UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB/A
                                (AMENDMENT NO. 1)

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDING DECEMBER 31, 2004

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

            FOR THE TRANSITION PERIOD FROM __________ TO ____________

                         COMMISSION FILE NUMBER 0-28717

                              ADZONE RESEARCH, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             DELAWARE                                    88-0420405
   (STATE OR OTHER JURISDICTION OF          (I.R.S. EMPLOYER IDENTIFICATION NO.)
   INCORPORATION OR ORGANIZATION)

                            4062-80 GRUMMAN BOULEVARD
                            CALVERTON, NEW YORK 11933
                                 (631) 369-1100

    (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                  OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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

          APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                         DURING THE PRECEDING FIVE YEARS

Indicate  by check mark  whether  the  registrant  has filed all  documents  and
reports  required  to be filed by  Sections  12,  13 or 15(d) of the  Securities
Exchange Act for 1934 subsequent to the  distribution of securities under a plan
confirmed under a plan confirmed by a court. Yes |_| No |_|

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

                       APPLICABLE ONY TO CORPORATE ISSUERS

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common  stock as of the last  practicable  date:  August 3,  2005 -  104,673,203
common shares, $.001 par value.

Transitional small business disclosure format (check one): Yes |_| No |X|


                                       1
<PAGE>

                                EXPLANATORY NOTE

This  Amendment on Form  10-QSB/A  (Amendment  No. 1) amends and restates in its
entirety the  following  items of the  Quarterly  Reports on Form 10-QSB for the
quarterly period ended December 31, 2004 of Adzone  Research,  Inc. as initially
filed with the  Securities and Exchange  Commission  (the "SEC") on February 14,
2005 (the "original 2004 10-QSB"):

Part I - CONDENSED FINANCIAL INFORMATION

Item 1. Financial Statements

Item 2. Management's Discussion and Analysis or Plan of Operation

Item 3. Controls and Procedures

This  Amendment  is being  filed to reflect  the  restatement  of the  Company's
financial  statements  for the three and nine month periods  ended  December 31,
2004, as discussed in Note 5 to the  Company's  condensed  financial  statements
filed herewith.  Specifically,  these restatements relate to: 1) the recognition
of a derivative  financial  instrument indexed to and potentially settled in the
Company's own stock as a liability (versus common equity) and a charge or credit
to earnings for the change in the fair value of that  liability,  2) the accrual
of property dividends  declared as a liability,  a related charge to accumulated
deficit and the classification of investments restricted for the payment of such
dividends as a restricted asset, 3) the reclassification of deferred stock based
compensation  from an asset (prepaid  expenses) to a reduction in  stockholders'
equity  and  4)  the  effects  on  opening   stockholders'   equity  related  to
restatements  to the March 31, 2004 balances as discussed in Note C to the March
31, 2004 Form 10-KSB/A  Amendment No. 2 dated July 13, 2005.  The effects of the
restatement,  in management's view, rises to the level of a material weakness in
internal control, which is further discussed in Item 3, as amended.

This  Amendment  speaks  as of the end of the  Company's  fiscal  quarter  ended
December  31, 2004 as required by Form 10-QSB or as of the date of the filing of
the  original  2004 10-QSB.  Except for the  restatement  of certain  historical
financial  information  as  described  above,  it  does  not  update  any of the
statements  contained  in the  original  2004 10-QSB.  This  Amendment  contains
forward-looking  statements  that were made at the time the original 2004 10-QSB
was filed on February 14, 2005. It must be considered in light of any subsequent
statements,  including  forward looking  statements,  in any reports made by the
Company  subsequent  to  the  filing  of the  original  2004  10-QSB,  including
statements made in filings on Form 8-K.


                                       2
<PAGE>

                              ADZONE RESEARCH, INC.
                     FORM 10-QSB/A FOR THE QUARTERLY PERIOD
                             ENDED DECEMBER 31, 2004

                                      INDEX

PART I.  CONDENSED FINANCIAL INFORMATION

ITEM 1.  UNAUDITED CONDENSED FINANCIAL STATEMENTS:

         CONDENSED BALANCE SHEETS AS OF DECEMBER 31, 2004 AND
                  MARCH 31, 2004...............................................4
         CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
                  LOSS FOR THE THREE AND NINE MONTHS ENDED
                  DECEMBER 31, 2004 AND 2003...................................5
         CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT) FOR THE NINE
                  MONTHS ENDED DECEMBER 31, 2004...............................7
         CONDENSED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS
                  ENDED DECEMBER 31, 2004 AND 2003.............................8
         NOTES TO CONDENSED FINANCIAL STATEMENTS..............................10

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS.................................26
ITEM 3.  CONTROLS AND PROCEDURES..............................................30

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS....................................................31
ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS..........32
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES......................................33
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS..................34
ITEM 5.  OTHER INFORMATION....................................................35
ITEM 6.  EXHIBITS.............................................................36

SIGNATURES....................................................................37


                                       3
<PAGE>

PART I.  CONDENSED FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                              ADZONE RESEARCH, INC.
                            CONDENSED BALANCE SHEETS
                      DECEMBER 31, 2004 AND MARCH 31, 2004

<TABLE>
<CAPTION>
                                                                    DECEMBER 31,    MARCH 31,
                                                                        2004          2004
                                                                    (Unaudited/
                                                                     Restated)
                                                                      (Note 5)
<S>                                                               <C>             <C>
ASSETS
Current assets:
   Cash                                                           $    633,535    $    622,797
   Marketable securities                                                28,637              --
   Assets restricted for dividend payments                             257,733              --
   Prepaid consulting fees and other expenses                            4,893         134,272
                                                                  ------------    ------------
Total current assets                                                   924,798         757,069

Property and equipment, net                                             22,738          10,423
Other assets                                                             3,738          38,355
                                                                  ------------    ------------
Total assets                                                      $    951,274    $    805,847
                                                                  ============    ============

                 LIABILITIES AND STOCKHOLDERS' (DEFICIT) EQUITY

Current liabilities:
   Accounts payable                                               $    142,947    $    297,972
   Accrued compensation                                                 53,003         160,926
   Accrued dividends payable                                           257,733              --
   Deferred revenue                                                    206,302              --
   Current notes payable                                                50,507          62,787
   Stock settlement liability                                        1,718,000              --
                                                                  ------------    ------------
Total current liabilities                                            2,428,492         521,685

Notes payable                                                          166,783         166,783

Commitments and contingencies (Note 4)                                      --              --

Stockholders' (deficit) equity:
   Preferred stock                                                      68,147         518,816
   Common stock                                                         94,169          70,832
   Common stock to be issued                                            40,000              --
   Additional paid-in capital                                        9,291,179       6,690,030
   Accumulated deficit                                             (11,103,368)     (7,129,534)
   Other stockholders' equity                                          (34,128)        (32,765)
                                                                  ------------    ------------
Total stockholders' (deficit) equity                                (1,644,001)        117,379
                                                                  ------------    ------------
Total liabilities and stockholders' (deficit) equity              $    951,274    $    805,847
                                                                  ============    ============
</TABLE>

                             See accompanying notes.


                                       4
<PAGE>

                              ADZONE RESEARCH, INC.
                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE LOSS
                  NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                        DECEMBER 31,    DECEMBER 31,
                                                                           2004            2003
                                                                        ------------    ------------
                                                                        (Restated)
                                                                         (Note 5)
<S>                                                                     <C>             <C>
Net revenues                                                            $    244,423    $     74,844
                                                                        ------------    ------------

Operating costs and expenses:
   Cost of contract revenues                                                  42,000           2,196
   Consulting and professional services                                    1,367,954         115,456
   Salaries and related                                                    1,041,161       1,461,833
   General and administrative                                                520,726         226,353
   Depreciation and amortization                                               5,821           1,633
                                                                        ------------    ------------
                                                                           2,977,662       1,807,471
                                                                        ------------    ------------
Loss from operations                                                      (2,733,239)       (732,627)

Derivative loss                                                             (768,000)             --
Other income (expense), net                                                  (62,134)        (23,226)
                                                                        ------------    ------------
Net loss                                                                ($ 3,563,373)   ($ 1,755,853)
                                                                        ============    ============

Reconciliation of net loss to loss applicable to common stockholders:
   Net loss                                                             ($ 3,563,373)   ($ 1,755,853)
   Preferred stock dividends and accretion                                  (177,274)       (343,709)
                                                                        ------------    ------------
   Loss applicable to common stockholders                               ($ 3,740,647)   ($ 2,099,562)
                                                                        ============    ============

Loss per common share:
   Basic and diluted loss per common share                              ($      0.05)   ($      0.03)
                                                                        ------------    ------------
Weighted average common shares, basic and diluted                         80,123,404      60,162,995
                                                                        ============    ============

Comprehensive loss:
    Net loss, as reported                                               ($ 3,563,373)   ($ 1,755,853)
    Unrealized loss on available for sale securities
                                                                              (1,363)             --
                                                                        ------------    ------------
Comprehensive loss                                                      ($ 3,564,736)   ($ 1,755,853)
                                                                        ============    ============
</TABLE>

                             See accompanying notes.


                                       5
<PAGE>

                              ADZONE RESEARCH, INC.
                  UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
                             AND COMPREHENSIVE LOSS
                  THREE MONTHS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                         DECEMBER 31,   DECEMBER 31,
                                                                            2004           2003
                                                                        ----------------------------
                                                                         (Restated)
                                                                          (Note 5)
<S>                                                                     <C>             <C>
Net revenues                                                            $     94,423    $     10,750
                                                                        ------------    ------------

Operating costs and expenses:
   Cost of contract revenues                                                      --         (58,290)
   Consulting and professional services                                      455,749         (46,095)
   Salaries and related                                                      283,680          98,609
   General and administrative                                                268,664          29,091
   Depreciation and amortization                                               1,940             545
                                                                        ------------    ------------
                                                                           1,010,033          23,860
                                                                        ------------    ------------
Loss from operations                                                        (915,610)        (13,110)

Derivative loss                                                             (218,000)             --
Other income (expense), net                                                  (58,567)        (10,957)
                                                                        ------------    ------------
Net loss                                                                ($ 1,192,177)   ($    24,067)
                                                                        ============    ============

Reconciliation of net loss to loss applicable to common stockholders:
   Net loss                                                             ($ 1,192,177)   ($    24,067)
   Preferred stock dividends and accretion                                   (32,875)       (248,297)
                                                                        ------------    ------------
   Loss applicable to common stockholders                               ($ 1,225,052)   ($   272,364)
                                                                        ============    ============

Loss per common share:
   Basic and diluted loss per common share                              ($      0.01)   ($      0.00)
                                                                        ============    ============
Shares used in computing basic and diluted loss per
common share                                                              85,754,920      67,600,291
                                                                        ============    ============

Comprehensive loss:
   Net loss, as reported                                                ($ 1,192,177)   ($    24,067)
   Unrealized loss on available for sale securities                           (1,363)             --
                                                                        ------------    ------------
Comprehensive loss                                                      ($ 1,193,540)   ($    24,067)
                                                                        ============    ============
</TABLE>

                             See accompanying notes.


                                       6
<PAGE>

                              ADZONE RESEARCH, INC.
        UNAUDITED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
            NINE MONTHS ENDED DECEMBER 31, 2004 (Restated) ( Note 5)

<TABLE>
<CAPTION>
                                           Series A Preferred             Series B Preferred             Common Stock
                                     ------------   ------------   ------------   ------------   ------------  ------------
                                        Shares         Amount         Shares         Amount         Shares        Amount
                                     ------------   ------------   ------------   ------------   ------------  ------------
<S>                                  <C>            <C>            <C>            <C>            <C>           <C>
Balances at April 1, 2004                      24   $    278,530             31   $    240,286     70,832,255  $     70,832

Sales of common stock and warrants
  for cash, net of $150,000 of
  offering expenses and $950,000 of
  stock settlement liability                   --             --             --             --      9,167,284         9,167

Issuances of common stock to
  non-employees for services
                                               --             --             --             --      4,127,971         4,128

Issuances of common stock upon the
  exercise of warrants and stock
  options
                                               --             --             --             --      2,507,201         2,507

Issuances of common stock to
  employees for services and
  compensation                                 --             --             --             --             --     2,070,000

Issuances of warrants and options
  to non-employees for services
                                               --             --             --             --             --            --

Redemption of warrants                         --             --             --             --             --            --

Employee stock-based compensation
  applying variable plan option
  accounting
                                               --             --             --             --             --            --

Preferred stock dividends                      --             --             --             --             --            --

Marketable securities declared as a
  property dividend                            --             --

Periodic accretions of preferred
  stock carrying values to
  redemption values
                                               --             --             --        116,214             --            --

Conversion of preferred stock                 (20)      (221,883)           (30)      (345,000)     5,464,601         5,465

Unrealized loss on marketable
  securities                                   --             --             --             --             --            --

Net loss for the period                        --             --             --             --             --            --
                                     ------------   ------------   ------------   ------------   ------------  ------------
Balances at December 31, 2004                   4   $     56,647              1   $     11,500     94,169,312  $     94,169
                                     ============   ============   ============   ============   ============  ============
<CAPTION>
                                                     Common
                                       Paid-In      Stock to be    Accumulated       Other          Total
                                       Capital        Issued          Deficit        Equity         Equity
                                     ------------   ------------   ------------   ------------   ------------
<S>                                  <C>            <C>            <C>            <C>            <C>
Balances at April 1, 2004            $  6,690,030   $         --   ($ 7,129,535)  ($    32,765)  $    117,379

Sales of common stock and warrants
  for cash, net of $150,000 of
  offering expenses and $950,000 of
  stock settlement liability               92,516         40,000             --             --        141,683

Issuances of common stock to
  non-employees for services
                                        1,043,879             --             --             --      1,048,007

Issuances of common stock upon the
  exercise of warrants and stock
  options
                                          327,363             --             --             --        329,870

Issuances of common stock to
  employees for services and
  compensation
                                            2,070        123,659             --             --        125,729

Issuances of warrants and options
  to non-employees for services
                                          479,801             --             --             --        479,801

Redemption of warrants                    (76,744)            --             --             --        (76,744)

Employee stock-based compensation
  applying variable plan option
  accounting
                                           49,256             --             --             --         49,256

Preferred stock dividends                      --             --        (61,060)            --        (61,060)

Marketable securities declared as a
  property dividend                                                    (233,186)            --       (233,186)

Periodic accretions of preferred
  stock carrying values to
  redemption values
                                               --             --       (116,214)            --             --

Conversion of preferred stock             561,419             --             --             --             --

Unrealized loss on marketable
  securities                                   --             --             --         (1,363)        (1,363)

Net loss for the period                        --             --     (3,563,373)            --     (3,563,373)
                                     ------------   ------------   ------------   ------------   ------------
Balances at December 31, 2004        $  9,291,179   $     40,000   ($11,103,368)  ($    34,128)  ($ 1,644,001)
                                     ============   ============   ============   ============   ============
</TABLE>

                             See accompanying notes.


                                       7
<PAGE>

                              ADZONE RESEARCH, INC.
                       UNAUDITED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                                December 31,  December 31,
                                                                                   2004          2003
                                                                                -----------   -----------
                                                                                (Restated)
                                                                                 (Note 5)
<S>                                                                             <C>           <C>
OPERATING ACTIVITIES
Net loss                                                                        ($3,563,373)  ($1,755,853)
Adjustments to reconcile net loss to net cash flows from operating activities:
     Common stock issued for services                                             1,048,007       250,918
     Warrants and options  issued to non-employees for services                     479,801            --
     Common stock issued to employees for  compensation                             125,729            --
     Amortization of deferred revenue                                               (93,698)           --
     Employee stock-based compensation expense related to options                    49,256     1,316,060
     Depreciation                                                                     5,821         3,829
     Write down of investments and marketable securities                             36,814
     Derivative loss                                                                768,000
     Changes in operating assets and liabilities:
         Accounts receivable                                                             --        (3,063)
         Prepaid expenses and other current assets                                  129,379        26,625
         Other assets                                                                34,616      (228,315)
         Accounts payable and accrued expenses                                     (155,024)       15,020
         Accrued compensation                                                      (107,923)      (85,823)
                                                                                -----------   -----------
Net cash flows from operating activities                                         (1,242,595)     (460,602)
                                                                                -----------   -----------

INVESTING ACTIVITIES
Purchases of equipment                                                              (18,136)           --
                                                                                -----------   -----------
Net cash flows from investing activities                                            (18,136)           --
                                                                                -----------   -----------

FINANCING ACTIVITIES
Proceeds from sales of common stock, preferred stock and warrants                   141,683       484,600
Proceeds from stock settlement liability                                            950,000
Proceeds from the exercise of employee stock options                                329,870            --
Payment for the redemption of warrants                                              (76,744)           --
Payments for preferred stock dividends                                              (61,060)      (12,041)
(Payments) on receipt from notes payable                                            (12,280)      140,217
Financing costs                                                                          --      (113,339)
Payments to acquire treasury stock                                                       --        (2,215)
                                                                                -----------   -----------
Net cash flows from financing activities                                          1,271,469       497,222
                                                                                -----------   -----------

Net increase in cash                                                                 10,738        36,620
Cash at beginning of year                                                           622,797         8,084
                                                                                -----------   -----------
Cash at end of year                                                             $   633,535   $    44,704
                                                                                ===========   ===========
</TABLE>

                             See accompanying notes.


                                       8
<PAGE>

                              ADZONE RESEARCH, INC.
                       UNAUDITED STATEMENTS OF CASH FLOWS
                  NINE MONTHS ENDED DECEMBER 31, 2004 AND 2003
                                   (CONTINUED)

<TABLE>
<S>                                                             <C>               <C>
SUPPLEMENTAL CASH FLOW DISCLOSURES:

     Cash paid for interest                                     $         1,914   $         2,239
                                                                ===============   ===============

     Cash paid for income taxes                                 $            --   $            --
                                                                ===============   ===============

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Marketable securities declared as a property dividend           $       233,186   $            --
                                                                ===============   ===============
Securities received as payment of revenues (deferral)           $       300,000                --
                                                                ===============   ===============

Unrealized loss on marketable securities                        ($        1,363)               --
                                                                ===============   ===============

Issuance of common stock (at market value) in settlement of
     accrued compensation liability                             $            --   $        85,823
                                                                ===============   ===============

Increase in value of investment declared as property dividend   $        24,547   $            --
                                                                ===============   ===============
</TABLE>

                             See accompanying notes.


                                       9
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

1.    BASIS OF PRESENTATION

      The  accompanying  unaudited  condensed  financial  statements  have  been
      prepared in accordance with Generally Accepted  Accounting  Principles for
      interim  financial  information  and pursuant to the Regulation S-B of the
      Rules and Regulations of the Securities and Exchange  Commission.  Certain
      financial  information and footnote disclosure normally included in annual
      financial  statements  prepared  in  accordance  with  Generally  Accepted
      Accounting  Principles  have been condensed or omitted.  Accordingly,  the
      accompanying  financial  statements  should  be read in  conjunction  with
      ADZONE's  annual  financial  statements and notes thereto  included in its
      Form 10-KSB/A for the year ended March 31, 2004.

      In the  opinion  of  management,  the  financial  statements  reflect  all
      adjustments   (consisting  of  only  normal  and  recurring   adjustments)
      necessary to present fairly the financial position,  results of operations
      and cash flows for those periods presented. Operating results for the nine
      months  ended  December  31, 2004 are not  necessarily  indicative  of the
      results that may be expected for the year ended March 31, 2005.

      Certain accounting policies:

      Revenue recognition:

      Revenues under contracts with the United States  Department of Defense are
      recorded when earned.  The Company's  derived  $150,725 of revenues during
      the  nine-month  period ended  December 31, 2004 under  contracts with the
      United States  Department of Defense and related  agencies.  Revenues from
      the Senticore  Technology  Distribution  Agreement  represent  both annual
      minimum fees, paid in advance,  and royalty income.  The Company  received
      fees of $300,000  during the  quarterly  period  ended  December 31, 2004,
      which fees have been deferred and amortized  over the period of benefit of
      one year. Revenues include $93,698 of revenues that were earned under this
      contract during the quarterly period ended December 31, 2004.

      Marketable securities:

      The  Company's   investments   consist  of  marketable  equity  securities
      classified  as available  for sale and recorded at fair value.  Unrealized
      holding  gains  and  losses  are  recorded,  net of any tax  effect,  as a
      separate component of accumulated other comprehensive income.

      Assets restricted for dividend payments:

      Assets restricted for dividend  payments consist of marketable  securities
      valued at  $122,733  at  December  31,  2004 and  1,500,000  shares of The
      Justice Fund valued at $135,000 December 31, 2004.


                                       10
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

1     BASIS OF PRESENTATION (CONTINUED)

      Comprehensive income (loss):

      Comprehensive  loss for the three and nine month periods  ending  December
      31, 2004 consist of the Company's  net loss for the periods,  adjusted for
      unrealized losses on available-for-sale marketable securities.

      Derivative financial instruments:

      The Company accounts for derivative  financial  instruments indexed to and
      potentially  settled in its own stock in accordance  with Emerging  Issues
      Task Force 00-19,  which provides that if the number of shares deliverable
      in a  transaction  be  indeterminable,  that said shares be presented as a
      liability in the balance sheet.  Further,  the liability is to be measured
      at fair value until such time as the  obligation  is  settled.  The shares
      issued in connection with the Nutmeg  Subscription  Agreement discussed in
      Note 3 to the financial statements are derivative transactions and as such
      have been presented in the accompanying balance sheet as liabilities.  The
      difference in the fair value of this liability at each financial reporting
      date is charged to operations.

      Recent accounting pronouncements:

      In December 2004, the Financial  Accounting  Standards Board (FASB) issued
      FASB Statements on Financial  Accounting  Standards No. 153,  Exchanges of
      Non-monetary  Assets - An Amendment of APB Opinion No. 29. APB Opinion No.
      29, "Accounting For Non-monetary Transactions," provides that exchanges of
      non-monetary  assets  should be  measured  based on the fair  value of the
      assets exchanged. Statement No. 153 amends Opinion No. 29 to eliminate the
      exception  for  non-monetary  exchanges of similar  productive  assets and
      replaces it with a general exception of non-monetary  assets whose results
      are not  expected  to  significantly  change the future  cash flows of the
      entity.  The  adoption of  Statement  No. 153 is not  expected to have any
      impact  on  the  Company's  current  financial  condition  or  results  of
      operations.

      In December 2004, the FASB also issued Statement No. 123R,  Accounting for
      Share  Based  Payments.  Statement  123R  establishes  revised  accounting
      standards for employee-stock based compensation  measurement that requires
      employee  stock-based  compensation  be  measured at the fair value of the
      award,  replacing the intrinsic approach currently  available to companies
      under Statement 123. Compensation cost continues to be recognized over the
      period  during  which the  employee is required  to provide  service.  The
      provisions of the revised statement are effective for financial statements
      issued for the first interim or annual  reporting  period  beginning after
      December 15, 2005, with early adoption  encouraged.  The Company  accounts
      for  options   issued  to   employees   using  the   intrinsic   approach.
      Implementation  of this new  standard is  currently  expected to result in
      increases  in future  compensation  expense.  However,  such effect is not
      currently estimable.


                                       11
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

2.    LIQUIDITY AND MANAGEMENT'S PLANS:

      The  preparation  of financial  statements  in accordance  with  Generally
      Accepted Accounting Principles contemplates that the Company will continue
      as a going  concern.  As noted  in the  accompanying  condensed  financial
      statements,  the Company incurred a net loss of ($3,563,373) and used cash
      of ($1,242,595) in conducting its operations  during the nine-month period
      ended December 31, 2004. These recurring negative trends raise substantial
      doubt about the Company's ability to continue as a going concern.

      While operating cash flows for the remaining  periods in fiscal year ended
      March 31, 2005 are not projected to be sufficient to sustain the Company's
      operations,  management  currently believes that existing cash reserves of
      $633,535,   coupled  with  (i)  a  potential  outstanding  commitment  for
      approximately   $750,000  in  connection  with  the  Nutmeg   Subscription
      Agreement (see Note 3) will be sufficient to fund operating deficits for a
      period of approximately twelve months. Management considered the following
      specific  elements of its internal  projections in making its  conclusions
      about its ability to continue for approximately twelve months:

      a.    Management does not believe that the significant  level of cash used
            in  operations  during  the nine  months  ended  December  31,  2004
            ($1,242,595)  is  indicative of cash flow usage during the next four
            fiscal quarters. Cash flow from operations during the current period
            included two amounts, as follows,  that increased cash usage. First,
            a bonus of  $320,000  was awarded to two  officers by the  Company's
            Board of Directors during the second quarter.  Accordingly,  at this
            time,  no  further  officer  bonuses  are  contemplated.Second,  the
            Company used cash proceeds from the Nutmeg Subscription Agreement to
            pay  certain  current  and past due  accounts  payable  and  accrued
            liabilities  amounting  to  $262,947.  While  payments  on  accounts
            payable and accrued  expenses  will continue in the normal course of
            business,  such  payments  are  not  expected  to  be at  the  level
            reflected in the Company's year to date operations.

      b.    Certain vendors continue to accept the Company's  equity  securities
            for  compensation  for their  services,  which has  helped  and will
            continue to help preserve cash.  While such non-cash  expense is not
            currently expected to be as high in the near term future quarters as
            during the current quarter,  based upon ongoing discussions with the
            vendors,  management believes that they will continue to accept such
            securities in the foreseeable future.

      c.    The  Company  completed  a three  month U.S.  Department  of Defense
            contract  in the second  quarter  and  collected  $150,000  for said
            contract.  Management of the Company is optimistic  that the success
            of  this  contract  will  lead  to  follow  on  contracts  with  the
            government,  although  no such  contracts  have  yet  been  awarded.
            However,  management is actively negotiating three such proposals in
            the Defense Industry arena.


                                       12
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

2.    LIQUIDITY AND MANAGEMENT'S PLANS (CONTINUED)

      d.    Management does not currently project expending  significant  levels
            of cash to acquire  equipment to support  revenue  growth during the
            next four fiscal  quarters.  Equipment  necessary  for the Company's
            contracts  principally  relates  to  computer  equipment,  which  is
            projected to be sufficient for the foreseeable future.  However, the
            nature of  contracts  awarded in the future,  if any,  may result in
            additional   modifications   and  expenditures  at  the  request  of
            customers.

      e.    The Company's working capital deficiency of ($1,503,694)  includes a
            stock  settlement  liability of $1,718,000  that can be settled with
            registered  equity  securities upon the  effectiveness  of a related
            registration statement. However, obtaining an effective registration
            statement is presumed not to be within the management's  control. In
            the  event  that  an   effective   registration   related  to  these
            instruments  can not be obtained,  management  believes  that it can
            renegotiate  the terms of the underlying  instruments to provide for
            fulfillment with equity  securities of the Company.  There can be no
            assurances,  though,  that  management  would be  successful in such
            negotiations.

      f.    Finally,  management believes that, in the event necessary,  certain
            operating expenses can be curtailed.  These expenses are principally
            related to employment and facility costs.

      During the remainder of fiscal year ended March 31, 2005, management plans
      to continue to promote the U.S.  Department of Defense and Commercial uses
      of its  technologies.  There can be no  assurances  that the  Company  can
      execute revenue-producing contracts under acceptable terms and conditions.

      The Company's ability to continue as a going concern is dependent upon the
      preservation  of  existing  cash  reserves,   the  receipt  of  the  final
      conditional traunch of the Nutmeg Subscription Agreement (see Note 3) and,
      ultimately,  the  achievement  of  profitable  operations.  The  financial
      statements do not include any adjustments  that might arise as a result of
      this uncertainty.

3.    STOCKHOLDERS' EQUITY:

      Issuances of common stock:

      During the nine month period ended  December 31, 2004,  the Company issued
      shares of common stock, as follows:  9,167,284 shares for cash proceeds of
      $1,091,683  (which  is  inclusive  of  $950,000   recognized  as  a  stock
      settlement  liability,  $40,000  common  stock  to be  issued  and  net of
      $150,000 in expenses)  and  2,507,201  shares for the exercise of employee
      stock options and non-employee warrant for cash proceeds of $329,870.


                                       13
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

3.    STOCKHOLDERS' EQUITY (continued):

      Issuances of common stock: (continued):

      During the nine month period ended  December 31, 2004,  the Company issued
      2,070,000 shares of common stock to employees for services rendered, which
      were valued at $329,600  using the trading  market  prices on the dates of
      grant.  Compensation  expense  under these awards is  recognized  over the
      vesting period of these  restricted  awards.  The following table reflects
      the recognition of the cost of this award:

            Total compensation expense of 2,070,000 shares of
              common stock on the date of award                       $ 329,600

            Less: recognition of compensation expense, as vested       (125,729)
                                                                      ---------

            Deferred compensation at December 31, 2004                $ 203,871
                                                                      =========

      During the nine month period ended  December 31, 2004,  the Company issued
      5,464,601  shares of common stock upon the  conversion of a portion of its
      outstanding  Series A  Preferred  Stock and Series B Preferred  Stock,  as
      follows:

            Common shares issued upon conversion of Series A
            Preferred Stock                                            2,295,261

            Common shares issued upon conversion of Series B
            Preferred Stock                                            3,169,340
                                                                       ---------

            Total common shares issued                                 5,464,601
                                                                       =========

      During the nine month period ended  December 31, 2004,  the Company issued
      an aggregate of 4,127,971  shares of common stock for services by vendors,
      valued at  $1,048,007  using the  trading  market  value of the  Company's
      common stock on the date of the respective grants.


                                       14
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

3.    STOCKHOLDERS' EQUITY (continued):

      Issuances of non-employee options and warrants:

      During the nine months ended  December 31, 2004,  the Company issued stock
      options  and  warrants to  non-employees  to acquire  7,086,134  shares of
      common stock for financing  activities,  consulting and other services, as
      follows:  3,786,134  warrants in connection  with the Nutmeg  Subscription
      Agreement  (see  below);  1,000,000  warrants  in  connection  with future
      services  under  the  Baltic  Ventures  Agreement  (see  Note  4,  below);
      3,300,000 to advisers  for  services.  Warrants  were valued at fair value
      using the  Black  Scholes  Valuation  Model.  Such  model  resulted  in an
      aggregate  valuation  of  $785,000,  of which  $554,640  related to future
      services and is being amortized over the contractual  performance  period.
      Expense charges for the nine months ended December 31, 2004 is included in
      the caption  Consulting  and  Professional  Services  in the  accompanying
      statement of operations, as follows:

            Charges to expense immediately                              $230,360
            Amortization of vested warrants                              249,441
                                                                        --------
                                                                        $479,801
                                                                        ========

      The value of unamortized warrants at December 31, 2004 was $305,199.

      The  Black  Scholes   Valuation  Model  requires  the  use  of  subjective
      estimates.  Management  estimated the future  volatility and the risk free
      rate of return for  issuances  during the nine months  ended  December 31,
      2004 at 360% and 3.0%, respectively.

      Including  these  fiscal 2005  issuances,  the  Company  has  non-employee
      options and warrants  outstanding to acquire  16,411,829  shares of common
      stock at exercise prices ranging from $0.07 to $5.00. The weighted average
      exercise price is $0.31.  These options and warrants  expire,  as follows:
      1,285,000 in 2005;  3,275,000 in 2006; 0 in 2007;  7,990,695 in 2008; and,
      3,861,134 in 2009.

      On March 24, 2004, the Company  executed a Securities  Purchase  Agreement
      with Spartan  Securities Group, Ltd. whereby the Company purchased 232,528
      Warrants  previously  issued to Spartan as compensation on the sale of the
      Company's 9% Series A Preferred  Stock issue.  The Company  completed this
      transaction with the payment of an aggregate  $76,744 to Spartan in April,
      2004  ($50,000)  and May,  2004  ($26,744).  The  payment was treated as a
      charge to paid-in-capital during the three months ended June 30, 2004.


                                       15
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

3.    STOCKHOLDERS' EQUITY (continued):

      Issuances of employee stock options:

      During the nine months ended December 31, 2004, the Company  granted stock
      options to acquire 1,975,000 shares of common stock to employees under the
      Company's 2004 Incentive Stock Plan. The employees  exercised 1,939,000 of
      the options prior to December 31, 2004.  These options are exercisable for
      a period  of one year at 90% of the  lowest  trading  price on the date of
      exercise. As a result of this provision,  these options while outstanding,
      and any  further  options  issued  under this  particular  Plan (up to the
      5,000,000 shares authorized),  will be accounted for using "variable plan"
      accounting.  Under variable plan accounting,  as applied to these options,
      the initial  intrinsic value, plus future increases in the intrinsic value
      of the options is recorded as  compensation  expense  periodically,  until
      such  options are  exercised.  During the nine months  ended  December 31,
      2004,  the  Company  recorded  $49,256  as  "variable  plan"  compensation
      expense.

      The Company also has 10,000,000 employee stock options outstanding under a
      former plan that provides for "fixed plan"  accounting.  That is, both the
      number of shares and exercise price were known and fixed on the respective
      dates of grant.  Exercise  prices of these  options  range  from  $0.10 to
      $2.00. The weighted average exercise price is $1.06.  These options expire
      as follows: 2,000,000 in 2006; 1,000,000 in 2008; and, 7,000,000 in 2010.

      Pro forma Stock-Based Compensation Information:

      The following table reflects supplemental financial information related to
      stock-based  employee  compensation for the nine months ended December 31,
      2004 and 2003, as required by Statement of Financial  Accounting Standards
      No.  148,  Accounting  for  Stock-Based   Compensation  -  Transition  and
      Disclosure:

<TABLE>
<CAPTION>
                                                                                          Nine Months Ended
                                                                                            December 31,
                                                                              ----------------------------------------
                                                                                      2004                  2003
                                                                              ------------------    ------------------
<S>                                                                           <C>                   <C>
              Loss applicable to common stockholders, as reported             $       (3,740,647)   $       (2,099,562)
                                                                              ==================    ==================
              Employee stock based compensation, as reported                  $         (174,985)   $       (1,358,260)

                                                                              ==================    ==================
              Employee stock-based compensation under fair value method       $         (964,256)   $       (1,382,260)
                                                                              ==================    ==================
              Pro-forma loss applicable to common stockholders under
                  fair value method                                           $       (4,529,918)   $       (2,123,562)
                                                                              ==================    ==================

              Loss applicable to common stockholders per share, as reported   $            (0.05)   $            (0.03)
                                                                              ==================    ==================
              Pro-forma loss applicable to common stockholders per share
                under fair value method                                       $            (0.06)   $            (0.04)
                                                                              ==================    ==================
</TABLE>


                                       16
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

3.    STOCKHOLDERS' EQUITY (continued):

      Nutmeg subscription agreement

      On May 20, 2004, the Company  executed a  Subscription  Agreement with The
      Nutmeg Group, L. L. C., a U. S. Virgin Islands limited liability  company,
      for the sale of common stock and warrants. The aggregate selling price was
      $1,750,000  (increased on July 23, 2004 to  $1,850,000)  to be received in
      four  traunches as follows:  (1) $400,000 by May 20, 2004 (net proceeds of
      $320,000  were  received  for  3,457,217  shares and  warrants  to acquire
      1,728,600  shares  of common  stock);  (2)  $600,000  by June 4, 2004 (net
      proceeds of $530,000 were received for 3,289,474 share of common stock and
      warrants to acquire  1,644,737  shares of common  stock);  (3) $100,000 on
      July 23, 2004 (net proceeds of $100,000  were received for 825,593  shares
      of common stock and warrants to acquire  412,797  shares of common stock);
      and, (4) $750,000,  at the option of the Company,  within five (5) days of
      the date that a Registration  Statement covering the underlying securities
      in this  agreement  is  declared  effective  by the U. S.  Securities  and
      Exchange  Commission.  The number of shares  issued and/or to be issued is
      stated to be equal to the purchase price divided by the lesser of a) $0.20
      per  share;  b) 57% of the  average  closing  bid price for the  Company's
      common  stock  on  the  two  trading  days  prior  to the  closing  of the
      respective  traunche;  or c) 57% of the average  closing bid price for the
      Company's  common  stock on the two (2) trading  days prior to the date on
      which the Registration  Statement  covering the underlying  shares in this
      agreement  is declared  effective  by the U. S.  Securities  and  Exchange
      Commission.  The proceeds from this  transaction  have been  classified as
      stock settlement liability in the accompanying condensed balance sheet.

      The  Warrants  will expire on December 31, 2008.  The  Warrant's  exercise
      price will be at 125% of 57% of the  average  closing bid price for Common
      Stock on the two (2)  trading  days  immediately  prior to the filing of a
      Registration  Statement  covering the  underlying  stock in this agreement
      with the U. S. Securities and Exchange Commission.

      The  Company  filed the  Registration  Statement  on July 23,  2004 and an
      Amended  Registration  Statement  on  November 4, 2004.  The  Subscription
      Agreement  imposes a penalty of 1% of the amount invested by Nutmeg if the
      Registration  Statement is not declared  effective  within 120 days of the
      initial filing and an additional  penalty of 1% for each additional 30 day
      period that the  Registration  Statement  is not declared  effective.  The
      Registration  Statement has not been declared  effective as of the date of
      this filing.  Through September 1, 2005, the Company has accrued a penalty
      of  $99,000  related  to the  registration  statement  not being  declared
      effective.

      There  can be no  assurances  that  the  Registration  Statement  will  be
      declared effective by the Securities and Exchange Commission. There are no
      other funding commitments as of this date.


                                       17
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

3.    STOCKHOLDERS' EQUITY (continued):

      Preferred stock:

      The Company has Series A Preferred Stock ($.001 par value, 4 shares issued
      and  outstanding)  and Series B Preferred  Stock ($.001 par value, 1 share
      issued and  outstanding).  As of  December  31,  2004 the  redemption  and
      carrying  values of the Series A  Preferred  Stock are  $56,647.  Series A
      Preferred  Stock was issued in  connection  with a unit offering in August
      2003. As of December 31, 2004, the  redemption and carrying  values of the
      Series B Preferred Stock are $11,500.  Series B Preferred Stock was issued
      in connection  with a unit offering in three  traunches  between  November
      2003 and January  2004.  Preferred  stock became  convertible  into common
      stock  at the  earlier  of  180  days  following  the  sale  or  upon  the
      effectiveness of the  aforementioned  Registration  Statement.  During the
      quarter ended December 31, 2004, 20 shares of Series A Preferred Stock and
      30 shares of Series B Preferred  Stock were  converted  to  2,295,261  and
      3,169,340 shares common stock, respectively.

      For purposes of classification,  the original proceeds from the respective
      offerings were allocated  between the underlying units offered,  which, in
      each instance were  preferred  stock and warrants to acquire common stock,
      based upon their  relative  fair  values.  Such  allocation  requires  the
      Company  to  compute  an  effective  conversion  price on the  convertible
      security  (the  preferred  stock in this  instance)  using  the  allocated
      proceeds.  Effective conversion prices lower than prevailing market prices
      result in a  beneficial  conversion  feature,  which  requires  accounting
      recognition under Generally Accepted Accounting Principles.

      The following table reflects the details of these original allocations:

<TABLE>
<CAPTION>
                                                                          Allocation
                                                                 ------------------------
                                                                  Preferred
                                                                   Stock        Warrants     Proceeds
                                                                 ----------    ----------   ----------
<S>                                                              <C>           <C>          <C>
            Series A Preferred Stock:
                 Initial allocation                              $  197,525    $  150,975   $  348,500
                                                                               ==========   ==========
                 Beneficial conversion feature included in
                      additional paid-in capital                   (145,997)
                                                                 ----------
                 Initial carrying value of the preferred stock   $   51,528
                                                                 ==========

            Series B Preferred Stock:
                 Initial allocation                              $  133,853    $  176,147   $  310,000
                                                                               ==========   ==========
                 Beneficial conversion feature included in
                      additional paid-in capital                   (133,853)
                                                                 ----------
                 Initial carrying value of the preferred stock   $       --
                                                                 ==========
</TABLE>


                                       18
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

3.    STOCKHOLDERS' EQUITY (continued):

      Preferred stock (continued):

      Following the initial  allocations,  the preferred stock was accreted over
      the period up to the earliest redemption date (180 days) to its redemption
      amount through  periodic charges to accumulated  earnings  $116,214 during
      the nine month period ended  December 31, 2004).  Such  accretions,  along
      with preferred stock dividends are treated as increases to loss per common
      share attributable to common stockholders.

4.    COMMITMENTS AND CONTINGENCIES

      Litigation:

      AdZone is a party to a lawsuit  filed against it by R. C. Auletta and Co.,
      Inc.  (Auletta),  which was filed during 2001.  Auletta is seeking fees in
      the amount of  approximately  $32,000 for  services  which were  allegedly
      performed  after the  expiration  of a contract  for  consulting  services
      between AdZone and Auletta. A judgment in the amount of $34,692, including
      interest,  was entered against the Company during Fiscal 2004. The Company
      executed a settlement  agreement  whereby the judgment  will be retired as
      follows: $5,000 cash upon execution of the settlement agreement and $1,000
      per month,  commencing  December 15,  2003,  until the judgment is paid in
      full.  In  prior  periods,   the  Company  has  accrued,  and  charged  to
      operations, all costs associated with this transaction.  No further effect
      on the financial  condition of the Company should occur on this matter. As
      of December 31, 2004 the balance accrued on this judgment is $16,692.

      Due to the Company's  financial  position,  from time to time, the Company
      may  become  party to  collection  actions,  litigation  and/or  judgments
      related to the non-payment of various operating expenses. Management is of
      the  opinion  that an  appropriate  provision  for  amounts  due and other
      related expenses has been made in the accompanying financial statements.


                                       19
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

4.    COMMITMENTS AND CONTINGENCIES (continued):

      Litigation (continued):

      Baltic Ventures Agreement:

      On April 30,  2004,  the Company  executed an  Engagement  Agreement  with
      Baltic Ventures,  LLC, a New York limited liability  company,  (Baltic) to
      provide advice and  representation for strategic  opportunities  including
      Mergers,  Joint Ventures,  Acquisitions  and other business matters and to
      advise  and  represent  the  Company  after  such  assessment  to  close a
      transaction  or  acquisition  after  approval  by the  Company  as soon as
      reasonably possible.  This agreement is valid through January 31, 2005 and
      is renewable at the option of either party. For compensation,  the Company
      issued  25,000  shares of common stock  registered  on Form S-8 to each of
      Baltic's  principals,  Jeffrey Hale and Terry Kent.  Further,  the Company
      issued 200,000 shares of unregistered,  restricted common stock to Baltic.
      In the event that Baltic  terminates the contract during the initial term,
      the 200,000  shares must be returned  to the  Company.  Additionally,  the
      Company  must issue  Warrants to purchase  up to  1,000,000  shares of the
      Company's  common  stock,  exercisable  for a two (2) year  period,  at an
      exercise price of $1.00 per share.  As  compensation  for any  consummated
      transaction,  the Company is liable to pay Baltic a  commission  of 10% of
      the closing  transaction  value and  Warrants to purchase up to  1,000,000
      shares of the  Company's  common stock at the quoted  closing price of the
      Company's common stock on the date of closing with a term of two (2) years
      from the closing date. Further, the Company shall reimburse Baltic for all
      reasonable   out-of-pocket   expenses   upon   approval  by  the  Company.
      Additionally,  the Company  shall  furnish  Baltic a computer  system,  if
      requested, with a value of not more than $2,500.

      The Justice Fund/Senticore Agreement:

      On September 9, 2004, the Company  entered into a  Distribution  Agreement
      (the  "Agreement")  with  Senticore,   Inc.  and  The  Justice  Fund  (the
      "Counterparties") that provides the Counterparties  exclusive distribution
      rights to the Company's  proprietary  Internet monitoring  technologies on
      the  continents of Asia and South America.  The Agreement  provided for an
      initial annual fee to the Company of $300,000. The contract contains three
      one-year renewal options, at the discretion of the counter parties, with a
      maximum revenue potential of $2.25 million.  This contract provides Adzone
      with marketing and additional  services for  distribution of the Company's
      products  internationally.  It also provides  access to  additional  legal
      services supporting the Company's anti-piracy efforts.

      On October 13, 2004,  the Agreement was amended to provide for  collection
      of the initial fee in the form of equity securities of the  Counterparties
      (See Note 2).  During  the three  months  ended  December  31,  2004,  the
      Company's  board of directors  declared a property  dividend of 90% of the
      equity securities received from the counter parties. The dividend amounted
      to $233,186.  At December 31, 2004 assets  restricted for dividend payment
      and accrued  dividends  payable related to the property  dividend declared
      was $257,733.


                                       20
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

5.    RESTATEMENTS

      The  accompanying  quarterly  financial  statements  have been restated to
      reflect  adjustments  related  to  (i)  the  recognition  of a  derivative
      financial  instrument indexed to and potentially  settled in the Company's
      own stock as a liability  (versus common equity) and a charge or credit to
      earnings  for the  change in the fair  value of that  liability;  (ii) the
      accrual of property dividends declared as a liability, a related charge to
      accumulated  deficit and the classification of investments  restricted for
      the  payment  of  such  dividends  as  a  restricted   asset;   (iii)  the
      reclassification  of  deferred  stock  based  compensation  from an  asset
      (prepaid  expenses)  to a reduction in  stockholders'  equity and (iv) the
      effects on opening  stockholders'  equity related to  restatements  to the
      March 31, 2004  balances as discussed in Note C to the March  31,2004 Form
      10-KSB/A  Amendment  No. 2 dated  July 13,  2005.  The  following  tabular
      presentation  reflects the effects of the adjustments on amounts  reported
      during the nine months ended December 31, 2004:


                                       21
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

                             Condensed Balance Sheet
                                December 31, 2004
                             -----------------------

<TABLE>
<CAPTION>
                                           As Originally
                                             Reported                      Adjustments          As Restated
                                        ------------------             -----------------     -----------------
<S>                                       <C>                          <C>                   <C>
ASSETS

Current assets:
    Cash                                  $       633,535              $             --      $        633,535
    Marketable securities                         136,370      (2)             (107,733)               28,637
    Assets restricted for dividend
       payment                                         --      (2)              257,733               257,733
    Prepaid consulting fees and
       other expenses                             310,092      (3)             (305,199)                4,893
                                          ----------------             -----------------     -----------------
Total current assets                            1,079,997                      (155,199)              924,798

Property and equipment, net                        22,738                            --                22,738
Investments                                       150,000      (2)             (150,000)                    -
Other assets                                        3,739      (5)                   --                 3,738
                                          ----------------             -----------------     -----------------
Total assets                              $     1,256,473              ($       305,199)     $        951,274
                                          ================             =================     =================

LIABILITIES AND STOCKHOLDERS (DEFICIENCY) EQUITY

Current liabilities:
    Accounts payable                      $       142,948      (5)     $             --      $        142,947
    Accrued compensation                           53,003                            --                53,003
    Accrued dividend payable                           --      (2)              257,733               257,733
    Deferred notes payable                        206,302                            --               206,302
    Current notes payable                          50,507                            --                50,507
    Stock settlement liability                         --      (1)            1,718,000             1,718,000
                                          ----------------             -----------------     -----------------
Total current liabilities                         452,759                      1,975,733            2,428,492

Notes payable                                     166,783                            --               166,783

Stockholders' (deficit) equity:
    Preferred stock                                68,147                            --                68,147
    Common stock                                   94,169                            --                94,169
    Common stock to be issued                      40,000                            --                40,000
    Additional paid-in capital                  9,873,662    (1,3,4)           (582,483)            9,291,179
    Accumulated deficit                        (9,188,780)   (2,4,5)         (1,914,587)          (11,103,368)
    Other stockholders' equity                    (46,395)     (2)               12,267               (34,128)
    Deferred employee stock-based
       compensation                              (203,871)     (4)              203,871                     -
                                          ----------------             -----------------     -----------------
Total stockholders' (deficit) equity              636,930                    (2,280,932)           (1,644,001)
                                          ---------------              -----------------     -----------------
Total liabilities and stockholders'
    (deficit) equity                      $     1,256,473              ($       305,199)     $        951,274
                                          ================             =================     =================
</TABLE>


                                       22
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

                        Condensed Statement of Operations
                       Nine Months Ended December 31, 2004

<TABLE>
<CAPTION>
                                           As Originally
                                             Reported                      Adjustments          As Restated
                                        ------------------             -----------------     -----------------
<S>                                     <C>                            <C>                   <C>
Net revenues                            $         244,423              $             --      $        244,423
                                        --------------------           -----------------     -----------------

Operating costs and expenses:
    Cost of contract revenues                      42,000                            --                42,000
    Consulting and professional
       services                                 1,367,954                            --             1,367,954
    Salaries and related                        1,041,161                            --             1,041,161
    General and administrative                    520,727      (5)                                    520,726
    Depreciation and amortization                   5,821                            --                 5,821
                                        ------------------             -----------------     -----------------
                                                2,977,663      (5)                   --             2,977,662
                                        ------------------             -----------------     -----------------
Loss from operations                           (2,733,240)     (5)                   --            (2,733,239)

Derivative loss                                        --      (1)             (768,000)             (768,000)
Other income (expense), net                       (25,320)     (2)              (36,814)              (62,134)
                                        ------------------             -----------------     -----------------
Net loss                                ($      2,758,560)             ($       804,814)     ($     3,563,373)
                                        ==================             =================     =================

Reconciliation of net loss to common stockholders:
      Net loss                          ($      2,758,559)             ($       804,814)     ($     3,563,373)
      Preferred stock dividends
        and accretions                           (158,491)     (2)              (18,783)             (177,274)
                                        ------------------             -----------------     -----------------
      Loss applicable to common
       stockholders                     ($      2,917,050)             ($       823,597)     ($     3,740,647)
                                        ==================             =================     =================

Loss per common share:
    Basic and diluted loss per
       common share                     ($           0.04)     (5)     $             --      ($          0.05)
                                        ==================             =================     =================
Weighted average common
    shares, basic and diluted                  80,123,404                            --            80,123,404
                                        ==================             =================     =================

Comprehensive loss:
    Net loss as reported                ($      2,758,559)             ($       804,814)     ($     3,563,373)
    Unrealized loss on available
       for sale securities                        (13,630)     (2)               12,267                (1,363)
                                        ------------------             -----------------     -----------------

    Comprehensive loss                  ($      2,772,189)             ($       792,547)     ($     3,564,736)
                                        ==================             =================     =================
</TABLE>


                                       23
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004
                        Condensed Statement of Operations
                      Three Months Ended December 31, 2004

<TABLE>
<CAPTION>
                                           As Originally
                                             Reported                      Adjustments          As Restated
                                        ------------------             -----------------     -----------------
<S>                                     <C>                            <C>                   <C>
Net revenues                            $          94,423              $             --      $         94,423
                                        --------------------           -----------------     -----------------

Operating costs and expenses:
    Cost of contract revenues                          --                            --                     -
    Consulting and professional
       services                                   455,749                            --               455,749
    Salaries and related                          283,680                            --               283,680
    General and administrative                    268,665      (5)                                    268,664
    Depreciation and amortization                   1,940                            --                 1,940
                                        ------------------             -----------------     -----------------
                                                1,010,034      (5)                   --             1,010,033
                                        ------------------             -----------------     -----------------
Loss from operations                             (915,611)     (5)                   --              (915,610)

Derivative loss                                        --      (1)             (218,000)             (218,000)
Other income (expense), net                       (21,753)     (2)              (36,814)              (58,567)
                                        ------------------             -----------------     -----------------
Net loss                                ($        937,363)             ($       254,814)     ($     1,192,177)
                                        ==================             =================     =================

Reconciliation of net loss to loss applicable to common stockholders:

      Net loss                          ($        937,363)             ($       254,814)     ($     1,192,177)
      Preferred stock dividends
        and accretions                            (14,092)     (2)              (18,783)              (32,875)
                                        ------------------             -----------------     -----------------
      Loss applicable to common
       stockholders                     ($        951,455)             ($       273,597)     ($     1,225,052)
                                        ==================               ===============     =================

Loss per common share:
    Basic and diluted loss per
       common share                     ($           0.01)             $             --      ($          0.01)
                                        ==================             =================     =================
Weighted average common
    shares, basic and diluted                  85,754,920                            --            85,754,920
                                        ==================             =================     =================
Comprehensive loss:
    Net loss, as reported               ($        937,363)             ($       254,814)     ($     1,192,177)
    Unrealized loss on available
       for sale securities                        (13,630)                       12,267                (1,363)
                                        ------------------             -----------------     -----------------
    Comprehensive loss                  ($        950,993)             ($       242,547)     ($     1,193,540)
                                        ==================              ================     =================
</TABLE>


                                       24
<PAGE>

                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                DECEMBER 31, 2004

5.    RESTATEMENTS (continued):

      (1) In connection with the Nutmeg Subscription Agreement, a commitment was
      made to issue stock valued at  $1,100,000  at such time as a  registration
      statement is filed.  The ultimate  number of common shares to be issued is
      not  readily  determinable  at this time.  In  accordance  with EITF 00-19
      "Accounting for Derivative Instruments Indexed to, and Potentially Settled
      in, a Company's Own Stock", if the value of the ultimate settlement of the
      liability is  undeterminable,  the proceeds  should be recorded as a stock
      settlement  liability  until such time as the  transaction  is  ultimately
      settled. The initial stock settlement liability should be measured at fair
      value,  with changes in fair value  reported in earnings and  disclosed in
      the financial  statements as long as the contracts remain  classified as a
      liability. This adjustment has been recorded in the accompanying condensed
      financial statements.

      (2) During the three months ended December 31, 2004,  the Company's  board
      of  directors  declared a property  dividend of certain  investments.  The
      adjustment to record the accrued dividends payable,  the related charge to
      accumulated  deficit,  the  classification  of investments  restricted for
      payment of such dividends as a restricted  asset and the related charge to
      operations and other comprehensive  income for the decline in market value
      of  such  investments   (equity  securities)  has  been  recorded  in  the
      accompanying condensed financial statements.

      (3) During the nine months ended  December 31,  2004,  the Company  issued
      certain  stock options and warrants to  non-employees  for past and future
      services (See Note 3). Those issuances  related to future services will be
      amortized  over  the  contractual   performance  period  as  a  charge  to
      operations  and  credit  to  stockholders'   equity.   These  amounts  had
      previously  been  recorded as an asset  (prepaid  expenses) in the balance
      sheet.  The adjustment to reclassify such deferred  amounts to a reduction
      in stockholders'  equity has been recorded in the  accompanying  condensed
      financial statements.

      (4) Certain  restatements  of errors were made to the Company's  March 31,
      2004  financial  statements  as  originally  filed,  and a  Form  10-KSB/A
      Amendment No. 2 dated July 13, 2005 was  reissued.  The effects on opening
      stockholders'  equity related to these  restatements  has been recorded in
      the accompanying condensed financial statements.

      (5) Difference in as originally reported and as restated due to rounding.


                                       25
<PAGE>

PART 1.  CONDENSED FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The   discussion   in  this   document   contains   trend   analysis  and  other
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, that involve risks and uncertainties,  such as statements concerning
growth and future  operating  results;  developments  in markets  and  strategic
focus; new products and product technologies; and future economic, business, and
regulatory conditions. Such forward-looking statements are generally accompanied
by words such as "plan", "estimate",  "expect",  "believe",  "should",  "would",
"could",  "anticipate",  "may" and other words that convey uncertainty of future
events or outcomes.  These forward-looking  statements and other statements made
elsewhere  in  this  report  are  made in  reliance  on the  Private  Securities
Litigation  Reform Act of 1995. The section below entitled "Certain Factors That
May Affect Future Results,  Financial  Condition and Market Price of Securities"
sets forth material factors that could cause actual results to differ materially
from these statements.

RESULTS OF OPERATIONS
Nine Months Ended DECEMBER 31, 2003 and DECEMBER 31, 2004

Revenues:  Revenues  for the nine months  ended  December  31, 2004  amounted to
$244,423,  compared to $74,844  for the nine months  ended  December  31,  2003.
Current  period  revenues  are  derived  from (i) a $150,725  firm,  fixed-price
contract  (including  a  $50,000  option  that  was  exercised)  with  the  U.S.
Department  of  Defense  for use of our  fully  automated  NetGet  (C)  Internet
decryption  service and (ii) $93,698 from the Senticor  Technology  Distribution
Agreement.  The Company has recorded revenue on the firm-fixed price contract on
a straight-line  basis, as earned, based upon the contract performance period of
six months. The straight-line basis was considered appropriate for this contract
because  our  deliverables,  consisting  solely of  computer-generated  activity
reports,  are  delivered  to the  customer  on a daily  basis over the six month
period   contracted.   (While  the  Company  expects  future  revenue  producing
government contracts,  no additional contracts have been executed at this date.)
The Company  recognized  revenue  from annual  fees on the  Senticor  Technology
Distribution  Agreement ratably over the period of benefit.  Deferred revenue on
this agreement,  which will be recorded as earned in future periods,  amounts to
$206,302.

Cost of contract revenue: Cost of revenue for the nine months ended December 31,
2004 was $42,000 compared to $2,196 for the nine months ended December 31, 2003.
This trend reflects the nearly fully automated  process of the Company's Net Get
(C) Decryption  Process.  NetGet (C) was deployed for the current  Department of
Defense  Contract.  This  technology  was  developed  to be a  fully  automated,
Internet-based technology that monitors  customer-provided  web-pages, or URL's,
for terrorist or criminal  activities.  The  Department of Defense  provided the
Company with the URL's for this contract which are monitored and reported to the
customer.  Therefore,  direct costs  associated  with this contract are minimal.
Future  contracts,  if  any,  will  be  contracted  to the  customers'  specific
requirements and may require production, development, other services or enhanced
scope. As a result, any future contracts may require additional direct resources
and cost, which will be recorded as the revenues are earned.


                                       26
<PAGE>

Consulting and professional  services:  Consulting and professional services for
the nine months ended  December  31, 2004  amounted to  $1,367,954,  compared to
$115,456  for the  nine  months  ended  December  31,  2003.  The  increase  was
attributable  to the  engagement of firms to raise  capital,  assist in contract
negotiation and acquisition and assist in seeking  strategic  merger/acquisition
candidates.  During the nine months ended December 31, 2004, these expenses were
largely paid with equity securities that were valued at the closing market price
on the date  issued  or,  in the  case of  warrants,  using  the  Black  Scholes
Valuation Model (see Note 3 to the Condensed Financial Statements). There can be
no assurances that equity will be acceptable to the Company's  consultants on an
extended basis.

Salaries  and related:  Salaries and related for the nine months ended  December
31, 2004 amounted to $1,041,161 compared to $1,461,833 for the nine months ended
December  31,  2003.  During 2003,  cost of revenue  also  included  $297,000 of
salaries and wages.  Salaries and related includes  stock-based  compensation of
$174,985 and $1,183,133 during the nine months ended December 31, 2004 and 2003,
respectively.

General  and  administrative  expenses:   General  and  administrative  expenses
amounted to $520,726  for the nine months ended  December 31, 2004,  compared to
$226,353  for the nine months ended  December 31, 2003.  The increase is largely
attributable  to  higher  travel  expenses  necessary  to  access   governmental
customers.  As the Company's  commercial  applications come on line, general and
administrative expenses will increase.

Depreciation and amortization:  Depreciation and amortization amounted to $5,821
for the nine months ended  December  31,  2004,  compared to $1,633 for the nine
months ended December 31, 2003;  during 2003 $2,196 of depreciation  expense was
included in cost of revenues.  The increase was attributable to higher levels of
fixed  assets in the current  period.  While the Company has no  commitments  to
acquire property and equipment,  significant  levels of future revenue producing
contracts,  if any, will require  comparable  significant  investments  in fixed
assets.

Derivative  loss:  Derivative  loss amounted to  ($768,000)  for the nine months
ended  December 31, 2004,  compared to $0 for the nine months ended December 31,
2003. For the nine month period ended December 31, 2004, such balance relates to
adjustments for the change in fair value of the stock settlement liability.

Other income  (expense):  Other income  (expense)  amounted to ($62,134) for the
nine months ended  December 31, 2004,  compared to ($23,226) for the nine months
ended December 31, 2003. For the nine month period ended December 31, 2004, such
balance  relates  to  penalties  incurred  related  to the  Nutmeg  subscription
agreement (See Note 3) and interest  expense on note payable,  offset by a small
balance of interest  income,  where in the prior year the balance also  included
other miscellaneous expenses.

Preferred  stock   dividends  and  accretion:   Preferred  stock  dividends  and
accretions  relate to the Company's Series A and Series B Preferred Stock,  each
having cumulative dividend features. For purposes of computing loss attributable
to common  stockholders,  net loss is reduced by preferred  stock  dividends and
accretions to the carrying values of the preferred stock.


                                       27
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

GOING CONCERN CONSIDERATIONS AND MANAGEMENT'S PLANS

The preparation of financial  statements in accordance  with Generally  Accepted
Accounting  Principles  contemplates  that the Company will  continue as a going
concern.  As noted  in the  accompanying  condensed  financial  statements,  the
Company  incurred a net loss of  $(3,563,373)  and used cash of  ($1,242,595) in
conducting its operations  during the nine-month period ended December 31, 2004.
These  recurring  negative  trends raise  substantial  doubt about the Company's
ability to continue as a going concern.

While operating cash flows for the remaining  periods in fiscal year ended March
31, 2005 are not projected to be sufficient to sustain the Company's operations,
management  currently believes that existing cash reserves of $633,535,  coupled
with (i) a  potential  outstanding  commitment  for  approximately  $750,000  in
connection  with  the  Nutmeg  Subscription  Agreement  (see  Note  3)  will  be
sufficient  to fund  operating  deficits  for a period of  approximately  twelve
months.  Management  considered the following  specific elements of its internal
projections  in  making  its  conclusions  about its  ability  to  continue  for
approximately twelve months:

      a.    Management does not believe that the significant  level of cash used
            in  operations  during  the nine  months  ended  December  31,  2004
            ($1,242,595)  is  indicative of cash flow usage during the next four
            fiscal quarters. Cash flow from operations during the current period
            included two amounts, as follows,  that increased cash usage. First,
            a bonus of  $320,000  was awarded to two  officers by the  Company's
            Board of Directors during the second quarter.  Accordingly,  at this
            time,  no  further  officer  bonuses  are  contemplated.Second,  the
            Company used cash proceeds from the Nutmeg Subscription Agreement to
            pay  certain  current  and past due  accounts  payable  and  accrued
            liabilities  amounting  to  $262,947.  While  payments  on  accounts
            payable and accrued  expenses  will continue in the normal course of
            business,  such  payments  are  not  expected  to  be at  the  level
            reflected in the Company's year to date operations.

      b.    Certain vendors continue to accept the Company's  equity  securities
            for  compensation  for their  services,  which has  helped  and will
            continue to help preserve cash.  While such non-cash  expense is not
            currently expected to be as high in the near term future quarters as
            during the current quarter,  based upon ongoing discussions with the
            vendors,  management believes that they will continue to accept such
            securities in the foreseeable future.

      c.    The  Company  completed  a three  month U.S.  Department  of Defense
            contract  in the second  quarter  and  collected  $150,000  for said
            contract.  Management of the Company is optimistic  that the success
            of  this  contract  will  lead  to  follow  on  contracts  with  the
            government,  although  no such  contracts  have  yet  been  awarded.
            However,  management is actively negotiating three such proposals in
            the Defense Industry arena.

      d.    Management does not currently project expending  significant  levels
            of cash to acquire  equipment to support  revenue  growth during the
            next four fiscal  quarters.  Equipment  necessary  for the Company's
            contracts  principally  relates  to  computer  equipment,  which  is
            projected to be sufficient for the foreseeable future.  However, the
            nature of  contracts  awarded in the future,  if any,  may result in
            additional   modifications   and  expenditures  at  the  request  of
            customers.


                                       28
<PAGE>

      e.    The Company's working capital deficiency of ($1,503,694)  includes a
            stock  settlement  liability of $1,718,000  that can be settled with
            registered  equity  securities upon the  effectiveness  of a related
            registration statement. However, obtaining an effective registration
            statement is presumed not to be within management's  control. In the
            event  that an  effective  registration  statement  related to these
            instruments  can not be obtained,  management  believes  that it can
            renegotiate  the terms of the underlying  instruments to provide for
            fulfillment with equity  securities of the Company.  There can be no
            assurances,  though,  that  management  would be  successful in such
            negotiations.

      f.    Finally,  management believes that, in the event necessary,  certain
            operating expenses can be curtailed.  These expenses are principally
            related to employment and facility costs.

During the  remainder of fiscal year ended March 31, 2005,  management  plans to
continue to promote the U.S.  Department of Defense and  Commercial  uses of its
technologies.   There  can  be  no  assurances  that  the  Company  can  execute
revenue-producing contracts under acceptable terms and conditions.

The  Company's  ability to continue  as a going  concern is  dependent  upon the
preservation  of existing cash  reserves,  the receipt of the final  conditional
traunch of the Nutmeg Subscription  Agreement (see Note 3) and, ultimately,  the
achievement of profitable  operations.  The financial  statements do not include
any adjustments that might arise as a result of this uncertainty.

LIQUIDITY

December 31, 2004 compared to March 31, 2004

The Company has a working  capital  deficit of  ($1,503,694)  as of December 31,
2004  compared  to  $235,384  as of March 31,  2004.  Working  capital is net of
$206,302 of deferred revenue which will not require cash to liquidate.  Net cash
and working capital of $1,271,469 was generated from financing activities during
the nine months ended December 31, 2004,  consisting of proceeds from the Nutmeg
Subscription Agreement, proceeds from the exercise of employee stock options and
the sale of common stock to third parties.  The working  capital  generated from
these  financing  activities was diminished by  ($1,242,595)  and ($18,136) from
operating and investing activities respectively. Operating activities during the
nine months ended December 31, 2004 reflected  significant  continuing operating
losses.  In addition,  cash proceeds from the financing  activities were used to
reduce  accounts  payable  and  accrued   liabilities  by  $262,947.   Investing
expenditures related solely to upgrades in the Company's computer network.

As more fully  described in Note 3 to the Condensed  Financial  Statements,  the
Company has received a potential commitment from the Nutmeg Group for funding of
a final Traunch of $750,000,  less  applicable  expenses  (expenses  were 15% of
total  proceeds  on the  first two  traunches),  upon the  effectiveness  of the
Registration  Statement  filed on July 23,  2004,  and an  Amended  Registration
Statement on November 4, 2004.  There can be no assurances that the Registration
Statement will be declared effective by the Securities and Exchange  Commission.
There are no other funding commitments as of this date.


                                       29
<PAGE>

OFF BALANCE SHEET ARRANGEMENTS
The Company has no off balance sheet arrangements of the types described in Item
303 (c) of Regulation SB.


                                       30
<PAGE>

PART I.  CONDENSED FINANCIAL INFORMATION
ITEM 3. CONTROLS AND PROCEDURES

As of the end of the period covered by this report ("the Evaluation  Date"), our
management,  including our chief executive officer and chief financial  officer,
conducted an evaluation  ("Evaluation")  of the  effectiveness of the design and
operation  of our  disclosure  controls  and  procedures,  as  defined  in  Rule
13a-15(e) or Rule 15d-15(e)  under the  Securities  Exchange Act of 1934. In the
course of the Evaluation,  we identified  significant material weaknesses in our
internal disclosure controls and procedures.

The Company has had discussions  with the accounting  staff (the "Staff") of the
SEC with respect to (1) the valuation of equity  securities  issued to employees
and  non-employees and (2) the accounting and reporting for preferred stock that
had also included the issuance of warrants and beneficial  conversion  features.
After the Company's  discussions with the Staff, and after the Company consulted
with its independent  registered public accounting firm, the Company  determined
the need to restate its annual and  quarterly  financial  statements  for fiscal
2004, and the first two quarterly financial statements for fiscal 2005.


                                       31
<PAGE>

Aidman, Piser & Company, P.A. advised AdZone that each of these internal control
deficiencies  constitute a material weakness as defined in Statement of Auditing
Standards  No.  60.  Certain  of  these  internal  control  weaknesses  may also
constitute  material  weaknesses  in our  disclosure  controls.  Management  has
considered the effects of the financial statement restatements on its evaluation
of disclosure  controls and  procedures  and has concluded  that  weaknesses are
present.  Our chief executive  officer and our chief financial officer concluded
that as of the Evaluation  Date our disclosure  controls and procedures were not
effective,  and as of the date of the filing of this amended  report,  our chief
executive  officer  and our chief  financial  officer  concluded  that we do not
maintain  disclosure  controls and  procedures  that are  effective in providing
reasonable  assurance that  information  required to be disclosed in our reports
under the Securities Exchange Act of 1934 is recorded, processed, summarized and
reported  within the time periods  specified  in the SEC's rules and forms,  and
that  such  information  is  accumulated  and  communicated  to our  management,
including our chief executive officer and our chief financial officer,  to allow
timely decisions regarding required disclosure.

We are committed to improving our financial  organization.  However, the Company
does  not  possess  the  financial  resources  to  address  other  than the most
rudimentary  of accounting  and  reporting  requirements,  and therefore  relies
heavily on outside advisors.  The Company's  inability to independently  prepare
its  financial  reports  to  the  standards  of  Generally  Accepted  Accounting
Principles  and  the  Rules  and  Regulations  of the  Securities  and  Exchange
Commission rise to the level of a material weakness in internal control.

Management of the Company intends to promptly remediate this deficiency by:

(i) acquiring the appropriate level of internal financial support

(ii) access current developments training programs for financial employees and

(iii) provide financial  employees with adequate technical resources to research
financial accounting and reporting requirements.

We currently  believe we will need to take  additional  steps to  remediate  the
above-referenced  material  weaknesses,  and we will  continue to  evaluate  the
effectiveness  of our  design  and  operation  of our  disclosure  controls  and
procedures on an ongoing basis, and will take further action as appropriate.


                                       32
<PAGE>

PART II.  OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS

ADZONE is not a party to any pending legal proceedings,  and no such proceedings
are known to be contemplated.


                                       33
<PAGE>

PART II.  OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The securities  described below represent  AdZone  securities sold by it for the
period  starting  from  October  1,  2004 to  December  31,  2004  that were not
registered  under the  Securities  Act of 1933,  as  amended,  all of which were
issued by AdZone pursuant to exemptions  under the Securities Act.  Underwriters
were involved in none of these transactions.

On October 4, 2004, we issued 50,000 shares of common stock to Paul B. Sigfusson
for a purchase price of $0.22 per share.

On  October  4,  2004,  we issued  300,000  shares  of  common  stock to Paul B.
Sigfusson & Becky B.  Sigfusson-Joint  Tenants for a purchase  price of 0.22 per
share.

On  October  4,  2004,  we issued  100,000  shares  of common  stock to James P.
McEnaney for a purchase price of $0.10 per share.

The  issuance  of the  shares and the  warrants  was  exempt  from  registration
requirements  of the  Securities  Act of 1933  pursuant to Section  4(2) of such
Securities  Act  and  Regulation  D  promulgated   thereunder   based  upon  the
representations  of each of the Investors that it was an  "accredited  investor"
(as defined  under Rule 501 of  Regulation  D) and that it was  purchasing  such
securities  without a present view toward a distribution of the  securities.  In
addition,  there was no general  advertisement  conducted in connection with the
sale of the securities.


                                       34
<PAGE>

PART II.  OTHER INFORMATION
ITEM 3. DEFAULTS ON SENIOR SECURITIES

NONE.


                                       35
<PAGE>

PART II.  OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

ADZONE has not conducted any meetings of shareholders during the current quarter
or periods subsequent thereto.


                                       36
<PAGE>

PART II.  OTHER INFORMATION
ITEM 5. OTHER INFORMATION

NONE.


                                       37
<PAGE>

PART II.  OTHER INFORMATION
ITEM 6. EXHIBITS

      (a)   Exhibits

            The exhibits in the accompanying  Exhibit Index are filed as part of
            this Quarterly Report on Form 10-QSB/A.


                                       38
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned, thereunto duly authorized.

ADZONE RESEARCH, INC.

/s/ Charles Cardona      Chief Executive Officer,             September 14, 2005
----------------------   Principal Accounting Officer
Charles Cardona          and Director


                                       39

<PAGE>

ADZONE RESEARCH, INC.
EXHIBIT INDEX

Exhibit
-------

3.1   Certificate of Incorporation **

3.2   By-Laws **

10.1  Consulting  Agreement  dated as of October 26, 2001 with  Theresa A. Kober
      ***

10.2  Consulting Agreement dated as of November 2, 2001 with Blanchfield,  King,
      Kober & Company, P.C. +

10.3  Consulting Agreement with Thomas F. Gavin

10.4  Consulting  Agreement  dated as of  February  5, 2002  with  International
      Standard Consulting Corporation +++

10.5  Employment Agreement dated as of February 5, 2004 with Charles Cardona

10.6  Employment Agreement dated as of February 5, 2004 with John Cardona

10.7  Systems Integration Agreement dated as of September 21, 2002 with Raytheon
      Company

10.8  A-K Consulting  agreements with Kyle Kennedy dated as of August 19, 2002 -
      May 22, 2003

10.9  Stipulation of Settlement with Sheldon Katz dated as of September 2002

10.10 Multimedia  Web Site design  contract with Jason Genet dated as of October
      16, 2002

10.11 Investment  Banking Agreement with Spartan Securities dated as of November
      27, 2002

10.12 Agreement to borrow shares for stock loans dated as of March 7, 2003

10.13 Joint Marketing agreement with Sarnoff Corp. dated as of March 3, 2003

10.14 Warrant agreement with Tom Gavin dated as of March 12, 2003

10.15 Agreement with Boeing Autometric Division dated as of April 2003.

31.1  Certification  by Chief  Executive  Officer  and  Acting  Chief  Financial
      Officer pursuant to Sarbanes Oxley Section 302.

32.1  Certification  by Chief  Executive  Officer  and  Acting  Chief  Financial
      Officer pursuant to 18 U.S. C. Section 1350

----------
*     Incorporated by reference to Exhibit 2 to the Registrant's  Report on Form
      8-K filed with the  Securities  and Exchange  Commission  on September 21,
      2001.

**    Incorporated  by reference to the same exhibit number in the  Registrant's
      Form 10SB12G filed with the Securities and Exchange Commission on December
      30, 1999.

***   Incorporated  by  reference  to Exhibit 101 to the  Registrant's  Form S-8
      filed with the Securities and Exchange Commission on December 13, 2001.

+     Incorporated  by reference to Exhibit  10.2 to the  Registrant's  Form S-8
      filed with the Securities and Exchange Commission on December 13, 2001.

++    Incorporated  by reference to Exhibit  10.1 to the  Registrant's  Form S-8
      filed with the Securities and Exchange Commission on January 28, 2002.

+++   Incorporated  by reference to Exhibit  10.1 to the  Registrant's  Form S-8
      filed with the Securities and Exchange Commission on February 21, 2002.


                                       40