**UNITED        STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,        D.C.  20549**

**FORM        10-QSB**

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

**Commission        file number:  0-15224**

| **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 principle executive offices)  (Zip                  Code) |

| **(303)                  267-0111**                                                      |
|------------------------------------------------------------------------------------------|
| (Issuer’s                  telephone number, including area                  code) |

| YES | X | NO |   |
|-----|---|----|--------|

| YES |   | NO | X |
|-----|--------|----|---|

**ADVANCE        DISPLAY TECHNOLOGIES, INC.**

**INDEX**

|                     |                                                                                                                                   |     |
|--------------------------|----------------------------------------------------------------------------------------------------------------------------------------|----------|
|                     |                                                                                                                                   |     |
|                     | PART                  I.  FINANCIAL INFORMATION                                                                              | Page     |
|                     |                                                                                                                                   |     |
| Item                  1. | Balance                  Sheets                                                                                                        |     |
|                     |      March                  31, 2007 (unaudited) and June 30, 2006                                            | 1        |
|                     |                                                                                                                                   |     |
|                     | Statements                  of Operations (unaudited)                                                                                  |     |
|                     |      Three                  and nine months ended March 31, 2007 and 2006 and for the                  period |     |
|                     |                       from March 15, 1995, inception, to March 31, 2007                                            | 2        |
|                     |                                                                                                                                   |     |
|                     | Statements                  of Cash Flows (unaudited)                                                                                  |     |
|                     |      Nine                  months ended March 31, 2007 and 2006 and for the period                            |     |
|                     |      from                  March 15, 1995, inception, to March 31, 2007                                       | 3-4      |
|                     |                                                                                                                                   |     |
|                     | Notes                  to Financial Statements (unaudited)                                                                             | 5-7      |
|                     |                                                                                                                                   |     |
| Item                  2. | Management’s                  Discussion and Analysis or Plan of Operations                                                      | 8-12     |
|                     |      Results                  of Operations                                                                   | 9-10     |
|                     |      Liquidity                  and Capital Resources                                                         | 11-12    |
|                     |      Forward                  Looking Statements                                                              | 12       |
|                     |                                                                                                                                   |     |
| Item                  3. | Controls                  and Procedures                                                                                               | 13       |
|                     |                                                                                                                                   |     |
|                     |                                                                                                                                   |     |
|                     | PART                  II.  OTHER INFORMATION                                                                                 |     |
|                     |                                                                                                                                   |     |
| Item                  1. | Legal                  Proceedings                                                                                                     | 13       |
|                     |                                                                                                                                   |     |
| Item                  2. | Unregistered                  Sale of Equity Securities and Use of Proceeds                                                            | 13       |
|                     |                                                                                                                                   |     |
| Item                  3. | Defaults                  Upon Senior Securities                                                                                       |  13 |
|                     |                                                                                                                                   |     |
| Item                  4. | Submission                  of Matters to a Vote of Security Holders                                                                   | 13-15    |
|                     |                                                                                                                                   |     |
| Item                  5. | Other                  Information                                                                                                     | 15       |
|                     |                                                                                                                                   |     |
| Item                  6. | Exhibits                                                                                                                               | 15       |
|                     |                                                                                                                                   |     |
|                     | Signatures                                                                                                                             | 16       |

**PART        I.  FINANICAL INFORMATION**

**Item        1.**

**ADVANCE        DISPLAY TECHNOLOGIES, INC.**

**(A        Development Stage Company)**

**BALANCE        SHEETS**

|                                                                                                                                                                                                                                                                                                                                  |   | **March                        31,****2007** |        |   | **June                        30,****2006** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------|-------------|--------|---------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                  |   | (Unaudited)                                  |        |   |                                             |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                |   |
| Current                        Assets:                                                                                                                                                                                                                                                                                                |   |                                         |        |   |                                        |   |
| Cash                                                                                                                                                                                                                                                                                                                                  |   | $                                            | 20,577      |   |                                        | $      | 130,248 |   |
| Inventory                                                                                                                                                                                                                                                                                                                             |   |                                         | 132,000     |   |                                        |   | --- |   |
| Other                        current                        assets                                                                                                                                                                                                                                                                    |   |                                         | 51,989      |   |                                        |   | 11,719 |   |
| Total                        current                        assets                                                                                                                                                                                                                                                                    |   |                                         | 204,566     |   |                                        |   | 141,967 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| Property                        and Equipment, Net                                                                                                                                                                                                                                                                                    |   |                                         | 102,666     |   |                                        |   | 48,749 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| Total                        Assets                                                                                                                                                                                                                                                                                                   |   | $                                            | 307,232     |   |                                        | $      | 190,716 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| LIABILITIES                        AND SHAREHOLDERS’ (DEFICIT)                                                                                                                                                                                                                                                                  |   |
| Current                        Liabilities:                                                                                                                                                                                                                                                                                           |   |                                         |        |   |                                        |   |   |   |
| Accounts                        payable                                                                                                                                                                                                                                                                                               |   |                                         |        |   |                                        |   |   |   |
| Trade                                                                                                                                                                                                                                                                                                                                 |   | $                                            | 248,309     |   |                                        | $      | 72,530 |   |
| Related                        party                                                                                                                                                                                                                                                                                                  |   |                                         | 13,245      |   |                                        |   | 19,324 |   |
| Revolving,                        convertible,                        redeemable promissory notes payable-related party                                                                                                                                                                                                               |   |                                         | 740,000     |   |                                        |   | 740,000 |   |
| Demand                        notes payable-related                        party                                                                                                                                                                                                                                                      |   |                                         | 800,000     |   |                                        |   | 500,000 |   |
| Accrued                        interest-related                        parties                                                                                                                                                                                                                                                        |   |                                         | 203,902     |   |                                        |   | 91,691 |   |
| Other                        accrued                        liabilities                                                                                                                                                                                                                                                               |   |                                         | 23,156      |   |                                        |   | 29,142 |   |
| Total                        current                        liabilities                                                                                                                                                                                                                                                               |   |                                         | 2,028,612   |   |                                        |   | 1,452,687 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| Long-Term                        Capital Lease Obligation Less Current Maturities:                                                                                                                                                                                                                                                    |   |                                         | 4,998       |   |                                        |   | 5,980 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| Total                        liabilities                                                                                                                                                                                                                                                                                              |   |                                         | 2,033,610   |   |                                        |   | 1,458,667 |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| Commitments                        and Contingencies                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| Shareholders’                        (Deficit):                                                                                                                                                                                                                                                                                 |   |                                         |        |   |                                        |   |   |   |
| Preferred                        Series D stock, $.001                        par value, 70,100,000 shares authorized, 25,780,322 shares                        issued and                        outstanding, respectively (liquidation preference of                        $430,531)                                               |   |                                         | 25,780      |   |                                        |   | 25,780 |   |
| Preferred                        Series E stock, $.001                        par value, cumulative 5% dividend,1,008,985 shares authorized,                        1,008,985                        shares issued and outstanding, respectively (liquidation                        preference of                        $1,177,145) |   |                                         | 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, 50,000 shares authorized, 10,714 shares issued                        and outstanding                        (liquidation preference of $750,000)                                                                                            |   |                                         | 11          |   |                                        |   | --- |   |
| Common                        stock, $.001 par value,                        175,000,000 shares authorized, 26,198,177 issued and outstanding,                        respectively                                                                                                                                                    |   |                                         | 26,199      |   |                                        |   | 26,199 |   |
| Additional                        paid-in                        capital                                                                                                                                                                                                                                                              |   |                                         | 12,117,515  |   |                                        |   | 11,355,802 |   |
| (Deficit)                        accumulated during the                        development stage                                                                                                                                                                                                                                      |   |                                         | (13,901,441 | )      |                                        |   | (12,681,290 | ) |
| Total                        Shareholders’                        (Deficit)                                                                                                                                                                                                                                                     |   |                                         | (1,726,378  | )      |                                        |   | (1,267,951 | ) |
|                                                                                                                                                                                                                                                                                                                                  |   |                                         |        |   |                                        |   |   |   |
| Total                        Liabilities and Shareholders’ (Deficit)                                                                                                                                                                                                                                                            |   | $                                            | 307,232     |   |                                        | $      | 190,716 |   |

**ADVANCE        DISPLAY TECHNOLOGIES, INC.**

**(A        Development Stage Company)**

**STATEMENTS        OF OPERATIONS**

**(Unaudited)**

|                                                                                                                    |   | Three                          Months EndedMarch                          31, |       |   | Nine                          Months EndedMarch                          31, |   |       | Cumulative                          From Inception(March                          15, 1995) Through March 31, |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|------------|--------|------------------------------------------------------------------------------|--------|------------|---------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                    |   | 2007                                                                          |       |   | 2006                                                                         |   |       | 2007                                                                                                          |   |   | 2006 |   |   | 2007 |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |
| Consulting                          Revenue                                                                             |   | $                                                                             | ---        |   |                                                                         | $      | 6,750      |                                                                                                          |   | $ | --- |   |   | $ | 40,795 |   |   | $ | 91,014 |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                          Income:                                                                                  |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|         Related                          party interest income                  |   |                                                                          | ---        |   |                                                                         |   | ---        |                                                                                                          |   |   | --- |   |   |   | --- |   |   |   | 162,761 |   |
|         Other                          interest income                          |   |                                                                          | 133        |   |                                                                         |   | 4          |                                                                                                          |   |   | 291 |   |   |   | 170 |   |   |   | 9,364 |   |
|         Settlement                          income                              |   |                                                                          | ---        |   |                                                                         |   | ---        |                                                                                                          |   |   | --- |   |   |   | 86,117 |   |   |   | 463,179 |   |
| Other                                                                                                                   |   |                                                                          | ---        |   |                                                                         |   | ---        |                                                                                                          |   |   | --- |   |   |   | --- |   |   |   | 550 |   |
| Total                          revenue and other                          income                                        |   |                                                                          | 133        |   |                                                                         |   | 6,754      |                                                                                                          |   |   | 291 |   |   |   | 127,082 |   |   |   | 726,868 |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Costs                          and Expenses:                                                                            |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|         Cost                          of consulting revenue                     |   |                                                                          | ---        |   |                                                                         |   | 13,341     |                                                                                                          |   |   | --- |   |   |   | 52,377 |   |   |   | 93,648 |   |
| General                          and                          administrative                                            |   |                                                                          | 275,376    |   |                                                                         |   | 169,632    |                                                                                                          |   |   | 666,232 |   |   |   | 442,246 |   |   |   | 5,894,243 |   |
| Research                          and                          development                                              |   |                                                                          | 173,140    |   |                                                                         |   | 36,160     |                                                                                                          |   |   | 441,999 |   |   |   | 126,133 |   |   |   | 4,611,503 |   |
| Impairment                          of intangible                          asset                                        |   |                                                                          | ---        |   |                                                                         |   | ---        |                                                                                                          |   |   | --- |   |   |   | --- |   |   |   | 451,492 |   |
| Interest                          expense – related                          parties                              |   |                                                                          | 37,722     |   |                                                                         |   | 59,661     |                                                                                                          |   |   | 112,211 |   |   |   | 389,189 |   |   |   | 3,812,582 |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                          costs and                          expenses                                              |   |                                                                          | 486,238    |   |                                                                         |   | 278,794    |                                                                                                          |   |   | 1,220,442 |   |   |   | 1,009,945 |   |   |   | 14,863,468 |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                          Before Discontinued  Operations                          and Extraordinary Gain |   | $                                                                             | (486,105   | )      |                                                                         | $      | (272,040   | )                                                                                                             |   | $ | (1,220,151 | ) |   | $ | (882,863 | ) |   | $ | (14,136,600 | ) |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                          from discontinued operations                                                              |   |                                                                          | ---        |   |                                                                         |   | ---        |                                                                                                          |   |   | --- |   |   |   | --- |   |   |   | (202,278 | ) |
| Gain                          on disposal of discontinued operations                                                    |   |                                                                          | ---        |   |                                                                         |   | ---        |                                                                                                          |   |   | --- |   |   |   | --- |   |   |   | 108,652 |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss                          Before Extraordinary Gain                                                                 |   | $                                                                             | (486,105   | )      |                                                                         | $      | (272,040   | )                                                                                                             |   | $ | (1,220,151 | ) |   | $ | (882,863 | ) |   | $ | (14,230,226 | ) |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Extraordinary                          Gain Due to                                                                      |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|    Extinguishment                          of Debt                                                       |   |                                                                          | ---        |   |                                                                         |   | ---        |                                                                                                          |   |   | --- |   |   |   | --- |   |   |   | 328,785 |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                          Loss                                                                                       |   | $                                                                             | (486,105   | )      |                                                                         | $      | (272,040   | )                                                                                                             |   | $ | (1,220,151 | ) |   | $ | (882,863 | ) |   | $ | (13,901,441 | ) |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|    Accrued                          preferred series e dividend                                          |   |                                                                          | (12,612    | )      |                                                                         |   | (12,612    | )                                                                                                             |   |   | (37,836 | ) |   |   | (37,836 | ) |   |   | (168,160 | ) |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                          loss applicable to common shareholders                                                     |   | $                                                                             | (498,717   | )      |                                                                         | $      | (284,652   | )                                                                                                             |   | $ | (1,257,987 | ) |   | $ | (920,699 | ) |   | $ | (14,069,601 | ) |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                          loss per common share  (basic and dilutive):                                     |   | $                                                                             | (.02       | )      |                                                                         | $      | (.01       | )                                                                                                             |   | $ | (.05 | ) |   | $ | (.03 | ) |   |   |   |   |
|                                                                                                                    |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                          average number of common                                                              |   |                                                                          |       |   |                                                                         |   |       |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|  shares                          outstanding                                                                       |   |                                                                          | 26,198,177 |   |                                                                         |   | 26,196,844 |                                                                                                          |   |   | 26,198,177 |   |   |   | 25,827,593 |   |   |   |   |   |

**ADVANCE        DISPLAY TECHNOLOGIES, INC.**

**(A        Development Stage Company)**

**STATEMENTS        OF CASH FLOWS**

**(Unaudited)**

|                                                                                     |   |                                                                               |         |   |                                                                            |   |
|------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|--------------|--------|---------------------------------------------------------------------------------|--------|
|                                                                                     |   |                                                                               |         |   |                                                                            |   |   |   |   |
|                                                                                     |   |                                                                               |         |   |                                                                            |   |   |   |   |
|                                                                                     |   |                                                                               |         |   |                                                                            |   |   |   |   |
|                                                                                     |   |    Nine                    Months EndedMarch                    31, |         |   | Cumulative                    From Inception (March 15, 1995) Through March 31, |   |
|                                                                                     |   | 2007                                                                               |         |   | 2006                                                                            |   |   | 2007 |   |
| Cash                    flows from (to) operating activities:                            |   |                                                                               |         |   |                                                                            |   |   |   |   |
| Net                    (Loss)                                                            |   | $                                                                                  | (1,220,151   | )      |                                                                            | $      | (882,863 | ) |   | $ | (13,901,441 | ) |
| 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 |   |
| Depreciation                    and                    amortization                      |   |                                                                               | 16,927       |   |                                                                            |   | 9,375 |   |   |   | 322,826 |   |
| Amortization                    of deferred merger                    costs              |   |                                                                               | ---          |   |                                                                            |   | --- |   |   |   | 75,000 |   |
| Stock                    and stock option                    compensation expense        |   |                                                                               | 11,724       |   |                                                                            |   | 19,889 |   |   |   | 252,399 |   |
| Interest                    expense related to debt                    discount          |   |                                                                               | ---          |   |                                                                            |   | 340,000 |   |   |   | 1,893,573 |   |
| Loss                    on disposal of property and                    equipment         |   |                                                                               | 1,570        |   |                                                                            |   | --- |   |   |   | 7,015 |   |
| (Increase)                    decrease in:                                               |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |
| Trade                    accounts                    receivable                          |   |                                                                               | ---          |   |                                                                            |   | (13,710 | ) |   |   | --- |   |
| Inventory                                                                                |   |                                                                               | (132,000     | )      |                                                                            |   | --- |   |   |   | (125,952 | ) |
|     Vendor                    deposits                               |   |                                                                               | ---          |   |                                                                            |   | 66,062 |   |   |   | --- |   |
| Other                    current                    assets                               |   |                                                                               | (40,270      | )      |                                                                            |   | (12,746 | ) |   |   | (108,474 | ) |
| (Decrease)  increase                    in:                                    |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |
| Accounts                    payable                                                      |   |                                                                               | 169,700      |   |                                                                            |   | 6,710 |   |   |   | 223,855 |   |
| Interest                    payable to                    shareholders                   |   |                                                                               | 112,211      |   |                                                                            |   | 49,189 |   |   |   | 1,846,057 |   |
|     Customer                    deposits                             |   |                                                                               | ---          |   |                                                                            |   | (24,196 | ) |   |   | --- |   |
| Other                    accrued                    liabilities                          |   |                                                                               | (3,937       | )      |                                                                            |   | 5,717 |   |   |   | (153,701 | ) |
| Net                    cash used in operating                    activities              |   |                                                                               | (1,084,226   | )      |                                                                            |   | (436,573 | ) |   |   | (7,084,008 | ) |
|                                                                                     |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |
| Cash                    flows from (to) investing activities:                            |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |
| Purchases                    of property and                    equipment                |   |                                                                               | (72,414      | )      |                                                                            |   | (77,208 | ) |   |   | (246,795 | ) |
| Proceeds                    from sale of property                    and equipment       |   |                                                                               | ---          |   |                                                                            |   | --- |   |   |   | 17,030 |   |
| 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              |   |                                                                               | (72,414      | )      |                                                                            |   | (77,208 | ) |   |   | (1,083,878 | ) |
|                                                                                     |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |
| Cash                    flows from (to) financing activities:                            |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |
| Proceeds                    from stock                    sales                          |   |                                                                               | 750,000      |   |                                                                            |   | --- |   |   |   | 1,453,127 |   |
|     Proceeds                    from exercise of options             |   |                                                                               | ---          |   |                                                                            |   | 14,400 |   |   |   | 14,400 |   |
| Proceeds                    from notes payable to                    shareholders        |   |                                                                               | 300,000      |   |                                                                            |   | 540,000 |   |   |   | 6,429,754 |   |
| Proceeds                    from line of                    credit                       |   |                                                                               | ---          |   |                                                                            |   | --- |   |   |   | 299,505 |   |
| Principal                    payments on leased                    equipment             |   |                                                                               | (3,031       | )      |                                                                            |   | (2,956 | ) |   |   | (8,323 | ) |
| Net                    cash provided by financing                    activities          |   |                                                                               | 1,046,969    |   |                                                                            |   | 551,444 |   |   |   | 8,188,463 |   |
|                                                                                     |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |
| Increase                    (decrease) in cash                                           |   |                                                                               | (109,671     | )      |                                                                            |   | 37,663 |   |   |   | 20,577 |   |
| Cash                    & cash equivalent at beginning of period                     |   |                                                                               | 130,248      |   |                                                                            |   | 41,602 |   |   |   | --- |   |
| Cash                    & cash equivalent at end of period                           |   | $                                                                                  |  20,577 |   |                                                                            | $      | 79,265 |   |   | $ | 20,577 |   |
|                                                                                     |   |                                                                               |         |   |                                                                            |   |   |   |   |   |   |   |

**ADVANCE        DISPLAY TECHNOLOGIES, INC.**

**(A        Development Stage Company)**

**STATEMENTS        OF CASH FLOWS**

**(Unaudited)**

|                                                                                                                                                                                                                  |   |                                                                               |   |   |                                                                            |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                  |   |                                                                               |   |   |                                                                            |   |   |   |   |
|                                                                                                                                                                                                                  |   |                                                                               |   |   |                                                                            |   |   |   |   |
|                                                                                                                                                                                                                  |   |                                                                               |   |   |                                                                            |   |   |   |   |
|                                                                                                                                                                                                                  |   |    Nine                    Months EndedMarch                    31, |   |   | Cumulative                    From Inception (March 15, 1995) Through March 31, |   |
|                                                                                                                                                                                                                  |   | 2007                                                                               |   |   | 2006                                                                            |   |   | 2007 |   |
|                                                                                                                                                                                                                  |   |                                                                               |   |   |                                                                            |   |   |   |   |
| 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                                                                                                                                                                             |   | $                                                                                  | ---    |   |                                                                            | $      | --- |   |   | $ | 328,785 |   |
| Conversion                    of Preferred Series C Stock to   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 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 |   |
| Equipment                    acquired under capital lease                                                                                                                                                             |   | $                                                                                  | ---    |   |                                                                            | $      | 7,900 |   |   | $ | 14,603 |   |
| Issuance                    of shares of Common Stock for debt                                                                                                                                                        |   | $                                                                                  | ---    |   |                                                                            | $      | 5,000 |   |   | $ | 5,000 |   |
| Issuance                    of shares of Preferred Series D stock for   deferred                    compensation                                                                                       |   | $                                                                                  | ---    |   |                                                                            | $      | 69,500 |   |   | $ | 304,500 |   |
| Cancellation                    of unearned Preferred Series D stock                                                                                                                                                  |   | $                                                                                  | ---    |   |                                                                            | $      | (297,491 | ) |   | $ | (297,491 | ) |

**ADVANCE        DISPLAY TECHNOLOGIES, INC.**

**NOTES        TO UNAUDITED FINANCIAL STATEMENTS**

**Note        1. – Interim Financial Statements**

**Recently        Issued Accounting Pronouncements**

*Fair Value        Measurements*

*Employers' Accounting for Defined Benefit Pension and Other        Postretirement Plans−An amendment of FASB Statements No. 87, 88, 106, and        132(R)*

**Note        2. –Demand Notes - Related Parties**

**Note        3. –Commitments and Contingencies**

**Note        4 – Shareholders’ Equity**

**Note        5. – Subsequent Events**

**Item        2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF        OPERATIONS**

**General**

**Results        of Operations**

**Liquidity        and Capital Resources**

**Forward        Looking Statements**

**Item        3.  CONTROLS AND PROCEDURES**

**PART        II.  OTHER INFORMATION**

**Item        1.  LEGAL PROCEEDINGS.**

**Item        2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF        PROCEEDS**

**Item        3.  DEFAULTS UPON SENIOR SECURITIES**

**Item        4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY        HOLDERS**

| Nominee                               | For        | Withheld    |
|---------------------------------------|------------|-------------|
| Matthew                  W. Shankle   | 49,537,001 | 18,275      |
| Lawrence                  F. DeGeorge | 49,550,081 |  5,195 |
| John                  W. Temple       | 49,549,981 |  5,295 |

|                                            | For        | Against | Abstain |
|-------------------------------------------------|------------|---------|---------|
| Common                  Stock & Equivalents | 49,414,849 | 138,538 | 1,889   |
| Series                  E & F Preferred     | 4,752,057  | -0-     | -0-     |
|                                            |       |    |    |

|                                            | For        | Against | Abstain |
|-------------------------------------------------|------------|---------|---------|
| Common                  Stock & Equivalents | 46,443,903 | 23,647  | 1,973   |
| Series                  E & F Preferred     | 4,752,057  | -0-     | -0-     |
|                                            |       |    |    |

| For        | Against | Abstain |
|------------|---------|---------|
| 46,442,494 | 21,952  | 5,077   |
|       |    |    |

**Item        5.  OTHER INFORMATION**

**Item        6.  EXHIBITS**

|   | (a)    | Exhibits                     |                                                                                                                                                              |
|--------|--------|------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                         |                                                                                                                                                              |
|   |   | 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 |

**SIGNATURES**

|                                | ADVANCE                  DISPLAY TECHNOLOGIES, INC.(Registrant)                                                         |
|-------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
| Date:                  May 14, 2007 | /s/                  Matthew W. Shankle                                                                                                     |
|                                | Matthew                  W. ShanklePresident,                  Principal Executive Officer and Principal Financial                  Officer |