UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

--------------------------------------------------------------------------------
(Mark one)

[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange
    Act of 1934.

    FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2003

[ ] Transition Report Under 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 small business issuer as specified in its charter)

       Delaware                                               88-0420405
(State of incorporation)                                (IRS Employer ID Number)

              4062-80 Grumman Boulevard, Calverton, New York 11933
                    (Address of principal executive offices)

                                 (631) 369-1100
                           (Issuer's telephone number)

--------------------------------------------------------------------------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. YES [X] NO [ ]

State the number of shares outstanding of each of the issuer's classes of common
equity as of the latest practicable date: August 11, 2003: 61,996,128

Transitional Small Business Disclosure Format (check one): YES [ ]  NO [X]
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                 Form 10-QSB for the Quarter ended June 30, 2003

                                Table of Contents


                                                                           Page
                                                                           ----
PART I - FINANCIAL INFORMATION

   Item 1  Financial Statements                                              3

   Item 2  Management's Discussion and Analysis or Plan of Operation        32

   Item 3  Controls and Procedures                                          34

PART II - OTHER INFORMATION

   Item 1  Legal Proceedings                                                35

   Item 2  Changes in Securities                                            35

   Item 3  Defaults Upon Senior Securities                                  35

   Item 4  Submission of Matters to a Vote of Security Holders              35

   Item 5  Other Information                                                35

   Item 6  Exhibits and Reports on Form 8-K                                 35

SIGNATURES                                                                  35

                                        2
<PAGE>
PART I
ITEM 1 - FINANCIAL STATEMENTS

                              ADZONE RESEARCH, INC.
                          (a development stage company)
                                 BALANCE SHEETS
                             June 30, 2003 and 2002

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                          June 30, 2003       June 30, 2002
                                                          -------------       -------------
<S>                                                        <C>                 <C>
CURRENT ASSETS
   Cash on hand and in bank                                $    50,516         $     2,987
   Accounts receivable - trade                                  39,125                  --
   Prepaid expenses and other                                   26,500              20,300
                                                           -----------         -----------
     TOTAL CURRENT ASSETS                                      117,141              23,197
                                                           -----------         -----------

PROPERTY AND EQUIPMENT - AT COST                                60,860              60,252
   Accumulated depreciation                                    (50,531)            (36,529)
                                                           -----------         -----------
     NET PROPERTY AND EQUIPMENT                                 10,329              24,223
                                                           -----------         -----------

OTHER ASSETS                                                       390               2,190
                                                           -----------         -----------

TOTAL ASSETS                                               $   127,860         $    49,610
                                                           ===========         ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
   Notes payable                                           $   206,175         $    65,958
   Accounts payable - trade                                    103,697             173,464
   Accrued interest payable                                      2,794               1,398
   Advances from officers                                           --              11,320
   Accrued officer compensation                                569,034             346,719
                                                           -----------         -----------

TOTAL LIABILITIES                                              881,700             598,859
                                                           -----------         -----------
COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
   Preferred stock - $0.001 par value
     20,000,000 shares authorized
     none issued and outstanding                                    --                  --
   Common stock - $0.001 par value
     100,000,000 shares authorized
     53,203,462 and 29,880,129 shares
     issued and outstanding, respectively                       53,203              29,880
   Additional paid-in capital                                2,339,085           1,700,340
   Deficit accumulated during the development stage         (3,112,073)         (2,279,469)
                                                           -----------         -----------
                                                              (719,785)           (549,249)
   Stock subscription receivable                               (33,050)                 --
   Treasury stock - at cost                                     (1,005)                 --
                                                           -----------         -----------
TOTAL SHAREHOLDERS' EQUITY                                    (753,840)           (549,249)
                                                           -----------         -----------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                 $   127,860         $    49,610
                                                           ===========         ===========
</TABLE>
   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                        3
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)
                 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                  Three months ended June 30, 2003 and 2002 and
     Period from February 28, 2000 (date of inception) through June 30, 2003

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                           Period from
                                                                                        February 28, 2000
                                                Three months         Three months       (date of inception)
                                                    ended                ended               through
                                                June 30, 2003        June 30, 2002        June 30, 2003
                                                -------------        -------------        -------------
<S>                                              <C>                  <C>                  <C>
REVENUES                                         $     39,125         $         --         $    123,131
                                                 ------------         ------------         ------------
PRODUCTION EXPENSES
   Salaries, wages and related costs                   22,157                   --              591,064
   Direct occupancy and operating expenses             14,839                6,302              273,465
   Depreciation                                           732                3,542               42,049
                                                 ------------         ------------         ------------
     Total production expenses                         40,728                9,844              909,578
                                                 ------------         ------------         ------------

GROSS PROFIT                                           (1,603)              (9,844)            (786,447)
                                                 ------------         ------------         ------------
OPERATING EXPENSES
   Selling and marketing costs
     Salaries, wages and related costs                     --                   --              326,458
     Direct occupancy and operating expenses               --               16,265              337,457
   General and administrative costs
     Officers compensation                             15,150               77,787              633,360
     Other general and administrative costs            52,357               65,230              850,247
   Compensation expense related to common
     stock issuances at less than "fair value"             --                   --              102,150
   Depreciation                                           544                  654               12,508
                                                 ------------         ------------         ------------
     Total operating expenses                          68,051              159,936            2,262,180
                                                 ------------         ------------         ------------

LOSS FROM OPERATIONS                                  (69,654)            (169,780)          (3,048,627)

OTHER INCOME (EXPENSE)                                 (7,388)              (2,195)             (63,446)
                                                 ------------         ------------         ------------

NET LOSS                                              (77,042)            (171,975)          (3,112,073)

OTHER COMPREHENSIVE INCOME                                 --                   --                   --
                                                 ------------         ------------         ------------

COMPREHENSIVE LOSS                               $    (77,042)        $   (171,975)        $ (3,112,073)
                                                 ============         ============         ============
Net loss per weighted-average share of
 common stock outstanding, computed
 on Net Loss - basic and fully diluted           $      (0.00)        $      (0.01)        $      (0.11)
                                                 ============         ============         ============
Weighted-average number of shares of
 common stock outstanding -
 basic and fully diluted                           50,541,329           24,479,563           29,173,414
                                                 ============         ============         ============
</TABLE>

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                        4
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)
                  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
  Period from February 28, 2000 (date of inception of AdZone Interactive, Inc.)
                             through June 30, 2003

                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                   Deficit
                                                                                  accumulated
                                              Common Stock          Additional      in the         Stock
                                      -------------------------      paid-in      development   subscription
                                        Shares         Amount        capital         stage       receivable      Total
                                      ----------    -----------    -----------    -----------    ---------    -----------
<S>                                  <C>           <C>            <C>            <C>            <C>          <C>
INITIAL CAPITALIZATION
 FEBRUARY 28, 2000                           170    $       150    $        --    $        --    $      --    $       150
 Effect of September 10, 2000
  125,000 for 1 forward stock
  split and change to $0.001 par
  value from no par value             21,249,830         21,100        (21,100)            --           --             --

February 29, 2000 private
 placement of common stock                    30      1,000,000             --             --     (600,000)       400,000
 Effect of September 10, 2000
  125,000 for 1 forward stock
  split and change to $0.001 par
  value from no par value              3,749,970       (996,250)       996,250             --           --             --
 Less costs of raising capital                --             --        (12,500)            --           --        (12,500)

Net loss for the period                       --             --             --        (35,822)          --        (35,822)
                                      ----------    -----------    -----------    -----------    ---------    -----------

BALANCES AT MARCH 31,2000             25,000,000         25,000        962,650        (35,822)    (600,000)       351,828

Cash received on stock
 subscription receivable                      --             --             --             --      600,000        600,000

November 30, 2000 private
 placement of common stock               666,665            667        289,333             --           --        290,000
 Less costs and expenses
  of raising capital                          --             --       (188,500)            --           --       (188,500)

Common stock issued for:
 Costs and expenses of
  raising capital                        400,000            400        175,600             --           --        176,000
 Prepaid interest on loan                250,000            250         31,000             --           --         31,250
 Employee wages and bonuses            1,095,000          1,095         64,605             --           --         65,700
 Officer bonus                           500,000            500         29,500             --           --         30,000
 Professional services                   107,000            107          6,313             --           --          6,420

Net loss for the year                         --             --             --     (1,460,043)          --     (1,460,043)
                                      ----------    -----------    -----------    -----------    ---------    -----------

BALANCES AT MARCH 31, 2001
 PRE-ACQUISITION                      28,018,665    $    28,019    $ 1,370,501    $(1,495,865)   $      --    $   (97,345)
                                      ==========    ===========    ===========    ===========    =========    ===========
</TABLE>
                                  - CONTINUED -

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                        5
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)
                  STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
  Period from February 28, 2000 (date of inception of AdZone Interactive, Inc.)
                             through June 30, 2003
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                   Deficit
                                                                                  accumulated
                                              Common Stock          Additional      in the         Stock
                                      -------------------------      paid-in      development   subscription
                                        Shares         Amount        capital         stage       receivable      Total
                                      ----------    -----------    -----------    -----------    ---------    -----------
<S>                                  <C>           <C>            <C>            <C>            <C>          <C>

BALANCES AT MARCH 31, 2001
 PRE ACQUISITION                      28,018,665      $ 28,019     $ 1,370,501    $(1,495,865)   $     --     $ (97,345)

Conversion of AdZone
 Interactive, Inc. common
 stock to AdZone Research, Inc.
 common stock                        (10,018,643)      (10,019)         10,019             --          --            --

Effect of reverse merger with
 AdZone Research, Inc.                 5,346,000         5,346          (5,346)            --          --            --
                                     -----------      --------     -----------    -----------    --------     ---------

BALANCES AT MARCH 31, 2001
 POST ACQUISITION                     23,346,022        23,346       1,375,174     (1,495,865)         --       (97,345)

Issuance of common stock for
 Conversion of short-term debt           360,000           360          21,240             --          --        21,600
 Cash                                    744,442           744          39,656             --          --        40,400
 Lawsuit settlement                      500,000           500          19,500             --          --        20,000
 Consulting and Legal fees
  and services                         1,531,666         1,532         115,668             --          --       117,200

Net loss for the year                         --            --              --       (611,630)         --      (611,630)
                                     -----------      --------     -----------    -----------    --------     ---------

BALANCES AT MARCH 31, 2002            26,482,130        26,482       1,571,238     (2,107,495)         --      (509,775)

Issuance of common stock for
  Cash                                 2,413,334         2,413         103,587             --          --       106,000
  Exercise of granted options          9,350,000         9,350         211,950             --     (14,800)      206,500
  Directors fees                         160,000           160           8,140             --          --         8,300
  Employee compensation                5,790,000         5,790          98,860             --          --       104,650
  Professional services                5,900,998         5,901         257,467             --          --       263,368

Net loss for the year                         --            --              --       (927,536)         --      (927,536)
                                     -----------      --------     -----------    -----------    --------     ---------

BALANCES AT MARCH 31, 2003            50,096,462        50,096       2,251,242     (3,035,031)    (14,800)     (748,493)

Issuance of common stock for
  Cash                                 1,030,000         1,030          25,070             --     (15,000)       11,100
  Exercise of granted options            925,000           925          36,325             --      (3,250)       34,000
  Employee compensation                  500,000           500           7,500             --          --         8,000
  Professional services                  652,000           652          18,948             --          --        19,600

Net loss for the year                         --            --              --        (77,042)         --       (70,042)
                                     -----------      --------     -----------    -----------    --------     ---------

BALANCES AT JUNE 30, 2003             53,203,462      $ 53,203     $ 2,339,085    $(3,112,073)   $(33,050)    $(753,840)
                                     ===========      ========     ===========    ===========    ========     =========

TREASURY STOCK - AT COST                                                                         $ (1,005)
                                                                                                 ========
</TABLE>
   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                        6
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)
                            STATEMENTS OF CASH FLOWS
                  Three months ended June 30, 2003 and 2002 and
     Period from February 28, 2000 (date of inception) through June 30, 2003

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                           Period from
                                                                                        February 28, 2000
                                                     Three months      Three months     (date of inception)
                                                         ended             ended             through
                                                     June 30, 2003     June 30, 2002      June 30, 2003
                                                     -------------     -------------      -------------
<S>                                                   <C>               <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss for the period                            $   (77,042)      $  (171,974)        $(3,112,073)
  Adjustments to reconcile net loss to
   net cash provided by operating activities
     Depreciation and amortization                         1,276             4,196              54,557
     Loss on disposition of equipment                         --                --              15,816
     Compensation expense related to common
       stock issuances at less than "fair value"              --                --             102,150
     Common stock issued for
       Salaries, wages and bonuses                         8,000             4,500             141,550
       Professional fees                                  26,600            38,000             386,138
       Directors fees                                         --                --               8,300
       Interest expense                                    1,875             1,875              18,750
       Lawsuit settlement                                     --                --              20,000
     (Increase) Decrease in
       Accounts receivable - trade                       (39,125)               --             (39,125)
       Deposits and other assets                              --                --                (390)
     Increase (Decrease) in
       Accounts payable and accrued liabilities          (26,644)           52,067             184,654
       Accrued officers compensation                      (1,326)           77,787             569,034
       Accrued interest payable                              280               320               2,794
                                                     -----------       -----------         -----------

NET CASH USED IN OPERATING ACTIVITIES                   (106,106)            6,771          (1,647,845)
                                                     -----------       -----------         -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Cash paid to purchase property and equipment                --              (500)            (85,385)
  Cash received on disposition of equipment                   --                --               5,900
                                                     -----------       -----------         -----------

NET CASH USED IN INVESTING ACTIVITIES                         --              (500)            (80,701)
                                                     -----------       -----------         -----------
</TABLE>
                                  - CONTINUED -

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                        7
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)
                      STATEMENTS OF CASH FLOWS - CONTINUED
                  Three months ended June 30, 2003 and 2002 and
     Period from February 28, 2000 (date of inception) through June 30, 2003

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                          Period from
                                                                                       February 28, 2000
                                                     Three months     Three months     (date of inception)
                                                         ended            ended             through
                                                     June 30, 2003    June 30, 2002      June 30, 2003
                                                     -------------    -------------      -------------
<S>                                                   <C>              <C>                <C>
CASH FLOWS FROM FINANCING ACTIVITIES
  Net cash activity on officer advances                 (34,774)            (3,374)                --
  Principal received from notes payable                 140,217                 --            211,817
  Sale of common stock                                   45,100                 --          1,594,250
  Cash paid for costs and expenses
   related to raising capital                                --                 --            (25,000)
                                                    -----------        -----------        -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES               149,538             (3,374)         1,780,062
                                                    -----------        -----------        -----------

INCREASE (DECREASE) IN CASH                              43,432              2,897             51,516

Cash at beginning of period                               8,084                 --                 --
                                                    -----------        -----------        -----------

CASH AT END OF PERIOD                               $    51,516        $     2,897        $    51,516
                                                    ===========        ===========        ===========
SUPPLEMENTAL DISCLOSURE OF
 INTEREST AND INCOME TAXES PAID
  Interest paid for the period                      $     2,233        $        --        $     4,760
                                                    ===========        ===========        ===========
  Income taxes paid for the period                  $        --        $        --        $        --
                                                    ===========        ===========        ===========

SUPPLEMENTAL DISCLOSURE OF NON-CASH
 INVESTING AND FINANCING ACTIVITIES
  Common stock issued for prepaid interest          $        --        $        --        $    31,250
                                                    ===========        ===========        ===========
  Common stock issued in
   repayment of short-term debt                     $        --        $        --        $    21,600
                                                    ===========        ===========        ===========
  Common stock issued for prepaid
   consulting fees                                  $        --        $        --        $    28,000
                                                    ===========        ===========        ===========
  Common stock issued in partial
   payment of accrued officers
   compensation                                     $        --        $        --        $    65,000
                                                    ===========        ===========        ===========
</TABLE>

   The financial information presented herein has been prepared by management
           without audit by independent certified public accountants.
   The accompanying notes are an integral part of these financial statements.

                                        8
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                          NOTES TO FINANCIAL STATEMENTS


NOTE A - ORGANIZATION AND DESCRIPTION OF BUSINESS

AdZone Research,  Inc. (Company) was incorporated on May 31, 1994 under the laws
of the State of  Delaware  as  Executive  Help  Services,  Inc.  The Company was
initially  formed for the purpose of  developing an internet web site that would
offer  professional  space planning and design,  pricing  information and direct
ordering of modular office furniture systems.

On August 10, 2001, the Company executed an Agreement and Plan of Share Exchange
with AdZone Interactive,  Inc. (a privately-owned New York corporation) (AdZone)
whereby the Company  exchanged  18,000,022  shares of  restricted,  unregistered
common stock for 100.0% of the issued and outstanding common stock of AdZone and
effected a merger of the two entities with the Company being the surviving legal
entity. Concurrent with this transaction, the Company changed its corporate name
to AdZone Research, Inc.

AdZone Interactive,  Inc. (AdZone) was initially  incorporated as Web-AdNet.com.
Inc.  under the laws of the State of New York on February 28, 2000.  The Company
was formed to extract various data elements through the monitoring and review of
internet  websites   developed  and  maintained  by  independent  third  parties
worldwide. These extracted data elements are then used to provide various market
research  statistics  and other focused  information  as guided by the Company's
clientele.

The Company's business plan has not been fully implemented and, accordingly, has
not fully commenced operations. The Company has had no substantial operations or
substantial  assets since  inception and is considered to be in the  development
stage.

NOTE B - PREPARATION OF FINANCIAL STATEMENTS

The  Company  follows  the  accrual  basis  of  accounting  in  accordance  with
accounting principles generally accepted in the United States of America and has
a year-end of March 31.

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

Management further acknowledges that it is solely responsible for adopting sound
accounting  practices,   establishing  and  maintaining  a  system  of  internal
accounting  control and preventing and detecting  fraud. The Company's system of
internal  accounting  control is designed to assure,  among other items, that 1)
recorded  transactions  are valid; 2) valid  transactions  are recorded;  and 3)
transactions  are  recorded in the proper  period in a timely  manner to produce
financial  statements which present fairly the financial  condition,  results of
operations  and cash  flows of the  Company  for the  respective  periods  being
presented

During interim periods, the Company follows the accounting policies set forth in
its annual  audited  financial  statements  filed with the U. S.  Securities and
Exchange Commission on its Annual Report on Form 10-KSB for the year ended March
31, 2003. The information  presented within these interim  financial  statements
may not  include  all  disclosures  required by  generally  accepted  accounting
principles and the users of financial  information  provided for interim periods
should refer to the annual  financial  information  and footnotes when reviewing
the interim financial results presented herein.

                                        9
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE B - PREPARATION OF FINANCIAL STATEMENTS - CONTINUED

In the opinion of management,  the accompanying  interim  financial  statements,
prepared in  accordance  with the U. S.  Securities  and  Exchange  Commission's
instructions   for  Form  10-QSB,   are   unaudited  and  contain  all  material
adjustments,  consisting  only of  normal  recurring  adjustments  necessary  to
present fairly the financial condition,  results of operations and cash flows of
the Company for the respective  interim  periods  presented.  The current period
results of operations are not necessarily indicative of results which ultimately
will be reported for the full fiscal year ending March 31, 2004.

NOTE C - GOING CONCERN UNCERTAINTY

The Company is engaged in the  extraction of various data  elements  through the
monitoring  and  review  of  internet  websites   developed  and  maintained  by
independent third parties worldwide. These extracted data elements are then used
to provide various market research  statistics and other focused  information as
guided by the Company's clientele.

The events  which  occurred on  September  11,  2001,  and  subsequent  thereto,
generated,  and  continue to  generate,  additional  interest  in the  Company's
internet data mining  research  capabilities  for  potential  private and public
sector  clients.  Management  continues  to maintain the belief that the Company
will be able to acquire various  contracts to provide  research  information for
various private and public sector purposes.

On May 27, 2003,  the Company  received a $50,000  contract  from a major United
States defense  contractor to provide support  services related to that entity's
provision of services for Homeland  Security  issues.  As of June 30, 2003,  the
Company has billed approximately $39,125 against this contract and received cash
collections in subsequent periods.

The Company remains in the  development  stage,  has focused  principally on the
refinement and  maintenance of its proprietary  software and providing  services
pursuant to the May 27, 2003 contract.  Due to cash flow shortages,  the Company
continues to pursue various revenue and capital sources.

The Company is principally on additional private placements of equity securities
to provide sufficient working capital to maintain the integrity of the corporate
entity.

Because of the Company's lack of operations,  the Company's future  continuance,
for the  foreseeable  future,  will be fully dependent on either future sales of
equity  securities  and/or  advances or loans from  significant  stockholders or
corporate  officers  to  provide  sufficient  working  capital to  preserve  the
integrity of the corporate entity during the development phase.

There is no assurance that the Company will be able to obtain additional funding
through the sales of additional  securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant stockholders to provide additional future funding.

                                       10
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. CASH AND CASH EQUIVALENTS

   For Statement of Cash Flows purposes,  the Company considers all cash on hand
   and in banks, including accounts in book overdraft positions, certificates of
   deposit and other  highly-liquid  investments with maturities of three months
   or less, when purchased, to be cash and cash equivalents.

2. ACCOUNTS RECEIVABLE AND REVENUE RECOGNITION

   In the normal course of business,  the Company periodically extends unsecured
   credit to  repetitive  customers  which are  located  throughout  the  United
   States.  Because of the credit  risk  involved,  management  will  provide an
   allowance  for  doubtful  accounts  which will reflect its opinion of amounts
   which  will  eventually  become  uncollectible.  In  the  event  of  complete
   non-performance,  the maximum  exposure to the Company is the recorded amount
   of  trade  accounts  receivable  shown  on the  balance  sheet at the date of
   non-performance.

   Revenue is recognized pro-rata over the term of the respective  corresponding
   agreement to provide  research  services  and  information  to the  Company's
   customers.

3. PROPERTY, PLANT AND EQUIPMENT

   Property and  equipment  are  recorded at  historical  cost.  These costs are
   depreciated  over  the  estimated  useful  lives  of the  individual  assets,
   generally 3 years for computer  equipment and 5 to 7 years for other tangible
   equipment and office furniture and fixtures, using the straight-line method.

   Gains and losses from disposition of property and equipment are recognized as
   incurred and are included in operations.

4. ORGANIZATION COSTS

   The Company has adopted the  provisions of AICPA  Statement of Position 98-5,
   "Reporting on the Costs of Start-Up  Activities" whereby all organization and
   initial costs incurred with the incorporation  and initial  capitalization of
   the Company were charged to operations as incurred.

5. PRODUCTION, RESEARCH AND DEVELOPMENT EXPENSES

   Costs  associated  with software  production,  research and  development  are
   charged to operations as incurred.

6. ADVERTISING EXPENSES

   Advertising and marketing expenses are charged to operations as incurred.

                                       11
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE D - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

7. INCOME TAXES

   The Company  utilizes the asset and liability method of accounting for income
   taxes.  At June 30, 2003 and 2002,  the  deferred  tax asset and deferred tax
   liability  accounts,  as recorded when  material,  are entirely the result of
   temporary differences.

   Temporary  differences represent differences in the recognition of assets and
   liabilities for tax and financial reporting purposes,  primarily  accumulated
   depreciation and amortization. As of June 30, 2003 and 2002, the deferred tax
   asset is related solely to the Company's net operating loss  carryforward and
   is fully reserved.

8. LOSS PER SHARE

   Basic earnings (loss) per share is computed by dividing the net income (loss)
   by the  weighted-average  number of shares of common  stock and common  stock
   equivalents  (primarily  outstanding  options  and  warrants).  Common  stock
   equivalents  represent  the  dilutive  effect of the assumed  exercise of the
   outstanding stock options and warrants,  using the treasury stock method. The
   calculation of fully diluted  earnings  (loss) per share assumes the dilutive
   effect of the  exercise of  outstanding  options  and  warrants at either the
   beginning  of the  respective  period  presented  or the  date  of  issuance,
   whichever is later. As of June 30, 2003 and 2002, respectively, the Company's
   outstanding stock options are deemed to be anti-dilutive due to the Company's
   net operating loss position.

NOTE E - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.


NOTE F - PROPERTY AND EQUIPMENT

Property and equipment consists of the following at June 30, 2003 and 2002:

                                   June 30, 2003   June 30, 2002  Estimated life
                                   -------------   -------------  --------------
     Computer equipment               $ 50,856       $ 50,248        3 years
     Office furniture and other
      equipment                         10,004         10,004        7 years
                                      --------       --------
                                        60,860         60,252
     Less accumulated depreciation     (50,531)       (36,529)
                                      --------       --------

     Net property and equipment       $ 10,329       $ 24,223
                                      ========       ========

Depreciation  expense  for the years ended June 30, 2003 and 2002 and the period
from  February  28, 2000 (date of  inception)  through June 30, 2003 was $1,276,
$4,327, and $54,557, respectively.

                                       12
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE G - NOTES PAYABLE
                                                     June 30,          June 30,
                                                       2003              2002
                                                     --------          --------

$50,000   installment   note  payable  to  an
  individual.  Interest  imputed at 15.0% and
  paid  in  advance   with  the  issuance  of
  250,000 shares of restricted,  unregistered
  common  stock  to the  lender.  Payable  in
  monthly  installments of $1,000  commencing
  September 1, 2001 and each successive month
  until paid in full.  Scheduled payments are
  in default at March 31, 2002 and the entire
  amount is  classified  as  "current" in the
  accompanying      financial     statements.
  Unsecured.                                         $ 50,000         $ 50,000

$15,958  promissory  note  payable  to a  law
  firm.  Interest at 9.0%. Payable in full on
  June 30,  2001.  Scheduled  payments are in
  default  at March 31,  2002 and the  entire
  amount is  classified  as  "current" in the
  accompanying financial statements.  Secured
  by 150,000  shares of common stock owned by
  the Company's Chief Operating Officer.               15,958           15,958

Various loan agreements  aggregating $140,217
  payable to an Indiana corporation. Interest
  at the Prime Rate (as defined)  plus 1.0% (
  at June 30, 2003);  plus an origination fee
  equal  to 1.0% of the  advanced  principal.
  Maturity on the first  anniversary  of each
  respective   principal  advance.   Interest
  payable  quarterly for the preceding  three
  months  on April  1,  2003,  July 1,  2003,
  October 1, 2003 and  January  1, 2004.  All
  accrued   and   unpaid   interest   due  at
  principal maturity.  Secured by a pledge of
  common  stock valued at the  equivalent  of
  2.13 times the respective principal advance
  as  registered  in  the  names  of  Charles
  Cardona and John Cardona, the Company's CEO
  and former President, respectively.                 140,217               --
                                                     --------          -------

                                                     $206,175          $65,958
                                                     ========          =======

NOTE H - ADVANCES FROM OFFICERS

The Company's officers, in prior periods, advanced various monies to the Company
under formal  unsecured note documents  bearing  interest at 10.0%. The advances
were repayable in aggregate  monthly amounts of  approximately  $370. Due to the
nature of the debt and irregular payment history, these advances were classified
as "current" in the accompanying financial statements.  During the quarter ended
June 30, 2003, all open advances were repaid in full.

                                       13
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE I - OFFICER COMPENSATION

In August  2001,  the Company  entered  into an  employment  agreement  with Mr.
Charles Cardona  (CCardona),  which  superseded a prior  agreement,  under which
CCardona will serve as the Company's Chief Executive  Officer through August 31,
2004.  Under his agreement,  CCardona was/is entitled to base salary at the rate
of $141,000 during the balance of the 2001 calendar year;  $151,000 for the 2002
calendar year;  $161,000 for the 2003 calendar year; and at the rate of $208,000
for the 2004 calendar  year. In addition,  CCardona may be awarded,  at the sole
discretion of the Board of Directors of the Company,  a bonus of $15,000  during
each quarter of his  employment  and a bonus of $25,000 at the conclusion of the
2002 calendar year.  CCardona may also receive a $100,000 cash bonus and 250,000
shares  of  common  stock  of  the  Company  if  the  Company   reaches   annual
profitability. Under his employment agreement, CCardona will also receive 10% of
sales revenues generated through his efforts.  Additional bonuses are payable as
follows:  (i) 0.5% of prior year's revenues;  (ii) 3.5% of prior year's profits;
(iii)  3.75% of the first $3 million in growth in market  capitalization  during
any year; and (iv) 1.75% of any growth in market  capitalization over $3 million
during  any year.  CCardona  was also  granted an option to  purchase  1,000,000
shares of the Company's common stock  exercisable at $0.10 per share for 5 years
after the date of grant.  In the event  CCardona's  employment is  involuntarily
terminated,  he will be entitled  to receive an amount  equal to three times his
annual salary in effect during the year in which such termination occurred.

In August 2001, the Company  entered into an employment  agreement with Mr. John
Cardona (JCARDONA), which superseded a prior agreement, JCARDONA agreed to serve
as the Company's  President  through August 31, 2004.  Under his agreement,  the
Company  agreed to pay JCARDONA  base salary at the rate of $141,000  during the
balance of the 2001 calendar year; $151,000 for the 2002 calendar year; $161,000
for the 2003  calendar  year;  and at the rate of $208,000 for the 2004 calendar
year. In addition, the agreement provided that Mr.
Cardona  could be awarded,  at the sole  discretion of the Board of Directors of
the  Company,  a bonus of $15,000  during each quarter of his  employment  and a
bonus of $25,000 at the conclusion of the 2002 calendar year.  JCARDONA was also
entitled  to a $100,000  cash bonus and  250,000  shares of common  stock of the
Company if the  Company  achieved  annual  profitability.  Under his  agreement,
JCARDONA was also entitled to receive 10% of sales  revenues  generated  through
his  efforts.  Additional  bonuses  were  payable as follows:  (i) 0.5% of prior
year's revenues;  (ii) 3.5% of prior year's profits; (iii) 3.75% of the first $3
million  in growth in market  capitalization  during a previous  year;  and (iv)
1.75% of any growth in market  capitalization  over $3 million during a previous
year.

JCARDONA  was also  granted  an  option  to  purchase  1,000,000  shares  of the
Company's common stock exercisable at $0.10 per share for 5 years after the date
of grant.  JCARDONA  terminated his employment with the Company in June 2002 but
has remained as a consultant to the Company.


                (Remainder of this page left blank intentionally)

                                       14
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE I - OFFICER COMPENSATION - CONTINUED

In March 2003,  the Company  entered into an  employment  agreement  with Daniel
Wasserman to serve as its  Executive  Vice  President  and Managing  Director of
Global Defense Group for a 12-month period.  Under his agreement,  Mr. Wasserman
received a salary of $175,000 per year,  commencing  upon closing of a paid sale
or completed financing of $1,000,000 or more. Until such time, the Company shall
pay  Employee  an interim  salary  beginning  at $550 per week.  The salary will
increase  by $1000 per month upon the first paid sale of $50,000 or more made by
the employee.  The salary will then  increase by an  additional  $1500 per month
upon each paid sale of $100,000 or more made by the  employee.  These  increases
will  continue  until the standard  base salary of $175,000 per year is reached.
This  salary is  independent  of any  commission,  which may be earned and paid.
Should the  employee  reach  $1,200,000  in paid  sales by the end of 2003,  the
employee will be entitled to full base salary of $175,000 for the entire year of
2003,  any back  portion  of which is  unpaid  at that  time will be paid to the
employee within 30 days. This provision is in addition to any commission,  which
is due. Mr.  Wasserman also received a contract signing bonus of 450,000 shares.
The  company  shall  pay the  employee  a  bonus  of  100,000  shares  upon  the
contracting of a sale of $1,000,000 or more. The employee shall be entitled to 4
weeks paid vacation,  plus 10 holiday days off per year. Unused vacation will be
paid at the end of the year.  Medical  benefits will be paid by the company once
the board begins coverage for the employee. The Company shall pay the employee a
cash bonus of $175,000  should sales exceed  $3,000,000 for the calendar year of
2003.  This bonus shall be paid  proportionally  as sales revenues are received.
The employee  shall receive 1.5 % of the first  $1,000,000 of contract  value as
paid on each contract brought in by employee. The employee shall receive 2.5% of
contract  values  above  $1,000,000  as  paid  on each  contract  brought  in by
employee.  Additional  compensation for consulting  contracts brought in will be
negotiated on a case by case basis.  This commission shall be payable when funds
are received by the company and shall be paid to the employee  regardless of the
salary status.  There shall be an additional sales commission bonus of 1% on any
$ 500,000 plus sale closed prior to July 4, 2003.  Should a multi year  contract
be closed,  this bonus  shall apply to first year value  only.  This  commission
bonus shall be paid as the money is received by AdZone.

As of June 30,  2003 and 2002,  total  cumulative  amounts  unpaid  under  these
agreements are as follows:

                                                June 30,          June 30,
                                                  2003              2002
                                                --------          --------
     Officer compensation                       $569,034          $346,719
                                                ========          ========

Future amounts due under employment agreements are approximately:

                                               Year ending
                                                March 31,          Amount
                                                ---------          ------
                                                  2004            $172,750
                                                  2005             156,000
                                                                  --------
                                                                  $328,750
                                                                  ========

                                       15
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE J - INCOME TAXES

The  components of income tax (benefit)  expense for the three months ended June
30, 2003 and 2002 and for the period from  February 28, 2000 (date of inception)
through June 30, 2003, respectively, are as follows:

                                                                Period from
                                                              February 28, 2000
                                                             (date of inception)
                            Year ended        Year ended          through
                          June 30, 2003     June 30, 2002      June 30, 2003
                          -------------     -------------      -------------
     Federal:
       Current              $     --          $     --           $     --
       Deferred                   --                --                 --
                            --------          --------           --------
                                  --                --                 --
                            --------          --------           --------
     State:
       Current                    --                --                 --
       Deferred                   --                --                 --
                            --------          --------           --------
                                  --                --                 --
                            --------          --------           --------

     Totals                 $     --          $     --           $     --
                            ========         ========         ========

As of June 30,  2003,  the  Company has a net  operating  loss  carryforward  of
approximately  $2,500,000 to offset future  taxable  income.  Subject to current
regulations,  this  carryforward  will  begin to expire in 2020.  The amount and
availability  of  the  net  operating  loss  carryforwards  may  be  subject  to
limitations set forth by the Internal  Revenue Code.  Factors such as the number
of shares ultimately issued within a three year look-back period;  whether there
is a deemed more than 50 percent change in control; the applicable long-term tax
exempt bond rate;  continuity of historical  business;  and subsequent income of
the  Company  all  enter  into  the  annual   computation  of  allowable  annual
utilization of the carryforwards.

The  Company's  income tax expense for each of the three  months  ended June 30,
2003 and 2002 and for the period  from  February  28,  2000 (date of  inception)
through June 30, 2003, respectively, differed from the statutory federal rate of
34 percent as follows:

<TABLE>
<CAPTION>
                                                                                               Period from
                                                                                             February 28, 2000
                                                                                            (date of inception)
                                                        Year ended          Year ended            through
                                                       June 30, 2003       June 30, 2002       June 30, 2003
                                                       -------------       -------------       -------------
<S>                                                    <C>                 <C>                 <C>
Statutory rate applied to loss before income taxes     $   (26,000)        $   (58,000)        $(1,058,000)
Increase (decrease) in income taxes resulting from:
  State income taxes                                            --                  --                  --
  Other, including reserve for deferred tax asset           26,000              58,000           1,058,000
                                                       -----------         -----------         -----------

      Income tax expense                               $        --         $        --         $        --
                                                       ===========         ===========         ===========
</TABLE>
                                       16
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE J - INCOME TAXES - CONTINUED

Temporary  differences,  consisting primarily of statutory deferrals of expenses
for organizational costs and statutory  differences in the depreciable lives for
property and equipment, between the financial statement carrying amounts and tax
bases of assets and liabilities give rise to deferred tax assets and liabilities
as of June 30, 2003 and 2002:

                                             June 30, 2003        June 30, 2002
                                             -------------        -------------
Deferred tax assets
Net operating loss carryforwards               $ 816,000            $ 775,000
Less valuation allowance                        (816,000)            (775,000)
                                               ---------            ---------

   Net Deferred Tax Asset                      $      --            $      --
                                               =========            =========

During the years  ended June 30, 2003 and 2002,  the  reserve  for the  deferred
current tax asset increased by approximately $26,000 and $58,000, respectively.


NOTE K - COMMON STOCK TRANSACTIONS

On August 10, 2001, the Company executed an Agreement and Plan of Share Exchange
with AdZone Interactive,  Inc. (a privately-owned New York corporation) (AdZone)
whereby the Company  exchanged  18,000,022  shares of  restricted,  unregistered
common stock for 100.0% of the issued and outstanding common stock of AdZone and
effected a merger of the two entities with the Company being the surviving legal
entity. Concurrent with this transaction, the Company changed its corporate name
to AdZone Research, Inc.

During Fiscal 2003 and 2002,  the Company  issued  approximately  25,364,332 and
3,136,108   shares  of  common  stock,   in  both   registered  and  restricted,
unregistered form.

On January 28,  2002,  February  21, 2002 and March 26, 2003 (as  amended),  the
Company filed separate Registration  Statements on Form S-8 registering 538,665,
303,000 and 17,100,000 shares of common stock respectively.

The  following  table  recaps the status of each of the  Company's  Registration
Statements on Form S-8:

                                     Cumulative        Cumulative
                                      number of         number of      Remaining
                                       shares            shares          to be
                                     registered         issued          issued
                                     ----------         ------          ------
Filing dated 1/28/02                    538,665          459,998          78,667
Filing dated 2/21/02                    303,000          171,000         132,000
Filing dated 3/26/03 (as amended)    17,100,000       11,889,000       5,211,000


                (Remainder of this page left blank intentionally)

                                       17
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

The following table presents the various  categories for stock issuances  during
Fiscal 2002 and 2003:

                                      Registered      Restricted        Total
                                      ----------      ----------        -----
Balances at March 31, 2001             5,346,000      18,000,022      23,346,022
  Cash                                        --         744,442         744,442
  Conversion of short-term loans              --         360,000         360,000
  Consulting and Legal services          681,666          25,000         706,666
  Lawsuit settlement                          --         500,000         500,000
  Legal services                              --         170,000         170,000
  Operating expenses                          --         405,000         405,000
  Personnel compensation                      --         250,000         250,000
                                     -----------     -----------     -----------

Balances at March 31, 2002             6,027,666      20,454,464      26,482,130

  Cash                                        --       2,413,334       2,413,334
  Consulting and Legal services       12,258,332       2,982,666      15,240,998
  Directors fees                              --         160,000         160,000
  Operating expenses                          --          10,000          10,000
  Personnel compensation                      --       5,790,000       5,790,000
  Reclassifications per Rule 144(k)   20,454,464     (20,454,464)             --
                                     -----------     -----------     -----------

Balances at March 31, 2003            38,740,462      11,356,000      50,096,462

  Cash                                        --       1,030,000       1,030,000
  Consulting and Legal services        1,075,000         502,000       1,577,000
  Personnel compensation                      --         500,000         500,000
                                     -----------     -----------     -----------

Balances at June 30, 2003             39,815,462      13,388,000      53,203,462
                                     ===========     ===========     ===========

In each instance where the agreed-upon value of the Company's common stock, when
issued,  and/or the value of the services rendered or the cash received was less
than the "fair  value" of the  Company's  common  stock,  as  determined  by the
discounted closing quoted closing price of the Company's securities as quoted on
the OTC Bulletin Board,  the Company  recognized a non-cash charge to operations
for the difference.

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                                       18
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

The  following  tables  recap the  Company's  stock  issuances,  by  purpose  or
function,  for each of the Fiscal  Years  ended  March 31, 2002 and 2003 and the
period from April 1, 2003 through June 30, 2003, respectively:

                        FISCAL YEAR ENDED MARCH 31, 2002

Issuances pursuant to an exemption from registration pursuant to Section 4(2)

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
Cash
8/22/2001   Seth Blumenthal                 100,000        $ 7,000        $ --
8/29/2001   Suzanne Tryphonos                 1,666            100          --
10/11/2001  Thomas Clemens                   33,333          2,000          --
10/11/2001  Gerard Stankewicz                33,333          2,000          --
10/11/2001  Barbara Welker                   10,000            600          --
10/11/2001  Marcia Strada                    10,000            600          --
10/22/2001  Colleen Strada                   10,000            600          --
10/31/2001  Kenneth Ullman                  444,444         20,000          --
12/18/2001  Gerard Stankewicz                16,666          2,000         500
1/22/2002   Ruth Makofske                    85,000          5,000          --
                                           --------        -------        ----
                                            744,442        $39,900        $500
                                           ========        =======        ====
Conversion of short-term loans (1)
8/10/2001   Barbara Welker                  166,667        $10,000        $ --
8/10/2001   Charles Blanchfield              83,333          5,000          --
8/10/2001   Thomas Clemens                   50,000          3,000          --
8/10/2001   Marilyn Hyman                    33,333          2,000          --
8/10/2001   Joe Mortimer                     16,667          1,000          --
8/10/2001   Suzanne Tryphonos                10,000            600          --
                                           --------        -------        ----
                                            360,000        $21,600        $ --
                                           ========        =======        ====
Consulting and Legal services
11/29/2001  Seth Blumenthal                  25,000        $ 1,000        $250
                                           ========        =======        ====
Lawsuit settlement (2)
9/9/2001    Competitive Media
             Reporting, LLC.                500,000        $20,000        $ --
                                           ========        =======        ====
Legal services (3)
12/28/2001  Warren Hamburger                120,000        $ 7,200        $ --
3/7/2002    Warren Hamburger                 50,000          2,500          --
                                           --------        -------        ----
                                            170,000        $ 9,700        $ --
                                           ========        =======        ====
Operating expenses
1/29/2002   Jeffrey Halbirt (4)             200,000        $14,000        $ --
1/29/2002   Terry Nield (4)                 200,000         14,000          --
3/14/2002   Sheldon Katz (5)                  5,000            250          --
                                           --------        -------        ----
                                            405,000        $28,250        $ --
                                           ========        =======        ====
Personnel compensation
3/24/2002   Daniel Wasserman (6)            250,000        $15,000        $ --
                                           ========        =======        ====

                                       19
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

(1) - Between April 1, 2001 and August 10, 2001,  AdZone received  approximately
$21,600 in cash proceeds for the sale of restricted,  unregistered  common stock
of  Executive  Help  Services,  Inc. to be issued  concurrent  with the business
combination date at a rate of $0.06 per share.
(2) - In  September  2001,  the Company  issued  500,000  shares of  restricted,
unregistered  common stock to an unrelated  company in settlement of a breach of
contract and  non-competition  agreement between the Company's President and the
President's former employer.
(3) - Mr. Hamburger is a member of the Company's Board of Directors
(4) - Mr. Halbirt and Mr. Nield were previously  officers  and/or  affiliates of
the Company prior to the reverse acquisition business combination between AdZone
Research, Inc. (formerly Executive Help Services,  Inc.) and AdZone Interactive,
Inc.
(5) - Issued in  payment  of late fees  incurred  on the lease of the  Company's
former executive offices in Riverhead, New York.
(6) - Issued  pursuant to an  employment  contract for services as the Company's
Vice President for Contract Procurement in lieu of cash compensation

Issuances pursuant to Registration Statement(s) filed on Form(s) S-8
 with the U. S. Securities and Exchange Commission
 -------------------------------------------------

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
Consulting services
12/13/2001  Charles Blanchfield (7)          40,000        $ 4,000      $   --
12/13/2001  Robert King (7)                  40,000          4,000          --
12/13/2001  Thomas Kober (7)                 40,000          4,000          --
12/13/2001  Theresa Kober (7)               300,000         18,000          --
1/29/2002   Leonard Braumberger (8)         133,333         16,000          --
3/1/2002    Leonard Braumberger (8)          53,333          8,000          --
2/21/2002   Dave Grandy (9)                  75,000          9,000          --
                                           --------        -------      ------
                                            681,666        $63,000      $   --
                                           ========        =======      ======

(7) - Issued to various professionals,  some of whom were existing shareholders,
providing legal and accounting services to the Company under one-year contracts.
(8) - Issued to Mr.  Braumberger  and/or  Communique  Media  Services,  Inc.  of
Blaine, Washington, an unrelated entity, to provide web development services and
maintain the Company's corporate internet web site for a fee of $8,000 per month
payable in shares as registered on a Form S-8 filing.
(9) - Issued to Mr. Grandy and/or International  Standard Consulting Corporation
of  Vancouver,  British  Columbia,  Canada,  an  unrelated  entity,  to  provide
strategic business and technology  development  consulting services for a fee of
$4,500 per month payable in shares as registered on a Form S-8 filing.

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                                       20
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

                        FISCAL YEAR ENDED MARCH 31, 2003

Issuances pursuant to an exemption from registration pursuant to Section 4(2)

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
Cash
5/15/02     B&G Holding Co.                   75,000     $  5,000       $   --
6/6/02      Eleanor Garrett                  300,000       15,000           --
6/6/02      Warren Hamburger (10)            200,000       10,000           --
6/24/02     Kevin Messina                    375,000       15,000           --
7/19/02     Scott Bolkema                    700,000       35,000           --
10/8/02     Carl Washwick                    333,334       10,000           --
11/18/02    Joshua Blumenthal                 50,000       10,000           --
3/21/02     Eleanor Garrett                  140,000        2,000           --
3/21/03     Warren Hamburger (10)            140,000        2,000           --
3/31/03     Warren Hamburger (10)            100,000        2,000           --
                                          ----------     --------       ------
                                           2,413,334     $106,000       $   --
                                          ==========     ========       ======
Consulting and Legal Services
8/2/02      Jack Kratoville (11)              20,000     $  1,200       $   --
8/5/02      Keith Peters (12)                 50,000        5,000           --
9/7/02      Keith Peters (12)                 50,000        5,000           --
9/7/02      Dag Finn Sjoen (11/18)            10,000          250           --
9/20/02     Suzanne Tryphonos (13)            16,666          333           --
10/2/02     Warren Hamburger (10/14)         100,000        2,000           --
10/4/02     Kathleen Kenney (14)              25,000          500           --
10/9/02     Jason Genet (15)               1,200,000       36,000           --
10/11/02    First American Ventures (16)     500,000       12,500           --
10/16/02    Jason Genet (15)                  25,000          875           --
11/7/02     Arthur Metz (17)                  14,000          700           --
11/20/02    Bob Schmidt                      100,000        5,000           --
12/3/02     Arthur Metz (17)                 150,000        4,500           --
12/12/02    Robert Fitzpatrick (14)           60,000        1,200           --
1/10/03     Arthur Metz (17)                 162,000        4,860           --
2/28/03     Warren Hamburger (10/14)         210,000        4,200           --
2/28/03     Thomas Kober (17)                100,000        3,000           --
3/21/03     Charles Blanchfield (17)         100,000        3,000           --
3/21/03     Thomas Gavin (16)                100,000        5,000           --
                                          ----------     --------       ------
                                           2,992,666     $ 95,118       $   --
                                          ==========     ========       ======
Directors fees
5/1/02      John Conley                       10,000     $    500       $   --
11/18/02    Jonathan White                    40,000        4,500           --
2/28/03     Russell Ivy                       10,000          300           --
2/28/03     John Conley                       50,000        1,500           --
2/28/03     Jonathan White                    50,000        1,500           --
                                          ----------     --------       ------
                                             160,000     $  8,300       $   --
                                          ==========     ========       ======

                                       21
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
Personnel compensation
2/28/02     Charles Cardona                2,000,000      $ 30,000      $   --
5/29/02     Valerie Cardona (19)             150,000         4,500          --
7/9/02      Daniel Wasserman                 300,000        12,000          --
8/5/02      Elizabeth Neese                    5,000           500          --
9/20/02     Reidar Sjoen (18)                275,000         5,500          --
10/1/02     Ursula Olivares                  250,000         5,000          --
10/7/02     Valerie Cardona (19)             275,000         5,500          --
1/27/03     Reidar Sjoen (18)                250,000         5,000          --
1/28/03     Thomas Madigan                    60,000           900          --
2/28/03     Thomas Madigan                    25,000           750          --
2/28/03     John Cardona                   2,000,000        30,000          --
2/28/03     Ursula Olivares                  100,000         3,000          --
2/28/03     Reidar Sjoen (18)                100,000         2,000          --
                                          ----------      --------      ------
                                           5,790,000      $104,650      $   --
                                          ==========      ========      ======

(10) - Mr. Hamburger is a member of the Company's Board of Directors
(11) - Issued for various services  related to the Company's  relocation of it's
corporate offices. (12) - Issued for general business advisory services.  (13) -
Issued  for  general  office  and  clerical  services  (14) - Issued  for  legal
services.
(15) - Issued for Website  development,  updates and maintenance.  (16) - Issued
for  various  investor  and  public  relations  services.   (17)  -  Issued  for
accounting, bookkeeping and other financial reporting services.
(18) - Mr. Dag Finn Sjoen is the father of Mr. Reidar Sjoen,  an employee of the
Company.
(19) - Ms. Cardona is the mother of Charles Cardona, the Company's Chairman, and
John Cardona, the Company's former President of the Company

Issuances pursuant to Registration Statement(s) filed on Form(s) S-8
 with the U. S. Securities and Exchange Commission
 -------------------------------------------------

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
                          Common stock directly issued
Consulting and Legal services
4/3/02      Leonard Braumberger (8)         53,333        $ 8,000       $   --
4/10/02     Dave Grandy (9)                 30,000          4,500           --
5/7/02      Leonard Braumberger (8)         53,333          8,000           --
5/7/02      Dave Grandy (9)                 30,000          4,500           --
6/6/02      Leonard Braumberger (8)         53,333          8,000           --
6/6/02      Dave Grandy (9)                 18,000          4,500           --
7/1/02      Leonard Braumberger (8)         53,333          8,000           --
7/1/02      Dave Grandy (9)                 18,000          4,500           --
8/19/02     Tyler Byrd (12)                400,000         24,000           --
8/19/02     Thomas Gavin (16)              175,000         10,500           --
9/7/02      Thomas Gavin (16)              140,000          7,000           --

                                       22
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

Issuances pursuant to Registration Statement(s) filed on Form(s) S-8
 with the U. S. Securities and Exchange Commission - Continued
 -------------------------------------------------

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
                          Common stock directly issued
Consulting and Legal services - continued
9/20/02     Charles Blanchfield (17)         233,333        9,333           --
9/20/02     Robert King (17)                 233,333        9,333           --
9/20/02     Thomas Kober (17)                233,334        9,334           --
10/4/02     Robert Fitzpatrick (14)          100,000        3,000           --
10/7/02     Jason Genet (15)                 400,000        8,000        8,000
10/9/02     Leonard Braumberger (8)           60,000        8,000           --
1/1/03      Thomas Gavin (17)                306,000       15,300           --
1/10/03     John Calcagni (14)               168,000        4,200           --
3/27/03     Hank Zemla (12)                  150,000        2,250           --
                                          ----------     --------       ------
                                           2,908,332     $160,250       $8,000
                                          ==========     ========       ======

       Common stock issued pursuant to the granting of options to purchase

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
Consulting and Legal services
8/19/02         Kyle Kennedy (20)           500,000       $ 18,000      $12,000
10/7/02         Kyle Kennedy (20)           250,000          2,500        5,000
10/16/02        Kyle Kennedy (20)         1,000,000         15,000       20,000
11/12/02        Kyle Kennedy (20)           200,000          3,000        3,000
11/26/02        Kyle Kennedy (20)           300,000          4,300        2,700
12/10/02        Kyle Kennedy (20)         2,100,000         30,800       23,100
1/23/03         Kyle Kennedy (20)         1,050,000         23,100       15,750
1/28/03         Kyle Kennedy (20)         3,950,000         28,500       11,850
                                         ----------       --------      -------
                                          9,350,000       $113,100      $93,400
                                         ==========       ========      =======

(20) - On Aug. 19, 2002 the Company  entered into a  consulting  agreement  with
Kyle Kennedy to assist the Company with business strategy,  business development
and mergers and  acquisitions.  Mr.  Kennedy's  compensation  was in the form of
options to purchase  registered  freely trading  securities at various discounts
to the then current Market  price.  The agreement  was on a month to month basis
cancellable  at 30 days notice by either  party.  Mr.  Kennedy was also formerly
affiliated  with  Spartan  Securities  Group,  Ltd. and has  represented  to the
Company that the services  provided in this agreement are separate and unique to
Spartan's efforts in capital raising.

                (Remainder of this page left blank intentionally)

                                       23
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

                        FISCAL YEAR ENDING MARCH 31, 2004

Issuances pursuant to an exemption from registration pursuant to Section 4(2)

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
Cash
4/23/03     Ruth Makofske                   500,000        $ 8,000       $  --
5/5/03      Thomas Madigan                    5,000            100          --
5/13/03     Warren Hamburger                150,000          3,000          --
6/3/03      Kevin Messina                   375,000         15,000          --
                                         ----------        -------       -----
                                          1,030,000        $26,100       $  --
                                         ==========        =======       =====

Consulting and Legal Services
4/28/03     Paidoussis Olga                 200,000          3,200       $  --
4/30/03     Paul Weaver                      50,000          1,000          --
5/5/03      Jason Miller                      7,000            280          --
5/5/03      Scott Rubin                       7,000            280          --
5/5/03      Thomas Gavin                     50,000          2,000          --
5/22/03     Victor Yurkins                   25,000          1,250          --
5/23/03     Jo Ann Palminteri                 3,000             90          --
5/23/03     Elizabeth Neese                  10,000            700          --
6/5/03      Equities Magazine, LLC           50,000          4,500          --
6/5/03      Hank Zemla                      100,000          6,300          --
                                                           -------       -----
                                            502,000        $19,600       $  --
                                         ==========        =======       =====
Employee Compensation
4/28/03     Daniel Wasserman                500,000        $ 8,000       $  --
                                         ==========        =======       =====

Issuances pursuant to Registration Statement(s) filed on Form(s) S-8
 with the U. S. Securities and Exchange Commission
 -------------------------------------------------

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
                          Common stock directly issued
Consulting and Legal services
5/5/03      Hank Zemla                     100,000        $ 9,000        $  --
5/7/03      Duane Lewin                     20,000            600           --
5/7/03      Elizabeth Wooley-Lewin          15,000            400           --
5/7/03      Sunny Lewin                     15,000            400           --
                                          --------        -------        -----
                                           150,000        $10,000        $  --
                                          ========        =======        =====

                                       24
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE K - COMMON STOCK TRANSACTIONS - CONTINUED

       Common stock issued pursuant to the granting of options to purchase

 Date of                                    Number       Proceeds or    Excess
  Issue         Issuee                     of Shares     Valuation    fair value
  -----         ------                     ---------     ---------    ----------
Consulting and Legal services
5/6/03      Kyle Kennedy                    300,000         6,000           --
5/20/03     Kyle Kennedy                    625,000        31,250           --
                                           --------       -------        -----
                                            925,000       $37,250        $  --
                                           ========       =======        =====

NOTE L - STOCK OPTIONS

In August 2001, pursuant to an employment  agreement which superceded an earlier
agreement  dated January 29, 2001,  with Charles  Cardona,  the Company's  Chief
Executive  Officer,  the Company  granted  options to  purchase up to  1,000,000
shares  of  common  stock at a price of $0.10  per  share.  The  options  vested
immediately  upon  execution of the  employment  agreement  and expire in August
2006.

In August 2001, pursuant to an employment  agreement which superceded an earlier
agreement  dated  February  9,  2001,  with John  Cardona,  the  Company's  then
President and Chief  Operating,  the Company  granted  options to purchase up to
1,000,000  shares of common  stock at a price of $0.10 per  share.  The  options
vested  immediately  upon  execution of the  employment  agreement and expire in
August 2006.

At various  times during Fiscal 2003,  the Company  granted  short-term  options
(generally  with a term of 30 days) to Kyle  Kennedy to assist the Company  with
business  strategy,  business  development  and  mergers and  acquisitions.  Mr.
Kennedy's  compensation was in the form of options to purchase registered freely
trading  securities at various  discounts to the then current Market price.  The
agreement was on a month to month basis  cancellable at 30 days notice by either
party.
                                                                Weighted average
                                                                price per share
                                                                ---------------
     Options outstanding at April 1, 2001        2,000,000          $0.10
       Issued                                           --
       Exercised                                        --
       Expired/Terminated                               --
                                               -----------

     Options outstanding at March 31, 2002       2,000,000          $0.10
       Issued                                   13,350,000           0.03
       Exercised                                (9,350,000)          0.01
       Expired/Terminated                       (4,000,000)          0.08
                                               -----------

     Options outstanding at March 31, 2003       2,000,000          $0.10
       Issued                                      925,000           0.04
       Exercised                                  (925,000)          0.04
       Expired/Terminated                               --
                                               -----------

     Options outstanding at June 30, 2003        2,000,000          $0.10
                                               ===========

                                       25
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE L - STOCK OPTIONS - CONTINUED

The weighted  average  exercise price of all issued and  outstanding  options at
June 30, 2002 is approximately $0.10.

Had  compensation  cost for options  granted been  determined  based on the fair
values at the grant dates,  as prescribed  by Statement of Financial  Accounting
Standards  No. 123, the Company's net loss and net loss per share would not have
changed  significantly  as the  exercise  price of the  options  was  relatively
equivalent to the  estimated  fair value of the  underlying  shares at the grant
date.

The  calculations  to estimate the fair value of the options were made using the
Black-Scholes pricing model which required making significant assumptions. These
assumptions include the expected life of the options, which was determined to be
one year, the expected volatility,  which was based on management's estimates as
there was no quoted or listed  price on the  Company's  equity  securities,  the
expected  dividends,  determined to be zero bon past  performance,  and the risk
free interest rate,  which was estimated using the bond equivalent yield of 6.0%
at March 31, 2002 and June 30, 2003, respectively.

NOTE M - STOCK WARRANTS

Pursuant to an agreement with Thomas Gavin (Gavin) to provide  informational and
educational  news releases and distribute  said releases to the news media,  the
Company  issued 180,000  warrants to purchase an equivalent  number of shares of
the Company's common stock at a price of $0.25 per share and 380,000 warrants to
purchase an equivalent number of shares of the Company's common stock at a price
of $0.10 per share.  The aggregate  560,000  warrants  have an average  exercise
price of  approximately  $0.15 per share.  Each warrant will be for a three year
term from the date of issuance.

No  warrants  have been  exercised  during  the period  ended  June 30,  2003 or
subsequent thereto.

                                   Warrants        Warrants
                                  originally    outstanding at
                                    issued      June 30, 2003     Exercise price
                                    ------      -------------     --------------
     Gavin warrants - Series A      180,000        180,000       $0.25 per share
     Gavin warrants - Series B      380,000        380,000       $0.10 per share
                                    -------        -------

     Totals at June 30, 2003        560,000        560,000
                                    =======        =======

                (Remainder of this page left blank intentionally)

                                       26
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE N - COMMITMENTS AND CONTINGENCIES

LITIGATION

AdZone  Interactive,  Inc.  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  Interactive,
Inc.  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 court date was held on October 6, 2002 and a
settlement was reached, pending completion of all appropriate documentation. 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.

Due to the Company's financial position, from time to time, the Company is party
to  either  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.

OFFICE FACILITIES

On September  14, 2002,  the Company  executed a new long-term  operating  lease
agreement  for office space to house the Company's  administrative,  development
and marketing operations located in Calverton, New York.
 The
lease is for an initial term of 60 months at a rate of approximately  $1,800 per
month for Year 1,  approximately  $1,850  per  month  for Year 2;  approximately
$2,418  per  month  for Year 3;  approximately  $2,545  per month for Year 4 and
approximately $2,625 per month for Year 5.

CONSULTING AGREEMENTS

In January 2002, the Company executed a one-year  contract with Communique Media
Services,  Inc. and/or Leonard Braumberger,  an unrelated entity, to provide web
development  services and maintain the Company's corporate internet web site for
a  fee  of  $8,000  per  month  payable  in  shares  registered  on a  Form  S-8
Registration  Statement.  Through July 1, 2002,  the Company issued an aggregate
399,998 shares under the Form S-8 Registration Statement.  Each monthly issuance
was charged to  operations  as  consulting  fees.  As of December 31, 2002,  the
Company has no further obligations under this agreement.

In February 2002, the Company  executed a one-year  contract with  International
Standard  Consulting  Corporation,  and/or Dave Grandy,  an unrelated entity, to
provide strategic business and technology  development consulting services for a
fee of  $4,500  per  month  payable  in  shares  as  registered  on a  Form  S-8
Registration  Statement.  Through July 1, 2002,  the Company issued an aggregate
171,000 shares under the Form S-8 Registration Statement.  Each monthly issuance
is charged to  operations  as  consulting  fees.  As of December 31,  2002,  the
Company has no further obligations under this agreement.

                                       27
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE N - COMMITMENTS AND CONTINGENCIES - CONTINUED

CONSULTING AGREEMENTS - CONTINUED

In April 2002,  the Company  entered into a one-year  consulting  agreement with
NuQuest  Consulting,  Inc.  pursuant to which NuQuest agreed to consult with and
assist  the  Company  with  respect to the  Company's  business  pits  financial
statements  and other  materials  prepared for the purpose of  obtaining  equity
financing,  engaging in a public offering, and/or relating to the trading of the
Company's  common stock in the public  markets.  Nalso agreed to use  reasonable
efforts to seek and identify potential  investors for the Company, to assist the
Company in the  consummation  of any  proposed  financing,  and to  provide  the
Company  with  written  reports  of the  status of its  efforts on behalf of the
Company.  As  compensation  for its  services,  the  Company  agreed to issue to
NuQuest  warrants to purchase 900,000 shares of common stock, on a fully diluted
basis.  The warrants  are  exercisable  at $0.15 per share,  and the Company has
agreed to file an S-8  Registration  Statement  with the Securities and Exchange
Commission  to register the shares  underlying  the warrants.  In addition,  the
Company agreed to pay NuQuest cash  compensation  of $33,000  payable in monthly
installments over the term of the contract. As of March 31, 2003, and subsequent
thereto,  the  Company  has not  completed  the  preparation  and  filing of the
required Form S-8 Registration Statement and has not made any cash payments.

On December 2, 2002,  the Company  entered into a one year business  development
agreement with Paul Weaver to provide  assistance in the  acquisition of various
contracts  utilizing  the  Company's  data mining  research  capabilities.  This
agreement  requires  compensation  as follows:  25,000  shares of the  Company's
common stock upon  execution of the  agreement;  a 3.0%  commission on the first
cumulative $3 million in total contract value; an additional 2.0% commission for
total contract value in excess of $3 million, an additional 25,000 shares of the
Company's  common  stock on the first  contract  in excess of  $500,000 in total
contract value.

On August 13, 2002,  the Company  entered  into an  agreement  with Thomas Gavin
(Gavin) to provide  informational  and educational  news releases and distribute
said  releases to the news media.  Gavin is required to spend  approximately  40
hours per month 1) developing news release concepts and a news release timeline;
2) drafting  and editing  news  releases  for Company  review and  approval;  3)
issuing these news  releases with a quality wire news service to ensure  highest
possible media distribution; 4) identifying major trade and general daily/weekly
media to expand  coverage;  5)  reconnecting  with reporters  providing  earlier
coverage  to update them and to begin the  building  of a major  media  outreach
effort for the longer term;  and 6) preparing a general  snapshot  report on the
Company and it's operating  history.  As compensation,  the Company issued Gavin
175,000 shares of the Company's  common stock,  as registered on Form S-8, as of
August 1, 2002 and 70,000 shares of the Company's common stock, as registered on
Form S-8, on the first day of each succeeding month.  Additionally,  the Company
will issue Gavin 30,000  warrants per month to purchase an equivalent  number of
shares of the  Company's  common stock at an exercise  price of $0.25 per share.
Each warrant will be for a three year term from the date of issuance.

On October 16, 2002, the Company  entered into a  Multi-Media/Corporate  Imaging
Agreement  with Jason Genet (Genet).  This agreement  contains two (2) phases of
services:  Phase I - Create [a] Multimedia  Website,  Corporate  Imaging and Web
Mercial  ("New  Product")  and Phase II - assist the Company in the marketing of
New Product, make reasonable effort to organize, produce and supervise corporate
imaging and advertising as approved by the Company.  The Company is obligated to
compensate  Genet for both Phase I and Phase II in either  cash of  $370,000  or
common stock of the Company,  as  registered  on Form S-8, in a number of shares
equal to $400,000,  priced at the closing  quoted price of the Company's  common
stock on the day of issuance.  This  agreement is cancellable at any time by the
Company with no further  obligation beyond that which was already earned and due
to be paid. Through December 31, 2002, the Company has issued Genet an aggregate
1,625,000 shares of common stock under this agreement.

                                       28
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE N - COMMITMENTS AND CONTINGENCIES - CONTINUED

CONSULTING AGREEMENTS - CONTINUED

On November 11, 2002, the Company entered into a Consulting Agreement with PAW &
Associates  and/or Paul Weaver to provide various  product sales services.  This
Agreement  is for a 12 month term  starting  November  7, 2002.  The  Company is
obligated to issue 25,000 shares of restricted,  unregistered  common stock upon
execution of the Agreement and to pay a 3.0%  commission on the first $3 million
of acquired contract value and 5.0% on all acquired contract values in excess of
$3 million.

INVESTMENT BANKING AGREEMENTS

On June 20, 2002, the Company signed a Financial  Services  Agreement with First
American  Financial Group, New York, New York,  pursuant to which First American
Financial  Group  agreed to attempt to complete a private  placement of up to $5
million of the Company's 9% convertible  preferred stock. As of the date of this
Report,  First  American  Financial  Group has not introduced the Company to any
proposed  purchaser(s) of its convertible preferred stock, and management cannot
provide any assurances  that the Company will be able to complete such financing
in the future.  Through  December 31, 2002,  the Company has paid First American
Financial Group approximately $5,000 in conjunction with this Agreement.

On  October  23,  2002,  the  Company  executed  a  Structured  Equity  Purchase
Commitment  with  Cornell  Capital  Partners,   LP  (Cornell).   This  agreement
established  a  commitment  for Cornell to purchase up to  $3,000,000  in common
stock from time to time over the course of the next 24 months from an  effective
registration of the underlying shares,  with the shares to be issued pursuant to
Regulation  D of the U. S.  Securities  and Exchange  Commission.  The price per
share is to be 95% of the  lowest  closing  bid  price  during  the 5  preceding
trading days from the date the Company  receives notice to purchase.  There is a
maximum of $45,000 per  transaction.  The Company is  obligated to pay the first
$15,000 of Cornell's  legal fees - $5,000 upon the execution of this  Agreement,
payable in 100,000 shares of  free-trading  [sic] of the Company's  common stock
and $10,000 from the proceeds of the first  transaction.  Additionally,  Cornell
will retain the first 6.0% of each transaction as compensation for unaccountable
fees and expenses.

On November  27, 2002,  the Company  entered  into an  agreement  (the  "Spartan
Agreement") with Spartan Securities Group, Ltd.  ("Spartan") under which Spartan
agreed to provide,  on an exclusive  basis,  financial  advisory and  investment
banking services to the Company for a period of one (1) year, subject to earlier
termination  by either the  Company or Spartan  upon at least  thirty (30) days'
prior written  notice to the other party.  The services  that Spartan  agreed to
provide  include  rendering  advice  with  regard  to our  internal  operations,
corporate  finance  matters,  mergers  and  acquisitions,  and  capital  raising
activities.  Spartan  also  will act as our  exclusive  Placement  Agent for any
private  offering of the Company's  securities  and as underwriter in any public
offering of equity or debt securities.  The Company has also agreed to appoint a
person nominated by Spartan to our Board of Directors.

In consideration for Spartan's  services,  the Company has agreed to pay Spartan
an initial  non-refundable  retainer of 300,000 shares of our Common Stock and a
monthly  consulting  fee of  $2,500  that will  commence  upon  completion  of a
financing  of not less  than  $350,000,  increasing  to $3,000  per  month  upon
completion of a financing of not less than $500,000.

                                       29
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE N - COMMITMENTS AND CONTINGENCIES - CONTINUED

INVESTMENT BANKING AGREEMENTS - CONTINUED

In addition, upon completion of certain extraordinary transactions,  including a
sale of the Company's assets,  securities or business,  or the purchase by us of
another company or any of such other company's  assets,  securities or business,
Spartan  will be  entitled  to  receive  5% of the first  Five  Million  Dollars
($5,000,000),  4% of the second Five  Million  Dollars  ($5,000,000),  3% of the
third  Five  Million  Dollars  ($5,000,000),  and 2% of any  amount in excess of
Fifteen  Million  Dollars  ($15,000,000)  of  consideration   involved  in  such
transaction.  If Spartan  is  involved  in  originating  a loan or other  credit
facility with any bank or other institutional  lender, the Company has agreed to
pay Spartan a fee of 2% of the maximum amount of the credit facility,  including
of any increases in such facility after the date of the original financing.

The Company  also granted  Spartan a right of first  refusal to act as Placement
Agent  for  any  private  offering  of  our  equity  securities  (or  securities
convertible  into  equity  securities)  except for  private  placements  of such
securities  originating  from our officers and  directors.  Spartan will receive
Placement  Agent  compensation  of 10% of the gross proceeds  raised in any such
private offering and a 2% non-accountable expense allowance, as well as warrants
to  purchase  up to  20% of the  number  of  securities  sold  in the  offering,
exercisable  at 100% of the market  price of the  securities  on the date of the
sale.

If Spartan acts as  underwriter in any public  offering of the Company's  equity
securities,  Spartan  will  receive  7% of  the  gross  proceeds  raised  in the
offering, a 2% non-accountable expense allowance, and warrants to purchase up to
10% of the number of securities sold in the offering, exercisable at 100% of the
closing  market  price  on the  date of the  sale of  securities  in the  public
offering.

BUSINESS DEVELOPMENT AGREEMENT

During Fiscal 2003, the Company has executed multiple Consulting Agreements with
Kyle  Kennedy  to  provide   consulting   services  in  the  areas  of  business
development, mergers and acquisitions and business strategy for the Company. Mr.
Kennedy is affiliated with Spartan  Securities  Group,  Ltd. (see above) and has
represented  to the Company that the  services  provided in this  agreement  are
separate and unique to Spartan's efforts in capital raising.
The dates and consideration  related to the various  agreements with Mr. Kennedy
are as follows:

August 19, 2002      1,000,0000  options to  purchase  an  equivalent  number of
                     shares of the  Company's  common  stock at $0.04 per share;
                     666,000 options to purchase an equivalent  number of shares
                     of the  Company's  common  stock at $0.06  per  share;  and
                     334,000 options to purchase an equivalent  number of shares
                     at $0.08 per share.  These options  expired on February 19,
                     2003.

October 7, 2002      250,000 options to purchase an equivalent  number of shares
                     of the  Company's  common  stock at $0.01 per share.  These
                     options expired on November 7, 2002

October 11, 2002     1,000,000  options  to  purchase  an  equivalent  number of
                     shares of the  Company's  common stock at $0.015 per share.
                     These options expired on November 10, 2002.

November 12, 2002    200,000 options to purchase an equivalent  number of shares
                     of the  Company's  common  stock at $0.02 per share.  These
                     options expired on December 12, 2002.

November 26, 2002    300,000 options to purchase an equivalent  number of shares
                     of the  Company's  common stock at $0.016 per share.  These
                     options expired on December 26, 2002.

                                       30
<PAGE>
                              ADZONE RESEARCH, INC.
                          (a development stage company)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED


NOTE N - COMMITMENTS AND CONTINGENCIES - CONTINUED

BUSINESS DEVELOPMENT AGREEMENT - CONTINUED

December 11, 2002    2,100,000  options  to  purchase  an  equivalent  number of
                     shares of the  Company's  common stock at $0.016 per share.
                     These options expired on January 10, 2003.

January 23, 2003     1,050,000  options  to  purchase  an  equivalent  number of
                     shares of the  Company's  common  stock at $0.01 per share.
                     These options expired on February 22, 2003.

January 28, 2003     3,950,000  options  to  purchase  an  equivalent  number of
                     shares of the  Company's  common  stock at $0.01 per share.
                     These options expired on February 28, 2003.

May 6, 2003          300,000 options to purchase an equivalent  number of shares
                     of the  Company's  common  stock at $0.02 per share.  These
                     options expired on June 6, 2003.

May 20, 2003         625,000 options to purchase an equivalent  number of shares
                     of the  Company's  common  stock at $0.05 per share.  These
                     options expired on June 20, 2003.

As of June 30,  2003,  Mr.  Kennedy owes the Company  approximately  $18,050 for
shares issued under exercised options.

BROKER-DEALER MARKETING AGREEMENT

On October 10, 2002,  the Company  signed a  "Broker-Dealer  Marketing  Program"
agreement with First American  Financial Group of New York, NY (First American).
First  American will contact  broker-dealers  as potential  market makers in the
Company's equity securities;  contact broker-dealers via e-mail and telephone to
review  current  Company  information  and meet with  broker-dealers,  and their
registered  representatives,  to discuss and promote  awareness of the Company's
equity  securities.  As  compensation  to First  Financial,  the Company  issued
500,000  shares of restricted,  unregistered  common stock upon the execution of
this  agreement.  Further,  the Company is  obligated  to pay First  Financial a
non-accountable  expense  allowance  of $10,000 cash payable upon receipt of any
financing  from any  source in a  minimum  amount of  $500,000.  Further,  First
American  is  entitled  to  Bonus   Compensation  equal  to  100,000  shares  of
restricted,  unregistered  common  stock if at any  time  during  the 12  months
following the execution of this  agreement,  the Company's  common stock reaches
$0.10 per share; an additional 100,000 shares of restricted, unregistered common
stock if at any time  during  the 12  months  following  the  execution  of this
agreement,  the Company's  common stock  reaches $0.20 per share;  an additional
100,000  shares of restricted,  unregistered  common stock if at any time during
the 12 months  following the execution of this agreement,  the Company's  common
stock reaches $0.40 per share;  and an additional  100,000 shares of restricted,
unregistered  common  stock if at any time  during the 12 months  following  the
execution of this agreement, the Company's common stock reaches $0.60 per share.
This agreement terminates on September 30, 2003.

                                       31
<PAGE>
PART I - ITEM 2

MANAGEMENT'S  DISCUSSION  AND  ANALYSIS OF  FINANCIAL  CONDITION  AND RESULTS OF
OPERATIONS

(1) CAUTION REGARDING FORWARD-LOOKING INFORMATION

Certain  statements  contained  in this  quarterly  filing,  including,  without
limitation, statements containing the words "believes", "anticipates", "expects"
and  words  of  similar  import,  constitute  forward-looking  statements.  Such
forward-looking  statements  involve known and unknown risks,  uncertainties and
other factors that may cause the actual results,  performance or achievements of
the Company,  or industry  results,  to be materially  different from any future
results,   performance   or   achievements   expressed   or   implied   by  such
forward-looking statements.

Such factors include, among others, the following:  international,  national and
local general economic and market conditions:  demographic  changes; the ability
of the Company to sustain,  manage or  forecast  its growth;  the ability of the
Company to successfully make and integrate acquisitions;  raw material costs and
availability;  new product  development and  introduction;  existing  government
regulations  and  changes  in,  or  the  failure  to  comply  with,   government
regulations;  adverse publicity;  competition; the loss of significant customers
or suppliers;  fluctuations  and  difficulty in forecasting  operating  results;
changes in business strategy or development  plans;  business  disruptions;  the
ability  to attract  and  retain  qualified  personnel;  the  ability to protect
technology; and other factors referenced in this and previous filings.

Given  these  uncertainties,  readers  of this Form  10-QSB  and  investors  are
cautioned not to place undue reliance on such  forward-looking  statements.  The
Company  disclaims  any  obligation  to update any such  factors or to  publicly
announce the result of any  revisions to any of the  forward-looking  statements
contained herein to reflect future events or developments.

(2) GENERAL COMMENTS

AdZone Research,  Inc. (Company) was incorporated on May 31, 1994 under the laws
of the State of  Delaware  as  Executive  Help  Services,  Inc.  The Company was
initially  formed for the purpose of  developing an internet web site that would
offer  professional  space planning and design,  pricing  information and direct
ordering of modular office furniture systems.

On August 10, 2001, the Company executed an Agreement and Plan of Share Exchange
with AdZone Interactive,  Inc. (a privately-owned New York corporation) (AdZone)
whereby the Company  exchanged  18,000,022  shares of  restricted,  unregistered
common stock for 100.0% of the issued and outstanding common stock of AdZone and
effected a merger of the two entities with the Company being the surviving legal
entity. Concurrent with this transaction, the Company changed its corporate name
to AdZone Research, Inc.

AdZone Interactive,  Inc. (AdZone) was initially  incorporated as Web-AdNet.com.
Inc.  under the laws of the State of New York on February 28, 2000.  The Company
was formed to extract various data elements through the monitoring and review of
internet  websites   developed  and  maintained  by  independent  third  parties
worldwide. These extracted data elements are then used to provide various market
research  statistics  and other focused  information  as guided by the Company's
clientele.

The Company's business plan has not been fully implemented and, accordingly, has
not fully commenced operations. The Company has had no substantial operations or
substantial  assets since  inception and is considered to be in the  development
stage.

The Company is engaged in the  extraction of various data  elements  through the
monitoring  and  review  of  internet  websites   developed  and  maintained  by
independent third parties worldwide. These extracted data elements are then used
to provide various market research  statistics and other focused  information as
guided by the Company's clientele.

                                       32
<PAGE>
The events  which  occurred on  September  11,  2001,  and  subsequent  thereto,
generated,  and  continue to  generate,  additional  interest  in the  Company's
internet data mining  research  capabilities  for  potential  private and public
sector  clients.  Management  continues  to maintain the belief that the Company
will be able to acquire various  contracts to provide  research  information for
various private and public sector purposes.

On May 27, 2003,  the Company  received a $50,000  contract  from a major United
States defense  contractor to provide support  services related to that entity's
provision of services for Homeland  Security  issues.  As of June 30, 2003,  the
Company has billed approximately $39,125 against this contract and received cash
collections in subsequent periods.

The Company remains in the  development  stage,  has focused  principally on the
refinement and  maintenance of its proprietary  software and providing  services
pursuant to the May 27, 2003 contract.  Due to cash flow shortages,  the Company
continues to pursue various revenue and capital sources.

The Company is principally on additional private placements of equity securities
to provide sufficient working capital to maintain the integrity of the corporate
entity.

Because of the Company's lack of operations,  the Company's future  continuance,
for the  foreseeable  future,  will be fully dependent on either future sales of
equity  securities  and/or  advances or loans from  significant  stockholders or
corporate  officers  to  provide  sufficient  working  capital to  preserve  the
integrity of the corporate entity during the development phase.

There is no assurance that the Company will be able to obtain additional funding
through the sales of additional  securities or, that such funding, if available,
will be obtained on terms favorable to or affordable by the Company.

It  is  the  intent  of  management  and  significant  stockholders  to  provide
sufficient  working  capital  necessary to support and preserve the integrity of
the  corporate  entity.  However,  there  is  no  legal  obligation  for  either
management or significant stockholders to provide additional future funding.

(3) RESULTS OF OPERATIONS, PLAN OF OPERATION, LIQUIDITY AND CAPITAL RESOURCES

During  the first  quarter of Fiscal  2004 (year  ending  March 31,  2004),  the
Company  obtained  a  $50,000  contract  from  a  major  United  States  defense
contractor.  During this quarter, the Company completed and billed approximately
$39,125. The Company realized cash collections on this receivable  subsequent to
June 30.

As the Company has not fully commenced operations,  management is of the opinion
that our current financial  results,  as reported in the accompanying  financial
statements, are not meaningful as an indication of future operations.

The Company incurred system production and maintenance expenses of approximately
$40,700,  including  depreciation  of  approximately  $700, for the three months
ended June 30, 2003, as compared to approximately $9,800, including depreciation
of  approximately  $3,500,  for the same three month  period of the prior fiscal
year.

The Company incurred operating expenses of approximately  $53,000,  exclusive of
officer's  compensation  for the three months ended June 30, 2003 as compared to
approximately $82,000 for the same period of the prior fiscal year.

For the three  months ended June 30,  2003,  the Company  incurred a net loss of
approximately  $(77,000) as compared to a net loss of  approximately  $(172,000)
for the three months ended June 30, 2001. Based on the  weighted-average  number
of shares of common  stock  issued and  outstanding  at June 30,  2003 and 2002,
respectively, the Company incurred a net loss per share of approximately $(0.00)
and $(0.02).

                                       33
<PAGE>
LIQUIDITY

The  Company had  approximately  $51,500 in  available  cash at June 30, 2003 as
compared to $8,100 at March 31, 2003 and approximately  $2,900 at June 30, 2002.
The Company attempts to maintain a cash balance  sufficient to sustain corporate
operations  until such time as  management  can raise the funding  necessary  to
advance its business plan.

Liquidity  during  Fiscal  2001 and 2002 was  provided  principally  through the
unregistered  sales of equity  securities  and the  exercise of options  granted
under a plan  registered  on Form  S-8 with the U. S.  Securities  and  Exchange
Commission..

Additional  funding from either the sale of equity  securities  or advances from
shareholders  will be necessary to support  future  maintenance of the corporate
entity and service future contracts which may be obtained by the Company.

The Company,  due to it's lack of working  capital,  has no  definitive  capital
requirements  for future periods.  However,  the infusion of additional  capital
and/or  increased  immediate  demands for the Company's  services will certainly
require additional investment in computer hardware to handle the processing load
required by the  Company's  customers.  The  ultimate  amount and timing of this
potential investment is unknown at this time.

PLAN OF OPERATION

The Company's  operations focus on mining of data and other information  through
the  monitoring  and review of internet  websites  developed  and  maintained by
independent third parties worldwide. These extracted data elements are then used
to provide various market research  statistics and other focused  information as
guided by the Company's clientele.  The Company has initially identified two key
consumers of the  Company's  product:  advertising  research  and  Federal/State
governments

The Company  will face  considerable  risk in each of its future  business  plan
steps,  such as  difficulty  of hiring  competent  personnel  within its budget,
longer than anticipated web site decoding, difficulty in completing key business
acquisitions, and a shortfall of funding due to the Company's inability to raise
capital in the equity securities market.

The Company is currently  dependent  upon either funds advanced or loaned by the
Company's directors and officers or the sale of equity securities. The Company's
officers and directors have no formal  commitments or arrangements to advance or
loan funds for the Company and do not have any legal requirement to do so.

In such a restricted cash flow scenario, the Company would be unable to complete
its  business  plan  steps,  and  would,  instead,   delay  all  cash  intensive
activities.  Without  necessary cash flow, the Company may be dormant during the
next twelve months, or until such time as necessary funds could be raised in the
equity securities market.

ITEM 3 - CONTROLS AND PROCEDURES

As required by Rule 13a-15 under the Exchange  Act,  within the 90 days prior to
the filing date of this report,  the Company  carried out an  evaluation  of the
effectiveness of the design and operation of the Company's  disclosure  controls
and  procedures.  This evaluation was carried out under the supervision and with
the  participation  of  the  Company's   management,   including  the  Company's
President,  Chief  Executive  and  Chief  Financial  Officer.  Based  upon  that
evaluation, the Company's President, Chief Executive and Chief Financial Officer
concluded that the Company's  disclosure  controls and procedures are effective.
There have been no significant  changes in the Company's internal controls or in
other factors,  which could  significantly  affect internal controls  subsequent
to the date the Company 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 Company reports
filed or submitted under the Exchange Act is recorded, processed, summarized and

                                       34
<PAGE>
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 Company  reports  filed under the  Exchange Act is
accumulated  and  communicated  to  management,  including the  Company's  Chief
Executive Chief  Financial  Officer as  appropriate,  to allow timely  decisions
regarding required disclosure.

                          PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None

ITEM 2 - CHANGES IN SECURITIES

See the accompanying Notes to the Financial Statements

ITEM 3 - DEFAULTS ON SENIOR SECURITIES

None

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

ITEM 5 - OTHER INFORMATION

None

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

Exhibits
 31.1   Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 32.1   Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Reports on Form 8-K

None

--------------------------------------------------------------------------------

                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                                           ADZONE RESEARCH, INC.

Date: August 11, 2003                                 /s/ Charles A. Cardona III
      ---------------                          ---------------------------------
                                                          Charles A. Cardona III
                                               Chairman, Chief Executive Officer
                                                     and Chief Financial Officer

                                       35