liability for unrecognized
tax benefits and no accrual for the payment of related interest and penalties.
The Company did not record a cumulative effect adjustment relating to the
adoption of FIN 48.
  13
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
   NOTE 7 - UNCERTAIN TAX
POSITIONS - CONTINUED
 
 Interest costs related to unrecognized
tax benefits are classified as “Interest expense, net” in the accompanying
condensed consolidated statements of operations. Penalties, if any, would be
recognized as a component of “Selling, general and administrative expenses”. The
Company recognized $0 of interest and penalties expense related to unrecognized
tax benefits during 2007. In many cases the company’s uncertain tax positions
are related to tax years that remain subject to examination by relevant tax
authorities. With few exceptions, the company is generally no longer subject to
U.S. federal, state, local or non-U.S. income tax examinations by tax
authorities for years before 2004. The following describes the open tax years,
by major tax jurisdiction, as of December 31, 2007:
  United
      States (a)
                  
                  2004
      - Present
 
 (a)
Includes federal as well as state or similar local jurisdictions, as
applicable.
 
 NOTE 8 - RELATED PARTY
TRANSACTIONS
 
 As of September 30, 2008 and December
31, 2007, the Company owed Santeo Financial $82,508 and $118,743 respectfully
for consulting services.  Ron Ruskowsky, President and CEO of the
Company is an affiliate of Santeo Financial.  Currently the Company
has an agreement with Santeo Financial whereby Santeo Financial provides
consulting services in exchange the Company agrees to pay a consultant fee of
$5,000 per month.
 
 As of September 30, 2008 and December
31, 2007 the Company owed Roger Janssen $1,345 for services paid directly by
Roger.
 
 As of September 30, 2008 and December
31, 2007, shareholders have advanced the Company $19,845 and $25,485,
respectively, payable on demand and do not carry an interest
rate.  This transaction has been recorded in the accompanying
financial statements as Shareholder loans.
  14
 
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 9 - COMMON STOCK AND
WARRANTS
 
 The
company issued 6,250,000 shares for satisfaction of a $500,000 note from a
private investor.  As per the terms of the note the company was to
repay the $500,000 plus interest of $75,000 on or before July 31,
2008.  An additional interest fee of $50,000 was also charged by the
lender as per the terms of the note for non payment.
 
 In May
2008, the Company issued 580,000 shares in a private placement for $0.25 per
Unit.  Each Unit entitled the holder to acquire 1 common share of the
company’s stock at $0.25 per share and one share purchase warrant, entitling the
holder to purchase one share at a price of $0.40 for a period of 12 months from
closing of the private placement, resulting in the Company receiving $145,000 in
cash.  The shares were issued in a transaction which the Company
believes satisfies the requirements of the Regulation S exemption from the
registration and prospectus delivery requirements of the Securities Act of 1933.
The Company is using those funds for working capital.
 
 In April of 2008 the Company issued
100,000 shares in a private placement for $.25 per share which resulted in the
Company receiving $25,000 in cash.  The shares were issued in a
transaction which the Company believes satisfies the requirements of the
Regulation S exemption from the registration and prospectus delivery
requirements of the Securities Act of 1933. The Company is using those funds for
working capital.
 
 In April of 2008 the Company issued
125,000 shares of restricted stock recorded at $0.47 per share along with a
$25,000 cash payment in consideration for an extension on the Anderson Oil &
Gas property to May 30, 2008.
 
 In March
of 2008 the Company issued 50,000 shares to M2 Law in settlement of outstanding
legal invoices totaling $50,000. The shares were recorded at $0.65 per share for
a value of $32,500 and the difference of $17,500 was booked as forgiveness of
debt.
 
 In March 2008, the Company issued
1,820,000 shares in a private placement for $0.10 per Unit.  Each Unit
entitled the holder to acquire 1 common share of the company’s stock at $0.10
per share and one share purchase warrant, entitling the holder to purchase one
share at a price of $0.15 for a period of 18 months from closing of the private
placement, resulting in the Company receiving $182,000 in cash.  The
shares were issued in a transaction which the Company believes satisfies the
requirements of the Regulation S exemption from the registration and prospectus
delivery requirements of the Securities Act of 1933. The Company is using those
funds for working capital.
 
 On June 26, 2007 the Company
issued 333,333 shares of common stock to Randall Lanham in total satisfaction of
legal fees in the amount of $20,000.
  15
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
 NOTE 9 - COMMON STOCK AND
WARRANTS – (CONTINUED)
 
 On May 9, 2007 the company issued
500,000 shares to Phil van Angeren as compensation for his assuming the position
of Exploration Manager of the Corporation. These shares have been valued at the
market price of $0.29.  Compensation expense of $145,000 has been
booked on the accompanying Statement of Operations.$145,000
has been booked on the accompanying Statement of Operations.
 
 In February 2007, the Company issued
2,653,640 shares in a private placement for $.05 per share which resulted in the
Company receiving $132,682 in cash.  The shares were issued
in
 a
transaction which the Company believes satisfies the requirements of the
Regulation S exemption from the registration and prospectus delivery
requirements of the Securities Act of 1933. The Company is using those funds for
working capital.
 
 On June 14, 2006, the Company issued
2,500,000 shares of common stock to Keith Campbell in total satisfaction of a
shareholder loan in the principal amount of $25,000 and interest of
$100,000.  The securities were issued pursuant to Section 4(2) of the
Securities Act of 1933.
  On October 4, 2005, in accordance to
the Board of Directors written consent effective July 11, 2005 the Company
issued 2,000,000 restricted shares to Roger Janssen the company’s Vice President
and Secretary. These shares have been valued at the market price of
$0.012.  Compensation expense of $24,000 has been booked on the
accompanying Statement of Operations.
 
 On October 4, 2005, in accordance to
the Board of Directors written consent effective September 13, 2005, the Company
issued 14,970,000 shares of common stock (the “Shares”) to Santeo Financial
Corporation (“Santeo”) in exchange for the cancellation of $149,700 owed by the
Company to Santeo.  Ron Ruskowsky, the Company’s Director, President
and Chief Executive Officer is an affiliate of Santeo.  The Shares
were issued without registration in reliance upon the exemption provided by
Section 4(2) of the Securities Act of 1933, as amended and Regulation D
promulgated thereunder.  These shares have been valued at the market
price on the date of the agreement of $0.017.  In addition to the
cancellation of the $149,700 an additional amount of compensation expense of
$104,790 has been booked on the accompanying Statement of
Operations.
  16
 ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company)
 NOTES TO FINANCIAL
STATEMENTS
 FOR THE 9 MONTHS ENDED
SEPTEMBER 30, 2008 AND 2007
   NOTE 10 – NOTES
PAYABLE
  The
company was unable to secure the neessary funding to repay the note issued to a
private lender in June of 2008 and as a result has issued 6,250,000 shares in
total satisfaction of the debt in the amount of $500,000 in principal; interest
of $75,000 and penalties of $50,000, totaling $625,000.
 In June
2008 the company received a loan of $500,000 from a private
investor.  The loan carries an interest rate of 15% and is due and
payable on or before July 31, 2008.  The terms of the note allow for a
1% per week penalty up to a maximum of 10% at which time the note and all
outstanding interest and penalties will be converted into 6,250,000 shares of
the companies stock. The Lender has the right at his sole discretion, the
ability to convert any unpaid debt, along with any interest due, into
free-trading common stock of the Company at a conversion price of forty cents
($0.40) per share. As at June 30, 2008 the company has booked a $575,000 note
payable consisting of principal in the amount of $500,000 and interest in the
amount of $75,000.
 
 The Company has a note payable with
Integrated Business Concepts, Inc. that is due upon demand and carries and
interest rate of 12%.  As of September 30, 2008 the amount owing on
the notes is $264,307 which consists of principal in the amount of $201,952 and
interest of $62,355.
 
 NOTE 11 – SUBSEQUENT
EVENTS
 
 As at
October 31, 2008 the company has not been able to come to terms with the land
owner on an acceptable agreement for the acquisition of the Ohio Oil & Gas
property.  As a result management has determined it is not in the best
interest of the company to continue with the project and has notified the
landowner of its intent not to pursue the acquisition.  The company
has also demanded the return of the funds issued to the landowner for the final
extension.  To date the landowner has not responded to our
request.
  17
 Item 2.  Plan of
Operation
 
 This
following information specifies certain forward-looking statements of management
of the company. Forward-looking statements are statements that estimate the
happening of future events and are not based on historical fact. Forward-looking
statements may be identified by the use of forward-looking terminology, such as
“may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”,
“probable”, “possible”, “should”, “continue”, or similar terms, variations of
those terms or the negative of those terms. The forward-looking statements
specified in the following information have been compiled by our management on
the basis of assumptions made by management and considered by management to be
reasonable. Our future operating results, however, are impossible to predict and
no representation, guaranty, or warranty is to be inferred from those
forward-looking statements.
 
 The
assumptions used for purposes of the forward-looking statements specified in the
following information represent estimates of future events and are subject to
uncertainty as to possible changes in economic, legislative, industry, and other
circumstances. As a result, the identification and interpretation of data and
other information and their use in developing and selecting assumptions from and
among reasonable alternatives require the exercise of judgment. To the extent
that the assumed events do not occur, the outcome may vary substantially from
anticipated or projected results, and, accordingly, no opinion is expressed on
the achievability of those forward-looking statements. We cannot guaranty that
any of the assumptions relating to the forward-looking statements specified in
the following information are accurate, and we assume no obligation to update
any such forward-looking statements.
 
 Critical Accounting Policy and
Estimates.Our Management's Discussion and Analysis of Financial
Condition and Results of Operations section discusses our financial statements,
which have been prepared in accordance with accounting principles generally
accepted in the United States of America. The preparation of these financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. On an on-going basis, management evaluates its estimates and
judgments, including those related to revenue recognition, accrued expenses,
financing operations, and contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions. The most
significant accounting estimates inherent in the preparation of our financial
statements include estimates as to the appropriate carrying value of certain
assets and liabilities which are not readily apparent from other
sources.
 
 These
accounting policies are described at relevant sections in this discussion and
analysis and in the notes to the financial statements included in our Quarterly
Report on Form 10-Q for the period ended September 30, 2008.
 
 Overview .Royal
Quantum Group Inc. is a public company trading on the OTCBB market under the
symbol RYQG.  Royal Quantum is focused on the acquisition, exploration
and development of oil and gas and mineral properties located within favorable
geo-political climates.
 
 In
February 2007 and in reliance on the exemption from registration under
Regulation S, we sold 2,653,640 shares at $0.05 for a total of $132,682. We used
those funds for working capital.
 
 In May
2007, we entered into a Purchase Agreement (“Agreement”) with U3, LLC (“U3”) to
acquire a 100% interest in 1,540 acres that consist of 77 claims of prospective
uranium property located adjacent to the Sheep Mountain Mine in Fremont County,
Central Wyoming, approximately 90 miles southwest of Casper,
Wyoming.  We paid $10,000 to U3 when we executed the Agreement on May
28, 2007. However, we later agreed with U3 not to continue to acquire the
claims, due to delays in receiving WMC numbers on the claims, and we have
requested U3 return the $10,000 as per the agreement terms.  We did
not issue any shares pursuant to this Agreement and as of the date of this
report have also not received the $10,000.
  18
 
 In May
2007, we appointed Phil van Angeren, P. Geol as our Exploration Manager and as a
member of our board of directors. Mr. van Angeren is responsible for our
property acquisition and development. Mr. van Angeren, 51, has been the
exploration manager and a director of a junior Canadian exploration and
development company for the past 5 years.  He has over 25 years of
experience in exploration of uranium and precious metals in North
America.   Mr. van Angeren is a graduate from McGill University
with a BSc. Honors degree in geology, which he earned in 1977.  We
issued Mr. van Angeran 500,000 shares of our common stock, equivalent to
approximately 1.2% of our issued and outstanding shares.
 
 On June
26, 2007, we issued 333,333 shares of common stock to Randall Lanham in total
satisfaction of legal fees in the amount of $20,000.
 
 In
January of 2008 the company acquired an option to purchase a 6,000 acre Oil
& Gas property located in the state of Ohio. The closing date of
the transaction has been extended to July 31, 2008 and is subject to
financing.
 
 In
February of 2008 the company signed an agreement with First Diversified
Financial Services (FDFS) and Launchpad Capital to assist the company in
securing the necessary capital for the Anderson Oil and Gas project
acquisition.  The agreement requires payment of USD $100,000 to FDFS
as well as 3% of any cash received and 2% of any debt financing completed as a
result of FDFS’s efforts.  Launchpad Capital is to receive a fee of
3.5% of the debt and/or equity portion of the funding received by the company as
a result of their efforts.
 
 In March
2008, the Company issued 1,820,000 shares in a private placement for $0.10 per
Unit.  Each Unit entitled the holder to acquire 1 common share of the
company’s stock at $0.10 per share and one share purchase warrant, entitling the
holder to purchase one share at a price of $0.15 for a period of 18 months from
closing of the private placement,  resulting in the Company receiving
$182,000 in cash.  The shares were issued in a transaction which the
Company believes satisfies the requirements of the Regulation S exemption from
the registration and prospectus delivery requirements of the Securities Act of
1933. The Company is using those funds for working capital.
 
 In April
of 2008 we issued 125,000 shares of restricted stock recorded at $0.47 per share
along with a $25,000 cash payment in consideration for an extension on the
Anderson Oil & Gas property to May 30, 2008.
 
 In March
of 2008 we issued 50,000 shares to M2 Law in settlement of outstanding legal
invoices totaling $50,000. The shares were recorded at $0.65 per share for a
value of $32,500 and the difference of $17,500 was booked as forgiveness of
debt.
 
 In April
of 2008 the company issued 100,000 shares in a private placement for $.25 per
share which resulted in the Company receiving $25,000 in cash.  The
shares were issued in a transaction which the Company believes satisfies the
requirements of the Regulation S exemption from the registration and prospectus
delivery requirements of the Securities Act of 1933. The Company is using those
funds for working capital.
 
 In May
2008, the Company issued 580,000 shares in a private placement for $0.25 per
Unit.  Each Unit entitled the holder to acquire 1 common share of the
company’s stock at $0.25 per share and one share purchase warrant, entitling the
holder to purchase one share at a price of $0.40 for a period of 12 months from
closing of the private placement, resulting in the Company receiving $145,000 in
cash.  The shares were issued in a transaction which the Company
believes satisfies the requirements of the Regulation S exemption from the
registration and prospectus delivery requirements of the Securities Act of 1933.
The Company is using those funds for working capital.
  19
  In June
2008 the company received a loan of $500,000 from a private
investor.  The loan carries an interest rate of 15% and is due and
payable on or before July 31, 2008.  The terms of the note allow for a
1% per week penalty up to a maximum of 10% at which time the note and all
outstanding interest and penalties will be converted into 6,250,000 shares of
the companies stock. The Lender has the right at his sole discretion, to convert
any unpaid debt, along with any interest due, into free-trading common stock of
the Company at a conversion price of forty cents ($0.40) per share. The funds
from this loan are being used for the Ohio Property Extension payment, payment
for a third party engineering evaluation of the Ohio Property and working
capital.
 
 In June
2008 we paid $300,000 in consideration for an extension on the Ohio Oil &
Gas property to July 31, 2008.
 
 In
September 2008 we issued 6,250,000 shares as satisfaction for the $500,000 note
due to a private investor.
 
 In
October, the company issued notice to the landowner on the Ohio Oil & Gas
property of its intent to not pursue the acquisition of the
project.  The company has also issued a demand letter to the land
owner for the return of the $300,000 paid in June for the
extension.  No response has been received from the land owner to
date.
 
 Liquidity and Capital
Resources.We had cash of $164,452 as of September 30,
2008, all of which comprised our total current assets. As of the nine month
period ended September 30, 2008, we also had fixed assets of $1,018, represented
by furniture and fixtures of $1,851 less accumulated depreciation of $833. The
decrease in total fixed assets is due solely to depreciation.  We also
had $1 in intangible assets and $1 in total other assets, which was represented
by our E-learning System which is related to our former business and $487,477
for mineral and oil properties and deferred expenditures. Therefore, for the
nine month period ended September 30, 2008, we had total assets of
$652,948.
 
 For the
nine month period ended September 30, 2008, we had $489,390 in total current
liabilities, which was represented by $141,230 in accounts payable, $264,307
notes payable and $83,853 in related party accounts payable.  We also
had $19,845 in shareholder loans for the nine months ended September 30,
2008.  Therefore, for the nine months ended September 30, 2008, we had
total liabilities of $509,235. We had no other long term liabilities,
commitments or contingencies.  Other than anticipated explorations
costs associated with the mineral and oil interests that we acquire and
anticipated increases in the legal and accounting costs of being a public
company, we not aware of any other known trends, events or uncertainties which
may affect our future liquidity.
 
 Results
of Operations.
 
 Revenues.We had no
revenue for the nine month period ended September 30, 2008 or for the nine month
period ended September 30, 2007.
 
 Operating Expenses and Net Loss.We had a loss from operations of $237,200 for the nine month period ended
September 30, 2008, as compared to a loss from operations of $326,694 for the
nine month period ended September 30, 2007. For the nine month period ended
September 30, 2008, our operating expenses were comprised of general and
administrative expenses of $51,262 and consulting fees in the amount of
$185,938. We also had $148,649 in interest expense, a $18,499 foreign currency
exchange gain and a gain from debt forgiveness of $17,500. Therefore, our net
loss for the September 30, 2008 was $349,850 as compared to a net loss of
$346,840 for the nine month period ended September 30, 2007.
 
 Our Plan of Operation for the Next
Twelve Months. Our focus is to acquire oil and gas, mineral and resource
properties for exploration and development with the intent to bring the projects
to feasibility at which time we will either contract out the operations or joint
venture the project to qualified interested parties.
 
 We had
cash of $164,452 as of September 30, 2008. In the opinion of management, our
available funds will not satisfy our working capital requirements for the next
twelve months.  The company issued 6,250,000 shares as settlement for
the note ($500,000), interest ($75,000) and penalties ($50,000) totaling
$625,000 from a private lender.
 
 Our
forecast for the period for which our financial resources will be adequate to
support our operations involves risks and uncertainties and actual results could
fail as a result of a number of factors. We will need to raise additional
capital to expand our operations to the point at which we are able to operate
profitably. Other than anticipated explorations costs associated with the
resource and mineral interests that we acquire and anticipated increases in the
legal and accounting costs of being a public company, we are not aware of any
other known trends, events or uncertainties, which may affect our future
liquidity.
 
 In the
event that we experience a shortfall in our capital, we intend to pursue capital
through public or private financing as well as borrowings and other sources,
such as our officers, directors and principal shareholders. We cannot guaranty
that additional funding will be available on favorable terms, if at
all.  If adequate funds are not available, then our ability to expand
our operations may be significantly hindered. If adequate funds are not
available, we believe that our officers, directors and principal shareholders
will contribute funds to pay for our expenses to achieve our objectives over the
next twelve months.
  20
 
 Our
belief that our officers, directors and principal shareholders will pay our
expenses is based on the fact that our officers, directors and principal
shareholders collectively own approximately 45% of our outstanding common stock.
We believe that our officers, directors and principal shareholders will continue
to pay our expenses as long as they maintain their ownership of our common
stock.
 
 We are
not currently conducting any research and development activities.  We
do not anticipate conducting such activities in the near future. We do not
anticipate that we will purchase or sell any significant equipment. In the event
that we expand our customer base, then we may need to hire additional employees
or independent contractors as well as purchase or lease additional
equipment.
 
 Off-Balance Sheet
Arrangements.We have no off-balance sheet
arrangements.
  Item 3. Quantitative and
Qualitative Disclosures about Market Risk
  Not
applicable.
  Item 4. Controls and
Procedures
 
 Evaluation of disclosure controls and
procedures. We maintain controls and procedures designed to ensure that
information required to be disclosed in the reports that we file or submit under
the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed as of September 30, 2008, the date of this
report, our chief executive officer and the principal financial officer
concluded that our disclosure controls and procedures were
effective.
 
 Item 4(T). Controls and
Procedures.
 
 Changes in internal controls.There were no changes in our internal control over financial reporting
that occurred during the fiscal quarter covered by this report that have
materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.
 
 
 PART
II — OTHER INFORMATION
 
 Item 1. Legal
Proceedings.
 
 None.
 
 Item 1A. Risk
Factors.
 
 Not
applicable.
 
 Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds.
 
 None.
 
 Item 3.  Defaults
Upon Senior Securities
 
 None.
  21
 
 Item
4.  Submission of Matters to Vote of Security
Holders
 
 None.
 
 Item 5.  Other
Information
 
 None.
 
 Item
6.  Exhibits
  31. Rule 13a-14(a)/15d-14(a) Certifications.
  32.
Section 1350 Certifications.
      22
 SIGNATURES
 
 In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
  Royal
      Quantum Group, Inc.
                    a
      Nevada corporationNovember
      12, 2008
                  By:
                  /s/ Ron
      RuskowskyRon
      Ruskowsky
                    Principal
      Executive Officer
                    Principal
      Accounting Officer
                    President, CEO and a
      Director
  November
      12, 2008
                  By:
                  /s/ Roger
      JanssenRoger
      Janssen
                    Vice-President,
      Secretary and a Director