royal_10q-063009.htm

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

This summary of accounting policies for Royal Quantum Group, Inc. (the “Company”) is presented to assist in understanding the Company's financial statements. The accounting policies conform to generally accepted accounting principles and have been consistently applied in the preparation of the financial statements.

Interim Financial Statements

The unaudited financial statements as of June 30, 2009 and the three and six months then ended, reflect, in the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to fairly state the financial position and results of the operations for the three and six months then ended. Operating results for interim periods are not necessarily indicative of the results which can be expected for full years.

Nature of Operations and Going Concern

The accompanying financial statements have been prepared on the basis of accounting principles applicable to a “going concern”, which assume that the Company will continue in operation for at least one year and will be able to realize its assets and discharge its liabilities in the normal course of operations.

Several conditions and events cast doubt about the Company’s ability to continue as a “going concern”. The Company has incurred net losses of approximately $5,030,819 for the period from August 23, 2002 (inception of development stage) to June 30, 2009 has a liquidity problem, and as of June 30, 2009 has no sources of revenue. In the interim, shareholders of the Company have committed to meeting any shortfall of operational cash flow. In addition the company may require increasing equity and debt financing in order to finance its business activities on an ongoing basis.

These financial statements do not reflect adjustments that would be necessary if the Company were unable to continue as a “going concern”. While management believes that the actions already taken or planned, will mitigate the adverse conditions and events which raise doubt about the validity of the “going concern” assumption used in preparing these financial statements, there can be no assurance that these actions will be successful.

If the Company were unable to continue as a “going concern”, then substantial adjustments would be necessary to the carrying values of assets, the reported amounts of its liabilities, the reported expenses, and the balance sheet classifications used.

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation

The Company was incorporated under the laws of the State of Nevada on October 22, 1996 under the name PSM Corp. The Company ceased all operating activities during the period from October 22, 1996 to July 9, 1999 and was considered dormant. On July 9, 1999, the Company obtained a Certificate of renewal from the State of Nevada.

On October 3, 2002, the Company changed its name to Platinum SuperYachts, Inc. in anticipation of a merger with SuperYachts Holdings, Inc. (a Nevada Corporation that was incorporated on August 23, 2002). On November 15, 2002, the shareholders of the Platinum SuperYachts, Inc. completed a stock exchange agreement with SuperYachts Holdings, Inc. dated August 8, 2002. The merger was accounted for as a reverse merger, with SuperYachts Holdings being treated as the acquiring entity for financial reporting purposes.

For financial reporting purposes, Platinum SuperYachts, Inc. was considered a new reporting entity on November 15, 2002

On November 23, 2005 holders of a majority of the Company’s common stock approved an Amendment to change the name of the Company to Royal Quantum Group, Inc., to increase the number of shares of common stock the Company is authorized to issue to 500,000,000 and to authorize the Company to issue up to 10,000,000 shares of preferred stock.

As of June 30, 2009, the Company is in the development stage.

Nature of Business

Royal Quantum Group Inc. is a public company trading on the OTCBB market under the symbol RYQG. Royal Quantum is focused on the acquisition, exploration and development of resource and mineral properties located within favorable geo-political climates.

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

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents to the extent the funds are not being held for investment purposes.

Depreciation and Amortization

Fixed assets are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the assets which range from three to five years. Fixed assets consisted of the following at June 30, 2009 and December 31, 2008:

	June 30,			December 31,
	2009			2008
Furniture & Fixtures	$	1,851		$	1,851
Less accumulated depreciation		(1,111	)		(925	)

Total	$	740		$	926

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 six months ended June 30, 2009 and the year end December 31 2008 was $186 and $370 respectively.

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

Intangible Assets

The Company has adopted the Financial Accounting Standards Board SFAS No., 142, “Goodwill and Other Intangible Assets.” SFAS 142 requires, among other things, that companies no longer amortize goodwill, but instead test goodwill for impairment at least annually. In addition, SFAS 142 requires that the Company identify reporting units for the purposes of assessing potential future impairments of goodwill, reassess the useful lives of other existing recognized intangible assets, and cease amortization of intangible assets with an indefinite useful life. An intangible asset with an indefinite useful life should be tested for impairment in accordance with the guidance in SFAS 142.

Intangible Assets consisted of the following at June 30, 2009 and December 31, 2008:

	June 30		December 31,
Intangible Asset	2009		2008		Amortization Period
E-Learning System	$	-	$	1	Indefinite
Less accumulated amortization		-		-
Total	$	-	$	1

Total amortization expense for the six months ended June 30, 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.

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.

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

Concentrations of Credit Risk

The Company has no significant off-balance-sheet concentrations of credit risk such as foreign exchange contracts, options contracts or other foreign hedging arrangements. The Company had cash and cash equivalents in the amount of $47,530 and $90,363 as of June 30, 2009 and December 31, 2008.

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. Diluted loss per common share for the six months ended June 30, 2009 and 2008 are not presented as it would be anti-dilutive. At June 30, 2009 and 2008, the total number of potentially dilutive common stock equivalents was 720,000 and 0, respectively.

Stock Compensation for Non-Employees

Effective June 1, 2006, the company adopted the provisions of SFAS No. 123 (R) requiring employee equity awards to be accounted for under the fair value method. Accordingly, share-based compensation is measured at grant date, based on the fair value of the award. Prior to June 1, 2006, the company accounted for awards granted to employees under its equity incentive plans under the intrinsic value method prescribed by Accounting Principles Board (APB) Opinion No. 25, “Accounting for Stock Issued to Employees” (APB 25), and related interpretations, and provided the required pro forma disclosures prescribed by SFAS No. 123, “Accounting for Stock-Based Compensation” (SFAS No. 123), as amended. No stock options were granted to employees during the years ended December 31, 2006, and 2005 and accordingly, no compensation expense was recognized under APB No. 25 for the years ended December 31, 2007, and 2006. In addition, no compensation expense is required to be recognized under provisions of SFAS No. 123 (R) with respect to employees. Under the modified prospective method of adoption for SFAS No. 123 (R), the compensation cost recognized by the company beginning on June 1, 2006 includes (a) compensation cost for all equity incentive awards granted prior to, but not vested as of June 1, 2006, based on the grant-dated fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all equity incentive awards granted subsequent to June 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS No, 123 (R). The company uses the straight-line attribution method to recognize share-based compensation costs over the service period of the award. Upon exercise, cancellation, forfeiture, or expiration of stock options, or upon vesting or forfeiture of restricted stock units, deferred tax assets for options and restricted stock units with multiple vesting dates are eliminated for each vesting

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

Stock Compensation for Non-Employees (Continued)

period on a first-in, first-out basis as if each vesting period was a separate award. To calculate the excess tax benefits available for use in offsetting future tax shortfalls as of the dated of implementation, the company followed the alternative transition method discussed in FASB Staff Position No. 123 (R)-3. During the periods ended December 31, 2008 and 2007, no stock options were granted to non-employees. Accordingly, no stock-based compensation expense was recognized for new stock option grants in the Statement of Operations and Comprehensive Loss at December 31, 2008 and 2007.

Financial Instruments

The Company’s financial instruments, as defined under SFAS No. 107, Disclosure about Fair Value of Financial Instruments, include its cash and cash equivalents, accounts payable and accrued liabilities. Except as otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values due to the short-term maturities of these instruments.

Income Taxes

The Company accounts for income taxes under the provisions of SFAS No.109, “Accounting for Income Taxes.” SFAS No.109 requires recognition of deferred income tax assets and liabilities for the expected future income tax consequences, based on enacted tax laws, of temporary differences between the financial reporting and tax bases of assets and liabilities.

Recent Accounting Standards

In February 2007, the FASB issued SFAS no, 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 provides companies with an option to report selected financials assets and liabilities at fair value. The objective of SFAS 159 is to reduce both complexity in accounting for financial instruments and the volatility in earnings caused by measuring related assets and liabilities differently. Generally accepted accounting principles have required different measurement attributes for different assets and liabilities that can create artificial volatility in earnings. The FASB has indicated it believes that SFAS 159 helps to mitigate this type of accounting-induced volatility by enabling companies to report related assets and liabilities at fair value, which would likely reduce the need for companies to comply with detailed rules for hedge accounting. SFAS 159 also establishes presentation and

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

Recent Accounting Standards (Continued)

disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 does not eliminate disclosure requirements included in other accounting standards, including requirements for disclosures about fair value measurements included in SFAS 157 and SFA No. 107, “Disclosures about Fair Value of Financial Instruments.” SFAS 159 is effective for the Company as of the beginning of fiscal year 2009. The adoption of this pronouncement is not expected to have an impact on the Company’s financial position, results of operations or cash flows.

In December 2007, the FASB issued No. 160, “Noncontrolling Interests in Financial Statements, an amendment of ARB No. 51" (“SFAS 160"). SFAS 160 amends ARB 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. This Statement is effective for fiscal years beginning on or after December 15, 2008. Early adoption is not permitted. Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.

In December 2007, the FASB issued No. 141(R), “Business Combinations” (“SFAS 141(R)”. SFAS 141(R) provides companies with principles and requirements on how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interest in the acquiree as well as the recognition and measurement of goodwill acquired in a business combination. SFAS 141(R) also requires certain disclosures to enable users of the financial statements to evaluate the nature and financial effects of the business combination. Acquisition costs associated with the business combination will generally be expensed as incurred. SFAS 141(R) is effective for business combinations occurring in fiscal years beginning after December 15, 2008, which will require the Company to adopt these provisions for business combinations occurring in fiscal 2009 and thereafter. Early adoption of SFAS 141(R) is not permitted. Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.

In March 2008, the FASB issued No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133. (“SFAS 161"). SFAS 161 requires enhanced disclosures about an entity's derivative and hedging activities and thereby improves the transparency of financial reporting. This Statement is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. This Statement encourages, but does not require, comparative disclosures for earlier periods at initial adoption. Management is currently evaluating the effects of this statement, but it is not expected to have any impact on the Company’s financial statements.

NOTE 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 amortization or not subject to amortization. The Company operates one cost center in the U.S.A. To date the Company has not established any proven recoverable reserves on its properties.

The capitalized costs of oil and gas properties are amortized 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.

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 its unproved oil and natural gas properties and has not yet determined whether these properties contain reserves that are economically recoverable. 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.

NOTE 2 - INCOME TAXES

	2008			2007
Net Operating Losses	$	4,250,000		$	3,963,988
Accrued Consulting Fees		33,000			39,251
Valuation Allowance		(4,283,000	)		(4,003,239	)
	$	-		$	-

As of December 31, 2008, the Company had a net operating loss carry forward for income tax reporting purposes of approximately $12,510,000 that may be offset against future taxable income through 2025. Current tax laws limit the amount of loss available to be offset against future taxable income when a substantial change in ownership occurs. Therefore, the amount available to offset future taxable income may be limited. No tax benefit has been reported in the financial statements, because the Company believes there is a 50% or greater chance the carry forwards will expire unused. Accordingly, the potential tax benefits of the loss carried forwards are offset by a valuation allowance of the same amount.

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

	2008			2007
Provision (Benefit) at US Statutory Rate	$	(413,854	)	$	(141,145	)
Stock Compensation / Interest		127,500			-
Excess Capital Losses over Capital Gains		(3,400	)		-
Accrued Consulting Fees		7,421			-
Depreciation and other		2,572			(75	)
Increase (Decrease) in Valuation Allowance		279,761			141,220
	$	-		$	-

The Company evaluates its valuation allowance requirements based on projected future operations. When circumstances change and causes a change in management’s judgment about the recoverability of deferred tax assets, the impact of the change on the valuation is reflected in current income.

NOTE 3 - DEVELOPMENT STAGE COMPANY/GOING CONCERN

The Company has not commenced its intended principal operations and as is common with a development stage company, the Company has had recurring losses. Continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to be successful in its planned activity, and the management of the Company has developed a strategy, which it believes will accomplish this objective through additional equity funding and long term financing, which will enable the Company to operate for the coming year.

NOTE 4- INVESTMENT IN OIL & GAS PROPERTY

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 2008, 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 36% in the drilling and development of the Gleason #4-16 well located in Oklahoma, USA. The company capitalized $135,785 for the drilling of the well during this period. Subsequent to the period end, the company is in the final stages of completing the well.

NOTE 5 – INVESTMENT IN MINERAL PROPERTY

In May 2007, we entered into a Purchase Agreement (“Agreement”) with U3, LLC (“U3”) to acquire a 100% interest in 1,540 acres that consist of 77 claims of prospective uranium property located adjacent to the Sheep Mountain Mine in Fremont County, Central Wyoming, approximately 90 miles southwest of Casper, Wyoming. We paid $10,000 to U3 when we executed the Agreement on May 28, 2007. However, we later agreed with U3 not to continue to acquire the claims, due to delays in receiving WMC numbers on the claims, and we have requested U3 return the $10,000 as per the agreement terms. 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.

NOTE 6 - LEASE AGREEMENT

The company has entered into a month-to-month lease agreement for an office in Calgary, Alberta, Canada. This lease can be canceled on one month’s written notice. The current lease requires rental payments of approximately $450 Canadian Dollars per month plus applicable taxes after consolidating leased space. The new monthly rate is effective as of May 1, 2009. Prior to October 1, 2007, the lease was approximately $4,854 per month plus applicable taxes. For the year ended December 31, 2008 and 2007 the Company had $3,000 and $14,879 respectively in rent expense.

During 2008, the Lessor wrote off the entire balance owed to them through March 31, 2008. The company has recorded $29,025 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, 2007, the company had no liability for unrecognized tax benefits and no accrual for the payment of related interest and penalties. The Company did not record a cumulative effect adjustment relating to the adoption of FIN 48.

Interest costs related to unrecognized tax benefits are classified as “Interest expense, net” in the accompanying condensed consolidated statements of operations. Penalties, if any, would be recognized as a component of “Selling, general and administrative expenses”. The Company recognized $0 of interest and penalties expense related to unrecognized tax benefits during 2007. In many cases the company’s uncertain tax positions are related to tax years that remain subject to examination by relevant tax authorities. With few exceptions, the company is generally no longer subject to U.S. federal, state, local or non-U.S. income tax examinations by tax authorities for years before 2004. The following describes the open tax years, by major tax jurisdiction, as of December 31, 2007:

United States (a)

2004 - Present

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

NOTE 8 - RELATED PARTY TRANSACTIONS

As of June 30, 2009 and December 31, 2008, the Company owed Santeo Financial $97,406 and $89,353 respectfully for consulting services. Ron Ruskowsky, President and CEO of the Company is an affiliate of Santeo Financial. Currently the Company has an agreement with Santeo Financial whereby Santeo Financial provides consulting services in exchange the Company agrees to pay a consultant fee of $15,000 per month. In April, 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 Well. The $15,000 was written off of the payable and booked as additional paid in capital.

As of June 30, 2009 and December 31, 2008, the Company owed Phil Van Angeren, an officer and director of the Company, $8,686 and $7,564 respectfully for consulting services performed as the Exploration Manager.

As of June 30, 2009 and December 31, 2008 the Company owed Roger Janssen, an officer and director of the Company $1,345 for incurred expenses.

NOTE 8 - RELATED PARTY TRANSACTIONS (Continued)

As of June 30, 2009 and December 31, 2008, shareholders have advanced the Company $19,845, payable on demand and do not carry an interest rate. This transaction has been recorded in the accompanying financial statements as Shareholder loans.

NOTE 9 - COMMON STOCK AND WARRANTS

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.

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 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.

NOTE 9 - COMMON STOCK AND WARRANTS (Continued)

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

In March of 2008 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 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.

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

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

In February 2007, the Company issued 2,653,640 shares in a private placement for $.05 per share which resulted in the Company receiving $132,682 in cash. The shares were issued in a transaction which the Company believes satisfies the requirements of the Regulation S exemption from the registration and prospectus delivery requirements of the Securities Act of 1933. The Company is using those funds for working capital.

NOTE 10 – NOTES PAYABLE

The Company has a note payable with Integrated Business Concepts, Inc. that is due upon demand and carries and interest rate of 12%. As of June 30, 2009 the amount owing on the notes is $266,003 which consists of principal in the amount of $185,838 and interest of $80,165.

NOTE 11 – SUBSEQUENT EVENTS

As of the date of this report drilling of the Gleason #4-16 well has finished. The company is in the final stages of completing the well.

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

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

	(Unaudited)			(Audited)
	June 30,			December 31,
ASSETS	2009			2008
Current Assets:
Cash & Cash Equivalents	$	47,530		$	90,363
Total Current Assets		47,530			90,363

Fixed Assets:
Furniture & Fixtures		1,851			1,851
Less: Accumulated Depreciation		(1,111	)		(925	)
Total Fixed Assets		740			926

Other Assets:
Intangible Assets		-			1
Unproved Oil and Gas Properties, full cost method		135,785			-
Total Other Assets		135,785			1

Total Assets	$	184,055		$	91,290

LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	98,127		$	86,082
Notes Payable		266,003			235,755
Related Party Payables		107,437			98,262
Shareholder Loans		19,845			19,845
Total Current Liabilities		491,412			439,944
Total Liabilities		491,412			439,944
Stockholders' Equity:
Common Stock, Par value $.001
Authorized 500,000,000 shares
Issued 48,380,338 shares at June 30,2009
and 48,020,338 shares at Dec 31, 2008		48,380			48,020
Paid-in Capital		4,675,082			4,480,442
Deficit Accumulated During the
Development Stage		(5,030,819	)		(4,877,116	)
Total Stockholders' Equity		(307,357	)		(348,654	)

Total Liabilities and Stockholders' Equity	$	184,055		$	91,290

													Cumulative
													since
													August 23,
													2002
													inception of
	For the three months ended June 30,						For the six monthsended June 30,						development
	2009			2008			2009			2008			stage

Revenues	$	-		$	-		$	-		$	-		$	-
		-			-			-			-			-

Expenses
Consulting Fees		45,771			30,808			95,421			150,808			1,142,934
Compensation Expense		-			-			-			-			273,790
Exploration Expense		-			-			-			-			475,949
General & Administrative		22,214			11,685			28,513			34,892			506,489

Loss from Operations		(67,985	)		(42,493	)		(123,934	)		(185,700	)		(2,399,162	)

Other Income (Expenses)
Write-down of Assets		-			-			-			-			(157,986	)
Foreign currency exchange gain (loss)		(14,683	)		(2,337	)		(15,248	)		7,900			1,885
Interest (Expense)		(7,377	)		(82,780	)		(14,521	)		(90,633	)		(688,300	)
Interest Income		-			-			-			-			263
Forgiveness of debt		-			17,500			-			17,500			46,520
Total Other Income (Expense)		(22,060	)		(67,617	)		(29,769	)		(65,233	)		(797,618	)

Net Loss from Continuing Operations	$	(90,045	)	$	(110,110	)	$	(153,703	)	$	(250,933	)	$	(3,196,780	)

Discontinued Operations
Loss from operation of discontinued component		-			-			-			-			(1,967,294	)
Gain pn disposal net of tax effect of $0		-			-			-			-			133,255
Net Income (Loss) from Discontinued Operations		-			-			-			-			(1,834,039	)

Net Loss	$	(90,045	)	$	(110,110	)	$	(153,703	)	$	(250,933	)	$	(5,030,819	)

Basic and Diluted Loss Per Share
Continuing Operations		0.00			0.00			0.00			(0.01	)
Loss per share		0.00			0.00			0.00			(0.01	)

Weighted Average Shares Outstanding		48,202,316			41,478,580			48,111,830			40,346,959

							Cumulative
							since
							August 23,
							2002
							inception of
	For the six months ended June 30,						development
	2009			2008			stage
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(153,703	)	$	(250,933	)	$	(5,030,819	)
Net Income/(Loss)from Discontinued Operations		-			-			1,578,681
Adjustments to reconcile net income (loss) to
net cash provided (used in) operating activities:
Depreciation		186			185			1,111
Write-down of mineral property		-			-			475,949
Write-down of assets		1			-			10,001
Stock issued for interest		-			-			600,000
Stock issued for start up costs		-			-			12,600
Stock issued for services		-			-			644,390
Forgiveness of debt		-			(17,500	)		(46,520	)
Foreign currency exchange loss (gain)		15,248			(7,900	)		(1,885	)
Increase (decrease) in interest on notes payable		14,521			90,633			81,614
Increase (decrease) in accounts payable		5,601			(7,886	)		348,369
Increase (decrease) in related party accounts payable		24,175			(22,718	)		84,795
Net cash provided (used in) continuing activities		(93,971	)		(216,119	)		(1,241,714	)
Net cash provided (used in) discontinuing activities		-			-			386,515
Net cash provided by (used in) operating activities		(93,971	)		(216,119	)		(855,199	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Mineral Property		-			-			(10,000	)
Investment in Oil Property		(128,862	)		(400,492	)		(552,984	)
Purchase of fixed assets		-			-			(1,851	)
Net cash provided by (used in) investing activities		(128,862	)		(400,492	)		(564,835	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholder loans		-			-			136,027
Payment on shareholder loans		-			(6,000	)		(88,182	)
Proceeds from notes payable		-			500,000			685,795
Contributed capital		-			-			2,842
Stock issued in exchange for cash		180,000			352,000			731,082
Net cash provided by (used in) financing activities		180,000			846,000			1,467,564

Net (Decrease) increase in Cash and Cash Equivalents		(42,833	)		229,389			47,530
Cash and Cash Equivalents at Beginning of Period		90,363			3,448			-
Cash and Cash Equivalents at End of Period	$	47,530		$	232,837		$	47,530
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest	$	-		$	-		$	12
Income taxes	$	-		$	-		$	-
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES
Stock issued in plan of reorganization	$	-		$	-		$	858
Stock issued in asset acquisition	$	-		$	-		$	2,243,000
Stock issued for services	$	-		$	-		$	594,390
Stock issued for investment in oil property	$	-		$	58,750		$	58,750
Stock issued for cancellation of debt	$	-		$	-		$	674,700
Shareholder loans converted to paid in capital	$	-		$	-		$	3,000
Stock issued for Accounts Payable	$	-		$	50,000		$	52,500

	Royal Quantum Group, Inc. a Nevada corporation

August 10, 2009	By:	/s/ Ron Ruskowsky
		Principal executive officer Principal accounting officer President, CEO and a director


August 10, 2009	By:	/s/ Roger Janssen
		Roger Janssen Vice-President, Secretary and a director

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