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

                                   FORM 10-QSB

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

                  FOR THE QUARTERLY PERIOD ENDING JUNE 30, 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 [ ].

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common  stock  as of  the  last  practicable  date:  June  30,  2004--79,637,622
common shares, $.001 par value.

Transitional small business disclosure format (check one):  Yes [ ] No [x]


<PAGE>




                              ADZONE RESEARCH, INC.
                 FORM 10-QSB FOR THE PERIOD ENDED JUNE 30, 2004

                                      INDEX

PART I.  CONDENSED FINANCIAL INFORMATION

ITEM 1.  UNAUDITED CONDENSED FINANCIAL STATEMENTS

         CONDENSED BALANCE SHEETS AS OF JUNE 30, 2004 AND MARCH 31, 2004       3
         CONDENSED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS
                  ENDED JUNE 30, 2004 AND 2003                                 4
         CONDENSED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS
                  ENDED JUNE 30, 2004 AND 2003                                 5
         NOTES TO CONDENSED FINANCIAL STATEMENTS                               6

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS                                 11
ITEM 3.  CONTROLS AND PROCEDURES                                              14

PART II.  OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS                                                    15
ITEM 2.  CHANGES IN SECURITIES                                                16
ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                      18
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                  19
ITEM 5.  OTHER INFORMATION                                                    20
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K                                     21


SIGNATURES


                                       2
<PAGE>


PART I. CONDENSED FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS


                              ADZONE RESEARCH, INC.
                                 BALANCE SHEETS
                        JUNE 30, 2004 AND MARCH 31, 2004


                                               JUNE 30,       MARCH 31,
                                                 2004           2004
                                             -----------    -----------
ASSETS
Current assets:
   Cash                                      $   867,097    $   622,797
   Accounts receivable                            50,000             --
   Prepaid expenses and other                    254,480        134,272
                                             -----------    -----------
Total current assets                           1,171,577        757,069

Property and equipment, net                       20,882         10,423
Other assets                                      25,670         38,355
                                             -----------    -----------
Total assets                                 $ 1,218,129    $   805,847
                                             ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                          $   118,853    $   297,972
   Accrued compensation                          107,744        160,926
   Current notes payable                          62,787         62,787
                                             -----------    -----------
Total current liabilities                        289,384        521,685

Notes payable                                    166,783        166,783

Commitments and contingencies (Note 4)                --             --

Stockholders' equity:
   Preferred stock                                    --             --
   Common stock                                   79,637         70,832
   Additional paid-in capital                  6,531,934      4,876,105
   Accumulated deficit                        (5,816,844)    (4,796,793)
   Other stockholders' equity                    (32,765)       (32,765)
                                             -----------    -----------
Total stockholders' equity                       761,962        117,379
                                             -----------    -----------
Total liabilities and stockholders' equity   $ 1,218,129    $   805,847
                                             ===========    ===========

See accompanying notes


                                       3
<PAGE>


                              ADZONE RESEARCH, INC.
                       UNAUDITED STATEMENTS OF OPERATIONS
                    THREE MONTHS ENDED JUNE 30, 2004 AND 2003


                                               JUNE 30,       JUNE 30,
                                                 2004           2003
                                             -----------    -----------
 Net contract revenues                       $    50,000    $    39,125
                                             -----------    -----------

 Operating costs and expenses:
    Cost of contract revenues                         --         40,728
    Consulting and professional services         565,371             --
    Salaries and related                         422,041         15,150
    General and administrative                    78,919         52,357
    Depreciation and amortization                  1,940            544
                                             -----------    -----------
                                               1,068,271        108,779
                                             -----------    -----------
 Loss from operations                         (1,018,271)       (69,654)

 Other income (expense)                           (1,780)        (7,388)
                                             -----------    -----------
 Net loss                                    $(1,020,051)   $   (77,042)
                                             ===========    ===========

 Reconciliation of net loss to loss
    applicable to common stockholders:
    Net loss                                 $(1,020,051)   $   (77,042)
    Preferred stock dividends                    (13,971)            --
                                             -----------    -----------
    Loss applicable to common stockholders   $(1,034,023)   $   (77,042)
                                             ===========    ===========

 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                                     73,056,178     50,541,329
                                             ===========    ===========

See accompanying notes


                                       4
<PAGE>


                              ADZONE RESEARCH, INC.
                       UNAUDITED STATEMENTS OF CASH FLOWS
                    THREE MONTHS ENDED JUNE 30, 2004 AND 2003

                                               JUNE 30,       JUNE 30,
                                                2003           2002
                                             -----------    -----------
OPERATING ACTIVITIES
Net loss                                     $(1,020,051)   $   (77,042)
Adjustments to reconcile net loss to
 net cash flows from operating activities:
     Depreciation expense                          1,940          1,276
     Common stock issued for services            479,538         36,475
     Warrants issued for services                116,000             --
     Changes in operating assets and
        liabilities:
         Accounts receivable                     (50,000)       (39,125)
         Prepaid expenses and other
            current assets                       104,792             --
         Other assets                             12,685             --
         Accounts payable and accrued expense   (232,301)       (27,690)
                                             -----------    -----------
Net cash flows from operating activities        (587,397)      (106,106)
                                             -----------    -----------

INVESTING ACTIVITIES
Purchases of equipment                           (12,399)            --
                                             -----------    -----------
Net cash flows from investing activities         (12,399)            --
                                             -----------    -----------

FINANCING ACTIVITIES
Proceeds from sales of common stock and
   warrants, net of $150,000 of
     offering expenses                           846,811         45,100
Proceeds from the exercise of employee
   stock options                                  88,000             --
Payment for the redemption of warrants           (76,744)            --
Payments for preferred stock dividends           (13,971)            --
Payments of loans from related parties                --        (34,774)
Proceeds from issuance of notes                       --        140,217
                                             -----------    -----------
Net cash flows from financing activities         844,096        149,538
                                             -----------    -----------
Net decrease in cash                             244,300         43,432
Cash at beginning of year                        622,797          8,084
                                             -----------    -----------
Cash at end of year                          $   867,097    $    51,516
                                             ===========    ===========

SUPPLEMENTAL DISCLOSURES
Cash paid for interest                       $     1,914    $     2,233
See accompanying notes


                                       5
<PAGE>


                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                  JUNE 30, 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 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 three months ended June 30, 2004
are not necessarily  indicative of the results that may be expected for the year
ended March 31, 2005.

Effective  in the first  fiscal  quarter of the year ended March 31,  2005,  the
Company discontinued operating as a development stage enterprise.

The Company's revenues during the quarterly periods ended June 30, 2004 and 2003
were  concentrated  with the United  States  Department  of Defense  and related
agencies. Revenues are recorded when earned under these arrangements.

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  $(1,020,051)  and used cash of  $(587,397)  in
conducting its operations.  These recurring  conditions 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, management
currently  believes that  existing  cash  reserves of $867,097,  coupled with an
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 to eighteen  months.  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.
However,  there  can be no  assurances  that the  Company  can  execute  revenue
producing contracts under acceptable terms and conditions.


                                       6
<PAGE>



                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                  JUNE 30, 2004

2.   LIQUIDITY AND MANAGEMENT'S PLANS (CONTINUED)

The  Company's  ability to continue  as a going  concern is  dependent  upon the
preservation of existing cash reserves,  the receipt of the final 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 AND WARRANTS

During the three month period ended June 30, 2004, the Company issued  8,805,367
shares of common  stock,  as  follows:  7,381,691  shares for cash  proceeds  of
$846,811 (which is net of $150,000 in expenses); 260,000 shares for the exercise
of employee  stock  options,  netting  proceeds to the Company of $88,000;  and,
1,163,676 shares for consulting and non-employee  related services.  The Company
recorded  stock-based  compensation  during the three months ended June 30, 2004
based upon the closing  market price on the date the stock was issued which,  on
this  basis,  resulted in a charge to  operations  of  $479,538.  This charge is
included in the caption Consulting and Professional Services in the accompanying
statement of operations.

During the three  months  ended June 30, 2004,  the Company  issued  warrants to
acquire  3,821,300  shares of common stock,  as follows:  2,696,300  warrants in
connection  with  the  Nutmeg  Subscription  Agreement  (see  below);  1,000,000
warrants in connection with the Baltic  Ventures  Agreement (see Note 4, below);
and,  125,000  warrants in  connection  with other service  providers.  Warrants
issued in connection with the Baltic  Ventures  Agreement and for other services
were valued at fair value using the Black Scholes  Valuation  Model.  Such model
resulted in an aggregate valuation of $341,000, of which $225,000 related to the
Baltic  Ventures  Agreement  has been  deferred and will be  amortized  over the
contractual  performance  period.  The charge to  operations  is included in the
caption  Consulting and Professional  Services in the accompanying  statement of
operations.  (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 three  months  ended June 30, 2004 at 942% and
3.0%, respectively.)

Total  stock-based  compensation  expense  charged to operations  from the above
transactions  amounted to $595,538  and $36,475 for the three  months ended June
30, 2004 and 2003, respectively.


                                       7
<PAGE>


                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                  JUNE 30, 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  purchase price is $1,750,000 to be
paid in three  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); $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  967,700
shares of common stock); and $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) 57.0% 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) 57.0% 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.

Nutmeg  received on Traunches 1 and 2, and will be issued on Traunch 3, Warrants
to purchase  shares of common  stock  exercisable  into such number of shares of
common stock as is equal to 50.0% of the Purchase Price paid by Nutmeg,  divided
by the Fixed Price.  The common  stock  underlying  the Warrants  will also have
"piggyback"  registration  rights and the  Warrants  will be  transferable.  The
Warrants will expire on December 31, 2008. The Warrant's  exercise price will be
at 125.0% of 57.0% 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.  If  the
Registration  Statement is not declared effective within 120 days of the initial
filing,  the  Company  will owe  Nutmeg a  penalty  equal to 1.0% of the  amount
invested by Nutmeg.  Further, the Company is liable for an additional penalty of
1.0% for each  additional 30 day period that the  Registration  Statement is not
declared effective.


                                       8
<PAGE>


                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


3.   STOCKHOLDERS' EQUITY (CONTINUED)

REDEMPTION OF WARRANTS

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 9.0%
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.

PRO FORMA STOCK COMPENSATION INFORMATION

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

                                                           JUNE 30,    JUNE 30,
                                                            2004         2003
                                                        ------------  --------
Net loss, as reported                                   ($1,021,051)  ($77,042)
                                                        ============  ========
Stock-based compensation, as reported                   ($  565,374)  ($36,475)
                                                        ============  ========
Stock-based compensation under fair value method        ($  771,624)  ($44,475)
                                                        ============  ========
Pro-forma net loss under fair value method              ($1,227,301)  ($85,472)
                                                        ============  ========

Net loss per share, as reported                         ($      .01)  ($   .00)
                                                        ============  ========
Pro-forma net loss per share under fair value method    ($      .02)  ($   .00)
                                                        ============  ========

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 which were performed after the expiration of a
contract for consulting  services between AdZone and Auletta.  The Company is of
the  opinion  that the  lawsuit is without  merit and has accrued an open unpaid
balance due of approximately  $600 as of the expiration date of the contract.  A
judgment in the amount of $34,691.87,  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.


                                       9
<PAGE>



                              ADZONE RESEARCH, INC.
                NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
                                  JUNE 30, 2004


4.   COMMITMENTS AND CONTINGENCIES (CONTINUED)

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.

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 advise
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 each to 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 10.0% 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.


                                       10
<PAGE>


PART I.  CONDENSED FINANCIAL INFORMATION
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS

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
Three Months Ended June 31, 2004 and June 31, 2003

Revenues: Revenues for the three months ended June 30, 2004 amounted to $50,000,
compared to $39,125 for the three  months ended June 30,  2004.  Current  period
revenues are derived from a $150,000  contract  (including a $50,000 option that
was  exercised)  with the U.S.  Department of Defense.  The Company has recorded
revenue on this contract as earned based upon the contract  performance  period.
While the Company  expects future revenue  producing  government  contracts,  no
additional contracts have been executed at this date.

Cost of contract  revenue:  Cost of revenue for the three  months ended June 30,
2004 was nil, compared to $40,728 for the three months ended June 30, 2003. This
trend reflects the nearly fully  automated  process of the Company's Net Get (C)
Decryption  Process.  Future  contracts,  if any, may require  additional direct
resources.

Consulting and professional  services:  Consulting and professional services for
the three  months ended June 30, 2004  amounted to  $565,371,  compared to a nil
amount for the three months ended June 30, 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 three months ended June 30, 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 three months ended June 30,
2004  amounted to $422,041  compared to $15,150 for the three  months ended June
30, 2003. The  significant  increase  relates to a higher head count compared to
the same  period  last  year  and the  Company's  officers  (i)  receiving  full
compensation for their services based upon the Company's  ability to render such
compensation  in cash and (ii) the  Board of  Director's  award of  $200,000  in
bonuses to the officers for successful capital  acquisition  efforts;  the later
provided for in the officers' employment agreements.


                                       11
<PAGE>


General  and  administrative  expenses:   General  and  administrative  expenses
amounted  to $78,919  for the three  months  ended June 30,  2004,  compared  to
$52,357  for the three  months  ended June 30,  2003.  The  increase  is largely
attributable to increased travel expenses necessary to access customers.

Depreciation and amortization:  Depreciation and amortization amounted to $1,940
for the three months ended June 30, 2004,  compared to $544 for the three months
ended June 30,  2003.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.

Other  income  (expense):  Other income  (expense)  amounted to ($1,780) for the
three  months  ended June 30,  2004,  compared to ($7,388)  for the three months
ended June 30,  2003.  For the three  month  period  ended June 30,  2004,  such
balance relates to 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:  Preferred  stock dividends  relate to the Company's
Series and Series B Preferred Stock,  each having  cumulative  dividend features
The Company  pays its  dividends  on  preferred  stock  timely.  For purposes of
computing  loss  attributable  to common  stockholders,  net loss is  reduced by
preferred stock dividends.

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  $(1,020,051)  and used cash of  $(587,397)  in
conducting its operations.  These recurring  conditions 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, management
currently  believes that  existing  cash  reserves of $867,097,  coupled with an
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 to eighteen  months.  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.
However,  there  can be no  assurances  that the  Company  can  execute  revenue
producing contracts under acceptable terms and conditions.


                                       12
<PAGE>


The  Company's  ability to continue  as a going  concern is  dependent  upon the
preservation of existing cash reserves,  the receipt of the final 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
June 30, 2004 compared to March 31, 2004

The  Company has  working  capital of  $882,193 as of June 30, 2004  compared to
$235,384 as of March 31, 2004.  Net working  capital of $844,096  was  generated
from financing  activities  during the quarter,  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 $587,397 and $12,399
from  operating  and investing  activities  respectively.  Operating  activities
during the three months  ended June 30, 2004  reflected  significant  continuing
operating  losses,  although  there  continues  to be $100,000 in backlog on the
current  Department  of Defense  contract.  In addition,  cash proceeds from the
financing   activities  were  used  to  reduce  accounts   payable  and  accrued
liabilities by $232,301.  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  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.  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.

The Company  continues to carry  indebtedness  of $50,000 that is in default and
$179,570  that is being  serviced  in  accordance  with the  original  terms and
conditions. Creditors of debt in default have not and are not expected to demand
current  payment,  although they have the right to do so. Principal and interest
payment terms on indebtedness are not expected to require significant amounts of
cash in the near term. In addition,  the Company has no  commitments or plans to
incur any additional indebtedness.

OFF BALANCE SHEET ARRANGEMENTS

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


                                       13
<PAGE>


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

As required by Rule 13a-15 under the Securities Exchange Act of 1934,  effective
with the filing date of this report,  ADZONE  carried out an  evaluation  of the
effectiveness  of the design and operation of ADZONE's  disclosure  controls and
procedures.  This  evaluation was carried out under the supervision and with the
participation  of  ADZONE's  management,   including  ADZONE's  Chief  Executive
Officer,  who concluded  that ADZONE's  disclosure  controls and  procedures are
effective.  There have been no significant changes in ADZONE's internal controls
or  in  other  factors,  which  could  significantly  affect  internal  controls
subsequent to the date ADZONE carried out its evaluation.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that information required to be disclosed in ADZONE's reports
filed or submitted  under the Exchange Act is recorded,  processed,  summarized,
and reported,  within the time periods  specified in the Securities and Exchange
Commission's  rules and  forms.  Disclosure  controls  and  procedures  include,
without limitation,  controls and procedures designed to ensure that information
required to be  disclosed  in ADZONE's  reports  filed under the Exchange Act is
accumulated and communicated to management,  including  ADZONE's Chief Executive
Officer as appropriate, to allow timely decisions regarding required disclosure.


                                       14
<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.  ADZONE  may be subject  to a claim  relating  to
certain previously leased facilities. In May 2000 ADZONE executed a 5-year lease
for  marketing  premises in the Empire  State  Building  in New York City.  This
office was closed prior to March 2001,  and ADZONE  surrendered  the premises to
the landlord.  The scheduled annual rental amount was approximately  $65,145 for
the period from May 1, 2000 through December 31, 2001; approximately $68,175 for
the period from  January 1, 2002  through  August 31,  2003;  and  approximately
$71,205  for  the  period  from  September  1,  2003  through  April  30,  2005.
Additionally,  ADZONE was  responsible for its pro-rata share of increases in ad
valorem taxes,  utilities,  insurance and common area  operating  costs over the
base year expenses.  The lease also provided that in the event of ADZONE's early
termination of the lease,  ADZONE would be responsible for supplemental  amounts
during  the  occupancy  period  using  the  effective  annual  rental  yield  of
approximately  $68,175  and the  amounts  actually  paid by  ADZONE.  ADZONE has
surrendered  all  security  deposits to the  landlord.  To date,  ADZONE has not
received  any notice from the  landlord  demanding  amounts  additional  to such
security deposits.  Management cannot provide you any assurances,  however, that
such demand may not be made in the future.


                                       15
<PAGE>


PART II.  OTHER INFORMATION
ITEM 2.   CHANGES IN SECURITIES

The securities  described below represent  AdZone  securities sold by it for the
period  starting  from April 1, 2004 to June 30,  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.

PRIVATE PLACEMENTS OF COMMON STOCK AND WARRANTS FOR CASH

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  purchase price is $1,750,000 to be
paid in three  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); $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  967,700
shares of common stock); and $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) 57.0% 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) 57.0% 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.  Nutmeg  received on Traunches 1 and 2, and
will be issued  on  Traunch  3,  Warrants  to  purchase  shares of common  stock
exercisable  into such number of shares of common  stock as is equal to 50.0% of
the Purchase Price paid by Nutmeg, divided by the Fixed Price.

SALES OF DEBT AND WARRANTS FOR CASH

None.

OPTION GRANTS

There was no option grants during this quarter.

ISSUANCES OF STOCK FOR SERVICES OR IN SATISFACTION OF OBLIGATIONS

On April 30, 2004,  the Company  executed an  Engagement  Agreement  with Baltic
Ventures, LLC, a New York limited liability company,  (Baltic) to provide advise
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.  For compensation,  the
Company  issued  25,000  shares of common stock  registered  on Form S-8 each to


                                       16
<PAGE>


Baltic's  principals,  Jeffrey Hale and Terry Kent. Further,  the Company issued
200,000 shares of unregistered, restricted common stock to Baltic. 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.

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.


                                       17
<PAGE>


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

NONE.

                                       18
<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.



                                       19
<PAGE>


PART II.  OTHER INFORMATION
ITEM 5.   OTHER INFORMATION

NONE.


                                       20
<PAGE>




PART II.  OTHER INFORMATION
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibits

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

     (b)  Reports on Form 8-K

          Form 8-K was filed August 4, 2004 regarding a change in our Registered
          Public Accountant.



                                   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,          August 19, 2003
---------------------------    Principal Accounting Officer
Charles Cardona                and Director




                                       21
<PAGE>


ADZONE RESEARCH, INC.
EXHIBIT INDEX




Exhibit
-------

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