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,
2007
 
 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 [X] No [  ]
  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 5, 2008, approximately $15,638,135.
 
 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, 2008, there were 40,965,338
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.  Royal Quantum is
focused on the acquisition, exploration and development of mineral or oil and
gas and resource properties located within favorable geo-political
climates.





Our Properties.We currently do not own
any property, nor do we hold any mining claims or other interests in any real
property.





In May
2007, we entered into a Purchase Agreement (“Agreement”) with U3, LLC (“U3”) to
acquire a 100% interest in 1,540 acres that consist of 77 claims of prospective
uranium property located adjacent to the Sheep Mountain Mine in Fremont County,
Central Wyoming, approximately 90 miles southwest of Casper,
Wyoming.  We paid $10,000 to U3 when we executed the Agreement on May
28, 2007.





On July
18, 2007, the Agreement was amended to specify that we make the following
payments to U3 when the claim numbers (“WMC numbers”) were issued by the Bureau
of Land Management (“BLM”) on each claim, and on each of an additional 100
claims within a three-mile radius of the claims:


·
              $50,000
      on or before October 1, 2007;
 ·
              $50,000
      on or before  November 1,
2007;
 ·
              $50,000
      on or before December 1, 2007;
and
 ·
              $70,000
      on or before January 15,
2008.


The
Amendment also provided for a closing on or before September 3,
2007.




2





Pursuant
to the Agreement, we also agreed to issue 1,000,000 restricted shares of our
common stock to U3 when the claims were transferred to us, clear of any liens or
encumbrances.  In addition, we agreed to begin a $150,000 work program
on the Sheep Mountain Claim block before June 1, 2008, with the option to
undertake an additional $150,000 work program on the claims if we paid an
additional $200,000 in cash to U3 and issue an additional 500,000 restricted
shares of our common stock to U3. Provided we elect to continue on or before
June 1, 2009, we agreed to pay U3 a final $200,000 and issue an additional
1,250,000 restricted shares of our common stock to U3 and reserve a 2% NSR for
U3 on any production from the claims. The Agreement also provides that we will
register the shares we issued to U3 if we close a financing of more than
$1,000,000. If we drop the claims at any point, the claims are transferred back
to U3.





However,
we later agreed with U3 not to continue to acquire the claims as outlined above,
due to delays in receiving WMC numbers on the claims, and we have requested U3
return the $10,000 as per the agreement terms.  We did not issue any
shares pursuant to this Agreement and as of the date of this report have also
not received the $10,000.





Subsequent
to the period covered by this report, we have acquired an option to purchase a
6,000 acre Oil & Gas property located in the state of Ohio, which
includes 171 producing wells. The closing date of the transaction is on or
before March 31, 2008 and is subject to financing.  We are now in
discussions to extend the closing date.





Our Competition.The
competition for acquiring mineral or oil and gas and resource properties for
exploration and development is intense. We may not be able to compete
successfully against current or future competitors. Our competitors vary in size
and in the scope and breadth of the services they can offer to potential merger
or acquisition candidates. We encounter competition from a variety of companies.
All of these mining companies are seeking properties of merit and availability
of funds. We will have to compete against such companies to acquire the funds to
develop our mineral or oil and gas claims. The availability of funds for
exploration is sometimes limited and we may find it difficult to compete with
larger and more well-known companies for capital. Even though we have the right
to the minerals or other oil and gas resources on our claims there is no
guarantee we will be able to raise sufficient funds in the future to maintain
our mineral or oil and gas claims in good standing. Therefore, if we do not have
sufficient funds for exploration our claims might lapse and be staked by other
mining interests. We might be forced to seek a joint venture partner to assist
in the exploration of our mineral or oil and gas claims. In this case, there is
the possibility that we might not be able to pay our proportionate share of the
exploration costs and might be diluted to an insignificant carried
interest.





Even when
a commercial viable ore body is discovered, there is no guarantee competition in
refining the ore will not exist. Other companies may have long term contracts
with refining companies thereby inhibiting our ability to process our ore and
eventually market it. At this point in time we do not have any contractual
agreements to refine any potential ore we might discover on our mineral claims
or other resources on oil and gas claims.





The
exploration business is highly competitive and highly fragmented, dominated by
both large and small mining or oil and gas companies. Success will largely
depend on our ability to attract talent from the field and our ability to fund
our operations. There is no assurance that our operations and expansion plans
will be realized.





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.





We are
committed to complying with and, to our knowledge, are in compliance with all
governmental and environmental regulations. Permits from a variety of regulatory
authorities are required for many aspects of mine operation and reclamation. We
cannot predict the extent to which future legislation and regulation could cause
additional expense, capital expenditures, restrictions, and delays in the
exploration of our properties.





Our
activities are not only subject to extensive federal, state and local
regulations controlling the mining of and exploration for mineral or oil and gas
properties, but also the possible effects of such activities upon the
environment. Future legislation and regulations could cause additional expense,
capital expenditures, restrictions and delays in the exploration of our
properties, the extent of which cannot be predicted. Permits may also be
required from a variety of regulatory authorities for many aspects of mine
operation and reclamation. In the context of environmental permitting, including
the approval of reclamation plans, we must comply with known standards, existing
laws and regulations that may entail greater or lesser costs and delays
depending on the nature of the activity to be permitted and how stringently the
regulations are implemented by the permitting authority. We are not presently
aware of any specific material environmental constraint affecting our properties
that would preclude the economic development or operation of any specific
property.




3




It is
reasonable to expect that compliance with environmental regulations will
increase our costs. Such compliance may include feasibility studies on the
surface impact of our proposed exploration operations; costs associated with
minimizing surface impact; water treatment and protection; reclamation
activities, including rehabilitation of various sites; on-going efforts at
alleviating the mining impact on wildlife; and permits or bonds as may be
required to ensure our compliance with applicable regulations. It is possible
that the costs and delays associated with such compliance could become so
prohibitive that we may decide not to proceed with exploration on any of our
mineral or oil and gas properties.





We are
prepared to engage professionals, if necessary, to ensure regulatory compliance
but in the near term expect our activities to require minimal regulatory
oversight. If we expand the scope of our activities in the future it is
reasonable to expect expenditures on compliance to rise.





Our Research and Development.We are not currently conducting any research and development activities
other than property explorations and assessments. 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 relationship
additional with third parties. None of these costs will be borne by our
customers, however.





Our Intellectual Property.We
do not presently own any patents, trademarks, licenses, concessions or
royalties.


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 March 5,
2008, we have no full-time employees and no part-time employees. We believe we
may need to hire three additional 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 expansion and 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 $250 ($250 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.





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.




4





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 incurred a net loss since
inception and expect to incur net losses for the foreseeable
future.




As of
December 31, 2007, our net loss since inception was $3,659,899.
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.





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 55% of our
outstanding shares of common stock, allowing these shareholders control matters
requiring approval of our shareholders.





Our
officers, directors and principal shareholders beneficially own, in the
aggregate, approximately 55% 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.




5




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, 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.  If our common stock
becomes 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
December 31, 2007 and 2006, we held no real property and do not presently own
any interests in real estate, mining or otherwise.





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 $250 ($250 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.





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 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
            
            
            LowDecember
      31, 2007
            
            
            0.115
            
            
            
            0.115September
      30, 2007
            
            
            0.19
            
            
            
            0.112June
      30, 2007
            
            
            0.27
            
            
            
            0.26March
      31, 2007
            
            
            0.21
            
            
            
            0.19December
      31, 2006
            
            
            0.05
            
            
            
            0.045September
      30, 2006
            
            
            0.055
            
            
            
            0.045June
      30, 2006
            
            
            0.06
            
            
            
            0.06March
      31, 2005
            
            
            0.07
            
            
            
            0.05







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.




6





There
are
nooutstanding shares of our common stock which can be sold
pursuant to Rule 144. We had 39,095,338shares of common stock
issued and outstanding as of December 31, 2007, which were held by approximately
90 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.





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,while
operating under our previous business plan,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, of our common stock that were beneficially owned by Mr.
Vohra.  These
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 to Santeo Financial
Corporation ("Santeo") in exchange for the cancellation of $149,700 we owed to
Santeo.  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,
weissued
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 issuedin
reliance on the exemption underSection
4(2) of the Securities Act of 1933.





In
February 2007 and in reliance on the exemption from registration under
Regulation S, we sold 2,653,640 shares at $0.05 for a total of $132,682. We used
those funds for working capital.





On May 9,
2007 we issued 500,000 shares to Phil van Angeren as compensation for his
assuming the position of Exploration Manager of the Corporation. These shares
have been valued at the market price of $0.29.  Compensation expense
of $145,000 has been booked on the accompanying Statement of
Operations.





On June
26, 2007, we issued 333,333 shares of common stock to Randall Lanham in total
satisfaction of legal fees in the amount of $20,000.





Subsequent
to the period covered by this report, in February 2008 and in reliance on the
exemption from registration under Regulation S, we sold 1,820,000 shares at
$0.10 for a total of $182,000. We used those funds for working capital. Also, in
March 2008, we issued 50,000 shares of common stock to M2 Law Professional
Corporation in total satisfaction of legal fees in the amount of
$50,000.


7





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.





Use of Proceeds of Registered
Securities.There were no sales or proceeds during the calendar year
ended December 31, 2007, 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:





·
            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.




8





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 acquirenear term cash flow producing mining projects for exploration
and development with the intent to bring the projects to
feasibility.





As of
December 31, 2007, we are in the development stage and have not commenced our
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.





Our
current focus is on the
acquisition, exploration and development of mineral resource properties located
within favorable geo-political climates.







For the year ended December
31, 2007 as compared to the year ended December 31, 2006.





Results
of Operations.





Revenues.The
Company had no revenue for the year ended December 31, 2007 or for the year
ended December 31, 2006.




9





Operating Expenses and Net Loss.The
Company’s net loss from operations of $351,623 for the year ended December 31,
2007 was comprised of general and administrative expenses of $85,820, consulting
fees in the amount of $120,803, and compensation expense of $145,000. The
Company also had $63,509 in total other expenses, including $37,927 in foreign
currency exchange loss and $25,582 represented by net interest. Therefore, the
Company’s net loss from continuing operations was $415,132.  As the
Company had no net income or loss from discontinued operations, its net loss for
the year ended December 31, 2007 was $415,132.  In comparison to the
year ended December 31, 2006,   The Company’s net loss from
operations of $134,872 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 for year ended December 31, 2006 was
$398,911.




Liquidity and Capital
Resources.The Company had cash of $3,448 as of December
31, 2007, as compared to $340 as of December 31, 2006.  As of the year
ended December 31, 2007, the Company also had fixed assets of $1,296,
represented by furniture and fixtures of $1,851 less accumulated depreciation of
$555 as compared to the year ended December 31, 2006, the Company had fixed
assets of $1,666, represented by furniture and fixtures of $1,851 less
accumulated depreciation of $185.  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.




For the
year ended December 31, 2007, the Company had $563,587 in total current
liabilities, which was represented by $184,342 in accounts payable, $259,157 in
demand notes payable, and $120,088 in related party accounts
payable.  This is in comparison to the year ended December 31, 2006,
where the Company had $426,341 in total current liabilities, which was
represented by $142,126 in accounts payable, $196,330 in demand notes payable,
and $87,885 in related party accounts payable.  For the year ended
December 31, 2007, the Company also had $25,845 represented by related party
notes payable, for total liabilities of $601,008.  This is in
comparison to the year ended December 31, 2006, where the Company had $32,902
represented by related party notes payable, for total liabilities of
$459,243.  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 or oil
and gas and resource properties for exploration and development with the intent
to bring the projects to feasibility at which time we will either contract out
the operations or joint venture the project to qualified interested
parties.





We had
cash of $3,448 as of December 31, 2007. 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
March 2008 and in reliance on the exemption from registration under Regulation
S, the Company sold 1,820,000 shares at $0.10 for a total of $182,000. The
Company will use these funds for working capital.





Subsequent
to the period covered by this report, we acquired an option to purchase a 6,000
acre Oil & Gas property located in the state of Ohio, which
includes 171 producing wells. The closing date of the transaction is on or
before March 31, 2008 and is subject to financing.  The company is now
in discussions to extend the closing date.





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. However, our officers, directors and principal shareholders
are not committed to contribute funds to pay for our expenses.




10





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 55% 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, our officers, directors and principal shareholders are not
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 property interests or holdings, then we may need to hire
additional employees or independent contractors as well as purchase or lease
additional equipment.




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




Item 7. Financial
Statements





The
financial statements required by Item 7 are presented in the following
order:




11




ROBISON,
      HILL & CO.
              
              
              
              Certified
      Public AccountantsA
      PROFESSIONAL CORPORATIONBRENT
      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 (a development
stage company) as of December 31, 2007, and 2006, and the related statements of
operations, and cash flows for the years ended December 31, 2007, and 2006, and
the cumulative since August 23, 2002 (inception) to December 31, 2007, and the
statement of stockholder’s equity since August 23, 2002 (inception) to December
31, 2007.  These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our 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, 2007, and 2006 and the results of
its operations and its cash flows for the years ended December 31, 2007, and
2006 and the cumulative since August 23, 2002 (inception) to December 31, 2007,
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 $3,660,000, has
a liquidity problem and has minimal 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 AccountantsSalt
      Lake City, Utah
                    March
      31, 2008








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


12


ROYAL QUANTUM GROUP, INC.
 (A Development Stage Company) CONSOLIDATED  BALANCE
SHEETS


December
      31,ASSETS
              
              2007
              
              
              2006Current
      Assets:Cash
      & Cash Equivalents
              
              $
              3,448
              
              
              $
              340Loan
      receivable
              
              
              -
              
              
              
              -Total
      Current Assets
              
              
              3,448
              
              
              
              340Fixed
      Assets:Furniture
      & Fixtures
              
              
              1,851
              
              
              
              1,851Less:
      Accumulated Depreciation
              
              
              (555
              )
              
              
              (185
              )Total
      Fixed Assets
              
              
              1,296
              
              
              
              1,666Other
      Assets:Intangible
      Assets
              
              
              1
              
              
              
              1Investment
      in Mineral Property
              
              
              10,000
              
              
              
              -Total
      Other Assets
              
              
              10,001
              
              
              
              1Total
      Assets
              
              $
              14,745
              
              
              $
              2,007LIABILITIES
      & STOCKHOLDERS' EQUITYCurrent
      Liabilities:Accounts
      Payable
              
              $
              184,342
              
              
              $
              142,126Notes
      Payable
              
              
              259,157
              
              
              
              196,330Related
      Party Payables
              
              
              120,088
              
              
              
              87,885Total
      Current Liabilities
              
              
              563,587
              
              
              
              426,341Shareholder
      Loans
              
              
              25,845
              
              
              
              32,902Total
      Liabilities
              
              
              589,432
              
              
              
              459,243Stockholders'
      Equity:Common
      Stock, Par value $.001Authorized
      500,000,000 sharesIssued
      39,095,338 and 35,608,365Shares
      at December 31, 2007 and Dec 31, 2006
              
              
              39,095
              
              
              
              35,608Paid-in
      Capital
              
              
              3,046,117
              
              
              
              2,751,923Deficit
      Accumulated During theDevelopment
      Stage
              
              
              (3,659,899
              )
              
              
              (3,244,767
              )Total
      Stockholders' Equity
              
              
              (574,687
              )
              
              
              (457,236
              )Total
      Liabilities and Stockholders' Equity
              
              $
              14,745
              
              
              $
              2,007
   The
accompanying notes are an integral part of these financials
statements.




13


ROYAL QUANTUM GROUP,
INC.


(A Development Stage
Company) STATEMENTS OF
OPERATIONS


Cumulative
      sinceFor
      the twelve months ended
              
              
              August
      23, 2002December
      31,
              
              
              inception
      of2007
              
              
              2006
              
              
              development stageRevenues
              
              $
              -
              
              
              $
              -
              
              
              
              -Total
      Revenues
              
              
              -
              
              
              
              -
              
              
              
              -Expenses:Consulting
      Fees
              
              
              120,803
              
              
              
              66,229
              
              
              
              809,577Compensation
      Expense
              
              
              145,000
              
              
              
              -
              
              
              
              273,790General
      & Administrative
              
              
              85,820
              
              
              
              68,643
              
              
              
              414,722Loss
      from Operations
              
              
              (351,623
              )
              
              
              (134,872
              )
              
              
              (1,498,089
              )Other
      Income (Expenses)Write-down
      of  Assets
              
              
              -
              
              
              
              (147,986
              )
              
              
              (147,986
              )Foreign
      currency exchange loss
              
              
              (37,927
              )
              
              
              -
              
              
              
              (37,927
              )Interest
      (Expense)
              
              
              (25,582
              )
              
              
              (116,303
              )
              
              
              (142,121
              )Interest
      Income
              
              
              -
              
              
              
              250
              
              
              
              263Total
      Other Income (Expense)
              
              
              (63,509
              )
              
              
              (264,039
              )
              
              
              (327,771
              )Net
      Loss from Continuing Operations
              
              $
              (415,132
              )
              
              $
              (398,911
              )
              
              
              (1,825,860
              )Discontinued
      OperationsLoss
      from operation of discontinued component
              
              
              -
              
              
              
              -
              
              
              
              (1,967,294
              )Gain
      on disposal,net of tax effect of $0
              
              
              -
              
              
              
              -
              
              
              
              133,255Net
      Income (Loss) from Discontinued Operations
              
              
              -
              
              
              
              -
              
              
              
              (1,834,039
              )Net
      Loss
              
              
              (415,132
              )
              
              
              (398,911
              )
              
              
              (3,659,899
              )Basic
      and Diluted Loss Per ShareContinuing
      Operations
              
              
              (0.01
              )
              
              
              (0.01
              )Discontinued
      Operations
              
              
              0.00
              
              
              
              0.00Loss
      per share
              
              
              (0.01
              )
              
              
              (0.01
              )Weighted
      Average Shares Outstanding
              
              
              38,026,889
              
              
              
              34,485,077






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




14


ROYAL QUANTUM GROUP,
INC.
 (A Development Stage
Company) STATEMENTS OF STOCKHOLDER'S
EQUITY


DeficitAccumulated
      SinceAugust
      23, 2002Paid-in
              
              Retained
              
              Inception
      ofShares
              
              Par
      Value
              
              Capital
              
              Deficit
              
              Development
      StageBalance
      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
              
              -
              
              -Issued
      stock for cancellation of debt
              
              2,500,000
              
              2,500
              
              122,500
              
              -
              
              -Stock
      cancelled on  X-treme rescission
              
              (250,000)
              
              (250)
              
              (2,250)
              
              -
              
              -Contributed
      Capital
              
              -
              
              -
              
              3,000
              
              -
              
              -Net
      Loss
              
              -
              
              -
              
              -
              
              -
              
              (398,911)Balance
      at December 31, 2006
              
              35,608,365
              $
              35,608
              $
              2,751,923
              $
              -
              $
              (3,244,767)Stock
      issue for cash
              
              2,653,640
              
              2,654
              
              130,027
              
              -
              
              -Issued
      stock in exchange for services
              
              500,000
              
              500
              
              144,500Issued
      stock in exchange for services
              
              333,333
              
              333
              
              19,667Net
      Loss
              
              -
              
              -
              
              -
              
              -
              
              (415,132)Balance
      at December 31, 2007
              
              39,095,338
              $
              39,095
              $
              3,046,117
              $
              -
              $
              (3,659,899)






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




15




ROYAL QUANTUM GROUP,
INC. (FORMERLY PLATINUM
SUPERYACHTS,  INC.) (A Development Stage
Company)
 STATEMENTS OF CASH
FLOWS






CumulativesinceFor
      the twelve months ended
              
              
              August
      23,2002December
      31,
              
              inception
      of2007
              
              
              2006
              
              
              developmentstageCASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Loss
              
              $
              (415,132
              )
              
              $
              (398,911
              )
              
              $
              (3,659,899
              )Net
      Income/(Loss)from Disconued Operations
              
              
              -
              
              
              
              -
              
              
              
              1,578,681Adjustments
      to reconcile net income (loss) tonet
      cash provided (used in) operating activities:Depreciation
              
              
              370
              
              
              
              185
              
              
              
              555Stock
      issued for interest
              
              
              -
              
              
              
              100,000
              
              
              
              100,000Stock
      issued for start up costs
              
              
              -
              
              
              
              -
              
              
              
              12,600Stock
      issued for services
              
              
              145,000
              
              
              
              -
              
              
              
              644,390Foreign
      currency exchange loss
              
              
              37,927
              
              
              
              -
              
              
              
              37,927Increase
      (decrease) in interest on notes payable
              
              
              24,900
              
              
              
              10,535
              
              
              
              35,435Increase
      (decrease) in accounts payable
              
              
              62,215
              
              
              
              39,423
              
              
              
              347,521Increase
      (decrease) in related party accounts payable
              
              
              32,203
              
              
              
              57,807
              
              
              
              90,010Net
      cash provided (used in) continuing activities
              
              
              (112,517
              )
              
              
              (190,961
              )
              
              
              (812,780
              )Net
      cash provided (used in) discontinuing activities
              
              
              -
              
              
              
              -
              
              
              
              386,515Net
      cash provided by (used in) operating activities
              
              
              (112,517
              )
              
              
              (190,961
              )
              
              
              (426,265
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Investment
      in Mineral Property
              
              
              (10,000
              )
              
              
              -
              
              
              
              (10,000
              )Purchase
      of fixed assets
              
              
              -
              
              
              
              (1,851
              )
              
              
              (1,851
              )Net
      cash provided by (used in) investing activities
              
              
              (10,000
              )
              
              
              (1,851
              )
              
              
              (11,851
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from shareholder loans
              
              
              14,625
              
              
              
              13,057
              
              
              
              136,027Payment
      on shareholder loans
              
              
              (21,682
              )
              
              
              (7,500
              )
              
              
              (82,182
              )Proceeds
      from notes payable
              
              
              -
              
              
              
              185,795
              
              
              
              185,795Contributed
      capital
              
              
              -
              
              
              
              -
              
              
              
              2,842Stock
      issued in exchange for cash
              
              
              132,682
              
              
              
              -
              
              
              
              199,082Net
      cash provided by (used in) financing activities
              
              
              125,625
              
              
              
              191,352
              
              
              
              441,564Net
      (Decrease) increase in Cash and Cash Equivalents
              
              
              3,108
              
              
              
              (1,460
              )
              
              
              3,448Cash
      and Cash Equivalents at Beginning of Period
              
              
              340
              
              
              
              1,800
              
              
              
              -Cash
      and Cash Equivalents at End of Period
              
              $
              3,448
              
              
              $
              340
              
              
              $
              3,448SUPPLEMENTAL
      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
              
              $
              145,000
              
              
              $
              -
              
              
              $
              594,390Stock
      issued for cancellation of debt
              
              $
              -
              
              
              $
              25,000
              
              
              $
              174,700Shareholder
      loans converted to paid in capital
              
              $
              -
              
              
              $
              3,000
              
              
              $
              3,000Stock
      issued for Accounts Payable
              
              $
              20,000
              
              
              $
              -
              
              
              $
              20,000


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




16




ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006






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
$3,660,000 for the period from August 23, 2002 (inception of development stage)
to December 31, 2007, has a liquidity problem, and as of December 31, 2007 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.
  17
 ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 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, 2007, 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.  Royal Quantum is focused on the acquisition, exploration
and development of mineral and resource properties located within favorable
geo-political climates.
  18
 ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
   NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Cash and Cash
Equivalents
 
 For
purposes of the statement of cash flows, the Company considers all highly liquid
debt instruments purchased with a maturity of three months or less to be cash
equivalents to the extent the funds are not being held for investment
purposes.
 
 Depreciation and
Amortization
 
 Fixed
assets are recorded at cost and depreciated using the straight-line method over
the estimated useful lives of the assets which range from three to five
years.  Fixed assets consisted of the following at December 31, 2007
and December 31, 2006:
 
 December
      31,
              
              
              December
      31,2007
              
              
              2006Furniture
      & Fixtures
              
              $
              1,851
              
              
              $
              1,851Less
      accumulated depreciation
              
              
              (555
              )
              
              
              (185
              )Total
              
              $
              1,296
              
              
              $
              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, 2007 and 2006 was
$370 and $185 respectively.
  19
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 NOTE
1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES(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, 2007 and December 31,
2006:
 
 December
      31,
              
              
              December
      31,Intangible
      Asset
              
              2007
              
              
              2006
              
              Amortization
      PeriodE-Learning
      System
              
              $
              1
              
              
              $
              1
              
              IndefiniteLess
      accumulated amortization
              
              
              -
              
              
              
              -Total
              
              $
              1
              
              
              $
              1
  Total
amortization expense for the twelve months ended December 31, 2007 and December
31, 2006 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.
  20
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 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 $3,448 and $340 as of December 31, 2007 and 2006 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, 2007 and 2006.
 
 Stock Compensation for
Non-Employees
 
 Effective
June 1, 2006, the company adopted the provisions of SFAS No. 123 (R) requiring
employee equity awards to be accounted for under the fair value method.
Accordingly, share-based compensation is measured at grant date, based on the
fair value of the award. Prior to June 1, 2006, the company accounted for awards
granted to employees under its equity incentive plans under the intrinsic value
method prescribed by Accounting Principles Board (APB) Opinion No. 25,
“Accounting for Stock Issued to Employees” (APB 25), and related
interpretations, and provided the required pro forma disclosures prescribed by
SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123), as
amended. No stock options were granted to employees during the years ended
December 31, 2006, and 2005 and accordingly, no compensation expense was
recognized under APB No. 25 for the years ended December 31, 2007, and 2006. In
addition, no compensation expense is required to be recognized under provisions
of SFAS No. 123 (R) with respect to employees.  Under the modified
prospective method of adoption for SFAS No. 123 (R), the compensation cost
recognized by the company beginning on June 1, 2006 includes (a) compensation
cost for all equity incentive awards granted prior to, but not vested as of June
1, 2006, based on the grant-dated fair value estimated in accordance with the
original provisions of SFAS No. 123, and (b) compensation cost for all equity
incentive awards granted subsequent to June 1, 2006, based on the grant-date
fair value estimated in accordance with the provisions of SFAS No, 123 (R). The
company uses the straight-line attribution method to recognize share-based
compensation costs over the service period of the award. Upon exercise,
cancellation, forfeiture, or expiration of stock options, or upon vesting or
forfeiture of restricted stock units, deferred tax assets for options and
restricted stock units with
  21
 ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Stock Compensation for
Non-Employees (Continued)
 
 multiple
vesting dates are eliminated for each vesting period on a first-in, first-out
basis as if each vesting period was a separate award. To calculate the excess
tax benefits available for use in offsetting future tax shortfalls as of the
dated of implementation, the company followed the alternative transition method
discussed in FASB Staff Position No. 123 (R)-3.  During the periods
ended December 31, 2007 and 2006, no stock options were granted to
non-employees. Accordingly, no stock-based compensation expense was recognized
for new stock option grants in the Statement of Operations and Comprehensive
Loss at December 31, 2007 and 2006.
 
 Financial
Instruments
 
 The
Company’s financial instruments, as defined under SFAS No. 107, Disclosure about
Fair Value of Financial Instruments, include its cash and cash equivalents,
accounts payable and accrued liabilities. Except as otherwise noted, it is
management’s opinion that the Company is not exposed to significant interest or
credit risks arising from these financial instruments.  The fair value
of these financial instruments approximates their carrying values due to the
short-term maturities of these instruments.
 
 Income
Taxes
 
 The
Company accounts for income taxes under the provisions of SFAS No.109,
“Accounting for Income Taxes.”  SFAS No.109 requires recognition of
deferred income tax assets and liabilities for the expected future income tax
consequences, based on enacted tax laws, of temporary differences between the
financial reporting and tax bases of assets and liabilities.
 
 Recent Accounting
Standards
 
 In
February 2007, the FASB issued SFAS no, 159, “The Fair Value Option for
Financial Assets and Financial Liabilities” (“SFAS 159”).  SFAS 159
provides companies with an option to report selected financials assets and
liabilities at fair value.  The objective of SFAS 159 is to reduce
both complexity in accounting for financial instruments and the volatility in
earnings caused by measuring related assets and liabilities
differently.  Generally accepted accounting principles have required
different measurement attributes for different assets and liabilities that can
create artificial volatility in earnings.  The FASB has indicated it
believes that SFAS 159 helps to mitigate this type of accounting-induced
volatility by enabling companies to report related assets and liabilities at
fair value, which would likely reduce the need for companies to comply with
detailed rules for hedge accounting.  SFAS 159 also
  22
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
   NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent Accounting Standards
(Continued)
  establishes
presentation and disclosure requirements designed to facilitate comparisons
between companies that choose different measurement attributes for similar types
of assets and liabilities.  SFAS 159 does not eliminate disclosure
requirements included in other accounting standards, including requirements for
disclosures about fair value measurements included in SFAS 157 and SFA No. 107,
“Disclosures about Fair Value of Financial Instruments.” SFAS 159 is effective
for the Company as of the beginning of fiscal year 2009.  The adoption
of this pronouncement is not expected to have an impact on the Company’s
financial position, results of operations or cash flows.
 
 In
December 2007, the FASB issued No. 160, “Noncontrolling Interests in Financial
Statements, an amendment of ARB No. 51" (“SFAS 160").  SFAS 160 amends
ARB 51 to establish accounting and reporting standards for the noncontrolling
interest in a subsidiary and for the deconsolidation of a
subsidiary.  It clarifies that a noncontrolling interest in a
subsidiary is an ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements.  This
Statement is effective for fiscal years beginning on or after December 15,
2008.  Early adoption is not permitted. Management is currently
evaluating the effects of this statement, but it is not expected to have any
impact on the Company’s financial statements.
 
 In
December 2007, the FASB issued No. 141(R),  “Business Combinations”
(“SFAS 141(R)”.  SFAS 141(R) provides companies with principles and
requirements on how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, liabilities assumed, and any
noncontrolling interest in the acquiree as well as the recognition and
measurement of goodwill acquired in a business combination. SFAS 141(R) also
requires certain disclosures to enable users of the financial statements to
evaluate the nature and financial effects of the business combination.
Acquisition costs associated with the business combination will generally be
expensed as incurred. SFAS 141(R) is effective for business combinations
occurring in fiscal years beginning after December 15, 2008, which will require
the Company to adopt these provisions for business combinations occurring in
fiscal 2009 and thereafter. Early adoption of SFAS 141(R) is not
permitted.  Management is currently evaluating the effects of this
statement, but it is not expected to have any impact on the Company’s financial
statements.
  23
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
   NOTE 1 - ORGANIZATION AND
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Recent Accounting Standards
(Continued)
 
 In March
2008, the FASB issued No. 161, “Disclosures about Derivative Instruments and
Hedging Activities, an amendment of FASB Statement No. 133.  (“SFAS
161").  SFAS 161 requires enhanced disclosures about an entity's
derivative and hedging activities and thereby improves the transparency of
financial reporting.  This Statement is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008, with early application encouraged. This Statement encourages, but does
not require, comparative disclosures for earlier periods at initial
adoption.  Management is currently evaluating the effects of this
statement, but it is not expected to have any impact on the Company’s financial
statements.
 
 NOTE 2 - INCOME
TAXES
  As of
December 31, 2007, the Company had a net operating loss carryforward for income
tax reporting purposes of approximately $11,658,788that 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.
  2007
                
                
                2006Net
      Operating Losses
                
                $
                3,963,988
                
                
                $
                3,832,138Accrued
      Consulting Fees
                
                
                39,251
                
                
                
                29,881Valuation
      Allowance
                
                
                (4,003,239
                )
                
                
                (3,862,019
                )$
                -
                
                
                $
                -
 24
 ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 NOTE 2 - INCOME TAXES
(Continued)
 
 The
provision for income taxes differ from the amount computed using the federal US
statutory income tax rate as follows:
  2007
              
              
              2006Provision
      (Benefit) at US Statutory Rate
              
              $
              (141,145
              )
              
              $
              (135,630
              )Excess
      Capital Losses over Capital Gains
              
              
              -
              
              
              
              50,315Accrued
      Consulting Fees
              
              
              -
              
              
              
              (20,454
              )Depreciation
              
              
              (75
              )
              
              
              (62
              )Increase
      (Decrease) in Valuation Allowance
              
              
              141,220
              
              
              
              105,831$
              -
              
              
              $
              -
 
 The
Company evaluates its valuation allowance requirements based on projected future
operations.  When circumstances change and causes a change in
management’s judgment about the recoverability of deferred tax assets, the
impact of the change on the valuation is reflected in current
income.
 
 NOTE 3 - DEVELOPMENT STAGE
COMPANY/GOING CONCERN
 
 The
Company has not commenced its intended principal operations and as is common
with a development stage company, the Company has had recurring
losses.  Continuation of the Company as a going concern is dependent
upon obtaining the additional working capital necessary to be successful in its
planned activity, and the management of the Company has developed a strategy,
which it believes will accomplish this objective through additional equity
funding and long term financing, which will enable the Company to operate for
the coming year.
 
 NOTE 4 – INVESTMENT IN
MINERAL PROPERTY
 
 In May
2007, the company entered into a Purchase Agreement (“Agreement”) to acquire
from U3, LLC (“Seller”) 100% interest in 1,540 acres that consist of 77 claims
of prospective Uranium property located adjacent to the Sheep Mountain Mine in
Fremont County, Central Wyoming, approximately 90 miles SW of Casper
Wyoming.  On May 28, 2007, we paid $10,000 to the Seller on the
execution of Agreement.
  25
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
   NOTE 4 – INVESTMENT IN
MINERAL PROPERTY (Continued)
 
 On July
18, 2007, we executed an Amendment to the Agreement (“Amendment”) with the
Seller.  The Amendment revised the Agreement to provide that the
following payments be made to the Seller upon issuance of claim numbers (“WMC
numbers”) from the Bureau of Land Management (“BLM”) on each claim and the
issuance of WMC numbers from the BLM on each of an additional 100 claims within
a 3 mile radius of the claims:
 
 ·$50,000
on or before October 1, 2007;
 ·$50,000
on or before  November 1, 2007;
 ·$50,000
on or before December 1, 2007; and
 ·$70,000
on or before January 15, 2008.
 
 The
Amendment also provides that the closing shall be on or before September 3,
2007.
 
 Pursuant
to the Agreement, we also agreed to issue 1,000,000 restricted shares of our
common stock to the Seller upon transfer of claims to us, clear of any liens or
encumbrances.  In addition, we agreed to a $150,000 work program on
the Sheep Mountain Claim block before June 1, 2008. On or before June 1, 2008
and provided we elect to continue, we agreed to make an additional $200,000 cash
payment to the Seller, issue an additional 500,000 restricted shares of our
common stock to the Seller, and enter into an additional $150,000 work program
on the claims. On or before June 1, 2009, and provided we elect to continue, we
agreed to make a final $200,000 cash payment to the Seller and issue an
additional 1,250,000 restricted shares of our common stock issued to the Seller
and reserve a 2% NSR for Seller on any production from the claims. The Agreement
also provides that we will register the shares issued to the Seller if we close
a financing of more than $1,000,000. If we drop the claims at any point, the
claims are transferred back to the Seller.
 
 The
Company and U3 elected not to continue with the agreement to acquire the claims
as outlined due to delays in receiving WMC numbers on the claims, and the
Company has requested the return of the $10,000 from U3 as per the agreement
terms.  The company did not issue any shares pursuant to this
agreement and as of the date of this report has not received the
$10,000.
  NOTE 5 - LEASE
AGREEMENT
 
 The
company has entered into a month-to-month lease agreement for an office in
Calgary, Alberta, Canada.  This lease can be canceled on one month’s
written notice. The current lease requires rental payments of approximately $250
($250 Canadian Dollars) per month plus applicable taxes. For the year ended
December 31, 2007 and 2006 the Company had $15,312 and $13,592 respectively in
rent expense.
 26
 ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
   NOTE 6 - UNCERTAIN TAX
POSITIONS
 
 Effective
January 1, 2007, the company adopted the provisions of FASB Interpretation No.
48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB
Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement of
tax positions taken or expected to be taken in a tax return. For those benefits
to be recognized, a tax position must be more-likely-than-not to be sustained
upon examination by taxing authorities. The adoption of the provisions of FIN 48
did not have a material impact on the company’s condensed consolidated financial
position and results of operations. At January 1, 2007, the company had no
liability for unrecognized tax benefits and no accrual for the payment of
related interest and penalties. The Company did not record a cumulative effect
adjustment relating to the adoption of FIN 48.
 
 Interest
costs related to unrecognized tax benefits are classified as “Interest expense,
net” in the accompanying condensed consolidated statements of operations.
Penalties, if any, would be recognized as a component of “Selling, general and
administrative expenses”. The Company recognized $0 of interest and penalties
expense related to unrecognized tax benefits during 2007. In many cases the
company’s uncertain tax positions are related to tax years that remain subject
to examination by relevant tax authorities. With few exceptions, the company is
generally no longer subject to U.S. federal, state, local or non-U.S. income tax
examinations by tax authorities for years before 2004. The following describes
the open tax years, by major tax jurisdiction, as of December 31,
2007:
  United
      States (a)
              2004
      - Present
 
 (a)
Includes federal as well as state or similar local jurisdictions, as
applicable.
 
 NOTE 7 - RELATED PARTY
TRANSACTIONS
 
 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.
 
 As of December 31, 2007 and 2006, the
Company owed Santeo Financial $118,743 and $87,885 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.
  27
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 NOTE 7 - RELATED PARTY
TRANSACTIONS (Continued)
 
 As of
December 31, 2007 and 2006, the Company owed Roger Janssen $1,345 and $0
respectfully for services paid directly by Roger.
 
 As of
December 31, 2007 and 2006, shareholders have advanced the Company $25,485 and
$32,902, 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 8 - COMMON STOCK AND
WARRANTS
 
 On June
26, 2007 the Company issued 333,333 shares of common stock to Randall Lanham in
total satisfaction of legal fees in the amount of $20,000.
 
 On May 9,
2007 the company issued 500,000 shares to Phil van Angeren as compensation for
his assuming the position of Exploration Manager of the Corporation. These
shares have been valued at the market price of $0.29.  Compensation
expense of $145,000 has been booked on the accompanying Statement of
Operations.  $145,000 has been booked on the accompanying Statement of
Operations.
 
 In
February 2007, the Company issued 2,653,640 shares in a private placement for
$.05 per share which resulted in the Company receiving $132,682 in
cash.  The shares were issued in a transaction which the Company
believes satisfies the requirements of the Regulation S exemption from the
registration and prospectus delivery requirements of the Securities Act of 1933.
The Company is using those funds for working capital.
 
 On June
14, 2006, the Company issued 2,500,000 shares of common stock to Keith Campbell
in total satisfaction of a shareholder loan in the principal amount of $25,000
and interest of $100,000.  The securities were issued pursuant to
Section 4(2) of the Securities Act of 1933.
 
 On
October 4, 2005, in accordance to the Board of Directors written consent
effective July 11, 2005 the company issued 2,000,000 restricted shares to Roger
Janssen the company’s Vice President and Secretary. These shares have been
valued at the market price of $0.012.  Compensation expense of $24,000
has been booked on the accompanying Statement of Operations.
  28
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 NOTE 8 - COMMON STOCK AND
WARRANTS (Continued)
 
 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.
 
 NOTE 9 – NOTES
PAYABLE
 
 The
Company has a note payable with Integrated Business Concepts, Inc. that is due
upon demand and carries and interest rate of 12%.  As of December 31,
2007, the amount owing on the notes is $259,157 which consists of principal in
the amount of $216,568 and interest of $42,589.
 
 NOTE 10 - 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.
  29
  ROYAL QUANTUM
GROUP, INC.
 (A
Development Stage Company)
 NOTES TO
FINANCIAL STATEMENTS
 FOR THE YEAR
DECEMBER, 2007 AND 2006
 NOTE 11 – 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 12 – SUBSEQUENT
EVENTS
 
 In March
2008, the Company issued 1,820,000 shares in a private placement for $0.10 per
Unit.  Each Unit entitled the holder to acquire 1 common share of the
company’s stock at $0.10 per share and one share purchase warrant, entitling the
holder to purchase one share at a price of $0.15 for a period of 18 months from
closing of the private placement,  resulting in the Company receiving
$182,000 in cash.  The shares were issued in a transaction which the
Company believes satisfies the requirements of the Regulation S exemption from
the registration and prospectus delivery requirements of the Securities Act of
1933. The Company is using those funds for working capital.
 
 The
company has acquired an option to purchase a 6,000 acre Oil & Gas
property located in the state of Ohio, which includes 171 producing
wells. The closing date of the transaction is on or before March 31, 2008 and is
subject to financing.  The company is now in discussions to extend the
closing date.
  30


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(T)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,
2007, 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.





Our Chief
Executive Officer and our Chief Financial Officer are responsible for
establishing and maintaining adequate internal control over financial reporting.
 Internal control over financial reporting is defined in Rule 13a-15(f) and
15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process
designed by, or under the supervision of, our principal executive and principal
financial officers and effected by our board of directors, management and other
personnel, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:





·
            pertain
      to the maintenance of records that in reasonable detail accurately and
      fairly reflect the transactions and dispositions of our
      assets;





·
            provide
      reasonable assurance that transactions are recorded as necessary to permit
      preparation of financial statements in accordance with generally accepted
      accounting principles, and that our receipts and expenditures are being
      made only in accordance with authorizations of management and our
      directors; and





·
            provide
      reasonable assurance regarding prevention or timely detection of
      unauthorized acquisition, use or disposition of our assets that could have
      a material effect on the financial
statements.





Because
of its inherent limitations, our internal control over financial reporting may
not prevent or detect misstatements. Therefore, even those systems determined to
be effective can provide only reasonable assurance with respect to financial
statement preparation and presentation.  Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Our Chief
Executive Officer and our Chief Financial Officer assessed the effectiveness of
our internal control over financial reporting as of December 31, 2007.   In
making this assessment, management used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal
Control — Integrated Framework.





Based on
our assessment, our Chief Executive Officer and our Chief Financial Officer
believe that, as of December 31, 2007, our internal control over financial
reporting is effective based on those criteria.




31





This
report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
 Management's report was not subject to attestation by our registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit us to provide only management’s report in this
report.




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
            PositionRon
      Ruskowsky
              Suite
      #145, 251 MidPark Blvd S.E. Calgary, AB T2X 1S3 Canada
            40
            President,
      CEO and Principal Accounting Officer
              DirectorRoger
      Janssen
              Suite
      #145, 251 MidPark Blvd S.E. Calgary, ABT2X 1S3
              Canada
            44
            Vice-President,
      Secretary
              DirectorPhillip
      van Angeren
              Suite
      #145, 251 MidPark Blvd S.E. Calgary, ABT2X 1S3
              Canada
            51
            Exploration
      Manager, 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 22
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 one years of
experience in the manufacturing industry. For the past seventeen 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.




32





Phil van Angeren,P.Geol. -Exploration Manager, Director.
Mr. van Angeren is a graduate
from McGill University with a BSc. Honors degree in geology.  He has
over 25 years of experience in managing exploration and development programs in
precious metal and oil and gas throughout North and South America. Mr.
van Angeren has been a director of the company since May 2007.





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).





CodeofEthics. 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 in that our sole officer and
director 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, which occurs 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.The 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 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, serving on its
audit committee.  The board of directors believes that all members of
its audit committee are financially literate and experienced in business
matters, and that one or more members of the audit committee 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.  However, the board of directors believes that there
are not any audit committee members who has 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 audit committee is
able to fulfill its 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.




33





Audit Committee.  We
do not have an Audit Committee, 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.





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, 2007 and 2006.





Name
      and Principal
              Position
            Year
              Ended
            Salary
              $
            Bonus
              $
            Stock
      Awards
              $
            Option
              Awards
              $
            Non-Equity
              Incentive
      Plan Compensation
              $
            Nonqualified
              Deferred
              Compensation
              Earnings
              $
            AllOther
              Compensation
              $
            Total
              $Ron
      Ruskowsky President and CEO, Director
            2007
            0
            0
            0
            0
            0
            0
            0
            02006
            0
            0
            0
            0
            0
            0
            0
            0Roger
      Janssen Vice-President and Secretary
            2007
            0
            0
            0
            0
            0
            0
            0
            02006
            0
            0
            0
            0
            0
            0
            0
            0





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, 2007, 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).




34





Outstanding Equity Awards at Fiscal
Year-end.As of the year ended December 31, 2007, the following named
executive officer had the following unexercised options, stock that has not
vested, and equity incentive plan awards:





Option  Awards
            Stock
      AwardsName
            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
              StockNot
              Vested
            Market
              Value
      of
              Shares
      or Units  Not
              Vested
            Equity
              Incentive
      Plan Awards: Number
              of
      Unearned Shares,Unitsor
      OtherRights
              NotNested
            Value
      of Unearned Shares, Units or Other Rights Not VestedRon
      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, 2007:





Name
            Fees
              Earnedor
              Paidin
              Cash
            Stock
              Awards
              $
            Option
      Awards
              $
            Non-Equity
              IncentivePlanCompensation
              $
            Non-Qualified
              Deferred
              Compensation
              Earnings
              $
            All
      Other
              Compensation
              $
            Total
              $Ron
      Ruskowsky
            0
            0
            0
            0
            0
            0
            0Roger
      Janssen
            0
            0
            0
            0
            0
            0
            0Phil
      van Angeren
            0
            145,000(1)
            0
            0
            0
            0
            0




(1)
            We
      issued Phil van Angeren 500,000 shares of common stock on May 9, 2007 as
      compensation for services rendered as a director and his agreement to
      serve as the Exploration Manager.





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 31, 2008 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.




35





Title
              of
      Class
            Name
      and Address
              of
      Beneficial Owner
            Amount
      and Nature
              of
      Beneficial Owner
            Percent
              of
      ClassCommon
      Stock
            Ron
      Ruskowsky (1)
              Suite
      #145, 251 MidPark BlvdS.E.
      Calgary,
              Alberta
      T2X 1S3
              Canada
            18,470,000
      Shares
              President,
      CEO and Principal Accounting Officer, Director
            45.1%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
            6.1%Common
      Stock
            Phil
      van Angeren
              Suite
      #145, 251 MidPark Blvd S.E. Calgary,
              AB
      Alberta T2X 1S3
              Canada
            500,000
      Shares
              Exploration
      Manager
              Director
            1.2%Common
      Stock
            All
      directors and named executive officers
              as
      a group
            21,470,000
            52.4%
      ( 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




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.Ourmanagement 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.Effective May 9, 2007, we issued 500,000 restricted shares to Phil van
Angeren, our Exploration Manager. These shares have been valued at the market
price of $0.29 per share.  Compensation expense of $145,000 has been
booked on the accompanying Statement of Operations.





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




On June
14, 2006, we 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, 2007, we owed Roger Janssen $1,345 for services paid directly by
Mr. Janssen.




36





As of
December 31, 2007 and December 31, 2006, we owed Santeo Financial $118,743 and
$87,885 respectively, for consulting services.  Ron Ruskowsky, our
President and CEO, is an affiliate of Santeo Financial.





Currently
we have an agreement with Santeo Financial whereby Santeo Financial provides
consulting services in exchange for which we pay a consultant fee of $5,000 per
month.





As of
December 31, 2007 and December 31, 2006, shareholders have advanced us $25,845
and $32,902, respectively, payable on demand and do not carry an interest
rate.  This transaction has been recorded in the accompanying
financial statements as Shareholder loans.





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.





DirectorIndependence.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, 2007 and 2006 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 $18,085 and $16,440, respectively.





Audit-Related Fees. For the
fiscal year ended December 31, 2007, 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, 2007 and December 31, 2006, our accountants rendered services
for tax compliance, tax advice, and tax planning work for which we paid $130 and
$45, 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.




37




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 March 31, 2008.




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,
                  Secretaryand
      a director


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
                
                
                March
      31, 2008Its:
                Ron
      Ruskowsky
                  Director
 By:
                  /s/
      Roger Janssen
                  
                  
                  March
      31, 2008Its:
                  Roger
      Janssen
                    Director


By:
                  /s/
      Phil van Angeren
                  
                  
                  March
      31, 2008Its:
                  Phil
      van Angeren
                      Director