form10k123109.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

Commission file number: 000-27739

ROYAL QUANTUM GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		90-0315909
(State of incorporation)		(I.R.S. Employer Identification No.)

Suite #145, 251 MidPark Blvd S.E.

Calgary, AB Canada T2X 1S3

(Address of principal executive offices)

(403) 288-4321

(Registrant’s telephone number, including area code)

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

None

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

Common Stock, Par Value $0.001

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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. Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ¨	Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller Reporting Company x

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

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 April 13, 2009, approximately $1858,524.

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date. As of December 31, 2009, there were 48,980,338 shares of the issuer’s $.001 par value common stock issued and outstanding.

Documents Incorporated By Reference: None

	ROYAL QUANTUM GROUP, INC.
	TABLE OF CONTENTS
	PART I

ITEM 1.	BUSINESS	4

ITEM 1.A	RISK FACTORS	8

ITEM 2.	PROPERTIES	9

ITEM 3.	LEGAL PROCEEDINGS	9

ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	10

	PART II

ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	11

ITEM 6.	SELECTED FINANCIAL DATA	14

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14

ITEM 7.A	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	16

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	16

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	45

ITEM 9.A	CONTROLS AND PROCEDURES	45

ITEM 9.B	OTHER INFORMATION	45

	PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	46

ITEM 11.	EXECUTIVE COMPENSATION	47

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	49

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE	50

ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	50

	PART IV

ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	50

	SIGNATURES

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 oil and gas and mineral properties located within favorable geo-political climates.

Our Properties.

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.

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. After numerous attempts to collect on the $10,000, the company has written the debt off as bad debt expense.

In February of 2008 the company signed an agreement with First Diversified Financial Services (FDFS) and Launchpad Capital to assist the company in securing the necessary capital for the Anderson Oil and Gas project acquisition. The agreement required payment of USD $100,000 to FDFS as well as 3% of any cash received and 2% of any debt financing completed as a result of FDFS’s efforts. Launchpad Capital was to receive a fee of 3.5% of the debt and/or equity portion of the funding received by the company as a result of their efforts.

In March 2008, the Company issued 1,820,000 shares in a private placement for $0.10 per Unit. Each Unit entitled the holder to acquire 1 common share of the company’s stock at $0.10 per share and one share Series A 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 used those funds for working capital.

In April of 2008 we issued 125,000 shares of restricted stock recorded at $0.47 per share along with a $25,000 cash payment in consideration for an extension on the Anderson Oil & Gas property to May 30, 2008.

In March of 2008 we issued 50,000 shares to M2 Law in settlement of outstanding legal invoices totaling $50,000. The shares were recorded at $0.65 per share for a value of $32,500 and the difference of $17,500 was booked as forgiveness of debt.

In April of 2008 the company issued 100,000 shares in a private placement for $.25 per share which resulted in the Company receiving $25,000 in cash. The shares were issued in a transaction which the Company believes satisfies the requirements of the Regulation S exemption from the registration and prospectus delivery requirements of the Securities Act of 1933. The Company used those funds for working capital.

In May 2008, the Company issued 580,000 shares in a private placement for $0.25 per Unit. Each Unit entitled the holder to acquire 1 common share of the company’s stock at $0.25 per share and one share Series B purchase warrant, entitling the holder to purchase one share at a price of $0.40 for a period of 12 months from closing of the private placement, resulting in the Company receiving $145,000 in cash. The shares were issued in a transaction which the Company believes satisfies the requirements of the Regulation S exemption from the registration and prospectus delivery requirements of the Securities Act of 1933. The Company used those funds for working capital.

In June 2008 the company received a loan of $500,000 from a private investor. The loan carried an interest rate of 15% and was due and payable on or before July 31, 2008. The terms of the note allow for a 1% per week penalty up to a maximum of 10% at which time the note and all outstanding interest and penalties will be converted into 6,250,000 shares of the company’s stock. The Lender had the right at his sole discretion, to convert any unpaid debt, along with any interest due, into free-trading common stock of the Company at a conversion price of forty cents ($0.40) per share. The funds from this loan were used for the Ohio Property Extension payment, payment for a third party engineering evaluation of the Ohio Property and working capital.

In June 2008 we paid $300,000 in consideration for an extension on the Ohio Oil & Gas property to July 31, 2008.

In September 2008 we issued 6,250,000 shares as satisfaction for the $500,000 note, interest and penalties due to a private investor.

In October, the company issued notice to the landowner on the Ohio Oil & Gas property of its intent to not pursue the acquisition of the project. The company has also issued a demand letter to the land owner for the return of the $300,000 paid in June for the extension. No response has been received from the land owner to date, the company will continue to pursue the return of the funds. Since the entire amount is deemed abandoned on December 31, 2008, $475,949 has been written off as an exploration expense.

In April 2009, the company extended the expiration of its Series B warrants to May 8, 2010.

In April 2009, Santeo Financial Corporation agreed to forgive $15,000 of debt owed by the Company in exchange for a 4% interest in the Company’s share of the net revenue received from the Gleason #4-16 well. The $15,000 was written off of the payable and booked as additional paid in capital.

During the period ending June 30, 2009 the company acquired a 36% interest in the drilling and development of the Gleason #4-16 well located in Oklahoma, USA. The company capitalized $173,740 for the drilling of the well during 2009. The well has been completed and is on production.

In August 2009, the company extended the expiration of its Series A Warrants to September 25, 2010.

During the period ending September 30, 2009 the company raised $137,500 for the drilling of the Bond #1-18. The company acquired a 25% interest in this well with 60% of the revenue received from this well being distributed proportionately to the investors. The company issued 550,000 shares relating to this financing. The company also agreed to pay a 10% commission to a 3rd party on the portion of the funds raised by the 3rd party relating to the Bond #1-18 well. This commission totaled $12,500 which was converted to a proportionate interest in the well along with 50,000 shares.

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 any oil, gas or mineral 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 oil, gas or mineral resources on our claims there is no guarantee we will be able to raise sufficient funds in the future to maintain the oil, gas or mineral claims in good standing. Therefore, if we do not have sufficient funds for exploration our claims might lapse and be claimed by other parties. We might be forced to seek a joint venture partner to assist in the exploration of our oil, gas or mineral 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.

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 oil, gas or 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.

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.

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 December 31, 2009, 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 $450 ($450 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 1A. Risk Factors.

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

Risks Related to our Business:

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

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

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

To acquire 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 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, 2009, our net loss since inception was $5,219,452. 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 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 45% 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 45% of our outstanding shares of common stock. Our officers, directors and principal shareholders can control matters requiring approval by our security holders, including the election of directors.

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

The Securities and Exchange Commission has adopted rules that regulate broker-dealer practices in connection with transactions in “penny stocks”. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system). The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, 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 1B. Unresolved Staff Comments

There are no unresolved staff comments.

Item 2. Description of Property.

Property held by us.

During the period ending December 30, 2009 the company acquired a 25% interest in the Bond #1-18 well located in Oklahoma, USA. The well has been completed and is on production at a rate of approximately 85 Bbls per day.

During the period ending June 30, 2009 the company acquired a 36 % interest in the Gleason #4-16 well located in Oklahoma, USA. The well has been completed and is on production at a rate of approximately 5 Bbls per day.

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	Low
December 31, 2009	0.11	0.085
September 30, 2009	0.04	0.04
June 30, 2009	0.07	0.07
March 31, 2009	0.04	0.04
December 31, 2008	0.035	0.035
September 30, 2008	0.08	0.07
June 30, 2008	0.07	0.07
March 31, 2008	0.52	0.43

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

We had 48,980,338 shares of common stock issued and outstanding as of December 31, 2009, which were held by approximately 107 shareholders.

There are 580,000 shares available to be purchased under option at $0.40/share until May 8, 2010 pursuant to the private placement financing completed in April 2008. There are 1,820,000 shares available to be purchased under option at $0.15/share until September 25, 2010 pursuant to the private placement financing completed in March of 2008. There are 720,000 shares available to be purchased under option at $0.25/share until November 15, 2010 pursuant to the private placement financing completed in May of 2009. There are 1,100,000 shares available to be purchased under option at $0.25/share until March 8, 2011 pursuant to the private placement financing completed in September 2009.

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. 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:

In June 2008 the company received a loan of $500,000 from a private investor. The loan carried an interest rate of 15% and was due and payable on or before July 31, 2008. The terms of the note allow for a 1% per week penalty up to a maximum of 10% at which time the note and all outstanding interest and penalties will be converted into 6,250,000 shares of the companies stock. The Lender had the right at his sole discretion, to convert any unpaid debt, along with any interest due, into free-trading common stock of the Company at a conversion price of forty cents ($0.40) per share. The funds from this loan were used for the Ohio Property Extension payment, payment for a third party engineering evaluation of the Ohio Property and working capital.

In September 2008 we issued 6,250,000 shares as satisfaction for the $500,000 note due to a private investor. This included interest and penalties.

During the period ending June 30, 2009, Santeo Financial Corporation agreed to forgive $15,000 of debt owed by the Company in exchange for a 4% interest in the Company’s share of the net revenue received from the Gleason #4-16 well. The $15,000 was written off of the payable and booked as additional paid in capital.

During the period ending June 30, 2009 the company raised a $180,000 for the drilling and completion of the Gleason #4-16 well through the issuance of 72 units. The Company earned a 36% interest in the well with 67% of the company’s net revenue received being allocated proportionally to the unit holders. Each of the 72 units was priced at $2,500 per unit totaling $180,000 cash and consisted of 5,000 restricted common shares and 10,000 share purchase options at $0.25 per share with an expiration date of November 15, 2010. The Company issued a total of 360,000 shares and 720,000 options related to the private placement. The unit holder also has the option to surrender their interest in the well back to the company in exchange for 5,000 restricted common shares per unit surrendered for a period of 36 months from the date of receipt of the first revenue cheque paid to the unit holders.

During the period ending September 30, 2009 the company raised $137,500 for the drilling of the Bond #1-18 through the issuance of 55 units priced at $2,500 per unit. Each unit consisted of 10,000 restricted common shares and 20,000 share purchase options at $0.25 per share with an expiration date of March 8, 2011. The Company issued a total of 550,000 shares and 1,100,000 options related to the private placement. The unit holder has the option to surrender their interest in the well back to the company in exchange for 10,000 restricted common shares per unit surrendered for a period of 36 months from the date of receipt of the first revenue cheque paid to the unit holders. The company acquired a 25% interest in this well with 60% of the revenue received from this well being distributed proportionately to the investors. The company paid a 10% commission to a 3rd party on the portion of the funds raised by the 3rd party relating to the Bond well. This commission totaled $12,500 which was converted to an interest in the well. As per the terms of the commission agreement the company issued 50,000 shares valued at $12,500 to the 3rd party for consulting expenses related to the Bond financing and 100,000 options expiring March 8, 2011.

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, 2009, 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. Selected Financial Data

Not applicable to smaller reporting companies.

Item 7. Management’s Discussion and Analysis of Financial Condition or Plan of Operation.

This following information specifies certain forward-looking statements of management of the company. Forward-looking statements are statements that estimate the happening of future events are not based on historical fact. Forward-looking statements may be identified by the use of forward-looking terminology, such as “may”, “shall”, “could”, “expect”, “estimate”, “anticipate”, “predict”, “probable”, “possible”, “should”, “continue”, or similar terms, variations of those terms or the negative of those terms. The forward-looking statements specified in the following information have been compiled by our management on the basis of assumptions made by management and considered by management to be reasonable. Our future operating results, however, are impossible to predict and no representation, guaranty, or warranty is to be inferred from those forward-looking statements.

The assumptions used for purposes of the forward-looking statements specified in the following information represent estimates of future events and are subject to uncertainty as to possible changes in economic, legislative, industry, and other circumstances. As a result, the identification and interpretation of data and other information and their use in developing and selecting assumptions from and among reasonable alternatives require the exercise of judgment. To the extent that the assumed events do not occur, the outcome may vary substantially from anticipated or projected results, and, accordingly, no opinion is expressed on the achievability of those forward-looking statements. No assurance can be given that any of the assumptions relating to the forward-looking statements specified in the following information are accurate, and we assume no obligation to update any such forward-looking statements.

Critical Accounting Policy and Estimates. Our Management's Discussion and Analysis of Financial Condition and Results of Operations section discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources.

Overview . Our focus is to acquire near term cash flow producing mining projects for exploration and development with the intent to bring the projects to feasibility.

As of December 31, 2009, we are in the production stage and have commenced our planned principal operations. As a development stage company, we 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.

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, 2009 as compared to the year ended December 31, 2008.

Results of Operations.

Revenues. The Company had revenue for the year ended December 31, 2009 of $48,265 and production costs of $36,524., as compared to the year ended December 31, 2008 of revenue $0 and production costs of $0.

Operating Expenses and Net Loss. The Company’s net loss is $342,336 for the year ended December 31, 2009 was comprised of general and administrative expenses of $20,352, consulting fees in the amount of $198,845, professional fees in the amount of $57,539 and rent expenses of $3,982. The Company also had $73,359 in total other expenses, including $41,865 in foreign currency exchange loss, $31,494 of net interest. In comparison to the year ended December 31, 2008, The Company’s net loss of $1,217,217 was comprised of general and administrative expenses of $12,225, consulting fees in the amount of $237,936, exploration expenses of $475,949, professional fees of $48,029 and rent expense of $3,000. The Company also had $440,078 in total other expenses, including $55,060 in foreign currency exchange gain, $531,658 net interest, $46,520 gain from forgiveness of debt, and $10,000 write-down of assets.

Liquidity and Capital Resources. The Company had cash of $12,022 as of December 31, 2009, as compared to $90,363 as of December 31, 2008. As of the year ended December 31, 2009, the Company also had fixed assets of $556, represented by furniture and fixtures of $1,851 less accumulated depreciation of $1,295 as compared to the year ended December 31, 2008, the Company had fixed assets of $926, represented by furniture and fixtures of $1,851 less accumulated depreciation of $925. The Company also had $1 in intangible assets in 2008.

For the year ended December 31, 2009, the Company had $656,706 in total current liabilities, which was represented by $134,728 in accounts payable, $309,648 in demand notes payable, $192,485 in related party accounts payable, and $19,845 in shareholder loans. This is in comparison to the year ended December 31, 2008, where the Company had $439,944 in total current liabilities, which was represented by $86,082 in accounts payable, $235,755 in demand notes payable, $98,262 in related party accounts payable, and $19,845 in shareholder loans.

The Company had long term liabilities of $10,980 for the year ended December 31, 2009 which consisted of an asset retirement obligation, The Company had total liabilities of $667,686. This is in comparison to the year ended December 31, 2008, where the Company no long-term liabilities and total liabilities of $439,944. 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 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 $12,022 as of December 31, 2009. In the opinion of management, our available funds will not satisfy our working capital requirements for the next twelve months.

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.

Our belief that our officers, directors and principal shareholders will pay our expenses is based on the fact that our officers, directors and principal shareholders collectively own approximately 45% of our outstanding common stock. We believe that our officers, directors and principal shareholders will continue to pay our expenses as long as they maintain their ownership of our common stock. 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 7A. Quantitative and Qualitative Disclosure About Market Risk

Not Applicable.

Item 8. Financial Statements

The financial statements required by Item 8 follow:




ROBISON, HILL & CO.				Certified Public Accountants
A PROFESSIONAL CORPORATION
				BRENT M. DAVIES, CPA
				DAVID O. SEAL, CPA
				W. DALE WESTENSKOW, CPA
				BARRY D. LOVELESS, CPA
				STEPHEN M. HALLEY, CPA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Royal Quantum Group, Inc.

We have audited the accompanying balance sheets of Royal Quantum Group, Inc. (Formerly a development stage company) as of December 31, 2009 and 2008, and the related statements of income, stockholders’ equity and cash flows for each of the years in the two-year period ended December 31, 2009. Royal Quantum Group, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. 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. as of December 31, 2009 and 2008, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2009 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 $5,219,000, has a liquidity problem and has just recently entered the production stage in the oil and gas industry, 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.
Robison, Hill & Co.

ertified Public Accountants

Salt Lake City, UT

April 15, 2010

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

	December 31,			December 31,
ASSETS	2009			2008

Current Assets:
Cash & Cash Equivalents	$	12,022		$	90,363
Accounts receivable		31,851			-

Total Current Assets		43,873			90,363

Fixed Assets:
Furniture & Fixtures		1,851			1,851
Less: Accumulated Depreciation		(1,295	)		(925	)

Total Fixed Assets		556			926

Other Assets:
Intangible Assets		-			1
Proved Oil & Gas Properties,full cost method		255,868			-
Less: Accumulated Depletion		(5,657	)		-
Unproved Oil & Gas Properties		27,056

Total Other Assets		277,267			1

Total Assets	$	321,696		$	91,290

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

	December 31,			December 31,
	2009			2008
LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts Payable	$	134,728		$	86,082
Notes Payable		309,648			235,755
Related Party Payables		192,485			98,262
Shareholder Loans		19,845			19,845

Total Current Liabilities		656,706			439,944

Long-Term Liabilities:
Asset Retirement Obligation		10,980			-

Total Long-Term Liabilities		10,980			-

Total Liabilities		667,686			439,944

Stockholders' Equity:
Preferred Stock, Par value $.001
Authorized 10,000,000 shares
Issued 0 shares at December 31, 2009 and 2008		-			-
Common Stock, Par value $.001
Authorized 500,000,000 shares
Issued 48,980,338 shares at December 31,2009
and 48,020,338 shares at December 31, 2008		48,980			48,020
Paid-in Capital		4,824,482			4,480,442
Retained Deficit		(5,219,452	)		(4,877,116	)

Total Stockholders' Equity		(345,990	)		(348,654	)

Total Liabilities and Stockholders' Equity	$	321,696		$	91,290

The accompanying notes are an integral part of the financial statements

ROYAL QUANTUM GROUP, INC.
(Formerly A Development Stage Company)
STATEMENTS OF OPERATIONS

	For the year ended
	December 31,
	2009			2008

Oil Revenue	$	48,265		$	-

Operating Expenses
Production Costs		36,524			-
Consulting Fees		17,336			146,358
Exploration Expense		-			475,949
General & Administrative		20,352			12,225
Professional Fees		57,539			48,029
Related Party Consulting		181,509			91,578
Related Party Rent Expense		3,982			3,000

Total Operating Expenses		(317,242	)		(777,139	)

Other Income (Expenses)
Write-down of Assets		-			(10,000	)
Foreign currency exchange gain (loss)		(41,865	)		55,060
Interest (Expense)		(31,494	)		(531,658	)
Forgiveness of debt		-			46,520
Total Other Income (Expense)		(73,359	)		(440,078	)

Net Loss	$	(342,336	)	$	(1,217,217	)


Loss per share	$	(0.01	)	$	(0.03	)

Weighted Average Shares Outstanding		48,431,297			43,316,636

The accompanying notes are an integral part of the financial statements

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


					Paid-in		Retained
	Shares		Par Value		Capital		Deficit
Balance at December 31, 2007		39,095,338	$	39,095	$	3,046,117	$	(3,659,899	)

Stock issued for cash		2,500,000		2,500		349,500		-
Issued stock in exchange for accounts payable		50,000		50		32,450		-
Issued stock in exchange for services		125,000		125		58,625		-
Issued stock for cancellation of debt		6,250,000		6,250		993,750		-
Net Loss		-		-		-		(1,217,217	)
Balance at December 31, 2008		48,020,338		48,020		4,480,442		(4,877,116	)

Stock issued for cash		910,000		910		316,590		-
Cancellation of debt due to related party(Santeo)		-		-		15,000		-
Issued stock in exchange for services		50,000		50		12,450		-
Net Loss		-		-		-		(342,336	)
Balance at December 31, 2009		48,980,338	$	48,980	$	4,824,482	$	(5,219,452	)

The accompanying notes are an integral part of the financial statements

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

	For the year ended
	December 31,
	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:

Net Loss	$	(342,336	)	$	(1,217,217	)
Adjustments to reconcile net income (loss) to
net cash provided (used in) operating activities:
Depreciation		370			370
Depletion		5,657			-
Write-down of mineral property		-			475,949
Write-down of assets		1			10,000
Stock issued for interest		-			500,000
Stock issued for services		12,500			-
Forgiveness of debt		-			(46,520	)
Foreign currency exchange loss (gain)		41,865			(55,060	)
Increase (decrease) in accounts receivable		(31,851	)		-
Increase (decrease) in interest on notes payable		31,494			31,658
Increase (decrease) in accounts payable		49,179			(19,240	)
Increase (decrease) in related party accounts payable		109,223			(21,826	)

Net cash provided (used in) continuing activities		(123,898	)		(341,886	)

CASH FLOWS FROM INVESTING ACTIVITIES:

Acquisition of proven oil and gas property interests		(244,887	)		(417,199	)
Investment in unproven oil and gas property		(27,056	)		-

Net cash provided by (used in) investing activities		(271,943	)		(417,199	)

CASH FLOWS FROM FINANCING ACTIVITIES:

Payment on shareholder loans		-			(6,000	)
Proceeds from notes payable		-			500,000
Stock issued in exchange for cash		317,500			352,000
Net cash provided by (used in) financing activities		317,500			846,000

ROYAL QUANTUM GROUP, INC.
(Formerly A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Continued)

	For the year ended
	December 31,
	2009			2008

Net (Decrease) increase in Cash and Cash Equivalents		(78,341	)		86,915
Cash and Cash Equivalents at Beginning of Period		90,363			3,448
Cash and Cash Equivalents at End of Period	$	12,022		$	90,363

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	-		$	-
Income taxes	$	-		$	-

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Stock issued in plan of reorganization	$	-		$	-
Stock issued in asset acquisition	$	-		$	-
Stock issued for services	$	12,500		$	-
Stock issued for investment in oil property	$	-		$	58,750
Stock issued for cancellation of debt	$	-		$	500,000
Related party payable converted to paid in capital	$	15,000		$	-
Stock issued for Accounts Payable	$	-		$	32,500

The accompanying notes are an integral part of the financial statements

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

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 $5,200,000, has recently entered the production stage of the oil and gas industry, and has a liquidity problem. 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.

Reclassifications

Certain reclassifications have been made in the 2008 financial statements to conform with the 2009 presentation.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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, 2009, the Company is in the production stage of the oil and gas industry.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 resource and mineral properties located within favorable geo-political climates.

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.

Revenue Recognition

The Company recognizes oil and gas revenue from its interests in producing wells as oil and gas is produced and sold from those wells. Oil and gas sold is not significantly different from the Company’s share of production. Revenues from the purchase, sale and transportation of natural gas are recognized upon completion of the sale and when transported volumes are delivered. Shipping and handling costs in connection with such deliveries are included in production costs. Revenue under carried interest agreements is recorded in the period when the net proceeds become receivable, measurable and collection is reasonably assured. The time the net revenues become receivable and collection is reasonably assured depends on the terms and conditions of the relevant agreements and the practices followed by the operator. As a result, net revenues may lag the production month by one or more months.

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, 2009 and December 31, 2008:


	December 31,			December 31,
	2009			2008
Furniture & Fixtures	$	1,851		$	1,851 -
Less accumulated depreciation		(1,296	)		(925	)

Total	$	555		$	926

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Depreciation and Amortization (continued)

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, 2009 and 2008 was $370 and $370 respectively.

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, 2009 and December 31, 2008:

	December 31,		December 31,
Intangible Asset	2009		2008		Amortization Period
E-Learning System	$	- 1	$	1	Indefinite
Less accumulated amortization		-		-
Total	$	-	$	1

Total amortization expense for the twelve months ended December 31, 2009 and December 31, 2008 was $0 and $0 respectively. During the second quarter of 2009, the Company determined not to pursue the E-Learning System and expensed the impaired asset.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Oil and Gas Properties

The Company follows the full cost method of accounting for its oil and gas properties. Under this method, all costs associated with acquisition, exploration, and development of oil and gas properties are capitalized. Such costs include land and lease acquisition costs, annual carrying charges of non-producing properties, geological and geophysical costs, costs of drilling and equipping productive and non-productive wells, asset retirement costs, and direct exploration salaries and related benefits. Capitalized costs are categorized as being subject to depletion or not subject to depletion. The Company operates in one cost center, the United States.

The capitalized costs of oil and gas properties are depleted on the unit-of-production method using estimates of proved reserves as determined by independent engineers. Investments in unproved properties are not amortized until proved reserves associated with projects can be determined or until impairment occurs. If the results of an assessment indicate that the properties are impaired, the amount of the impairment is added to the capitalized costs to be amortized. Depletion expense for the years ending December 31, 2009 and 2009 was $5,657 and $0, respectively.

The Company applies a ceiling test to capitalized costs to ensure that such costs do not exceed estimated future net revenues from production of proven reserves at year end market prices less future production, administrative, financing, site restoration, and income tax costs plus the lower of cost or estimated market value of unproved properties. If capitalized costs are determined to exceed estimated future net revenues, a write-down of carrying value is charged to depletion in the period.

Proceeds from the sale of oil and gas properties are recorded as a reduction of the related capitalized costs without recognition of a gain or loss unless such sales involve a significant change in the relationship between costs and the value of proved reserves or the underlying value of unproved properties, in which case a gain or loss is recognized.

The Company is in the process of exploring additional unproved oil and natural gas properties. The recoverability of amounts shown for oil and natural gas properties is dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying oil and gas leases, the ability of the Company to obtain necessary financing to complete their exploration and development and future profitable production or sufficient proceeds from the disposition thereof.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

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 $12,022 and $90,363 as of December 31, 2009 and 2008 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. In periods where losses are reported, the weighted average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. Diluted loss per common share for the years ended December 31, 2009 and 2008 are not presented as it would be anti-dilutive. At December 31, 2009 and 2008, the total number of potentially dilutive common stock equivalents was 4,220,000 and 4,220,000, respectively.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Asset Retirement Obligations

The Company applies SFAS 143, Accounting for Asset Retirement Obligations. This statement applies to obligations associated with the retirement of tangible long-lived assets that result from the acquisition, construction and development of the assets. SFAS 143 requires that the fair value of a liability for a retirement obligation be recognized in the period in which the liability is incurred. For oil and gas properties, this is the period in which an oil or gas well is acquired or drilled. The asset retirement obligation is capitalized as part of the carrying amount of our oil and gas properties at its discounted fair value. The liability is then accreted each period until the liability is settled or the well is sold, at which tie the liability is reversed.

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 October 2009, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2009-13 (ASU 2009-13), which provided an update to ASC 605. ASU 2009-13 addresses how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting in multiple-deliverable arrangements. The amendments in this update will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the impact that this update will have on its Financial Statements.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Standards (continued)

In June 2009, the FASB created the Accounting Standards Codification, which is codified as ASC 105. ASC 105 establishes the codification as the single official non-governmental source of authoritative accounting principles (other than guidance issued by the SEC) and supersedes and effectively replaces previously issued GAAP hierarchy framework. All other literature that is not part of the codification will be considered non-authoritative. The codification is effective for interim and annual periods ending on or after September 15, 2009. The Company has applied the codification, as required, beginning with the 2009 Form 10-K. The adoption of the codification did not have a material impact on the Company’s financial position, results of operations or cash flows.

In June 2009, the FASB updated ASC 855, which established principles and requirements for subsequent events. This guidance details the period after the balance sheet date which the Company should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, the circumstances under which the Company should recognize events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. ASC 855 is effective for interim and annual periods ending after June 15, 2009. The implementation of ASC 855 did not have a material effect on the Company’s financial statements. The Company adopted ASC 855, and has evaluated all subsequent events through April 15, 2010.

In April 2009, the FASB updated ASC 820 to provide additional guidance for estimating fair value when the volume and level of activity for the asset or liability have decreased significantly. ASC 820 also provides guidance on identifying circumstances that indicate a transaction is not orderly. The implementation of ASC 820 did not have a material effect on the Company’s financial statements.

In April 2009, the FASB updated ASC 825 regarding interim disclosures about fair value of financial instruments. ASC 825 requires disclosures about fair value of financial instruments in interim reporting periods of publicly traded companies that were previously only required to be disclosed in annual financial statements. The implementation of ASC 825 did not have a material effect on the Company’s financial statements.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Recent Accounting Standards (continued)

In April 2009, the FASB updated ASC 320 for proper recognition and presentation of other-than-temporary impairments. ASC 320 provides additional guidance designed to create greater clarity and consistency in accounting for and presenting impairment losses on securities. The implementation of ASC 320 did not have a material effect on the Company’s consolidated financial statements.

NOTE 2 - INCOME TAXES

As of December 31, 2009, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $12,513,000 that may be offset against future taxable income through 2029. 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.

	2009			2008
Net Operating Losses	$	4,254,000		$	4,250,000
Accrued Consulting Fees		62,000			33,000
Valuation Allowance		(4,316,000	)		(4,283,000	)
	$	-		$	-

The provision for income taxes differ from the amount computed using the federal US statutory income tax rate as follows:

	2009			2008
Provision (Benefit) at US Statutory Rate	$	(116,394	)	$	(413,854	)
Stock Compensation / Interest		4,250			127,500
Excess Capital Losses over Capital Gains		(-	)		(3,400	)
Accrued Consulting Fees		28,849			7,421
Other		50,295			2,572
Increase (Decrease) in Valuation Allowance		33,000			279,761
	$	-		$	-

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.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 3 – 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.

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. After numerous attempts to collect on the $10,000, the company has written the debt off as bad debt expense.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 4 - INVESTMENT IN OIL & GAS PROPERTY

In January of 2008 the company acquired an option to purchase a 6,000 acre Oil & Gas property located in the state of Ohio. The closing date of the transaction was extended to July 31, 2008 and was subject to financing. Pursuant to the agreement, the Company paid the seller $325,000 in cash and issued 125,000 shares of stock valued at $58,750 for the acquisition and extension of the agreement. The Company had capitalized a total of $475,949 related to this property.

In October, the company issued notice to the landowner of the Ohio Oil & Gas property of its intent to not pursue the acquisition of the project. The company has also issued a demand letter to the land owner for the return of the $300,000 paid in June for the extension. No response has been received from the land owner to date; the company will continue to pursue the return of the funds. Since the entire amount is deemed abandoned on December 31, 2008, $475,949 has been written off as an exploration expense.

During the period ending June 30, 2009, the Company acquired an interest in the Gleason #4-16 well in Oklahoma, U.S.A. The company raised a total of $180,000 for the drilling and completion of the Gleason #4-16 well through the issuance of 72 units. The Company earned a 36% interest in the well with 67% of the company’s net revenue received being allocated proportionally to the unit holders. Each of the 72 units was priced at $2,500 per unit totaling $180,000 cash and consisted of 5,000 restricted common shares and 10,000 share purchase options at $0.25 per share with an expiration date of November 15, 2010. The Company issued a total of 360,000 shares and 720,000 options related to the private placement. The unit holder also has the option to surrender their interest in the well back to the company in exchange for 5,000 restricted common shares per unit surrendered for a period of 36 months from the date of receipt of the first revenue cheque paid to the unit holders.

Santeo Financial Corporation agreed to forgive $15,000 of debt owed by the Company in exchange for a 4% interest in the Company’s share of the net revenue received from the Gleason #4-16 well. The $15,000 was written off of the payable and booked as additional paid in capital.

During the year ended December 31, 2009, the Company capitalized a total of $173,740 in acquisition and exploration costs relating to the Gleason #4-16 well. It has been determined the Gleason #4-16 well has proved oil reserves. For the year ended December 31, 2009, the Company received revenues of $18,512 from the Gleason #4-16 well. As of December 31, 2009, the total capitalized costs related to the Gleason well was $173,740. Depletion on the Gleason well at December 31, 2009 was $4,907.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 4 - INVESTMENT IN OIL & GAS PROPERTY (continued)

During the period ending September 30, 2009, the Company acquired an interest in the Bond #1-18 well in Oklahoma, U.S.A. The company raised a total of $137,500 for the drilling of the Bond #1-18 through the issuance of 55 units priced at $2,500 per unit. Each unit consisted of 10,000 restricted common shares and 20,000 share purchase options at $0.25 per share with an expiration date of March 8, 2011. The Company issued a total of 550,000 shares and 1,100,000 options related to the private placement. The unit holder has the option to surrender their interest in the well back to the company in exchange for 10,000 restricted common shares per unit surrendered for a period of 36 months from the date of receipt of the first revenue cheque paid to the unit holders. The company acquired a 25% interest in this well with 60% of the revenue received from this well being distributed proportionately to the investors. The company paid a 10% commission to a 3rd party on the portion of the funds raised by the 3rd party relating to the Bond well. This commission totaled $12,500 which was converted to an interest in the well. As per the terms of the commission agreement the company issued 50,000 shares valued at $12,500 to the 3rd party for consulting expenses related to the Bond financing and 100,000 options expiring March 8, 2011.

During the year ended December 31, 2009, the Company capitalized a total of $77,628 in acquisition and exploration costs relating to the Bond #1-18 well. It has been determined the Bond #1-18 well has proved oil reserves. For the year ended December 31, 2009, the Company received revenues of $29,753 from the Bond #1-18 well. As of December 31, 2009, the total capitalized costs related to the Bond well was $82,128. Depletion on the Bond well at December 31, 2009 was $750.

During 2009, the Company acquired an interest in additional oil property in Oklahoma and has capitalized $27,056 as part of unproved properties.

NOTE 5 - ASSET RETIREMENT OBLIGATION

The Company adopted Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations (“SFAS 143”). This statement applies to obligations associated with the retirement of tangible long-lived assets that result from the acquisition, construction and development of the assets.

SFAS 143 requires that the fair value of a liability for a retirement obligation be recognized in the period in which the liability is incurred. For oil and gas properties, this is the period in which an oil or gas well is acquired or drilled. The asset retirement obligation is capitalized as part of the carrying amount of the asset at its discounted fair value. The liability is then accreted each period until the liability is settled or the asset is sold, at which time the liability is reversed.

The Company identified and estimated all of its asset retirement obligations for tangible, long-lived assets as of December 31, 2009. These obligations were for plugging and abandonment costs for depleted oil and gas wells. The Company had no proved reserves in 2008; therefore the Company did not record an asset retirement obligation. During the year ended December 31, 2009, the Company estimated its asset retirement obligation to be $10,980. Upon recognition of this asset retirement obligation, a liability of $10,980 was recorded and the capitalized costs of proved properties was increased by $10,980.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 6 - LEASE AGREEMENT

The company has entered into a month-to-month lease agreement with Trio Gold for an office in Calgary, Alberta, Canada. Trio Gold’s President is the father of Ron Ruskowsky, CEO. This lease can be canceled on one month’s written notice. The current lease requires rental payments of approximately $450 ($450 Canadian Dollars) per month plus applicable taxes effective April 1, 2009 after consolidating leased space. Prior to April 1, 2009, the lease was approximately $250 per month plus applicable taxes. For the year ended December 31, 2009 and 2008 the Company had $3,982 and $3,000 respectively in rent expense.

During 2008, Trio Gold wrote off the entire balance owed to them through March 31, 2008. The company has recorded $29,020 in forgiveness of debt as of December 31, 2008.

NOTE 7 - UNCERTAIN TAX POSITIONS

Effective January 1, 2007, the company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement No. 109” (“FIN 48”). FIN 48 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The adoption of the provisions of FIN 48 did not have a material impact on the company’s condensed consolidated financial position and results of operations. At January 1, 2008, 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 2009 and 2008. 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 2006. The following describes the open tax years, by major tax jurisdiction, as of January 1, 2009e:


United States (a)		2006 - Present

(a) Includes federal as well as state or similar local jurisdictions, as applicable.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 8 - RELATED PARTY TRANSACTIONS

As of December 31, 2009 and 2008, the Company owed Santeo Financial $172,693 and $89,353 respectively 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 $15,000 per month effective October 1, 2008.

As of December 31, 2009 and 2008, the Company owed Ron Ruskowsky, President and CEO of the Company, $9,374 and $0 respectively for operating expenses paid for by Ron.

As of December 31, 2009 and 2008, the Company owed Roger Janssen, an officer and director of the Company, $1,345 and $1,345 respectively for services performed.

As of December 31, 2009 and 2008, the Company owed Phil Van Angren, an officer and director of the Company, $9,073 and $7,564 respectively for consulting services performed as the Exploration Manager.

As of December 31, 2009 and 2008, shareholders have advanced the Company $19,845 and $19,845, respectively, payable on demand and do not carry an interest rate. This transaction has been recorded in the accompanying financial statements as Shareholder loans.

As of December 31, 2009 and 2008, the Company rented office space from Trio Gold in the amount of $3,982 and $3,000 respectfully. Trio Gold’s president is the father of Ron Ruskowsky, President and CEO of the Company.

NOTE 9 - COMMON STOCK AND WARRANTS

In September 2009 the company closed a unit funding at 55 units totaling $137,500. The Company has a 25% participation in the Bond #1-18 well, with 60% of the company’s net revenue received being allocated proportionally to the unit holders. The funds were raised via a unit private placement. Each of the 55 units was priced at $2,500 per unit totaling $137,500 and consisted of 10,000 restricted common shares and 20,000 share purchase options at $0.25 per share with an expiration date of March 10, 2011. The Company issued a total of 550,000 shares and 1,100,000 options related to the private placement. The unit holder also has the option to surrender their interest in the well back to the company in exchange for 10,000 restricted common shares per unit surrendered for a period of 36 months from the date of receipt of the first revenue cheque paid to the unit holders. The company issued 50,000 shares valued at $12,500 for consulting expense, related to the Bond financing, to a 3rd party. The $12,500 was converted to a proportionate 5% interest in the Bond #1-18 well.

In May 2009 the company closed its intended unit funding at 72 units totaling $180,000. The Company has a 36% participation in the Gleason #4-16 well, with 67% of the company’s net revenue received being allocated proportionally to the unit holders. The funds were raised via a unit private placement. Each of the 72 units was priced at $2,500 per unit totaling $180,000 cash and consisted of 5,000 restricted common shares and 10,000 share purchase options at $0.25 per share with an expiration date of November 15, 2010. The Company issued a total of 360,000 shares and 720,000 options related to the private placement. The unit holder also has the option to surrender their interest in the well back to the company in exchange for 5,000 restricted common shares per unit surrendered for a period of 36 months from the date of receipt of the first revenue cheque paid to the unit holders.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 9 - COMMON STOCK AND WARRANTS (Continued)

In June 2008 the company received a loan of $500,000 from a private investor. The loan carried an interest rate of 15% and was due and payable on or before July 31, 2008. The terms of the note allow for a 1% per week penalty up to a maximum of 10%. As part of the agreement, 6,250,000 shares were placed into escrow for security. The Lender had the right at his sole discretion, to convert any unpaid debt, along with any interest due, into free-trading common stock of the Company at a conversion price of forth cents ($0.40) per share. The funds from this loan were used for the Ohio Property Extension payment, payment for a third party engineering evaluation of the Ohio Property and working capital. In September 2008 the company issued 6,250,000 shares held in escrow as satisfaction for the $500,000 note due plus interest of $75,000 and penalties of $50,000 to a private investor at a value of ten cents ($0.10) per share. The market value of the shares was sixteen cents ($0.16) the date the loan was satisfied resulting in additional interest booked on the financial statements of $375,000 at December 31, 2008.

In May 2008, the Company issued 580,000 shares in a private placement for $0.25 per Unit. Each Unit entitled the holder to acquire 1 common share of the company’s stock at $0.25 per share and one share purchase warrant, entitling the holder to purchase one share at a price of $0.40 for a period of 12 months from closing of the private placement, resulting in the Company receiving $145,000 in cash. The shares were issued in a transaction which the Company believes satisfies the requirements of the Regulation S exemption from the registration and prospectus delivery requirements of the Securities Act of 1933. The Company used those funds for working capital.

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 used those funds for working capital.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008

NOTE 9 - COMMON STOCK AND WARRANTS (Continued)

The following table sets forth common share purchase warrants outstanding as of December 31, 2009:

	Warrants Outstanding
Balance, December 31, 2008		4,220,000
Warrants granted		-
Warrants expired		-
Balance, December 31, 2009		4,220,000

The following table lists the common share warrants outstanding at December 31, 2009. Each warrant is exchangeable for one common share.

Number Outstanding	Exercise Price	Weighted Average Contractual Remaining Life (years)	Number Currently Exercisable	Exercise Price
580,000	$ 0.40	0.42	580,000	$ 0.40
1,820,000	$ 0.15	0.75	1,820,000	$ 0.15
720,000	$ 0.25	0.92	720,000	$ 0.25
1,100,000	$ 0.25	1.17	1,100,000	$ 0.25
4,220,000			4,220,000

NOTE 10 – NOTES PAYABLE

The Company has a note payable with Integrated Business Concepts, Inc. that is due upon demand and carries an interest rate of 12%. As of December 31, 2009, the amount owing on the note is $309,648 which consists of principal in the amount of $203,792 and interest of $105,856. The total amount due at December 31, 2008 was $235,755.

NOTE 11 – SUBSEQUENT EVENTS

The Company evaluated all events subsequent to December 31, 2009 through April 15, 2010, the financial statement issuance date, and concluded that there are no significant or material transactions to be reported for the period from January 1, 2010 to April 15, 2010.

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES

(Unaudited)

Net Capitalized Costs

The following summarized net capitalized costs as of December 31, 2009 and 2008.

	December 31,			December 31,
	2009			2008
Oil and Gas Properties
Proved	$	255,868		$	-
Unproved		27,056			-
Less: Depletion		(5,657	)		-
Net capitalized costs	$	277,267		$	-

Unproved Property Costs

The following summarizes the capitalized unproved property costs excluded from amortization as of December 31, 2009. All costs represent investment in unproved properties and will be evaluated over several years as the properties are explored.


	2009		2008		Total

Property acquisition costs	$	27,056	$	-	$	27,056

Costs Incurred in Oil and Gas Acquisition, Exploration and Development

	December 31,		December 31,
	2009		2008
Development costs	$	251,668		-
Exploration costs		-		-
Acquisition costs:				-
Proved		4,200		-
Unproved		27,056	$	475,949
Sales of Properties		-		-
Totals	$	282,924	$	475,949

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES

(Unaudited)

(Continued)

Oil and Gas Reserve Quantities

The reserve information presented below is based on reports prepared by independent petroleum engineers, Ramsey Property Management for the properties Gleason #4-16 and Bond #1-18.

The information is presented in accordance with regulations prescribed by the Securities and Exchange Commission and based on Reserve definitions found in Rule 4-10(a) of Regulation S-X. Reserve estimates are inherently imprecise.

Proved oil and gas reserves are the estimated quantities of crude oil, natural gas and gas liquids which geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions, ie., prices and costs as of the date the estimate is made. Prices include consideration of changes in existing prices provided only by contractual arrangements, but not on escalations based upon future conditions.

Reservoirs are considered proved if economic productivity is supported by either actual production or conclusive formation test. The area of a reservoir considered proved includes (A) that portion delineated by drilling and defined by gas-oil and/or oil-water contacts, if any; and (B) the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data. In the absence of information on fluid contacts, the lowest known structural occurrence of hydrocarbons controls the lower proved limit of the reservoir.

	Oil				Gas
	MBBL				MMcf
	Gross		Net		Gross		Net
Gleason #4-16		11.554		3.328		12.129		3.494
Bond #1-18		47.774		9.556		31.552		6.311
Totals		59.328		12.884		43.681		9.805

Standardized Measure of Discounted Future Net Cash Flows

The standardized measure of discounted future net cash flows, related to the above oil and gas reserves, is calculated in accordance with the requirements of SFAS No 69. Estimated future cash inflows from production are computed by applying year-end prices for oil and gas to year-end quantities of estimated proved reserves. Adjustment in this calculation for future price changes is limited to those required by contractual arrangements in existence at the end of each reporting period. Future development and production costs are those estimated future expenditures necessary to develop and produce year-end proved reserves based on year-end cost

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES

(Unaudited)

(Continued)

indices, assuming continuation of year end economic conditions. Estimated future income taxes are calculated by applying appropriate year-end statutory tax rates. These rates reflect allowable deductions and tax credits and are applied to estimated future pre-tax cash flows, less the tax bases of related assets. Discounted future net cash flows have been calculated using a 10% discount factor. Discounting requires a year-by-year estimate of when future expenditures will be incurred and when reserves will be produced.

The information provided in tables set out below does not represent management’s estimate of the Company’s expected future cash flows or of the value Company’s proved oil and gas reserves. Estimates of proved reserves quantities are imprecise and change over time, as new information becomes available. Moreover, probable and possible reserves, which may become proved in the future, are excluded from the calculations. The arbitrary valuation prescribed under SFAS No.69 requires assumptions as to the timing and the amount of future development and production costs. The calculations should not be relied upon as an indication of the Company’s future cash flows or of the value of its oil and gas reserves.

	2009			2008
Future cash inflows	$	912,508		$	-
Future production and development costs		(150,525	)		-
Future income tax expense		-			-
Future net cash flows		761,983			-
Less effect of a 10% discount factor		(167,095	)		-
Discounted future net cash flows	$	594,888		$	-

ROYAL QUANTUM GROUP, INC.

(Formerly a Development Stage Company)

SUPPLEMENTAL INFORMATION ON OIL AND GAS PRODUCING ACTIVITIES

(Unaudited)

(Continued)

Principal sources of changes in standardized measure of discounted future net cash flows are as follows:

	2009		2008
Discounted present value as at beginning of year	$	-	$	-
Sales and transfers of oil and gas, net of production costs		-		-
Changes in future development costs		-		-
Extensions and discoveries and revisions, net of future
production and development costs		-		-
Net change in price and production costs		-		-
Change in estimated net profit payments		-		-
Accretion of discount		-		-
Standardized measure, end of period	$	-	$	-

Item 9. 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 9A(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, 2008, 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, 2009. 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, 2009, our internal control over financial reporting is effective based on those criteria.

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 9B. Other Information.

None.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance.

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

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

Name	Age	Position
Ron Ruskowsky Suite #145, 251 MidPark Blvd S.E. Calgary, AB T2X 1S3 Canada	42	President, CEO and Principal Accounting Officer Director
Roger Janssen Suite #145, 251 MidPark Blvd S.E. Calgary, ABT2X 1S3 Canada	46	Vice-President, Secretary Director
Phillip van Angeren Suite #145, 251 MidPark Blvd S.E. Calgary, ABT2X 1S3 Canada	53	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.

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 metals 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).

Code of Ethics. We have not adopted a corporate code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions 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.

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 11. 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, 2009 and 2008.

Name and Principal Position	Year Ended	Salary $	Bonus $	Stock Awards $	Option Awards $	Non-Equity Incentive Plan Compensation $	Nonqualified Deferred Compensation Earnings $	All Other Compensation $	Total $
Ron Ruskowsky President and CEO, Director	2009	0	0	0	0	0	0	0	0
	2008	0	0	0	0	0	0	0	0
Roger Janssen Vice-President and Secretary	2009	0	0	0	0	0	0	0	0
	2008	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.

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, 2009, we had no group life, health, hospitalization, or medical reimbursement or relocation plans in effect. Further, we had no pension plans or plans or agreements which provide compensation on the event of termination of employment or change in control of us.

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

Outstanding Equity Awards at Fiscal Year-end. As of the year ended December 31, 2009, the following named executive officer had the following unexercised options, stock that has not vested, and equity incentive plan awards:

Option Awards						Stock Awards
Name	Number of Securities Underlying Unexercised Options # Exercisable	# Un-exercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Options	Option Exercise Price	Option Expiration Date	Number of Shares or Units of Stock Not Vested	Market Value of Shares or Units Not Vested	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights Not Nested	Value of Unearned Shares, Units or Other Rights Not Vested
Ron Ruskowsky President, CEO, Principal Accounting Officer	0	0	0	0	0	0	0	0	0
Roger 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, 2009:

Name	Fees Earned or Paid in Cash	Stock Awards $	Option Awards $	Non-Equity Incentive Plan Compensation $	Non-Qualified Deferred Compensation Earnings $	All Other Compensation $	Total $
Ron Ruskowsky	0	0	0	0	0	0	0
Roger Janssen	0	0	0	0	0	0	0
Phil 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 12. 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 February 26, 2010 by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group.

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Owner	Percent of Class
Common Stock	Ron Ruskowsky (1) Suite #145, 251 MidPark Blvd S.E. Calgary, Alberta T2X 1S3 Canada	18,470,000 Shares President, CEO and Principal Accounting Officer, Director	38.5 %
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	5.2 %
Common Stock	Phil van Angeren Suite #145, 251 MidPark Blvd S.E. Calgary, AB Alberta T2X 1S3 Canada	500,000 Shares Exploration Manager Director	1.04%
Common Stock	All directors and named executive officers as a group	21,470,000	44.7% ( 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. Our management is not aware of any arrangements which may result in “changes in control” as that term is defined by the provisions of Item 403(c) of Regulation S-B.

No Equity Compensation Plan. We do not have any securities authorized for issuance under any equity compensation plan. We also do not have an equity compensation plan.

Item 13. 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.

As of December 31, 2009, we owed Roger Janssen $1,345 for services paid directly by Mr. Janssen.

As of December 31, 2009, the Company owed Phil Van Angren, an officer and director of the Company, $9,073 for consulting services performed as the Exploration Manager.

As of December 31, 2009 and 2008, the Company owed Santeo Financial $172,693 and $89,353 respectively for consulting services. Ron Ruskowsky, President and CEO of the Company, is an affiliate of Santeo Financial.

As of December 31, 2009 and 2008, the Company owed Ron Ruskowsky, President and CEO of the Company, $9,374 and $0 respectively for operating expenses paid for by Ron.

Currently we have an agreement with Santeo Financial whereby Santeo Financial provides consulting services in exchange for which we pay a consultant fee of $15,000 per month.

As of December 31, 2009 and December 31, 2008, shareholders have advanced us $19,845 and $19,845, 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.

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

Item 14. Principal Accountant Fees and Services.

Audit Fees. The aggregate fees billed in each of the fiscal years ended December 31, 2009 and 2008 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-K or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years were $21,381 and $16,783, respectively.

Audit-Related Fees. For the fiscal year ended December 31, 2009, 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, 2009 and December 31, 2008, our accountants rendered services for tax compliance, tax advice, and tax planning work for which we paid $140 and $162, 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.

Item 15. Exhibits

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

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

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned in the City of Calgary, Alberta, Canada, on April 15, 2010

Royal Quantum Group, Inc.

a Nevada corporation

By: __/S/___________________

Ron Ruskowsky

Its:

Principal executive officer, Principal accounting officer

President, CEO and a director

By: __/S/____________________

Roger Janssen

Its: Vice-President, Secretary and 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/___________________ April 15, 2010

Ron Ruskowsky

Its: Director

By: ___/S/__________________ April 15, 2010

Roger Janssen

Its: Director