SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   -----------
                                   Form 10-KSB
                                   -----------

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                      SECURITIES AND EXCHANGE ACT OF 1934

                    For the Fiscal Year ended June 30, 2001

                          Commission File No. 000-26687

                           The Regency Group, Limited
             (Exact Name of Registrant as Specified in its Charter)

                 Nevada                                          88-0429812
      (State or other jurisdiction                             I.R.S. Employer
   of incorporation or organization)                       Identification Number

         8930 E. Raintree Drive
                Suite 100
           Scottsdale, Arizona                                      85260
(Address of Principal Executive Offices)                         (Zip Code)

                                  480-444-0081
            (The Registrant's telephone number, including area code)

           Securities Registered pursuant to section 12(b) of the act:
                                      None

           Securities Registered pursuant to section 12(g) of the act:
                    Common Stock, $0.001 par value per share

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

     Indicate by checkmark if disclosure of delinquent  filers  pursuant to item
405 of Regulation S-B is not contained herein, and will not be contained, to the
best of the  registrant's  knowledge,  in any  definitive  proxy or  information
statements  incorporated  by reference in Part III if this form 10-K (SB) or any
amendment to this Form 10-K (SB): [ ]

     The aggregate  market value of the voting stock held by  non-affiliates  of
the  registrant,  based on the  closing  price per share of the common  stock on
October 10, 2001 of $.055, as reported on the OTCBB, was approximately $917,000.
Shares of common  stock held by each  officer  and  director  and by each person
known to Regency  Group,  Limited who own 5% or more of the  outstanding  common
stock have been  excluded in that such  persons may be deemed to be  affiliates.
This   determination  of  affiliate  status  is  not  necessarily  a  conclusive
determination for other purposes.

         As of October 10, 2001, the registrant had 27,980,800 shares of
                            common stock outstanding
<PAGE>
                           THE REGENCY GROUP, LIMITED
                        2001 ANNUAL REPORT ON FORM 10-KSB
                                TABLE OF CONTENTS

                                     PART I

                                                                            PAGE
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Item 1     Business........................................................    3
Item 2     Property........................................................   10
Item 3     Legal Proceedings...............................................   10
Item 4     Submission of Matters to a Vote of Security Holders.............   10

                                     PART II

Item 5     Market for Common Equity and Related Stockholder's Matters......   11
Item 6     Management's Discussion and Analysis of Financial Condition
           and Results of Operations ......................................   11
Item 7     Financial Statements............................................   16
Item 8     Changes in and Disagreements with Accountants and Financial
           Disclosure .....................................................   30

                                    PART III

Item 9     Directors, Executive Officers, Promoters, and Control Persons...   31
Item 10    Executive Compensation..........................................   31
Item 11    Security Ownership of Certain Beneficial Owners and Management..   32

                                     PART IV

Item 12    Exhibits, Financial Statement Schedules and Reports on
           Form 8-K .......................................................   34

Signatures  ...............................................................   34

                                       2
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                                     PART I

ITEM 1. BUSINESS

     WE MAKE MANY STATEMENTS IN THIS ANNUAL REPORT, SUCH AS STATEMENTS REGARDING
OUR PLANS,  OBJECTIVES,  EXPECTATIONS AND INTENTIONS,  WHICH ARE FORWARD LOOKING
STATEMENTS  WITHIN THE MEANING OF SECTION 27A OF THE  SECURITIES ACT AND SECTION
21E OF THE EXCHANGE  ACT. WE MAY IDENTIFY  THESE  STATEMENTS BY THE USE OF WORDS
SUCH  AS  "BELIEVE",  "EXPECT",  "ANTICIPATE",   "INTEND",  "PLAN"  AND  SIMILAR
EXPRESSIONS.   THESE  FORWARD-LOOKING   STATEMENTS  INVOLVE  SEVERAL  RISKS  AND
UNCERTAINTIES. OUR ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE ANTICIPATED
IN THESE  FORWARD-LOOKING  STATEMENTS AS A RESULT OF VARIOUS FACTORS,  INCLUDING
THOSE WE DISCUSS IN "RISK  FACTORS" AND ELSEWHERE IN THIS ANNUAL  REPORT.  THESE
FORWARD-LOOKING  STATEMENTS SPEAK ONLY AS OF THE DATE OF THIS ANNUAL REPORT, AND
WE CAUTION YOU NOT TO RELY ON THESE  STATEMENTS  WITHOUT  ALSO  CONSIDERING  THE
RISKS AND  UNCERTAINTIES  ASSOCIATED  WITH  THESE  STATEMENTS  AND OUR  BUSINESS
ADDRESSED IN THIS ANNUAL REPORT.

OVERVIEW

     The Regency  Group,  Limited  (Regency)  is a  technology-based  investment
company that was incorporated in February of 1999. Based in Scottsdale, Arizona,
the firm  makes  investments  in  companies  that are  developing  key  emerging
technologies.  Regency's  main focus is  developing  the  Companies  that it has
interests in with a view towards  enhancing  their value as potential  take-over
targets or through taking them public.  Regency provides financial,  management,
and technical support as needed. We believe we are positioned to act promptly on
potential opportunities.

STRATEGY

     Our strategy is to provide  technology-based outdoor mobile marketing media
solutions,  business-to-business  e-commerce solutions,  web-marketing services,
and sales and  managerial  expertise.  We have made  investments  in  technology
companies and formed strategic  relationships  that we believe position us to be
competitive,  and we apply our business  philosophy  and  expertise to deliver a
compelling  menu  of  services  to our  clients.  We are  continually  reviewing
investment  and  development  opportunities  that are  consistent  with our core
strategy. In July, 2001, Regency formed Regency Preferred Corporation,  a wholly
owned  subsidiary,  to take  advantage of the market for outdoor  mobile  media.
Previously, we had made a significant investment in AdZone Interactive.

                          REGENCY PREFERRED CORPORATION

     Regency Preferred Corporation is a wholly owned subsidiary of Regency Group
Limited. It was founded by Terry Neild, an experienced management executive with
extensive background in the consumer products and retail marketing industry, for
the purpose of capitalizing  upon the recent and dramatic  changes  favoring the
transition of traditional  advertising to alternative media types,  particularly
those  such as mobile  electronic  advertising  which  target  the new  "mobile"
consumer.

                      ALTERNATIVE MEDIA - THE MOBILE MARKET

     Current consumer trends and the highly competitive  advertising arena favor
immediacy  and  proximity  of  advertising  delivery  to the  consumer.  Outdoor
advertising has long been favored as a media to  cost-effectively  deliver image
exposures to consumers  while they are  essentially  captive in their cars or to
bring local or event venue advertising direct to the consumer.  The emergence of
the "mobile"  consumer,  who is spending  increasing  amounts of time in the car
and/or destination-bound, has favored the emergence of outdoor advertising media
as a potent regional and national advertising mechanism.

     Similarly,  localized event  merchandizing has found that outdoor media has
strong pull for "mobile" consumers. Nonetheless, as competition for local venues
and for the attention of the "mobile" consumer has increased, so has the pursuit
of alternative  advertising  media. This presents a significant  opportunity for
the Company that can secure, manage and grow these resources.

     In light of these opportunities and trends,  Regency Preferred  Corporation
sought  to  secure  a  lead  position  in  select  regional   alternative  media
opportunities,  seeking  to  acquire  strategic  assets and to bring to them the
proven  management,  operating and financial  experience of its team in order to

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grow the businesses and to expand them on a national  scale.  The company sought
opportunities that provide:

     *    High exposure, low cost venues
     *    Versatile media
     *    Regional and national account capability
     *    Positioning with the emerging "mobile" advertising trends
     *    Distinct competitive advantages
     *    E-commerce enabled

     Furthermore,  The Company believes the current economic  downturn  presents
discounting  opportunities.   Advertising  invariably  suffers  during  economic
downturns,  putting pressure on revenues,  cash flow and ultimately  valuations.
The  Company   believes  there  will  be  significant   opportunities   to  make
acquisitions   at  a  significant   discount-to-market   value  because  of  the
recessionary pressures now occurring in the US and worldwide.

                                  THE BUSINESS

     Regency Preferred Corporation, is in the business of:

     *    Developing and/or acquiring existing mobile media companies.
     *    Providing capital, management, marketing and contracting to grow these
          companies.
     *    Bringing operational efficiencies, maximizing the tremendous cash flow
          opportunities inherent in mobile media.
     *    Providing  rapid build out and  positioning  for the rapidly  emerging
          "mobile media" content delivery.

     The Company  believes it can create  long-term value by  consolidating  the
fragmented regional aspects of the emerging mobile media markets into a national
company. This approach should have several significant competitive advantages:

     *    Uniformity of management practices
     *    Economies of scale
     *    Availability of capital
     *    National accounts capture
     *    Visibility and client retention
     *    Lowered overhead
     *    Enhanced profitability

     In  addition,  the  Company  intends to "cookie  cutter" its  approach  for
growth,  replicating its management and  acquisition  models across the country,
allowing  it  to  more  efficiently  identify,   assess,  implement  and  manage
acquisitions,  quickly  building a national network of uniformly and efficiently
managed mobile media assets.

                               THE BUSINESS MODEL

     The mobile media business model is based upon the simple approach of:

     *    Filling the market need for mobile advertising in major markets
     *    Using state-of-the art technology which provides critical  competitive
          advantages
     *    Coupling this with national business
     *    Filling in with local business
     *    Positioning for interactivity
     *    Partnering

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      FILLING THE UNMET MARKET NEED FOR MOBILE ADVERTISING IN MAJOR MARKETS

     The Company has identified a huge need for high  visibility,  temporary and
mobile real-time advertising.  There are national and local advertisers that are
actively seeking cost-effective means to bring their messages to their potential
consumers in an immediate and as high-impact a manner as possible. This requires
placement of  advertisements  in areas of high traffic,  where repeat images are
possible.  Unlike  fixed  advertisement  venues  which  have  severe  placement,
licensing and logistical limitations,  mobile media requires only identification
of the proper geographical area and demographics, which is then coupled with the
proper  technology for delivering the advertising  message in the most efficient
and high impact means possible.

USING STATE-OF-THE-ART TECHNOLOGY WHICH PROVIDES CRITICAL COMPETITIVE ADVANTAGES

     Mobile  media  technology  is  evolving  into a  blend  of  technology  and
practicality:

     *    The   technology   must   provide  the  means  to  deliver   real-time
          advertisements   in  diverse   environments   with  full   multi-media
          capabilities and electronic presentation, production and connectivity.
     *    The practicality  inherent in mobile media comes from a need to manage
          the tough  realities of  delivering  advertising  on time with minimal
          downtime in harsh environments.

                                DELIVERY PLATFORM

     PROVEN  CAPABILITIES - The vans have a strong operating track record.  They
have been  thoroughly  reviewed for  reliability,  both in terms of  on-the-road
uptime as well as electronic component and systems reliability.

     MODERN PROPERLY ADAPTED TRUCKS - Delivering  advertising in multiple venues
requires  proper  visibility,   drivability,   range,  serviceability,   parking
capability  and layout.  These  trucks have proven to be ideal in meeting all of
these requirements.

     STATE-OF-THE-ART DISPLAY TECHNOLOGY - These vans combine:

     *    New  state-of-the-art  rear projection  display screens  positioned to
          encompass  the  three  major  sides  of  the  truck,  allowing  almost
          universal visibility in all lighting situations.
     *    This is coupled with live-feed and wireless  connectivity options that
          enable   real-time   delivery  of  advertising   content  as  well  as
          pre-produced  content.  This  allows for rapid  change out of copy and
          Minimal production time and expense
     *    This technology platform provides for full-time advertising display as
          well as  timed-shift  advertising.  This allows the Company to serve a
          broad  variety of  clientele,  moderate  the  advertising  messages to
          comply  with  State and local  zoning,  to  rapidly  accommodate  both
          national  and local  advertisers  utilizing  one uniform  platform and
          delivery vehicle,  and maximize the revenue potential from each mobile
          platform

                                 LOCAL BUSINESS

     National accounts,  lower production costs and versatility of venues brings
added revenue stability,  enhanced profitability,  stronger growth opportunities
and a stable and visible base for attracting local advertising  business.  Local
advertising business is less reliable but can be highly profitable. "Filling in"
with local business can dramatically  enhance the cash flow and profitability of
each mobile platform.

                                NATIONAL BUSINESS

     The bread and  butter of the  mobile  advertising  are  national  accounts.
Currently,  the  mobile  media  market is in its  infancy,  with few  candidates
offering  suitably robust  platforms to attract  national  accounts.  We will be
offering multi-venue, multi-market capabilities, which are suitable for national
advertisers.  Furthermore,  the Company's multimedia capabilities allow national

                                       5
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advertisers to integrate  their messages across  multiple  platforms,  utilizing
television content for radio and outdoor. This is attractive due to:

     *    Reduction in production costs
     *    Reduction in time to market
     *    Integration and uniformity of advertising campaigns
     *    Ease of media buying

                          POSITIONING FOR INTERACTIVITY

     There are few advertising platforms that are positioned for true multimedia
interactivity, including:

     *    Live feed
     *    Event simulcast
     *    Proximity messaging
     *    Timed offerings

     Our   multi-market,   multi-venue   platform,   technology   and   wireless
capabilities position the Company to take a lead in providing these capabilities
to advertisers as the market develops and grows.

     The entire industry is moving toward bringing the advertising message right
to the consumer  i.e.  "mobile  media".  GPS and proximity  broadcasting  are in
development worldwide,  with applications directed at consumers in their phones,
their PDA's and their autos. The connectivity and display capabilities  position
the Company to be an ideal distribution channel for this emerging trend.

                                   PARTNERING

     These  capabilities and market  positioning should provide the Company with
an  attractive  platform  for  partnering  in  order to  expand  its  scope  and
offerings.  The Company believes it will rapidly be able to pursue  partnerships
with:

     *    Alternative media enterprises such as radio
     *    Advertising buying companies
     *    Integrated marketing companies
     *    Exclusive media ventures

                                  ACQUISITIONS

     The Company is in negotiations to acquire an existing  confidential  mobile
media company. Upon completion of this acquisition,  and initial build-out,  the
Company intends to immediately pursue additional acquisitions.

     Regency   believes  the  current  downturn  in  the  economy  favors  media
acquisitions at discount pricing. This is coupled with the Company's belief that
investment in the working assets of alternative  media  companies makes an ideal
managed-risk,  high cash-on-cash  profile investment.  These types of assets are
generally re-marketable;  often geography insensitive and they can be managed as
Separate Business Units (SBU's),  generating dedicated cash flow,  particular to
each asset.  This makes them  relatively  secure,  manageable and predictable in
cash flow potential. These assets usually generate substantial cash flow, making
the purchases of additional units a risk-managed,  easy to control,  high growth
prospect investment. Growth of regionally based media companies is often limited
by access to capital and  limitations on access to national  advertisers  due to
their  lack of breadth  of  coverage.  Bringing  capital,  national  advertising
accounts,  consolidated  overhead and  efficient  management  is a simple,  high
growth  strategy for taking and keeping  leadership  in this niche  market.  The
Company  intends to build upon its position with the mobile media company and to
pursue similarly profiled investments as quickly as possible.

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<PAGE>
                             INDUSTRY & MARKETPLACE

                                   ADVERTISING

     The  $200  billion  dollar  advertising   industry  is  mature  and  highly
competitive. With a broad range of established media and venues, advertisers are
constantly seeking alternative advertising vehicles that can deliver messages to
consumers  with  impact,  immediacy  and  retention.  Coupled  with this are the
rapidly  shifting  consumer  trends of age,  lifestyle  and  mobility,  favoring
advertising   methods  that  bring  the  message  to  the   consumers  in  their
environment,  with  immediacy  and  differentiation  from the  current  complex,
competitive  advertising  background.  As a result,  outdoor advertising,  which
caters to the  increasingly  mobile  consumer,  has grown to over $4  billion in
annual revenues.

     Traditional media such as print, television, outdoor and radio rely heavily
on alternative creative content and repetition in order to capture the attention
of the consumers.  As a result,  advertising and creative agencies play critical
roles  in  traditional   advertising,   adapting  content  to  fit  in  familiar
undifferentiating  traditional  media.  Outside of these venues,  technology and
innovation  can play a key role,  especially  if they provide the means to bring
messages to consumers in a more convenient,  immediate and memorable way. Mobile
media is an ideal medium, utilizing new technology and practical innovation.

                          CHANGES FAVORING MOBILE MEDIA

     There are numerous  significant  market forces that are rapidly emerging to
drive the growth and importance of mobile media.  These changes are occurring as
a confluence of events, which, independently,  are relatively uneventful, but as
a whole,  they lead to entirely  different  market  drivers that support  mobile
media as a mainstream advertising platform.

                               THE MOBILE CONSUMER

     Today's consumers are unlike any of the past. They are:

     *    Less urban, traveling more
     *    More informed
     *    Less media sensitive
     *    More physically mobile
     *    More event driven
     *    Plugged in (e-commerce)
     *    Consuming more, saving less

     As a result,  today's  consumer  spends  more time on the road,  at events,
pursuing  lifestyle,  consumables and experiences.  Reaching these  increasingly
aware,  demanding and mobile  consumers is a daunting task,  particularly in the
face of relentless  traditional  media.  Catching  consumers  while  mobile,  in
action,  on-site,  with immediacy and  differentiating  multimedia is now a high
value proposition. Only now is the technology advancing to allow this to occur.

                                   TECHNOLOGY

     Only in the last several years has the appropriate  technology developed to
enable true mobile media advertising. These technologies include:

     *    Large daylight capable rear projection displays
     *    Presentation and streaming hardware and software
     *    Delivery hardware and software
     *    Information channels and bandwidth
     *    Wireless technology

     True "mobile media", which can deliver full multimedia  advertising in real
time,   coordinated  for  accurate   geographic   delivery  and   cost-effective
production,   implementation,   scheduling  and   reporting,   has  simply  been
unavailable until now.

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                                       LAW

     Furthermore, advertising zoning laws can be quite restrictive. As a result,
static outdoor  advertising  media  encountered  problems with  versatility  and
adaptability  in meeting  strict  laws,  thus  limiting  its  adaptation  and/or
extension  into  new  markets.   The   production   and  change-out   costs  and
implementation  timing  were  simply too  onerous.  Only with the advent of true
mobile  computer-driven  media,  can the cost and required  versatility  to meet
these laws be met. This presents a true  window-of-opportunity to take advantage
of former barriers-to-entry and to stake leadership in these markets.

                                      COST

     Cost is a major factor in media  choice for  advertisers,  particularly  in
times  of a  down  economy.  Traditional  outdoor  advertising  has  significant
limitations due to the costs of producing and mounting ads. These costs include:

     *    Production
     *    Conversion
     *    Delivery
     *    Make-up
     *    Installation

     Current  mobile media  technology  streamlines  and minimized each of these
cost elements, resulting in:

     *    Lowered production costs
     *    Immediate/no conversion required
     *    E-delivery
     *    Elimination of make-up and installation.
     *    Instantaneous, no cost change out

                             BANDWIDTH AND CAPACITY

     Only  recently  have we seen the  development  of delivery  technology  and
capacity that can allow full  internet-enabled  multimedia  content  delivery in
real  time.  Coupled  with  emerging  high-speed  wireless  technology,   mobile
multimedia  is now  enabled.  Moreover,  advertisers,  who  increasingly  demand
immediacy of their message,  can deliver timed,  immediate,  sequential or truly
interactive  messages  to their  audiences,  gaining  true added  value from the
mobile media  platform.  Those who quickly  capture  leadership in the practical
delivery of this new media will have strong market share leadership foundations.

                                    SERVICES

     Our mobile media initiative  includes offering  comprehensive  mobile media
services,  ranging from turnkey mobile  advertising  services,  to simple mobile
imaging with sound.  Initially,  the Company will offer  services that emphasize
delivery instead of production services.  This allows the Company to tap current
advertisers  with  produced  advertising  thereby  incurring  minimal  overhead,
allowing  the  Company  to  focus  on  growing  the  delivery  platform,  adding
talent-intensive  services at a later  time.  In the  meantime,  the Company can
offer  comprehensives  services to meet demand  through a series of  advertising
services  vendor  relationships.  These  will allow the  Company to fulfill  its
client's  needs,  augment the Company's  revenue  stream  through profit sharing
arrangements, while minimizing permanent overhead that would limit the Company's
planned rapid expansion into multiple  markets.  The Company's current offerings
will be:

                    MOBILE ADVERTISEMENTS - SPECIFIC ACCOUNT

     The Company will allow  exclusive  use of a limited  number of its vans for
single advertisers.  While this may not bring the most cost-effective use of our
mobile media platform to the client because of lost cost-sharing  opportunities,
some advertisers have indicated a desire for exclusivity and, even further,  for
branded exclusivity, where the entire outdoor mobile media truck would be logoed
and dedicated to a particular client.

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<PAGE>
                    MOBILE ADVERTISEMENTS - MULTIPLE ACCOUNTS

     The  Company  anticipates  that the bulk of its  business  will  come  from
multiple account  advertising,  wherein multiple clients share the display space
time on each or a series of vans. This type of scenario generally has one or two
lead  national  accounts  that  dominate  the ad space,  while the  remainder is
"filled in" with local advertisements.

                       MOBILE ADVERTISEMENTS - ON LOCATION

     As the  Company  has  evaluated  the  mobile  media  markets,  it has found
increasing demand for on-location  advertising.  This is alternative advertising
designed to attract  consumers to a particular  proximate  attraction  or event.
Examples of this include:

     *    Las Vegas:  Competing  casinos  strive to attract  walk-by  consumers,
          either with or for an  attraction  or with a special  offering.  Their
          objective  is to draw in the  consumer  immediately  with a timely and
          immediate  advertisement.  However,  these needs  change  daily,  even
          hourly and  signage  is  tightly  zoned and  expensive  to change.  An
          outdoor mobile media truck out front is an ideal real-time,  low-cost,
          high-value advertisement platform.
     *    Fairs and Shows:  Fairs and shows  strive to have their  clients  come
          back  to  the  event,  often  advertising   ticket  rebates,   special
          attractions or other incentives.  However, due to the temporary nature
          of these  venues,  they are severely  restricted  in their  ability to
          advertise  these  incentives.  Furthermore,  they have  little time to
          produce  and  implement  the actual  advertisement  due to the limited
          tenure of the event/venue themselves. An outdoor mobile media truck is
          an ideal platform for high visibility, high impact event and incentive
          advertising, where advertisers need to reach consumers on-location.

         TEMPORARY PLACEMENT ADVERTISEMENTS OR IMAGING - VENUE SPECIFIC

     Events such as the X-games,  the Olympics or other  sports  events  present
enormous  opportunities  for both  advertisers and event sponsors to utilize the
flexibility,  immediacy,  multimedia and simulcast  capabilities  of the outdoor
mobile media platform.  Limited viewing and dispersed audiences make delivery of
the event coverage and sponsorship in remote viewing locations a strong pull and
revenue enhancement mechanism for these types of venues. Similarly,  trade shows
are,  by nature,  temporary,  making  them  ideal  venues  for  temporary,  high
visibility multimedia displays. The ADVANtage(TM) vans can be quickly adapted to
be a high impact trade show centerpiece.  These types of services are simple and
easy for the Company to deliver  consistently and on time, with minimal overhead
at premium prices.

                             THE ADVANTAGE(TM) VANS

     Our outdoor mobile media initiative will have critical  advantages with its
technology and delivery  platform,  the ADVANtage(TM)  vans. These  field-proven
mobile multimedia studios provide an ideal blend of practicality and technology.

     *    THE TRUCK - The  outdoor  mobile  media  vans are built upon the heavy
          duty  Ford  F-350   platform.   This  is  one  of  the  most  durable,
          fuel-efficient, reliable and fleet-use proven trucks in the industry.
     *    THE SCREENS - Proprietary  state-of-the-art  rear projection  displays
          make up the composite  full-wall  displays on our vans.  These screens
          are  specially  selected  for  their day and  night  visibility.  More
          important,  however, is the additional  proprietary  suspension system
          that buffers the screens from constant road shock, while also allowing
          easy swap out of replacement screens coupled with antitheft security.
     *    THE PLACEMENT - The unique  outdoor mobile media setup allows for full
          three-sided  placement  of its  screens,  while still  allowing  space
          within the truck for a full mobile office. As a result,  while both on
          the  road  and  while  stationary,   the  ADVANtage(TM)  vans  provide
          exceptional exposure and practical functionality.
     *    THE SETUP - Each truck is equipped with Utility plug ins,  Generators,
          Integrated power management  systems,  Dedicated  climate control,  PC
          with  redundant  systems,  Power  backup,  Fax,  Telephone,   Wireless
          internet,  CDRW,  RHD, Tape,  Dish (as needed),  Theater quality sound
          broadcast equipment,
     *    SELF-SUFFICIENT  MOBILE  UNITS - all trucks  combine  office,  studio,
          presentation,  sound,  capabilities and are Essentially  "full-service
          multimedia advertising on wheels".

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                                  MANUFACTURING

     The Company's proprietary west coast-based manufacturer will build new vans
until such time as it is economical  and practical to bring this in house.  Each
truck  requires  60  days  from  time  of  order  to  complete.   The  Company's
manufacturer  can complete  and deliver an initial  order of up to 20 vans in 90
days. Vans will carry extended  warrantees,  and all electronic  components will
have critical  redundancies and can be immediately changed out upon failure of a
component. Each truck will carry critical backup equipment, and the Company will
provide overnight swap out services.

                                     SERVICE

     Service will be performed during the hours of 12 AM through 7 AM, utilizing
contract fleet service providers in each market. Each truck will undergo routine
preventive fleet maintenance procedures. These types of service arrangements are
highly  cost-effective,  reliable and well  established in each of the Company's
primary target markets.

                                    LOGISTICS

     Each market  will have a minimum of two vans  servicing  the  market.  This
allows for downtime and  servicing,  with an expected  combined truck up time of
nearly  95%.  Routing  will be  established  weekly  and daily by  headquarters,
prioritized  by  national  accounts  scheduling.  Local  managers  will have the
responsibility for "fill-in" scheduling, reviewed daily by headquarters.

                                       I/T

     I/T  services  will be managed  from  headquarters.  This will  include all
production   coordination,   service,   interactivity  and  systems  design  and
management.  This will also include centralized training and protocols.  Systems
will include  hourly  monitoring of on-site  activities  and  twice-daily  route
reporting.

                             PERSONNEL AND TRAINING

     In order to insure  quality  control,  reliable  uptime  and  comprehensive
product  uniformity,  all  personnel  will be screened  and trained  through the
Company  headquarters.  All payroll  and HR  functions  will be directed  out of
headquarters  in order to ensure that the company can reliably  and  efficiently
manage each local  operation  with the  uniformity  required in order to rapidly
grow the company and to secure and maintain national accounts. Each local market
will be overseen  by a local  manager  who will have  specific  responsibilities
initially limited to:

     *    Implementation of national account media delivery and routes
     *    Local advertising sales
     *    Local personnel management
     *    Reporting

                                   PRODUCTION

     Our outdoor mobile media production will be fully electronic, with wireless
connectivity  and a full  multimedia  software  library  capable of handling all
major media formats. As a result, we will be able to quickly interface with most
advertising  and  creative  agencies,  accepting  a broad  range of formats  for
immediate display. In addition,  the technology platform inherent in each truck,
coupled  with  selected  regional  vendors,  will  allow  us  to  provide  media
production  capabilities  for its  regional  clients.  Initially,  however,  all
production will be managed out of headquarters, with all project design, finance
and project management elements overseen by the company's marketing staff.

                                       10
<PAGE>
                               MARKETING AND SALES

                                    MARKETING

     The Company's  marketing efforts will be directed toward national accounts,
and the  Company's  image will be as a national  multimedia  organization.  As a
result,  the Company's  overall image will be uniform  across  markets,  tightly
controlled by the corporate marketing staff.

                                      SALES

     Our outdoor mobile media strategic sales efforts will be two-pronged:

     *    National Accounts
     *    Fill-in regional sales

     The  Company's  national  account  manager and staff will  pursue  national
sales,  the  primary  emphasis  of  the  company.   Regional  managers  will  be
responsible for implementing the national accounts and then filling in open time
slots with regional advertising sales.

     The  Company  has  found  that the blend of  national  account  demand  vs.
regional  account demand is region  specific.  For example,  local venues in Las
Vegas,  once  attracted  by the image of the  Company's  vans  showing  national
advertisements,  could take the  entire  time  allotment  normally  allowed  for
national  and  regional  ads  combined.  Nonetheless,  we believe the  long-term
success of the Company will be driven by national accounts.

     The company believes it has the best platform in the market, with:

     *    Practical application of the best technology
     *    Ability to meet the market at the point of need
     *    Robust markets
     *    Flexibility, reliability, pricing
     *    Immediacy, impact and modern media

     This gives us the ability to secure  national and  regional  sales with low
marketing overhead, reduced lag-times and high repeat business.

     The full  multimedia  capabilities of the  ADVANtage(TM)  Mobile Media vans
allow the  Company  to pursue a broad  range of  clientele  across  many  market
segments. The Company has two primary components to its initial marketing plan.

     *    Positioning for national accounts
     *    Segmenting and targeting high value regional and local market segments

                               MARKET SEGMENTATION

     The  Company has  segmented  its  markets to favor the  company's  emerging
growth stage and to target geography, demographics and venue.

                                      STAGE

     The early stage of the Company requires that its efforts be triaged to only
highest use venues and areas.  This means that the Company  will only  initially
pursue areas that have:

     *    Broad supporting demographics.
     *    Established national advertising account buying history

                                       11
<PAGE>
                                NATIONAL ACCOUNTS

     Marketing to national accounts is conducted through  advertising  agencies,
media buying  companies and the new emerging  integrated  media  companies  that
serve as intermediaries  for national  advertisers,  particularly in alternative
advertising venues.

     According to  Advertising  Age Magazine,  there are over 84 companies  with
advertising budgets in excess of $200 million annually.  As these companies seek
additional ways to promote their products and services nationwide,  we recognize
that these companies offer the greatest market potential for having its vehicles
included  in  their  marketing  mix.  Our  advantages  are  simple  and  provide
compelling differentiation. National accounts look for differentiation, coverage
and reach.  We meets these needs with state of the art,  easy to  implement  and
value priced alternative media offerings.

                             LOCAL/REGIONAL ACCOUNTS

     Local and regional  advertising can be quite lucrative.  Indeed,  there are
enough high-value opportunities that the Company must segment and prioritize its
marketing  efforts,  separating the best geographic  markets and the best market
segments within them.

                                  DEMOGRAPHICS

     In the US there  are 121  cities  with at  least  200,000  households.  The
Company is ranking  cities  offering the greatest  marketing  potential  for the
number of vehicles that can be supported  related to the total household  count.
One of our  vehicles  can be  supported  in a community  with at least  200,000.
Recognizing  that many cities have  considerably  more households in their media
markets, and can support additional vehicles,  the market potential increases to
over 400 vehicles nation wide.

     As an example of market potential, New York City and its surrounding market
area have 6.7 million  households.  At one vehicle per every 200,000 households,
the New York City market can support 33  vehicles.  Los Angeles with 4.9 million
households  can  support  nearly 25  vehicles.  Portland,  Oregon  with  933,440
households can support nearly 5 vehicles and Eugene,  Oregon and its surrounding
area of 204,000 can support 1 vehicle.  WE recognizes  that all markets will not
be able to set up immediately, but the data supports a vast market potential for
the company and it's concepts.

                               HIGH VALUE MARKETS

     In addition to selling into proven markets,  the Company is positioning for
capturing  on-the-ground  mobile  media  market  share  in high  value  markets,
enhancing the Company's partnering,  sale and or merger possibilities with these
major outdoor advertisers. There are numerous proven high value markets that are
ideally suited for our offering.  These include:

     *    Trade shows and conventions
     *    Special Events
     *    Tourism
     *    Political Campaigns
     *    Destinations

                                 SPECIAL EVENTS

     Community  events,  such as major golf  tournaments,  car  races,  or other
special   interest  venues  that  attract  large  numbers  of  attendees  and/or
spectators  are vibrant  markets for the visual impact  deliverable by us. These
events can dovetail national  advertising in unprecedented  flexible formatting.
Furthermore,  they  provide  enormous  visibility  for the  Company  because  of
collateral television coverage and executive attendance.

                                       12
<PAGE>
                            PROVEN GEOGRAPHIC MARKETS

     We do not have to forge new paths. We will essentially  "piggy-back' on the
market  research  and proven  results of the majors.  The market for outdoor and
alternative  advertising is established and thriving.  The compelling advantages
of  our  media   platform  allow  the  Company  to  target  high  value  markets
immediately.  The Company has selected several priority markets according to the
viability of these markets as  established by the leading  outdoor  advertisers,
including:

     *    Outdoor Systems
     *    Eller Media
     *    3M Media
     *    Universal
     *    Lamar Outdoor Advertising
     *    Whiteco Outdoor
     *    AK Media
     *    Martin Media
     *    Don Ray Media
     *    Adams Outdoor Advertising

                                   TRADE SHOWS

     According  to the  TradeShow  Week Data Book,  there were 2,226 large trade
shows in 1998;  571 consumer  shows;  and 1,484 shows open to both the trade and
public.  Of these,  481 trade  shows  generated  attendance  in excess of 50,000
attendees.  While our media  vehicles  will  certainly  be used for many smaller
shows,  the company believes that the larger shows offer  significant  marketing
opportunity  for use in promoting  exhibitor's  products and services  along the
hotel-convention center route.

     The company  projects that its vehicles can be pre-booked  with one or more
exhibitors,  each renting time to have their messages and products projected for
viewing by trade show attendees along the hotel-convention center route.

     According to the TradeShow Week Data Book, there are over 10 cities with at
least 75 major trade shows annually. These include:

     *     Chicago                156
     *     Toronto                151
     *     New York City          138
     *     Atlanta                130
     *     Dallas                 122
     *     Las Vegas              121
     *     Orlando                 99
     *     San Francisco           91
     *     Boston                  77
     *     New Orleans             75

     These larger shows present a tremendous marketing  opportunity for us. With
over 1.4 million exhibiting companies,  and 110 million attendees visiting trade
shows in 1998, we will be focused on developing  this robust source of business.
In  addition,  there are many  cities  with more shows that  could  utilize  our
vehicles. As an example, Las Vegas held over 650 expositions in 1998.

                              POLITICAL CAMPAIGNS:

     Political  campaigns  are now big  business.  Television  and  grass  roots
campaigning  are  mainstays  in this  growing  arena.  Our outdoor  mobile media
initiative  offers  an  ideal  hybrid  vehicle  for  taking  television-produced
messages into communities as grass roots  campaigns.  With high demand placed on
the candidate's time, we can serve as a "real-life" surrogate. Delivering highly
visible  personalized  messages  offers huge impact.  We will be able to provide

                                       13
<PAGE>
candidates  with  the  ability  to  bring  issues  live to  targeted  audiences,
simulcasting  speeches  for example.  This type of  campaigning  is  high-value,
high-impact and truly unprecedented.



                                     TOURISM

     According  to  national  studies,  35  of  the  world's  top  200  vacation
destinations  are found in the United States.  Each of these 35 locations spends
significant  dollars to  attract  new and  returning  vacationers.  The  Company
foresees developing  marketing campaigns for Hawaii and other destinations to be
showcased in its top markets to correspond with weather,  vacation timing and/or
special offerings, such as discount seasons.

     Another  example  includes Las Vegas or other gambling  destinations  to 1)
attract the visitors to Las Vegas or 2) to lure the vacationer into a particular
casino or show. In many cases,  the marketing  campaigns  involving our vehicles
may be entirely used by one major advertiser.  However,  the company  recognizes
that a greater market will develop if numerous  advertisers within a destination
site combine  their  advertising  resources and share in the purchased our media
time.

                                  DESTINATIONS

     Destinations  compete  aggressively for customers,  often out at the street
level.  Destinations,  such  as  theatres,  local  tourist  attractions,  malls,
historical sites or even gift sales are viable markets.

                                 MARKETING PLAN

     The  compelling  advantages,  field-proven  technology  and  pricing of our
offering allows the Company to have a simple and direct  marketing plan.  Easily
implemented from headquarters and simple to train and manage locally,  this plan
is seen as the key to being able to  "cookie-cutter"  the Company's  growth into
multiple markets. The company's plan has:

     *    Prioritized markets
     *    Targeted messages
     *    A no-nonsense, highly trained sales force

                               PRIORITIZED MARKETS

     We have a focused  implementation plan, with prioritized markets and clear,
manageable and predictable sales prospects.

     *    National Ads via established sales channels
     *    Regional sales, driven by:
          -    Local Advertising Agencies
          -    Calendared Events
          -    National Sponsor to local events
          -    High visibility local venues

                                TARGETED MESSAGES

     We deliver a simple message

     *    Immediacy
     *    Multimedia
     *    State-of-the-art impact
     *    Flexibility
     *    Convenience
     *    Price

                                       14
<PAGE>
     Clear  marketing  messages  make our  services  easy to buy and  implement.
Targeting   these  messages  to  clearly  and  easily   identifiable   prospects
streamlines  the  Company's  marketing  process.  The  sale is low  tech,  clear
value-added and simple.

                     NO NONSENSE HIGHLY TRAINED SALES FORCE

     The  lessons  learned by the outdoor  billboard  market are not lost on us.
During the 1980's the  outdoor  billboard  markets  consolidated,  with  smaller
companies becoming  acquisition  targets for larger media companies that had the
strength  of  national  advertising  accounts.   Nonetheless,  the  consolidated
companies found that there was no substitute for aggressive direct account sales
to fill the ad space.  With the  exception of our  corporate  staff,  the entire
employee base is a highly  trained sales force,  utilizing  incentives to pursue
targeted  accounts.  As a  result,  our  marketing  plan  is a  simple  easy  to
implement.

                                   COMPETITION

     The Company  faces  significant  competition.  Indeed,  it is creating  new
market share in the midst of the established and highly competitive  advertising
arena.  However,  this media type is new and so  innovative  in its  delivery of
multimedia  advertising  that it competes  directly  with only several  types of
traditional advertising:  outdoor billboards,  transit and fixed frame temporary
signs.  Furthermore,  when this new type of mobile  media is  compared  to these
types of media,  the features and benefits are so  dramatically  different  that
direct comparison is difficult. Mobile media is, in fact, a new niche within the
industry,  bringing new content, form and mobility,  and altogether changing the
way advertisers think about delivering their messages.

     The clear  advantages of this media  differentiate it from the competition.
The matrix below  illustrates  the  comparative  positioning of our mobile media
offering.

<TABLE>
<CAPTION>
CATEGORY            TYPE                POSITIONING            COMPETITORS              COMPARISON
--------            ----                -----------            -----------              ----------
<S>                 <C>                 <C>                    <C>                      <C>
INDIRECT
     Print          * Single media      * In home              * National               * In home only
                                                                                        * Single media
                                                                                        * Limited immediacy
     Cable          * Multimedia        * In home              * National, regional     * In home only
     Television     * Multimedia        * In home              * National, regional     * In home only
     Internet       * Multimedia        * In home,             * National               * In home only
                                          mobile devices
     Radio          * Single media      * Auto, in home        * National, regional     * Single media
                                                                                        * Auto, in home only

DIRECT
     BILLBOARD      * Fixed             * Auto                 * National, Regional     * Single images
                                                                                        * Auto only
                                                                                        * No multimedia
                                                                                        * High change out burden
                    * Mechanical        * Auto                 * National, Regional     * Limited images
                      multi-image                                                       * Auto only
                      (limited)                                                         * No multimedia
                                                                                        * Change out burden

     TRANSIT        * Fixed             * Auto, Pedestrian     * National, Regional     * Single images
                                                                                        * Change out burden
                                                                                        * No multimedia

     Taxis          * Single media      * Auto, Pedestrian     * Regional, national     * Routing issues
                                                                                        * Single media
                                                                                        * Change out issues

     PDA's          * Limited           * Consumer             * Emerging               * Infrastructure burden
                      multimedia                                                        * Technology hurdles
                                                                                        * Device specific
                                                                                        * Consumer specific
</TABLE>

                                       15
<PAGE>
<TABLE>
<CAPTION>
CATEGORY            TYPE                POSITIONING            COMPETITORS              COMPARISON
--------            ----                -----------            -----------              ----------
<S>                 <C>                 <C>                    <C>                      <C>
ALTERNATIVE
     Mobile --      * Multimedia        * Auto, Pedestrian,    * Emerging, limited      * Multimedia
     Electronic                           Event, Indoor          regional               * Low change out burden
     van/truck                                                                          * Flexible mobility

     Mobile -       * Single media      * Auto, Pedestrian,    * Regional               * Single media
     fixed frame                          Event, Indoor                                 * Change out burden

     Trailers       * Single media      * Auto, Pedestrian,    * Regional               * Space, parking;
                                          Event, Indoor                                   legislation issues
                                                                                        * Single media
                                                                                        * Change out burden

     Bicycles       * Single media      * Auto, Pedestrian,    * Regional               * Single media
                                          Limited event                                 * Change out burden

     Wraps; cars,   * Single media      * Auto, Pedestrian     * Regional               * Single media
     buses, etc.                          Event                                         * Change out burden
                                                                                        * Routing issues

     Taxis          * Single media      * Auto, Pedestrian     * Regiona, national      * Routing issues
                                                                                        * Single media
                                                                                        * Change out issues

     PDA's          * Limited           * Consumer             * Emerging               * Infrastructure burden
                      multimedia                                                        * Technology hurdles
                                                                                        * Device specific
                                                                                        * Consumer specific
</TABLE>

     Nonetheless,  we face  competition  from similar  types of mobile media and
alternative  advertising offerings.  The comparative  positioning of alternative
media  types  is  highlighted   above.  We  have  found  only  limited,   highly
regionalized  and/or  undercapitalized  competition from mobile electronic media
ventures.  Furthermore, the Company believes its platform offers advantages over
any competing offering due to:

     *    Superior technology
     *    Superior display
     *    Superior design practicality
     *    Management practices
     *    Overhead Structure

                               ADZONE INTERACTIVE

     During the current year, we wrote-off our investment in AdZone  Interactive
due to operating  losses and the Company's  financial  position.  While the book
value of our  investment  is zero,  Adzone  Interactive  continues its operating
activities. AdZone Interactive is a single source solution provider for Web Site
hosting  providers,  Ad Agencies and Advertisers who require  information  about
Internet  advertising  activity  data.  The Company's  team of experts  includes
programmers,  business  executives  and  scientists  who have created a suite of
databases  which can be  searched  extensively  to create a wide array of timely
information and reports. The Company's  proprietary NetGet technology,  monitors
the top 2000+  International  web sites 24 hours a day for  content,  frequency,
brand,  creative  executions,  advertiser and date. This  information is updated
hourly and available  almost  immediately with their Online  Interactive  AdZone
Reporter.

     AdZone  Interactive's  service  includes  a  sophisticated   database  that
provides crucial advertising  activity data for the most frequented sites on the
Internet.  It constantly monitors 2000+ International web sites and thousands of
advertisers to give the most complete and up to date picture of this dynamically
changing marketplace. Additionally, the websites monitored account for more than
95% of all  Internet  advertising  revenue.  The Company not only  measures  web
publications and search engines, but also monitors online services sites such as
AOL and MSN. The monitoring  includes all banners,  text ads,  keywords,  links,
buttons and pop-ups.  Our database has  information on more than 70,000 websites
and can provide  detailed  monthly  reports from the top sites in the  database.
This  information  includes  parent  company,   brand,   expenditures  and  site
information.

                                       16
<PAGE>
     Data is collected  through the use of proprietary  technology that monitors
various   Internet  sites  and  the  database  is  updated  daily  with  current
information.  The  proprietary  NetGet  technology,  a computerized  advertising
information  retrieval  system,  monitors  top web  sites  on the  internet  for
content,  frequency,  brand,  creative  executions,  advertiser  and date.  This
information is collected  around the clock,  updated hourly and available almost
immediately with the Online AdZone Interactive Reporter. Each site's advertising
profile is  carefully  monitored  and updated to reflect the dynamic  changes in
advertising structure.  The process monitors advertisers,  frequency,  brand, as
well as timing  information  and  information is tabulated and  integrated  with
current rate and activity  data to generate  complete,  accurate and  up-to-date
reports.

                EXPAND OUR PRODUCTS AND SERVICES INTO OTHER AREAS

     We intend to provide our customers  with access to premier  outdoor  mobile
media,  business-to-business and  business-to-consumer  e-commerce solutions, at
any  time,  from any  Internet  enabled  device.  We have  invested  substantial
resources  to develop  advanced  technology  and web sites that  facilitate  our
business model. As new technologies and business  opportunities arise, we intend
to select the most promising ideas, incorporate them into our business model and
make them available to our customer base.

EMPLOYEES

     As of June 30, 2001, Regency had 2 full-time  employees excluding temporary
personnel and  consultants.  None of our employees  are  represented  by a labor
union,  and we consider our relations with our employees to be good. Our ability
to achieve our financial and operational  objectives  depends in large part upon
the continued service of our senior  management and key technical  personnel and
our  continuing  ability to attract and retain  highly  qualified  technical and
managerial  personnel.  Competition for such qualified personnel in our industry
and geographical location in the Phoenix/Scottsdale  area is intense. Our future
success  depends on our ability to attract,  retain and motivate  highly skilled
employees.

RISK FACTORS

     THE  RISKS  DESCRIBED  BELOW  ARE NOT THE ONLY  ONES  FACING  OUR  COMPANY.
ADDITIONAL RISKS NOT PRESENTLY KNOW TO US, OR THAT WE CURRENTLY DEEM IMMATERIAL,
MAY ALSO IMPAIR OUR BUSINESS  OPERATIONS.  OUR BUSINESS,  FINANCIAL CONDITION OR
RESULTS OF OPERATIONS COULD BE SERIOUSLY HARMED BY ANY OF THESE RISKS;  AND, THE
TRADING  PRICE OF OUR COMMON STOCK COULD ALSO DECLINE DUE TO ANY OF THESE RISKS.
WE MAY FAIL TO INTEGRATE  OUR BUSINESS  TECHNOLOGIES  WITH THE  TECHNOLOGIES  OF
E-RIVER AND OTHER COMPANIES WE HAVE RECENTLY ACQUIRED OR MAY ACQUIRE.

              WE HAVE INCURRED AND EXPECT TO INCUR OPERATING LOSSES

     Regency was incorporated  and commenced  operations in February of 1999 and
has incurred  losses in its initial years of operations.  As of June 30, 2001 we
had  an  accumulated  deficit  of  approximately  $4,054,000.  In  addition,  we
currently  intend to increase  capital  expenditures  and operating  expenses in
order to  expand  lines of  products  and  services  to  potential  clients  and
customers.  As a result of our strategic investment  initiative,  it is possible
that we will incur  additional  charges.  Therefore we  anticipate  that we will
incur additional losses in the future.

       OUR EQUITY INVESTMENTS IN OTHER COMPANIES MAY NOT YIELD ANY RETURNS

     We have made equity  investments in other companies.  These investments are
in the form of illiquid securities of private companies.  These companies are in
the early stages of their growth and may be expected to incur operating  losses.
Our  investments in these  companies may not yield any return.  Furthermore,  if
these  companies  are  not  successful,   we  could  incur  charges  related  to
write-downs  or  write-offs  of assets.  We also record and continue to record a
share of the net losses in some of these  companies,  up to our cost  basis,  if
they are our affiliates.  We intend to continue to invest in illiquid securities
of private  companies  and in joint  ventures in the  future.  Losses or charges
resulting from these investments could harm our operating results.

                                       17
<PAGE>
                       RISKS RELATED TO REGENCY'S BUSINESS

We have  made  several  significant  investments  recently.  We intend to pursue
additional investment and/or acquisitions in the future. If we fail to integrate
these initiatives,  our quarterly and annual results may be adversely  affected.
Integrating  acquired  organizations,  products and services could be expensive,
time-consuming  and a strain on our resources.  Risks we could face with respect
to acquisitions include:

     *    The  difficulty in integrating  acquired  technology and rights in our
          services;
     *    The  difficulty  of   assimilating   the  personnel  of  the  acquired
          companies;
     *    The  difficulty  of  coordinating   and  integrating   geographically-
          disbursed operations;
     *    Our ability to retain customers of an acquired company;
     *    The potential  disruption of our ongoing  business and  distraction of
          management;
     *    The maintenance of brand recognition of acquired businesses;
     *    The failure to successfully develop acquired in-process technology;
     *    Unanticipated expenses related to technology integration;
     *    The maintenance of uniform standards,  corporate  cultures,  controls,
          procedures and policies;
     *    The  impairment  of  relationships  with  employees and customers as a
          result of the integration of new management personnel.

     In addition, we may be unable to identify future acquisition targets and we
may be unable to complete future acquisitions on reasonable terms.

               RECENTLY ACQUIRED BUSINESSES MAY NOT BE SUCCESSFUL

     We have recently made significant  investments in companies in early stages
of development and with unproven business models. Acquired features,  functions,
products  or  services  may not  achieve  market  acceptance.  We expect to make
additional  investments and/or acquisitions in the future. The companies that we
invest in or acquire may have specific  technologies and other capabilities that
we may not be able to  successfully  integrate  with our  existing  products  or
services.  As  a  result  we  may  incur  unexpected   integration  and  product
development  expenses that could harm our results of operations.  We may also be
required to record  charges to operations  related to the impairment of acquired
technologies or other intangible assets.

  OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE BECAUSE OF A NUMBER OF FACTORS

     Our quarterly  operating results may fluctuate  significantly in the future
as a result of a variety of factors,  many of which are outside of our  control.
These factors include:

     *    The level of usage of the  Internet in general and use of web sites in
          particular;
     *    General economic conditions;
     *    Seasonal  nature  during  the  year of  demand  for our  products  and
          services;
     *    Timing of marketing expenditures to promote our products and services;
     *    The introduction of new products and services by our competitors;
     *    The addition of loss of clients and customers;
     *    Costs incurred with respect to acquisitions and investments.

     Due to all of the  foregoing  factors  and other  risks  described  in this
section, you should not rely on quarter-to-quarter comparisons of our results of
operations as an indication of future performance,  particularly in light of the
acquisitions and investments that we have completed. It is possible that in some
future periods our results of operations may be below the expectations of public
market analysts and investors.  In this event, the price of our common stock may
fall.

  WE MUST DEVELOP AND MAINTAIN THE AWARENESS OF OUR BRANDS TO ATTRACT CUSTOMERS

     Maintaining  and   strengthening   our  brands  is  critical  to  achieving
widespread acceptance of our products and services by our clients and customers,
particularly  in light of the  competitive  nature of the market.  Promoting and
positioning  our brand  will  depend  largely on the  success  of our  marketing
efforts,  and our  ability  to provide  high  quality  services.  We may find it
necessary to increase our marketing  budget or otherwise  increase our financial
commitment  to creating  and  maintaining  brand  loyalty  among our clients and

                                       18
<PAGE>
customers.  If we fail to promote  and  maintain  our brands or incur  excessive
expenses in an attempt to promote and maintain our brands our business  could be
harmed.

        OUR FUTURE DEPENDS ON OUR ABILITY TO ATTRACT, RETAIN AND MOTIVATE
                            HIGHLY SKILLED EMPLOYEES

     Our future success  depends on our ability to attract,  retain and motivate
highly skilled employees.  Competition for employees in the e-commerce  industry
is  intense,  particularly  in  Phoenix/Scottsdale  where we are  headquartered.
Additionally,  it is often more difficult to attract  employees once a company's
stock is publicly  traded  because the exercise  price of equity  awards such as
stock options are based on the public market,  which is highly volatile.  We may
be unable to attract,  assimilate or retain other highly qualified  employees in
the future. We have from time to time experienced,  and we expect to continue to
experience  in the future,  difficulty in hiring and  retaining  highly  skilled
employees with appropriate  qualifications.  Furthermore,  certain key employees
possess  marketing,  technical  and other  expertise,  which is important to the
operations of our business,  and if these employees leave, we may not be able to
replace them with employees possessing comparable skills.

      WE MAY FACE POTENTIAL LIABILITY FROM OUR ELECTRONIC COMMERCE-RELATED
                            ADVERTISING ARRANGEMENTS

     Some of our  advertising  relationships  will  provide  that we may receive
payments  based on the  amount  of  goods or  services  purchased  by  consumers
clicking  from our  services to the seller's web site.  These  arrangements  may
expose us to legal risks and uncertainties,  including potential  liabilities to
consumers of the  advertised  products and  services.  Although we carry general
liability  insurance,  our insurance may not cover potential claims of this type
or may not be adequate to indemnify us from all  liability  that may be imposed.
Some of the liabilities that may result from these arrangements include:

     *    Potential  liabilities for illegal activities that may be conducted by
          the sellers;
     *    Product  liability or other tort claims  relating to goods or services
          sold through third-party e-commerce sites;
     *    Claims for consumer fraud and false or deceptive  advertising or sales
          practices;
     *    Breach of contract claims relating to purchases;
     *    Claims  that items  sold  through  these  sites  infringe  third-party
          intellectual property rights.

     Even to the  extent  these  types  of  claims  do not  result  in  material
liability, investigating and defending these claims could harm our business.

 WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS THAT ARE COSTLY
TO DEFEND AND COULD LIMIT OUR ABILITY TO USE CERTAIN TECHNOLOGIES IN THE FUTURE

     Many  parties are actively  developing  Internet-related  technologies.  We
believe  that  these  parties  will  continue  to take  steps to  protect  these
technologies,  including seeking patent protection. As a result, we believe that
disputes  regarding the ownership of these  technologies  are likely to arise in
the future. From time to time, parties assert patent infringement claims against
us in the form of  letters,  lawsuits  and  other  forms of  communications.  In
addition to patent  claims,  third parties may assert claims against us alleging
infringement  of  copyrights,  trademark,  rights,  trade secret rights or other
proprietary rights or alleging unfair competition.

     We  may  incur  substantial   expenses  in  defending  against  third-party
infringement  claims  regardless  of the merit of the claims,  In the event that
there is a  determination  that we have  infringed  on  third-party  proprietary
rights we could incur substantial monetary liability and be prevented from using
the rights in the future.

     PROTECTION OF OUR INTELLECTUAL PROPERTY RIGHTS IS COSTLY AND DIFFICULT

      We regard our intellectual  property,  including our patents,  copyrights,
trademark,  trade secrets, and similar intellectual  property as critical to our
success.  We rely upon  patents,  trademark  and  copyright  law,  trade  secret
protection and confidentiality and license agreements to protect our proprietary
rights.  We cannot  guarantee  that the steps that we have taken to protect  our
proprietary rights will be adequate.

                                       19
<PAGE>
        FUTURE ACQUISITIONS DEPEND ON THE STABILITY OF THE EQUITY MARKETS

     We have  typically  paid for our  acquisitions  by  issuing  shares  of our
capital stock. In the future, we may effect other large or small acquisitions by
using stock, and this will dilute our stockholders.  We may also use cash to buy
companies or technologies in the future and we may need to incur additional debt
to pay for these  acquisitions.  Acquisition  financing  may not be available on
favorable  terms or at all. In addition,  we will likely be required to amortize
significant  amounts of goodwill and other intangible  assets in connection with
future  acquisitions,  which  will  have a  material  effect on our  results  of
operations.

     GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES RELATING TO THE INTERNET
                  COULD HINDER THE POPULARITY OF THE INTERNET

     NEW INTERNET AND PRIVACY LAWS.  There are currently few laws or regulations
that specifically regulate communications or commerce on the Internet.  However,
laws and  regulations  may be adopted in the future that address  issues such as
user privacy,  pricing,  content and the  characteristic and quality of products
and services. For example:

     *    The United States  Federal  government  and various state  governments
          have proposed  limitations on the  collections  and use of information
          regarding  Internet users. In October 1998, the European Union adopted
          a directive  that may result in  limitations on our ability to collect
          and use information regarding Internet users in Europe;
     *    A portion of the  Telecommunications  Act,  which has since been ruled
          unconstitutional,  sought to prohibit  transmitting  certain  types of
          information and content over the Internet.

Moreover,  it may take several years to determine  the extent to which  existing
laws relating to issues such as property ownership,  libel, and personal privacy
are  applicable to the  Internet.  Any new laws or  regulations  relating to the
Internet could harm our business.

     TAX LAWS:  The tax  treatment of the Internet  and  electronic  commerce is
currently unsettled.  A number of proposals have been made at the federal, state
and local level that could  impose  taxes on the sale of goods and  services and
certain other Internet activities.  Our business may be harmed by the passage of
laws in the  future  imposing  taxes or other  burdensome  regulation  on online
commerce.

     OTHER JURISDICTIONS: Because our services are available in multiple states,
these  jurisdictions may claim that we are required to qualify to do business as
a  foreign  corporation  in each of these  states.  If we file to  qualify  as a
foreign  corporation in a jurisdiction  where we are required to do so, we could
be subject to taxes and penalties.

                            WE MUST MANAGE OUR GROWTH

     Our growth,  recent  acquisition and investments  have placed a significant
strain on our managerial,  operational, and financial resources. In addition, we
plan to  continue  to hire  additional  personnel.  To manage our growth we must
continue to implement and improve our operational  and financial  systems and to
expand,  train and manage our  employee  base.  Any failure to manage our growth
effectively could harm our business.

                     UNKNOWN DEMAND FOR OUTDOOR MOBILE MEDIA

     Management estimates that there are over 100 cities with compelling markets
for mobile media.  The Company may be building in an overall market where demand
quickly  exceeds  its  capacity  to  fulfill,  either  though  lack of  adequate
fulfillment  capabilities  or through uneven or unbalanced  service.  This could
fuel  competition  and/or  damage  the  Company's  goodwill.  Further,  it could
significantly change the company's capital  requirements.  The Company's initial
plan is targeted, allowing selected/managed  fulfillment. It is also designed to
provide for initial emphasis on simple fulfillment,  preparing the Company to be
able to address demand issues with sufficient  capital and trained,  experienced
management.

     While  management  believes  the  market  for  mobile  media is  large  and
untapped,  the Company could experience lack of demand for its services.  Market
demand  will  be  the  end  result  of  numerous   factors  such  as  marketing,
fulfillment,  reputation,  competition,  etc. All or one of these  factors could
result in unforeseen lack of demand for the Company's services.

                                       20
<PAGE>
                  COST OF SERVICING OUTDOOR MOBILE MEDIA ASSETS

     Innovation, convenience and price are the primary competitive advantages of
our outdoor mobile media  initiative.  This requires that the Company  implement
high-quality,   efficient   fulfillment,   service  and   support.   Ultimately,
utilization,  efficiency  and  overhead  will be the  determining  factor in how
competitive  our  prices  will be.  The  Company's  current  plan is based  upon
historical  and projected  costs.  However,  there are no assurances  that these
costs accurately reflect the cost of doing business under the Company's business
model.  Furthermore,  there may be "unseen" costs that are discovered only after
the company  begins  operations  and discovers  all of the elements  required to
implement its pioneering plan.

                         POTENTIAL MARKETING SHORTFALLS

     We believe  our  markets  are  driven by urgent  demand.  As a result,  the
company believes it will garner a high percentage market capture relative to its
marketing  expenditures.  Furthermore,  the  company  is  relying  heavily  upon
national  account  sales and the sales  efforts of its regional  managers.  This
strategy could leave the Company in an under marketed position with insufficient
demand to fulfill its business  plan.  The Company's  growth plan is essentially
incremental,  driven  by van  utilization.  Management  believes  20 vans can be
marketed  simply  by  driving  each  market  with an  advertisement  on the vans
themselves. Each van has low cost, high visibility marketing built in.

                           RELIANCE UPON ONE SUPPLIER

     Initially  the  Company  will be  manufacturing  all of its  vans  with one
contract  manufacturer,  based in the Northwest.  Until such time as the Company
can develop additional manufacturing relationships, this concentration of one of
the most crucial  elements of the Company's  business plan presents  substantial
risk of loss in the event that this vendor became unavailable,  disenfranchised,
etc. Management has secured tentative  agreements with additional  manufacturers
to mitigate the negative impact of the loss of its current vendor.

                         OUTDOOR MOBILE MEDIA TECHNOLOGY

     AMM is using  state-of-the-art  technology packaged to integrate all of the
most sought after features for advertisers. Nonetheless, technology continues to
advance and innovative new technologies  could bypass AMM,  bringing  additional
features  that  could  render  the  Company's  technology  package  obsolete  or
non-competitive.  AMM  believes  that  technology  must be combined  with strong
practical  design.  Its  mobile  media  platform  is built upon a  framework  of
practical application of new technology. The Company believes this approach will
allow it to remain highly competitive into the foreseeable future.

                     FRAGMENTATION AND LOW BARRIERS TO ENTRY

     The mobile  media  market is  currently  fragmented,  with  relatively  low
long-term  barriers to entry. Much like the outdoor  advertising  industry years
ago,  this  segment  of the  industry  is only now  developing,  with  disparate
competition.  This could bring  confusion and  additional  fragmentation  to the
market,  obscuring the Company's  position.  We believe the fragmentation of the
market is an opportunity for consolidation.  With a lead market offering, access
to capital,  national  accounts  and a solid  management  team and plan,  we are
poised to rapidly implement a consolidation strategy,  providing the opportunity
to take and keep market leadership.

                               ECONOMIC VARIABLES

     Advertising  traditionally  suffers when the economy enters a downturn.  We
could experience negative economic pressures that adversely affect its sales. We
believe the current economic  downturn is actually an opportunity to take market
share,  to make  acquisitions of undervalued  companies and to offer  high-value
alternative  advertising,  where it will clearly  differentiate  itself from the
normative advertising modes.

                                       21
<PAGE>
                     NEW LEGISLATION ADVERSE TO OUR BUSINESS

     Current  legislation  is  restrictive  regarding  signage  and  alternative
advertising,  and adverse laws could  negatively  impact our ability to enter or
grow in new  markets.  Furthermore,  laws could  change,  further  limiting  the
viability of mobile  advertising and negatively  affecting the Company's ability
to grow.

ITEM 2. PROPERTY

     We are leasing facilities  consisting of approximately 6,000 square feet in
Scottsdale,  Arizona,  which we occupy under a 5-year  lease.  Our  headquarters
facilities are located in buildings constructed during 1999. We believe that our
existing  facilities  will  be  adequate  to  accommodate  our  growth  for  the
foreseeable future.

ITEM 3. LEGAL PROCEEDINGS

     The Regency Group, Limited was not involved in any legal proceedings during
the period covered by this filing.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY VOTERS

     No matters  were  submitted  to a vote of security  holders for the quarter
ending June 30, 2001.

                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

                    MARKET FOR THE REGISTRANT'S COMMON EQUITY

     Regency  Group,  Limited's  common stock  trades on the OTC bulletin  board
under the symbol  "RGNC.OB."  The  following  table sets  forth,  on a per share
basis,  the high and low sales  prices  of the  Company's  common  stock for the
periods indicated as reported by the NASDAQ National Market.

                                                                 HIGH      LOW
                                                                 ----      ---

FISCAL YEAR ENDED JUNE 30, 2000 *
   Quarter ended September 30, 1999............................    N/A       N/A
   Quarter ended December 31, 1999.............................    N/A       N/A
   Quarter ended March 31, 2000................................    N/A       N/A
   Quarter ended June 30, 2000.................................  2.563     1.750

FISCAL YEAR ENDED JUNE 30, 2001
   Quarter ended September 30, 2000............................  1.875     1.188
   Quarter ended December 31, 2000.............................   .438      .188
   Quarter ended March 31, 2001................................   .281      .156
   Quarter ended June 30, 2001.................................   .470      .150

*    - Regency Group, Limited commenced operations in February of 1999

     As of June 30, 2001 there were 177  stockholders  of record.  We have never
declared or paid cash  dividends on our common  stock.  We  presently  intend to
retain future earnings, if any, for use in our business, and therefore we do not
anticipate  paying any cash  dividends on our capital  stock in the  foreseeable
future.

                                       22
<PAGE>
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     THE  FOLLOWING  DISCUSSION  AND  ANALYSIS OF OUR  FINANCIAL  CONDITION  AND
RESULTS  OF  OPERATIONS  SHOULD  BE  READ  IN  CONJUNCTION  WITH  THE  FINANCIAL
STATEMENTS  AND RELATED NOTES  CONTAINED IN ITEM 8 OF THIS ANNUAL  REPORT.  THIS
DISCUSSION CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A
OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. WE MAY IDENTIFY THESE
STATEMENTS  BY THE USE OF  WORDS  SUCH  AS  "BELIEVE",  "EXPECT",  "ANTICIPATE",
"INTEND",  "PLAN" AND  SIMILAR  EXPRESSIONS.  THESE  FORWARD-LOOKING  STATEMENTS
INVOLVE  SEVERAL  RISKS AND  UNCERTAINTIES.  OUR  ACTUAL  RESULTS  COULD  DIFFER
MATERIALLY  FROM THOSE  ANTICIPATED  IN THESE  FORWARD-LOOKING  STATEMENTS  AS A
RESULT OF  VARIOUS  FACTORS,  INCLUDING  THOSE  PREVIOUSLY  DESCRIBED  UNDER THE
CAPTION  "RISK  FACTORS" IN " ITEM 1.  BUSINESS"  ABOVE.  THESE  FORWARD-LOOKING
STATEMENTS  SPEAK ONLY AS OF THE DATE OF THIS ANNUAL REPORT,  AND WE CAUTION YOU
NOT TO  RELY  ON  THESE  STATEMENTS  WITHOUT  ALSO  CONSIDERING  THE  RISKS  AND
UNCERTAINTIES  ASSOCIATED  WITH THESE  STATEMENTS AND OUR BUSINESS  ADDRESSED IN
THIS ANNUAL REPORT.

OVERVIEW

     Regency  Group's   strategy  is  to  provide   technology  based  marketing
solutions,  business-to-business  e-commerce solutions,  web-marketing services,
electronics  manufacturing  and sales  and  managerial  expertise.  We have made
investments in technology  companies and formed strategic  relationships that we
believe  position us to be  competitive.  We apply our business  philosophy  and
expertise  to  deliver  a  compelling  menu  of  services  to  our  clients.  We
continually review investment and development  opportunities that are consistent
with our core strategy.  In July,  2001,  year Regency formed Regency  Preferred
Corp.,  a wholly owned  subsidiary,  to take advantage of the market for outdoor
mobile  marketing.  Previously,  we had made a significant  investment in AdZone
Interactive.

                          REGENCY PREFERRED CORPORATION

     Regency  Preferred  Corporation  ("Regency"  or the  "Company"),  a  Nevada
Corporation,  is a wholly  owned  subsidiary  of  Regency  Group  Limited  whose
strategic  initiative  is targeted  at the new  "mobile"  consumer.  The Company
intends to capture market share through the acquisition and consolidation of the
currently fragmented and regionalized outdoor mobile advertising markets.

                      ALTERNATIVE MEDIA - THE MOBILE MARKET

     Current consumer trends and the highly competitive  advertising arena favor
immediacy  and  proximity  of  advertising  delivery  to the  consumer.  Outdoor
advertising has long been favored as a media to  cost-effectively  deliver image
exposures to consumers  while they are  essentially  captive in their cars or to
bring local or event venue advertising direct to the consumer.  The emergence of
the "mobile"  consumer,  who is spending  increasing  amounts of time in the car
and/or destination-bound, has favored the emergence of outdoor advertising media
as a potent regional and national advertising mechanism.

     Similarly,  localized event  merchandizing has found that outdoor media has
strong pull for "mobile" consumers. Nonetheless, as competition for local venues
and for the attention of the "mobile" consumer has increased, so has the pursuit
of alternative  advertising  media. This presents a significant  opportunity for
the Company that can secure, manage and grow these resources.

     Furthermore,  The Company believes the current economic  downturn  presents
discounting  opportunities.   Advertising  invariably  suffers  during  economic
downturns,  putting pressure on revenues,  cash flow and ultimately  valuations.
The  Company   believes  there  will  be  significant   opportunities   to  make
acquisitions at a significant  discount-to-market  value because of recessionary
pressures now occurring in the US and worldwide.

                                  THE BUSINESS

     Regency Preferred Corporation, is in the business of:

     *    Developing and/or acquiring existing mobile media companies.
     *    Providing capital, management, marketing and contracting to grow these
          companies.

                                       23
<PAGE>
     *    Bringing operational efficiencies, maximizing the tremendous cash flow
          opportunities inherent in mobile media.
     *    Providing  rapid build out and  positioning  for the rapidly  emerging
          "mobile media" content delivery.

     The Company  believes it can create  long-term value by  consolidating  the
fragmented regional aspects of the emerging mobile media markets into a national
company. This approach should have several significant competitive advantages:

     *    Uniformity of management practices
     *    Economies of scale
     *    Availability of capital
     *    National accounts capture
     *    Visibility and client retention
     *    Lowered overhead
     *    Enhanced profitability

     In  addition,  the  Company  intends to "cookie  cutter" its  approach  for
growth,  replicating its management and  acquisition  models across the country,
allowing  it  to  more  efficiently  identify,   assess,  implement  and  manage
acquisitions,  quickly  building a national network of uniformly and efficiently
managed mobile media assets.

                               THE BUSINESS MODEL

     The Mobile  media  Business  model is based upon the simple  approach of:

     *    Filling the market need for mobile advertising in major markets
     *    Using state-of-the art technology which provides critical  competitive
          advantages
     *    Coupling this with national business
     *    Filling in with local business
     *    Positioning for interactivity
     *    Partnering

      FILLING THE UNMET MARKET NEED FOR MOBILE ADVERTISING IN MAJOR MARKETS

     The Company has identified a huge need for high  visibility,  temporary and
mobile real-time advertising.  There are national and local advertisers that are
actively seeking cost-effective means to bring their messages to their potential
consumers in an immediate and as high-impact a manner as possible. This requires
placement of  advertisements  in areas of high traffic,  where repeat images are
possible.  Unlike  fixed  advertisement  venues  which  have  severe  placement,
licensing and logistical limitations,  mobile media requires only identification
of the proper geographical area and demographics, which is then coupled with the
proper  technology for delivering the advertising  message in the most efficient
and high impact means possible.

USING STATE-OF-THE-ART TECHNOLOGY WHICH PROVIDES CRITICAL COMPETITIVE ADVANTAGES

     Mobile  media  technology  is  evolving  into a  blend  of  technology  and
practicality:

     *    The   technology   must   provide  the  means  to  deliver   real-time
          advertisements   in  diverse   environments   with  full   multi-media
          capabilities and electronic presentation, production and connectivity.
     *    The practicality  inherent in mobile media comes from a need to manage
          the tough  realities of  delivering  advertising  on time with minimal
          downtime in harsh environments.

                                DELIVERY PLATFORM

     PROVEN  CAPABILITIES - Our vans have a strong operating track record.  They
have been  thoroughly  reviewed for  reliability,  both in terms of  on-the-road
uptime as well as electronic component and systems reliability.

     MODERN PROPERLY ADAPTED TRUCKS - Delivering  advertising in multiple venues
requires  proper  visibility,   drivability,   range,  serviceability,   parking
capability  and layout.  These  trucks have proven to be ideal in meeting all of
these requirements.

                                       24
<PAGE>
     STATE-OF-THE-ART DISPLAY TECHNOLOGY - These vans combine:

     *    New  state-of-the-art  rear projection  display screens  positioned to
          encompass  the  three  major  sides  of  the  truck,  allowing  almost
          universal visibility in all lighting situations.
     *    This is coupled with live-feed and wireless  connectivity options that
          enable   real-time   delivery  of  advertising   content  as  well  as
          pre-produced  content.  This  allows for rapid  change out of copy and
          Minimal production time and expense
     *    This technology platform provides for full-time advertising display as
          well as  timed-shift  advertising.  This allows the Company to serve a
          broad  variety of  clientele,  moderate  the  advertising  messages to
          comply  with  State and local  zoning,  to  rapidly  accommodate  both
          national  and local  advertisers  utilizing  one uniform  platform and
          delivery vehicle,  and maximize the revenue potential from each mobile
          platform

                               ADZONE INTERACTIVE

     During the current year, we wrote-off our investment in AdZone Interactive.
While the book value of our investment is zero, Adzone Interactive continues its
operating  activities.  AdZone  Interactive is a single source solution provider
for Web  Site  hosting  providers,  Ad  Agencies  and  Advertisers  who  require
information  about  Internet  advertising  activity  data. The Company's team of
experts  includes  programmers,  business  executives  and  scientists  who have
created a suite of databases which can be searched  extensively to create a wide
array of timely  information  and  reports.  The  Company's  proprietary  NetGet
technology,  monitors the top 2000+  International  web sites 24 hours a day for
content,  frequency,  brand,  creative  executions,  advertiser  and date.  This
information is updated hourly and available almost immediately with their Online
Interactive AdZone Reporter.

     AdZone  Interactive's  service  includes  a  sophisticated   database  that
provides crucial advertising  activity data for the most frequented sites on the
Internet.  It constantly monitors 2000+ International web sites and thousands of
advertisers to give the most complete and up to date picture of this dynamically
changing marketplace. Additionally, the websites monitored account for more than
95% of all  Internet  advertising  revenue.  The Company not only  measures  web
publications and search engines, but also monitors online services sites such as
AOL and MSN. The monitoring  includes all banners,  text ads,  keywords,  links,
buttons and pop-ups.  Our database has  information on more than 70,000 websites
and can provide  detailed  monthly  reports from the top sites in the  database.
This  information  includes  parent  company,   brand,   expenditures  and  site
information.

     Data is collected  through the use of proprietary  technology that monitors
various   Internet  sites  and  the  database  is  updated  daily  with  current
information.  The  proprietary  NetGet  technology,  a computerized  advertising
information  retrieval  system,  monitors  top web  sites  on the  internet  for
content,  frequency,  brand,  creative  executions,  advertiser  and date.  This
information is collected  around the clock,  updated hourly and available almost
immediately with the Online AdZone Interactive Reporter. Each site's advertising
profile is  carefully  monitored  and updated to reflect the dynamic  changes in
advertising structure.  The process monitors advertisers,  frequency,  brand, as
well as timing  information  and  information is tabulated and  integrated  with
current  rate and activity  data to generate  complete  accurate and  up-to-date
reports.

RECENT EVENTS:

     ACQUISITION OF  E-RIVER MARKETING, INC.

     In July 2000,  Regency entered into an agreement to acquire  privately held
e-River    Marketing,    Inc.,    a   computer    and    consumer    electronics
business-to-business  solutions provider.  The acquisition process was completed
in  September.  The  acquisition  of  e-River  and its  five  primary  operating
divisions were expected to offer a proven and  diversified  revenue stream which
Regency  planned to utilize to enhance  its  existing  investments  in  emerging
technologies.  e-River  Marketing was to become a wholly owned subsidiary of the
Regency Group and continue to provide the same services and product solutions to
its accounts after the close of the transaction.

     The  acquisition of e-River  Marketing,  Inc. was an all-stock  acquisition
consisting of 5,000,000  shares of  restricted  common stock and 2,500 shares of
convertible  preferred stock. The convertible preferred stock was convertible at
the rate of 1,000 shares of common for every share of the convertible  preferred
stock held.

                                       25
<PAGE>
      In May,  2001 it was  determined  that there were  management  differences
between the two  business  entities  and,  in June,  2001 the  relationship  was
terminated and the stock of the companies was returned to it's issuers.

     EQUITY INVESTMENT IN CLICKINCOMES.COM IS WRITTEN-OFF

     In December of 2000,  Regency  determined  that the remaining  value of its
equity  investment  in  ClickIncomes.com  had become  impaired and wrote-off the
remaining portion of the investment valued at $375,502.  ClickIncomes.com was an
Internet based company specializing in marketing products, services and selected
business opportunities to home business consumers and small businesses.

     TERRY NEILD HIRED AS CHAIRMAN AND CEO

     In February of 2001, Terry Neild was retained as Chairman and CEO.

     EQUITY INVESTMENT IN ADZONE INTERACTIVE IS WRITTEN-OFF

     In June of 2001,  Regency determined that the remaining value of its equity
investment in AdZone Interactive had become impaired and wrote-off the remaining
portion of the  investment  valued at $775,000.  AdZone  Interactive is a single
source  solution  provider  for Web Site  hosting  providers,  Ad  Agencies  and
Advertisers who require information about Internet advertising activity data.

     REGENCY PREFERRED CORPORATION COMMENCES OPERATING ACTIVITY

     In  July  of  2001,  Regency  Preferred  Corporation  was  created  to take
advantage of the increased demand in outdoor mobile advertising.

RESULTS OF OPERATIONS:

     REVENUES

     Since  inception  Regency has  essentially,  acted as a business  incubator
providing its capital and managerial  expertise towards the objective of growing
viable  business  models and earning future  revenue.  Additionally,  during the
current year,  management  determined that a number of initiatives  that Regency
had previously  made  investments in were deemed to not have a monetary value at
June  30,  2001  and  were  written-off.   Regency's  current  year's  financial
statements reflect the value of these investments that have been written-off and
which  are  reflected  in the  loss  for  the  current  year.  Additionally,  in
conjunction  with the  write-off of previous  investments,  Regency is currently
involved in  restructuring  its  business  model with the  objective of becoming
profitable.

     GENERAL AND ADMINISTRATIVE EXPENSES

     Total general and administrative expenses for the year ending June 30, 2001
were  $483,659  compared to $136,489 to the  transition  period  ending June 30,
2000, an increase of 254%.  The major  components of general and  administrative
expenses for both years are broken out as follows:

                            YEAR ENDING JUNE 30, 2001

     *    Approximately $132,000 or 27% was incurred for amortization.
     *    Approximately $133,000 or 27% was incurred for salaries and wages.
     *    Approximately $119,000 or 25% was incurred for legal and accounting.
     *    Approximately $79,000 or 16% was incurred for facilities rent.

                                       26
<PAGE>
                            YEAR ENDING JUNE 30, 2000

     *    Approximately $50,000 or 37% was incurred for consulting fees.
     *    Approximately $49,000 or 36% was incurred for salaries and benefits.
     *    Approximately $17,000 or 13% was incurred for legal and accounting.

     LOSS ON INVESTMENTS

     The  total  loss on  investments  for the year  ending  June  30,  2001 was
$1,450,502. The major components of the loss is broken out as follows:

                            YEAR ENDING JUNE 30, 2001

     *    $300,000 or 21% relates to the  write-off  of a  note-receivable  from
          Knowledge Foundation
     *    $375,500   or  26%  relates  to   Regency's   equity   investment   in
          ClickIncomes.com
     *    $775,000  or 53%  relates to  Regency's  equity  investment  in AdZone
          Interactive

     OTHER INCOME AND EXPENSE

     Total "Other Income" for the year ending June 30, 2001 was $11,488 compared
to total "Other Expense" of $(121,999) for the transition period ending June 30,
2000, a difference of $133,447. Essentially the entire difference relates to the
equity losses in Regency's  investments  in the prior  transition  period ending
June 30,  2000 that are  reflected  in "loss  from  operations  of  discontinued
e-River segment" in the current year.

     DISCONTINUED OPERATIONS

     The total loss from  discontinued  operations  for the year ending June 30,
2001 was $1,736,020  compared to zero for the transition  period ending June 30,
2000.  The loss is  comprised  of $736,920  in equity  losses  arising  from the
operations  of its e-River  investment  for the current  period and  $999,100 in
infrastructure related costs that were written off.

     In June of 2001,  Regency  divested  itself of its  e-River  subsidiary  by
conveying all shares of e-River  stock held by Regency to e-River.  Regency also
released  a  creditor's  claim  against  e-River  in the  approximate  amount of
$250,000,  and any  and all  other  claims  against  each  other  were  mutually
released.

     NET LOSS

     Our net loss for the year ending June 30, 2001 was $3,658,733 compared to a
net loss of $258,488 for the transition period ending June 30, 2000, an increase
of $3,400,245. Essentially all, or 81% of our current year's loss relates to the
write-offs  of  investments  made  in  prior  years  as well  as the  loss  from
discontinued  operations pertaining to the divestiture of our e-River subsidiary
in the current year. The operating portion of our loss, or $483,659 was $347,170
higher than it was for the transition  period ending June 30, 2000. This was due
to  the  ramping-up  of  operating  activity  during  the  current  year  as  we
restructured our operations.

     LIQUIDITY AND CAPITAL RESOURCES

     Since inception,  we have financed our operations primarily through private
sales of  equity.  At June 30,  2001,  our  principal  source of  liquidity  was
approximately  $100 in cash.  We intend to  generate  additional  capital,  from
various sources,  including possible private placements,  which will be used for
operating capital and potential  additional  business  expansion.  The amount of
cash  proceeds  raised from these  various  sources,  together  with our current
available  cash, is  anticipated to sustain  Regency's  operating and investment
activities through the current fiscal year.

                                       27
<PAGE>
ITEM 7. FINANCIAL STATEMENTS

                         INDEPENDENT ACCOUNTANTS' REPORT

To The Stockholders and Board of Directors of
Regency Group Limited, Inc.

We have audited the accompanying balance sheet of Regency Group Limited, Inc. as
of  June  30,  2001,  and the  related  statements  of  operations,  changes  in
stockholders'  equity (deficit) and cash flows for the years ended June 30, 2001
and 2000.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements referred to above presents fairly, in
all material respects,  the financial position of Regency Group Limited, Inc. as
of June 30, 2001, and the results of its  operations,  changes in  stockholders'
equity (deficit), and its cash flows for the years ended June 30, 2001 and 2000,
in conformity with generally accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in  Note 6 to the
financial  statements,  the  Company's  significant  operating  losses,  deficit
working capital and deficit equity raise  substantial doubt about its ability to
continue  as a going  concern.  Management's  plans in regard to this matter are
also  discussed  in  Note  6.  The  financial  statements  do  not  include  any
adjustments that might result from the outcome of this uncertainty.


Certified Public Accountants            /s/ Semple & Cooper, LLP
Phoenix, Arizona

October 12, 2001

                                       28
<PAGE>
                           REGENCY GROUP LIMITED, INC.
                                  BALANCE SHEET
                                  JUNE 30, 2001

<TABLE>
<CAPTION>
<S>                                                                             <C>
                                     ASSETS
CURRENT ASSETS:
  Cash                                                                          $       100
  Prepaid expenses                                                                    2,000
                                                                                -----------

          TOTAL CURRENT ASSETS                                                        2,100

PROPERTY AND EQUIPMENT, NET (NOTES 1 AND 2)                                          78,362
                                                                                -----------

          TOTAL ASSETS                                                          $    80,462
                                                                                ===========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Notes payable - related parties (Note 3)                                          754,015
  Accounts payable                                                                   91,428
  Capital lease - current portion ( Note 5)                                           3,687
  Accrued payroll                                                                     2,728
  Accrued interest payable                                                           28,800
                                                                                -----------

          TOTAL CURRENT LIABILITIES                                                 880,658

CAPITAL LEASE- LONG TERM PORTION (NOTE 5)                                             6,443
                                                                                -----------

                 TOTAL LIABILITIES                                                  887,101
                                                                                -----------

STOCKHOLDERS' EQUITY (DEFICIT): (NOTE 6)
  Convertible preferred stock, $.001 par value, 5,000,000 shares
   authorized
    - Series A, 15,500 shares issued and outstanding at June 30, 2001                    17
  Common stock, $.001 par value, 100,000,000 shares authorized
   27,980,800 shares issued and outstanding at June 30, 2001                         27,980
  Additional paid-in capital                                                      3,218,753
  Accumulated deficit                                                            (4,053,389)
                                                                                -----------


          TOTAL STOCKHOLDERS' EQUITY (DEFICIT)                                     (806,639)
                                                                                -----------

          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                  $    80,462
                                                                                ===========
</TABLE>

                   The Accompanying Notes are an Integral Part
                           of the Financial Statements

                                       29
<PAGE>
                         THE REGENCY GROUP LIMITED, INC.
                            STATEMENTS OF OPERATIONS
                      FOR THE YEAR ENDED JUNE 30, 2001 AND
             FOR THE SIX MONTH TRANSITION PERIOD ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
                                                                               For The Six Month
                                                                               Transition Period
                                                              June 30,           Ended June 30,
                                                                2001                  2000
                                                            ------------          ------------
<S>                                                         <C>                   <C>
Revenues                                                    $         --          $         --

COST OF REVENUES                                                      --                    --
                                                            ------------          ------------

GROSS PROFIT                                                          --                    --

GENERAL AND ADMINISTRATIVE EXPENSES                              483,659               136,489
LOSS ON INVESTMENTS                                            1,450,502                    --
                                                            ------------          ------------

LOSS FROM CONTINUING OPERATIONS                               (1,934,161)             (136,489)
                                                            ------------          ------------
OTHER INCOME (EXPENSE):
  Equity in loss of minority interest investment                      --              (124,498)
  Loss on investment                                                  --               (25,000)
  Interest expense                                               (30,767)               (4,800)
  Other income                                                    23,038                27,499
  Interest income                                                 19,177                 4,800
                                                            ------------          ------------

TOTAL OTHER INCOME (EXPENSE)                                      11,448              (121,999)
                                                            ------------          ------------

NET LOSS FROM CONTINUING OPERATIONS                           (1,922,713)             (258,488)
                                                            ------------          ------------
DISCONTINUED OPERATIONS: (NOTE 5)
  Loss from operations of discontinued E-River segment          (736,920)                   --
  Loss on disposal of E-River segment                           (999,100)                   --
                                                            ------------          ------------
                                                              (1,736,020)                   --
                                                            ------------          ------------

NET LOSS                                                    $ (3,658,733)         $   (258,488)
                                                            ============          ============
BASIC LOSS PER COMMON SHARE FROM
  CONTINUING OPERATIONS                                     $      (0.07)         $      (0.01)
  DISCONTINUED OPERATIONS                                          (0.06)         $         --
                                                            ------------          ------------

BASIC LOSS PER COMMON SHARE, NET                            $      (0.13)         $      (0.01)
                                                            ============          ============

WEIGHTED AVERAGE SHARES OUTSTANDING                           27,108,145            34,827,060
                                                            ============          ============
</TABLE>

                   The Accompanying Notes are an Integral Part
                           of the Financial Statement

                                       30
<PAGE>
                           REGENCY GROUP LIMITED, INC.
             STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
             FOR THE YEAR ENDED JUNE 30, 2001 AND FOR THE SIX MONTH
                      TRANSITION PERIOD ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
                                                      Convertible Preferred Stock
                                             --------------------------------------------
                                                  Series A                 Series B                   Common Stock
                                             ------------------      --------------------     -------------------------
                                              Shares     Amount        Shares      Amount        Shares         Amount
<S>                                          <C>       <C>            <C>        <C>          <C>              <C>
Balance at December 31, 1999                      --      $ --              --     $   --       4,618,750      $  4,619

Stock split                                       --        --              --         --      41,568,750        41,569

Private placement of common stock                 --        --              --         --       1,619,000         1,619

Conversion of common stock to preferred
 stock                                        15,500        15              --         --     (24,500,000)      (24,500)

Net loss, transition period ended
 June 30, 2000                                    --        --              --         --              --            --
                                             -------      ----       ---------     ------     -----------      --------

Balance at June 30, 2000                      15,500        15              --         --      23,306,500        23,307

Stock issued in connection with
 acquisition                                   2,500         3              --         --       5,000,000         5,000

Surrender of stock from E-River               (1,200)       (1)             --         --        (350,000)         (351)

Additional stock granted in private
 placement                                        --        --              --         --          24,300            24

Net loss, year ended June 30, 2001                --        --              --         --              --            --
                                             -------      ----       ---------     ------     -----------      --------

Balance at June 30, 2001                      16,800      $ 17               0          0      28,330,800      $ 27,980
                                             =======      ====       =========     ======     ===========      ========

                                          Additional
                                           Paid-in         Accumulated
                                           Capital           Deficit            Total
                                           -------           -------            -----
Balance at December 31, 1999             $   123,131      $  (136,168)      $    (8,418)

Stock split                                  (41,569)              --                --

Private placement of common stock          1,617,381               --         1,619,000

Conversion of common stock to preferred
 stock                                        24,485               --                --

Net loss, transition period ended
 June 30, 2000                                    --         (258,488)         (258,488)
                                         -----------      -----------       -----------

Balance at June 30, 2000                   1,723,428         (394,656)        1,352,094

Stock issued in connection with
 acquisition                               1,494,997               --         1,500,000

Surrender of stock from E-River                  352               --                --

Additional stock granted in private
 placement                                       (24)              --                --

Net loss, year ended June 30, 2001                --       (3,658,733)       (3,658,733)
                                         -----------      -----------       -----------

Balance at June 30, 2001                 $ 3,218,753      $(4,053,389)      $  (806,639)
                                         ===========      ===========       ===========
</TABLE>

                   The Accompanying Notes are an Integral Part
                           of the Financial Statements

                                       31
<PAGE>
                           REGENCY GROUP LIMITED, INC.
                            STATEMENTS OF CASH FLOWS
                      FOR THE YEAR ENDED JUNE 30, 2001 AND
             FOR THE SIX MONTH TRANSITION PERIOD ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
                                                                                      Transition Period
                                                                     June 30,           Ended June 30,
                                                                       2001                 2000
                                                                   -----------           -----------

<S>                                                                <C>                   <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss from continuing operations                              $(1,922,713)          $  (258,488)

ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH PROVIDED BY
 (USED) IN OPERATING ACTIVITIES:
  Depreciation and amortization                                         24,486                 1,239
  Loss on investments                                                2,950,502                25,000
  Loss on minority interest investment                                      --               124,498
  Debt restructuring                                                        --               (22,000)

CHANGES IN ASSETS AND LIABILITIES:
  Due from related party                                                78,463           $   (78,463)
  Other current assets                                                  39,121               (39,121)
  Interest receivable                                                    4,800                (4,800)
  Prepaid expenses                                                      (2,000)                   --
  Accounts payable                                                      91,428                    --
  Accrued wages                                                          2,728                    --
  Interest payable                                                      24,000                 4,800
                                                                   -----------           -----------

NET CASH POVIDED (USED) IN CONTINUING OPERATIONS                     1,290,815              (247,335)
Loss from discontinued operations                                   (1,736,020)                   --
                                                                   -----------           -----------
          Net cash used in operating activities                       (445,205)             (247,335)
                                                                   -----------           -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of fixed assets                                             (81,395)                 (718)
  Disbursements for note receivable                                         --              (300,000)
  Purchase of equity method investment                                      --              (500,000)
  Purchase of investments                                                   --              (800,000)
                                                                   -----------           -----------
          Net cash used in investing activities                        (81,395)           (1,600,718)
                                                                   -----------           -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt-related parties                                   404,015               350,000
  Proceeds from issuance of stock                                           --             1,619,000
                                                                   -----------           -----------
          Net cash provided by financing activities                    404,015             1,969,000
                                                                   -----------           -----------

NET CHANGE IN CASH AND CASH EQUIVALENTS                               (122,585)              120,947
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                       122,685                 1,738
                                                                   -----------           -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                         $       100           $   122,685
                                                                   ===========           ===========

                                                                                      Transition Period
                                                                    June 30,            Ended June, 30
                                                                      2001                  2000
                                                                   -----------           -----------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Noncash investing and financing activities:
    Loss on investment                                             $        --           $   (25,000)
                                                                   ===========           ===========
    Loss on minority interest investment                           $        --           $  (124,498)
                                                                   ===========           ===========
    Debt restructuring                                             $        --           $    22,000
                                                                   ===========           ===========
    Common and preferred stock surrendered from E-River            $       352           $        --
                                                                   ===========           ===========
    Interest Paid                                                  $    30,767           $     4,800
                                                                   ===========           ===========
    Interest Earned                                                $    19,177           $     4,800
                                                                   ===========           ===========
</TABLE>

                   The Accompanying Notes are an Integral Part
                           of the Financial Statements

                                       32
<PAGE>
                           REGENCY GROUP LIMITED, INC.
                          NOTES TO FINANCIAL STATEMENTS

--------------------------------------------------------------------------------
                                     NOTE 1
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS
                              AND USE OF ESTIMATES
--------------------------------------------------------------------------------

NATURE OF OPERATIONS:

Regency Group Limited,  Inc. (the "Company"),  is a Nevada corporation formed on
February 1, 1999.  The principal  business  purpose of the Company is to provide
managerial  assistance and resources to selected  eligible  portfolio  companies
through  performance  oriented financing and high-level  administrative  support
throughout the United States.

USE OF ESTIMATES:

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.

SOFTWARE DEVELOPMENT COSTS:

The Company capitalizes  software development costs in accordance with Statement
of Position No. 98-1,  "Accounting for Costs of Computer  Software  Developed or
Obtained for Internal Use."  Capitalization of software development costs begins
when the  preliminary  project stage is completed and management  authorizes and
commits to funding the  computer  software  project and it is probable  that the
project will be completed  and the software will be used to perform the function
intended.  Upgrades and enhancements that result in additional functionality are
capitalized as incurred.  The Company periodically reviews the carrying value of
software  development  costs.  Impairments,  if any, will be recognized when the
asset is not  expected to provide any future  service  potential to the Company.
Amortization  of  capitalized   software   development  costs  begins  when  all
substantial  testing is  complete,  and the  computer  software is ready for its
intended use.  Software  development costs are amortized using the straight-line
method  with a  useful  life of  five  years,  which  represents  the  remaining
estimated economic life of the computer software.

PROPERTY AND EQUIPMENT:

Property and equipment are recorded at cost. Depreciation is provided for on the
straight-line  method over the estimated useful lives of the assets. The average
life is five years.  Maintenance and repairs that neither  materially add to the
value of the property nor appreciably prolong its life are charged to expense as
incurred.  Betterments or renewals are capitalized  when incurred.  Property and
equipment   are  reviewed   each  year  to  determine   whether  any  events  or
circumstances  indicate  that  the  carrying  amount  of the  assets  may not be
recoverable.  Such review includes  estimating  future cash flows.  Property and
equipment costs are expensed when determined to be not realizable.  Depreciation
expense was $24,486 for the year ended June 30, 2001, and $350 for the six month
transition period ended June 30, 2000.

The  Company is the lessee of  telephone  equipment,  with an  original  cost of
approximately  $21,400,  under  a  capital  lease  agreement,  expiring  through
October,  2003. The assets and liabilities under the capital lease agreement are
recorded at the lower of the present value of the minimum lease  payments or the
fair value of the assets.  The assets are being depreciated over their estimated
productive lives.  Depreciation of the assets under the capital lease agreements
is included in depreciation expense as noted above.

                                       33
<PAGE>
                           REGENCY GROUP LIMITED, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

--------------------------------------------------------------------------------
      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, NATURE OF OPERATIONS AND
                          USE OF ESTIMATES (CONTINUED)
--------------------------------------------------------------------------------

INCOME TAXES:

Deferred  income taxes are provided on an asset and  liability  method,  whereby
deferred tax assets are  recognized  for deductible  temporary  differences  and
operating loss and tax credit  carryforwards,  and deferred tax  liabilities are
recognized for taxable  temporary  differences.  Temporary  differences  are the
differences between the reported amounts of assets and liabilities and their tax
basis.  Deferred tax assets are reduced by a valuation  allowance  when,  in the
opinion of management,  there is uncertainty of the utilization of the operating
losses in future  periods.  Deferred tax assets and liabilities are adjusted for
the effects of changes in tax laws and rates on the date of enactment.

PENDING ACCOUNTING PRONOUNCEMENTS:

In June, 2001, the Financial Accounting Standards Board adopted Opinion No. 141,
Business Combinations,  and Opinion No. 142, Goodwill and Other Intangibles. The
pronouncements provide for the cessation of the pooling method of accounting for
business  combinations,  as well as providing that goodwill and other intangible
assets that have  indefinite  useful lives will not be amortized but rather will
be tested at least  annually  for  impairment.  The Company has yet to determine
what effect, if any, the adoption of these financial  standards will have on the
financial  statements.  The effective dates for Financial  Accounting  Standards
Nos. 141 and 142 are July 1, 2001 and for fiscal years  beginning after December
15, 2001, respectively.

NET LOSS PER SHARE:

Basic net loss per common  share is computed  based on weighted  average  shares
outstanding and excludes any potential dilution from stock options,  warrants or
other common stock equivalents. Basic net loss per share is computed by dividing
loss available to common  shareholders by the weighted  average number of common
shares  outstanding  for the period.  Diluted net loss per common share reflects
potential  dilution from the exercise or  conversion  of securities  into common
stock or from other  contracts to issue common  stock.  As the Company has a net
loss available to common shareholders for all periods presented, the calculation
of diluted net loss per share has been excluded  from the financial  statements.
As of June 30, 2001, there are 18,000,000 potential dilutive securities.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

Accounts  payable,  notes  payable from related  parties,  accrued  liabilities,
accrued payroll and capital leases are substantially  current or bear reasonable
interest rates. As a result, the carrying values of these financial  instruments
approximate fair value.

--------------------------------------------------------------------------------
                                     NOTE 2
                             PROPERTY AND EQUIPMENT
--------------------------------------------------------------------------------

As of June 30, 2001, property and equipment consists of the following:

     Computers and  equipment                                    $   5,810
     Furniture and fixtures                                         57,412
     Leasehold improvements                                         11,121
     Telephone and equipment                                        21,400
     Website development                                             8,900
                                                                 ---------
                                                                   104,643
     Less: accumulated depreciation                                (26,281)
                                                                 ---------

                                                                 $  78,362
                                                                 =========

                                       34
<PAGE>
                           REGENCY GROUP LIMITED, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

--------------------------------------------------------------------------------
                                     NOTE 3
                           RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

NOTES PAYABLE:

As of June 30,  2001,  notes  payable to related  parties  is  comprised  of the
following:

     8% note payable to a related party with principal and
     interest due on demand                                           $ 300,000

     Non-interest bearing notes payable to a related party,
     due on demand; unsecured                                           404,015
                                                                      ---------
                                                                        704,015
     Less: current portion of notes payable to related parties         (704,015)
                                                                      ---------

                                                                      $      --
                                                                      =========

--------------------------------------------------------------------------------
                                     NOTE 4
                                  INCOME TAXES
--------------------------------------------------------------------------------

As of June 30, 2001, long-term deferred tax assets (liabilities)  consist of the
following:

     Net operating loss carryforwards                               $ 1,300,000

     Less: valuation allowance                                       (1,300,000)
                                                                    -----------

                                                                    $        --
                                                                    ===========

The Company has  established a valuation  allowance  equal to the full amount of
the net deferred tax asset  primarily  because of uncertainty in the utilization
of net operating loss carryforwards.

At June 30,  2001,  the  Company  has  federal  and  state  net  operating  loss
carryforwards in the approximate amount of $4,000,000 available to offset future
taxable income through June 30, 2001 and 2006, respectively.

--------------------------------------------------------------------------------
                                     NOTE 5
                                  CAPITAL LEASE
--------------------------------------------------------------------------------

As of June 30, 2001,  future  minimum lease payments due under the capital lease
agreement, are as follows:

               Year Ending
                June 30,
                --------
                 2002                                                  $  5,104
                 2003                                                     5,104
                 2004                                                     1,701
                                                                       --------
     Total minimum lease payments                                        11,909
     Less: amount representing interest                                  (1,779)
                                                                       --------

     Present value of net minimum lease payments                         10,130
     Less: current maturities of capital lease obligations               (3,687)
                                                                       --------

     Long-term maturities of capital lease obligations                 $  6,443
                                                                       ========

                                       35
<PAGE>
                           REGENCY GROUP LIMITED, INC.
                    NOTES TO FINANCIAL STATEMENTS (Continued)

--------------------------------------------------------------------------------
                                     NOTE 6
                             DISCONTINUED OPERATIONS
--------------------------------------------------------------------------------

In May,  2001, the Company  adopted a formal plan to sell its E-River  Marketing
business segment, which was acquired in July, 2000. On June 8, 2001, the Company
completed the disposal operation.  The assets disposed of consisted primarily of
accounts  receivable,  inventories,  and  equipment.  Operating  results  of the
E-River  segment  for the year ended June 30, 2001 are shown  separately  in the
accompanying statement of operations.

Net  revenues  of the  E-River  segment  for the year ended  June 30,  2001 were
approximately  $1,100.000.  This amount is not  included in net  revenues in the
accompanying statements of operations.

--------------------------------------------------------------------------------
                                     NOTE 7
                                  GOING CONCERN
--------------------------------------------------------------------------------

Through  June 30,  2001,  the  Company  had  sustained  significant  losses from
operations,  deficit working capital of $876,208 and deficit equity of $806,639.
These conditions raise substantial doubt about the Company's ability to continue
as a going concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

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

     None

                                    PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The  following  table shows the name,  age and position of each of our executive
officers and directors as of June 30, 2001:

                 NAME                 AGE           POSITION
                 ----                 ---           --------
     Terry Neild ..................   50        President & CEO
     Pamela Michie ................   57        Corporate Secretary
     Ralph Massetti ...............   35        Director

TERRY NEILD is currently a Director,  President & CEO of Regency Group  Limited.
He is also a Director of Future Carz, Inc. (FCZI) and AdZone  Interactive,  Inc.
(EHSV) both  reporting  issuers.  Mr. Neild is President  and CEO of  Investment
Capital  Corporation,  a venture  capital firm that assists  small  companies in
obtaining  funding  and  moving  forward  with  their  business  plans.  He  has
successfully   raised  in  excess  of  One   Hundred   Fifty   Million   Dollars
($150,000,000)  for various small cap issuers.  He was a Founder and Director of
National  Scientific  Corporation  from 1995  until  1997;  and,  was a founder,
Chairman and CEO of Clearly Canadian Beverage Corporation from 1986 to 1990. Mr.
Neild, who is a professional  accountant,  has held a number of senior financial
positions in three Fortune 500 companies from 1968 through 1978.

                                       36
<PAGE>
PAMELA  MICHIE is the  Corporate  Secretary  of the  Regency  Group  Limited and
Regency  Preferred  Corporation.  She is also Mr. Terry  Neild's  Assistant  and
responsible for the administration of the office.  Over the last 20 years Pamela
has had management positions with Alexander Grant,  Raytheon,  General Research,
and Duke Louis  Dreyfus.  Pamela  attended  UCSB  College in Santa  Barbara  and
obtained her Bachelor's Degree in Business Administration.

RALPH  MASSETTI has served as a board member of Regency since  February of 1999.
Currently,   Mr.  Massetti  is  the  Chief  Executive  Officer  and  founder  of
SalesRepCentral.com   (OTC  BB:  SREP).  Mr.  Massetti  has  over  12  years  of
professional sales and management  experience,  including extensive Internet and
technical  training.  Additional  experience  includes  working as a trained and
licensed  Stockbroker  for Morgan  Stanley Dean Witter.  More  recently,  he has
served as a Consulting Marketing Specialist for Computer Associates, Inc., where
he marketed  enterprise  management  software solutions at the officer level for
many of the nation's largest organizations.  Mr. Massetti received his Bachelors
and Masters  degrees in Business  Administration,  and is  currently  pursuing a
Masters in Finance specializing in High Technology.

     COMPLIANCE  UNDER  SECTION  16(a) OF THE  SECURITIES  EXCHANGE ACT OF 1934.
Section  16 of the  Exchange  Act  requires  our  directors  and  certain of our
officers, and persons who own more than 10% of our common stock, to file initial
reports of ownership and reports of changes in ownership with the Securities and
Exchange Commission and the NASDAQ National Market. Such persons are required by
Securities and Exchange  Commission  regulation to furnish us with copies of all
Section 16(a) forms they file.  Based solely on our review of the copies of such
forms  furnished  to us and  written  representation  from  these  officers  and
directors, we believe that all Section 16(a) filing requirements were met during
the year ended June 30, 2001

ITEM 10. EXECUTIVE COMPENSATION

     The following table provides compensation awarded to, earned by or paid for
services rendered to Regency in all capacities for the years ended June 30, 2000
and 2001 by our President and other highly  compensated  executive  officers and
who were serving as executive  officers at the end of 2001. We did not grant any
other  compensation,  restricted  stock awards or stock  appreciation  rights to
these individuals in 2000 or 2001.

                           SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
                                                                LONG-TERM
                                              ANNUAL          COMPENSATION      ALL OTHER
                                           COMPENSATION          AWARDS       COMPENSATION
                                          ----------------    ------------    ------------
                                                               SECURITIES
                                                    ANNUAL     UNDERLYING       ALL OTHER
NAME AND PRINCIPAL POSITION      YEAR     SALARY     BONUS       OPTIONS      COMPENSATION
---------------------------      ----     ------     -----       -------      ------------
<S>                              <C>      <C>       <C>        <C>            <C>
Terry Neild (1)                  2001        -0-     -0-           -0-            -0-
                                 2000        -0-     -0-           -0-            -0-

Pamela Michie (1)                2001     12,700     -0-           -0-            -0-
                                 2000        -0-     -0-           -0-            -0-
</TABLE>

----------
(1)  - Hired in February 2001

     STOCK OPTION GRANTS:

     Regency did not grant any stock options in 2000 or 2001.

                                       37
<PAGE>
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The following table presents information as to the beneficial owners of our
common stock as of June 30, 2001 by:

     *    Each  stockholder  known by us to be the beneficial owner of more than
          5% of our common stock;
     *    Each of our directors;
     *    Each  executive  officer  listed in the  SUMMARY  COMPENSATION  TABLE,
          listed above;
     *    All of our executive officers and directors as a group.

     Beneficial  ownership is determined  under the rules of the  Securities and
Exchange  Commission  and generally  includes  voting or  investment  power with
respect to securities. Unless indicated above, to our knowledge, the persons and
entities  named in the table  have sole  voting and sole  investment  power with
respect to all shares  beneficially  owned,  subject to community  property laws
where applicable.  Percentage  ownership is based on 28,330,800 shares of common
stock outstanding as of June 30, 2001.

Unless  otherwise  indicated in the table below,  the address for each executive
officer and director is:

     Regency Group, Limited
     8930 East Raintree Drive
     Suite 100
     Scottsdale, Arizona 85260

                   BENEFICIAL STOCK OWNERSHIP AT JUNE 30, 2001

<TABLE>
<CAPTION>
                                                                     PERCENTAGE
                                                                    COMMON STOCK     PERCENTAGE VOTING
                                                                    BENEFICIALLY     RIGHTS OF COMMON
                       NAME                        COMMON STOCK        OWNED              STOCK
                       ----                        ------------        -----              -----
<S>                                                <C>              <C>               <C>
EXECUTIVE OFFICERS AND DIRECTORS
--------------------------------
Terry Neild                                             16,200           .10%              .10%
Pamela Michie                                              -0-           N/A               N/A
Ralph Massetti                                       1,000,000             4%                4%

5% SHAREHOLDERS
---------------
Advantage Nevada Corporation                         2,833,531            10%               10%
Investment Capital Corporation                       4,600,000            16%               16%
Charles Neild  (1)                                   1,600,000             6%                6%
Kurt Waber  (2)                                      1,616,200             6%                6%
All Executive officers and Directors as a group     11,665,931            41%               41%
</TABLE>

(1)  Charles Neild
     14266 - 32nd Avenue
     White Rock, BC Canada

(2)  Kurt Waber
     12840 - 16th Avenue
     White Rock, BC Canada

                                       38
<PAGE>
                                     PART IV

ITEM 12. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

<TABLE>
<CAPTION>
                                                                                           INCORPORATED BY REFERENCE
                                                                               ----------------------------------------------
                                                                                                       EXHIBIT
                            EXHIBIT DESCRIPTION                                FORM     FILE NUMBER     NUMBER    FILING DATE
                            -------------------                                ----     -----------     ------    -----------
<S>                                                                            <C>      <C>            <C>        <C>
Change in Registrant's certifying accountant to Brad Beckstead                 8-K/A      000-26687       16       06/02/00

Agreement and plan of reorganization dated July 01, 2001
  between the Registrant, Deal Update.com and its wholly owned
  subsidiary e-River Marketing, Inc.                                            8-K       000-26687        2       07/25/00

Change in Registrant's certifying accountant to Semple & Cooper,
  LLP and change in Registrant's fiscal year-end to June 30                     8-K       000-26687                08/11/00

Letter from Brad Beckstead to the Securities and Exchange Commission
regarding changes in the Registrant's certifying accountant                    8-K/A      000-26687      16.1      08/22/00

Letter from Brad Beckstead to the Securities and Exchange Commission
regarding changes in the Registrant's certifying accountant                    8-K/A      000-26687      16.1      09/18/00

Finalization of e-River acquisition and presentation of e-River's audited
financial statements for the period ending June 30, 2000                       8-K/A      000-26687                09/25/00

Initial statement of beneficial ownership of securities for Joseph Romano        3        000-26687                11/01/00

Notice of intent to file extension for period ending September 30, 2000       NT 10-Q     000-26687                11/15/00

Resignation  of Joseph Roman as CEO and election of Terry Neild as
  chairman and CEO                                                              8-K       000-26687                02/12/01

Re-conveyance of all Regency stock owned by e-River to Regency, and of all
e-River stock owned by Regency to e-River                                       8-K       000-26687                06/12/01

Notice of intent to file extension for period ending June 30, 2001            NT 10-K     000-26687                11/15/00
</TABLE>

                                       39
<PAGE>
                                   SIGNATURES

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

Date: October 10, 2001                  REGENCY GROUP, LIMITED


                                        By: /s/ Terry Neild
                                            ------------------------------------
                                            Terry Neild
                                            Chairman & CEO

 .