**U.
      S. Securities and Exchange Commission**


**Washington,
      D.C. 20549**




**FORM
      10-KSB**




x
            ANNUAL
                REPORTUNDER
                SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934





For
      the
      fiscal yea r
      ended
      June 30, 2005





o
            REPORT
                UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934





For
      the
      transition period from _________________ to __________________




Commission
      File No. 000-15260




**Element
      21 Golf Company**


(Name
      of
      Small Business Issuer in its Charter)




Delaware
            
            88-0218411(State
                or Other Jurisdiction of incorporation or
                organization)
            
            (I.R.S.
                Employer I.D. No.)


**207
      Queens Quay W. #455, Toronto, Ontario, Canada, M5J 2A7**


(Address
      of Principal Executive Offices)





Registrant’s
      Telephone Number: **800-710-2021**





Not
      Applicable


(Former
      name and former address, if chang ed
      since
      last Report)


200
      Perimeter Road, Manchester, NH 03103


Securities
      Registered under Section 12(b) of the Exchange Act: None.





Securities
      Registered under Section 12( g)
      of the
      Exchange Act: Common Stock, one-cent ($0.01) Par Value





Check
      whether the Issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 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
o   No
x




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





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





State
      Issuer’s revenues for its most recent fiscal year: June 30, 2005 =
      $65,633.





State
      the
      aggregate market value of the voting and non-voting common stock held by
      non-affiliates computed by reference to the price at which the stock was sold,
      or the average bid and asked prices of such stock, as of a specified date within
      the past 60 days. As of October 5, 2005 there were approximately 83,073,582
      shares of our common voting stock held by non-affiliates having a market value
      of **** $6,645,887 **** on
      such
      date. Without asserting that any director or executive officer of the issuer,
      or
      the beneficial owner of more than five percent of the issuer’s common stock, is
      an affiliate, the shares of which they are the beneficial owners have been
      deemed to be owned by affiliates solely for this calculation.





State
      the
      number of outstanding shares of each of the Registrant’s classes of common
      equity, as of the latest practicable date. As of October 5, 2005, there were
      90,924,046 shares of common stock of the Issuer outstanding.











**Element
      21 Golf Company**




**10-KSB
      for the Year Ended June 30, 2005**





**Table
      of Contents**




PART
                  I
              
              1ITEM
                  1.
              DESCRIPTION
                  OF BUSINESS
              1ITEM
                  2.
              DESCRIPTION
                  OF PROPERTY
              14ITEM
                  3.
              LEGAL
                  PROCEEDINGS
              14ITEM
                  4.
              SUBMISSION
                  OF MATTERS TO A VOTE OF SECURITY HOLDERS
              15PART
                  II
              
              15ITEM
                  5.
              MARKET
                  FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              15ITEM
                  6.
              MANAGEMENT’S
                  DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
              17ITEM
                  7.
              FINANCIAL
                  STATEMENTS
              22ITEM
                  8.
              CHANGES
                  IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                  DISCLOSURE
              22ITEM
                  8A
              CONTROLS
                  AND PROCEDURES
              22ITEM
                  8B
              OTHER
                  INFORMATION
              22PART
                  III
              
              22ITEM
                  9.
              DIRECTORS,
                  EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                  SECTION
                  16(a) OF THE EXCHANGE ACT
              22ITEM
                  10.
              EXECUTIVE
                  COMPENSATION
              25ITEM
                  11.
              SECURITY
                  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
              26ITEM
                  12.
              CERTAIN
                  RELATIONSHIPS AND RELATED TRANSACTIONS
              27ITEM
                  13.
              EXHIBITS
              28ITEM
                  14.
              PRINCIPAL
                  ACCOUNTANT FEES AND SERVICES
              28Signatures
              
              31Financial
                  Statements
              
              F-1










**PART
      I**




**ITEM
                1.**
            **DESCRIPTION
                OF BUSINESS**




**B** **usiness
      Development.**




Element
      21 Golf Company (the “Company,”“E21,”“we,”“us” or terms of similar meaning) was
      originally formed as OIA, Inc., a Delaware corporation, in 1986. In 1992, the
      Company changed its name to Biorelease Corp., and was e ngaged
      in
      the business of biotechnology from 1992 through 1995. From mid-1995 through
      September 2001, the Company sponsored a number of early-stage
      ventures .
      I n
      June
      2001, the Company changed its name from Biorelease Corp. to BRL Holdings,
      Inc.




Effective
      November 9, 2001, we acquired 100% of the outstanding common stock of AssureTec
      Systems, Inc., a Delaware corporation (“Systems”), in a stock-for-stock
      transaction. We issued 6,354,000 shares of restricted common stock and converted
      outstanding options to acquire 4,750,000 shares of Systems common stock into
      options to acquire 4,750,000 shares of the Company’s common stock.




On
      April
      1, 2002, we exchanged 2,852,000 shares of Systems common stock that had been
      issued in connection with the Systems acquisition for
      5,704,000 shares of our common stock , from
      substantially all the founders and consultants from whom our interest in Systems
      was initially acquired. In addition, options to acquire 4,750,000 shares of
      our
      common stock then held by these individuals were cancelled. As a result of
      these
      transactions and the issuance of additional shares of Systems to employees
      upon
      the exercise of stock options, our ownership of Systems decreased to 34.2%
      of
      Systems as of June 30, 2003.




On
      June
      12, 2002 we incorporated Tech Ventures, Inc. (now named AssureTec Holdings,
      Inc.
      or “AssureTec”) and transferred all our assets and liabilities to AssureTec in
      exchange for 100% ownership of AssureTec common stock. At that time, our only
      business was the business of AssureTec.




Effective
      October 3, 2002, we acquired 100% of the outstanding common stock of Element
      21
      Golf Company, a Delaware corporation (“Element 21”), in exchange
      for 42,472,420 restricted shares of our common stock (“the
      Acquisition”). We also converted options
      to acquire 6,432,000 shares of Element 21 common stock into options to acquire
      6,432,000 shares of our common stock. This Acquisition has been accounted for
      as
      a “reverse” acquisition using the purchase method of accounting, as the
      shareholders of Element 21 owned
      a
      majority of the outstanding stock of our
      Company immediately following the Acquisition. Following the Acquisition, we
      changed our name to Element 21 Golf Company.




We
      now
      own approximately 5.1% of the issued and outstanding stock of AssureTec, which,
      as a result of a share exchange with the prior stockholders of Systems, now
      owns
      100% of the outstanding stock of Systems. We have agreed to distribute these
      shares on a pro rata basis to our shareholders of record as of October 4, 2002
      (excluding shareholders who received shares of our common stock in connection
      with the Acquisition). We anticipate that this distribution will occur as soon
      as possible after all appropriate documentation has been prepared and filed
      with
      the Securities and Exchange Commission.




In
      October 2003, the Company issued 12,287,082 shares to consultants in exchange
      for liabilities owed.




In
      May
      2004, the Company issued 20,460,010 shares of the Company’s common stock to
      consultants in exchange for liabilities owed in the amount of $1,841,401. This
      issuance increased the outstanding shares of the Company from 49,906,220 at
      June
      30, 2003 to 82,653,312 at June 30, 2004.




-1-


During
      the fiscal year of 2005, the Company issued an aggregate of 4,833,929 shares
      of
      common stock to consultants in exchange for liabilities owed in the amount
      of
      $318,238.




**Business
      of the Issuer**




Element
      21 was formed on September 18, 2002 to acquire partially-developed golf
      technology and to design, develop and bring to market scandium alloy golf club
      shafts and golf heads. Scandium is Element No. 21 in the Periodic Table of
      Elements. Scandium alloys are believed to exhibit properties that out-perform
      titanium with a higher strength-to-weight ratio of up to 25% and a specific
      density advantage of 55%. Scandium alloys are lighter, stronger and more cost
      effective than titanium. This advanced metal technology was originally developed
      in the former Soviet Union for military applications during the 1980s. Scandium
      alloys have been used in intercontinental ballistic missiles, jet aircraft,
      the
      Mir space station and most recently, in the International Space Station. The
      Company plans to commercialize Scandium’s use in golf shafts and golf heads.




In
      September, 2002, Element 21 acquired from Dr. Nataliya Hearn, our current Chief
      Executive Officer, and David Sindalovsky, a consultant to the Company (the
      “Assignors”), the exclusive right to use, produce and sell a specified range of
      scandium metal alloy for golf club shafts and golf heads. Although these rights
      do not cover all mixes of scandium metal alloy, the Company believes that any
      scandium alloy outside the range of its patent-protected rights cannot be used
      to produce golf club shafts or heads in an economically feasible manner. Upon
      completion of the Acquisition, the previous officers and directors of the
      Company resigned and Dr. Hearn became the Company’s President/ CEO and a
      Director and Jim Morin and Gerald Enloe also became Directors. Mr. Morin also
      serves as Vice President and Principal Financial Officer of the
      Company.




In
      March
      2005, the Company began marketing full iron sets to retailers and golf pro
      shops. In April 2005, the Company entered into an agreement with The GolfWorks
      for the sale of the Company’s scandium metal shafts for irons, utility clubs and
      wedges. The GolfWorks has been providing club makers and other golf equipment
      experts with a complete complement of proprietary club head designs, and a
      full
      selection of brand name shafts and grips for more than 25 years.




The
      Company operates solely through strategic consultants and without full-time
      employees. Consultant Nataliya Hearn, PhD, who is our CEO and President, is
      based in Toronto, Canada, and oversees the Company’s engineering, alloy supply
      and production. Consultants Jim Morin, who is also our Vice-President, Secretary
      and Treasurer, and Frank Gojny, both of whom
      are based in
      California, oversee the development, testing and USGA approval for the golf
      products. David Sindalovsky is another consultant responsible for supervising
      the engineering and design of the golf club components. Howard
      Butler, PhD, is one of the world’s leading golf designers. Dr. Butler has done
      extensive design work on the various types of clubs incorporating the Company’s
      advanced scandium technology as well as laboratory testing and informal player
      testing and assessments. Stephen Meldrum has 17 years senior executive
      experience in international sales and licensing, and is handling investor
      relations for the Company. Additionally, several sales executives have been
      retained for business development and building retail distribution channels
      are
      consulting. Professional player relations are handled by Jack Curry and Andy
      Harris.




The
      Company believes that this structure is advantageous because it allows the
      Company to avoid having large marketing, administrative and development
      organizations in order to be responsive to fluctuations in the marketplace
      that
      have plagued other start-up golf companies.




The
      Company has a strategic supply agreement with an affiliate of Kamensk-Uralsky
      Metallurgical Works Joint Stock Company, located in a number of locations in
      Russia, also known as OAO KUMZ. Under this agreement, concentrated scandium
      will
      be produced to the specification of the Company by the KUMZ affiliate. KUMZ
      will
      also transfer the latest innovations in scandium alloys to the Company as they
      become available. KUMZ is a well-established, diversified producer of aluminum,
      aluminum alloys and products for aerospace, shipbuilding, automotive, and other
      industries. KUMZ is also the world’s largest facility specializing in scandium
      alloy products **.** Work in
      scandium initially began 20-25 years ago with the development of scandium
      aerospace alloys for fighter aircraft.




-2-


The
      second strategic partner of the Company is Yunan Aluminum, which is in the
      business of manufacturing precision tubing for outdoor recreation and sporting
      markets. Yunan Aluminum was established in 1979 in South Korea, and now
      manufactures, for parties other than the Company, about 80,000 pounds per month
      of high quality products made of high strength aluminum alloys. In August 2003
      the company reached an agreement with Yunan Aluminum to produce scandium
      golf shafts and club components exclusively for the Company in South Korea.




Pan
      Osprey, a Chinese manufacturer of OEM golf equipment specializing in high-end
      golf clubs manufactured under license for some of the leading brand names in
      golf, will manufacture a full line of clubs with proprietary designs from
      Element 21's design labs when the Company begins commercial production of its
      clubs, of which there can be no assurance. The planned lineup includes drivers,
      fairway woods, a full range of irons, wedges, hybrid clubs, and putters.
      Pursuant to the Company’s exclusive manufacturing agreement with Pan Osprey, the
      Company will provide the raw materials from which Pan Osprey will manufacture
      a
      full line of clubs under the E21 brand name.




**Golf
      Products**




We
      believe that scandium golf products have outstanding potential in the industry
      based on several factors:




·
            Results
                of player and robotic testing indicate scandium’s improved performance
                over leading titanium clubs, and


·
            Improved
                distance and less dispersion, allowing longer more accurate results,
                which
                are impossible to achieve with current metals.




The
      interest in scandium has been supported by several performance and marketing
      features:




·
            Scandium
                alloys strategically incorporated into the production of metal woods,
                irons and putters can result in heads with a larger “sweet spot” for more
                consistency and accuracy;


·
            If
                increased club head size is not required, the reduced density and
                improved
                strength allows flexibility in placing perimeter weighting that can
                affect
                the trajectory (flight path) of the
                ball;


·
            Scandium
                alloys are softer than titanium providing superior feel and workability
                for the player;


·
            Scandium
                alloys are lower in cost and easier to fabricate than
                titanium;


·
            The
                specific yield strength advantage of scandium alloys over steel and
                high-end aluminum alloys enables the design of shafts at substantially
                reduced weight and higher
                performance;


·
            The
                homogeneous nature of scandium alloys allow for consistent shaft
                production, a problem inherent with graphite
                shafts.




**Golf
      Shafts**




Scandium
      golf shafts provide the light weight and flexibility of graphite with the
      favorable playing characteristics of steel. Steel dominates the shaft market
      for
      irons, while graphite is the most popular shaft material for metal woods.
      Graphite shafts are generally more expensive than steel, and golfers often
      experience inconsistency from club to club due to reproducibility problems
      inherent with graphite. The Company has produced prototype scandium shafts
      with
      several flex strengths that have been tested initially with irons and accepted
      as complying with the rules of golf by the USGA.




-3-


We
      believe the E21 scandium metal alloy shafts show improved performance in a
      number of respects to graphite and stainless steel shafts. Scandium's inherent
      metallurgical properties combined with a proprietary 25-step seamless production
      process results in a shaft that is nearly perfectly symmetrical, unlike graphite
      and stainless steel shafts. Many golf customers do not realize that steel shafts
      are welded creating a seam or spine that is not visible to the eye. The
      difference in the tube wall thickness at the point of welding creates an
      imbalance, which affects the consistency of shots. Similarly, the production
      process for graphite shafts also results in inconsistencies through the shaft
      with similar associated problems. The Company believes that scandium provides
      greater accuracy and improved consistency from club to club.




The
      tests
      conducted by Golf Labs Inc. on behalf of the Company showed remarkable 10-20
      yard distance improvement when scandium shafts are tested against the best
      Graffaloy graphite and True Temper steel shafts. Of
      even
      greater significance were the test results that showed superior accuracy
      afforded by this new scandium technology. The dispersion pattern of shots hit
      with a robotic arm yielded a dispersion factor that was 250% smaller than
      popular steel and graphite shafts, when measured by the total square footage
      of
      the footprint of hit balls and their dispersion off-center. Although testing
      results cannot predict actual performance with certainty, the Company believes
      that these test results are meaningful.




Concurrent
      with the development of the overall shaft design, the Company has developed
      a
      shock absorbing system under the trademark ShockBlok TM which
      redirects shaft vibration back into the club head, generating an added energy
      kick for extra distance and reducing the amount of vibration transfer to the
      player's hands. Golfing
      has a negative effect on the body. Shock energy transferred to the player’s
      hands during a round of golf creates fatigue. For frequent golfers, this can
      lead to stress injuries to a player’s hands, wrist, elbows or shoulders, much
      like ‘tennis elbow’. The Company believes, based on test results only, that
      scandium improves shock absorption by up to 300%. The Company also believes
      that
      most users of its shafts would immediately notice the superior shock absorption
      and that scandium also contributes to a measurably superior feel as compared
      with steel and graphite clubs.




According
      to an analysis commissioned by a consultant to the Company, Dr. Howard Butler,
      along with two orthopedic physicians, during a typical round of golf, the extra
      energy transmitted to the hands of a golfer using steel shafts is 30.60
      foot-pounds of force. This
      can
      significantly reduce fatigue during the course of the day, as well as reduce
      the
      incidence of shock related injury over the long-term.




The
      market for golf shafts was estimated by Golfdatatech to be close to 30 million
      units in the US and 60 million units worldwide in 1999. Golfdatatech estimates
      that the market size of the high performance premium shafts that the Company’s
      scandium shaft will initially be targeting represents approximately 27 million
      units worldwide.




The
      Company currently markets shafts designed for irons through select channels.
      Design and engineering of shafts for all other club heads (drivers, wedges,
      hybrids and putters) is complete and prototypes are currently being
      tested.




**Clubhead
      Designs and Features**




The
      Company has completed the design and engineering process for a full line of
      clubs, from drivers to putters. Prototypes of these various clubs are now
      undergoing testing, and production tooling is well underway. The golf shafts
      have undergone lab testing, including testing with a robotic arm at
      Golf
      Laboratories, Inc. in San Diego. These
      tests conducted to date have demonstrated favorable results for our scandium
      clubs as compared with competitive products, including greater distance,
      significant improvements in accuracy and consistency, and the “feel” of the
      clubs themselves. Although test results cannot predict actual performance
      results, the Company believes these test results are meaningful.




-4-


The
      E21
      driver has one of the largest face areas of any driver on the market, and
      because the head and shaft are
      both
      made of the same patented scandium alloy, the Company believes that players
      should experience True Contact SignatureTM at impact with the ball. The energy
      passes from the head to the shaft at the same frequency providing the golfer
      with a fully “harmonized” golf club. Shots are consistent both “off the
      centerline” and “along the centerline” giving the golfer a very tight, concise
      landing pattern resulting in a high level of control and repeatability. The
      scandium alloy club head also creates less ball spin at the point of impact
      for
      greater distance.




The
      Company believes its club will be distinctly recognizable due to its unique
      design features that include a louvered effect on the crown plate of the club.
      These features create a corrugated effect that provides additional strength
      to
      the clubhead design and allows more freedom to move weight to strategic points
      within the sole of the clubhead to improve distance and accuracy. As with any
      object moving at a high speed, louvers provide aerodynamic stabilization
      benefits.




The
      Company used advanced proprietary software to optimize the head design, which
      includes a bulge and roll and the center of gravity. Additional software was
      then used to optimize the performance of the clubhead to E21’s unique scandium
      metal alloy shafts. A number of patents on the special design features of the
      club have been filed.




The
      Company’s Low Gravity Logic TM irons
      have a cavity back design with a hollow body filled with a patented high rebound
      aerospace polymer insert, that transfers more energy to the ball for livelier
      performance and maintains a low center of gravity. The head geometry is designed
      to leverage maximum performance from E21’s patented new scandium metal alloy
      shafts. The clubs also feature variable face thickness with over six square
      inches of playing surface to maximize the sweet spot of the clubface. A large
      sole plate helps the player avoid hitting the ball fat. The mass of the head
      is
      closely aligned with the launch angles delivered by the shaft during contact
      with the ball. To maximize this benefit, the crown is back slanted by 15°.




The
      clubs
      are designed to allow professional clubmakers and PGA tour players to fine-tune
      the club to their unique preferences. This is accomplished by removing the
      E21
      insignia on the back of the club, gaining access to a  tubular
      weight port to add
      up to 28 grams of additional weight to the clubhead while maintaining its low
      center of gravity.




The
      E21
      line of wedges includes clubs with 52 degree, 56 degree and 60 degree lofts
      that
      will also feature the revolutionary new Eagle One shafts made from E21's new
      Scandium alloy.




The
      wedges use E21’s patented new Contact Signature Tuned system (CST
      System TM )
      that
      uses advanced proprietary software to calculate and match the club head
      performance to E21’s advanced scandium metal alloy shafts in order to provide
      enhanced head responsiveness. Through
      an optimum balance of launch angle and spin rate, E21 has developed what it
      believes are easy-to-hit wedges that provide improved feel, accuracy and
      consistency from club to club. These wedges with the E21 shafts will offer
      players a greater spin rate with a higher launch angle enabling them to stop
      the
      ball on the green.




-5-


The
      muscle back design, with Twin Peaks elongated on the center axis of the club
      back, offers a solid feel with an extremely consistent ball flight and
      trajectory. This peaked muscle back design actually raises the center of gravity
      behind the sweet spot for more carry distance on center hit shots. This design
      acts to focus the transfer of energy into the sweet spot of the club face.
      An
      additional benefit from the element gated Twin Peaks design is its ability
      to
      track straight through sand or turf by controlling the displacement of the
      ground beneath the club as contact is being made with the golf
      ball.




The
      weighted sole plate affords the capability to cut through even the worst rough,
      and get the ball up in the air. Simultaneously, the
      leading edge  radius
      insures a true contact signature with the ball even from a poor
      lie.




Element
      21’s first putter is a traditional and proven Newport design. The new putter
      incorporates the advanced properties of scandium metal alloy in both the shaft
      and head of the new putter. The putter head incorporates a scandium metal alloy
      insert, which is milled for superior contact with the ball. Scandium’s superior
      strength to weight ratio over existing golf metals has allowed E21 to
      redistribute weight in the head of the putter to create a larger sweet spot,
      which in turn provides substantial forgiveness on mis-hits.




The
      scandium metal alloy in both the shaft and putter head take advantage of
      scandium’s soft feel and spin reduction, which translates to reduced ball “skid”
      upon contact with the ball, and allows the ball to begin rolling more quickly
      and easily off the face of the club. The Company believes that these features
      provide enhanced distance control and a more accurate ball trajectory. Initial
      player testing of these new clubs has provided very positive feedback on the
      improved “feel” that the putter provides over competitive
      offerings.




**Scandium
      Alloys Evolution in the Golf Industry**




The
      Company derives its name from the 21 st element
      in the “Periodic Table of the Elements,” which is the unique metal “scandium”
      (the beginning of a new millennium). Scandium, when mixed with other metals,
      has
      a higher strength-to-weight ratio than titanium and 50% more strength than
      typical high-strength aluminum alloys. The
      rights to develop other products not related to the golf industry were retained
      by the Assignors solely for their own benefit. All applications of scandium
      to
      golf products that are covered by the Assignors’ patents have been acquired by
      the Company.




In
      August
      2003, the Company finalized its golf sha ft
      design
      criteria through the use of the most advanced CAD/CAM computer software programs
      available. These systems are used by the major aerospace companies to produce
      aircraft such as the Advanced Tactical Fighter, America’s fighter jet for the
      21 st century.
      Utilizing the designs created and analyzed with this software, the Company’s
      Korean manufacturer can produce golf shafts to the exacting standards of
      advanced aerospace products. The manufacturer has a capacity of processing
      in
      excess of 100,000 lbs of material per month which equates to approximately
      450,000 golf shafts. The manufacturer has negotiated a $50,000US credit line
      with preferential payment terms to begin full production of its golf shafts.
      In
      return, the Company has purchased and provided to the manufacturer the
      semi-automatic testing and calibration equipment necessary to produce high
      quality golf products on a full production basis.




-6-


In
      April
      2004, the Company announced the full implementation of a new Linear Forging
      Process, a proprietary method utilized in the mass product ion of Scandium
      Golf
      shafts. The unique “Linear Forging Process” utilizes a pulsed energy system in
      matching the structures’ natural frequency resonance to elongate the metals
      grains with the least dimensional change to the golf shaft’s design. The
      process’ secondary benefit is in providing aligned straightness. All of these
      benefits are realized in just a few seconds, which results in high production
      rates and significant cost reduction in an otherwise labor-intensive
      operation.




In
      September 2005, the Company completed negotiations with Pan Osprey Golf
      Appara tus
      Co, Limited,
      a Chinese manufacturer of high-end golf equipment that manufactures golf clubs
      under license for a number of leading OEMs. The Company will provide Pan Osprey
      with the raw materials, as well as the necessary knowledge transfer, to properly
      work with this advanced metal alloy.




To
      date,
      the Company has produced a significant inventory of scandium metal alloy shafts
      under the E21 brand name, and Eagle One sub brand. The shafts are currently
      available for sale through catalog and online via the Golfworks, a company
      that
      sells wholesale parts to clubmakers around the world. The Company is also
      pursuing the possible development of traditional retail channels of
      distribution.




Dependent
      in part on its ability to obtain the necessary funding, of which there is no
      assurance, the Company intends to commence the production and roll-out of its
      proprietary scandium metal wood driver with a scandium alloy shaft to be sold
      to
      the retail golfer through a direct marketing program. Ultimately, the complete
      lineup of clubs will be made available through traditional retail channels
      of
      distribution. Again, depending on financing and marketing conditions, the
      Company may choose to license its products to other OEMs rather than develop
      the
      E21 brand name on its own.




**Element
      21’s Competitive Advantage**




We
      believe that we have a competitive advantage in our industry for the following
      reasons:




1.
            License
                and supply agreements for scandium metal alloys in place.


2.
            Longtime
                association with the world’s largest producer of the highest quality
                scandium master alloy.


3.
            Strategic
                association with the world’s largest producer of scandium products, which
                has over 20 years of experience in producing scandium metal alloy
                billet,
                extruded products, and forged products. Lowest production costs due
                to
                location, size, and experience, as well as the advantage of waste
                control
                during the production process.


4.
            Experienced
                team of alloy developers, processing specialists, production specialists,
                light metal sports equipment designers, and product marketing
                specialists.


5.
            Knowledge
                and association with several production paths of semi-finished and
                finished scandium products.


6.
            Consulting
                agreements with leading golf product development and marketing
                experts.


7.
            Growing
                demand for high performance golf
                products.


8.
            Added
                value to an OEM’s golf club products providing for a longer and more
                accurate golf shots as tested against steel and graphite shafts
                manufactured by Royal Precision, Apollo, AldilaR,
                UST, PenleyR,
                True TemperRand GrafalloyR.


9.
            Advanced
                proprietary clubhead designs that take full advantage of the unique
                properties of scandium metal alloy, and offer superior performance
                to
                existing alternatives.


10.
            Significant
                barriers to entry due to the complex nature of working with scandium,
                and
                patent protection for golf
                applications.


11.
            Trademarked
                ShockBlokTMshock reduction system in scandium metal alloy
                shafts.




**Scandium
      Metal - “Element 21”**




Scandium,
      a little-known element, was developed primarily in secret aerospace programs
      in
      the former Soviet Union. It was used as an additive to traditional aluminum
      alloys to create the highest strength scandium metal alloys and alloys with
      significantly enhanced weldability. These super-alloys were used in missiles
      and
      MIG-29 aircraft and are currently used in MIG-31 and Sukhoi-27 aircraft. We
      believe that the rights we have acquired from the Assignors cover scandium
      metal
      alloys that have achieved the highest “strength-to-weight ratio” for golf
      applications.




-7-


Scandium
      is most often found in nature as an oxide in relatively low concentrations,
      from
      5 to 100 parts per million. It is rarely concentrated in nature due to its
      lack
      of affinity to combine with the common ore-forming anions. Therefore, it is
      usually derived as a by-product from uranium and other mineral leaching
      operations. The cost of scandium is directly related to the relatively high
      cost
      of processing and its lack of widespread use in commercial products. It has
      not
      been commercially mined in the United States or Europe because only small
      quantities have been used, primarily in high intensity halide lamps, lasers,
      electronics, high tech ceramics, and research applications.




However,
      in the former Soviet Union, scandium has been produced in significantly larger
      quantities since it was an additive to traditional aluminum alloys to produce
      ultra high strength scandium metal alloys for military aerospace uses. In
      Russia, there is now less scandium production due to reduced military spending.
      Currently however, Russia still possesses the world’s largest stockpile of pure
      scandium oxide, which is available to the Company through the rights it acquired
      from Assignors. When the current supply is exhausted, scandium can be obtained
      through reactivating production of various waste streams of already identified
      ore processing sites in Russia. In addition, several possible North American
      scandium production sites have also been identified, if there is sufficient
      demand to justify the investment.




**History
      of Commercial Scandium Metal Alloys**




Scandium
      metal alloys for sports applications were developed using the expertise of
      Russian and Ukrainian scientific institutes. To date, more than 75 tons of
      scandium metal master alloy have been sold for the production of over 2,500,000
      pounds of final product, including several sports products, and for a variety
      of
      civil and government funded transportation related development
      programs.




In
      1997,
      Easton Sports’ baseball and softball bats constituted the first production of a
      large-scale scandium sports product. The ultra light high-strength Easton bats,
      known as the Scandium/Sc 7000 Redline series, quickly became the most successful
      new product launch in Easton’s 75-year history. As of September 2003, Easton has
      sold in excess of $800,000,000 of scandium metal alloy baseball and softball
      bats. Easton then produced a weldable scandium metal alloy for use in bicycle
      frames, and handle bars. Both products have been highly successful and the
      frame
      is now considered one of the lightest in the industry and used by many
      top-racing teams. In addition to baseball bats and bicycle frames, scandium
      golf
      shaft, metal wood drivers, putters, lacrosse sticks, bicycle seat posts and
      handlebars, and hockey stick prototypes have been developed.




**Scandium
      Metal Alloy Product Advantages**




Scandium
      alloys have advantages over other high strength aluminum and titanium alloys
      and
      composite materials, especially in heavily drawn and worked
      products:




·
            Up
                to 50% strength increase over high-strength aluminum
                alloys;


·
            Over
                20% specific strength advantage over titanium
                alloys;


·
            Significant
                cost and design advantages over composite
                materials;


·
            Reduction
                and elimination of surface
                re-crystallization;


·
            Increase
                in weldability and weld strength;


·
            Increase
                in weld fatigue life of 200%;


·
            Reduction
                and elimination of hot-cracking in
                welds;


**·**
            Increased
                plasticity, durability, and
                formability.




-8-


**Sports
      Equipment**




As
      athletes and marketers demand improvement in sports equipment, designers push
      material limitations when using existing metals and alloys. Most aluminum
      products in the sports market today have alloy development origins from the
      1930s, while other high-performance alloys were developed in the 1960s. Titanium
      and composite materials have replaced aluminum in some sporting goods; however,
      these materials are more expensive and more difficult to process. Consequently,
      they have found major acceptance only in the highest end of the
      market.




Our
      objective is to develop and market new golf products with scandium alloys which
      can provide measurable advantages over existing high-end aluminum alloys,
      stainless steel, titanium and composite materials.




**Sales
      and Marketing**




This
      product development effort has provided the Company with several sales and
      marketing options. These options include the sale of semi-finished products
      to
      other original equipment manufacturers (OEMs), the sale of finished heads to
      OEMs, and/or the Company’s own direct sale of branded scandium alloy golf
      products to the market place.




Currently,
      E21 scandium metal alloy shafts are available to clubmakers and fabricators
      through the Golfworks catalogue and web site. Some initial inroads have also
      been made on a limited basis to retail golf chains. As a product line unfolds,
      the Company will pursue a more aggressive stance to developing retail channels.
      This is, to a significant extent, dependent upon the Company raising additional
      capital to finance these activities of which there is no guarantee. Sales
      executives have been retained on a consulting basis to develop these retail
      channels of distribution.




Final
      testing of the various prototypes using a robotic arm will allow the company
      to
      validate the performance improvements available through this advanced material
      design, and provide documentation necessary to make substantive claims regarding
      the performance of the E21 lineup of clubs. It is anticipated that this testing
      will be conducted at Golf Labs Inc. in San Diego.




Upon
      raising additional financing, of which there is no assurance, the Company
      intends to introduce its scandium driver through the production and airing
      of an
      infomercial. The Company has entered into an agreement with Incredible
      Discoveries of Deerfield Beach, Florida ( www.incrediblediscoveries.com ) to
      produce a 28-minute infomercial on scandium golf club products. Incredible
      Discoveries’ direct response team is responsible for generating over $50 million
      in direct response television sales. If the Company is able to finance the
      infomercial, Incredible Discoveries would co-fund the venture to promote and
      sell the scandium golf clubs through multimedia venues. Based on positive
      performance and marketing features afforded by scandium, and the general market
      condition of golf, the Company believes this approach would
      be
      successful .
      To
      assist in this process, the Company has access to consultants with experience
      in
      infomercials from both marketing and production aspects. We believe that we
      would be in a position to introduce a number of new scandium golf products
      over
      time, including putters, fairway metal woods, and
      irons.




According
      to Golfdatatech, in 1999 the world retail golf club (metal woods, irons,
      putters) market was worth approximately $4.8 billion. Golfdatatech estimates
      that the US market represents about 50% of the world market, with approximately
      $2.4 billion in sales, including over $1.0 billion in metal wood sales.




-9-


**Scandium
      Raw Material Supply**




The
      raw
      material that goes into production of scandium alloys comes from scandium oxide,
      which has about 60% scandium metal content. Scandium oxide is used in the
      production of “master alloy,” which is then added to nine other metals and other
      alloy ingredients to create a concentration of approximately 0.001% - 10.00
      %
      scandium in the final alloy used in products. These are known as scandium
      alloys, which have the technical advantages needed for production of high
      performance equipment for sports, transportation, military and a erospace
      applications and are the subject of the Assignors’ patents.




Because
      of the experience and access to economic supply of scandium raw materials and
      experience with the scandium alloys, the Company will initially rely on KUNZ
      and
      Yunan as sole suppliers and reprocessors of its precursor materials. However,
      through its c onsultants,
      over time and with additional resources, of which there is no assurance, the
      Company intends to develop an independent resource for supplying these materials
      and services.




**Status
      of Any Publicly Announced New Product or Service**




The
      Company’s web site, at *www.e21golf.com* *,* c ontains
      its most recent press releases and financial reports as well as independent
      test
      results of the Company’s shafts against the leading high-performance golf shafts
      in the world. For additional information or earlier press releases go to any
      website’s financial bulletin board for Element 21 Golf Company (formerly BRL
      Holdings, Inc. (OTCBB EGLF).




**Competitive
      Business Conditions**




All
      major
      manufacturers of golf clubs, shafts and related equipment will be major
      competitors of our planned business operations, and all have greater resources,
      marketing capabilities and name recognition than we do. These factors, among
      others, will make it difficult for us to compete with these manufacturers.
      In
      the event that the Company completes and airs its infomercial, of which there
      is
      no assurance, the Company anticipates that the infomercial campaign will not
      only promote the sale of the Company’s scandium golf clubs, but will also help
      to generate additional media awareness through write ups in various major golf
      publications. However, there is no assurance that the infomercial will generate
      additional media coverage.




**Sources
      and Availability of Raw Materials**




The
      Company has a strategic supply agreement with an affiliate of OAO KUMZ. Under
      this agreement, concentrated scandium alloy shall be produced to the
      specification of the Company by the KUMZ affiliate. KUMZ also will transfer
      the
      latest innovations in scandium alloys to the Company as they become available.
      KUMZ is a well-established, diversified producer of aluminum, aluminum alloys
      and products for aerospace, shipbuilding, automotive, and other industries.
      KUMZ
      is also the world’s largest facility specializing in scandium alloy products.
      Scandium work initially began 20-25 years ago with the development of scandium
      aerospace alloys for fighter aircraft.




The
      second strategic partner of the Company is Yunan Aluminum, which is in the
      business of manufacturing precision tubing for outdoor recreation and sporting
      markets. Yunan Aluminum was established in 1979 in South Korea, and now
      manufactures, for customers other than the Company, about 80,000 pounds per
      month of high quality products made of high strength aluminum alloys. Yunan
      Aluminum intends to reprocess, in South Korea, alloy concentrate shipped by
      KUNZ
      on behalf of the Company and also intends to produce scandium golf shafts
      exclusively for the Company.




-10-


**Shift
      from Development to Sales**




The
      Company’s golf products are new to the market. The Company’s main focus is
      shifting from the development to actual sales of scandium golf clubs. While
      the
      market is large, we cannot be sure that the Company’s prod ucts
      will
      achieve general market adoption. As of the date of this report, we have not
      raised funds sufficient to significantly penetrate the golf market.




**Patents,
      Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor
      Contracts**




The
      Company has direct title to no patents. However, when it acquired Element 21,
      it
      acquired the exclusive right to use, produce and sell a specified range of
      scandium alloy for golf club shafts and golf heads. Although these rights do
      not
      cover all mixes of scandium alloy, the Company believes that any scandium alloy
      outside the range of its patent protected rights cannot be used to produce
      golf
      club shafts or heads in an economically feasible manner. The golf applications
      under these patent rights acquired by us in the Element 21 Acquisition are
      U. S.
      Patent Nos. 5,597,529 issued on January 28, 1997, and 5,620,662, issued on
      April
      15, 1997, initially filed by Ashurst Technologies, Inc. and acquired on January
      7, 2001 by Dr. Hearn.




**Need
      for any Government Approval of Principal Products or
      Services**




We
      believe there is no need for any government approval or regulation of our
      products. The game of golf in the United States is regulated by the USGA. To
      date the Company’s products are in compliance with USGA regulations. There may
      be a need to comply with certain trade agreements with our strategic partners
      outside of the United States of America.




**Effects
      of Existing or Probable Governmental Regulations**




***Sarbanes-Oxley
      Act***




On
      July
      30, 2002, President Bush signed into law the Sarbanes-Oxley Act of 2002 (the
      “Sarbanes-Oxley Act”). The Sarbanes-Oxley Act imposes a wide variety of new
      regulatory requirements on publicly held companies and their insiders. Many
      of
      these requirements will affect us. For example:




·
            Our
                chief executive officer and chief financial officer must now certify
                the
                accuracy of all of our periodic reports that contain financial
                statements;




·
            Our
                periodic reports must disclose our conclusions about the effectiveness
                of
                our disclosure controls and procedures;
                and




·
            We
                may not make any loan to any director or executive officer and we
                may not
                materially modify any existing
                loans.




The
      Sarbanes-Oxley Act has required us to review our current procedures and policies
      to determine whether they comply with the Sarbanes-Oxley Act and the new
      regulations promulgated there under. We will continue to monitor our compliance
      with all future regulations that are adopted under the Sarbanes-Oxley Act and
      will take whatever actions are necessary to ensure that we are in
      compliance.




***Penny
      Stock***




Our
      common stock is “penny stock” as defined in Rule 3a51-1 of the Securities and
      Exchange Commission (“SEC”). Penny stocks are stocks:




-11-


·
            with
                a price of less than five dollars per share;




·
            that
                are not traded on a “recognized” national exchange;




·
            whose
                prices are not quoted on the NASDAQ automated quotation system; or




·
            in
                issuers with net tangible assets less than $2,000,000, if the issuer
                has
                been in continuous operation for at least three years, or $5,000,000,
                if
                in continuous operation for less than three years, or with average
                revenues of less than $6,000,000 for the last three years.




Section
      15(g) of the Exchange Act and Rule 15g-2 of the Securities and Exchange
      Commission require broker/dealers dealing in penny stocks to provide potential
      investors with a document disclosing the risks of penny stocks and to obtain
      a
      manually signed and dated written receipt of the document before making any
      transaction in a penny stock for the investor’s account. You are urged to obtain
      and read this disclosure carefully before purchasing any of our shares.




Rule
      15g-9 of the Securities and Exchange Commission requires broker/dealers in
      penny
      stocks to approve the account of any investor for transactions in these stocks
      before selling any penny stock to that investor. This procedure requires the
      broker/dealer to:




·
            get
                information about the investor’s financial situation, investment
                experience and investment goals;




·
            reasonably
                determine, based on that information, that transactions in penny
                stocks
                are suitable for the investor and that the investor can evaluate
                the risks
                of penny stock transactions;




·
            provide
                the investor with a written statement setting forth the basis on
                which the
                broker/dealer made his or her determination; and




·
            receive
                a signed and dated copy of the statement from the investor, confirming
                that it accurately reflects the investors’ financial situation, investment
                experience and investment goals.




Compliance
      with these requirements may make it harder for our stockholders to resell their
      shares.




**Reporting
      Obligations**




Section
      14(a) of the Exchange Act requires all companies with securities registered
      pursuant to Section 12(g) of the Exchange Act to comply with the rules and
      regulations of the Securities and Exchange Commission regarding proxy
      solicitations, as outlined in Regulation 14A. Matters submitted to stockholders
      of our Company at a special or annual meeting thereof or pursuant to a written
      consent will require our Company to provide our stockholders with the
      information outlined in Schedules 14A or 14C of Regulation 14; preliminary
      copies of this information must be submitted to the Securities and Exchange
      Commission at least 10 days prior to the date that definitive copies of this
      information are forwarded to our stockholders.




We
      are
      also required to file annual reports on Form 10-KSB and quarterly reports on
      Form 10-QSB with the Securities Exchange Commission on a regular basis, and
      will
      be required to timely disclose certain material events (e.g., changes in
      corporate control; acquisitions or dispositions of a significant amount of
      assets other than in the ordinary course of business; and bankruptcy) in a
      Current Report on Form 8-K.




-12-


You
      may
      read and copy any materials filed with the SEC at the SEC’s Public Reference
      Room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain
      information on the operation of the Public Reference Room by calling the SEC
      at
      1-800-SEC-0330. The SEC maintains an internet site that contains reports, proxy
      and information statements, and other information regarding issuers that file
      electronically with the SEC at *www.sec.gov* ** .




**Small
      Business Issuer**




The
      integrated disclosure system for small business issuers adopted by the SEC
      in
      Release No. 34-30968 and effective as of August 13, 1992, substantially modified
      the information and financial requirements of a “Small Business Issuer,” defined
      to be an issuer that has revenues of less than $25,000,000; is a U.S. or
      Canadian issuer; is not an investment company; and if a majority-owned
      subsidiary, the parent is also a small business issuer; provided, however,
      an
      entity is not a small business issuer if it has a public float (the aggregate
      market value of the issuer’s outstanding securities held by non-affiliates) of
      $25,000,000 or more. We are deemed to be a “small business issuer.”




**Research
      and Development Expenses during Past Two Fiscal Years**




During
      the fiscal year ended 2005 and 2004 there were no research and development
      costs
      incurred by the Company. During the fiscal year ended 2003, the Company spent
      approximately $2,445 for research and development associated with the Element
      21
      golf technology. This amount does not include unallocated consulting fees paid
      to consultants, nor development of production and manufacturing paths. We
      anticipate that research and development funds will be required with respect
      to
      our planned business operations of the development manufacture and sale of
      scandium alloy golf clubs.




To
      date,
      the Company has relied on its consultants and their existing infrastructure
      to
      develop its initial products and has reflected these costs as operating costs.
      We expect to spend additional amounts on research and development during fiscal
      year 2006.




**Costs
      and Effects of Compliance with Environmental Laws**




Neither
      we nor any of our subsidiaries have yet
      reached the stage of development where environmental issues have arisen;
      however, we cannot yet determine what, if any, of these types of regulations
      will affect our planned business operations of the development, manufacture
      and
      sale of scandium alloy golf clubs.




Further,
      because the existing agreements with KUNZ and Yunan do not require the Company
      to retain responsibility for any environmental compliance and/or impact, the
      Company believes it has no significant exposure to environmental compliance
      nor
      any other governmental regulation or oversight




**Number
      of Employees**




As of
      September 30, 2005 we h ave
      no
      employees. Consultants Nataliya Hearn, PhD, who is our CEO and President, based
      in Toronto, Canada, oversees the engineering, alloy supply and production.
      David
      Sindalovsky is also responsible for engineering and work with overseas strategic
      partners. Consultants Jim Morin, who is also our Vice-President, Secretary
      and
      Treasurer, and Frank Gojny, both of whom are based in California, oversee the
      development, testing and USGA compliance for the golf products. Jack Curry
      and
      Andy Harris are additional consultants assisting with player relations. This
      consultant structure allows the Company to avoid having large fixed-cost
      marketing, administrative and development organizations in order to be
      responsive to fluctuations in the marketplace that have plagued other start-up
      golf companies.




-13-


**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-KSB, forward-looking statements also
      include:




·
            statements
                about our business plans;




·
            statements
                about the potential for the development, regulatory approval and
                public
                acceptance of new products;




·
            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
      Operations” and “Description of Business” as well as in this Form 10-KSB
      generally. 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-KSB. 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 affect actual results, whether as a result of new information, future events
      or otherwise. You should carefully review the risk factors described in other
      documents we file from time to time with the Securities and Exchange Commission,
      and also review the Quarterly Reports on Form 10-QSB.




**ITEM
                2.**
            **DESCRIPTION
                OF PROPERTY**




We
      occupy
      space leased from Brookfield Properties in Toronto. The Company entered into
      a
      one-year lease in April 2005. The lease calls for monthly payments of $2,180
      for
      finished offices measuring a total of 821 square feet. There is an additional
      office located in Irvine, California of approximately 900 square feet. The
      premises are leased for a three-year period ending August 31, 2007, at a monthly
      rate of $1,343.




**ITEM
                3.**
            **LEGAL
                PROCEEDINGS**




We
      are
      not a party to any pending legal proceedings, our property is not the subject
      of
      a pending legal proceeding and to the knowledge of our management, no
      proceedings are presently contemplated against us by any federal, state or
      local
      governmental agency.




-14-


Further,
      to the knowledge of our management, no director or executive officer is party
      to
      any action in which any has an interest adverse to us.




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




None.




**PART
      II**




**ITEM
                5.**
            **MARKET
                FOR COMMON EQUITY AND RELATED STOCKHOLDER
                MATTERS**




**Market
      Information**




There
      has
      never been any established trading market for our shares of common stock and
      there is no assurance that a trading market will develop. Our common stock
      is
      presently quoted on the Over-the-Counter Bulletin Board (“OTCBB”) of the
      National Association of Securities Dealers under the symbol “EGLF” as reflected
      below. No assurance can be given that any market for our common stock will
      develop in the future or be maintained. If an established trading market ever
      develops in the future, the sale of our common stock pursuant to Rule 144 of
      the
      Securities and Exchange Commission, or otherwise, by members of our management
      or others may have a substantial adverse impact on any such market.




The
      range
      of high and low bid quotations for our common stock during each of the last
      two
      fiscal years and the most recent interim quarter is shown below. Prices have
      not
      been adjusted to reflect the October 2002 stock dividend, and are inter-dealer
      quotations as reported by the NQB, LLC, and do not necessarily reflect
      transactions, retail markups, mark downs or commissions.




**High**
            **Low****Fiscal
                Year Ended June 30, 2004**First
                Quarter
            $0.31
            $0.04Second
                Quarter
            $0.16
            $0.09Third
                Quarter
            $0.26
            $0.12Fourth
                Quarter
            $0.16
            $0.08**Fiscal
                Year Ended June 30, 2005**First
                Quarter
            $0.11
            $0.07Second
                Quarter
            $0.10
            $0.08Third
                Quarter
            $0.09
            $0.06Fourth
                Quarter
            $0.06
            $0.06**Interim
                Quarter Ended September 30, 2005**
            $0.14
            $0.05


**Holders**




The
      number of record holders of our common stock as of September 30, 2005 was
      approximately 1,850. This number does not include an undetermined number of
      stockholders whose shares are held in brokerage accounts or by other nominee
      holders.




**Dividends**




We
      effected a two-for-one stock split in the form of a stock dividend on all our
      outstanding shares of common stock (including shares issued in connection with
      the Acquisition) on the record date of October 4, 2002, which also resulted
      in
      similar adjustments to all of our shares of common stock underlying our
      outstanding options. Except as otherwise indicated herein, all share and per
      share data reflected in this Annual Report has been retroactively restated
      to
      reflect this dividend.




-15-


We
      also
      resolved to effect, by exemption from registration under the Securities Act
      of
      1933, as amended (the “Securities Act”) or by registration under the Securities
      Act, a spin-off of our interests in AssureTec Holdings, Inc. to our shareholders
      of record as of October 4, 2002 (excluding shareholders who received shares
      of
      the Company’s common stock in connection with the Acquisition of Element 21).
      The Company currently is preparing the documentation necessary to implement
      this
      distribution.




All
      holders of shares and options issued or exchanged under the Element 21
      Acquisition waived any right to the spun-off shares of AssureTec Holdings,
      Inc.




**Recent
      Sales of Unregistered Securities**




On
      August
      31, 2004, the Company issued an aggregate of 4,000,000 shares of common stock
      to
      two consultants in consideration for services rendered **.**




On
      April
      22, 2005, the Company issued 100,000 shares of common stock to a consultant
      in
      consideration for services rendered.




On
      May 4,
      2005, the Company issued an aggregate of 530,000 shares of common stock to
      six
      consultants in consideration for services rendered.




On
      June
      8, 2005, the Company issued 203,929 shares of common stock to a consultant
      in
      consideration for services rendered.




Subsequent
      to the fiscal year ended June 30, 2005, the Company issued a total of 11,287,265
      shares of common stock to 24 consultants for services rendered.




Each
      of
      the above issuances was made pursuant to Section 4(2) of the Securities Act of 1933 and
      pursuant to Regulation D promulgated thereunder.




**Securities
      Authorized for Issuance Under Equity Compensation Plans**




**[PLEASE
      COMPLETE TABLE FOR 6/30/05]**




Equity
                Compensation Plan InformationPlan
                Category
            Number
                of Securities to be Issued Upon Exercise of Outstanding Options,
                Warrants
                and Rights
            Weighted-Average
                Exercise Price of Outstanding Options, Warrants and Rights
            Number
                of Securities Remaining Available for Future Issuance under Equity
                Compensation Plans (Excluding Securities Reflected in Column
                (a))*(a)
            (b)
            (c)Equity
                compensation plans approved by security holders
            
            N/a
            0Equity
                compensation plans not approved by security holders
            52,800
            N/a
            1,197,200Total
            52,800
            
            1,197,200*
                At June 30, 2005





**ITEM
                6.**
            **MANAGEMENT’S
                DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION**




**Overview**




Fiscal
      2005 has been a transitional year for the Company - from development stage
      status to purchases of actual products and subsequent sales. The Company has
      established a sales structure with internal and field sales representatives,
      who
      manage current sales. The Company has introduced its products through golf
      shows, catalogue sales though the GolfWorks publication, advertisings with
      the
      Professional Club Builder’s Society and various other publications managed by
      the Media Group. Subject to raising necessary additional funds, of which there
      can be no assurance, we intend to introduce our scandium shafted driver and
      similar metal headed woods built with our Element 21 shaft technology, through
      the production and airing of a program of infomercials to the general public,
      retail sales and manufacturing of components to the OEMs.




The
      use
      of infomercials has been successful
      for a number
      of new golf technology product roll-outs such as Taylor Made’s Burner Bubble
      fairway woods, Pure Spin Diamond Face Scoring Wedge, and Adams Golf Tight Lies
      clubs. In the event the Company’s planned infomercial is launched and subject to
      the Company’s raising sufficient funds, of which there can be no assurance, the
      Company expects to commence a program to engage an experienced infomercial
      managing agent to oversee the production, media purchase and follow-up
      fulfillment services for packaging, shipment and account collection of our
      golf
      product activities. Golf industry infomercial experience suggests that this
      infomercial approach generates initial cash flows almost immediately and
      generates a slow but steady retail revenue component independent of the
      continuing infomercial media response. The Company expects to continue to invest
      in this infomercial approach for at least one year after its
      initial product introduction followed by an increasing emphasis and support
      of
      the retail product introduction. There can be no assurance that this product
      introduction strategy will be successful. At the present time, the Company
      does
      not have sufficient cash or binding cash commitments to implement its business
      plan; however, management believes that it will be able to raise additional
      funding to pursue the Company’s business plan. There is no assurance that the
      Company will be able to raise these funds.




-16-


**Fiscal
      2005 Compared to Fiscal 2004**




During
      fiscal year 2005, we had $65,635 in revenues as compared to no revenues during
      fiscal year 2004. During the last fiscal year, our costs of sales were $39,380.
      During fiscal year 2005, our general and administrative costs were $1,379,186.
      These general and administrative costs primarily consist of marketing costs,
      including trade shows, legal and accounting expenses necessary to maintain
      the
      Company’s reporting requirements to be a publicly traded entity, employee
      compensation of $500,000 which is unpaid, and consulting fees valued at
      $288,000, which was satisfied through the issuance of our common stock. During
      fiscal 2004, general and administrative expenses aggregated $2,226,294 and
      consisted primarily of consulting fees which were paid through the issuance
      of
      our common stock. Net loss for fiscal 2005 was $1,352,931 ($0.02 per share)
      as
      compared to a net loss of $2,229,011 ($0.04 per share) for fiscal 2004. The
      decrease in net loss is largely attributable to a decrease in consulting costs
      net of an increase in marketing expenses.




**Liquidity
      and Capital Resources**




From
      our
      inception through October 2002 our primary source of funds has been the proceeds
      from private offerings of our common stock and advances from affiliates of
      Dr.
      Reeves, other consultants, related parties and loans from
      stockholders.  The
      Company’s need to obtain capital from outside investors is
      expected to continue until we are able to achieve profitable operations, if ever. There is no assurance that management will
      be
      successful in fulfilling all or any elements of its plans. The failure to
      achieve these plans will have a material adverse effect on our Company’s
      financial position, results of operations and ability to continue as a going
      concern. As noted in our auditor’s report dated September 2, 2005, there is
      substantial doubt about our Company’s ability to continue as a going
      concern.




During
      fiscal 2005, we utilized $414,754 for our operations compared to $537,556 used
      for fiscal 2004. During fiscal 2005, the Company purchased inventory and
      accounts payable increased by $319,701. As of June 30, 2005, we had accrued
      and
      unpaid compensation to our officers of $500,000. To fund our operation, our
      officers have advanced funds and paid expenses on our behalf. For fiscal 2005,
      funds generated from sources aggregated $426,567 compared to $540,261 generated
      in fiscal 2004.




**New
      Accounting Pronouncements**




In
      November 2004, the FASB issued Statement No. 151, “Inventory Costs.” This
      statement amends the guidance in ARB 43 (Chapter 4 - Inventory Pricing) to
      clarify the accounting for abnormal amounts of idle facility expense, freight,
      handling costs and wasted material (spoilage). SFAS No. 151 requires that such
      items be recognized as current period charges. SFAS 151 is effective for fiscal
      years beginning after June 15, 2005 and is not expected to have a material
      impact on the Company’s financial statements and results of
      operations.




In
      December 2004, the FASB issued SFAS No. 153 “Exchange of Non-monetary Assets -
      an amendment of APB Opinion No. 29.” Statement 153 eliminates the exception to
      fair value for exchanges of similar productive assets and replaces it with
      a
      general exception for exchange transactions that do not have commercial
      substance, defined as transactions that are not expected to result in
      significant changes in the cash flows of the reporting entity. This statement
      is
      effective for exchanges of non-monetary assets occurring after June 15, 2005.
      The application of this statement is not expected to have an impact on the
      Company’s financial statements considering the Company’s intermittent
      participation in exchanges of non-monetary assets.




-17-


In
      December 2004, the FASB issued SFAS No. 123 (revised 2004), or SFAS 123R,
“Share-Based Payment.” This statement replaces SFAS 123, “Accounting for
      Stock-Based Compensation” and supersedes Accounting Principles Board’s Opinion
      No. 25 (ABP 25), “Accounting for Stock Issued to Employees.” SFAS 123R will
      require us to measure the cost of our employee stock-based compensation awards
      granted after the effective date based on the grant date fair value of those
      awards and to record that cost as compensation expense over the period during
      which the employee is required to perform services in exchange for the award
      (generally over the vesting period of the award). SFAS 123R addresses all forms
      of share-based payments awards, including shares issued under employee stock
      purchase plans, stock options, restricted stock and stock appreciation rights.
      In addition, we will be required to record compensation expense (as previous
      awards continue to vest) for the unvested portion of previously granted awards
      that remain outstanding at the date of adoption. SFAS 123R is effective for
      fiscal years beginning after June 15, 2005. Therefore, we are required to
      implement the standard no later than our first fiscal quarter which begins
      on
      March 1, 2006. SFAS 123R permits public companies to adopt its requirements
      using the following methods: (1) a “modified prospective” method in which
      compensation cost is recognized beginning with the effective date (a) based
      on
      the requirements of SFAS 123R for all share-based payments granted after the
      effective date and (b) based on the requirements of SFAS 123 for all awards
      granted to employees prior to the effective date of SFAS 123R that remain
      unvested on the effective date; or (2) a “modified retrospective” method which
      includes the requirements of the modified prospective method described above,
      but also permits entities to restate their financial statements based on the
      amounts previously recognized under SFAS 123 for purposes of pro forma
      disclosures for either (a) all prior periods presented or (b) prior interim
      periods of the year of adoption.




We
      are
      currently evaluating the alternative methods of adoption as described above.
      As
      permitted by SFAS 123, we currently account for share-based payments to
      employees using APB 25’s intrinsic value method and, as such, generally
      recognize no compensation cost for employee stock options. Accordingly, the
      adoption of SFAS 123R’s fair value method will have a significant impact on our
      results of operations, although it will have no negative impact on our cash
      flow. The impact of adoption of SFAS 123R cannot be predicted at this time
      because it will depend on levels of share-based payments granted in the future.
      See Note 1(k) above for information related to the pro forma effects on our
      reported net income and net income per share of applying the fair value
      recognition provisions of the previous SFAS 123 to stock-based employee
      compensation.




**Critical
      Accounting Policies and Estimates**




The
      following estimates used in the preparation of our Company’s Consolidated
      Financial Statements had a significant effect on those statements.




Our
      Company has established a reserve against our deferred tax asset reducing the
      carrying value to $0 at June 30, 2005 and 2004.




**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
      $12,716,481 as of June 30, 2005, of which $3,261,401 represents development
      stage losses and $8,102,149 represents accumulated losses. For the year ended
      June 30, 2005, our net loss was $1,352,931. 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.




-18-


*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
      June 30, 2005, we have no employees.   Nataliya Hearn, PhD, who
      is our
      CEO and President, and is based in Toronto, Canada, oversees the Company’s
      engineering, alloy supply and production.  Jim Morin, who is
      also our
      Vice-President, Secretary and Treasurer, and Frank Gojny, both of whom are
      based
      in California, oversee the development, testing and United States Golf
      Association compliance for golf products.




The
      Duran
      Group was added in December 2004 to consult on the sales and marketing of the
      Company.  Our future success will depend in large part upon our
      ability to attract and retain highly skilled technical, managerial, sales and
      marketing personnel and consultants.  There is significant competition
      for such personnel in our industry.  There can be no assurance
      that we
      will continue to be successful in attracting and retaining the consultants
      and/or personnel we require to develop new and enhanced technologies and to
      grow
      and operate profitably.




*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
      Scandium alloy golf shafts that are only now entering the initial marketing
      phase. On May 10, 2005 the Company announced the receipt of a significant
      purchase order from GolfWorks, a distributor and retailer of golf equipment
      and
      during the last quarter the Company generated revenues of $65,635. 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.*




-19-


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 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.




-20-


**ITEM
                7.**
            **FINANCIAL
                STATEMENTS**




The
      Consolidated Financial Statements and schedules that constitute Item 7 are
      attached at the end of this Annual Report on Form 10-KSB.




**ITEM
                8.**
            **CHANGES
                IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
                DISCLOSURE**




None




**ITEM
                8A**
            **CONTROLS
                AND PROCEDURES**




We
      maintain “disclosure controls and procedures” (as defined in the Securities
      Exchange Act of 1934 Rules 13a-15(e) and 15(d)-15(e)) designed to ensure that
      information required to be disclosed in reports filed under the Securities
      Exchange Act of 1934, as amended, is recorded, processed, summarized and
      reported within the specified time periods. Our chief executive officer and
      chief financial officer, with the participation of our management, have
      evaluated the effectiveness of the design and operation of our disclosure
      controls and procedures as of June 30, 2005. Based upon that evaluation, the
      chief executive officer and chief financial officer concluded that our
      disclosure controls and procedures are effective in timely alerting them to
      material information required to be included in our periodic filings with the
      Securities and Exchange Commission.




To
      date,
      and during the first quarter of fiscal year 2006, there have been no changes
      in
      our internal control over financial reporting that have materially affected
      or
      are reasonably likely to materially affect our internal control over financial
      reporting.




**ITEM
                8B**
            **OTHER
                INFORMATION**




None.




**PART
      III**




**ITEM
                9.**
            **DIRECTORS,
                EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH
                SECTION
                16(a) OF THE EXCHANGE****ACT**




**Identification
      of Directors and Executive Officers**




The
      following table sets forth the names and the nature of all positions and offices
      held by all directors and executive officers of our Company for the fiscal
      year
      ended June 30, 2004, and the period or periods during which each such director
      or executive
      officer has served in his or her respective positions.




**Name**
            
            **Age**
            
            **Position
                with the Company**
            
            **Date
                of Election or Designation**Nataliya
                Hearn, Ph.D.
            
            38
            
            President,
                CEO and Director
            
            October
                4, 2002Jim
                Morin
            
            56
            
            Secretary,
                Treasurer, CFO and Director
            
            October
                4, 2002Gerald
                Enloe
            
            57
            
            Director
            
            October
                4, 2002





-21-


**Term
      of Office**




The
      term
      of office of the current Directors shall continue until the annual meeting
      of
      our stockholders, which is scheduled in accordance with the direction of the
      Board of Directors. The annual meeting of our Board of Directors immediately
      follows the annual meeting of our stockholders, at which officers for the coming
      year are elected.




**Business
      Experience**




**Nataliya
      Hearn, Ph.D., P. Eng** .,
      is a
      Canadian citizen with a Ph.D. in Civil Engineering from Cambridge University
      and
      is a registered professional engineer. Dr. Hearn serves as President and CEO
      of
      the Company. Since 1999, Dr. Hearn has been an Associate Professor at the
      University of Windsor and since 1994 has been an Adjunct Professor at the
      University of Toronto. Dr. Hearn is currently a Director of MagIndustries Corp.
      MAA.U TSX-V, Director of New Product Development and Marketing at Link -Pipe
      Inc., and Director of R&D at Materials Service Life LLC. Dr. Hearn has
      considerable experience in technology transfer, evaluation, and
      government/industry grants. Dr. Hearn’s managing experience involves:




·
            evaluation,
                exploration and organization of Ukrainian gold deposits, by the Canadian
                geologists together with the Ukrzoloto and Ashurst
                teams;


·
            management
                of teams for testing and evaluation of damaged concrete in construction
                defects litigation in the USA; and


·
            management
                of concept development, implementation, financing and marketing of
                new
                products in trenchless technology repair
                business.




**Jim
      Morin** of
      Mission Viejo, California, serves as Executive Vice President of Product
      Development, Treasurer and Secretary of our Company. He has been associated
      with
      the golf industry for the past 21 years. Mr. Morin is an owner of, and since
      1989 has been an officer of, Hyper Industries, a golf development and marketing
      company. In his capacity with Hyper Industries, Mr. Morin has worked with Tommy
      Armour, Cleveland, Echelon, Calloway, Cobra, McHenry Metals Golf, Taylor Made,
      Lynx and other golf companies. Mr. Morin has extensive experience in high
      performance golf alloys, design, testing and production of clubs and shafts
      that
      will be of particular value to us in our planned operations.




**Gerald
      Enloe** of
      Houston, Texas, serves as a Director and our Chairman of our Board. Mr. Enloe
      has served as President and CEO of Houston Industrial Materials, Inc. since
      1991.




**Family
      Relationships**




There
      are
      no family relationship among the Directors and executive officers named
      above.




**Involvement
      in Certain Legal Proceedings**




To
      the
      knowledge of management and during the past ten years, no present director,
      person nominated to become a director, executive officer, promoter or control
      person of the Company:




(1)
            Was
                a general partner or executive officer of any business by or against
                which
                any bankruptcy petition was filed, whether at the time of such filing
                or
                two years prior thereto;




(2)
            Was
                convicted in a criminal proceeding or named the subject of a pending
                criminal proceeding (excluding traffic violations and other minor
                offenses);




-22-


(3)
            Was
                the subject of any order, judgment or decree, not subsequently reversed,
                suspended or vacated, of any court of competent jurisdiction, permanently
                or temporarily enjoining him from or otherwise limiting his or her
                involvement in any type of business, securities or banking activities;




(4)
            Was
                found by a court of competent jurisdiction in a civil action, the
                Securities and Exchange Commission or the Commodity Futures Trading
                Commission to have violated any federal or state securities law or
                commodities law, and the judgment has not been subsequently reversed,
                suspended, or vacated.




**Audit
      Committee**




The
      Board
      of Directors serves as the Company’s audit committee. Currently none of the
      Company’s directors qualifies as a “financial expert” pursuant to Item 401 of
      Regulation S-B. The Company has not sought to add a director to its board who
      qualifies as a “financial expert” because although the Company believes it would
      be desirable to have a financial expert on its audit committee, the costs of
      retaining such an expert would be prohibitive, given the Company’s resources at
      this time.




**Compliance
      with Section 16(a) of the Exchange Act**




The
      following reports on Forms 3, 4 or 5 were required to be filed by our directors,
      executive officers, and 10% or greater stockholders under the rules and
      regulations promulgated by the Securities and Exchange Commission under the
      Securities Exchange Act of 1934, as amended (the “Exchange Act”), on the
      following dates; and as indicated, were filed later than required by the
      applicable rules and regulations:




**Name**
            
            **Description
                of Form or Schedule**
            
            **Required
                Filing Date**
            
            **Filing
                Date**
            
            **Number
                of Reportable Transactions**Nataliya
                Hearn, Ph.D.
            
            4
            
            08/14/04
            
            *
            
            1Gerald
                Enloe
            
            4
            
            08/14/04
            
            *
            
            1Jim
                Morin
            
            4
            
            08/14/04
            
            *
            
            1





*
            Management
                will use its best efforts to cause any forms listed above which are
                required to be filed and which have not yet been filed to be filed
                as soon
                as practicable.




**Code
      of Ethics**




The
      Company has not yet adopted a code of ethics for its principal executive
      officer, principal financial officers, principal accounting officer or
      controller due to the small number of executive officers involved with the
      Company and due to the fact that the Company operates through strategic
      consultants with no employees. The Board of Directors will continue to evaluate,
      from time to time, whether a code of ethics should be developed and
      adopted.




-23-


**ITEM
                10.**
            **EXECUTIVE
                COMPENSATION**




**EXECUTIVE
      COMPENSATION**




The
      following table sets forth in summary form the compensation of the Company’s
      current Chief Executive Officer and each other executive officer that received
      total salary and bonus exceeding $100,000 since its inception (“Named Executive
      Officers”).




**Summary
      Compensation Table**




The
      following table sets forth the aggregate executive compensation paid by our
      Company for services rendered during the periods indicated (each person is
      referred to in this Item 10 as a “Named Executive Officer”).




**SUMMARY
                COMPENSATION TABLE****Long-Term
                Compensation****Annual
                Compensation**
            **Awards**
            **Payouts****(a)**
            **(b)**
            **(c)**
            **(d)**
            **(e)**
            **(f)**
            **(g)**
            **(h)**
            **(i)****Name
                and Principal Position**
            **Years
                of Periods Ended**
            **$**
              **Salary**
            **$**
              **Bonus**
            **Other
                Annual Compensation**
            **Restricted
                Stock Awards $**
            **Option/**
              **SAR’s
                #**
            **LTIP
                Payouts $**
            **All
                Other Compensation**Nataliya
                Hearn, PhD, President, CEO and Director (1)
            06/30/05
              
              06/30/04
              
              06/30/03
            0
              
              0
              
              0
            0
              
              0
              
              0
            0
              
              0
              
              0
            0
              
              0
              
              0
            0
              
              0
              
              0
            0
              
              0
              
              0
            0
              
              0
              
              0





(1)
            Nataliya
                Hearn serves as the CEO and President of the Company and Jim Morin
                serves
                as Treasurer and Secretary without compensation. Both Ms. Hearn and
                Mr.
                Morin began serving as an executive officer of the Company on October
                4,
                2002.




Except
      as
      indicated above, no cash compensation, deferred compensation or long-term
      incentive plan awards were issued or granted to our Company’s management during
      the years ended June 30, 2005, or 2004, or the period ending on the date of
      this
      Annual Report. Further, except as indicated above, no member of our Company’s
      management has been granted any option or stock appreciation right; accordingly,
      no tables relating to such items have been included within this Item.




**Compensation
      Committee**




The
      Board
      of Directors serves as the Company’s compensation committee. The Company does
      not have any employees and its officers serve the Company without compensation.
      When the Company determines that compensation for services will commence, the
      Board of Directors expects to nominate a Compensation Committee.




**Compensation
      of Directors**




There
      are
      no standard arrangements pursuant to which our Company’s directors are
      compensated for any services provided as director. No additional amounts are
      payable to our Company’s directors for committee participation or special
      assignments.




-24-


**Termination
      of Employment and Change of Control Arrangement**




There
      are
      no compensatory plans or arrangements, including payments to be received from
      our Company, with respect to any person named in the Summary Compensation Table
      set out above which would in any way result in payments to any such person
      because of his or her resignation, retirement or other termination of such
      person’s employment with our Company or our subsidiaries, or any change in
      control of our Company, or a change in the person’s responsibilities following a
      change in control of our Company.




**ITEM
                11.**
            **SECURITY
                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT**




**Security
      Ownership of Certain Beneficial Owners**




The
      following table sets forth the beneficial owners of more than 5% of the
      Company’s outstanding voting common stock as of October 5, 2005:




**At
                October 5, 2005****Name
                and Address of Beneficial Owner**
            **Number
                of Shares Beneficially Owned (1)**
            **Percent
                of Common Stock Outstanding****Officers
                & Directors**Gerald
                Enloe, Director and Chairman
              PO
                Box 14391
              Humble
                TX 77347
            2,950,460
            3.4%Nataliya
                Hearn, Ph.D., President, CEO and Director
              3173
                Sandwich Street, 37
              Windsor,
                Ontario H3A P7S
              Canada
            4,900,000
            5.6%Jim
                Morin, Vice President, Secretary/Treasurer and Director
              27672
                Pasatiempo Drive
              Mission
                Viejo, CA 92692
            -0-
            0%All
                Officers, Directors as a Group (3 Persons)
            7,850,460(1)
            9.0%Beneficial
                owners of 5% or more of common stock
            0
            0**Total
                owned by Directors, Executive Officers and 5% or greater
                shareholders:**
            7,850,460
            9.0%


(1)
            Except
                as indicated in the footnotes below, each person has sole voting
                and
                dispositive power over the shares indicated. Percentages are based
                upon90,924,046shares
                issued and outstanding and no options are exercisable for the above
                named
                persons, as of the date hereof**.**




-25-


**Changes
      in Control**




As
      described in Part 1, Item 1(a) above, effective October 4, 2002, the Company
      issued 42,472,420 shares of restricted common stock and options to acquire
      6,432,000 shares of the Company’s common stock for 100% of the outstanding
      common stock of Element 21 Technologies, Inc.




Prior
      to
      the Closing of the Acquisition, excluding shares underlying options, none of
      which were exercisable, Dr. R. Bruce Reeves, our then President and CEO,
      including the shares owned by Sandra J. Reeves, his wife, beneficially owned
      2,688,312 shares or 49.5% of our outstanding voting securities. Immediately
      following the Acquisition, and also excluding shares underlying outstanding
      options, none of which are deemed to be owned by our “affiliates,” Dr. Reeves
      controlled 9.4% of our outstanding voting securities at October 4, 2002.
      Currently, he currently owns less than 5% of our outstanding voting securities.
      Dr. Reeves was the founding director of Element 21, and was instrumental in
      its
      acquisition of the Element 21 golf technology. For these services, he was issued
      2,100,000 shares of restricted common stock of Element 21, and was granted
      options to acquire an additional 900,000 shares of common stock for aggregate
      consideration of $900, payable in cash or services.




Also
      prior to our closing of the Acquisition, Richard F. Schubert, our Chairman,
      Richard Whitney, one of our directors, R. Bruce Reeves, our President and Kevin
      T. McGuire, our Secretary/Treasurer, respectively owned 144,422 shares, or
      approximately 2.6%; 131,564 shares or approximately 2.4%; 2,688,312 shares
      or
      approximately 49.5%; and 122,886 shares or approximately 2.3% of the Company’s
      issued and outstanding common stock.




Management
      and directors of our Company immediately following the Acquisition resigned
      effective October 4, 2002, and designated the members of management and
      directors and executive officers of Element 21 as directors and executive
      officers of our Company who now hold all three seats on our Board of Directors
      and currently comprise all of our officers.




Following
      the Acquisition, Dr. Nataliya Hearn, our new President and a director, owned
      4,950,000 shares or 10.2% of our outstanding voting securities; and Gerald
      Enloe, a director and our Chairman, owned 2,950,460 shares or 6.15% of our
      outstanding voting securities. Jim Morin, our third director and
      Secretary/Treasurer, does not own any of our securities. These securities were
      acquired in exchange for securities of Element 21 under the Acquisition. The
      control of the present members of our management is based upon stock ownership
      and their present respective positions with us, as directors and executive
      officers. No loans of any kind were a part of the consideration for the
      Acquisition, or any of the securities previously issued to the stockholders
      of
      Element 21 that were exchanged under the Acquisition.




**ITEM
                12.**
            **CERTAIN
                RELATIONSHIPS AND RELATED
                TRANSACTIONS**




**Transactions
      with Management and Others**




AssureTec
      Systems is a Delaware company that was originally a wholly owned subsidiary
      of
      the Company and is now a wholly owned subsidiary of AssureTec. Dr. Reeves
      currently serves as President and sole director of AssureTec. Dr. Reeves also
      serves at Chairman and CEO of AssureTec Systems and currently beneficially
      owns
      approximately 42.4% of AssureTec. Dr. Reeves is under a three-year employment
      contract with Systems providing a salary of $162,000 for the year ending June
      2004 which is currently being accrued until substantial profitability or
      capitalization occurs.




-26-


Kevin
      T.
      McGuire currently serves as Treasurer and Secretary of AssureTec and Systems.
      He
      serves without compensation. Through a family owned business Mr. McGuire serves
      the company is the area of regulatory advisor for accounting, tax and regulatory
      services.




Except
      as
      disclosed above in the section “Changes of Control,” and as described above in
      this section, there were no material transactions, or series of similar
      transactions, during our last two fiscal years, or any currently proposed
      transactions, or series of similar transactions, to which we or any of our
      subsidiaries was or is to be a party, in which the amount involved exceeded
      $60,000 and in which any director executive officer, any security holder who
      is
      known to us to own of record or beneficially more than 5% of any class of our
      common stock, or any member of the immediate family of any of the foregoing
      persons, or any promoter had a material interest, except as
      follows:




**ITEM
                13.**
            **EXHIBITS**




**Exhibit
                No.**
            
            **Exhibit
                Description**31
            
            Rule
                13a-14(a)/15a-14(a) Certifications of Chief Executive Officer and
                Chief
                Financial Officer. Filed herewith.32
            
            Certification
                of Chief Executive Officer and Chief Financial Officer Pursuant to
                18
                U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                Sarbanes-Oxley Act of 2002. Filed
                herewith.




**ITEM
                  14.**
              **PRINCIPAL
                  ACCOUNTANT FEES AND
                  SERVICES**
  **Audit
        Fees**
  Lazar
        Levine and Felix LLP is the
        Company’s independent auditors. Audit and review fees for the years ended June
        30, 2005 and 2004 aggregated $51,000 and $25,000, respectively. LLF was hired
        effective October 27, 2004.
  **Audit-Related
        Fees**
  For
        the
        year ended June 30, 2005, the Company was billed $1,700 for fees related
        to a
        registration statement. No similar costs were incurred for the fiscal 2004
        year.
  **Tax
        Fees**
  For
        the
        years ended June 30, 2005 and 2004, the Company did not receive any tax
        compliance, tax advice, and tax planning services for which we were
        billed.
  **All
        Other Fees**
  For
        the
        years ended June 30, 2005 and 2004, the Company was not billed for products
        and
        services other than those described above.


-27-


**Audit
        Committee Pre-Approval Policies**
  The
        Board
        of Directors, which is performing the equivalent functions of an audit
        committee, has
        pre-approved all audit services provided by the independent auditors, and
        the
        compensation, fees and terms for such services. No permitted non-audit
        services were
        provided or approved by the Board of Directors.


-28-




**SIGNATURES**




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




**ELEMENT
              21 GOLF COMPANY**Date:
              October 11, 2005
            By:
            /s/ Nataliya
              HearnNataliya
              Hearn, Ph.D.President
              and Director







Pursuant
      to the requirements of the Securities Exchange Act of 1934, as amended, this
      Report has been signed below by the following persons on behalf of the
      Registrant and in the capacities and on the dates indicated:











Date:October
              11, 2005
            By:/s/Nataliya
              HearnNataliya Hearn, Ph.D.President and DirectorDate:October
              11, 2005
            By:/s/
              Gerald EnloeGerald EnloeDirectorDate:October
              11, 2005
            By/s/
              Jim MorinJim MorinSecretary/Treasurer,CFO and Director








-29-




**ELEMENT
      21 GOLF COMPANY AND SUBSIDIARIES**











**INDEX**











PageReport
                of Registered Public Accounting firm
            F-2Consolidated
                Balance Sheets as of June 30, 2005
            F-3Consolidated
                Statements of Operations For The Years Ended June 30, 2005 and
                2004
            F-4Consolidated
                Statements of Shareholders’ Deficit For The Years Ended June 30, 2005 and
                2004
            F-5Consolidated
                Statements of Cash Flows For The Years Ended June 30, 2005 and
                2004
            F-6Notes
                to Consolidated Financial Statements
            F-7










F-1








**REPORT
      OF REGISTERED PUBLIC ACCOUNTING FIRM**








To
      the
      Shareholders and Board of Directors


Element
      21 Golf Company


Toronto,
      Canada








We
      have
      audited the accompanying consolidated balance sheet of Element 21 Golf Company
      and subsidiaries, (the “Company”) as of June 30, 2005 and the consolidated
      statements of operations, shareholders’ deficit and cash flows for the two years
      in the period ended June 30, 2005. These consolidated financial statements
      are
      the responsibility of the Company’s management. Our responsibility is to express
      an opinion on these consolidated financial statements based on our
      audits.





We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes consideration
      of
      internal control over financial reporting as a basis for designing audit
      procedures that are appropriate in the circumstances, but not for the purpose
      of
      expressing an opinion on the effectiveness of the Company’s internal control
      over financial reporting. Accordingly, we express no such opinion. An audit
      also
      includes examining, on a test basis, evidence supporting the amounts and
      disclosures in the financial statements, assessing the accounting principles
      used and significant estimates made by management, as well as evaluating the
      overall financial statement presentation. We believe that our audits provide
      a
      reasonable basis for our opinion.





In
      our
      opinion, the consolidated financial statements referred to above present
      fairly ,
      in all
      material respects, the consolidated financial position of Element 21 Golf
      Company and subsidiaries as of June 30, 2005 and 2004 and the results of its
      operations and its cash flows for the years then ended and, in conformity with
      accounting principles generally accepted in the United States of
      America.





The
      accompanying consolidated financial statements have been prepared assuming
      the
      Company will continue as a going concern. As discussed in Note 1(b), the
      Company’s recurring losses from operations and its dependency on future
      financing raise substantial doubt about its ability to continue as a going
      concern. Management’s plans concerning these matters are also discussed in Note
      1(b). The consolidated financial statements do not include any adjustments
      that
      might result from the outcome of these uncertainties.











**LAZAR
      LEVINE & FELIX LLP**








New
      York,
      New York


September
      2, 2005











F-2








**ELEMENT
      21 GOLF COMPANY**


**CONSOLIDATED
      BALANCE SHEET**


**JUNE
      30, 2005**




**-
                  ASSETS -****CURRENT
                  ASSETS:**Cash
              
              
              
              
              $
              1,148Accounts
                  receivable - net of allowance for doubtful accounts of $0
              
              
              
              
              
              36,451Inventories
              
              
              
              
              
              170,928Prepaid
                  expenses and other current assets
              
              
              
              
              
              6,380**TOTAL
                  CURRENT ASSETS**
              
              
              
              
              
              214,907**FIXED
                  ASSETS - NET**
              
              
              
              
              
              12,712**TOTAL
                  ASSETS**
              
              
              
              
              $
              227,619**-
                  LIABILITIES AND SHAREHOLDERS’ DEFICIT -****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              
              
              
              $
              416,446Accrued
                  expenses
              
              
              
              
              
              543,000**TOTAL
                  CURRENT LIABILITIES**
              
              
              
              
              
              959,446**LONG-TERM
                  LIABILITIES:**Accounts
                  payable - related parties
              
              $
              483,764Loans
                  and advances - officers/shareholders
              
              
              484,251
              
              
              968,015**COMMITMENTS
                  AND CONTINGENCIES****SHAREHOLDERS’
                  DEFICIT**Preferred
                  stock, $.10 par value, authorized 5,000,000 shares, no shares issued
                  and
                  outstanding
              
              
              -
              
              
              -Common
                  stock, $.01 par value; 100,000,000 shares authorized 87,487,241
                  shares
                  issued and outstanding
              
              
              874,872Additional
                  paid-in capital
              
              
              10,141,767Accumulated
                  deficit
              
              
              (12,716,481
              )
              
              (1,699,842
              )$
              227,619


See
      notes to consolidated financial
      statements.





F-3





**ELEMENT
      21 GOLF COMPANY**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**FOR
      THE YEARS ENDED JUNE 30, 2005 AND 2004**








Year
                Ended June 30,.**2005**
            
            2004**REVENUES**
            
            **$**
            **65,635**
            
            $
            -**COSTS
                AND EXPENSES**Costs
                of sales
            
            
            **39,380**
            
            
            -General
                and administrative
            
            
            **1,379,186**
            
            
            2,226,294**TOTAL
                COSTS AND EXPENSES**
            
            
            **1,418,566**
            
            
            2,226,294**LOSS
                FROM OPERATIONS**
            
            
            **(1,352,931**
            **)**
            
            (2,226,294
            )**OTHER
                INCOME (EXPENSE):**Other
                expense
            
            
            **-**
            
            
            (2,717
            )**LOSS
                BEFORE PROVISION FOR INCOME TAXES**
            
            
            **(1,352,931**
            **)**
            
            (2,229,011
            )Provision
                for income taxes
            
            
            **-**
            
            
            -**NET
                LOSS**
            
            **$**
            **(1,352,931**
            **)**
            $
            (2,229,011
            )Basic
                and diluted weighted average shares
            
            
            **86,089,275**
            
            
            62,531,532Basic
                and diluted loss per share
            
            **$**
            **(0.02**
            **)**
            $
            (0.04
            )





See
      notes to consolidated financial
      statements.





F-4





**ELEMENT
      21 GOLF COMPANY**


**CONSOLIDATED
      STATEMENT OF CHANGES IN SHAREHOLDERS' DEFICIT**


**FOR
      THE YEARS ENDED JUNE 30, 2005 AND 2004**





Shares
            
            Common
                Stock
            
            Additional
                Paid-In Capital
            
            Deficit
                Accumulated During the Development Stage
            
            Accumulated
                Deficit
            
            Total
                Shareholders’ Equity (Deficit)Balance,
                June 30, 2003
            
            
            49,906,220
            
            $
            499,062
            
            $
            7,826,135
            
            $
            (1,032,390
            )
            $
            (8,102,149
            )
            $
            (809,342
            )Stock
                issued in lieu of compensation
            
            
            2,000,000
            
            
            20,000
            
            
            38,808
            
            
            -
            
            
            -
            
            
            58,808Issuance
                of common stock in settlement of liabilities
            
            
            102,165
            
            
            1,022
            
            
            19,412
            
            
            -
            
            
            -
            
            
            20,434Issuance
                of common stock for services
            
            
            30,644,927
            
            
            306,449
            
            
            1,987,513
            
            
            -
            
            
            -
            
            
            2,293,962Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,229,011
            )
            
            -
            
            
            (2,229,011
            )**Balance,
                June 30, 2004**
            
            
            **82,653,312**
            
            
            **826,533**
            
            
            **9,871,868**
            
            
            **(3,261,401**
            **)**
            
            **(8,102,149**
            **)**
            
            **(665,149**
            **)****Issuance
                of common stock for services**
            
            
            **4,833,929**
            
            
            **48,339**
            
            
            **269,899**
            
            
            **-**
            
            
            **-**
            
            
            **318,238****Reclass
                development stage deficit**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **3,261,401**
            
            
            **(3,261,401**
            **)**
            
            **-****Net
                loss**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **-**
            
            
            **(1,352,931**
            **)**
            
            **(1,352,931**
            **)****Balance,
                June 30, 2005**
            
            
            **87,487,241**
            
            **$**
            **874,872**
            
            **$**
            **10,141,767**
            
            **$**
            **-**
            
            **$**
            **(12,716,481**
            **)**
            **$**
            **(1,699,842**
            **)**







See
        notes
        to consolidated financial statements.





F-5





**ELEMENT
      21 GOLF COMPANY**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE YEARS ENDED JUNE 30, 2005 AND 2004**








**2005**
            
            2004**CASH
                FLOWS FROM OPERATING ACTIVITIES:**Net
                loss
            
            **$**
            **(1,352,931**
            **)**
            $
            (2,229,011
            )Adjustments
                to reconcile net loss to net cash (used in) operating
                activities:Loss
                on investment
            
            
            **-**
            
            
            2,717Compensatory
                stock
            
            
            **318,238**
            
            
            2,373,204Depreciation
            
            
            **747**
            
            
            -Changes
                in:Accounts
                receivable
            
            
            **(36,451**
            **)**
            
            -Inventories
            
            
            **(170,928**
            **)**
            
            -Prepaid
                expenses and other current assets
            
            
            **(4,193**
            **)**
            
            (2,187
            )Accounts
                payable
            
            
            **319,701**
            
            
            (155,445
            )Accrued
                expenses
            
            
            **511,063**
            
            
            (526,834
            )Net
                cash (used in) operating activities
            
            
            **(414,754**
            **)**
            
            (537,556
            )**CASH
                FLOW FROM INVESTING ACTIVITIES:**Purchase
                of capital assets
            
            
            **(13,459**
            **)**
            
            -Net
                cash (used in) investing activities
            
            
            **(13,459**
            **)**
            
            -**CASH
                FLOWS FROM FINANCING ACTIVITIES:**Advances
                from related parties
            
            
            **(29,866**
            **)**
            
            513,630Loans
                proceeds from shareholders
            
            
            **456,433**
            
            
            26,631Net
                cash provided from financing activities
            
            
            **426,567**
            
            
            540,261**NET
                (DECREASE) INCREASE IN CASH**
            
            
            **(1,646**
            **)**
            
            2,705**CASH,
                BEGINNING OF YEAR**
            
            
            **2,794**
            
            
            89**CASH,
                END OF YEAR**
            
            **$**
            **1,148**
            
            $
            2,794





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








See
      notes to consolidated financial
      statements.


F-6





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      1 -**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES:**





***(a)***
            ***Organization
                and Basis of
                Presentation:***





In
      September of 2002, BRL Holdings, Inc. (“BRL”) acquired Element 21 Technologies,
      Inc. (“Technologies”) under an Amended and Restated Agreement (the “Agreement”)
      wherein BRL issued 42,472,420 shares of its common stock to shareholders of
      Technologies and assumed Technologies’ obligations under option agreements
      allowing for the purchase of 6,432,000 additional shares of common stock.
      Technologies was a development stage company formed to design, develop and
      market scandium alloy golf clubs. This acquisition was accounted for as a
      reverse acquisition using the purchase method of accounting, as the shareholders
      of Technologies assumed control immediately following the
      acquisition.





Immediately
      following the closing of the Technologies acquisition BRL declared: 1) a 2
      for 1
      split of its common stock effected in the form of a dividend and 2) a dividend
      of 100% of its ownership of TVI (now named AssureTec Holdings, Inc.
      (“AssureTec”) and Advanced Conductor Technologies, Inc. (“ACT”) which
      collectively represented substantially all of BRL’s assets prior to its
      acquisition of Technologies (the “Spin-Off”) and the officers and directors
      immediately prior to the acquisition resigned. The shareholders who received
      common stock in connection with the Technologies acquisition have received
      the
      stock dividend, but have waived their rights to receive distributions associated
      with the planned Spin-Off. The Spin-Off has not yet been effected and will
      only
      occur after compliance with Securities and Exchange Commission
      regulations.





In
      October 2003, BRL Holdings, Inc. changed its name to Element 21 Golf Company
      (the “Company”).





In
      May
      2001, the Company declared a reverse split of the then outstanding common stock
      of the Company on a one-for-12.5 basis. In July of 2001 the Company formed
      Advanced Conductor Technologies, Inc (“ACT”) and I-JAM Entertainment, Inc.
      (I-JAM) as wholly owned subsidiaries. These entities were formed in anticipation
      of certain merger and acquisition transactions, which were never consummated.
      These entities currently have no operating business and no sources of revenue.
      In November 2001, the Company issued 6,354,000 shares of its common stock under
      an Acquisition Agreement (the “Acquisition”) with AssureTec wherein the Company
      received 100% of AssureTec’s common stock. Effective April 1, 2002 the Company
      repurchased 5,704,000 shares of its common stock issued in connection with
      the
      Acquisition from founding shareholders of AssureTec in exchange for a like
      number of AssureTec common stock held by the Company. As a result of these
      transactions and the issuance of additional shares of AssureTec to employees
      on
      the exercise of stock options, the Company’s ownership fell to 34.2 % of
      AssureTec as of June 30, 2002. As of June 2005, this investment has been written
      down to zero as a result of losses incurred by AssureTec.





Upon
      the
      closing of the Technologies acquisition, as discussed above, the Company
      reported as a development stage enterprise effective September 17, 2002. During
      the current fiscal year, the Company commenced active operations and began
      reporting revenues during the last quarter of the year. As such, the Company
      is
      no longer reporting as a development stage entity.




F-7





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      1 -**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**





***(b)***  ***Going
      Concern:***





These
      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’s subsidiaries are
      inactive and are not expected to produce significant revenues or generate cash.
      During the last quarter of the current fiscal year, the Company commenced sales
      of its products and has begun generating revenue. However, as of June 30, 2005,
      the Company continues to have negative working capital of $744,539, an
      accumulated deficit of $12,716,481 ($3,261,401 of which was realized during
      the
      development stage period from September 17, 2002 to June 30, 2004), a total
      shareholders’ deficit of $1,699,842 and for the year ended June 30, 2005
      incurred a net loss of $1,352,931, all of which raise substantial doubt about
      the Company’s ability to continue as a going concern.





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 made 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.





***(c)***  ***Principles
      of Consolidation:***





The
      accompanying consolidated financial statements include the accounts of the
      company and its wholly owned, inactive subsidiaries (Element 21 Technologies,
      Inc. and Advanced Conductor Technologies, Inc.). All significant inter-company
      accounts and transactions have been eliminated.





***(d)***  ***Use
      of Estimates:***





The
      preparation of financial statements in conformity with generally accepted
      accounting principles in the United States of America requires 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.








***(e)***  ***Fair
      Value of Financial Instruments:***





The
      Company’s financial instruments consist of cash, short-term receivables and
      payables. The carrying value of all instruments approximates their fair
      value.





***(f)***  ***Cash
      and Cash Equivalents:***





For
      purposes of the statements of cash flows, the Company considers all highly
      liquid investments purchased with a remaining maturity of three months or less
      to be cash equivalents.





***(g)***  ***Inventories:***





Inventories,
      which consist primarily of goods held for resale, are stated at the lower of
      cost (first-in, first-out method) or market.







F-8





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      1 -**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**





***(h)***  ***Fixed
      Assets and Depreciation:***





Fixed
      assets are recorded at cost. Expenditures for major additions and improvements
      are capitalized and minor replacements, maintenance and repairs are expensed
      as
      incurred. Depreciation is provided over the estimated useful lives of the
      related assets using the straight-line method for financial statement purposes.
      The estimated useful lives are as follows:





Furniture
                and fixtures
            5
                yearsComputer
                equipment
            3
                yearsOffice
                equipment
            5
                years





***(i)***  ***Revenue
      Recognition:***





The
      Company recognizes revenue in accordance with the Securities and Exchange
      Commission Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”).
      Under SAB 104, revenue is recognized when there is persuasive evidence of an
      arrangement, delivery has occurred or services have been rendered, the sales
      price is determinable, and collectibility is reasonably assured. Revenues
      from product sales are recognized when title passes to customers, which is
      when
      goods are shipped.





***(j)***  ***Income
      Taxes:***





Deferred
      income taxes are recognized for the tax consequences in future years for
      differences between the tax bases of assets and liabilities and their financial
      reporting amounts at each year-end based on enacted tax laws and statutory
      tax
      rates applicable to the periods in which the differences are expected to affect
      taxable income. Valuation allowances are established when necessary to reduce
      deferred tax assets to the amount expected to be realized. Income tax expense
      is
      the tax payable for the period and the change during the period of deferred
      tax
      assets and liabilities.





***(k)***  ***Stock-Based
      Compensation:***





The
      Company accounts for employee stock-based compensation arrangements in
      accordance with the provisions of Accounting Principles Board (“APB”) Opinion
      No. 25, “Accounting for Stock Issued to Employees,” Financial Accounting
      Standards Board Interpretation (“FASB”) No. 44 (“FIN 44”), “Accounting for
      Certain Transactions Involving Stock Compensation — an Interpretation of APB
      Opinion No. 25,” and complies with the disclosure provisions of Statement of
      Financial Accounting Standards No. 123 (“SFAS No. 123”), “Accounting for
      Stock-Based Compensation.” The Company accounts for equity instruments issued to
      non-employees in accordance with the provisions of SFAS No. 123 and Emerging
      Issues Task Force (“EITF”) No. 96-18, “Accounting for Equity Instruments That
      Are Issued to Other Than Employees for Acquiring, or in Conjunction with
      Selling, Goods or Services.”





The
      Company does not maintain a formal incentive compensation plan covering its
      employees, directors and independent contractors. Options to purchase the
      Company’s common stock vest at varying intervals, but in general, typically vest
      over two to four year periods. An option’s maximum term is ten years. See Note 3
      for additional information regarding the Company’s stock options.








F-9





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      1 -**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**





***(k)***  ***Stock-Based
      Compensation (Continued):***





If
      compensation cost for the Company’s stock-based compensation plans had been
      determined in a manner consistent with the fair value approach described in
      SFAS
      No. 123, the Company’s net loss and net loss per share as reported would have
      been reduced to the pro forma amounts indicated below:





Year
                Ended June 30,**2005**
            
            2004Net
                loss, as reported
            
            **$**
            **(1,352,931**
            **)**
            $
            (2,229,011
            )Add
                back: stock-based compensation costs included in the determination
                of net
                loss, as reported
            
            
            **-**
            
            
            58,808Less:
                Stock-based compensation had all options been recorded at fair at
                fair
                value
            
            
            -
            
            
            -Adjusted
                net loss
            
            **$**
            **(1,352,931**
            **)**
            $
            (2,170,203
            )Weighted
                average shares outstanding, basic and diluted
            
            
            **86,089,275**
            
            
            62,531,532Net
                loss per share, basic and diluted, as reported
            
            **$**
            **(0.04**
            **)**
            $
            (0.04
            )Adjusted
                net loss per share, basic and diluted
            
            **$**
            **(0.04**
            **)**
            $
            (0.04
            )





Basic
      and
      diluted losses per share of common stock are the same for 2005 and 2004 since
      there are no potentially dilutive stock options at June 30, 2005 or June 30,
      2004.





***(l)***  ***Net
      Loss Per Common Share:***





Basic
      net
      loss per common share is computed by dividing the net loss applicable to common
      shareholders by the weighted average number of common shares outstanding during
      the period. Diluted net loss per common share reflects, in addition to the
      weighted average number of common shares, the potential dilution if common
      stock
      options were exercised into common stock, unless the effects of such exercises
      would have been antidilutive.





***(m)***  ***New
      Accounting Pronouncements Affecting the Company:***





In
      November 2004, the FASB issued Statement No. 151, “Inventory Costs.” This
      statement amends the guidance in ARB 43 (Chapter 4 - Inventory Pricing) to
      clarify the accounting for abnormal amounts of idle facility expense, freight,
      handling costs and wasted material (spoilage). SFAS No. 151 requires that such
      items be recognized as current period charges. SFAS 151 is effective for fiscal
      years beginning after June 15, 2005 and is not expected to have a material
      impact on the Company’s financial statements and results of
      operations.





In
      December 2004, the FASB issued SFAS No. 153 “Exchange of Non-monetary Assets -
      an amendment of APB Opinion No. 29.” Statement 153 eliminates the exception to
      fair value for exchanges of similar productive assets and replaces it with
      a
      general exception for exchange transactions that do not have commercial
      substance, defined as transactions that are not expected to result in
      significant changes in the cash flows of the reporting entity. This statement
      is
      effective for





F-10





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      1 -**  **SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES (Continued):**





***(m)***  ***New
      Accounting Pronouncements Affecting the Company
      (Continued):***





exchanges
      of non-monetary assets occurring after June 15, 2005. The application of this
      statement is not expected to have an impact on the Company’s financial
      statements considering the Company’s intermittent participation in exchanges of
      non-monetary assets.





In
      December 2004, the FASB issued SFAS No. 123 (revised 2004), or SFAS 123R,
“Share-Based Payment.” This statement replaces SFAS 123, “Accounting for
      Stock-Based Compensation” and supersedes Accounting Principles Board’s Opinion
      No. 25 (ABP 25), “Accounting for Stock Issued to Employees.” SFAS 123R will
      require us to measure the cost of our employee stock-based compensation awards
      granted after the effective date based on the grant date fair value of those
      awards and to record that cost as compensation expense over the period during
      which the employee is required to perform services in exchange for the award
      (generally over the vesting period of the award). SFAS 123R addresses all forms
      of share-based payments awards, including shares issued under employee stock
      purchase plans, stock options, restricted stock and stock appreciation rights.
      In addition, we will be required to record compensation expense (as previous
      awards continue to vest) for the unvested portion of previously granted awards
      that remain outstanding at the date of adoption. SFAS 123R is effective for
      us
      (a small business issuer) beginning
      with the first interim or annual reporting period that begins after December
      15,
      2005 .
      Therefore, we are required to implement the standard no later than the fiscal
      quarter which begins on January 1, 2006. SFAS 123R permits public companies
      to
      adopt its requirements using the following methods: (1) a “modified prospective”
      method in which compensation cost is recognized beginning with the effective
      date (a) based on the requirements of SFAS 123R for all share-based payments
      granted after the effective date and (b) based on the requirements of SFAS
      123
      for all awards granted to employees prior to the effective date of SFAS 123R
      that remain unvested on the effective date; or (2) a “modified retrospective”
      method which includes the requirements of the modified prospective method
      described above, but also permits entities to restate their financial statements
      based on the amounts previously recognized under SFAS 123 for purposes of pro
      forma disclosures for either (a) all prior periods presented or (b) prior
      interim periods of the year of adoption.





We
      are
      currently evaluating the alternative methods of adoption as described above.
      As
      permitted by SFAS 123, we currently account for share-based payments to
      employees using APB 25’s intrinsic value method and, as such, generally
      recognize no compensation cost for employee stock options. Accordingly, the
      adoption of SFAS 123R’s fair value method will have a significant impact on our
      results of operations, although it will have no negative impact on our cash
      flow. The impact of adoption of SFAS 123R cannot be predicted at this time
      because it will depend on levels of share-based payments granted in the future.
      See “Note 2k above for information related to the pro forma effects on our
      reported net loss and net loss per share of applying the fair value recognition
      provisions of the previous SFAS 123 to stock-based employee compensation.




F-11





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      2 -**  **FIXED
      ASSETS:**





Fixed
      assets consists of the following:




Furniture
                and fixtures
            
            **$**
            **3,530**Computer
                equipment
            
            
            **929**Office
                equipment
            
            
            **9,000****13,459**Less:
                accumulated depreciation
            
            
            **747****$**
            **12,712**





Depreciation
      expense for the fiscal 2005 year aggregated $747.





**NOTE
      3 -**  **RELATED
      PARTY TRANSACTIONS:**





***(a)***  ***Accounts
      Payable - Non-Current:***





Since
      April of 1996, the Company has engaged R T Robertson Consultants, Inc.
      (“Robertson”) and Robertson Advisors, LLC (‘Advisors”), consulting firms
      controlled by family members of Dr. R. Bruce Reeves, to perform the executive
      duties of the Company without specific compensation. Mr. Reeves was a member
      of
      the Board of Directors, President, and Chief Executive Officer of the Company
      until October 4, 2002. In this capacity and as an employee of the consulting
      firm, Dr. Reeves managed ongoing business activities of the Company until the
      transaction in September 2002. During the fiscal year ended June 30, 2005,
      Robertson charged $135,000 in administrative management oversight plus $9,449
      in
      billable expenses to the Company and its subsidiaries. During the fiscal year
      ended June 30, 2004, Robertson and/or Advisors charged $75,000 in administrative
      management oversight plus $3,044 in billable expenses to the Company and its
      subsidiaries. At June 30, 2005, $117,468 was owed to Robertson, $178,807 was
      owed to Advisors, $35,376 was owed to Dr. Reeves and the balance of $152,113
      was
      owed to other related parties. All parties have indicated that payment of these
      balances is not expected during the next fiscal year.





***(b)***  ***Loans
      and Advances - Officers/Shareholders:***





During
      the current fiscal year, the CEO and President of the Company advanced monies
      to
      and paid expenses on behalf of the Company, aggregating $484,251. Such payments
      were made on a non-interest bearing basis and the officer has agreed to not
      demand payment during the next fiscal year.





Included
      in Accrued Expenses is $500,000 of compensation accrued for our officers and
      directors. Depending on the financial condition of the Company, this liability
      may be converted into Company common stock at a future date.





F-12





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      4 -**  **SHAREHOLDERS’
      EQUITY/STOCK OPTION PLANS:**





During
      fiscal 2005, the Company issued 4,833,929 shares of its common stock to various
      consultants for marketing and investor relations services provided. Such shares
      were valued at the market price as of the date of issuance, aggregating
      $318,238.





During
      fiscal 2004, the Company issued 32,747,092 shares of common stock for consulting
      and legal services and in settlement of liabilities. The value recorded was
      based on the market price at the time of issuance and aggregated
      $2,373,204.





As
      of
      June 30, 2005 there are two stock option plans in effect; the 1992 Directors'
      Stock Option Plan (Directors' Plan) and the 1992 Stock Option Plan (Option
      Plan). The Directors' Plan allows for the grant of options to purchase up to
      250,000 shares of the Company’s common stock at an exercise price no less than
      the stock market price at the date of grant. Options granted under this Plan
      vest immediately and expire 10 years from the date of grant. The Option Plan
      allows for the grant of options to employees to purchase up to 10% of the issued
      and outstanding shares of the Company, not to exceed 1,000,000 shares, at an
      exercise price equal to the stock’s market price at the date of grant. The Board
      sets vesting and expiration dates.





The
      following table summarizes information about stock options outstanding, all
      of
      which were granted under the Directors’ Plan and are exercisable:





Outstanding
                as of June 30, 2003
            
            
            **57,200**Granted/exercised/expired
            
            
            -Outstanding
                as of June 30, 2004
            
            
            **57,200**Expired
            
            
            **(4,400**
            **)**Outstanding
                as of June 30, 2005
            
            
            **52,800**





Exercise
      prices of the outstanding options are as follows:





**Exercise
                Prices**
            
            **Number
                of****Options**$1.06
            
            
            6,400$0.32
            
            
            **3,200**$0.63
            
            
            3,200$0.17
            
            
            **40,000****52,800**








F-13





**ELEMENT
      21 GOLF COMPANY**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**YEARS
      ENDED JUNE 30, 2005 AND 2004**





**NOTE
      4 -**  **INCOME
      TAXES:**





The
      Company has not filed federal or state tax returns for any of the tax years
      subsequent to December 31, 1993. Management intends to cure this deficiency
      as
      soon as possible and expects there will be no federal tax liability (based
      on
      continued losses) for these delinquent years. Deferred tax assets and
      liabilities consist of the following as of June 30:




**2005**
            
            2004**Deferred
                tax assets:**Net
                operating loss carry forwards
            
            **$**
            **1,429,990**
            
            $
            888,990Less
                valuation allowance
            
            
            **(1,429,990**
            **)**
            
            (888,990
            )****
            
            **$**
            **-**
            
            $
            -





A
      valuation allowance equivalent to 100% of the deferred tax asset has been
      established since, at the current time, it is not more probable than not, that
      the Company will be able to recognize a tax benefit for the asset. The net
      operating losses expire at various dates through 2024.





**NOTE
      5 -**  **COMMITMENTS:**





In
      April
      2005, the Company entered into a one-year lease for office space in Toronto,
      Canada, for a monthly payment of $2,180. The Company is also obligated under
      a
      three-year lease for space in Irvine, California. This lease, which requires
      monthly payments of $1,343, expires on August 31, 2007. Rent expense for the
      years ended June 30, 2005 and 2004 aggregated $22,906 and $0,
      respectively.





F-14