**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**


**FORM
      10-KSB**





**xANNUAL
      REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For
      the
      fiscal year ended December
      31, 2006





**oTRANSITION
      REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** For
      the
      transition period from  to


Commission
      File Number: 000-27739





Royal
      Quantum Group, Inc.


(Exact
      name of registrant as specified in its charter)


Nevada
            
            77-0517966(State
                or other jurisdiction of
              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)
            
            (Zip
              Code)(402)
                288-4321(Registrant's
                Telephone Number, Including Area
                Code)




Securities
                registered under Section 12(b) of the Act:Title
                of each class registered:
            Name
                of each exchange on which registered:None
            NoneSecurities
                registered under Section 12(g) of the Act:Common
                Stock, Par Value
                $.001(Title
                of Class)




Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 12 months (or for such shorter period that the registrant was required
      to file such reports), and (2) has been subject to such filing requirements
      for
      the past 90 days. [X ]Yes [ ] No




Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B is not contained in this form, and no disclosure will be
      contained, to the best of registrant's knowledge, in definitive proxy or
      information statements incorporated by reference in Part III of this Form 10-KSB
      or any amendment to this Form 10-KSB. [X]




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




State
      issuer's revenues for its most recent fiscal year. $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. (See definition of affiliate in Rule
      12b-2 of the Exchange Act.) As of March 26, 2007, approximately
      $3,126,556.65.





State
      the
      number of shares outstanding of each of the issuer’s classes of common equity,
      as of the latest practicable date. As of March 31, 2007, there were 38,262,005
      shares of the issuer's $.001 par value common stock issued and outstanding.




Documents
      incorporated by reference. There are no annual reports to security holders,
      proxy information statements, or any prospectus filed pursuant to Rule 424
      of
      the Securities Act of 1933 incorporated herein by reference.





Transitional
      Small Business Disclosure format (check one):  [
      ]
      Yes  [
      x
      ] No





1





**PART
      I**





**Item
      1. Description of Business.**





**Our
      Background.** The
      Company was incorporated in Nevada in October, 1996, under the name PSM CORP,
      and was formed for the purpose of either merging with or acquiring an operating
      company with an operating history and assets. 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 January 11, 2000, the company changed
      its
      name to Mentor On Call, Inc.





On
      September 30, 2002, we entered into a Share Exchange Agreement with SuperYachts
      Holdings, Inc., a private Nevada corporation (“SuperYachts Holdings”), and its
      stockholders, to acquire 100% of the issued and outstanding shares of
      SuperYachts Holdings. In consideration for acquiring all of SuperYachts
      Holdings’ issued and outstanding shares, we agreed to issue its stockholders
      15,000,000 shares of our common stock. Effective as of October 1, 2002, the
      Company’s name was changed to Platinum SuperYachts, Inc. At that point, our
      business direction included yacht building, sales, re-sales and yacht services,
      such as supplies, maintenance, and delivery as well as full-scale contracted
      care of yachts. The core business was intended to be the building of yachts
      in
      excess of 80 to 200 feet. We had planned to hire subcontractors on a per job
      basis for the construction of the vessels.





We
      were
      not successful in the mega yacht industry due to two important factors. First,
      purchasers of yachts in the price range of our products were not interested
      in
      building with a manufacturer that was relatively new in the industry. The
      preference of the mega yacht buyer is to work with a builder that has a history
      in the business with product available for the client to view. Second, we were
      unable to close a financing large enough to allow the company to build a spec
      yacht. The ability to have a spec yacht available to show our clients the high
      quality craftsmanship of which we were capable would have significantly
      increased our ability to sell the product. As the share price of the Company’s
      common stock began to decrease, we were faced with the problem of significant
      shareholder dilution to secure a funding necessary to build a spec product.
      Management did not feel it was in the best interest of the shareholders to
      attempt a multi-million dollar financing while faced with such a low share
      price. Accordingly, we sold all of the Company’s assets related to the yacht
      business back to the former stockholders of PR Marine Inc. on September 29,
      2005
      in exchange for the former stockholders of PR Marine Inc. agreeing to cancel
      all
      of their outstanding shares of the Company. After completing the sale of the
      assets related to the yacht business we changed the name of the Company to
      Royal
      Quantum Group on January 10, 2006.





**Our
      Business.**  Royal
      Quantum Group Inc. is a public company trading on the OTCBB market under the
      symbol RYQG. Our focus is to acquire mineral 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. Priority will be given to projects with near
      term
      cash flow potential in the areas of Uranium, Gold, Silver and
      Copper.





**Our
      Products.** We
      currently are not selling any products.





**Our
      Target Markets and Marketing Strategy.** We
      are
      not currently marketing any products.





**Our
      Competition.** The
      competition for acquiring
      mineral properties for exploration and development is
      intense. We may not be able to compete successfully against other companies
      that
      are looking to acquire mineral interests. Our competitors vary in size and
      in
      the scope and breadth of the services they can offer to potential merger or
      acquisition candidates.





**Government
      Regulation.** We are
      subject to federal, state and local laws and regulations applied to businesses
      generally, such as payroll taxes on the state and federal levels. In general,
      our publications are not subject to particular regulatory requirements. We
      believe that we are in conformity with all applicable laws in all relevant
      jurisdictions. We may be prevented from operating if our activities are not
      in
      compliance and must take action to comply with any federal, state, or local
      regulation.





2





**Our
      Research and Development.** We
      are
      not currently conducting any research and development activities. We do not
      anticipate conducting such activities in the near future. If we generate
      significant revenues, we may expand our product line by entering into
      distribution relationships with third party manufacturers.





**Our
      Intellectual Property.**We do not presently own any patents, trademarks,
      licenses, concessions or royalties, except for the E-learning system which
      is
      related to our former business.





We
      own
      the Internet domain name www.royalquantum.com. Under current domain name
      registration practices, no one else can obtain an identical domain name, but
      someone might obtain a similar name, or the identical name with a different
      suffix, such as “.org”, or with a country designation. The regulation of domain
      names in the United States and in foreign countries is subject to change, and
      we
      could be unable to prevent third parties from acquiring domain names that
      infringe or otherwise decrease the value of our domain names.





**Employees.** As of
      April 13, 2007, we have no full-time employees and no part-time employees.
      We
      believe we may need to hire three employees in the next twelve months. From
      time-to-time, we anticipate that we may use the services of independent
      contractors and consultants to support our business development.





**Our
      Facilities.** Royal
      Quantum has entered into a month-to-month lease agreement for an office space
      in
      Calgary, Alberta, Canada. This lease can be canceled on one month’s written
      notice. The current lease requires rental payments of approximately $1,500
      ($1,850 Canadian Dollars) per month plus applicable taxes. We believe that
      our
      facilities are adequate for our needs and that additional suitable space will
      be
      available on acceptable terms as required. We do not own any real estate. Our
      telephone number is (402) 288-4321.





**Risk
      Factors.**





Investing
      in our common stock involves a high degree of risk. Any potential investor
      should carefully consider the risks and uncertainties described below before
      purchasing any shares of our common stock. The risks described below are those
      we currently believe may materially affect us.





**Risks
      Related to our Business:**





**We
      have a limited operating history upon which an evaluation of our prospects
      can
      be made.**





We
      have
      recently adopted our current business plan. Our lack of operating history in
      our
      current line of business makes an evaluation of our business and prospects
      very
      difficult. Our prospects must be considered speculative, considering the risks,
      expenses, and difficulties frequently encountered in the establishment of a
      new
      business. We cannot be certain that our business will be successful or that
      we
      will generate significant revenues and become profitable.





**We
      anticipate that we will need to raise additional capital to continue our
      operations. Our failure to raise additional capital will significantly affect
      our ability to fund our proposed activities.**





To acquire
      mineral properties for exploration and development ,
      we will
      be required to raise additional funds. We do not know if we will be able to
      acquire additional financing. We anticipate that we will need to spend
      significant funds on acquiring mineral
      properties for exploration and development .
      Our
      failure to obtain additional funds would significantly limit or eliminate our
      ability to fund those activities.




**We
      have incu** **rred
      a net loss since inception and expect to incur net losses for the foreseeable
      future.**




As
      of
      December 31, 2006, our net loss since inception was $3,244,767. We expect to
      incur significant operating and capital expenditures and, as a result, we expect
      significant net losses in the future. We will need to generate significant
      revenues to achieve and maintain profitability. We may not be able to generate
      sufficient revenues to achieve profitable operations.




**Our
      future success is highly dependent on the ability of management to locate and** **acquire
      mineral properties for exploration and development** **.**





3





The
      nature of our operations is highly speculative and there is a consequent risk
      of
      loss of your investment. The success of our plan of operation will depend to
      a
      great extent on the mineral properties that we acquire. We cannot assure you
      that we will be successful in acquiring mineral properties for exploration
      and
      development.





**The
      costs to meet our reporting requirements as a public company subject to the
      Exchange Act of ’34 are substantial and may result in us having insufficient
      funds to operate our business.**





We
      will
      incur ongoing expenses associated with professional fees for accounting and
      legal expenses associated with being a public company. Those fees will be higher
      if our business volume and activity increases. Those obligations will reduce
      our
      ability to fund our operations and may prevent us from meeting our normal
      business obligations.





**Our
      auditors have questioned our ability to continue operations as a “going
      concern.” Investors may lose all of their investment if we are unable to
      continue operations.**




We
      hope
      to obtain revenues from future operations. In the absence of significant
      operations, we may seek to raise additional funds to meet our working capital
      needs principally through the additional sales of our securities. However,
      we
      cannot guaranty that we will be able to obtain sufficient additional funds
      when
      needed, or that such funds, if available, will be obtainable on terms
      satisfactory to us. As a result, our auditors believe that substantial doubt
      exists about our ability to continue operations.




**Risks
      Related to Owning Our Common Stock**




**Our
      officers, directors and principal shareholders own approximately 58.5% of our
      outstanding shares of common stock, allowing these shareholders to control
      matters requiring approval of our shareholders.**





Our
      officers, directors and principal shareholders beneficially own, in the
      aggregate, approximately 58.5% of our outstanding shares of common stock. Our
      officers, directors and principal shareholders can control matters requiring
      approval by our security holders, including the election of directors.




**Our
      common stock may be subject to penny stock regulations which may make it
      difficult for investors to sell their stock.**




The
      Securities and Exchange Commission has adopted rules that regulate broker-dealer
      practices in connection with transactions in “penny stocks”. Penny stocks
      generally are equity securities with a price of less than $5.00 (other than
      securities registered on certain national securities exchanges or quoted on
      the
      NASDAQ system, provided that current price and volume information with respect
      to transactions in such securities is provided by the exchange or system).
      The
      penny stock rules require a broker-dealer, prior to a transaction in a penny
      stock not otherwise exempt from those rules, to deliver a standardized risk
      disclosure document prepared by the Commission, which specifies information
      about penny stocks and the nature and significance of risks of the penny stock
      market. The broker-dealer also must provide the customer with bid and offer
      quotations for the penny stock, the compensation of the broker-dealer and
      salesperson in the transaction, and monthly account statements indicating the
      market value of each penny stock held in the customer's account. In addition,
      the penny stock rules require that, prior to a transaction in a penny stock
      not
      otherwise exempt from those rules, the broker-dealer must make a special written
      determination that the penny stock is a suitable investment for the purchaser
      and receive the purchaser's written agreement to the transaction. These
      disclosure requirements may have the effect of reducing the trading activity
      in
      the secondary market for a stock that becomes subject to the penny stock rules.
      Our common stock is subject to the penny stock rules, holders of our shares
      may
      have difficulty selling those shares.





**Item
      2. Description of Property.**





**Property
      held by us.** As
      of the
      December 31, 2006 and 2005, we held no real property and do not presently own
      any interests in real estate.




**Our
      Facilities.** Royal
      Quantum has entered into a month-to-month lease agreement for an office space
      in
      Calgary, Alberta, Canada. This lease can be canceled on one month’s written
      notice. The current lease requires rental payments of
      approximately $1,500 ($1,850 Canadian Dollars) per month plus applicable taxes.
      We believe that our facilities are adequate for our needs and that additional
      suitable space will be available on acceptable terms as required. We do not
      own
      any real estate. Our telephone number is (403) 288-4321.





4




**Item
      3. Legal Proceedings.**





There
      are
      currently no legal actions pending against us nor are any legal actions
      contemplated by us at this time.





**Item
      4. Submission of Matters to Vote of Security Holders.**





Not
      applicable.





**PART
      II**





**Item
      5. Market Price for Common Equity and Related Stockholder
      Matters.**





**Market
      Information****.**Our
      common stock is listed on the NASD OTC Bulletin Board under the symbol "RYQG".
      The quotations provided are for the over the counter market which reflect
      interdealer prices without retail mark-up, mark-down or commissions, and may
      not
      represent actual transactions. The bid prices included below have been obtained
      from sources believed to be reliable:




**Quarter
                ended:**
            
            **High**
            
            **Low**December
                31, 2006
            
            0.05
            
            0.045September
                30, 2006
            
            0.055
            
            0.045June
                30, 2006
            
            0.06
            
            0.06March
                31, 2006
            
            0.07
            
            0.05December
                31, 2005
            
            0.025
            
            0.013September
                30, 2005
            
            0.0275
            
            0.011June
                30, 2005
            
            0.036
            
            0.01March
                31, 2005
            
            0.22
            
            0.029




**Reports
      to Security Holders.** We
      are a
      reporting company with the Securities and Exchange Commission, or SEC. The
      public may read and copy any materials filed with the Securities and Exchange
      Commission at the Security and Exchange Commission’s Public Reference Room at 100
      F
      Street, N.E., Washington, D.C. 20549 .
      The
      public may also obtain information on the operation of the Public Reference
      Room
      by calling the Securities and Exchange Commission at 1-800-SEC-0330. The
      Securities and Exchange Commission maintains an Internet site that contains
      reports, proxy and information statements, and other information regarding
      issuers that file electronically with the Securities and Exchange Commission.
      The address of that site is http://www.sec.gov.





We
      had
      35,608,365 shares of common stock issued and outstanding as of December 31,
      2006, which were held by approximately 81 shareholders.





There
      are
      no outstanding options or warrants to purchase, or securities convertible into,
      shares of our common stock. There are no outstanding shares of our common stock
      that we have agreed to register under the Securities Act for sale by security
      holders.





**Dividend
      Policy.** We
      have
      not paid a cash dividend on our common stock in the last two fiscal years.
      We do
      not anticipate paying any cash dividends on our common stock in the next 12
      month period. Management anticipates that earnings, if any, will be retained
      to
      fund our working capital needs and the implementation of our business plan.
      The
      payment of any dividends is at the discretion of the Board of Directors.





5





**Equity
      Compensation Plan.** We
      do not
      have any securities authorized for issuance under any equity compensation plan.
      We also do not have an equity compensation plan.





**Recent
      Sales of Unregistered Securities.** There
      have been no sales of unregistered securities within the last three (3) years
      which would be required to be disclosed pursuant to Item 701 of Regulation
      S-B,
      except for the following:





On
      September 29, 2005, we sold certain assets related to designing, building and
      selling yachts (the “Assets”) to Shahhid Vohra, our former Vice-President and
      Secretary. As consideration for the Assets Mr. Vohra agreed to allow us to
      cancel 9,000,000 shares (the “Cancelled Shares”), of our common stock that were
      beneficially owned by Mr. Vohra. The Cancelled Shares were originally issued
      to
      Mr. Vohra as consideration when we purchased the Assets from Mr. Vohra in
      November 2002. The Assets included, among other things, yacht models, a hull
      display, yacht blue prints, the content of our website, the domain name
      www.platinumsuperyachts.com and the rights to the name Platinum SuperYachts,
      Inc.





On
      October 4, 2005, we issued 14,970,000 shares of common stock (the “Shares”) to
      Santeo Financial Corporation ("Santeo") in exchange for the cancellation of
      $149,700 we owed by the Company to Santeo and for services in the amount of
      $104,790. Ron Ruskowsky, our Director, President and Chief Executive Officer,
      is
      an affiliate of Santeo.





Also,
      on
      October 4, 2005, we issued 2,000,000 shares of common stock to Roger Janssen
      as
      compensation for services rendered as a director.





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
      $25,000.00. The securities were issued pursuant to Section 4(2) of the
      Securities Act of 1933.





The
      foregoing securities were offered and sold without registration under the
      Securities Act to sophisticated investors who had access to all information
      that
      would have been in a registration statement in reliance on the exemption
      provided by Section 4(2) under the Securities Act and Regulation D thereunder.





Subsequent
      to the period covered by this report, in February 2007 and in reliance on the
      exemption from registration under Regulation S, the Company sold 2,653,640
      shares at $0.05 for a total of $132,682. The Company used those funds for
      working capital.





**Use
      of Proceeds of Registered Securities.** There
      were no sales or proceeds during the calendar year ended December 31, 2006,
      for
      the sale of registered securities.





**Penny
      Stock Regulation.** Shares
      of our common stock will probably be subject to rules adopted the Securities
      and
      Exchange Commission that regulate broker-dealer practices in connection with
      transactions in “penny stocks”. Penny stocks are generally equity securities
      with a price of less than $5.00 (other than securities registered on certain
      national securities exchanges or quoted on the NASDAQ system, provided that
      current price and volume information with respect to transactions in those
      securities is provided by the exchange or system). The penny stock rules require
      a broker-dealer, prior to a transaction in a penny stock not otherwise exempt
      from those rules, deliver a standardized risk disclosure document prepared
      by
      the Securities and Exchange Commission, which contains the following:





·
            a
                description of the nature and level of risk in the market for penny
                stocks
                in both public offerings and secondary trading;


·
            a
                description of the broker’s or dealer’s duties to the customer and of the
                rights and remedies available to the customer with respect to violation
                to
                such duties or other requirements of securities’ laws;


·
            a
                brief, clear, narrative description of a dealer market, including
                "bid"
                and "ask” prices for penny stocks and the significance of the spread
                between the "bid" and "ask" price;


·
            a
                toll-free telephone number for inquiries on disciplinary actions;


·
            definitions
                of significant terms in the disclosure document or in the conduct
                of
                trading in penny stocks; and


·
            such
                other information and is in such form (including language, type,
                size and
                format), as the Securities and Exchange Commission shall require
                by rule
                or regulation.





Prior
      to
      effecting any transaction in penny stock, the broker-dealer also must provide
      the customer the following:





6




·
            the
                bid and offer quotations for the penny stock;


·
            the
                compensation of the broker-dealer and its salesperson in the transaction;


·
            the
                number of shares to which such bid and ask prices apply, or other
                comparable information relating to the depth and liquidity of the
                market
                for such stock; and


·
            monthly
                account statements showing the market value of each penny stock held
                in
                the customer’s account.





In
      addition, the penny stock rules require that prior to a transaction in a penny
      stock not otherwise exempt from those rules, the broker-dealer must make a
      special written determination that the penny stock is a suitable investment
      for
      the purchaser and receive the purchaser’s written acknowledgment of the receipt
      of a risk disclosure statement, a written agreement to transactions involving
      penny stocks, and a signed and dated copy of a written suitably statement.
      These
      disclosure requirements may have the effect of reducing the trading activity
      in
      the secondary market for a stock that becomes subject to the penny stock rules.
      Holders of shares of our common stock may have difficulty selling those shares
      because our common stock will probably be subject to the penny stock
      rules.





**Purchases
      of Equity Securities.** None
      during the period covered by this report.




**Item
      6. Management’s Discussion and Analysis of Financial Condition or 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 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. No assurance can be
      given
      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.





**Overview
      .** Our
      focus
      is to acquire mineral 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. Our main priority will be given to projects with near term cash flow
      potential, although consideration will be given to projects that may not be
      as
      advanced from a technical standpoint but demonstrate the potential for
      significant upside. Royal Quantum will seek mineral properties in the areas
      of
      Uranium, Gold, Silver and Copper with a focus on North American
      interests.





7




As
      of
      December 31, 2006, we are in the development stage and have not commenced
      planned principal operations. As a development stage company, we have had
      recurring losses during this phase of operations. Management is currently
      developing a plan to raise capital to develop the business plan. No commitments
      to provide funding to the Company have been confirmed as of the date of this
      report.





On
      September 29, 2005, Royal Quantum Group, Inc. (the “Company”) disposed of
      certain assets related to designing, building and selling yachts. The decision
      to sell the component was based on the fact that we have not been successful
      in
      the mega yacht industry due to two important factors. First, purchasers of
      yachts in the price range of our products were not interested in building with
      a
      manufacturer that was relatively new in the industry. The preference of the
      mega
      yacht buyer is to work with a builder that has a history in the business with
      product available for the client to view. Second, we were unable to close a
      financing large enough to allow the company to build a spec yacht. The ability
      to have a spec yacht available to show our clients the high quality
      craftsmanship of which we were capable would have significantly increased our
      ability to sell the product. As the share price of the Company’s common stock
      began to decrease, we were faced with the problem of significant shareholder
      dilution to secure a funding necessary to build a spec product. Management
      did
      not feel it was in the best interest of the shareholders to attempt a
      multi-million dollar financing while faced with such a low share price.
      Accordingly, we sold all of the Company’s assets related to the yacht business
      back to the former stockholders of PR Marine Inc. on September 29, 2005 in
      exchange for the former stockholders of PR Marine Inc. agreeing to cancel all
      of
      their outstanding shares of the Company.





**For
      the year ended December 31, 2006 as compared to the year ended December 31,
      2005.**





**Results
      of Operations.**





**Revenues.** The
      Company had no revenue for the year ended December 31, 2006 or for the year
      ended December 31, 2005.





**Operating
      Expenses and Net Loss.** The
      Company’s net loss from operations of $134,872 for the year ended December 31,
      2006 was comprised of general and administrative expenses of $68,643 and
      consulting fees in the amount of $66,229. The Company also had $264,039 in
      total
      other expenses, including $147,986 in write-down of assets, and $116,053
      represented by net interest. Therefore, the Company’s net loss from continuing
      operations was $398,911. As the Company had no net income or loss from
      discontinued operations, its net loss for the year ended December 31, 2006
      was
      $398,911. This is in comparison to the year ended December 31, 2005, during
      which the Company disposed of assets and operations related to its yacht-related
      business.





The
      Company had $237,239 in loss from operations, which was represented by $60,813
      in consulting fees, $128,790 in compensation expense and $47,636 represented
      by
      general and administrative expenses. The decrease in expenses and therefore
      in
      losses is due to the fact that the Company had no compensation expenses for
      the
      year ended December 31, 2006 after the departure of its former management.
      For
      the year ended December 31, 2005, the Company also had $13 in net interest
      and
      the same amount in total other income, making its net loss from continuing
      operations $237,226. The increase in net loss from continuing operations between
      the years ended December 31, 2006 and 2005 is due to the expenses and write-down
      of assets during the more recent year.





For
      the
      year ended December 31, 2005, the Company had $68,159 in net income from
      discontinued operations, represented by our former yacht-related business.
      This
      amount is represented by a loss from discontinued operations in the amount
      of
      $65,096 and the gain on disposal of discontinued operations in the amount of
      $133,255. Therefore, the Company had a net loss of $169,067 for the year ended
      December 31, 2005. The Company’s net loss in the year ended 2006 increased as
      compared to the prior year primarily due to increases in net losses from its
      continuing operations, as it seeks to develop this line of
      business.





**Liquidity
      and Capital Resources.** The
      Company had cash of $340 as of December 31, 2006, as compared to $1,800 as
      of
      December 31, 2005. As of the year ended December 31, 2006, the Company also
      had
      fixed assets of $1,666, represented
      by furniture and fixtures of $1,851 less accumulated depreciation of $185,
      as
      compared to no fixed assets as of the year ended December 31, 2005. The increase
      in fixed assets is due to the items purchased by our current management to
      undertake our current business operations. The Company also had $1 in intangible
      assets and $1 in total other assets for both years, which was represented solely
      by the Company’s E-learning System.





8





For
      the
      year ended December 31, 2006, the Company had $426,342 in total current
      liabilities, which was represented by $142,127 in accounts payable, $196,330
      in
      demand notes payable, and $87,885 in related party accounts payable. This is
      in
      comparison to the year ended December 31, 2005, where the Company had $132,781
      in total current liabilities, which was represented by $102,703 in accounts
      payable and $30,078 in related party accounts payable. For the year ended
      December 31, 2006, the Company also had $32,902 represented by related party
      notes payable, for total liabilities of $459,244. This is in comparison to
      the
      year ended December 31, 2005, where the Company had $55,345 in related party
      notes payable, for total liabilities of $188,126. The increases are due to
      the
      additional funds owed to related parties as the Company attempts to develop
      its
      current business operations. The Company had no other long term liabilities,
      commitments or contingencies. The Company is not aware of any other known
      trends, events or uncertainties which may affect its future
      liquidity.





**Our
      Plan of Operation for the Next Twelve Months.**  Our
      focus
      is to acquire mineral 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.
      Our
      main priority will be given to projects with near term cash flow potential,
      although consideration will be given to projects that may not be as advanced
      from a technical standpoint but demonstrate the potential for significant
      upside. Royal Quantum will seek mineral properties in the areas of Uranium,
      Gold, Silver and Copper with a focus on North American interests.





We
      had
      cash of $340 as of December 31, 2006. In the opinion of management, our
      available funds will not satisfy our working capital requirements for the next
      twelve months. Subsequent to the period covered by this report, in February
      2007
      and in reliance on the exemption from registration under Regulation S, the
      Company sold 2,653,640 shares at $0.05 for a total of $132,682. The Company
      used
      those funds for working capital.





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. Besides generating revenue from our
      current operations, 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 increases in the legal and accounting costs of becoming 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.





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 58.5% 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. However, if our officers, directors and principal shareholders
      sell their shares, then they may no longer be committed to contribute additional
      capital.





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 employees or independent
      contractors as well as purchase or lease additional equipment.




**Off-Balance
      Sheet Arrangements.** We
      have
      no off-balance sheet arrangements.




**Item
      7. Financial Statements**





9














**Royal
        Quantum Group, Inc.**
 **(A
        Development Stage Company)**
 
 **-:-**
 
 **INDEPENDENT
        REGISTERED PUBLIC ACCOUNTANTS’ REPORT**
 
 **December
        31, 2006 and 2005**






10





**CONTENTS**
 PageReport
                  of Independent Registered Public Accountants
              F-1Comparative
                Balance SheetDecember
                    31, 2006 and 2005
              F-2Statements
                  of OperationsFor
                  the years ended December 31, 2006 and 2005 and for the cumulative
                  periodfrom
                  August 23, 2002 (inception) to December 31, 2006
              F-3Statement
                  of Stockholders' EquitySince
                  August 23, 2002 (inception) to December 31, 2006
              F-4Statements
                  of Cash FlowsFor
                  the years ended December 31, 2006 and 2005 and the cumulative
                  periodfrom
                  August 23, 2002 (inception) to December 31, 2006
              F-5Notes
                  to Financial Statements
              F-6


11


**R****OBISON****,
                  H****ILL****&
                  C****O****.**
              
              
              
              **Certified Public Accountants****A
                  PROFESSIONAL CORPORATION**BRENT M. DAVIES, CPADAVID O. SEAL, CPAW. DALE WESTENSKOW, CPABARRY D. LOVELESS, CPASTEPHEN M. HALLEY, CPA
  
 REPORT
        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
 
 Royal
        Quantum Group, Inc
 (A
        Development Stage Company)
 
 We
        have
        audited the accompanying balance sheets of Royal Quantum Group, Inc (a
        development stage company) as of December 31, 2006, and 2005, and the related
        statements of operations, and cash flows for the years ended December 31,
        2006,
        and 2005, and the cumulative since August 23, 2002 (inception) to December
        31,
        2006, and the statement of stockholder’s equity since August 23, 2002
        (inception) to December 31, 2006. These financial statements are the
        responsibility of the Company's management. Our responsibility is to express
        an
        opinion on these financial statements based on our audit.
 
 We
        conducted our audits in accordance with the standards of the Public Company
        Accounting Oversight Board (United States). Those standards require that
        we plan
        and perform the audit to obtain reasonable assurance about whether the financial
        statements are free of material misstatement. The Company is not required
        to
        have, nor were we engaged to perform, an audit of its internal control over
        financial reporting. Our audit included consideration of internal control
        over
        financial reporting as a basis for designing audit procedures that are
        appropriate in the circumstances, but not for the purpose of expressing an
        opinion on the effectiveness of the company’s internal control over financial
        reporting. Accordingly, we express no such opinion. An audit also includes
        examining, on a test basis, evidence supporting the amounts and disclosures
        in
        the financial statements, assessing the accounting principles used and
        significant estimates made by management, as well as evaluating the overall
        financial statement presentation. We believe that our audits provide a
        reasonable basis for our opinion.
 
 In
        our
        opinion, the financial statements referred to above present fairly, in all
        material respects, the financial position of Royal Quantum Group, Inc (a
        development stage company) as of December 31, 2006, and 2005 and the results
        of
        its operations and its cash flows for the years ended December 31, 2006,
        and
        2005 and the cumulative since August 23, 2002 (inception) to December 31,
        2006,
        in conformity with accounting principles generally accepted in the United
        States
        of America.
  The
        accompanying financial statements have been prepared assuming that the Company
        will continue as a going concern. As discussed in Note 1 to the financial
        statements, the Company has incurred net losses of approximately $3,200,000,
        has
        a liquidity problem and has no sources of revenues, which raise substantial
        doubt about its ability to continue as a going concern. Management’s plans in
        regard to these matters are also described in Note 1. The financial statements
        do not include any adjustments that might result from the outcome of this
        uncertainty.
  /s/ Robison,
                Hill & Co.Certified Public Accountants
                Salt
                  Lake City, Utah
                April
                  12, 2007
 
 MEMBERS
                    OF AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTSMEMBERS
                    OF THE SEC PRACTICE SECTION and THE PRIVATE COMPANIES PRACTICE
                    SECTION1366
                    East Murray-Holladay Road, Salt Lake City, Utah
                    84117-5050


F-1


**ROYAL
        QUANTUM GROUP, INC.**
 **(A
        Development Stage Company)**
  **December
                  31,**ASSETS
              
              **2006**
              ****
              **2005**Current
                  Assets:Cash
                  & Cash Equivalents
              
              $
              340
              
              $
              1,800Total
                  Current Assets
              
              
              340
              
              
              1,800Fixed
                  Assets:Furniture
                  & Fixtures
              
              
              1,851
              
              
              -Less:
                  Accumulated Depreciation
              
              
              (185
              )
              
              -Total
                  Fixed Assets
              
              
              1,666
              
              
              -Other
                  Assets:Intangible
                  Assets
              
              
              1
              
              
              1Total
                  Other Assets
              
              
              1
              
              
              1Total
                  Assets
              
              $
              2,007
              
              $
              1,801LIABILITIES
                  & STOCKHOLDERS' EQUITYCurrent
                  Liabilities:Accounts
                  Payable
              
              $
              142,126
              
              $
              102,703Notes
                  Payable
              
              
              196,330
              
              
              -Related
                  Party Accounts Payables
              
              
              87,885
              
              
              30,078Total
                  Current Liabilities
              
              
              426,341
              
              
              132,781Related
                  Party Notes Payable
              
              
              32,902
              
              
              55,345Total
                  Liabilities
              
              
              459,243
              
              
              188,126Stockholders'
                  Equity:Preferred
                  Stock, Par Value $.001Authorized
                  10,000,000 sharesIssued
                  0 Shares at December 31, 2006 and 2005
              
              
              -
              
              
              -Common
                  Stock, Par value $.001Authorized
                  500,000,000 sharesIssued
                  35,608,365 and 33,108,365Shares
                  at December 31, 2006 and 2005
              
              
              35,608
              
              
              33,108Paid-in
                  Capital
              
              
              2,751,923
              
              
              2,626,423Deficit
                  Accumulated During the Development Stage
              
              
              (3,244,767
              )
              
              (2,845,856
              )Total
                  Stockholders' Equity
              
              
              (457,236
              )
              
              (186,325
              )Total
                  Liabilities and Stockholders' Equity
              
              $
              2,007
              
              $
              1,801


**The
        accompany notes are an integral part of these financial
        statements.**


F-2
 
  **ROYAL
          QUANTUM GROUP, INC.**
 **(A
          Development Stage Company)**
 **STATEMENTS
          OF OPERATIONS**
  **Cumulative****since****For
                    the years ended**
                
                **August
                    23,****December
                    31,**
                
                **2002****2006**
                
                **2005**
                
                **Inception**Revenues
                
                $
                -
                
                $
                -
                
                $
                -Total
                    Revenues
                
                
                -
                
                
                -
                
                
                -Expenses:Consulting
                    Fees
                
                
                66,229
                
                
                60,813
                
                
                688,774Compensation
                    Expense
                
                
                -
                
                
                128,790
                
                
                128,790General
                    & Administrative
                
                
                68,643
                
                
                47,636
                
                
                328,902Loss
                    from Operations
                
                
                (134,872
                )
                
                (237,239
                )
                
                (1,146,466
                )Other
                    Income (Expenses)Write-down
                    of Assets
                
                
                (147,986
                )
                
                -
                
                
                (147,986
                )Interest
                    (Expense)
                
                
                (116,303
                )
                
                -
                
                
                (116,539
                )Interest
                    Income
                
                
                250
                
                
                13
                
                
                263Total
                    Other Income (Expense)
                
                
                (264,039
                )
                
                13
                
                
                (264,262
                )Net
                    Loss from Continuing Operations
                
                
                (398,911
                )
                
                (237,226
                )
                
                (1,410,728
                )Discontinued
                    OperationsLoss
                    from discontinued operations
                
                
                -
                
                
                (65,096
                )
                
                (1,967,294
                )Gain
                    on disposal of discontinued operations
                
                
                -
                
                
                133,255
                
                
                133,255Net
                    Income (Loss) from Discontinued Operations
                
                
                -
                
                
                68,159
                
                
                (1,834,039
                )Net
                    Loss
                
                $
                (398,911
                )
                $
                (169,067
                )
                $
                (3,244,767
                )Basic
                    and Diluted Loss Per ShareContinuing
                    Operations
                
                $
                (0.01
                )
                $
                (0.01
                )Discontinued
                    Operations
                
                
                -
                
                
                -Loss
                    per share
                
                $
                (0.01
                )
                $
                (0.01
                )Weighted
                    Average Shares Outstanding
                
                
                34,485,077
                
                
                26,206,343
  **The
          accompany notes are an integral part of these financial
          statements.**
 F-3
 **ROYAL
          QUANTUM GROUP, INC.**
 **(A
          Development Stage Company)**
 **STATEMENTS
          OF STOCKHOLDER'S EQUITY**
  **Deficit****Accumulated****Since
                    August****Common
                    Stock**
                
                **Paid-In**
                
                **Retained**
                
                **23,
                    2002****Shares**
                
                **Par
                    Value**
                
                **Capital**
                
                **Deficit**
                
                **Inception**Balance
                    at August 23, 2002(Inception)
                
                
                14,000,000
                
                $
                14,000
                
                $
                -
                
                $
                -
                
                $
                -Issued
                    stock in an asset acquisitionagreement
                
                
                10,000,000
                
                
                10,000
                
                
                2,233,000
                
                
                -
                
                
                -Issued
                    stock in association withplan
                    of reorganization
                
                
                858,365
                
                
                858
                
                
                (72,260
                )
                
                -
                
                
                -Net
                    Loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (65,638
                )Balance
                    at December 31, 2002
                
                
                24,858,365
                
                
                24,858
                
                
                2,160,740
                
                
                -
                
                
                (65,638
                )Issued
                    stock in association with privateplacement
                
                
                10,000
                
                
                10
                
                
                14,990
                
                
                -
                
                
                -Issued
                    stock in exchange for services
                
                
                170,000
                
                
                170
                
                
                370,430
                
                
                -
                
                
                -Net
                    Loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (825,198
                )Balance
                    at December 31, 2003
                
                
                25,038,365
                
                
                25,038
                
                
                2,546,160
                
                
                -
                
                
                (890,836
                )Issued
                    stock in exchange for cash
                
                
                100,000
                
                
                100
                
                
                49,900
                
                
                -
                
                
                -Contributed
                    capital
                
                
                -
                
                
                -
                
                
                2,842
                
                
                -
                
                
                -Net
                    Loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (1,785,953
                )Balance
                    at December 31, 2004
                
                
                25,138,365
                
                
                25,138
                
                
                2,598,902
                
                
                -
                
                
                (2,676,789
                )Issued
                    stock in exchange for services
                
                
                8,164,118
                
                
                8,164
                
                
                120,627
                
                
                -
                
                
                -Issued
                    stock for cancellation of debt
                
                
                8,805,882
                
                
                8,806
                
                
                140,894
                
                
                -
                
                
                -Cancelled
                    stock in connection
                
                
                (9,000,000
                )
                
                (9,000
                )
                
                (234,000
                )
                
                -
                
                
                -with
                    disposition of assetsNet
                    Loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (169,067
                )Balance
                    at December 31, 2005
                
                
                33,108,365
                
                
                33,108
                
                
                2,626,423
                
                
                -
                
                
                (2,845,856
                )Stock
                    issued for purchase of X-treme
                
                
                250,000
                
                
                250
                
                
                2,250
                
                
                -
                
                
                -Stock
                    issued for cancellation of debt
                
                
                2,500,000
                
                
                2,500
                
                
                122,500
                
                
                -
                
                
                -Stock
                    cancelled on X-treme rescission
                
                
                (250,000
                )
                
                (250
                )
                
                (2,250
                )
                
                -
                
                
                -Contribued
                    capital
                
                
                -
                
                
                -
                
                
                3,000
                
                
                -
                
                
                -Net
                    Loss
                
                
                -
                
                
                -
                
                
                -
                
                
                -
                
                
                (398,911
                )Balance
                    at December 31, 2006
                
                
                35,608,365
                
                $
                35,608
                
                $
                2,751,923
                
                $
                -
                
                $
                (3,244,767
                )
  **The
          accompany notes are an integral part of these financial
          statements.**
 F-4




**ROYAL
        QUANTUM GROUP, INC.**
 **(A
        Development Stage Company)**
 **STATEMENTS
        OF CASH FLOWS**
  **Cumulative****since****For
                  the years ended**
              
              **August
                  23,****December
                  31,**
              
              **2002****2006**
              
              **2005**
              
              **Inception**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  Loss
              
              $
              (398,911
              )
              $
              (169,067
              )
              $
              (3,244,767
              )Net
                  Income/(Loss)from Disconued Operations
              
              
              -
              
              
              (68,159
              )
              
              1,578,681Adjustments
                  to reconcile net income (loss) tonet
                  cash provided (used in) operating activities:Depreciation
              
              
              185
              
              
              -
              
              
              185Stock
                  issued for interest
              
              
              100,000
              
              
              -
              
              
              100,000Stock
                  issued for start up costs
              
              
              -
              
              
              -
              
              
              12,600Stck
                  issued for services
              
              
              -
              
              
              128,790
              
              
              499,390(Increase)
                  decrease in prepaid expenses
              
              
              -
              
              
              1,200
              
              
              -Increase
                  (decrease) in accounts payable
              
              
              39,423
              
              
              95,257
              
              
              285,306Increase
                  (decrease) in related party accounts payable
              
              
              57,807
              
              
              -
              
              
              57,807Net
                  cash provided (used in) continuing activities
              
              
              (201,496
              )
              
              (11,979
              )
              
              (710,798
              )Net
                  cash provided (used in) discontinuing activities
              
              
              -
              
              
              13,897
              
              
              386,515Net
                  cash provided by (used in) operating activities
              
              
              (201,496
              )
              
              1,918
              
              
              (324,283
              )CASH
                  FLOWS FROM INVESTING ACTIVITIES:Purchase
                  of fixed assets
              
              
              (1,851
              )
              
              -
              
              
              (1,851
              )Net
                  cash provided by (used in) investing activities
              
              
              (1,851
              )
              
              -
              
              
              (1,851
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from related party notes
              
              
              13,057
              
              
              37,000
              
              
              121,402Payment
                  on related party notes
              
              
              (7,500
              )
              
              (45,000
              )
              
              (60,500
              )Proceeds
                  from notes payable
              
              
              196,330
              
              
              -
              
              
              196,330Contributed
                  capital
              
              
              -
              
              
              -
              
              
              2,842Stock
                  issued in exchange for cash
              
              
              -
              
              
              -
              
              
              66,400Net
                  cash provided by (used in) financing activities
              
              
              201,887
              
              
              (8,000
              )
              
              326,474Net
                  (Decrease) increase in Cash and Cash Equivalents
              
              
              (1,460
              )
              
              (6,082
              )
              
              340Cash
                  and Cash Equivalents at Beginning of Period
              
              
              1,800
              
              
              7,882
              
              
              -Cash
                  and Cash Equivalents at End of Period
              
              $
              340
              
              $
              1,800
              
              $
              340SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION:Cash
                  paid during the year for:Interest
              
              $
              -
              
              $
              -
              
              $
              12Income
                  taxes
              
              $
              -
              
              $
              -
              
              $
              -SUPPLEMENTAL
                  DISCLOSURE OF NON-CASH INVESTING AND FINANCING
                  ACTIVITIES:Stock
                  issued in plan of reorganization
              
              $
              -
              
              $
              -
              
              $
              858Stock
                  issued in asset acquisition
              
              $
              -
              
              $
              -
              
              $
              2,243,000Stock
                  issued for services
              
              $
              -
              
              $
              128,790
              
              $
              449,390Stock
                  issued for cancellation of debt
              
              $
              25,000
              
              $
              149,700
              
              $
              174,700Shareholder
                  loans converted to paid in capital
              
              $
              3,000
              
              $
              -
              
              $
              3,000




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


F-5


ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005


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.
 
 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 $3,200,000
        for the period from August 23, 2002 (inception of development stage) to December
        31, 2006, has a liquidity problem, and as of December 31, 2006 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.
 
 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 January 11, 2000, the company changed its name to Mentor On Call,
        Inc.
  F-6
 ROYAL
          QUANTUM GROUP, INC.
 (A
          Development Stage Company)
 NOTES
          TO FINANCIAL STATEMENTS
 FOR
          THE YEAR DECEMBER, 2006 AND 2005
 NOTE
        1
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Organization
        and Basis of Presentation (Continued)
 
 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. In connection with
        this
        merger, SuperYachts Holdings issued 858,365 shares of common stock (100%)
        in
        exchange for the assets and liabilities of the Platinum SuperYachts,
        Inc.
 
 For
        financial reporting purposes, Platinum SuperYachts, Inc. was considered a
        new
        reporting entity on November 15, 2002
 
 The
        merger was recorded as a recapitalization. In connection with this
        recapitalization, the number of shares outstanding prior to the merger have
        been
        restated to their post merger equivalents (increased from 1,400,000 shares
        to
        14,000,000). All references in the accompanying financial statements to the
        number of Common shares and per-share amounts for 2002 have been restated
        to
        reflect the equivalent number of post merger shares.
 
 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.
 
 As
        of
        December 31, 2006, the Company is in the development stage.
 
 Nature
        of Business
 
 Royal
        Quantum Group Inc. is a public company trading on the OTCBB market under
        the
        symbol RYQG. Our focus is to acquire mineral 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.
  F-7
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
 
 NOTE
        1
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)
 
 Nature
        of Business (Continued)
 
 Priority
        will be given to projects with near term cash flow potential, although projects
        that may not be as advanced from a technical standpoint but demonstrate the
        potential for significant upside potential will be given strong consideration.
        Royal Quantum will seek mineral properties in the areas of Uranium, Gold,
        Silver
        and Copper with a focus on North American interests. Opportunities outside
        of
        North America will be considered on a project by project basis.
 
 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 December 31, 2006 and December
        31,
        2005:
 
 **December
                  31,**
              ****
              **December
                  31,**
              ********
              ****
              **2006**
              ****
              **2005**Furniture
                  & Fixtures
              
              $
              1,851
              
              $
              -Less
                  accumulated depreciation
              
              
              (185
              )
              
              -Total
              
              $
              1,666
              
              $
              -
 
 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 twelve months ended December 31, 2006 and 2005
        was
        $185 and $0 respectively.
  F-8
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
 
 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 December 31, 2006 and December 31,
        2005:
  **December
                  31,**
              ****
              **December
                  31,**
              ****
              ****
              ******Intangible
                  Asset**
              ****
              **2006**
              ****
              **2005**
              ****
              **Amortization
                  Period**E-Learning
                  System
              
              $
              1
                  1
              
              $
              1
              
              
              IndefiniteLess
                  accumulated amortization
              
              
              -
              
              
              -Total
              
              $
              1
              
              $
              1
 
 Total
        amortization expense for the twelve months ended December 31, 2006 and December
        31, 2005 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.
  F-9
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   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 $340 and $1,800 as
        of
        December 31, 2006 and 2005 all of which was fully covered by federal depository
        insurance.
 
 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 December 31, 2006 and 2005.
 
 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, 2006, and 2005.
        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
  F-10
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   NOTE
        1
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
        (Continued)
  Stock
          Compensation for Non-Employees (Continued)
  with
        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, 2006 and 2005,
        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, 2006 and
        2005.
  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 2006, The FASB issued SFAS No. 155 "Accounting for Certain Hybrid
        Financial Instruments - an amendment of FASB Statements No. 133 and 140."
        This
        statement amends FASB 133, Accounting for Derivative Instruments and Hedging
        Activities and Statement and No. 140, Accounting for Transfers and Servicing
        of
        Financial Assets and Extinguishments of Liabilities. The statement permits
        fair
        value remeasurement for any hybrid financial instrument that contains an
        embedded derivative that would otherwise require bifurcation, clarifies which
        interest only strips and principal are not subject to the requirements of
        Statement 133, establishes a requirement to evaluate interest in
        securitized
  F-11
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   NOTE
        1
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
        Accounting Standards (Contineud)
  financial
        assets, clarifies that concentrations of
        credit risk in the form of subordination are not embedded derivatives and
        amends
        statement 140 to eliminate the prohibition on a qualifying special purpose
        entity from holding a derivative financial instrument to a beneficial interest
        other than another derivative financial instrument. The statement is effective
        for fiscal years beginning after September 15, 2006. Management does not
        expect
        this statement to have any material effect on its financial
        statements.
  In
        March
        2006 the FASB issued SFAS No. 156 " Accounting for Servicing of Financial
        Instruments - an amendment of FASB No.140, Accounting for Transfers and
        Servicing of Financial Instruments and Extinguishments of Liabilities. The
        statement requires an entity to recognize a servicing asset or servicing
        liability each time it undertakes an obligation to service an asset by entering
        into a servicing contract, requires all separately recognized servicing assets
        and servicing liabilities to be initially measured at fair market value,
        permits
        an entity to choose either the amortization method or fair market value
        measurement method for subsequent measurement periods for each class of
        separately recognized servicing assets and servicing liabilities, permits
        a
        one-time reclassification of available-for-sale securities to trading securities
        by entities with recognized servicing rights at its initial adoption, and
        requires separate presentation of servicing assets and servicing liabilities
        subsequently measured at fair value. The statement is effective for fiscal
        years
        beginning after September 15, 2006. Management does not expect this statement
        to
        have any material effect on its financial statements.
 
 In
        June,
        2006 the FASB issued FIN 48, “Accounting for Uncertainty in Income Taxes—an
        interpretation of FASB Statement No. 109”. This Interpretation clarifies, among
        other things, the accounting for uncertainty in income taxes recognized in
        an
        enterprise’s financial statements in accordance with FASB Statement No. 109,
        Accounting for Income Taxes. This Interpretation prescribes a recognition
        threshold and measurement attribute for the financial statement recognition
        and
        measurement of a tax position taken or expected to be taken in a tax return.
        This Interpretation also provides guidance on derecognition, classification,
        interest and penalties, accounting in interim periods, disclosure, and
        transition is effective for fiscal years beginning after December 15, 2006.
        Earlier application is encouraged if the enterprise has not yet issued financial
        statements, including interim financial statements, in the period the
        Interpretation is adopted. FIN 48, Accounting for Uncertainty in Income Taxes—an
        interpretation of FASB Statement No. 109, is effective for fiscal years
        beginning after December 15, 2006. Earlier application is encouraged if the
        enterprise has not yet issued financial statements, including interim financial
        statements, in the period the Interpretation is adopted. Management is
        evaluating the financial impact of this pronouncement.
  F-12
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   NOTE
        1 -
        ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
        Accounting Standards (Continued)
 
 In
        September 2006, the FASB issued SFAS No. 157, "Accounting for Fair Value
        Measurements." SFAS No. 157 defines fair value, and establishes a framework
        for
        measuring fair value in generally accepted accounting principles and expands
        disclosure about fair value measurements. SFAS No. 157 is effective for the
        Company for financial statements issued subsequent to November 15, 2007.
        The
        Company does not expect the new standard to have any material impact on the
        financial position and results of operations.
 
 In
        September 2006, the staff of the Securities and Exchange Commission issued
        Staff
        Accounting Bulletin No. 108 (“SAB 108”) which provides interpretive guidance on
        how the effects of the carryover or reversal of prior year misstatements
        should
        be considered in quantifying a current year misstatement. SAB 108 becomes
        effective in fiscal 2007. Management is evaluating the financial impact of
        this
        pronouncement.
 
 In
        December 2006, the FASB approved FASB Staff Position (FSP) No. EITF 00-19-2,
        “Accounting for Registration Payment Arrangements” (“FSP EITF 00-19-2”), which
        specifies that
        the
        contingent obligation to make future payments or otherwise transfer
        consideration under a registration payment arrangement, whether issued as
        a
        separate agreement or included as a provision of a financial instrument or
        other
        agreement, should be separately recognized and measured in accordance with
        SFAS
        No. 5, “Accounting for Contingencies”. FSP EITF 00-19-2 also requires additional
        disclosure regarding the nature of any registration payment arrangements,
        alternative settlement methods, the maximum potential amount of consideration
        and the current carrying amount of the liability, if any. The guidance in
        FSP
        EITF 00-19-2 amends FASB Statements No. 133, “Accounting for Derivative
        Instruments and Hedging Activities”, and No. 150, “Accounting for Certain
        Financial Instruments with Characteristics of both Liabilities and Equity”, and
        FASB Interpretation No. 45, “Guarantor’s Accounting and Disclosure requirement
        for Guarantees, Including Indirect Guarantees of Indebtedness of Others”, to
        include scope exceptions for registration payment arrangements. FSP
        EITF
        00-19-2 is effective immediately for registration payment arrangements and
        the
        financial instruments subject to those arrangements that are entered into
        or
        modified subsequent to the issuance date of this FSP, or for financial
        statements issued for fiscal years beginning after December 15, 2006, and
        interim periods within those fiscal years, for registration payment arrangements
        entered into prior to the issuance date of this FSP. The adoption of this
        pronouncement is not expected to have an impact on the Company’s financial
        position, results of operations or cash flows.
  F-13
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   NOTE
        1
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent
        Accounting Standards (Continued
 
 In
        October 2005, the FASB issued FSP FAS 123(R)-2, “Practical Accommodation to the
        Application of Grant Date as Defied in FASB Statement No. 123(R)”, which
        provides clarification of the concept of mutual understanding between employer
        and employee with respect to the grant date of a share-based payment award.
        This
        FSP provides that a mutual understanding of the key terms and conditions
        of an
        award shall be presumed to exist on the date the award is approved by management
        if the recipient does not have the ability to negotiate the key terms and
        conditions of the award and those key terms and conditions will be communicated
        to the individual recipient within a relatively short time period after the
        date
        of approval. This guidance was applicable upon the initial adoption of SFAS
        123(R). The adoption of this pronouncement did not have an impact on the
        Company’s financial position, results of operations, or cash flows.
 
 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 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.
 F-14
  ROYAL
          QUANTUM GROUP, INC.
 (A
          Development Stage Company)
 NOTES
          TO FINANCIAL STATEMENTS
 FOR
          THE YEAR DECEMBER, 2006 AND 2005
 NOTE
        1
        - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 NOTE
        2
        - INCOME TAXES
  As
          of
          December 31, 2006, the Company had a net operating loss carryforward for
          income
          tax reporting purposes of approximately $11,270,993 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.
 
 **2006**
              ****
              **2005**Net
                  Operating Losses
              
              $
              3,832,138
              
              $
              3,766,415Accrued
                  Consulting Fees
              
              
              29,881
              
              
              (10,227
              )Valuation
                  Allowance
              
              
              (3,862,019
              )
              
              (3,756,188
              )$
              -
              
              $
              -
  The
        provision for income taxes differ from the amount computed using the federal
        US
        statutory income tax rate as follows:
  **2006**
              ****
              **2005**Provision
                  (Benefit) at US Statutory Rate
              
              $
              (135,630
              )
              $
              (57,483
              )Excess
                  of capital losses over capital gains
              
              
              50,315
              
              
              -Loss
                  on Sale of Assets previously written down for book
                  purposes
              
              
              -
              
              
              (359,151
              )Amortization
              
              
              -
              
              
              (44,963
              )Accrued
                  Consulting Fees
              
              
              (20,454
              )
              
              (31,661
              )Depreciation
              
              
              (62
              )
              
              -Increase
                  (Decrease) in Valuation Allowance
              
              
              105,831
              
              
              493,258$
              -
              
              $
              -
 
 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.
 F-15
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   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
        - 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 $1,500
        ($1,850 Canadian Dollars) per month plus applicable taxes. For the year ended
        December 31, 2006 and 2005 the Company had $13,592 and $9,134 respectively
        in
        rent expense.
 
 NOTE
        5
        - RELATED PARTY TRANSACTIONS
  Effective
        July 11, 2005, Shahhid Vohra resigned his positions as director, vice-president
        and secretary of Platinum SuperYachts, Inc. There were no disagreements between
        Mr. Vohra and the Company relating to the Company’s operations, policies or
        practices.
 
 On
        September 29, 2005, The Company sold certain assets related to designing,
        building and selling yachts (the “Assets”) to Shahhid Vohra, the Company’s
        former Vice-President and Secretary. As consideration for the assets, Mr.
        Vohra
        agreed to allow the Company to cancel 9,000,000 shares (the “Cancelled Shares”)
        of the Company’s common stock beneficially owned by Mr. Vohra. The Cancelled
        Shares were originally issued to Mr. Vohra as consideration when the Company
        purchased the Assets from Mr. Vohra in November 2002. The Assets included,
        among
        other things, yacht models, a hull display, yacht blue prints, the content
        of
        the Company’s website, the domain name www.platinumsuperyachts.com and the
        rights to the name Platinum SuperYachts, Inc.
 
 On
        May 8,
        2006 the company paid $7,500 to Shahhid Vohra for settlement of an outstanding
        shareholder loan owing to Mr. Vohra in the amount of $10,500.
 
 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
        $25,000.00. The securities were issued pursuant to Section 4(2) of the
        Securities Act of 1933.
  F-16
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   NOTE
        5
        - RELATED PARTY TRANSACTIONS (Continued)
 
 As
        of
        December 31, 2006 and 2005, the Company owed Santeo Financial $87,885 and
        $30,078 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
        December 31, 2006 and 2005, shareholders have advanced the Company $32,902
        and
        $55,345, respectively, payable on demand and do not carry an interest rate.
        This
        transaction has been recorded in the accompanying financial statements as
        Shareholder loans.
 
 NOTE
        6
        - COMMON STOCK AND WARRANTS
 
 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.
 
 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.
  F-17
  ROYAL
        QUANTUM GROUP, INC.
 (A
        Development Stage Company)
 NOTES
        TO FINANCIAL STATEMENTS
 FOR
        THE YEAR DECEMBER, 2006 AND 2005
   NOTE
        7
        - NOTES PAYABLE
 
 During
        the year, the Company entered into notes payable with Integrated Business
        Concepts, Inc. that is due upon demand and carries and interest rate of 12%.
        As
        of December 31, 2006, and 2005 the amount owing on the notes is $196,330
        which
        consists of principal in the amount of $185,795 and interest of $10,535.
 
 NOTE
        8
        - PENDING LITIGATION
  Dieterich
        & Associates v. Platinum SuperYachts, Inc. During 2004, Christopher H
        Dieterich, Esq. asserted in case number 04T01643 in Los Angeles County,
        California that Platinum owes his office for legal services rendered the
        sum of
        $9,807. Mr. Dieterich filed a “Request for Entry of Default” in that amount.
        Dieterich obtained a default judgment for the amount of $9,807. In June 2006,
        the Company settled the matter and obtained a release for $5,000.
 
 NOTE
        9
        - DISCONTINUED OPERATIONS
 
 On
        September 29, 2005, Royal Quantum Group, Inc. (The Company) disposed of certain
        assets related to designing, building and selling yachts. The decision to
        sell
        the component was based on the fact that we have not been successful in the
        mega
        yacht industry due to two important factors. First, purchasers of yachts
        in the
        price range of our products were not interested in building with a manufacturer
        that was relatively new in the industry. The preference of the mega yacht
        buyer
        is to work with a builder that has a history in the business with product
        available for the client to view. Second, we were unable to close a financing
        large enough to allow the company to build a spec yacht. The ability to have
        a
        spec yacht available to show our clients the high quality craftsmanship of
        which
        we were capable would have significantly increased our ability to sell the
        product. As the share price of the Company’s common stock began to decrease, we
        were faced with the problem of significant shareholder dilution to secure
        a
        funding necessary to build a spec product. Management did not feel it was
        in the
        best interest of the shareholders to attempt a multi-million dollar financing
        while faced with such a low share price. Accordingly, we sold all of the
        Company’s assets related to the yacht business back to the former stockholders
        of PR Marine Inc. on September 29, 2005 in exchange for the former stockholders
        of PR Marine Inc. agreeing to cancel all of their outstanding shares of the
        Company.   F-18
 ROYAL
          QUANTUM GROUP, INC.
 (A
          Development Stage Company)
 NOTES
          TO FINANCIAL STATEMENTS
 FOR
          THE YEAR DECEMBER, 2006 AND 2005
  NOTE
        9
        - DISCONTINUED OPERATIONS (Continued)
 
 The
        operating results of the discontinued operations for the periods ending December
        31, 2006 an 2005 consist of:
 
 **December
                  31,**
              ********
              ****
              **2006**
              ****
              **2005**Sales
              
              $
              -
              
              $
              18,926Cost
                  of Goods Sold
              
              
              -
              
              
              (15,029
              )Gross
                  Profit
              
              
              -
              
              
              3,897Depreciation
                  and Amortization
              
              
              -
              
              
              (68,993
              )Operating
                  Loss
              
              
              -
              
              
              (65,096
              )Other
                  IncomeGain
                  on Disposal
              
              
              -
              
              
              133,255Net
                  Income (Loss)
              
              $
              -
              
              $
              68,159
 
 NOTE
        10 - RESCISSION OF ACQUISITION
 
 As
        of
        June 30, 2006, the Company had concluded the acquisition of X-Treme Oilfield
        Communications Inc. The company issued 250,000 shares of restricted common
        stock
        for the X-Treme Oilfield shell company and paid $75,000.00 Canadian dollars
        for
        inventory pertinent to the communications business.
 
 As
        of
        December 31, 2006, both parties to the agreement entered into a rescission
        agreement. Pursuant to this agreement, the 250,000 shares were cancelled
        and the
        Company has written off the investment in this acquisition for a write down
        of
        assets totaling $147,986.
 
 NOTE
        11 - SUBSEQUENT EVENTS
 
 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.


F-19




**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





There
      have been no changes in or disagreements with our accountants since our
      formation required to be disclosed pursuant to Item 304 of Regulation
      S-B.





**Item
      8A. Controls and Procedures.**





(a)
      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 December
      31,
      2006, the date of this report, our chief executive officer and the principal
      financial officer concluded that our disclosure controls and procedures were
      effective.





(b)
      Changes in internal controls. There were no significant changes in our internal
      controls or in other factors that could significantly affect these controls
      subsequent to the date of the evaluation of those controls by the chief
      executive officer and principal financial officer.




**Item
      8B. Other Information.**




None. ****





**PART
      III**





**Item
      9. Directors, Executive Officers, Promoters and Control Persons and Corporate
      Governance; Compliance with Section 16(a) of the Exchange
      Act.**





**Executive
      Officers and Directors.** Directors are elected to serve until the next annual meeting of stockholders
      and
      until their successors have been elected and qualified. Officers are appointed
      to serve until the meeting of the Board of Directors following the next annual
      meeting of stockholders and until their successors have been elected and
      qualified.




The
      following table sets forth information regarding our executive officer and
      directors.





**Name**
            **Age**
            **Position**Ron
                Ruskowsky
              Suite
                #145, 251 MidPark Blvd S.E. Calgary, AB T2X 1S3 Canada
            39
            President,
                CEO and Principal Accounting Officer
              DirectorRoger
                Janssen
              Suite
                #145, 251 MidPark Blvd S.E. Calgary, ABT2X 1S3
              Canada
            43
            Vice-President,
                Secretary
              Director





**Ron
      Ruskowsky, President, CEO and Principal Accounting Officer,
      Director.** Mr.
      Ruskowsky has a diverse and strong background in corporate structure, management
      and finance. He has been involved in all aspects of management from marketing
      to
      finance and acquisitions in both public and private corporations for over 21
      years. Mr. Ruskowsky has been a director of the Company since October 1,
      2002.





**Roger
      Janssen, Vice-President, Secretary, Director** .
      Mr.
      Janssen has over twenty years of experience in the manufacturing industry.
      For
      the past sixteen years he has owned and operated his own business, which
      produces aeronautical
      and marine components, in the greater Seattle area, with clients, including;
      Boeing, Microsoft, Starbucks Corporation Precor and Eldec. Mr. Janssen has
      guided several manufacturing companies during their start up phase and has
      traveled internationally as a manufacturing consultant. Mr. Janssen has been
      a
      director of the company since October 1, 2002.





12





There
      are
      no familial relationships between any of the Company’s directors and officers.
      There are no orders, judgments, or decrees of any governmental agency or
      administrator, or of any court of competent jurisdiction, revoking or suspending
      for cause any license, permit or other authority to engage in the securities
      business or in the sale of a particular security or temporarily or permanently
      restraining any of our officers or directors from engaging in or continuing
      any
      conduct, practice or employment in connection with the purchase or sale of
      securities, or convicting such person of any felony or misdemeanor involving
      a
      security, or any aspect of the securities business or of theft or of any felony.
      Nor are any of the officers or directors of any corporation or entity affiliated
      with us so enjoined.





**Section
      16(a) Beneficial Ownership Reporting Compliance**.
      We
      believe that our officers, directors, and principal shareholders have filed
      all
      reports required to be filed on, respectively, a Form 3 (Initial
      Statement of Beneficial Ownership of Securities),
      a Form
      4 (Statement
      of Changes of Beneficial Ownership of Securities),
      or a
      Form 5 (Annual
      Statement of Beneficial Ownership of Securities).





**Code** **of****** **Ethics****.**We
      have
      not adopted a corporate code of ethics that applies to our principal executive
      officer, principal financial officer, principal accounting officer or
      controller, or persons performing similar functions. Mr. Ruskowsky serves in
      all
      the above capacities.





Our
      decision to not adopt such a code of ethics results from our having only two
      officers working closely together managing the Company. We believe that as
      a
      result of the limited interaction due to having such a small management team,
      eliminates the current need for such a code. Further, since the officers also
      serve as directors there is no one to report violations of such a code
      to.





**Nominating
      Committee.** T he
      Company's entire Board participates in consideration of director nominees.
      The
      Board will consider candidates who have experience as a board member or senior
      officer of a company or who are generally recognized in a relevant field as
      a
      well-regarded practitioner, faculty member or senior government officer. The
      Board will also evaluate whether the candidates' skills and experience are
      complementary to the existing Board's skills and experience as well as the
      Board's need for operational, management, financial, international,
      technological or other expertise. The Board will interview candidates that
      meet
      the criteria and then select nominees that Board believes best suit the
      Company's needs.





The
      Board
      will consider qualified candidates suggested by stockholders for director
      nominations. Stockholders can suggest qualified candidates for director
      nominations by writing to the Company's Corporate Secretary, Roger Janssen,
      at
      Suite #145, 251 MidPark Blvd S.E. Calgary, Alberta T2X 1S3 Canada. Submissions
      that are received that meet the criteria described above will be forwarded
      to
      the Board for further review and consideration. The Board will not evaluate
      candidates proposed by stockholders any differently than other
      candidates.





**Audit
      Committee.** We do
      not have an Audit Committee. Presently, our Board of Directors performs some
      of
      the same functions of an Audit Committee, such as: recommending a firm of
      independent certified public accountants to audit the annual financial
      statements; reviewing the independent auditors independence, the financial
      statements and their audit report; and reviewing management's administration
      of
      the system of internal accounting controls. The Company does not currently
      have
      a written audit committee charter or similar document.





**Audit
      Committee Financial Expert.** The
      Company’s board of directors does not have an “audit committee financial
      expert,” within the meaning of such phrase under applicable regulations of the
      Securities and Exchange Commission. The board of directors believes that all
      board members are financially literate and experienced in business matters,
      and
      that one or more members of the Board of Directors are capable of (i)
      understanding generally accepted accounting principles (“GAAP”) and financial
      statements, (ii) assessing the general application of GAAP principles in
      connection with our accounting for estimates, accruals and reserves, (iii)
      analyzing and evaluating our financial statements, (iv) understanding our
      internal controls and procedures for financial reporting; and (v) understanding
      audit committee functions, all of which are attributes of an audit committee
      financial expert.





13





However,
      the board of directors believes that there are not any board members who have
      obtained these attributes through the experience specified in the SEC’s
      definition of “audit committee financial expert.” Further, like many small
      companies, it is difficult for the Company to attract and retain board members
      who qualify as “audit committee financial experts,” as competition for these
      individuals is significant. The board believes that its current board members
      are able to fulfill this role under SEC regulations despite not having a
      designated “audit committee financial expert.” We believe the cost related to
      retaining a financial expert at this time is prohibitive. Further, because
      of
      our start-up operations, we believe the services of a financial expert are
      not
      warranted.




**Item
      10. Executive Compensation**





**Summary
      Compensation Table.** The
      table set forth below summarizes the annual and long-term compensation for
      services in all capacities to us payable to our principal executive officer
      and
      our only other executive officer during the years ending December 31, 2006
      and
      2005.





**Name
                and Principal**
              **Position**
            **Year**
              **Ended**
            **Salary**
              **$**
            **Bonus**
              **$**
            **Stock
                Awards**
              **$**
            **Option
                Awards**
              **$**
            **Non-Equity**
              **Incentive
                Plan Compensation**
              **$**
            **Nonqualified**
              **Deferred**
              **Compensation
                Earnings $**
            **All
                Other**
              **Compensation**
              **$**
            **Total**
              **$**Ron
                Ruskowsky President and CEO, Director
            2006
            0
            0
            0
            0
            0
            0
            0
            02005
            0
            0
            0
            0
            0
            0
            0
            0Roger
                Janssen Vice-President and Secretary
            2006
            0
            0
            0
            0
            0
            0
            0
            02005
            $40,000
                (1)
            0
            0
            0
            0
            0
            0
            0Shahid
                Shafiq Vohra Former Officer
            2005
            0
            0
            0
            0
            0
            0
            0
            0


(1)
      We
      issued Roger Janssen 2,000,000 shares of common stock on October 4, 2005 as
      compensation for services rendered as a director and his agreement to serve
      as
      the Company’s Secretary and Vice-President. The closing price for our common
      stock on the NASD OTC Bulletin Board on that date was $0.02.





Except
      as
      set forth above, none of the Company's officers and/or directors currently
      receives any compensation for their respective services rendered to the Company.
      Officers and directors have agreed to act without compensation until authorized
      by the Board of Directors, which is not expected to occur until the Company
      has
      generated sufficient revenues from its operations.





**Stock
      Options/SAR Grants** .
      No
      grants of stock options or stock appreciation rights were made since our date
      of
      incorporation in October 1996.





**Long-Term
      Incentive Plans** .
      As of
      December 31, 2006, we had no group life, health, hospitalization, or medical
      reimbursement or relocation plans in effect. Further, we had no pension plans
      or
      plans or agreements which provide compensation on the event of termination
      of
      employment or change in control of us.





**Employment
      Contracts and Termination of Employment.** We
      do not
      anticipate that we will enter into any employment contracts with any of our
      employees. We have no plans or arrangements in respect of remuneration received
      or that may be received by our executive officers to compensate such officers
      in
      the event of termination of employment (as a result of resignation or
      retirement).





**Outstanding
      Equity Awards at Fiscal Year-end.**As
      of the
      year ended December 31, 2006, the following named executive officer had the
      following unexercised options, stock that has not vested, and equity incentive
      plan awards:





14




**Option
                Awards**
            **Stock
                Awards****Name**
            **Number
                of Securities Underlying Unexercised Options**
              **#
                Exercisable**
            **#
                Un-**
              **exercisable**
            **Equity
                Incentive Plan Awards: Number of Securities Underlying Unexercised
                Options**
            **Option
                Exercise Price**
            **Option
                Expiration**
              **Date**
            **Number
                of**
              **Shares
                or**
              **Units
                of**
              **Stock
                Not**
              **Vested**
            **Market**
              **Value
                of**
              **Shares
                or**
              **Units
                Not**
              **Vested**
            **Equity**
              **Incentive
                Plan Awards:**
              **Number
                of Unearned**
              **Shares,
                Units**
              **or
                Other**
              **Rights
                Not**
              **Vested**
            **Value
                of Unearned Shares,**
              **Units
                or**
              **Other**
              **Rights
                Not Vested**Ron
                Ruskowsky President, CEO, Principal Accounting Officer
            0
            0
            0
            0
            0
            0
            0
            0
            0Roger
                Janssen, Vice-President, Secretary
            0
            0
            0
            0
            0
            0
            0
            0
            0





**Director
      Compensation.** Our
      directors received the following compensation for their service as directors
      during the fiscal year ended December 31, 2006:





**Name**
            **Fees**
              **Earned**
              **or
                Paid in**
              **Cash**
            **Stock**
              **Awards**
              **$**
            **Option
                Awards**
              **$**
            **Non-Equity**
              **Incentive
                Plan Compensation**
              **$**
            **Non-Qualified**
              **Deferred**
              **Compensation**
              **Earnings**
              **$**
            **All
                Other**
              **Compensation**
              **$**
            **Total**
              **$**Ron
                Ruskowsky
            0
            0
            0
            0
            0
            0
            0Roger
                Janssen
            0
            0(1)
            0
            0
            0
            0
            0


(1)
      We
      issued Roger Janssen 2,000,000 shares of common stock on October 4, 2005 as
      compensation for services rendered as a director and his agreement to serve
      as
      the Company’s Secretary and Vice-President.





**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.**





The
      following table sets forth certain information regarding the beneficial
      ownership of our common stock as of March 26, 2007, by each person or entity
      known by us to be the beneficial owner of more than 5% of the outstanding shares
      of common stock, each of our directors and named executive officers, and all
      of
      our directors and executive officers as a group.





**Title**
              **of
                Class**
            **Name
                and Address**
              **of
                Beneficial Owner**
            **Amount
                and Nature**
              **of
                Beneficial Owner**
            **Percent**
              **of
                Class**Common
                Stock
            Ron
                Ruskowsky (1)
              Suite
                #145, 251 MidPark Blvd S.E. Calgary, Alberta T2X 1S3
              Canada
            18,470,000
                Shares
              President,
                CEO and Principal Accounting Officer, Director
            52.0
                %Common
                Stock
            Roger
                Janssen
              Suite
                #145, 251 MidPark Blvd S.E. Calgary, AB Alberta T2X 1S3
              Canada
            2,500,000
                Shares
              Secretary
                and Vice-President
              Director
            7.0
                %Common
                Stock
            All
                directors and named executive officers as a group
            20,970,000
            58.5
                %(2)


(1)
            14,970,000
                shares are owned by Santeo, an entity affiliated with Mr. Ruskowsky.
                Mr.
                Ruskowsky has sole voting and dispostive power over these
                shares.




(2)
            Figures
                vary due to rounding  15




Beneficial
      ownership is determined in accordance with the rules of the Securities and
      Exchange Commission and generally includes voting or investment power with
      respect to securities. In accordance with Securities and Exchange Commission
      rules, shares of our common stock which may be acquired upon exercise of stock
      options or warrants which are currently exercisable or which become exercisable
      within 60 days of the date of the table are deemed beneficially owned by the
      optionees. Subject to community property laws, where applicable, the persons
      or
      entities named in the table above have sole voting and investment power with
      respect to all shares of our common stock indicated as beneficially owned by
      them.





**Changes
      in Control.** Our **** management
      is not aware of any arrangements which may result in “changes in control” as
      that term is defined by the provisions of Item 403(c) of Regulation S-B.





**No
      Equity Compensation Plan.** We
      do not
      have any securities authorized for issuance under any equity compensation plan.
      We also do not have an equity compensation plan and do not plan to implement
      such a plan.




**Item
      12. Certain Relationships and Related Transactions, and Director
      Independence.**





**Related
      Party Transactions.**    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
      September 29, 2005, The Company sold certain assets related to designing,
      building and selling yachts (the “Assets”) to Shahhid Vohra, the Company’s
      former Vice-President and Secretary. As consideration for the assets, Mr. Vohra
      agreed to allow the Company to cancel 9,000,000 shares (the “Cancelled Shares”)
      of the Company’s common stock beneficially owned by Mr. Vohra. The Cancelled
      Shares were originally issued to Mr. Vohra as consideration when the Company
      purchased the Assets from Mr. Vohra in November 2002. The Assets included,
      among
      other things, yacht models, a hull display, yacht blue prints, the content
      of
      the Company’s website, the domain name www.platinumsuperyachts.com and the
      rights to the name Platinum SuperYachts, Inc.





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 and for services
      in
      the amount of $104,790. 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.





On
      May 8,
      2006 the Company paid $7,500 to Shahhid Vohra, the Company’s former officer, for
      settlement of an outstanding shareholder loan owing to Mr. Vohra in the amount
      of $10,500.





On
      June
      14, 2006, the Company issued 2,500,000 shares of common stock to Keith Campbell,
      a shareholder, 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.




As
      of
      December 31, 2006 and December 31, 2005, the Company owed Santeo Financial
      $87,885 and $30,078 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
      December 31, 2006 and December 31, 2005, shareholders have advanced the Company
      $32,902 and $55,345, respectively, payable on demand and do not carry an
      interest rate. This transaction has been recorded in the accompanying financial
      statements as Shareholder loans.





16





With
      regard to any future related party transaction, we plan to fully disclose any
      and all related party transactions, including, but not limited to, the
      following:





·
            disclose
                such transactions in prospectuses where
                required;


·
            disclose
                in any and all filings with the Securities and Exchange Commission,
                where
                required;


·
            obtain
                disinterested directors consent; and


·
            obtain
                shareholder consent where required.





**Director
      Independence.** Members
      of our Board of Directors are not independent as that term is defined by defined
      in Rule 4200(a)(15) of the Nasdaq Marketplace Rules.





**Item
      13. Exhibits**





3.1  Articles
      of Incorporation*


3.2  Bylaws*


31  Rule
      13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief Financial
      Officer


32  Section
      906 Certification by Chief Executive Officer and Chief Financial
      Officer


*
      Incorporated by reference to the company’s registration statement on Form 10-5B
      filed on October 20, 1999.


**Item
      14. Principal Accountant Fees and Services.**





**Audit
      Fees.** The
      aggregate fees billed in each of the fiscal years ended December 31, 2006 and
      2005 for professional services rendered by the principal accountant for the
      audit of our annual financial statements and quarterly review of the financial
      statements included in our Form 10-KSB or services that are normally provided
      by
      the accountant in connection with statutory and regulatory filings or
      engagements for those fiscal years were $16,440 and $12,851, respectively.





**Audit-Related
      Fees.** For the
      fiscal year ended December 31, 2006, there were no fees billed for services
      reasonably related to the performance of the audit or review of the financial
      statements outside of those fees disclosed above under “Audit
      Fees.”




**Tax
      Fees.** For
      the
      fiscal years ended December 31, 2006 and December 31, 2005, our accountants
      rendered services for tax compliance, tax advice, and tax planning work for
      which we paid $45 and $24, respectively.





**All
      Other Fees.** None.





**Pre-Approval
      Policies and Procedures.** Prior
      to
      engaging our accountants to perform a particular service, our board of directors
      obtains an estimate for the service to be performed. All of the services
      described above were approved by the board of directors in accordance with
      its
      procedures.


17




**SIGNATURES**




Pursuant
      to the requirements of the Securities Exchange Act of 1934, the Registrant
      has
      duly caused this report to be signed on its behalf by the undersigned in the
      City of Calgary, Alberta, Canada, on April 11, 2007.






**Royal
        Quantum Group, Inc.**
 **a
        Nevada corporation**


By:
              /s/ Ron
              RuskowskyRon
              RuskowskyIts:Principal
                Executive Officer, Principal Accounting Officer
              President,
                CEO and a Director





By:
              /s/ Roger
              JanssenRoger
              JanssenIts:
                Vice-President,
                Secretary and a Director




18





In
        accordance with the Exchange Act, this report has been signed below by the
        following persons on behalf of the Registrant and in the capacities and on
        the
        dates indicated.




By:
                /s/ Ron
                Ruskowsky
              
              
              April
                12,
                2007Ron
                RuskowskyIts:
                  Director
 
 By:
                /s/ Roger
                Janssen
              
              
              April
                12,
                2007Roger
                JanssenIts:
                  Director
   19