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                                                                     EXHIBIT 13
                  FORWARD - LOOKING STATEMENTS AND IMPORTANT
                        FACTORS AFFECTING FUTURE RESULTS

         Our disclosure and analysis in this report contains some
forward-looking statements. Forward-looking statements give our current
expectations or forecasts of future events. You can identify these statements
by the fact that they do not relate strictly to historical or current facts.
They use words such as "anticipate", "believe", "expect", "estimate",
"project", "intend", "plan", and other words and terms of similar meaning in
connection with any discussion of future operating or financial performance. In
particular, these include statements relating to future actions, prospective
products or product approvals, future performance or results of current and
anticipated products, sales efforts, expenses, the outcome of contingencies
such as legal proceedings, and financial results. From time to time, we also
may provide oral or written forward-looking statements in other materials we
release to the public.

         Any or all of our forward-looking statements in this report and in any
other public statements we make may turn out to be wrong. They can be affected
by inaccurate assumptions we might make or by known or unknown risks or
uncertainties. Many factors mentioned in the following discussion - for
example, product development, competition, and the availability of funding -
will be important in determining future results. Consequently, no
forward-looking statement can be guaranteed. Actual future results may vary
materially.

         We undertake no obligation to publicly update any forward-looking
statements, whether as the result of new information, future events, or
otherwise. You are advised, however, to consult any further disclosures we make
on related subjects in our 10-Q, 8-K, and 10-K reports to the SEC. Also note
that we provide the following cautionary discussion of risks, uncertainties,
and possibly inaccurate assumptions relevant to our business. These are factors
that we think could cause our actual results to differ materially from expected
and historical results. Other factors besides those listed here could also
adversely affect the Company. This discussion is provided as permitted by the
Private Securities Litigation Reform Act of 1995.

DFE PRODUCT DEVELOPMENT IS IN ITS EARLY STAGES AND THE OUTCOME IS UNCERTAIN

         Our Diamond Field Emission ("DFE") technology, and any products that
use this technology, will require significant additional development,
engineering, testing and investment prior to commercialization. Our leading
potential DFE product is a cathode, or light source, intended for use in a
display. If the cathode is successful, a display using this cathode is also a
possibility. The cathode or display may not be successfully developed. If
either of these products is developed, it may not be possible to produce these
products in significant quantities at a price that is competitive with other
similar products.

THERE ARE NO CURRENT DFE PRODUCT REVENUES

         We currently receive no revenue from any products related to our DFE
technology. The only revenues that we receive related to our DFE technology are
revenues for continued research on the technology. We may never receive product
revenues from the DFE technology.

OUR SUCCESS IS DEPENDENT ON OUR PRINCIPAL PRODUCTS

         Our DFE technology is an emerging technology. Our financial condition
and prospects are dependent upon market acceptance and sales of our DFE
products and our Electronic Billboard and related electronic display products.
Additional R&D needs to be conducted on the DFE products before marketing and
sales efforts can be commenced. Market acceptance of our products will be
dependent upon the perception within the electronics and instrumentation
industries of the quality, reliability, performance, efficiency, breadth of
application and cost-effectiveness of the products. There can be no assurance
that we will be able to gain commercial market acceptance for our products or
develop other products for commercial use.


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WE HAVE A HISTORY OF OPERATING LOSSES

         We have a history of operating losses and have never had a profitable
quarter or year. We have incurred operating losses as shown below:

<TABLE>
<CAPTION>
                Year Ended December 31                              Net Loss
                ----------------------                           --------------

                <S>                                              <C>
                         1992                                     ($1,630,978)
                         1993                                     ($7,527,677)
                         1994                                     ($7,255,420)
                         1995                                    ($14,389,856)
                         1996                                    ($13,709,006)
                         1997                                     ($6,320,901)
                         1998                                     ($3,557,548)
</TABLE>

         We may continue to incur additional operating losses for an extended
period of time as we continue to develop products. We do, however, expect to be
profitable in 1999. We may not be profitable beyond 1999. Wallace Sanders &
Company, independent auditors of the Company, have expressed substantial doubt
as to our ability to continue as a going concern based on these accumulated
losses from operations. See "Independent Auditors' Report." We have funded our
operations to date primarily through the proceeds from the sale of our equity
securities. In order to continue our transition from a contract research and
development organization to an organization with ongoing operations, we
anticipate that substantial product development expenditures will continue to
be incurred.

WE HAVE FUTURE CAPITAL NEEDS AND THE SOURCE OF THAT FUNDING IS UNCERTAIN

         We expect to continue to incur substantial expenses for R&D, product
testing, production, manufacturing, product marketing, and administrative
overhead. The majority of R&D expenditures are for the development of our DFE
technology and our electronic billboard product. Some of our proposed products
may not be available for commercial sale or routine use for a period of one to
two years. Commercialization of our existing and proposed products will require
additional capital in excess of our current sources of funding. A shortage of
capital may prevent us from achieving profitability for an extended period of
time. Because the timing and receipt of revenues from the sale of products will
be tied to the achievement of certain product development, testing,
manufacturing and marketing objectives, which cannot be predicted with
certainty, there may be substantial fluctuations in our results of operations.
If revenues do not increase as rapidly as anticipated, or if product
development and testing and marketing require more funding than anticipated, we
may be required to curtail our expansion and/or seek additional financing from
other sources. We may seek additional financing through the offer of debt or
equity or any combination of the two at any time.

         We have developed a plan to allow us to maintain operations until we
are able to sustain ourselves on our own revenue. At the present time we have
existing resources, including royalties receivable, to sustain ourselves for a
period of approximately 18 months from the date of this report at current
spending levels. We believe that we have the ability to continue to raise short
term funding, if necessary, to enable us to continue operations until our plan
can be completed. Our plan is primarily dependent on raising funds through the
licensing of our technology and through strategic partners and debt offerings.
We are also concentrating on raising revenue by seeking customers for our
electronic billboard product, which is currently under development.

         Our plan is based on current development plans, current operating
plans, the current regulatory environment, historical experience in the
development of electronic products and general economic conditions. Changes
could occur which would cause certain assumptions on which this plan is based
to be no longer valid. Our plan is primarily dependent on increasing revenues
and raising additional funds through strategic partners and additional debt
offerings. If adequate funds are not available from operations or additional
sources of financing, we may have to eliminate, or reduce substantially,
expenditures for research and development, testing and production of our
products. We may have to obtain funds through arrangements with other entities
that may require us to relinquish rights to certain of our technologies or
products. These actions could materially and adversely affect the Company.

RAPID TECHNOLOGICAL CHANGE COULD RENDER OUR PRODUCTS OBSOLETE AND WE MAY NOT
REMAIN COMPETITIVE


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         The display industry is highly competitive and is characterized by
rapid technological change. Our existing and proposed products will compete
with other existing products and may compete against other developing
technologies. Development by others of new or improved products, processes or
technologies may reduce the size of potential markets for our products. There
is no assurance that other products, processes or technologies will not render
our proposed products obsolete or less competitive. Most of our competitors
have greater financial, managerial, distribution, and technical resources than
us. We will be required to devote substantial financial resources and effort to
further R&D. There can be no assurance that we will successfully differentiate
our products from our competitors' products, or that we will adapt to evolving
markets and technologies, develop new products, or achieve and maintain
technological advantages.

WE HAVE TECHNOLOGIES SUBJECT TO LICENSES

         As a licensee of certain research technologies through various license
and assignment agreements with Microelectronics and Computer Technology
Corporation and DiaGasCrown, Inc., we have acquired rights to develop and
commercialize certain research technologies. In certain cases, agreements
require us to pay royalties on the sale of products developed from the licensed
technologies and fees on revenues from sublicensees. We also have to pay for
the costs of filing and prosecuting patent applications. Each agreement is
subject to termination by either party, upon notice, in the event of certain
defaults by the other party. The payment of such royalties may adversely affect
the future profitability of the Company.

OUR PRODUCTS MAY NOT BE ACCEPTED BY THE MARKET

         Since our inception, we have focused our product development and R&D
efforts on technologies that we believe will be a significant advance over
currently available technologies. With any new technology, there is a risk that
the market may not appreciate the benefits or recognize the potential
applications of the technology. Market acceptance of our products will depend,
in part, on our ability to convince potential customers of the advantages of
such products as compared to competitive products. It will also depend upon our
ability to train manufacturers and others to use our products. We currently
have a limited marketing organization and there is no assurance that we will be
able to successfully market our proposed products even if such products perform
as anticipated.

WE HAVE LIMITED MANUFACTURING CAPACITY AND EXPERIENCE

         We have no established commercial manufacturing facilities in the
areas in which we are conducting our principal research. The management team
has commercial manufacturing and marketing experience in other industries and
with other products in the display industry; however, we have no experience in
manufacturing our proposed products. At the present time, we have no intention
of establishing a manufacturing facility. We are focusing our efforts on
licensing our technology to others for use in their manufacturing processes. We
intend to contract with a qualified manufacturer for assembly services related
to our electronic billboard product, which is currently under development. To
the extent that any of our other products require manufacturing facilities, we
intend to contract with a strategic partner or other qualified manufacturer.


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WE MAY NOT BE ABLE TO MARKET AND SELL OUR PRODUCTS

         We intend to establish and develop a sales organization to promote,
market, and sell our products. This may require significant additional
expenditures, management resources, and training time. There can be no
assurance that we will be able to establish a successful sales organization.

WE ARE DEPENDENT ON THE AVAILABILITY OF MATERIALS AND SUPPLIERS

         We anticipate that the materials to be used in producing our future
products will be purchased from outside vendors. In certain circumstances, we
may be required to bear the risk of material price fluctuations. We anticipate
that the majority of raw materials used in products to be manufactured by the
Company or its strategic partners will be readily available. However, there is
no assurance that these materials will be available in the future, or if
available, will be procurable at prices favorable to the Company or its
strategic partners.

LOSS OF KEY PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS

         Our future success will depend on our ability to attract and retain
highly qualified scientific, technical and managerial personnel. Competition
for such personnel is intense. We may not be able to attract and retain all
personnel necessary for the development of our business. In addition, much of
the know-how and processes developed by the Company reside in our key
scientific and technical personnel. This know-how and these processes are not
readily transferable to other scientific and technical personnel. The loss of
the services of key scientific, technical and managerial personnel could have a
material adverse effect on us.

WE MAY NOT BE ABLE TO PROVIDE SYSTEM INTEGRATION

         In order to prove that our technologies work and will produce a
complete product, we must ordinarily integrate a number of highly technical and
complicated subsystems into a fully-integrated prototype. There is no assurance
that we will be able to successfully complete the development work on any of
our proposed products or ultimately develop any marketable products.

WE MAY BE UNABLE TO ENFORCE OR DEFEND OUR OWNERSHIP AND USE OF PROPRIETARY
TECHNOLOGY

         Our ability to compete effectively with other companies will depend on
our ability to maintain the proprietary nature of our technology. Although we
have been awarded, have filed applications for, or have been licensed
technology under numerous patents, the degree of protection offered by these
patents or the likelihood that pending patents will be issued is uncertain.
Competitors in both the United States and foreign countries, many of which have
substantially greater resources and have made substantial investment in
competing technologies, may already have, or may apply for and obtain patents
that will prevent, limit or interfere with our ability to make and sell our
products. Competitors may also intentionally infringe on our patents. The
defense and prosecution of patent suits is both costly and time-consuming, even
if the outcome is favorable to the Company. In foreign countries, the expenses
associated with such proceedings can be prohibitive. In addition, there is an
inherent unpredictability in obtaining and enforcing patents in foreign
countries. An adverse outcome in the defense of a patent suit could subject us
to significant liabilities to third parties, require disputed rights to be
licensed from third parties or require us to cease selling our products.
Although third parties have not asserted infringement claims against us, there
is no assurance that third parties will not assert such claims in the future.
Claims that our products infringe on the proprietary rights of others are more
likely to be asserted after commencement of commercial sales incorporating our
technology.


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         We also rely on unpatented proprietary technology, and there is no
assurance that others will not independently develop the same or similar
technology, or otherwise obtain access to our proprietary technology. To
protect our rights in these areas, we require all employees and most
consultants, advisors and collaborators to enter into confidentiality
agreements. These agreements may not provide meaningful protection for our
trade secrets, know-how, or other proprietary information in the event of any
unauthorized use, misappropriation or disclosure of such trade secrets,
know-how, or other proprietary information. While we have attempted to protect
proprietary technology that we develop or acquire and will continue to attempt
to protect future proprietary technology through patents, copyrights and trade
secrets, we believe that our success will depend upon further innovation and
technological expertise.

OUR REVENUES HAVE BEEN DEPENDENT ON GOVERNMENT CONTRACTS IN THE PAST

         In previous years, a significant part of our revenues were derived
from contracts with agencies of the United States government. Following is a
summary of those revenues in recent years:

<TABLE>
<CAPTION>
                                                         Revenues from      Percentage of
                  Year Ended December 31                Gov. Contracts      Total Revenue
                  ----------------------               ---------------      -------------

                  <S>                                  <C>                   <C>
                         1992                          $    930,000             99%
                         1993                          $  1,147,000             89%
                         1994                          $    820,000             41%
                         1995                          $  1,009,000             33%
                         1996                          $  2,869,000             50%
                         1997                          $    854,000             24%
                         1998                          $          0              0%
</TABLE>


         We currently have no significant commitment for any future government
funding and do not intend to seek any government funding unless it directly
relates to achievement of our strategic objectives. To the extent that we are
unable to obtain funding from alternate sources, this could adversely affect
our ability to continue to perform research and development on our proposed
products.

         Contracts involving the United States government are, or may be,
subject to various risks including, but not limited to, the following:

-    Unilateral termination for the convenience of the government
-    Reduction or modification in the event of changes in the government's
     requirements or budgetary constraints
-    Increased or unexpected costs causing losses or reduced profits under
     fixed-price contracts or unallowable costs under cost reimbursement
     contracts
-    Potential disclosure of our confidential information to third parties
-    The failure or inability of the prime contractor to perform its prime
     contract in circumstances where we are a subcontractor
-    The failure of the government to exercise options provided for in the
     contracts
-    The right of the government to obtain a non-exclusive, royalty free,
     irrevocable world-wide license to technology developed under contracts
     funded by the government if we fail to continue to develop the technology


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YEAR 2000 ISSUES MAY EXPOSE US TO LIABILITY

         Some computers, software, and other equipment include programming code
in which calendar year data is abbreviated to only two digits. As a result of
this design decision, some of the systems could fail to operate or fail to
produce correct results if "00" is interpreted to mean 1900 rather than 2000.
These problems are widely expected to increase in frequency and severity as the
year 2000 approaches and are commonly referred to as the "Year 2000 Problem."

The Year 2000 Problem presents us potential risks including, but not limited
to, the following:

-    Products sold to customers - We have had very limited product sales to
     customers and believe that all products sold to customers are Year 2000
     complaint. Our risk in this area is extremely limited.

-    Internal Infrastructure - We have completed an internal evaluation and
     have determined that all of our internal systems will be Year 2000
     compliant well prior to the end of 1999. Our risk in this area is
     extremely limited.

-    Suppliers/third party relationships - There is no assurance that our
     suppliers or other third parties that we rely on will resolve any or all
     Year 2000 problems with their systems on a timely basis. Since we have no
     significant suppliers of product, we believe our risk is limited in this
     area.

-    External Infrastructure - We are dependent on other entities such as
     governmental units, utilities, banks, etc. that maintain an external
     infrastructure necessary for us to operate. Although we expect that such
     entities are addressing and solving their Year 2000 problems, there is no
     assurance that these problems will be addressed and solved on a timely
     basis.

WE ARE EXPOSED TO MATERIAL LITIGATION

         We have been sued by a former customer of Plasmatron for damages that
the former customer claims that it incurred as a result of the alleged failure
of the machine provided by Plasmatron to perform as intended. Various trade
creditors have also filed suit to collect unpaid trade amounts due. We expect
these items to be resolved with no material impact on our financial statements.
If we were to become subject to a judgment that exceeds our ability to pay,
that judgment could have a material impact on our financial condition and could
affect our ability to continue in existence.


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