----

| [ X      ] | QUARTERLY      REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|------------|----------------------------------------------------------------------------------------------|

| Advance      Display Technologies, Inc.                                 |
|-------------------------------------------------------------------------|
| (Exact      name of small business issuer as specified in its  charter) |

| Colorado                      |   | 84-0969445                    |
|-------------------------------|--------|-------------------------------|
| (State      of incorporation) |   | (IRS      Employer ID number) |

| 7334      South Alton Way, Suite F, Centennial, CO 80112             |
|----------------------------------------------------------------------|
| (Address      of principal executive offices)  (Zip  Code) |

| (303)      267-0111                                        |
|------------------------------------------------------------|
| (Issuer’s      telephone number, including areacode) |

|   | Large      accelerated filer | [   ] |   | Accelerated      filer         | [   ] |   |
|--------|------------------------------|----------------------|--------|--------------------------------|----------------------|--------|
|   |                         |                 |   |                           |                 |   |
|   | Non-accelerated      filer   | [   ] |   | Smaller      reporting company | [X]                  |   |

----

| ADVANCE      DISPLAY TECHNOLOGIES, INC.       |
|-----------------------------------------------|
|                                          |
| INDEX                                         |
|                                          |
| PART      I.  FINANCIAL INFORMATION |
|                                          |
|                                          |   |   |   | Page |
|                                          |   |   |   |   |
| Item      1.                                  |   | Consolidated      Balance Sheets - |   |   |
|                                          |   |     December      31, 2008 (unaudited) and June 30, 2008 |   | 1 |
|                                          |   |   |   |   |
|                                          |   | Consolidated      Statements of Operations (unaudited) |   |   |
|                                          |   |     Three      months and six months ended December 31, 2008 and 2007 and |   |   |
|                                          |   |     for      the period from March 15, 1995, inception, to December 31,      2008 |   | 2 |
|                                          |   |   |   |   |
|                                          |   | Consolidated      Statements of Cash Flows (unaudited) |   |   |
|                                          |   |     Six      months ended December 31, 2008 and 2007 and |   |   |
|                                          |   |     for      the period from March 15, 1995, inception, to December 31,      2008 |   | 3 |
|                                          |   |   |   |   |
|                                          |   | Notes      to Unaudited Consolidated Financial Statements |   | 5 |
|                                          |   |   |   |   |
| Item      2.                                  |   | Management’s      Discussion and Analysis of Financial Condition |   |   |
|                                          |   |     and      Results of Operations |   | 13 |
|                                          |   |   |   |   |
| Item      3.                                  |   | Quantitative      and Qualitative Disclosures About Market Risk |   | 20 |
|                                          |   |   |   |   |
| Item      4T.                                 |   | Controls      and Procedures |   | 20 |
|                                          |   |   |   |   |
|                                          |   | PART      II.  OTHER INFORMATION |   |   |
|                                          |   |   |   |   |
| Item      1.                                  |   | Legal      Proceedings |   | 21 |
|                                          |   |   |   |   |
| Item      1A.                                 |   | Risk      Factors |   | 21 |
|                                          |   |   |   |   |
| Item      2.                                  |   | Unregistered      Sales of Equity Securities and Use of Proceeds |   | 21 |
|                                          |   |   |   |   |
| Item      3.                                  |   | Defaults      Upon Senior Securities |   | 21 |
|                                          |   |   |   |   |
| Item      4.                                  |   | Submission      of Matters to a Vote of Security Holders |   | 21 |
|                                          |   |   |   |   |
| Item      5.                                  |   | Other      Information |   | 22 |
|                                          |   |   |   |   |
| Item      6.                                  |   | Exhibits |   | 22 |
|                                          |   |   |   |   |
|                                          |   | Signatures |   |   |

----

|                                                                                                                                                              |   | December      31,2008 |         |   | June      30,2008 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------|--------------|--------|-------------------|--------|
|                                                                                                                                                              |   | (Unaudited)           |         |   |              |   |
| ASSETS                                                                                                                                                            |   |
| Current      Assets:                                                                                                                                              |   |                  |         |   |              |   |
| Cash                                                                                                                                                              |   | $                     | 371,144      |   |              | $      | 1,271,364 |   |
| Component    inventory                                                                                                                                            |   |                  | 669,496      |   |              |   | 224,314 |   |
| Work in progress      inventory                                                                                                                                   |   |                  | 660,596      |   |              |   | 102,561 |   |
| Vendor deposits                                                                                                                                                   |   |                  | 19,171       |   |              |   | 33,400 |   |
| Other current    assets                                                                                                                                           |   |                  | 57,282       |   |              |   | 57,512 |   |
| Total current    assets                                                                                                                                           |   |                  | 1,777,689    |   |              |   | 1,689,151 |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| Property      and Equipment, Net                                                                                                                                  |   |                  | 1,305,801    |   |              |   | 1,153,892 |   |
| Deferred      Manufacturing Costs, Net                                                                                                                            |   |                  | 431,998      |   |              |   | 407,232 |   |
| Deposits                                                                                                                                                          |   |                  | 31,353       |   |              |   | 31,353 |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| Total Assets                                                                                                                                                      |   | $                     | 3,546,841    |   |              | $      | 3,281,628 |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| LIABILITIES AND      STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                         |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| Current      Liabilities:                                                                                                                                         |   |                  |         |   |              |   |   |   |
| Accounts payable                                                                                                                                                  |   |                  |         |   |              |   |   |   |
| Trade                                                                                                                                                             |   | $                     | 779,594      |   |              | $      | 989,450 |   |
| Related party                                                                                                                                                     |   |                  | 38,625       |   |              |   | 35,821 |   |
|        Senior      secured revolving convertible note, net of debt discount, to related      parties                           |   |                  | 820,608      |   |              |   | --- |   |
|        Revolving      convertible redeemable promissory notes to related parties                                               |   |                  | 740,000      |   |              |   | 740,000 |   |
|        Demand      notes to related parties                                                                                    |   |                  | 100,000      |   |              |   | 800,000 |   |
|        Accrued      interest payable to related parties                                                                        |   |                  | 273,847      |   |              |   | 321,008 |   |
|        Conversion      feature liability on debt to related parties                                                            |   |                  | 2,050,235    |   |              |   | --- |   |
| Other accrued      liabilities                                                                                                                                    |   |                  | 28,362       |   |              |   | 49,808 |   |
| Total current      liabilities                                                                                                                                    |   |                  | 4,831,271    |   |              |   | 2,936,087 |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| Long-term      obligations, less current maturities                                                                                                               |   |                  | 30,354       |   |              |   | 19,729 |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| Total liabilities                                                                                                                                                 |   |                  | 4,861,625    |   |              |   | 2,955,816 |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| COMMITMENTS      AND CONTINGENCIES                                                                                                                                |   |                  |         |   |              |   |   |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| Stockholders’      Equity (Deficit):                                                                                                                        |   |                  |         |   |              |   |   |   |
| Preferred Series D stock, $.001      par value, 70,100,000 shares authorized, 30,570,742 shares issued and      outstanding (liquidation preference of $510,531). |   |                  | 30,571       |   |              |   | 30,571 |   |
| Preferred Series E stock, $.001      par value, 1,008,985 shares authorized, 1,008,985 shares issued and      outstanding (liquidation preference of $1,265,429). |   |                  |  1,009  |   |              |   |  1,009 |   |
| Preferred Series F stock, $.001      par value, 4,549,015 shares authorized, 4,549,015 shares issued and      outstanding (liquidation preference of $4,549,015). |   |                  |  4,549  |   |              |   |  4,549 |   |
| Preferred Series G stock, $.001      par value, 100,000 shares authorized, 90,544 shares issued and outstanding      (liquidation preference of $8,802,750).      |   |                  | 91           |   |              |   | 91 |   |
| Common stock, $.001 par value,      175,000,000 shares authorized, 26,198,177 issued and      outstanding                                                         |   |                  |  26,199 |   |              |   | 26,199 |   |
| Additional paid-in      capital                                                                                                                                   |   |                  | 20,536,765   |   |              |   | 20,442,137 |   |
| Deficit accumulated during the      development stage                                                                                                             |   |                  | (21,913,968  | )      |              |   | (20,178,744 | ) |
| Total stockholders’ equity      (deficit)                                                                                                                   |   |                  | (1,314,784   | )      |              |   | 325,812 |   |
|                                                                                                                                                              |   |                  |         |   |              |   |   |   |
| Total      Liabilities and Stockholders’ Equity (Deficit)                                                                                                   |   | $                     | 3,546,841    |   |              | $      | 3,281,628 |   |

----

|                                                                                                  |   |  Three      Months EndedDecember      31, |       |   |  Six      Months EndedDecember      31, |   |       | Cumulative      From Inception(March      15, 1995)Through      December 31, |   |
|-------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|------------|--------|----------------------------------------------|--------|------------|------------------------------------------------------------------------------|--------|
|                                                                                                  |   | 2008                                           |       |   | 2007                                         |   |       | 2008                                                                         |   |   | 2007 |   |   | 2008 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |
| Consulting      Revenue                                                                               |   | $                                              | ---        |   |                                         | $      | ---        |                                                                         |   | $ | --- |   |   | $ | --- |   |   | $ | 91,014 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income:                                                                                    |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|         Related      party interest income                    |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | 162,761 |   |
|         Other      interest income                            |   |                                           | 289        |   |                                         |   | 3,583      |                                                                         |   |   | 719 |   |   |   | 9,368 |   |   |   | 29,719 |   |
|         Settlement      income                                |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | 463,179 |   |
| Other                                                                                                 |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | 550 |   |
| Total revenue and other      income                                                                   |   |                                           | 289        |   |                                         |   | 3,583      |                                                                         |   |   | 719 |   |   |   | 9,368 |   |   |   | 747,223 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs      and Expenses:                                                                              |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|         Cost      of consulting revenue                       |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | 93,648 |   |
| Manufacturing      operations                                                                         |   |                                           | 382,247    |   |                                         |   | ---        |                                                                         |   |   | 1,136,753 |   |   |   | --- |   |   |   | 1,686,041 |   |
| General and      administrative                                                                       |   |                                           | 493,468    |   |                                         |   | 415,215    |                                                                         |   |   | 969,877 |   |   |   | 753,365 |   |   |   | 7,988,890 |   |
| Marketing                                                                                             |   |                                           | 148,675    |   |                                         |   | 46,276     |                                                                         |   |   | 437,934 |   |   |   | 85,452 |   |   |   | 1,393,825 |   |
| Research and      development                                                                         |   |                                           | 97,418     |   |                                         |   | 1,202,184  |                                                                         |   |   | 167,695 |   |   |   | 2,306,555 |   |   |   | 8,249,082 |   |
| Impairment of intangible      asset                                                                   |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | 451,492 |   |
| Interest expense – related      parties                                                         |   |                                           | 97,792     |   |                                         |   | 39,356     |                                                                         |   |   | 147,203 |   |   |   | 78,711 |   |   |   | 4,156,891 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Total costs and      expenses                                                                         |   |                                           | 1,219,600  |   |                                         |   | 1,703,031  |                                                                         |   |   | 2,859,462 |   |   |   | 3,224,083 |   |   |   | 24,019,869 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Loss                                                                                   |   | $                                              | (1,219,311 | )      |                                         | $      | (1,699,448 | )                                                                            |   | $ | (2,858,743 | ) |   | $ | (3,214,715 | ) |   | $ | (23,272,646 | ) |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Income and  Expenses:                                                            |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|         Change      in derivative conversion feature          |   |                                           | 3,148,638  |   |                                         |   | ---        |                                                                         |   |   | 3,148,638 |   |   |   | --- |   |   |   | 3,148,638 |   |
|         Interest      expense - derivative conversion feature |   |                                           | (1,516,736 | )      |                                         |   | ---        |                                                                         |   |   | (1,516,736 | ) |   |   | --- |   |   |   | (1,516,736 | ) |
|         Amortization      of debt discount                    |   |                                           | (508,383   | )      |                                         |   | ---        |                                                                         |   |   | (508,383 | ) |   |   | --- |   |   |   | (508,383 | ) |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Total other income and      expenses                                                                  |   |                                           | 1,123,519  |   |                                         |   | ---        |                                                                         |   |   | 1,123,519 |   |   |   | --- |   |   |   | 1,123,519 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      Before  Discontinued  Operations      and Extraordinary Gain            |   | $                                              | (95,792    | )      |                                         | $      | (1,699,448 | )                                                                            |   | $ | (1,735,224 | ) |   | $ | (3,214,715 | ) |   | $ | (22,149,127 | ) |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      from discontinued operations                                                                |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | (202,278 | ) |
| Gain      on disposal of discontinued operations                                                      |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | 108,652 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss      Before Extraordinary Gain                                                                   |   | $                                              | (95,792    | )      |                                         | $      | (1,699,448 | )                                                                            |   | $ | (1,735,224 | ) |   | $ | (3,214,715 | ) |   | $ | (22,242,753 | ) |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Extraordinary      Gain Due to                                                                        |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    Extinguishment      of Debt                                                         |   |                                           | ---        |   |                                         |   | ---        |                                                                         |   |   | --- |   |   |   | --- |   |   |   | 328,785 |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Loss                                                                                         |   | $                                              | (95,792    | )      |                                         | $      | (1,699,448 | )                                                                            |   | $ | (1,735,224 | ) |   | $ | (3,214,715 | ) |   | $ | (21,913,968 | ) |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    accrued      preferred series e dividend                                            |   |                                           | (12,612    | )      |                                         |   | (12,612    | )                                                                            |   |   | (25,224 | ) |   |   | (25,224 | ) |   |   | (256,444 | ) |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loss applicable to common shareholders                                                       |   | $                                              | (108,404   | )      |                                         | $      | (1,712,060 | )                                                                            |   | $ | (1,760,448 | ) |   | $ | (3,239,939 | ) |   | $ | (22,170,412 | ) |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| net      loss per common share  (basic and dilutive):                                       |   | $                                              | (.00       | )      |                                         | $      | (.06       | )                                                                            |   | $ |  (.07 | ) |   | $ |  (.12 | ) |   |   |   |   |
|                                                                                                  |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| weighted      average number of common                                                                |   |                                           |       |   |                                         |   |       |                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|  shares      outstanding                                                                         |   |                                           | 26,198,177 |   |                                         |   | 26,198,177 |                                                                         |   |   | 26,198,177 |   |   |   | 26,198,177 |   |   |   |   |   |

----

|                                                                   |   |   Six      Months EndedDecember      31, |       |   | Cumulative      From Inception(March      15, 1995) Through December 31, |   |
|------------------------------------------------------------------------|--------|----------------------------------------------------|------------|--------|--------------------------------------------------------------------------|--------|
|                                                                   |   | 2008                                               |       |   | 2007                                                                     |   |   | 2008 |   |
| cash      flows from (to) operating activities:                        |   |                                               |       |   |                                                                     |   |   |   |   |
| Net (Loss)                                                             |   | $                                                  | (1,735,224 | )      |                                                                     | $      | (3,214,715 | ) |   | $ | (21,913,968 | ) |
| Adjustments      to reconcile net loss to net                          |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
|  Cash      used in operating activities:                          |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| Loss from discontinued      operations                                 |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 202,278 |   |
| Gain on disposition of      discontinued operations                    |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | (108,652 | ) |
| Gain on debt      forgiven                                             |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | (496,777 | ) |
| Acquired research and      development expense                         |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 2,536,494 |   |
| Impairment of intangible      asset                                    |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 451,492 |   |
| Impairment of    assets                                                |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 380,373 |   |
| Depreciation and      amortization                                     |   |                                               | 322,679    |   |                                                                     |   | 15,058 |   |   |   | 728,340 |   |
| Amortization of debt      discount                                     |   |                                               | 508,383    |   |                                                                     |   | --- |   |   |   | 508,383 |   |
| Amortization of deferred merger      costs                             |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 75,000 |   |
| Stock and stock option      compensation expense                       |   |                                               | 94,628     |   |                                                                     |   | 93,372 |   |   |   | 543,770 |   |
| Interest expense related to debt      discount                         |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 1,893,573 |   |
| Interest expense related to      derivative conversion feature on debt |   |                                               | 1,516,736  |   |                                                                     |   | --- |   |   |   | 1,516,736 |   |
| Change in derivative conversion      feature                           |   |                                               | (3,148,638 | )      |                                                                     |   | --- |   |   |   | (3,148,638 | ) |
| Loss on disposal of property and      equipment                        |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 7,015 |   |
| (Increase)      decrease in:                                           |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| Inventory                                                              |   |                                               | (1,003,217 | )      |                                                                     |   | (20,685 | ) |   |   | (1,649,436 | ) |
|     Vendor      deposits                           |   |                                               | 14,229     |   |                                                                     |   | --- |   |   |   | (19,171 | ) |
| Other current    assets                                                |   |                                               | 230        |   |                                                                     |   | (15,791 | ) |   |   | (113,767 | ) |
| (Decrease)  increase      in:                                |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| Accounts payable                                                       |   |                                               | (207,052   | )      |                                                                     |   | 104,468 |   |   |   | 780,520 |   |
| Interest payable to      shareholders                                  |   |                                               | 147,201    |   |                                                                     |   | 78,711 |   |   |   | 2,190,364 |   |
| Other accrued      liabilities                                         |   |                                               | (16,534    | )      |                                                                     |   | 3,305 |   |   |   | (146,822 | ) |
| Net cash used in operating      activities                             |   |                                               | (3,506,579 | )      |                                                                     |   | (2,956,277 | ) |   |   | (15,782,893 | ) |
|                                                                   |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| cash      flows from (to)  investing activities:             |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| Purchases of property and      equipment                               |   |                                               | (378,329   | )      |                                                                     |   | (40,563 | ) |   |   | (1,788,822 | ) |
| Proceeds from sale of property      and equipment                      |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 17,030 |   |
| Long-term    deposits                                                  |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | (31,353 | ) |
| Deferred manufacturing      costs                                      |   |                                               | (112,630   | )      |                                                                     |   | --- |   |   |   | (525,598 | ) |
| Advances to      affiliates                                            |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | (932,925 | ) |
| Purchase of notes receivable and      security interest                |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | (225,000 | ) |
| Cash received in      acquisition                                      |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 303,812 |   |
| Net cash used in investing      activities                             |   |                                               | (490,959   | )      |                                                                     |   | (40,563 | ) |   |   | (3,182,856 | ) |
|                                                                   |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| cash      flows from (to) financing activities:                        |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| Proceeds from stock      sales                                         |   |                                               | ---        |   |                                                                     |   | 2,212,750 |   |   |   | 9,505,877 |   |
|     Proceeds      from exercise of options         |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 14,400 |   |
| Proceeds from notes payable to      shareholders                       |   |                                               | 3,100,000  |   |                                                                     |   | --- |   |   |   | 9,529,754 |   |
| Proceeds from line of      credit                                      |   |                                               | ---        |   |                                                                     |   | --- |   |   |   | 299,505 |   |
| Principal payments on leased      equipment                            |   |                                               | (2,682     | )      |                                                                     |   | (640 | ) |   |   | (12,643 | ) |
| Net cash provided by financing      activities                         |   |                                               | 3,097,318  |   |                                                                     |   | 2,212,110 |   |   |   | 19,336,893 |   |
|                                                                   |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |
| Increase      (decrease) in cash                                       |   |                                               | (900,220   | )      |                                                                     |   | (784,730 | ) |   |   | 371,144 |   |
| Cash      & cash equivalent at beginning of period                 |   |                                               | 1,271,364  |   |                                                                     |   | 1,237,599 |   |   |   | --- |   |
| Cash      & cash equivalent at end of period                       |   | $                                                  | 371,144    |   |                                                                     | $      | 452,869 |   |   | $ | 371,144 |   |
|                                                                   |   |                                               |       |   |                                                                     |   |   |   |   |   |   |   |

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|                                                                                                                                             |   | Six      Months EndedDecember      31, |       |   | Cumulative      From Inception(March      15, 1995) Through December 31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|------------|--------|--------------------------------------------------------------------------|--------|
|                                                                                                                                             |   | 2008                                   |       |   | 2007                                                                     |   |   | 2008 |   |
|                                                                                                                                             |   |                                   |       |   |                                                                     |   |   |   |   |
| supplemental      disclosure of cash flow information                                                                                            |   |                                   |       |   |                                                                     |   |   |   |   |
| Cash      paid for:                                                                                                                              |   |                                   |       |   |                                                                     |   |   |   |   |
|   Interest                                                                                                                             |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | 26,570 |   |
| Non-cash      transactions:                                                                                                                      |   |                                   |       |   |                                                                     |   |   |   |   |   |   |   |
| Issuance      of common stock for acquisition of Display Group, LLC  and      Display Optics, Ltd. and conversion of convertible debt  |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | 2,199,026 |   |
| Conversion      of notes payable to stockholders to Common stock                                                                                 |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | 550,000 |   |
| Conversion      of interest payable on notes to notes payable                                                                                    |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | 12,354 |   |
| Retirement      of shares in settlement                                                                                                          |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | 1,402 |   |
| Extinguishment      of debt and trade payables                                                                                                   |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | 496,777 |   |
| Acquired      membership interest in Regent Theaters, LLC and  Regent      Releasing, LLC                                              |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 50,000 |   |
| Conversion      of Preferred Series C stock to common stock                                                                                      |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 1,844 |   |
| Subscriptions      for Preferred Series D stock                                                                                                  |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 400,000 |   |
| Cancellation      of Subscriptions for Preferred Series D Stock                                                                                  |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | (325,000 | ) |
| Conversion      of interest on convertible, redeemable promissory   notes      to Preferred Series D Stock                        |   | $                                      | ---        |   |                                                                     | $      |  --- |   |   | $ | 80,000 |   |
| Conversion      of demand notes and accrued interest to Preferred  Series      E stock                                                 |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 1,008,985 |   |
| Conversion      of convertible, redeemable promissory notes, demand   notes      and accrued interest to Preferred Series F stock |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 4,549,015 |   |
| Acquisition      of 15,000,000 shares of Preferred Series D stock                                                                                |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 75,000 |   |
| Conversion      of demand notes and accrued interest to senior   secured,      revolving, convertible note to related parties     |   | $                                      | 2,694,362  |   |                                                                     | $      |  --- |   |   | $ | 2,694,362 |   |
| Conversion      feature on senior secured, revolving, convertible   note      to related parties                                  |   | $                                      | 5,198,873  |   |                                                                     | $      |  --- |   |   | $ | 5,198,873 |   |
| Discount      on senior secured, revolving, convertible note to  related      parties                                                  |   | $                                      | (3,682,137 | )      |                                                                     | $      |  --- |   |   | $ | (3,682,137 | ) |
| Equipment      acquired under capital lease                                                                                                      |   | $                                      | 8,395      |   |                                                                     | $      | --- |   |   | $ | 14,603 |   |
| Issuance      of shares of Common Stock for debt                                                                                                 |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 5,000 |   |
| Issuance      of shares of Preferred Series D stock for   deferred      compensation                                              |   | $                                      |  ---  |   |                                                                     | $      |  --- |   |   | $ | 304,500 |   |
| Cancellation      of unearned Preferred Series D stock                                                                                           |   | $                                      | ---        |   |                                                                     | $      | --- |   |   | $ | (297,491 | ) |

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| Note 2. Impairment of      Assets |
|-----------------------------------|

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| ·   | Expected      term – one year |
|--------------------|-------------------------------------|

| ·   | Volatility      – 248% |
|--------------------|------------------------------|

| ·   | Annual      rate of quarterly dividends – 0% |
|--------------------|----------------------------------------------------|

| ·   | Discount      rate 1.17% |
|--------------------|--------------------------|

| ·   | Stock      Price at Valuation Date - $0.20 |
|--------------------|--------------------------------------------|

| ·   | Conversion      Price - $0.11 |
|--------------------|-------------------------------|

| ·   | Expected      term – .99% of one year |
|--------------------|---------------------------------------------|

| ·   | Volatility      – 248% |
|--------------------|------------------------------|

| ·   | Annual      rate of quarterly dividends – 0% |
|--------------------|----------------------------------------------------|

| ·   | Discount      rate - 1.16% |
|--------------------|----------------------------|

| ·   | Stock      Price at Valuation Date - $0.15 |
|--------------------|--------------------------------------------|

| ·   | Conversion      Price - $0.11 |
|--------------------|-------------------------------|

| ·   | Expected      term – .88% of one year |
|--------------------|---------------------------------------------|

| ·   | Volatility      – 248% |
|--------------------|------------------------------|

| ·   | Annual      rate of quarterly dividends – 0% |
|--------------------|----------------------------------------------------|

| ·   | Discount      rate - 0.40% |
|--------------------|----------------------------|

| ·   | Stock      Price at Valuation Date - $0.08 |
|--------------------|--------------------------------------------|

| ·   | Conversion      Price - $0.11 |
|--------------------|-------------------------------|

----

| Date      of Draw      |   | Amount      of Draw |      |   | Conversion      Feature |   |      | Debt      Discount |   |   | Amount      Recorded as Interest expense – derivative conversion    feature |   |   | Amortization      of Debt Discount |      |   | Senior      Secured Revolving Convertible Note, net of debt discount, to related      parties |   |
|------------------------|--------|---------------------|-----------|--------|-------------------------|--------|-----------|--------------------|--------|--------|-----------------------------------------------------------------------------------|--------|--------|------------------------------------|-----------|--------|-----------------------------------------------------------------------------------------------|--------|
| November      6, 2008  |   | $                   | 2,694,362 |   |                    | $      | 4,137,731 |               |   | $      | (2,694,362                                                                        | )      |   | $                                  | 1,443,369 |   |                                                                                          | $      | 406,000 |   |   | $ | 406,000 |   |
| November      10, 2008 |   |                | 650,000   |   |                    |   | 723,367   |               |   |   | (650,000                                                                          | )      |   |                               | 73,367    |   |                                                                                          |   | 91,828 |   |   |   | 91,828 |   |
| December      21, 2008 |   |                | 650,000   |   |                    |   | 337,755   |               |   |   | (337,775                                                                          | )      |   |                               | -         |   |                                                                                          |   | 10,555 |   |   |   | 322,780 |   |
| Total                  |   | $                   | 3,994,362 |   |                    | $      | 5,198,853 |               |   | $      | (3,682,137                                                                        | )      |   | $                                  | 1,516,736 |   |                                                                                          | $      | 508,383 |   |   | $ | 820,608 |   |

| ·   | Expected      term – .85% of one year |
|--------------------|---------------------------------------------|

| ·   | Volatility      – 248% |
|--------------------|------------------------------|

| ·   | Annual      rate of quarterly dividends – 0% |
|--------------------|----------------------------------------------------|

| ·   | Discount      rate - 0.37% |
|--------------------|----------------------------|

| ·   | Stock      Price as Valuation Date – $0.08 |
|--------------------|--------------------------------------------------|

| ·   | Conversion      Price - $0.11 |
|--------------------|-------------------------------|

----

| Quarter      Ended September 30, | Preferred      Series D stock | PreferredSeries G stock | Convertible      redeemable promissory      notes | Interest      on convertible redeemable promissory      notes | Revolving      Credit Agreement | Vested      Stock Options |
|----------------------------------|-------------------------------|-------------------------|---------------------------------------------------|---------------------------------------------------------------|---------------------------------|---------------------------|
|                             |                          |                    |                                              |                                                          |                            |                      |
| 2008                             | 30,570,742                    | 90,544,000              | 44,311,377                                        | 10,392,014                                                    | 36,312,382                      | 2,717,709                 |
|                             |                          |                    |                                              |                                                          |                            |                      |
| 2007                             | 25,780,322                    | 54,180,000              | 44,311,377                                        | 11,677,432                                                    | 0                               | 2,079,375                 |

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KETRISK

----

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|   | Exhibit No. |   | Description                                                                                                              |
|--------|-------------|--------|--------------------------------------------------------------------------------------------------------------------------|
|   |        |   |                                                                                                                     |
|   | 31          |   | Certificate      of Chief Executive and Financial Officer pursuant to Section 302 of The      Sarbanes-Oxley Act of 2002 |
|   |        |   |                                                                                                                     |
|   | 32          |   | Certificate      of Chief Executive and Financial Officer pursuant to Section 906 of The      Sarbanes-Oxley Act of 2002 |

----

|                                    | ADVANCE      DISPLAY TECHNOLOGIES, INC.(Registrant)      |
|-----------------------------------------|------------------------------------------------------------------------------|
| Date:      February 20, 2009            | /s/  Matthew      W. Shankle                                       |
|                                    | Matthew      W. ShanklePresident,      Chief Executive and Financial Officer |
|                                    |                                                                         |
| Date:  February      20, 2009 | /s/  Rebecca      L. McCall                                        |
|                                    | Rebecca      L. McCallVP      of Accounting, Chief AccountingOfficer         |