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

                                   FORM 10-QSB
(Mark One)

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

                   For the Quarter Ended December 31, 2002

            [   ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE
                  EXCHANGE ACT

           For the transition period from ____________ to ____________

                         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, BUILDING 14, SUITE F, ENGLEWOOD, CO 80112
        -----------------------------------------------------------------
               (Address of principle executive offices) (Zip Code)

                                 (303) 267-0111
                ------------------------------------------------
                (Issuer's telephone number, including area code)

Check whether the issuer (1) has filed all reports required to be filed by
section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.

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

As of February 14, 2003, 23,774,275 shares of Common Stock, $.001 par value per
share were outstanding.

<PAGE>

                       ADVANCE DISPLAY TECHNOLOGIES, INC.

                                      INDEX

                                                                            PAGE

                          PART I. FINANCIAL INFORMATION

Item 1.  Balance Sheets (unaudited) -
            December 31, 2002 and June 30, 2002..............................1

         Statements of Operations (unaudited)
            Three and six months ended December 31, 2002 and 2001 and for
            the period from March 15, 1995, inception, to December 31, 2002..2

         Statements of Cash Flows (unaudited)
           Three and six months ended December 31, 2002 and 2001
           and for the period from March 15, 1995, inception,
           to December 31, 2002............................................3-4

         Notes to Financial Statements (unaudited).........................5-6

Item 2.  Management's Discussion and Analysis or Plan of Operations.......7-11

Item 3.  Controls and Procedures............................................11


                           PART II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K...................................12

            Signatures......................................................13

                                        i

<PAGE>

                       ADVANCE DISPLAY TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                 BALANCE SHEETS
                                   (UNAUDITED)

                                                   December 31,     June 30,
                                                      2002           2002
                                                  -------------   ------------
                                     ASSETS
CURRENT ASSETS:
   Cash                                           $     6,462     $   22,720
   Other current assets                                27,456          8,013
                                                  ------------    ----------
      Total current assets                             33,918         30,733

PROPERTY AND EQUIPMENT                                125,931        125,931
   Less:  Accumulated depreciation                   (111,623)      (108,431)
                                                  -----------     ----------
      Net Property and Equipment                       14,308         17,500
                                                  -----------     ----------

      TOTAL ASSETS                                $    48,226     $   48,233
                                                  ============    ==========

                      LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:
   Accounts payable
      Trade                                       $   265,882     $  231,008
      Related party                                   122,465        134,495
   Current portion of notes payable-related party     830,000        550,000
   Convertible, redeemable promissory notes
      payable-related party                         2,911,079      2,911,079
   Accrued interest-related parties                 1,147,876        964,897
   Other accrued liabilities                           40,361         39,234
                                                  -----------     ----------
      Total current liabilities                     5,317,663      4,830,713

STOCKHOLDERS' DEFICIT:
   Preferred stock, $.001 par value, 100,000,000
      shares authorized, 1,843,900 shares issued
      and outstanding (liquidation preference of
      $2,765,850)                                       1,844          1,844

   Common stock, $.001 par value, 100,000,000
      shares authorized, 23,774,275 issued and
      outstanding                                      23,775         23,775

   Additional paid-in capital                       4,443,770      4,443,770
   Deficit accumulated during the development
      stage                                        (9,738,826)    (9,251,869)
                                                  -----------     ----------
      Total Shareholders' Deficit                  (5,269,437)    (4,782,480)
                                                  -----------     ----------

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT       $    48,226     $   48,233
                                                  ===========     ==========


          (See accompanying notes to unaudited financial statements)

                                       1
<PAGE>

                       ADVANCE DISPLAY TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                                 March 15,
                                                                                                   1995
                                        Three Months Ended          Six Months Ended            (Inception)
                                           December 31,               December 31,                Through
                                                                                               December 31,
                                        2002          2001           2002           2001           2002
                                    -----------   -----------    -----------    -----------    ------------
<S>                                 <C>           <C>            <C>            <C>            <C>
CONSULTING REVENUE                  $       ---   $       ---    $       ---    $       ---    $     30,200

OTHER INCOME:
    Related party interest income           ---           ---            ---            ---         162,761
    Other interest income                    20            12             31            139           7,988
    Settlement income                       ---           ---            ---            ---         178,418
    Other                                   ---           ---            ---            ---             550
                                    -----------   -----------    -----------    -----------    ------------
       Total revenue and other
         income                              20            12             31            139         379,917

COSTS AND EXPENSES:
    General and administrative          177,927        60,889        306,599        145,852       3,494,341
    Research and development                ---        26,053            ---         59,848       3,944,679
    Impairment of Intangible assets         ---           ---            ---            ---         451,492
    Interest expense - related
      parties                            93,730        80,049        182,979        157,470       2,559,606
                                    -----------   -----------    -----------    -----------    ------------
       Total costs and expenses         271,657       166,991        489,578        363,170      10,450,118
                                    -----------   -----------    -----------    -----------    ------------

LOSS BEFORE EXTRAORDINARY GAIN      $  (271,637)  $  (166,979)   $  (489,547)   $  (363,031)   $(10,070,201)
                                    -----------   -----------    -----------    ---------      ------------

EXTRAORDINARY GAIN DUE TO
    EXTINGUISHMENT OF DEBT                2,590           ---          2,590            ---         331,375
                                    -----------   -----------    -----------    -----------    ------------

NET LOSS                            $  (269,047)  $  (166,979)   $  (486,957)   $  (363,031)   $ (9,738,826)
                                    ===========   ===========    ===========    ===========    ============

NET LOSS PER COMMON SHARE
    (BASIC AND DILUTIVE):
     Loss before extraordinary gain $      (.01)  $      (.01)   $      (.02)   $      (.02)
     Extraordinary Gain                     ---           ---            ---            ---
                                    -----------   -----------    -----------    -----------
     Net loss                       $      (.01)  $      (.01)   $      (.02)   $      (.02)
                                    ===========   ===========    ===========    ===========

WEIGHTED AVERAGE NUMBER OF COMMON
     SHARES OUTSTANDING              23,774,275    23,774,275     23,774,275     23,774,275
                                    ===========   ===========    ===========    ===========
</TABLE>


         (See accompanying notes to unaudited financial statements)

                                       2
<PAGE>

                       ADVANCE DISPLAY TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                      March 15, 1995
                                                                                                                       (Inception)
                                                         Three Months Ended                    Six Months Ended          Through
                                                            December 31,                         December 31,          December 31,
                                                       2002              2001              2002               2001         2002
                                                    -----------      ------------      ------------      ---------    -------------
<S>                                                 <C>              <C>               <C>               <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net Loss                                          $  (269,047)     $   (166,979)     $   (486,957)     $(363,031)    $(9,738,826)
Adjustments to reconcile net loss to net
 Cash used in operating activities:
  Acquired research and development expense                 ---               ---               ---            ---       2,536,494
  Impairment of intangible asset                            ---               ---               ---            ---         451,492
  Depreciation and amortization                           1,595             1,882             3,192          3,722         276,425
  Amortization of deferred merger costs                     ---               ---               ---            ---          75,000
  Stock option compensation expense                         ---               ---               ---            ---         214,125
  Extraordinary gain due to extinguishment of debt        2,590               ---             2,590            ---       1,156,163
  Loss on disposal of assets                                ---               ---               ---            ---           5,445
(Increase) decrease in:
  Inventory                                                 ---               ---               ---            ---           6,048
  Other current assets                                  (12,540)             (268)          (19,443)        (8,064)       (158,941)
(Decrease) increase in:
  Accounts payable                                       (5,473)           (8,512)           20,254         13,866         (60,093)
  Interest payable to shareholders                       93,730            80,049           182,979        157,470       1,333,079
  Other accrued liabilities                                (469)           (1,150)            1,127         15,233         (60,184)
                                                    -----------      ------------      ------------      ---------     -----------
      Net cash used in operating activities            (189,614)          (94,978)         (296,258)      (180,804)     (3,963,773)
                                                    -----------      ------------      ------------      ---------     -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                       ---              (881)              ---         (1,180)       (125,068)
  Proceeds-sale of property and equipment                   ---               ---               ---            ---          17,030
  Advances to affiliates                                    ---               ---               ---            ---        (932,925)
  Purchases of notes receivable and
      security interest                                     ---               ---               ---            ---        (225,000)
  Cash received in acquisition                              ---               ---               ---            ---         303,812
                                                    -----------      ------------      ------------       --------     -----------
      Net cash used in investing activities                 ---              (881)              ---         (1,180)       (962,151)
                                                    -----------      ------------      ------------      ---------     -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Capital contributions                                     ---               ---               ---            ---         103,127
  Proceeds from notes payable to shareholders           190,000            96,000           280,000        176,000       4,529,754
  Proceeds from line-of-credit                              ---               ---               ---            ---         299,505
                                                    -----------      ------------      ------------       --------     -----------
      Net cash provided by financing activities         190,000            96,000           280,000        176,000       4,932,386
                                                    -----------      ------------      ------------      ---------     -----------

Increase (decrease) in cash                                 386               141           (16,258)        (5,984)          6,462
Cash & cash equivalent at beginning of period             6,076               502            22,720          6,627             ---
                                                    -----------      ------------      ------------      ---------     -----------
Cash & cash equivalent at end of period             $     6,462      $        643      $      6,462            643           6,462
                                                    ===========      ============      ============      =========     ===========
</TABLE>

          (See accompanying notes to unaudited financial statements)


                                       3
<PAGE>

                       ADVANCE DISPLAY TECHNOLOGIES, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                            STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                    March 15, 1995
                                                                                                                    (Inception)
                                                 Three Months Ended                    Six Months Ended               Through
                                                     December 31,                         December 31,              December 31,
                                                2002              2001              2002              2001               2002
                                           ------------      ------------      ------------      ------------       -------------
<S>                                        <C>               <C>               <C>               <C>                <C>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
  INFORMATION
Cash paid for:
  Interest                                 $        ---      $        ---      $        ---      $        ---       $     26,750
                                           ============      ============      ============      ============       ============
  Taxes                                    $        ---      $        ---      $        ---      $        ---       $        ---
                                           ============      ============      ============      ============       ============
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 on notes
  Payable to notes payable                 $        ---      $        ---      $        ---      $        ---       $     12,354
                                           ============      ============      ============      ============       ============
Retirement of shares in settlement         $        ---      $        ---      $        ---      $        ---       $      1,402
                                           ============      ============      ============      ============       ============
Extinguishment of Debt                     $        ---      $        ---      $        ---      $        ---       $    328,785
                                           ============      ============      ============      ============       ============
</TABLE>

          (See accompanying notes to unaudited financial statements)

                                       4
<PAGE>

                       ADVANCE DISPLAY TECHNOLOGIES, INC.
             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.

      The accompanying unaudited interim financial statements have been prepared
in accordance with the instructions to Form 10-QSB and do not include all the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. The results of operations for any interim
period are not necessarily indicative of results for the entire fiscal year.

      These statements should be read in conjunction with the financial
statements and related notes included in Form 10-KSB for Advance Display
Technologies, Inc. (ADTI or the Company) for the year ended June 30, 2002, as
the notes to these interim financial statements omit certain information
required for complete financial statements.

RECENT PRONOUNCEMENTS

IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

      In August 2002, the FASB issued Statements of Financial Accounting
Standards No. 147, "Acquisitions of Certain Financial Institutions" (SFAS 147).
SFAS 147 requires financial institutions to follow the guidance in SFAS 141 and
SFAS 142 for business combinations and goodwill and intangible assets, as
opposed to the previously applied accounting literature. This statement also
amends SFAS 144 to include in its scope long-term customer relationship
intangible assets of financial institutions. The provisions of SFAS 147 do not
apply to the Company.

      In December 2002, the FASB issued Statements of Financial Accounting
Standards No.148, "Accounting for Stock-Based compensation - Transition and
Disclosure - an amendment of FASB Statement 123" (SFAS 123). For entities that
change their accounting for stock-based compensation from the intrinsic method
to the fair value method under SFAS 123, the fair value method is to be applied
prospectively to those awards granted after the beginning of the period of
adoption (the prospective method). The amendment permits two additional
transition methods for adoption of the fair value method. In addition to the
prospective method, the entity can choose to either (i) restate all periods
presented (retroactive restatement method) or (ii) recognize compensation cost
from the beginning of the fiscal year of adoption as if the fair value method
had been used to account for awards (modified prospective method). For fiscal
years beginning December 15, 2003, the prospective method will no longer be
allowed. The Company currently accounts for its stock-based compensation using
the intrinsic value method as proscribed by Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" and plans on continuing using
this method to account for stock options, therefore, it does not intend to
adopt the transition requirements as specified in SFAS 148. The Company will
adopt the new SFAS 148 disclosure requirements in the first quarter of fiscal
2003.

                                       5
<PAGE>

Note 2.

      Subsequent to December 31, 2002, the Company issued one 10% demand note in
the aggregate amount of $40,000 to a stockholder.


                                       6
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

GENERAL

      In the second fiscal quarter ended December 31, 2002, the Company's
efforts continued to be directed toward raising additional capital for
operations with the intent to reorganize and re-capitalize the Company. As of
the date of this report, these efforts are mainly focused on a potential
acquisition and financing of Regent Worldwide Sales, LLC ("RWS"), an affiliate
of Regent Entertainment, Inc. ("Regent"). Regent is a six-year-old motion
picture company that finances, produces and distributes made for television
movies and theatrical films. RWS is a company formed in January 2002 that
succeeded to Regent's film distribution business and ownership of two specialty
movie theaters.

      The Board of Directors called a special meeting of the Company's
shareholders to approve a 1-for-64 reverse stock split of the Company's Common
Stock, to be effected by the Company's Board of Directors in connection with one
or more other transactions by which new capital or other assets would be infused
into the Company. The shareholder meeting was held on June 17, 2002 and the
proposal received shareholder approval. As of the date of this report, however,
the Board has not yet effected the reverse stock split.

      Before the special shareholders meeting, on May 23, 2002, the Company and
RWS executed a letter of intent (the "LOI") based on terms materially different
from those described in the prior January 2002 letter of intent with RWS. The
Company engaged 17th Street Capital Partners, LLP ("17th Street") as financial
advisor, and Brean Murray & Co., Inc. ("BMC") as the placement agent for the
Company's proposed transactions contemplated by the LOI.

      Various factors, including but not limited to unusually adverse conditions
in the financial markets, prevented the parties from proceeding with the
proposed transactions and raising the required capital. On August 31, 2002, the
LOI with RWS expired. In addition, 17th Street and BMC agreed to terminate their
agreements with the Company.

      In furtherance of the Company's reorganization, on September 1, 2002, the
Company, RWS and WEH L.L.C., a Regent affiliate, entered into a Contribution
Agreement whereby the membership interests in RWS would be contributed to the
Company in exchange for 5,250,000 shares of a new series of the Company's
preferred stock that would convert into the Company's Common Stock on a 2
preferred shares for 1 common share basis (the "RWS Transaction"). The RWS
Transaction is contingent on (i) the effectiveness of the reverse stock split,
(ii) the Company extinguishing the debt associated with its former business
through an exchange of a portion of such debt for equity in the Company and an
exchange of a portion of such debt for the Company's technology assets, (iii)
the conversion of all or substantially all of the Company's Series C Preferred
Stock into Common Stock, and (iv) the successful raising of funds in a private
placement.

      In furtherance of effecting the RWS Transaction, effective September 1,
2002 the Company entered into a Series C Preferred Stock Conversion Agreement
with all of the holders of its Series C Preferred Stock pursuant to which such
holders will convert their Series C Preferred Stock into the Company's Common
Stock on a 1-for-1 basis ("Series C Transaction"). Furthermore, the Company
entered into a Debt Exchange Agreement with certain of the Company's debt
holders to extinguish a portion of ADTI's debt in exchange for the issuance of
shares of the Company's Common Stock ("Exchange Transaction"), and a Technology

                                       7
<PAGE>

Purchase Agreement with an entity controlled by such debt holders whereby the
Company will sell its existing technology assets in exchange for the
cancellation of the remaining debt held by such holders ("Technology
Transaction"). As part of the Technology Transaction, the Company will retain a
10% royalty interest on any revenues generated from the technology assets in the
future. Subsequent to December 31, 2002, the Company entered into a new
agreement with 17th Street to act as a financial advisor and issue a fairness
opinion for the Company's planned reorganization transactions.

      The consummation of each of the reverse stock split, RWS Transaction,
Series C Transaction, Exchange Transaction and Technology Transaction
(collectively, the "Reorganization") is conditioned on (i) the consummation of
each of the other transactions, and (ii) the closing of an equity financing by
the Company.

      On September 2, 2002, the Company's Board of Directors increased the size
of the Board to five members and elected Stephen P. Jarchow of Regent as a
member of the Board. On September 3, 2002, Gene W. Schneider and Mark L.
Schneider resigned from the Board in order to avoid any potential conflicts of
interest which might impede the Company in pursuing financing and business plans
in the future. In connection with these resignations, the size of the Board was
reduced again to three members.

      In order to raise capital and effect the acquisition of RWS, the Company
engaged Janco Partners, Inc. ("Janco") of Greenwood Village, Colorado to assist
the Company in obtaining financing for the combined companies. The Company's
agreement required RWS to enter into an agreement in principle with United
Pan-European Communications ("UPC") or its affiliate to launch a cable channel
in UPC's Benelux market, which condition has since been satisfied.

      There can be no assurances that the Company will be successful in raising
capital or closing the Reorganization. If the Company fails to do so or if the
interim financing heretofore provided by its core investor is suspended, it will
be forced to immediately discontinue operations and liquidate its assets. In
such an event, it is extremely unlikely that there would be any funds or
property available for distribution to shareholders in any such liquidation.

RESULTS OF OPERATIONS

      For the fiscal quarter and six months ended December 31, 2002, the Company
reported net losses of ($269,047) and ($486,957), respectively, as compared to
net losses of ($166,979) and ($363,031) for the same periods in 2001. The
increase in net loss for the quarter ended December 31, 2002, is primarily due
to the Company's efforts to complete the Reorganization as described above.

      Research and development costs decreased from $26,053 and $59,848 for the
quarter and six months ended December 31, 2001 to $0 for both the quarter and
six months ended December 31, 2002. The decreases are due to the suspension of
Screen and manufacturing process development or product commercialization
efforts while focusing totally on the Reorganization. As part of the
Reorganization, the Company has agreed to exchange all such technology assets
with an entity controlled by the Company's note holders in return for the
cancellation of a portion of the outstanding Company debt.

                                       8
<PAGE>

      As of the date of this report, the Company remains in the development
stage, as it has not received significant revenues from operations. The Company
reported interest income of $20 and $31 for the quarter and six months ended
December 31, 2002, respectively, compared to $12 and $139 for the same periods
in 2001.

      The Company reported G&A expenses of $177,927 and $306,599 for the quarter
and six months ended December 31, 2002, compared to $60,889 and $145,852 for the
same periods in 2001. Professional fees and travel expenses increased by
approximately $77,500 and $600, respectively, for the fiscal quarter ended
December 31, 2002 and approximately $96,900 and $3,500, respectively, for the
six months ended December 31, 2002 over the comparable periods of the prior
fiscal year primarily in connection with the Reorganization. As a result of the
suspension of all R&D efforts, G&A salaries and related expenses increased
approximately $14,800 and $31,300 for the quarter and six month periods ended
December 31, 2002 over the prior year as 100% of the president's time was
directed toward the Reorganization. Due to rising insurance costs, directors and
officers' insurance increased by approximately $17,200 and $18,700 for the
quarter and six months ended December 31, 2002 over the prior year. Other G&A
expenses fluctuated slightly resulting in a net increase to the combined
remaining G&A expenses of approximately $6,900 and $10,300 for the quarter and
six month period ended December 31, 2002 over 2001.

      Interest expense increased from $157,470 for the six month period ended
December 31, 2001 to $182,979 for the same period in 2002 primarily due to an
increase in total debt outstanding for the six months ended December 31, 2002.

LIQUIDITY AND CAPITAL RESOURCES

      Since inception, the Company has been totally dependent on financing from
outside sources to fund operations. At December 31, 2002, the Company reported
negative net worth of $5,269,437 and negative working capital of $5,283,745. The
Company continues to require additional capital for administrative expenses and
business development efforts currently being explored on behalf of the Company.
Management believes that the current core investor will continue to fund the
Company's operations on an as needed basis through the third quarter of the
current fiscal year. Management believes that the Company's continued
operational existence beyond that time is dependent upon its ability to: (1)
successfully raise additional capital; (2) complete the Reorganization; and (3)
achieve and maintain profitable operations. There can be no assurance that the
Company will be able to successfully raise the necessary capital, complete the
Reorganization, or achieve profitable operations.

      If the Company is able to achieve these goals, the Company's capital
requirements will then depend on numerous new factors, including customer
acceptance of the RWS Film Library (the "Film Library"), the resources required
to acquire, distribute and exploit the Film Library and to develop new cable
channels, the resources required to develop its marketing and sales
organization, and other factors. The Company believes that cash flow from
operations, coupled with the raising of the necessary capital, and any funds
that may become available under other financing arrangements will be adequate to
meet the Company's obligations and commitments, and will enable the Company to
continue to conduct its operations in accordance with the RWS business plan. The
Company's belief as to the adequacy of its capital resources is based in part on
the assumption that the distribution revenues from the Film Library will
materialize as presently anticipated. There can be no assurance that cash flow
will be as projected or that the Company's capital requirements will

                                       9
<PAGE>

not be materially greater than currently planned. Offerings of securities by the
Company, if successful, may have a significant dilutive effect on the Company's
shareholders. If the Company's future anticipated financial resources prove to
be inadequate, it may be required to reduce the scope of its operations or its
anticipated expansion, either of which could have a materially adverse effect on
the Company.

      Cash flows from financing activities for the six month period ended
December 31, 2002, and 2001 consisted of the issuance of 10% demand notes to
shareholders totaling $280,000 and $176,000, respectively. Cash flows for the
six month period ended December 31, 2002, were primarily used for administrative
expenses as management efforts were focused completely on the Reorganization.
Cash flows for the quarter ended December 31, 2001, were used for limited
product process development and administrative expenses.

      At December 31, 2002, the Company reported current assets of $33,918 and a
working capital deficit. Current liabilities exceeded current assets by
$5,283,745. At December 31, 2002, current liabilities of $5,317,663 consisted of
convertible, redeemable promissory notes to shareholders, demand notes payable
to shareholders, trade payables and accrued expenses which were incurred
primarily for 1) working capital loans 2) interest on the outstanding promissory
notes, 3) product design and development, and 4) operating costs. Accrued
interest on notes payable due to shareholders totaled approximately $1,148,000.
The Company intends to satisfy payment of accrued interest with cash from future
operations or funding, or by issuance of Common Stock. In addition, management
intends to negotiate settlement on approximately $67,400 of very old payables
and accrued expenses by payment of a reduced amount in cash or by issuance of
shares of the Company's Common Stock. Also, due to inadequacies in certain
product design and development by a contracted engineering firm, the Company is
currently disputing approximately $81,000 in engineering fees.

      Subsequent to the fiscal quarter ended December 31, 2002, the Company
issued one additional 10% demand note to its core investor totaling $40,000.
While there can be no assurance of the continuing availability of such
financing, management believes the current core investor will continue to fund
the Company's operations through the third quarter of the current fiscal year.

      There can be no assurance that the Company will be successful in raising
capital or closing the Reorganization. If the Company fails to do so or if the
interim financing heretofore provided by its core investor is suspended, it will
be forced to immediately discontinue operations and liquidate its assets. In
such an event, it is extremely unlikely that there would be any funds or
property available for distribution to shareholders in any such liquidation.


                           FORWARD LOOKING STATEMENTS

      Certain statements contained herein constitute "forward looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward looking statements include, without limitation, statements
regarding Advance Display Technologies, Inc.'s (the "Company") anticipated
marketing and production, need for working capital, future revenues and results
of operations. Factors that could cause actual results to differ materially
include, among others, the following: future economic conditions, the ability of
the Company to obtain sufficient capital to develop a profitable business, its
success in attracting and retaining qualified management and other personnel,
and generally to successfully execute a business plan that will take the Company
from a development stage entity to a profitable operating company. Many of these
factors are outside the control of the Company. Investors are cautioned not to
put undue reliance on forward
                                       10
<PAGE>

looking statements. Except as otherwise required by rules of the Securities and
Exchange Commission, the Company disclaims any intent or obligation to update
publicly these forward looking statements, whether as a result of new
information, future events or otherwise

      Statements in this report are qualified in their entirety by reference to
contracts, agreements, and other exhibits filed or incorporated with the
Company's Form 10-KSB for the fiscal year ended June 30, 2002.


ITEM 3.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

      Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and participation of the Company's
Chief Executive and Financial Officer (the "Officer") of the effectiveness of
the design and operation of the Company's disclosure controls and procedures
pursuant to Securities Exchange Act Rule 13a-14. Based upon that evaluation, the
Officer concluded that the Company's disclosure controls and procedures are
effective in timely alerting him to material information relating to the Company
required to be included in the Company's periodic SEC filings, including this
report.

Internal Controls

      There were no significant changes made in the Company's internal controls
or in other factors that could significantly affect these controls subsequent to
the date of his evaluation.

                                       11
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibit 99.1  Certificate of President, Chief Executive and Chief
             Financial Officer

         (b) No reports on Form 8-K were filed by the Company during the period
             covered by this report.

                                       12

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                                   SIGNATURES

      In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has caused this report on Form 10-QSB to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     ADVANCE DISPLAY TECHNOLOGIES, INC.
                                     (Registrant)




Date: February 19, 2003              /s/ Matthew W. Shankle
                                     -------------------------------------------
                                     Matthew W. Shankle
                                     President, Chief Executive and
                                     Financial Officer

                                       13

<PAGE>

                                 CERTIFICATIONS



I, Matthew W. Shankle, certify that:

1. I have reviewed this quarterly report on Form 10-QSB of December 31, 2002;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

   a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this quarterly report is being prepared;

   b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

   c) presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

   a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

   b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly


<PAGE>

affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.

Date:  February 19, 2003


                                       /s/ Matthew W. Shankle
                                       -----------------------------------------
                                       Matthew W. Shankle
                                       President, Chief Executive and
                                       Financial Officer