**Table
          of Contents**





**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


Washington,
      D.C. 20549





**FORM
      10-QSB**





QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15 (d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934


For
      the
      quarterly period ended September 30, 2006


OR


TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15 (d)


OF
      THE
      SECURITIES EXCHANGE ACT OF 1934


For
      the
      transition period from __________ to __________________





Commission
      File No. 0-15260





**Element
      21 Golf Company**


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





Delaware
            
            88-0218411(State
                or other jurisdiction of incorporation or organization)
            
            (Internal
                Revenue Service Employer Identification
                No.)





**200
                Queens Quay East, Unit #1, Toronto, Ontario, Canada, M5A
                4K9**(Address
                of principal Executive offices Zip Code)**416-362-2121**Issuer's
                telephone number, including area codeFormer
                name, former address and formal fiscal year if changed since last
                report




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





Indicate
      by check mark whether the registrant is a shell company (as defined in Exchange
      Act Rule 12b-2).


Yes o No x





Indicate
      the number of shares outstanding of each of the issuer's classes of common
      stock, as of the last practicable date,  112,298,861 shares of common
      stock, par value $.01 per share as of November 15, 2006.





Transitional
      Small Business Disclosure Format (Check One) Yes x No o





**Table
        of Contents**




Element
      21 Golf Company





INDEX




Page
              Number**PART
                I.**
            **FINANCIAL
                INFORMATION**Item
                1
            Consolidated
                Condensed Financial Statements:Balance
                Sheets as of September 30, 2006 (unaudited) and June 30,
                2006
            3Statements
                of Operations for the Three Months Ended September 30, 2006 and 2005
                (unaudited)
            4Statements
                of Cash Flows for the Three Months Ended September 30, 2006 and 2005
                (unaudited)
            5Notes
                to Unaudited Financial Statements
            6Item
                2
            Management's
                Discussion and Analysis or Plan of Operation
            11Item
                3
            Controls
                and Procedures
            15**PART
                II**
            **OTHER
                INFORMATION**Item
                1
            Legal
                Proceedings
            15Item
                2
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            15Item
                3
            Defaults
                upon Senior Securities
            15Item
                4
            Submission
                of Matters to a Vote of Security Holders
            15Item
                5
            Other
                Information
            15Item
                6
            Exhibits
            15**SIGNATURES**
            16**EXHIBITS**





-2-
 **Table
            of Contents**




**PART
      1 - FINANCIAL INFORMATION**


**Item
      1 - Financial Statements**


**ELEMENT
      21 GOLF COMPANY**


**CONSOLIDATED
      CONDENSED BALANCE SHEETS**





**-
                ASSETS -****September
                30, 2006**
            
            June
                30,
              2006**(unaudited)****CURRENT
                ASSETS:**Cash
            
            **$****1,481,772**
            
            $263,219Accounts
                receivable - net of allowance for doubtful accounts of $0
            
            
            **7,063**
            
            
            11,994Inventories
            
            
            **387,819**
            
            
            128,382Prepaid
                expenses and other current assets
            
            
            **112,933**
            
            
            17,907**TOTAL
                CURRENT ASSETS**
            
            
            **1,989,587**
            
            
            421,502**FINANCING
                COSTS - NET**
            
            
            **294,618****FIXED
                ASSETS - NET**
            
            
            **440,412**
            
            
            510,530**TOTAL
                ASSETS**
            
            **$**
            **2,724,347**
            
            $
            932,032**-
                LIABILITIES AND SHAREHOLDERS’ DEFICIT -****CURRENT
                LIABILITIES:**Accounts
                payable
            
            **$**
            **344,971**
            
            $
            157,191Accrued
                expenses
            
            
            **1,053,492**
            
            
            1,054,858Accrued
                interest
            
            
            **44,294**
            
            
            31,485Convertible
                notes
            
            
            **290,178**
            
            
            348,581Derivative
                liability
            
            
            **3,498,286**
            
            
            1,491,945**TOTAL
                CURRENT LIABILITIES**
            
            
            **5,231,221**
            
            
            3,084,060**LONG-TERM
                LIABILITIES:**Accounts
                payable - related parties
            
            
            **39,396**
            
            
            504.001Loans
                and advances - officers/shareholders
            
            
            **482,076**
            
            
            104,162**521,472**
            
            
            608,163**SHAREHOLDERS’
                DEFICIT:**Preferred
                stock, $.10 par value, authorized 5,000,000 shares, no shares issued
                and
                outstanding
            
            
            
            
            
            -Series
                A Preferred stock, $.001 par value, authorized 5,000,000 shares,
                2,348,848
                and 2,113,556 issued and outstanding, as of September 30 and June
                30,
                2006
            
            
            **2,114**
            
            
            2,114Series
                B Preferred stock, $.01 par value, authorized 350,000 shares, 117,648
                and
                0 shares issued and outstanding at September 30 and June 30, 2006,
                respectively
            
            
            **117**
            
            
            -Common
                stock, $.01 par value; 300,000,000 shares authorized, 111,558,071
                and
                99,630,554 shares issued and outstanding at September 30, and June
                30,
                2006, respectively
            
            
            **1,115,583**
            
            
            996,308Additional
                paid-in capital
            
            
            **17,004,070**
            
            
            13,453,963Prepaid
                expense
            
            
            **(675,000**
            **)**
            
            -Accumulated
                deficit
            
            
            (20,475,231
            )
            
            (17,212,576
            )(3,028,347
            )
            
            (2,760,191
            )**$**
            **2,724,347**
            
            $
            932,032






See
      notes
      to consolidated financial statements.


-3-
 **Table
          of Contents**
  **ELEMENT
        21 GOLF COMPANY**


**CONSOLIDATED
      CONDENSED STATEMENTS OF
      OPERATIONS**


**FOR
      THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**


**(unaudited)**





Three
                months Ended
              September
                30,**2006**
            
            2005**REVENUES**
            
            **$**
            **1,227**
            
            $
            22,620-**COSTS
                AND EXPENSES**Costs
                of sales
            
            
            **14,823**
            
            
            12,074Depreciation
                expense
            
            
            **88,433**
            
            
            -General
                and administrative
            
            
            **1,169,893**
            
            
            969,292**TOTAL
                COSTS AND EXPENSES**
            
            
            **1,273,149**
            
            
            981,366**LOSS
                FROM OPERATIONS**
            
            
            (1,271,922
            )
            
            (958,746
            )**OTHER
                INCOME (EXPENSE)**Interest
                expense
            
            
            **(299,571**
            **)**Derivative
                income (expense)
            
            
            **302,579**Other
                expense, net
            
            
            **(13,839**
            **)****(10,831**
            **)****LOSS
                BEFORE PROVISION FOR INCOME TAXES**
            
            
            **(1,282,753**
            **)**
            
            (958,746
            )Provision
                for income taxes
            
            
            **-**
            
            
            -**NET
                LOSS**
            
            **$**
            (1,282,753
            )
            $
            (958,746
            )Preferred
                stock dividends
            
            
            **2,000,000**
            
            
            -**LOSS
                APPLICABLE TO COMMON STOCKHOLDERS**
            
            
            **(3,282,753**
            **)**
            
            (958,746
            )Basic
                and diluted weighted average shares
            
            
            **101,121,594**
            
            
            94,647,551Basic
                and diluted loss per share
            
            **$**
            (0.03
            )
            $
            (0.01
            )







See
      notes
      to consolidated financial statements.


-4-
 **Table
          of Contents**
  **ELEMENT
        21 GOLF COMPANY**


**CONSOLIDATED
      CONDENSED STATEMENTS OF CASH
      FLOWS**


**FOR
      THE THREE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005**


**(unaudited)**





**2006**
            
            2005**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            **$**
            (3,282,753
            )
            $
            (958,746
            )Adjustments
                to reconcile net loss to net cash (used in) operating
                activities:Compensatory
                common stock and warrants
            
            
            **854,788**
            
            
            779,539Beneficial
                conversion feature of convertible notes
            
            
            **56,029**Depreciation
                and amortization
            
            
            **86,408**
            
            
            784Amortization
                of discount to convertible notes
            
            
            **247,957**Excess
                derivative liability expense (income)
            
            
            **(302,579**
            **)**Changes
                in:Accounts
                receivable
            
            
            **4,931**
            
            
            30,258Inventories
            
            
            **(259,437**
            **)**
            
            40,461Prepaid
                expenses and other current assets
            
            
            **(95,026**
            **)**
            
            2,200Accounts
                payable
            
            
            **187,780**
            
            
            (58,391
            )Accrued
                expenses
            
            
            **(1,366**
            **)**
            
            -Derivative
                liability
            
            
            **2,006,341**Accrued
                interest
            
            
            **12,809**Net
                cash (used in) operating activities
            
            
            (484,118
            )
            
            (163,895
            )**CASH
                FLOW FROM INVESTING ACTIVITIES:**Purchase
                of capital assets
            
            
            (10,638
            )
            
            (3,200
            )Net
                cash (used in) investing activities
            
            
            (10,638
            )
            
            (3,200
            )**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Advances
                from related parties
            
            
            **(64,766**
            **)**
            
            89,763Loans
                and advances from officers/shareholders
            
            
            **(21,925**
            **)**Financing
                costs
            
            
            **(300,000**
            **)**Net
                proceeds from bridge loans
            
            
            **100,000**Proceeds
                from sale of preferred shares
            
            
            **2,000,000**
            
            
            80,000Net
                cash provided from financing activities
            
            
            **1,713,309**
            
            
            169,763**NET
                INCREASE IN CASH**
            
            
            **1,218,553**
            
            
            2,668**CASH,
                BEGINNING OF PERIOD**
            
            
            **263,219**
            
            
            1,148**CASH,
                END OF PERIOD**
            
            **$**
            **1,481,772**
            
            $
            6,633





**SUPPLEMENTAL
                CASH FLOW INFORMATION:**Interest
                paid
            
            **$**
            **-**
            
            $
            -Taxes
                paid
            
            
            **-**
            
            
            -








See
      notes
      to consolidated financial statements.


-5-
 **Table
          of Contents**




**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED CONDENSED FINANCIAL
      STATEMENTS**


**September
      30, 2006**


**(Unaudited)**





**NOTE
      1          NATURE OF BUSINESS
      AND OPERATIONS:**





Element
      21 Golf Company and subsidiaries (a development stage enterprise) (the “Company”
and or “Element 21”) designs, develops and has begun to market, Scandium alloy
      golf products.  The first products manufactured using the Company’s
      proprietary technology have been recently produced and the Company commenced
      distribution to wholesalers and retail markets during the last quarter of it’s
      fiscal year ended June 30, 2005.





The
      Company is subject to a number of risks similar to those of other companies
      in
      the early stages of operations.  Principal among these risks are
      dependencies on key individuals, competition from other current or substitute
      products and larger companies, the successful marketing of its products and
      the
      potential need to obtain adequate additional financing necessary to fund future
      operations.  Certain consultants, who are also stockholders of the
      Company, have advanced funds to allow the Company to acquire aluminum Scandium
      alloy concentrate from Russia and to acquire critical lateral forging equipment
      made in the U.S., both of which were shipped to South Korea to enable the
      production of Scandium alloy golf shafts. Update?





The
      accompanying unaudited consolidated condensed financial statements have been
      prepared from the books and records of Element 21 on the same basis as the
      annual financial statements and are consistent with the instructions to Form
      10-QSB and Rule 310 of Regulation S-B; however, these financial statements
      have
      not been reviewed by the Company’s auditors.  Accordingly, the accompanying
      financial statements do not include all the information and footnotes required
      by generally accepted accounting principles for complete financial statements.
      All significant inter-company accounts and transactions have been eliminated
      in
      consolidation. In the opinion of management, all adjustments (consisting of
      normal recurring adjustments) considered necessary for a fair presentation
      have
      been included. Operating results for the period ended September 30, 2006 are
      not
      necessarily indicative of the results that may be expected for the year ending
      June 30, 2007. For further information, refer to the consolidated financial
      statements and footnotes thereto included in the Company's annual report for
      the
      year ended June 30, 2006.





**NOTE
      2          FUTURE
      OPERATIONS/GOING CONCERN** :





These
      interim financial statements have been presented on the basis that the Company
      is a going concern, which contemplates the realization of assets and the
      satisfaction of liabilities in the normal course of business.  The
      Company has only recently begun producing revenues; however, not on any
      consistent basis.  Even with the generation of revenues from the sale
      of golf shafts now being produced and sold, the Company expects to incur
      expenses in excess of revenues for an indefinite period.





Key
      financial information follows:


**September
                30,**
              **2006**
            
            June
                30,
              2006Negative
                working capital
            
            **$**
            3,241,634
            
            $
            2,662,558Net
                loss
            
            
            3,282,753
            
            
            4,496,095Accumulated
                deficit
            
            
            20,475,231
            
            
            17,212,576





As
      shown
      in the accompanying financial statements, during the three months ended
      September 30, 2006 the Company incurred a net loss of $3,282,753 and cash
      utilized by operations during this period was $484,118. For the fiscal year
      ended June 30, 2006, the Company realized a net loss of $4,496,095 and generated
      cash of $48,445 for operating purposes.





These
      factors, among others, raise significant doubt about the Company’s ability to
      continue as a going concern.  The unaudited consolidated condensed
      financial statements do not include any adjustments relating to the
      recoverability and


-6-
 **Table
            of Contents**




**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**


**September
      30, 2006**


**(Unaudited)**





**NOTE
      2          FUTURE
      OPERATIONS/GOING CONCERN (CONTINUED)** :





classification
      of assets or the amounts and classification of liabilities that might be
      necessary should the Company be unable to continue as a going
      concern.  The Company’s continuation as a going concern is dependent
      upon its ability to generate sufficient cash flow and meet its obligations
      on a
      timely basis and ultimately attain profitability.  Since acquiring the
      Element 21 Technologies golf development business, the Company has depended
      on
      advances and consulting services from consultants engaged by the Company as
      well
      as the financings described below (See Notes 5 and 6). Absent these continuing
      advances, services and financings, the Company could not continue with the
      development and marketing of its golf products.





Managements’
      plans for the Company include more aggressive marketing, raising additional
      capital and other strategies designed to optimize shareholder value. However,
      no
      assurance can be given that management will be successful in fulfilling all
      components of its plan. The failure to achieve these plans will have a material
      adverse effect on the Company’s financial position, results of operations and
      ability to continue as a going concern.





During
      the three months ended September 30, 2006 the Company issued 9,242,233 shares
      of
      its common stock to consultants for services rendered by them and recorded
      additional expense of $854,788.





**NOTE
      3          RELATED PARTY
      ADVANCES:**





During
      the three month period ended September 30, 2006, the Company repaid certain
      related parties a net amount of $64,766.








**NOTE
      4          NET LOSS PER
      SHARE:**





Basic
      net
      loss per share is computed by dividing net loss by the weighted average number
      of common shares outstanding for the periods.  Diluted net loss per
      share reflects, in addition to the weighted average number of common shares,
      the
      potential dilution of stock options and warrants outstanding, exercised and/or
      converted into common stock, unless the effect of such equivalent shares was
      anti-dilutive.





For
      the
      three months ended September 30, 2006 and 2005, the effect of stock options
      and
      other potentially dilutive shares were excluded from the calculation of diluted
      net loss per common shares, as their inclusion would have been
      anti-dilutive.  Therefore diluted loss per share is equal to basic
      loss per share.





**NOTE
      5**   **CONVERTIBLE
      NOTES:**





*Bridge
      I Financing:*




Between
      January 17 and March 6, 2006, the Company issued 10% Convertible Promissory
      Notes in the aggregate principal face amount of $540,000 to 15 individual
      investors. In respect of notes totaling $340,000 (“$340,000 Notes”), each such
      investor also received three separate warrants (a warrant exercisable for one
      year, a warrant exercisable for two years, and a warrant exercisable for three
      years) to purchase shares of the Company's common stock up to an amount equal
      to
      the initial investment in the Notes at an exercise price to be determined based
      on a twenty day trading average of shares of the Company’s Common Stock prior to
      the date of exercise or from and after the date of an equity financing of at
      least $5.0 million (“Equity Financing”), if that at all occurs, the price per
      share paid by participants in the equity financing. In respect of one note
      for
      $200,000 (“200,000 Note”), the investor received 3,243,243 warrants (1/3
      warrants exercisable for one year, 1/3 warrants exercisable for two years,
      and
      remaining 1/3 warrants exercisable for three years) with similar terms, except
      that the warrants are exercisable at an exercise price which is fixed at $0.17
      per share. All these warrants are subject to certain anti-


-7-
 **Table
          of Contents**




**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS**


**September
      30, 2006**


**(Unaudited)**





**NOTE
      5**  **CONVERTIBLE
      NOTES (Continued):**




dilution
      price adjustments. The Notes mature one year after issuance and accrue interest
      at an annual interest rate equal to 10% per annum, payable at maturity. The
      notes are convertible, at the option of the investor, into shares of Company’s
      Common Stock, upon the consummation by the Company of an Equity Financing,
      at a
      price equal to the price per share paid by participants in the equity financing
      or in case there is not an equity financing the average twenty day trading
      average of shares of the Company’s common stock in respect of the $340,000 Notes
      and at $0.17 per share in respect of the $200,000 Note.




During
      the 3 months ended September 30, 2006, two notes totaling $75,000 principal
      amount of the $340,000 Notes and $7,500 in related accrued interest were
      converted into 485,294 shares of common stock. As
      a
      result, the Company recorded $50,073 of interest expense due to the beneficial
      conversion feature and expensed the remaining $40,625 of unamortized discount
      to
      the notes into interest expense. In order
      to induce the note holders to convert their notes into stock, the Company
      offered certain incentives, which included registration rights for the warrants,
      payment in full of all interest and an extension of the warrant expiration
      terms
      by approximately seven months. As a result of the extension of the warrant
      expiration date, the Company recorded an additional $122,215 in derivative
      expense. In addition, a $20,000 note was cancelled during the quarter and the
      proceeds were returned to the investor and all entries related to the recording
      of the note were reversed, including $33,549 of derivative liability and all
      accrued interest.




As
      of
      September 30 2006, all of the Bridge I financing warrants issued and conversion
      option were revalued and the liability was adjusted to $606,300.





As
      of
      September 30, 2006 the company values the warrants and conversion option under
      the Black Scholes option-pricing model with the following assumptions: an
      expected life equal to the contractual term of the conversion option or
      warrants, as the case may be; no dividends; a risk free rate of return of 4.6%
      to 5.0% and volatility ranging from 12% to 184%.





*Bridge
      II Financing:*




Between
      May 5 and July 11, 2006, the Company issued additional 10% Convertible
      Promissory Notes in the aggregate principal face amount of $623,000 to 20
      individual investors (the $623,000 Notes”). Each such investor also received
      warrants, exercisable for one year, to purchase shares of the Company's common
      stock up to 150% of the investor’s initial investment in the Notes at an
      exercise price equal to the lesser of (i) $0.175, or (ii) the ten day trading
      average of shares of the Company’s Common Stock prior to the date of exercise.
      All these warrants are subject to certain anti-dilution price adjustments.
      The
      Notes mature one year after issuance and accrue interest at an annual interest
      rate equal to 10% per annum, payable at maturity. The notes are convertible,
      at
      the option of the investor, into shares of Company’s Common Stock at a
      conversion price equal to the lesser of (i) $0.175, or (ii) the ten day trading
      average of shares of the Company’s Common Stock prior to the date of conversion.




During
      the month of July, 2006, the Company issued additional 10% Convertible
      Promissory Notes in the aggregate principal face amount of $120,000 to four
      additional investors (the “$120,000 Notes”). The terms of the notes are
      identical to the $623,000 Notes.




The
      Company has accounted for the above convertible notes and warrants as follows:
      under the provisions of Statement of Financial Accounting Standards No. 133,
      Accounting for Derivative Instruments and Hedging Activities, ("SFAS 133")
      an
      embedded conversion option should be bifurcated and accounted for separately
      as
      a derivative instrument, unless the specific requirements for equity
      classification of the embedded conversion option, as stated in EITF 00-19:
      Accounting for Derivative Financial Instruments Indexed to, and Potentially
      Settled in, a Company's Own Stock (“EITF 00-19”) are met. EITF 00-19 provides
      that an equity classification is appropriate if the settlement criteria set
      forth therein for such classification are met and that the additional conditions
      necessary for equity classification, set forth therein, are also met.  -8-
 **Table
            of Contents**


The
      Company has analyzed the convertible notes and warrants under the $120,000
      Notes
      Financings and has made the following determination:





The
      conversion option and the warrants in respect of $120,000 Notes Financings
      were
      determined to be a liability due to the tainting feature. The conversion option
      and warrants were valued at an amount less than the proceeds of the underlying
      notes. Therefore, the beneficial conversion option of the Notes and the value
      of
      the warrants of $118,920 have been recorded as discount to the convertible
      notes
      with a corresponding credit to a derivative liability. The discount is being
      accreted on a straight-line basis over the maturity period of the
      notes.





The
      company values the conversion option and the warrants under the Black Scholes
      option-pricing model with the following assumptions: an expected life equal
      to
      the contractual term of the conversion option or warrants, as the case may
      be;
      no dividends; a risk free rate of return of 5.0% and volatility of 116%.




During
      the 3 months ended September 30, 2006, six notes totaling $300,000 principal
      amount plus $30,000 in accrued interest of the Bridge II financing were
      converted into 2,200,000 shares of common stock. As a result, the Company
      recorded $150,722 of expense due to the beneficial conversion feature. In order
      to induce the note holders to convert their notes into stock, the Company
      offered certain incentives, which included registration rights for the warrants,
      payment in full of all interest and an extension of the warrant expiration
      term
      by approximately three months. There was no additional beneficial conversion
      feature to the incentives as the actual conversion rate exceeded to beneficial
      conversion rate at issuance. As a result of the extension of the warrant
      expiration date and setting of the conversion rate, the Company recorded an
      additional $42,533 in derivative expense.




EITF
      00-19 requires that the Company revalue the derivative instruments periodically
      to compute the value in connection with changes in the underlying stock price
      and other assumptions, with the change in value recorded as interest expense
      or
      interest income. Upon the earlier of the warrant exercise or their expiration
      date, the warrant liability will be reclassified into shareholders’ equity.
      Until that time, the warrant liability will record at fair value based on the
      methodology described above. Changes in the fair value during each period will
      be recorded as other income or other expense. The Company similarly revalues
      the
      conversion option each reporting period with the change in value recorded as
      interest expense or interest income.





As
      of
      September 30 2006, all of the Bridge II financing warrants issued and conversion
      option were revalued and the liability was adjusted to $226,155.





As
      of
      September 30, 2006 the company values the warrants and conversion option under
      the Black Scholes option-pricing model with the following assumptions: an
      expected life equal to the contractual term of the conversion option or
      warrants, as the case may be; no dividends; a risk free rate of return of 5.0%
      and volatility of 51%.





**NOTE
      6          PREFERRED
      SHARES:**





On
      July
      31, 2006 (the “Initial Closing Date”), the Company agreed to a $4 million equity
      financing by entering into two Series B Convertible Preferred Stock Subscription
      Agreements (each a “Subscription Agreement” and collectively the “Subscription
      Agreements”) with to investors (each a “Purchaser” and collectively, the
“Purchasers”). Each Subscription Agreement provides for the sale by the Company
      to the applicable Purchaser of 117,648 shares of the Company’s Series B
      Convertible Preferred Stock, par value $0.10 per share (the “Series B Preferred
      Stock”), and warrants to purchase an aggregate of 17,647,059 shares of the
      Company’s common stock, in exchange for and in consideration of an aggregate
      investment by each Purchaser of $2 million in cash (each Purchaser’s “Investment
      Amount”), which amount is to be invested by each Purchaser in two equal $1
      million installments, the first of which occurred on the Initial Closing Date
      and the second of which will occur at a subsequent closing to occur on or before
      November 30, 2006 (the “Subsequent Closing”, and the date of such Subsequent
      Closing, the “Subsequent Closing Date”); provided that the Company satisfies the
      necessary condition precedent to the Subsequent Closing as described below.





On
      the
      Initial Closing Date, each Purchaser invested $1 million in the Company in
      return for 58,824 shares of Series B Preferred Stock and two warrants (the
      terms
      of which are more fully described below) to purchase an aggregate of 8,823,530
      shares of common stock. The Subscription Agreements obligate each Purchaser
      to
      invest the remaining $1 million of its Investment Amount (each Purchaser’s
“Additional Investment Amount”) in the Company no later than November 30, 2006,
      subject only to the Company converting at least 80% of the aggregate outstanding
      principal amount evidenced by those certain convertible promissory notes issued
      by the Company between February 2006 and July 31, 2006 (collectively, the
“Promissory Notes”) into shares of common stock prior to the Subsequent Closing
      Date. In exchange for each Purchaser’s  -9-
 **Table
            of Contents**


Additional
      Investment Amount, the Company will issue to each Purchaser an additional 58,824
      shares of Series B Preferred Stock and two additional warrants (the terms of
      which are more fully described below) to purchase an aggregate of an additional
      8,823,529 shares of common stock.  On October 31, 2006, both Purchasers
      agreed to waive any conditions to the Subsequent Closing.




On
      the
      Initial Closing Date the Company granted each Purchaser (i) one warrant to
      purchase 3,750,000 shares of common stock at an exercise price of $0.22 per
      share in the event the warrant is exercised on or prior to July 31, 2007, and
      $0.28 per share in the event the warrant is exercised on or after August 1,
      2007, and (ii) one warrant to purchase 5,073,530 shares of common stock at
      an
      exercise price of $0.28 per share (each an “Initial Warrant”, and collectively,
      the “Initial Warrants”). Assuming that the conditions precedent to the
      Subsequent Closing are satisfied, on the Subsequent Closing Date, the Company
      will grant each Purchaser (i) one additional warrant to purchase 3,750,000
      shares of common stock at an exercise price of $0.22 per share in the event
      the
      warrant is exercised on or prior to July 31, 2007, which increases to $0.28
      per
      share in the event the warrant is exercised on or after August 1, 2007, and
      (ii)
      one additional warrant to purchase 5,073,530 shares of common stock at an
      exercise price of $0.28 per share (each a “Subsequent Warrant”, collectively,
      the “Subsequent Warrants” and collectively with the Initial Warrants, the
“Warrants”). The Warrants expire on January 31, 2009. The exercise prices of the
      Warrants are subject to adjustment in the event of certain dilutive issuances,
      stock dividends, stock splits, share combinations or other similar
      recapitalization events. The Warrants may only be exercised by the payment
      of
      the applicable exercise price to the Company in cash, no cashless exercise
      is
      permitted. The terms of the Initial Warrants and the Subsequent Warrants are
      identical.





The
      Company has evaluated the Series B Preferred to determine if there are any
      embedded derivatives and determined that the Series B Preferred is more akin
      to
      debt than equity as it is not redeemable and carries voting rights. As such
      the
      Series B Preferred is considered perpetual and the option to convert into shares
      of Company’s Common Stock is clearly and closely related to the host contract
      i.e. Series B Preferred and therefore need not be separated. The warrants
      associated with the issuance of some of the Series B Preferred have been
      determined to be equity in accordance with FAS 133 and EITF 00-19, as there
      are
      registration rights and associated liquidated damages. The warrants have been
      valued nieces of $2,000,000 using the Black Scholes method. The value of the
      warrant has been recorded as discount to the Series B Preferred and has been
      charged as dividend expense. The Series B Preferred is evaluated further under
      EITF 98-5: Accounting for Convertible Securities with Beneficial Conversion
      Features or Contingently Adjustable Conversion Ratios, (“EITF 98-5”) and EITF
      00-27: Application of Issue No. 98-5 to Certain Convertible Instruments, (“EITF
      00-27”) to determine if there is any beneficial conversion feature associated
      with the conversion. The Company calculated the beneficial conversion to was
      zero as the conversion price equaled the stock price on the date of the
      agreement.





The
      warrants in respect of the Preferred Stock Financing were determined to be
      a
      liability. The warrants were initially valued in excess of the proceeds of
      the
      Preferred Stock. As such, the value of the warrants was restricted to the amount
      of the proceeds of $2,000,000 and has been recorded as warrant liability and
      is
      valued each quarter. As of September 30, 2006 the warrant liability was
      determined to be $2,110,995.





As
      of
      September 30, 2006 the company values the warrants under the Black Scholes
      option-pricing model with the following assumptions: an expected life equal
      to
      the contractual term of the conversion option or warrants, as the case may
      be;
      no dividends; a risk free rate of return of 4.6% to 4.7% and volatility ranging
      from 121% to 183%.




**NOTE
      7          SHAREHOLDERS’ DEFICIT
      PREPAID EXPENSE:**


The
        Company issued 5,000,000 common shares to a consultant in advance of providing
        services. Since the prepayment was made in Company stock, the prepayment
        balance
        has been presented as a negative to Shareholders' Deficit. As the consulting
        services are rendered, the prepaid balance will be reduced.


-10-
 **Table
            of Contents**




**ITEM
      2           MANAGEMENT'S
      DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**





Cautionary
      Statement Regarding Forward-Looking Information





Under
      the
      Private Securities Litigation Reform Act of 1995, companies are provided with
      a
“safe harbor” for making forward-looking statements about the potential risks
      and rewards of their strategies.  Forward-looking statements often
      include the words “believe”, “expect”, “anticipate”, “intend”, “plan”,
“estimate” or similar expressions.  In this Form 10-QSB,
      forward-looking statements also include:





▪
             statements about our business
      plans;


▪
             statements about the potential for the
      development, regulatory approval and public acceptance of new
      services;


▪
             estimates of future financial
      performance;


▪
             predictions of national or
      international economic, political or market conditions;


▪
             statements regarding other factors
      that could affect our future operations or financial position; and


▪
             other statements that are not matters of
      historical fact.





These
      statements may be found under “Management’s Discussion and Analysis or Plan of
      Operation” as well as in this Form 10-QSB. Our ability to achieve our goals
      depends on many known and unknown risks and uncertainties, including changes
      in
      general economic and business conditions.  These factors could cause
      our actual performance and results to differ materially from those described
      or
      implied in forward-looking statements.





These
      forward looking statements speak only as of the date of this Form
      10-QSB.  We believe it is in the best interest of our investors to use
      forward-looking statements in discussing future events.  However, we
      are not required to, and you should not rely on us to, revise or update these
      statements or any factors that may materially affect actual results, whether
      as
      a result of new information, future events or otherwise.  You should
      carefully review the risk factors described in this Form 10-QSB and also review
      the other documents we file from time to time with the Securities and Exchange
      Commission (“SEC”).





Review
      by
      the Company’s Auditors





These
      statements have not been reviewed by the Company’s auditors.





Results
      of Operations





Three
      Months Ended September 30, 2006 and 2005





For
      the
      three months ended September 30, 2006 the Company, had revenue of $1,227 and
      incurred costs of sales of $14,823 and general and administrative expenses
      of
      $1,169,893. Included in general and administrative expenses is a non-cash charge
      of $854,788, representing the value of common shares issued for services
      provided by consultants. This resulted in a net loss of $3,282,753, as compared
      with the three months ended September 30, 2005 in which the Company had revenue
      of $22,620, incurred costs of sales of $12,074 and general and administrative
      expenses of $969,292 (including a non-cash charge of $779,539 representing
      the
      value of common shares issued for services provided by consultants), resulting
      in a net loss also of $958,746.  The primary reason for the higher
      amount of general and administrative expenses during the three months ending
      September 30, 2006 is due to expenditures incurred in the marketing of our
      product.





Financial
      Condition, Liquidity and Capital Resources





The
      Company has negative working capital as of September 30, 2006 of
      $3,241,634.  The Company retains consultants who are also significant
      stockholders of the Company to perform development and public company reporting
      activities in exchange for stock of the Company.  At June 30, 2006, we
      had a working capital deficiency of $2,662,558.  Our continuation as a
      going concern will require that we raise significant additional
      capital.





Absent
      continued issuance of common stock for services by these consultants and
      continued advances by stockholders of the Company, the Company cannot
      manufacture its golf shaft product line or market golf products based on its
      technologies.  The Company is actively searching for capital to
      implement its business plans, supply the Company with products for distribution,
      and develop collateral materials for its potential customer
      base.  There can be no assurance such capital will be raised on terms
      acceptable to the Company and if this capital is raised, it, may cause
      significant dilution to the Company’s stockholders.


-11-
 **Table
          of Contents**
  Dividend
        Policy





The
      Company has not declared or paid any cash dividends on its common stock since
      its inception and does not anticipate the declaration or payment of cash
      dividends in the foreseeable future.  The Company intends to retain
      earnings, if any, to finance the development and expansion of its
      business.  The Company’s future dividend policy will be subject to the
      discretion of the Board of Directors and will be contingent upon future
      earnings, if any, the Company's financial condition, capital requirements,
      general business conditions and other factors.  Therefore, there can
      be no assurance that dividends of any kind will ever be paid.





Effect
      of
      Inflation





Management
      believes that inflation has not had a material effect on its operations for
      the
      periods presented.





Risk
      Factors





*We
      have a limited operating history and a history of substantial operating losses
      and we may not be able to continue our business.*




We
      have a
      history of substantial operating losses and an accumulated deficit of
      $20,475,231 as of September 30, 2006 ($17,216,576 as of June 30, 2006). We
      have
      historically experienced cash flow difficulties primarily because our expenses
      have exceeded our revenues. We expect to incur additional operating losses
      for
      the immediate near future. These factors, among others, raise significant doubt
      about our ability to continue as a going concern. If we are unable to generate
      sufficient revenue from our operations to pay expenses or we are unable to
      obtain additional financing on commercially reasonable terms, our business,
      financial condition and results of operations will be materially and adversely
      affected.




*We
      will need additional financing in order to continue our operations which we
      may
      not be able to raise.*




We
      will
      require additional capital to finance our future operations.  We can
      provide no assurance that we will obtain additional financing sufficient to
      meet
      our future needs on commercially reasonable terms or otherwise.  If we
      are unable to obtain the necessary financing, our business, operating results
      and financial condition will be materially and adversely affected.




*We
      have no employees and our success is dependent on our ability to retain and
      attract consultants to operate our business and there is no assurance that
      we
      can do so.*




As
      of
      September 30, 2006, as discussed above, we have no employees and utilize the
      services of consultants.  Our consultants are bound by non-compete
      provisions; however, they are not otherwise prohibited from terminating their
      consulting relationship with the Company. The loss of the knowledge and
      management and industry expertise of any of these key consultants could have
      a
      material adverse impact on our future prospects, in particular Dr. Hearn and
      David Sindalovsky, who have played a key role in developing scandium technology
      for golf applications. In addition, once we are sufficiently capitalized, we
      will need to recruit new executive managers and hire employees to help us
      execute our business strategy and help manage the growth of our business.
      Competition for executive and other skilled personnel in the golf equipment
      industry is intense, and we may not be successful in attracting and retaining
      such personnel. Our business could suffer if we were unable to attract and
      retain additional highly skilled personnel or if we were to lose any key
      personnel and not be able to find appropriate replacements in a timely
      manner.




*Our
      performance depends on market acceptance of our products and we cannot be sure
      that our products are commercially viable.*




We
      expect
      to derive a substantial portion of our future revenues from the sales of E21
      alloy golf shafts that are only now entering the initial marketing phase.
      Although we believe our products and technologies will be commercially viable,
      these are new and untested products.  If markets for our products fail
      to develop further, develop more slowly than expected or are subject to
      substantial competition, our business, financial condition and results of
      operations will be materially and adversely affected.




*We
      depend on strategic marketing relationships and if we fail to maintain or
      establish them, our business plan may not succeed.*




We
      expect
      our future marketing efforts will focus in part on developing business
      relationships with distributors that will market our products to their
      customers. The success of our business depends on selling our products and
      technologies to a large number of distributors and retail customers. Our
      inability to enter into and retain strategic relationships, or the inability
      to
      effectively market our products, could materially and adversely affect our
      business, operating results and financial condition.




*Competition
      from traditional golf equipment providers may increase and we may not be able
      to
      adequately compete.*




The
      market for golf shafts is highly competitive.  There are a number of
      other established providers that have greater resources, including more
      extensive research and development, marketing and capital than we do and also
      have greater name recognition and market presence.  These competitors
      could reduce their prices and thereby decrease the demand for our products
      and
      technologies.  These competitors may lower their  -12-
 **Table
            of Contents**


prices
      to
      compete with us.  We expect competition to intensify in the future,
      which could also result in price reductions, fewer customer and lower gross
      margins.




*Rapidly
      changing technology and substantial competition may adversely affect our
      business.*




Our
      business is subject to rapid changes in technology.  We can provide no
      assurances that research and development by competitors will not render our
      technology obsolete or uncompetitive.  We compete with a number of
      companies that have technologies and products similar to those offered by us
      and
      have greater resources, including more extensive research and development,
      marketing and capital than we do.  We can provide no assurances that
      we will be successful in marketing our existing products and developing and
      marketing new products in such a manner as to be effective against our
      competition.  If our technology is rendered obsolete or we are unable
      to compete effectively, our business, operating results and financial condition
      will be materially and adversely affected.




*Litigation
      concerning intellectual property could adversely affect our
      business.*




We
      rely
      on a combination of trade secrets, trademark law, contractual provisions,
      confidentiality agreements and certain technology and security measures to
      protect our trademarks, license, proprietary technology and
      know-how.  However, we can provide no assurance that competitors will
      not infringe upon our rights in our intellectual property or that competitors
      will not similarly make claims against us for infringement.  If we are
      required to be involved in litigation involving intellectual property rights,
      our business, operating results and financial condition will be materially
      and
      adversely affected.




It
      is
      possible that third parties might claim infringement by us with respect to
      past,
      current or future technologies.  We expect that participants in our
      markets will increasingly be subject to infringement claims as the number of
      services and competitors in our industry grows.  Any claims, whether
      meritorious or not, could be time-consuming, result in costly litigation and
      could cause service upgrade delays or require us to enter into royalty or
      licensing agreements.  These royalty or licensing agreements might not
      be available on commercially reasonable terms or at all.




*Defects
      in our products may adversely affect our business.*




Complex
      technologies such as the technologies developed by us may contain defects when
      introduced and also when updates and new products are released. Our introduction
      of technology with defects or quality problems may result in adverse publicity,
      product returns, reduced orders, uncollectible or delayed accounts receivable,
      product redevelopment costs, loss of or delay in market acceptance of our
      products or claims by customers or others against us. Such problems or claims
      may have a material and adverse effect on our business, financial condition
      and
      results of operations.




*The
      inability to obtain a sufficient amount of scandium or of scandium alloy would
      adversely affect our business.*




Although
      we currently believe that we will continue to be able to have access to
      sufficient amounts of scandium or scandium alloy at feasible prices, there
      is no
      assurance of this, and any failure to be able to obtain a sufficient supply
      of
      scandium at reasonable prices would have a material adverse affect on our
      business.




*The
      large number of shares eligible for public sale could cause our stock price
      to
      decline.*




The
      market price of our common stock could decline as a result of the resale of
      the
      shares of common stock issuable upon conversion of our Series A Preferred Stock,
      Series B Preferred Stock and outstanding convertible promissory
      notes  and
      the
      exercise of outstanding warrants or the perception that these sales could occur.
      These sales also might make it more difficult for us to sell equity securities
      in the future at a time and price that we deem appropriate. The
      conversion of these securities into common stock will also result in substantial
      dilution of the interests of our current stockholders.




*Our
      stock price can be extremely volatile.*




Our
      common stock is traded on the OTC Bulletin Board. There can be no assurance
      that
      an active public market will continue for the common stock, or that the market
      price for the common stock will not decline below its current price. Such price
      may be influenced by many factors, including, but not limited to, investor
      perception of us and our industry and general economic and market conditions.
      The trading price of the common stock could be subject to wide fluctuations
      in
      response to announcements of our business developments or our competitors,
      quarterly variations in operating results, and other events or factors. In
      addition, stock markets have experienced extreme price volatility in recent
      years. This volatility has had a substantial effect on the market prices of
      companies, at times for reasons unrelated to their operating performance. Such
      broad market fluctuations may adversely affect the price of our common
      stock.


-13-
 **Table
          of Contents**




*Trading
      on the OTC Bulletin Board may be sporadic because it is not a stock exchange,
      and stockholders may have difficulty reselling their* ****** *shares* .




Our
      common stock is quoted on the OTC Bulletin Board. Trading in stock quoted on
      the
      OTC Bulletin Board is often thin and characterized by wide fluctuations in
      trading prices, due to many factors that may have little to do with our
      operations or business prospects. Moreover, the OTC Bulletin Board is not a
      stock exchange, and trading of securities on the OTC Bulletin Board is often
      more sporadic than the trading of securities listed on the Nasdaq SmallCap.




*If
      we
      fail to remain current on our reporting requirements, we could be removed from
      the OTC Bulletin Board which would limit the ability of broker-dealers to sell
      our securities and the ability of stockholders to sell their securities in
      the
      secondary market.*




Companies
      trading on the OTC Bulletin Board, such as us, must be reporting issuers under
      Section 12 of the Securities Exchange Act of 1934, as amended, and must be
      current in their reports under Section 13, in order to maintain price quotation
      privileges on the OTC Bulletin Board. If we fail to remain current on our
      reporting requirements, shares of our common stock could be removed from the
      OTC
      Bulletin Board. As a result, the market liquidity for our securities could
      be
      severely adversely affected by limiting the ability of broker-dealers to sell
      our securities and the ability of stockholders to sell their securities in
      the
      secondary market.




*Our
      common stock is subject to the “penny stock” rules of the sec and the trading
      market in our securities is limited, which makes transactions in our stock
      cumbersome and may reduce the value of an investment in our
      stock.*




The
      Securities and Exchange Commission has adopted Rule 15g-9 which establishes
      the
      definition of a “penny stock,” for the purposes relevant to us, as any equity
      security that has a market price of less than $5.00 per share or with an
      exercise price of less than $5.00 per share, subject to certain exceptions.
      For
      any transaction involving a penny stock, unless exempt, the rules require that
      a
      broker or dealer approve a person's account for transactions in penny stocks
      and
      the broker or dealer receive from the investor a written agreement to the
      transaction, setting forth the identity and quantity of the penny stock to
      be
      purchased.




In
      order
      to approve a person's account for transactions in penny stocks, the broker
      or
      dealer must, obtain financial information and investment experience objectives
      of the person and make a reasonable determination that the transactions in
      penny
      stocks are suitable for that person and the person has sufficient knowledge
      and
      experience in financial matters to be capable of evaluating the risks of
      transactions in penny stocks.




The
      broker or dealer must also deliver, prior to any transaction in a penny stock,
      a
      disclosure schedule prescribed by the Commission relating to the penny stock
      market, which, in highlight form sets forth the basis on which the broker or
      dealer made the suitability determination and that the broker or dealer received
      a signed, written agreement from the investor prior to the
      transaction.




Generally,
      brokers may be less willing to execute transactions in securities subject to
      the
“penny stock” rules. This may make it more difficult for investors to dispose of
      our common stock and cause a decline in the market value of our
      stock.




Disclosure
      also has to be made about the risks of investing in penny stocks in both public
      offerings and in secondary trading and about the commissions payable to both
      the
      broker-dealer and the registered representative, current quotations for the
      securities and the rights and remedies available to an investor in cases of
      fraud in penny stock transactions. Finally, monthly statements have to be sent
      disclosing recent price information for the penny stock held in the account
      and
      information on the limited market in penny stocks.




*We
      do
      not expect to pay dividends on our common stock.*




We
      have
      not declared dividends on our common stock since our incorporation and we have
      no present intention of paying dividends on our common stock.




**MANY
      OF THESE RISKS AND UNCERTAINTIES ARE OUTSIDE OF OUR CONTROL AND ARE DIFFICULT
      FOR US TO FORECAST. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED
      OR
      IMPLIED IN THE FORWARD-LOOKING STATEMENTS.**


-14-
 **Table
          of Contents**




**ITEM
      3           CONTROLS AND
      PROCEDURES:**





(a)
      Evaluation of disclosure controls and procedures.  Management,
      including our Chief Executive Officer and Principal Financial Officer, carried
      out an evaluation of the effectiveness of our disclosure controls and procedures
      as of the end of the period covered by this quarterly report.  Based
      on this evaluation, our Chief Executive Officer and Principal Financial Officer
      concluded that our disclosure controls and procedures were effective to provide
      a reasonable level of assurance that the information required to be disclosed
      in
      the reports filed or submitted by us under the Securities Exchange Act of 1934
      is recorded, processed, summarized and reported within the requisite time
      periods.





(b)
      Changes in internal control over financial reporting.  There were no
      changes in our internal control over financial reporting that occurred during
      the last fiscal quarter that have materially affected, or are reasonably likely
      to materially affect, our internal control over financial
      reporting.




**PART
      II - OTHER INFORMATION**




**Item
      1             LEGAL
      PROCEEDINGS**





None




**Item
      2             UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**





During
      the three months ended September 30, 2006 the Company issued 9,242,233 shares
      of
      its common stock to consultants for services rendered by them and recorded
      additional expense of $1,431,580.  The Company also issued 117,586
      shares of its Preferred B Stock shares in exchange for $2 million in financing
      as well as the issuance of warrants (See Note 6 above). The shares and warrants
      were issued in reliance on exemptions from registration pursuant to Section
      4(2)
      of the Securities Act of 1933, as amended.




**Item
      3             DEFAULT
      UPON SENIOR SECURITIES**





None




**Item
      4             SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS**





None




**Item
      5             OTHER
      INFORMATION**





None




**Item
      6             EXHIBITS**




Exhibit
                No.
            Exhibit
                Description31.1
            Certification
                Pursuant to Section 302 of the Sarbanes Oxley Act of
                2002





31.2
            Certification
                Pursuant to Section 302 of the Sarbanes Oxley Act of
                2002





32.1
            Certification
                Pursuant to Section 906 of the Sarbanes Oxley Act of
                2002




-15-
 **Table
          of Contents**
  **SIGNATURE**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, as amended, the Registrant has duly caused this report to be signed on
      its
      behalf by the undersigned, thereunto duly authorized.




Element
                21 Golf CompanyNovember
                20, 2006
            By:
            /s/
                 Nataliya HearnNataliya
                Hearn, Ph.D.President
                and DirectorNovember
                20, 2006
            By:
            /s/ John
                GrippoChief
                Financial Officer




-16-