Tableof Contents

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

## **FORM 10-KSB**

|  ý | Annual report under Section 13 or 15(d) of theSecurities Exchange Act of 1934 for the fiscal year endedDecember 31, 2002; or |
|--------------|------------------------------------------------------------------------------------------------------------------------------|
|   ̈ | Transition report under Section 13 or 15(d)of the Securities Exchange Act of 1934                                            |

         COMMISSION FILE NO. 1-11602

**SI DIAMOND TECHNOLOGY, INC.**(Exact name of small business issuer as specified in itscharter)

| **TEXAS**(State of Incorporation) | **76-0273345** (IRS Employer IdentificationNumber) |
|-----------------------------------|----------------------------------------------------|

**3006 Longhorn Boulevard, Suite 107, Austin, Texas 78758**(Address of principal executive office, including Zip Code)

          Registrant's telephone number,including area code: **(512) 339-5020**

          Securities registered pursuant toSection 12(b) of the Exchange Act:

******TITLE OF EACHCLASS**

Common Stock, $0.001 par value  

Securities registered pursuant to Section 12(g) of the Exchange Act:None

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

Yes  þ    No   ̈

       Indicate by check mark if disclosure ofdelinquent filers in response to Item 405 of Regulation S-B is not contained in this form and will not be contained, to the best ofregistrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-KSBor any amendment to this Form 10-KSB.     þ

          State issuer's revenues for itsmost recent fiscal year:  $1,414,848

        The aggregate market value of the Common Stockheld by non-affiliates of the Registrant, based upon the closing sale price of the Common Stock on the OTC Bulletin Board system onMarch 11, 2003 of $0.35, was approximately $28,333,610. Shares of Common Stock held by each officer and director and by each personwho may be deemed to be an affiliate have been excluded.

        As of March 11, 2003, the registrant had82,164,807 shares of Common Stock issued and outstanding.

Transitional Small Business Disclosure Format (check one).

Yes    ̈    No ý

----

----

**TABLE OF CONTENTS**

| **Part          I.**  | Page          1  |
|-----------------------|------------------|
|                  |                  |  |  |
|                  | Item          1. | *Business* | Page          1 |
|                       | Item 2.          | *Properties* | Page 8 |
|                  | Item  3.         | *Legal Proceedings* | Page 9 |
|                       | Item  4.         | *Submission of Matters to a Vote of Security Holders* | Page 9 |
|                  |                  |  |  |
| **PART II**           | Page          10 |
| * *              |                  |  |  |
|                  | Item  5.         | *Market for Registrant’s Common Stock and Related Stockholder Matters* | Page          10 |
|                       | Item 6*.*        | *Management's Discussion and Analysis of Financial Condition and Results of**Operations* | Page 14 |
|                  | Item 7*.*        | *Financial  Statements* | Page 19 |
|                       | Item 8*.*        | *Changes in and Disagreements with Accountants on Accounting and Financial**Disclosure* | Page          46 |
|                  |                  |  |  |
| **PART          III** | Page          47 |
| * *              |                  |  |  |
|                  | Item 9*.*        | *Directors, Executive Officers,  Promoters, Control Persons; Compliance          with Section**16 (a) of the Exchange  Act* | Page          47 |
|                       | Item 10.         | *Executive  Compensation* | Page          49 |
|                  | Item 11*.*       | *Security Ownership of Certain Beneficial  Owners and  Management and           Related Stockholder Matters* | Page          52 |
|                       | Item 12*.*       | *Certain Relationships and Related  Transactions* | Page          54 |
|                  | Item 13*.*       | *Exhibits and Reports on Form  8-K * | Page          54 |
|                       | Item 14*.*       | *Controls and Procedures* | Page          55 |

 

Page i

----

Tableof Contents

**FORWARD - LOOKING STATEMENTS AND IMPORTANTFACTORS AFFECTING FUTURE RESULTS**

Ourdisclosure and analysis in this report contains some forward-looking statements. Forward-looking statements give our currentexpectations or forecasts of future events. They use words such as “anticipate”, “believe”,“expect”, “estimate”, “project”, “intend”, “plan”, and other words andterms of similar meaning in connection with any discussion of future operating or financial performance. In particular, theseinclude statements relating to future actions, prospective products or product approvals, future performance or results of currentand 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 thepublic.

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

Weundertake 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-QSB, 8-K, and10-KSB reports to the SEC. Also note that we provide the following cautionary discussion of risks, uncertainties, and possiblyinaccurate assumptions relevant to our business. These are factors that we think could cause our actual results to differmaterially from expected and historical results. Other factors besides those listed here could also adversely affect us.

**We have no current royalty agreements producing revenue**

Ourfuture strategy is dependent on licensing our technology to other companies and obtaining royalties based on products that theselicensees develop and sell. We have no plans to manufacture and sell any carbon nanotube field emission products ourselves, and assuch, we have no carbon nanotube field emission product revenues. We signed a license agreement in 1999, for a one-time, up front,payment of approximately $5.6 million. This was a non-exclusive license to Canon, Inc. that covered substantially all of ourpatents, including a portion of those related to the carbon nanotube field emission technology. This license will produce no futurerevenue unless Canon decides to license the remaining patents. In 2002, we signed another license agreement with a large Japanesedisplay manufacturer. This license agreement included no upfront payment, but calls for royalties of 2% of the companies sales ofproducts using our technology. The licensee also will receive credit against royalties due under the agreement for $2 million ofresearch funding that the licensee has provided to us from 2001 to 2003. Accordingly, no royalties will be due under the agreementuntil sales of the licensee’s products exceed $100 million.

Upon completion of thedevelopment process, we expect to license our technology to be used in the HYFEDTM and PET products, as well as other carbonnanotube applications. See additional discussion related to the HYFEDTM and PET products in the risk factor “Ourproduct development is in its early stages and the outcome is uncertain”. It is our intention that all future licenseagreements will include a provision that requires the payment of ongoing royalties, although there can be no assurance that willoccur. We would expect to license our technology for these products, if they are successfully developed to some or all of ourdevelopment partners that were previously identified or to other third parties interested in manufacturing the products.

Page ii

----

Tableof Contents

**Our development partners have certain rights to jointly developed property and tolicense our technology**

We have committed to license our technology to our development partners uponcompletion of certain development projects that are in process. The terms of any such license have not yet been determined. One ofour development partners, a large Japanese display company, has paid us $2.0 million for research services and has the right tooffset this payment against any future license fee payments due as a result of an existing license agreement that we have with thiscompany. Our development partners in the HYFEDTM project also have rights to any jointly developed property, however any suchjointly developed property would be based, at least in part, on our underlying technology and would require our partners to enterinto an agreement with us. See also “Our  product development is in its early stages and the outcome is uncertain”for further discussion .

**Our****product development is in its early stagesand the outcome is uncertain**

Ourcarbon nanotube field emission technology, and certain products that use this technology, will require significant additionaldevelopment, engineering, testing and investment prior to commercialization. We are exploring the use of our technology in severaldifferent types of products, in addition to the cathodes that we have developed that currently use this technology. We haveadditional potential carbon nanotube field emission products. We are developing these products jointly with others based on ourtechnology. Upon successful completion of the development process, our development partners will be required to license ourtechnology to produce and sell the products. Our development partners retain all rights to any intellectual property that theydevelop in the process. Consequently, it may not be possible for others to produce these products without obtaining licenses fromboth our development partners and us.

One productbeing developed is a Picture Element Tube (“PET”) intended for use initially in large indoor displays. If the PET issuccessful, we expect to enhance it to allow it to be used in outdoor displays. We are jointly developing this product with a largeJapanese display company. We are overseeing the project and incurring the majority of the costs. Our development partner hasprovided us $1.1 million to cover our portion of the cost. Our development partner is also incurring internal costs related to theresearch; however the $1.1 million that we are incurring represents the majority of the costs incurred on the project. Ourdevelopment partner has licensed our technology and is obligated to pay future royalties of 2% of future sales of its products thatuse our technology. Our partner can offset the $1.1 million in funding that it has provided for the PET plus $0.9 million offunding that it has provided for another project, or a total of $2.0 million against future royalties due under this licenseagreement. 

We are alsodeveloping our technology to be applied in the production of large screen TVs (greater than 42”) and have developed a14” prototype to demonstrate the capabilities of our technology in this area. We are also working on a product called theHyFEDTM, which combines what we believe to be the best properties of a cathode ray tube (“CRT”) and our carbonnanotube field emission technology.  We believe this would be the logical next step in the improvement of the prototypes thatwe have developed using our technology and will ultimately reduce the production cost of products based on our technology. It isour intention to license our HyFEDTM technology to be used in the production of flat-screen TV applications that are costcompetitive with CRTs. We are jointly developing this product with the aid of a consortium that includes Electrovac GESMBH, ImagingSystem Technology, Inc., Supertex, Inc., Schott Fiber Optics, Lead Sangyo Co., Ltd., Shanghai Novel Color Picture Tube Co., Ltd.,and Shanghai Vacuum Electron Devices Co., Ltd. (see exhibits 10.14 through 10.20 to this annual report on from10-KSB). We areoverseeing this consortium and expect to incur approximately 50% of the total costs of the consortium over the life of the project.Each member of the consortium is responsible for its own costs. Upon completion of the project, each consortium member has thefirst right to enter into agreements with us to license our technology. We expect any products that are developed to bemanufactured by other members of the consortium. No terms have been negotiated for any potential license agreements.

Page iii

----

Tableof Contents

Wecurrently supply cathodes using our carbon nanotube field emission technology to Oxford Instruments, Inc. in small quantities asdescribed in greater detail on page 2 of this 10-KSB under “Business Development Strategies”.

If any of the productsthat are being developed using our carbon nanotube field emission technology are developed, it may not be possible for potentiallicensees to produce these products in significant quantities at a price that is competitive with other similar products. At thepresent time, the only revenue that we receive related to our carbon nanotube field emission technology is related to reimbursedresearch expenditures and the cathode sales to Oxford Instruments. These revenues are identified in our quarterly filings on form10-QSB and our annual filings on form 10-KSB as revenues of our Applied Nanotech, Inc. subsidiary in the related“Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections.

**Our products may not be accepted by the market**

Since our inception, wehave focused our product development and R&D efforts on technologies that we believe will be a significant advancement overcurrently available technologies. With any new technology, there is a risk that the market may not appreciate the benefits orrecognize the potential applications of the technology. Market acceptance of our products and products using our technology willdepend, in part, on our ability to convince potential customers of the advantages of such products as compared to competitiveproducts. It will also depend upon our ability to train manufacturers and others to use our products.

**We have a history of net losses**

We have ahistory of net losses. Our only profitable year was 1999, based on the strength of a license agreement of approximately $5.6million signed in March 1999.  We have incurred net income and  losses as shown below:

| Year Ended December 31  | NetIncome       (Loss)                                                                   |
|------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |                                                                                                                                                 |
| 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)                                |
| 1999                         | $1,118,134                        |
| 2000                         | ($7,671,014)                                |
| 2001                         | ($5,081,559)                                |
| 2002                         | ($4,908,856)                                |

Although we expect to beprofitable in the future, we may not be.  Our profitability in 2003 is dependent on the signing of additional licenseagreements or obtaining additional research funding. We may, however, continue to incur additional operating losses for an extendedperiod of time as we continue to develop products. We do, however, expect the magnitude of those losses, if they continue, todecrease. Sprouse & Anderson, L.L.P., independent auditors of the Company, have expressed uncertainty as to our ability tocontinue as a going concern based, in part, on our accumulated losses from operations in prior years. See “IndependentAuditor’s Report.” We have funded our operations to date primarily through the proceeds from the sale of our equitysecurities and debt offerings. We are primarily a contract research and development organization and are dependent on licenseagreements and research funding to achieve profitability.   In order to continue development of our technology, we anticipatethat substantial research and development expenditures will continue to be incurred.

 

Page iv

----

Tableof Contents

**We are exposed to litigation liability**

We havelawsuits that arise in the normal course of business, including lawsuits by various trade creditors related to payment of amountsdue. We have been subject to litigation in the past and have settled litigation in the past that has resulted in material payments.We expect all current lawsuits to be resolved with no material impact on our financial statements, and we are unaware of any otherpotential significant litigation. If we were to become subject to a judgment that exceeds our ability to pay, that judgment wouldhave a material impact on our financial condition and could affect our ability to continue in existence.

**We have future capital needs and the source of that funding isuncertain**

We expectto continue to incur substantial expenses for R&D, product testing, and administrative overhead. The majority of R&Dexpenditures are for the development of our carbon nanotube field emission technology. Some of our other proposed products may notbe available for commercial sale or routine use for a period of up to two years. Commercialization of our existing and proposedproducts will require additional capital in excess of our current capital. A shortage of capital may prevent us from achievingprofitability for an extended period of time. Because the timing and receipt of revenues from the sale of products will be tied tothe achievement of certain product development, testing, manufacturing and marketing objectives, which cannot be predicted withcertainty, there may be substantial fluctuations in our results of operations. If revenues do not increase as rapidly asanticipated, or if product development and testing require more funding than anticipated, we may be required to curtail ourexpansion and/or seek additional financing from other sources. We may seek additional financing through the offer of debt or equityor any combination of the two at any time.

We havedeveloped a plan to allow us to maintain operations until we are able to sustain ourselves on our own revenue, however our currentcash levels are not sufficient to fund operations until we reach that point. We have the existing resources to continue operationsfor approximately two to four weeks. We have been operating in this manner for an extended period of time, and we believe that wehave the ability to continue to raise short term funding, if necessary, to enable us to continue operations until our plan can becompleted, although there can be no assurance that this is the case.  Our plan is primarily dependent on raising funds throughthe licensing of our technology, revenue generated from performing contract research services, and through debt and equityofferings.

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

Page v

----

Tableof Contents

**Rapid technological changes could render our products obsolete and we maynot remain competitive**

Thedisplay industry is highly competitive and is characterized by rapid technological change. Our existing and proposed products willcompete with other existing products and may compete against other developing technologies. Development by others of new orimproved products, processes or technologies may reduce the size of potential markets for our products. There is no assurance thatother products, processes or technologies will not render our proposed products obsolete or less competitive. Many of ourcompetitors have greater financial, managerial, distribution, and technical resources than we do. We will be required to devotesubstantial financial resources and effort to further R&D. There can be no assurance that we will successfully differentiateour products from our competitors' products, or that we will adapt to evolving markets and technologies, develop new products, orachieve and maintain technological advantages.

 

 

Page vi

----

Tableof Contents

**We have technologies subject to licenses**

As a licensee ofcertain research technologies through license and assignment agreements with Microelectronics and Computer Technology Corporation(“MCC”), we have acquired rights to develop and commercialize certain research technologies. In certain cases, we arerequired 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. The agreement is subject to termination by eitherparty, upon notice, in the event of certain defaults by the other party. We expect any royalty payments to be made to MCC to beinsignificant based on the substantial amounts of revenues that would have to be generated to offset the costs of maintaining thepatents over the years.

We havealso licensed certain patents related to carbon nanotube technology from Till Keesman. We licensed 6 patents in exchange for apayment of $250,000 payable in shares of our common stock. Under the terms of the agreement, we are obligated to pay license feesequal to 50% of any royalties received by the Company related to these patents. We are allowed to offset certain expenses, up to amaximum of $50,000 per year, against payments due under this agreement. The agreement also contains provisions related to minimumlicense fee payments. The agreement originally called for minimum additional license fees of $500,000 by June 2002, however, sincethe patents were still pending and not officially issued at that point, the agreements were amended. Additional license fees of$100,000 were paid and $400,000 was deferred until the patents are issued. If we do not pay additional cumulative license fees of$1,000,000 (including any fees applied toward the previously described minimum due in June 2002) by May 2004, the license willterminate at that point. We are not obligated to make any additional payments, but the license may terminate if these payments arenot made. The effect of termination of this license could have a significant impact on us. At the present time, we have no productor revenue that is dependent on these patents. We are developing products that may depend, in part, on these patents, includingboth the HYFEDTM and PET. If these products are successfully developed and they use the licensed technology, termination ofthis license agreement would have a significant negative impact. We expect to make the minimum payments due under the agreement ifwe have products or other licenses that are dependent on these patents. This payment could have a significant impact on ourliquidity if it is paid in cash, or cause us to raise additional funds through the issuance of equity or debt.

Certain of the products that weare developing may, in part, be based on some of the patents that we have licensed. Both of the main products that we aredeveloping based on our carbon nanotube field emission technology may rely on certain of the patents. Successful completion of thedevelopment work and introduction of the HyFEDTM and PET products may require us to pay royalties or license fees to eitherMCC or Till Keesman.

**We have limited manufacturing capacity and experience**

We haveno established commercial manufacturing facilities in the area of  the carbon nanotube field emission technology in which weare conducting our principal research . At the present time, we have no intention of establishing a manufacturing facility relatedto our carbon nanotube field emission technology. We are focusing our efforts on licensing our technology to others for use intheir manufacturing processes. To the extent that any of our other products require manufacturing facilities, we intend to contractwith a qualified manufacturer.

Page vii

----

Tableof Contents

**Our success is dependent on our principal products and technology**

Ourcarbon nanotube field emission technology is an emerging technology. Our financial condition and prospects are dependent upon ourlicensing the technology to others and upon market acceptance of our electronic display products. Additional R&D needs to beconducted on the carbon nanotube field emission technology before others can produce products using this technology. Marketacceptance of  our products and products using our technology will be dependent upon the perception within the electronics andinstrumentation industries of the quality, reliability, performance, efficiency, and breadth of application and cost-effectivenessof the products. There can be no assurance that we will be able to gain commercial market acceptance for our products or developother products for commercial use.

 

 

 

Page viii

----

Tableof Contents

**We are dependent on the availability of materials andsuppliers**

Thematerials used in producing our current and future products are purchased from outside vendors. In certain circumstances, we may berequired to bear the risk of material price fluctuations. We anticipate that the majority of raw materials used in products to bedeveloped by us will be readily available. However, there is no assurance that the current availability of these materials willcontinue in the future, or if available, will be procurable at favorable prices.

**We may be unable to enforce or defend our ownership and use of proprietarytechnology**

Ourability to compete effectively with other companies will depend on our ability to maintain the proprietary nature of ourtechnology. Although we have been awarded patents, have filed applications for patents, or have licensed technology under patentsthat we do not own, the degree of protection offered by these patents or the likelihood that pending patents will be issued isuncertain. Competitors in both the United States and foreign countries, many of which have substantially greater resources and havemade 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. Thedefense and prosecution of patent suits is both costly and time-consuming, even if the outcome is favorable to us. In foreigncountries, the expenses associated with such proceedings can be prohibitive. In addition, there is an inherent unpredictability inobtaining and enforcing patents in foreign countries. An adverse outcome in the defense of a patent suit could subject us tosignificant liabilities to third parties. Although third parties have not asserted infringement claims against us, there is noassurance that third parties will not assert such claims in the future.

We alsorely on unpatented proprietary technology, and there is no assurance that others will not independently develop the same or similartechnology, or otherwise obtain access to our proprietary technology. To protect our rights in these areas, we require employees,consultants, advisors and collaborators to enter into confidentiality agreements. These agreements may not provide meaningfulprotection for our trade secrets, know-how, or other proprietary information in the event of any unauthorized use, misappropriationor disclosure of such trade secrets, know-how, or other proprietary information. While we have attempted to protect proprietarytechnology 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 technologicalexpertise.

**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 highlytechnical and complicated subsystems into a fully integrated prototype. There is no assurance that we will be able to successfullycomplete the development work on some of our proposed products or ultimately develop any market for those products.

**The loss of key personnel could adversely affect ourbusiness**

Ourfuture 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 ofour business. In addition, much of the know-how and processes developed by us reside in our key scientific and technical personnel.The loss of the services of key scientific, technical and managerial personnel could have a material adverse effect onus.

Page ix

----

Tableof Contents

**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:

| Year Ended December 31 | Revenues from Government               Contracts         Percentage of        Total Revenue
 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%

 1999

$0                 

 0%

2000

$352,341                 

13%

 2001

 $466,680                 

 15%

 2002

 $254,152                 

 18%

Wecurrently have no binding commitments for future government funding, but have received tentative approval for a grant ofapproximately $740,000. We do not intend to seek any government funding unless it directly relates to achievement of our strategicobjectives.

Contracts involving the UnitedStates 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

 

 
 
Page x
   
Tableof Contents

**PART I.**

When used in this document, the words “anticipate”, “believe”, “expect”,“estimate”, “project”, “intend”, “plan”, and similar expressions are intended toidentify forward-looking statements. Such statements are subject to certain risks, uncertainties, and assumptions. Should one ormore of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may varymaterially from those anticipated, believed, expected, estimated, projected, intended, or planned. For additional discussion ofsuch risks, uncertainties, and assumptions, see “Forward-Looking Statements and Important Factors Affecting FutureResults” included at the beginning of this report.

**Item 1.  *Business.***

**DESCRIPTION OF BUSINESS**

**General**

SI Diamond Technology, Inc., a Texas corporation, acting through its subsidiaries, is engaged in the development of products andservices based principally on novel applications of carbon nanotube technology using thin films and the development and applicationof display technologies. In 2002, we restructured the company to narrow our focus to our highest potential return businesses and tomake the most efficient use of our limited resources. We shut down the sales, marketing, and engineering operations of ElectronicBillboard Technology, Inc. to concentrate on licensing the proprietary technology held by EBT. As a result of this, Sign Buildersof America, Inc. was no longer a core part of our strategy for the future. To raise additional cash and to allow management tofocus all of its attention on its remaining high potential businesses, we sold the assets of SBOA in October 2002.

Webelieve that microelectronic and other applications of carbon nanotube technology will play an important role in the display,electronics, and other industries. Our research at ANI is focused on identifying key applications of this technology,with a particular focus on the display industry. In addition to the electronics industry, we are also working on applications ofour technology in the medical, x-ray, and wireless communication industries. Based on our research, we are currently engaged in thedevelopment of uses for our carbon nanotube field emission technology. We have also developed and patented electronic displayproducts based on existing technology. We believe that our greatest growth opportunity lies in our carbon nanotube field emissiontechnology and products that are developed using this technology.

We wereincorporated in Texas in 1987. Our directly and indirectly owned subsidiaries are as follows:

        Subsidiary                                                                
State ofIncorporation  
Status
Applied Nanotech, Inc. (“ANI”)

 Delaware

 Active

Electronic Billboard Technology, Inc. (“EBT”)

 Delaware

Active

Sign Builders of America, Inc. (“SBOA”)

 Delaware

 Inactive

Ourbusiness is primarily the development and commercialization of carbon nanotube field emission technology. We also conduct contractresearch and development for United States governmental agencies and large companies. The business efforts of SI Diamond havearisen out of our interest in nanoparticles and thin film materials, notably carbon nanotubes,  thin carbon film, diamondfilm, and diamond-like carbon film ("DLC"). These interests have led us into microelectronics-related processes, thin film basedcarbon nanotube field emission technology, and electronic display products.

Weconduct our operations through our subsidiaries. ANI is conducting research on and developing uses for carbon nanotube technology.Where appropriate, we enter into collaborations with third parties as discussed in greater detail under the heading“Technology Agreements” later in this section. EBT developed a patented display product called the E-WindowTM. InAugust 2002 EBT restructured and shut down all marketing, development, and engineering operations and redirected its focus tolicensing its technology. In October 2002, we sold the net assets of SBOA and it is now inactive.

Page 1
   
Tableof Contents

Weincurred research and development expense of $1,616,634 in 2002 and $2,368,744 in 2001. Some of our proposed products will requiresignificant additional development, engineering, testing and investment prior to commercialization and certain of these proposedproducts may not be available for commercial sale or routine use for a period of up to two years. We intend to seek funding forthis research, where possible. There is no assurance that all products currently under development will be successfullydeveloped,  produced in commercial quantities on a cost-effective basis, or marketed successfully.

**Business  Segments**

***Applied Nanotech, Inc**. * ANI  was incorporated in January 1997 and is developing our proprietary carbonnanotube field emission technology. In the past, our research has concentrated on the emission properties of diamond likesubstances. Diamond is a subset of carbon and our research has indicated that carbon is actually a better emitter. Accordingly, ourresearch is now focused in the broader area of carbon nanotube field emission technology and its application to the electronics,medical, x-ray, and wireless communication industries.

We aredeveloping a new display technology, the HyFEDTM, which combines what we believe to be the best properties of cathode raytubes (“CRTs”) and our carbon nanotube field emission technology. We are also expanding our research to apply ourtechnology to other non-display related fields. Our plans for this technology are discussed in the section entitled “BusinessDevelopment Strategies” later in this report. We successfully completed phase I of our HyFEDTM development by building a4” monochrome proof of concept. As part of phase II, we developed a proof of concept with an active gray scale.

Another intended use for the technology is ina PET. The PET is a unique, high brightness, multi-color display component intended for use initially in outdoor billboards, indoorvideo walls, and alphanumeric displays.

***Electronic Billboard Technology, Inc***. EBT was incorporated in January 1997 to focus on developing sun-readabledisplay products for outdoor use.  Its initial primary product focus was an electronic billboard which would enable theoutdoor advertising industry to exploit the Internet and information revolution by placing ads at different locations at differenttimes. The focus of EBT was shifted to displays for indoor use that could be used as part of an overall point of purchaseadvertising program. We developed a patented product called the E-WindowTM and currently are attempting to license thistechnology to others. Our plans for our electronic display products are discussed in greater detail in the section entitled“Business Development Strategies” later in this report.

***Sign Buildersof America, Inc.*** SBOA was incorporated in August 1999 to acquire the assets (including the right to use the name) andcertain liabilities of a company operating under the same name. In October 2002, we sold the assets of SBOA and the company is nowinactive. SBOA was a manufacturer of high quality signage that operated primarily in central Texas. SBOA assisted in thedevelopment of the electronic billboard and other areas of research at EBT. However, with the shift in strategy at EBT to focus onlicensing its technology, SBOA was no longer a core part of our operations.

***Other. *** We also incur general overhead to operate the Company that is not associated with anyspecific subsidiary.

***Revenue.*** We had revenue in 2002 of $1,284,462 from ANI and $130,386 from EBT. In 2001, we had revenue of $1,091,951from ANI and $10,000 from EBT.

**Business Development Strategies**

***Overall***.  We are primarily a technology company.  We are focusing our efforts on research, productdevelopment, and licensing our technology to others. ANI is focused on developing world-class technologies using carbon nanotubesand carbon films for electron field emission applications. EBT is focused on licensing its patented E-WindowTM technology. Wehave no plans to establish any manufacturing facilities in the foreseeable  future and manufacturing is not a part of our corestrategy. To the extent that we need to develop manufacturing capabilities, we intend to use manufacturing partnerships, jointventures, or arrange to have products manufactured through contract manufacturers. 

Page 2
   
Tableof Contents

**ANI**

***Licensing agreements**.*We have an extensive patent portfolio that we have developed andacquired over the years. Licensing of this technology to major companies in the display industry is a critical part of our overallstrategic plan and critical to achieving profitability in the short run. In March 1999, we signed our first significant licenseagreement with Canon, Inc. In exchange for a one-time, up-front payment of approximately $5.6 million, Canon was granted anon-exclusive right to use a portion of our technology. In 2002, we signed another license agreement with a large Japanese displaymanufacturer. This license agreement included no upfront payment, but calls for royalties of 2% of the companies sales of productsusing our technology. The licensee also will receive credit against royalties due under the agreement for $2 million of researchfunding that the licensee has provided to us from 2001 to 2003. Accordingly, no royalties will be due under the agreement untilsales of the licensee’s products exceed $100 million. We expect to sign multiple additional license agreements over the nextfew years and we expect that such license agreements will include both an up-front payment and a continuing royalty stream based onthe products sold by the licensee. We have made significant progress on our carbon nanotube based carbon nanotube field emissiontechnology since the time of the Canon license agreement and believe our patent portfolio to be much more valuable than it was atthe time of the Canon license agreement.

***Carbon Nanotube FieldEmission***Technology. The major short run focus of ANI is the continued development andcommercialization of its carbon nanotube field emission technology.  Our current research and development efforts are focusedon developing our technology for use in the display, medical, x-ray, and wireless communication industries. We are focusing ourresearch related to the display industry in four areas – large area color TVs, the PET for medium resolution large areaelectronic billboards, backlights for LCDs, and the HyFEDTM.

***LARGE AREA COLOR TVs*** – We believe our technology is ideal for use in applications relating to large flat screenTVs, with large being defined as 42 inches or greater. Our involvement in this area could take the form of supplying basicnanomaterials, cathodes, or simply licensing our technology. As previously indicated, we have licensed our technology to Canon,Inc. for their use in a large area color TV currently being developed. Other companies are developing large area color TVs that maybe, in part, based on our technology. These TVs are intended to compete with and improve on the plasma displays currentlyavailable.

***PETs FOR MEDIUM RESOLUTIONLARGE AREA ELECTRONIC BILLBOARDS***- The PET is a basic display device which could be used in manydisplay applications in addition to electronic billboards. The carbon nanotube field emission technology provides severaladvantages over the existing technologies used in these areas. It generally has a higher image quality, better sunlightreadability, lower cost, lower energy usage, improved viewing angle and excellent video capabilities. We do not intend tomanufacture these PETs ourselves, but rather license other manufacturers to produce them. We are currently working with a largeJapanese display manufacturer to complete development of the PET.

***BACKLIGHTS FOR LCDs*** – Liquid Crystal Display Technology is a non-emissive display technology that filtersrather than emits light. Consequently, virtually all color LCDs are backlit. Existing backlight technology consumes a significantportion of the power required by the display and the majority of the light generated by the backlight is not used in generating theimage on the display. ANI believes that the use of its technology as a backlight will allow a more focused use of the lightgenerated by the backlight and result in a more efficient use of power.

Page 3
   
Tableof Contents

***HYFEDTM*** - We have developed a new display technology, the HyFEDTM. We expect the HyFEDTM to be phasedin as an improvement to the way our technology will be used in the large area color displays previously described. HyFEDTMcombines what we believe to be the best properties of CRTs and our carbon nanotube field emission technology using our proprietarydiamond/carbon thin films. We expect the HyFEDTM to compete with Plasma Displays in both cost and quality. We anticipate thatthe HyFEDTM will achieve a high-quality thin display using the existing manufacturing base of CRTs. The HyFEDTM displayhas the potential to be larger, brighter, and have higher resolution than conventional CRTs, while still remaining cost-competitivewith existing CRTs.  In January 1999, we formed an International Development Team to develop the first HyFEDTM display.The International Development Team was composed of six organizations - four from Japan, one from Europe, and ourselves. TheInternational Development Team completed a working four-inch monochrome prototype of the HyFEDTM in January 2000. The team wasexpanded and developed a prototype with an active gray scale. Each member of the team was focused on the development of a specificportion of the prototype and members have funded their own portion of the work. Upon completion of the final prototype, these teammembers will be given the first opportunity to license the HyFEDTM technology. We expect to license our HyFEDTMtechnology upon completion of the project. Work on the HyFEDTM has been slowed until our basic carbon nanotube technology isbeing used in the production of large area color TVs, or until funding is received specifically for the HyFEDTM

***Cathodes*** – We currently supply cathodes to Oxford Instruments for use in their portable Horizon 600 hand-heldXRF Spectrometer, an X-ray device used for alloy sorting, materials identification, and inorganic analysis. These cathodes use ourproprietary carbon nanotube technology. We are also testing our cathodes for use by other potential customers in other applicationssuch as plasma igniters for electric thrusters, sterilization and decontamination applications and other microelectricapplications.

***Other Carbon Nanotube Field Emission Products*** – We are also concentrating on developing uses for our technologyin industries other than the display industry. We have developed a carbon nanotube cold cathode electron source, which can beutilized for many non-display related applications such as x-ray tubes, medical devices, microelectronics, nanotechnologies,low-power thrusters, CRT electron guns, wireless communications, and polluted air scrubbing. We have signed a license agreementwith Oxford Instruments to provide cathodes for use in their products in the field of X-ray technology.  We have also receiveda grant of approximately $582,000 from NASA to develop low power thrusters using our technology. This grant was received as afollow up to an initial feasibility study funded by NASA in the amount of approximately $67,000. We are also researching the use ofour technology in other industries, and are encouraged by the preliminary results that we have achieved to date.
**EBT**
***Electronic DisplayProducts.***  EBT is currently focused on licensing its proprietary technology. It has developed apatented product called the E-WindowTM and we are currently seeking licensees for this product. We expect to license thisproduct to entities that will market it, primarily to major retailers. We expect these licensees to either manufacture the product,or contract with others to manufacture the product. We expect any license agreements to include both an upfront payment and ongoingroyalties based on product sales by the licensee. EBT also has acquired the right to certain patented Liquid Crystal Display(“LCD”) technology that is ideal for use in outdoor electronic billboards. All research and development related to thistechnology has been suspended until we procure funding specifically to further develop thistechnology.

**SBOA**

***Custom SignManufacturing*. **SBOA was involved in custom sign manufacturing until October 2002 when theassets and liabilities of the company were sold. SBOA is currently inactive.
 
Page 4
   
Tableof Contents

**Competition**

**EBT**

***E-WindowTM***. Our E-window product isa unique patented product . It does, however, face competition from a variety of other indoor display products from a variety ofsources. Our success in this area is dependent on the ability of licensees to successfully market our products.

***LCD Billboard Technology.****** ***We are unaware ofany other organizations developing an electronic billboard using an LCD technology. However, we are not currently continuingdevelopment of this technology, and LCD technology is an existing technology used in many applications. Competition from othermanufacturers could develop at any time. There are several other companies either producing or developing electronic billboardsusing other technologies.

**ANI**

***Carbon Nanotube Field Emission Technology.***There are othercompanies attempting to develop non-carbon based field emission display technologies. It is our opinion that these technologieswill not be as cost efficient or demonstrate as high a level of brightness as the carbon nanotube field emission technology. In thedisplay industry, the primary competition comes from liquid crystal displays, plasma panel displays, Organic EL Displays, and colorpicture tubes. We believe our technology, when fully developed, will primarily compete with plasma displays and generally comparesfavorably with Plasma displays in several key technical measures.

***Nanoparticles.***  There are many organizations doing research and developing products using nanoparticles, some ofwhich may be carbon based. We believe our patents in this area are superior and give us an advantage over potential competitors andmay require some potential competitors to license our technology.

**Technology Agreements**

***MCC**.*We acquired 62 patents and patent applications related to the carbon nanotube field emission technology from MCC in1998.  We are obligated to pay MCC a royalty of 2% of future commercial revenues related to these patents. We can, however,offset certain pre-defined expenses against these royalty payments. Based on the expenses incurred and cost of maintaining thepatents, it is not considered likely that we will be required to pay MCC any royalties at any time in the near future.

***TillKeesman.***We licensed 6 patents from Till Keesman in exchange for a payment of $250,000 payable inshares of our common stock. Under the terms of the agreement, we are obligated to pay license fees equal to 50% of any royaltiesreceived by the Company related to these patents. We are allowed to offset certain expenses, up to a maximum of $50,000 per year,against payments due under this agreement. The agreement also contains provisions related to minimum license fee payments. Theagreement originally called for minimum additional license fees of $500,000 by June 2002, however, since the patents were still inthe reissuance process in the U.S. the agreements were amended. Additional license fees of $100,000 were paid and $400,000 wasdeferred until the patents reissuance issue is concluded. If we do not pay additional cumulative license fees of $1,000,000(including any fees applied toward the previously described minimum due in June 2002) by May 2004, the license will terminate atthat point. We are not obligated to make any additional payments, but the license may terminate if these payments are not made. Weexpect to make the minimum payments to retain our rights to the patents, even if sufficient royalties have not been generated yetby the patents.

**Intellectual  Property Rights**

Animportant part of our product development strategy is to seek, when appropriate, protection for our products and proprietarytechnology through the use of various United States and foreign patents and contractualarrangements.

Page 5
   
Tableof Contents

We own orlicense 66 issued patents, 8 allowed patents, have 68 patent applications pending before the United States Patent andTrademark Office, and have 23 provisional patent applications. We also have several unsubmitted patent applications in process. Thepatents, allowances and applications relate to the carbon nanotube field emission technology and other technologies. In addition,there are foreign counterparts to certain United States patents and applications. We consider our patent portfolio to be our mostvaluable asset.

Thepatenting of technology-related products and processes involves uncertain and complex legal and factual questions. To date, noconsistent policy has emerged regarding the breadth of claims of such technology patents. Therefore, there is no assurance that ourpending United States and foreign applications will issue, or what scope of protection any issued patents will provide, or whetherany such patents ultimately will be upheld as valid by a court of competent jurisdiction in the event of a legal challenge.Interference proceedings, to determine priority of invention, also could arise in any of our pending patentapplications. The costs of such proceedings would be significant and an unfavorable outcome could result in the loss of rights tothe invention at issue in the proceedings. If we fail to obtain patents for our technology, and are required to rely on unpatentedproprietary technology, there is no assurance that we can protect our rights in such unpatented proprietary technology, or thatothers will not independently develop substantially equivalent proprietary products and techniques, or otherwise gain access to ourproprietary technology.

Competitors have filedapplications for or have been issued patents and may obtain additional patents and proprietary rights relating to products orprocesses used in, necessary to, competitive with, or otherwise related to, our patents. The scope and validity of these patents,the extent to which we may be required to obtain licenses under these patents or under other proprietary rights and the cost andavailability of licenses are unknown. This may limit our ability to license our technology. Litigation concerning theseor other patents could be protracted and expensive. If suit were brought against us for patent infringement, a challenge in thesuit by us as to the validity of the other patent would have to overcome a legal presumption of validity. There can be no assurancethat the validity of the patent would not be upheld by the court or that, in such event, a license of the patent to us would beavailable. Moreover, even if a license were available, the payments that would be required are unknown and could materially reducethe value of our  interest in the affected products. We do, however, consider our patents to be very strong and easilydefendable in any action that may be brought against us. A major law firm has reviewed our patent portfolio and agreed to handlelitigation related to certain of our patents on a contingency basis.

We alsorely upon unpatented trade secrets. No assurance can be given that others will not independently develop substantially equivalentproprietary information and techniques or otherwise gain access to our trade secrets or disclose such technology or that we canmeaningfully protect our rights to our unpatented trade secrets.

We require our employees, directors, consultants, outside scientific collaborators and sponsored researchers and other advisors toexecute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreementsprovide that all confidential information developed or made known to the individual during the course of the relationship is to bekept confidential and not disclosed to third parties except in specific circumstances. In the case of employees, the agreementsprovide that all inventions conceived by the individual shall be our exclusive property. There is no assurance, however, that theseagreements will provide meaningful protection for our trade secrets in the event of unauthorized use or disclosure of suchinformation.

**Employees**

As of March 11, 2003, wehad 19 full-time employees, including 4 executive officers. Within the next twelve months, if business conditions support it, wemay hire additional employees. We are not subject to any collective bargaining agreements and we consider our relations with ouremployees to be good.

Page 6
   
Tableof Contents

**Government Regulation**

Ourproducts will be subject to extensive government regulation in the United States and in other countries. In order to produce andmarket our existing and proposed products, we must satisfy mandatory safety standards established by the U.S. Occupational Safetyand Health Administration ("OSHA"), pollution control standards established by the U.S. Environmental Protection Agency ("EPA") andcomparable state and foreign regulatory agencies. We may also be subject to regulation under the Radiation Control for Health andSafety Act administered by the Center for Devices and Radiological Health ("CDRH") of the U.S. Food and Drug Administration. We donot believe that our carbon nanotube field emission products will present any significant occupational risks to the operators ofsuch equipment.  In addition, the carbon nanotube field emission products are not expected to produce significant hazardous ortoxic waste that would require extraordinary disposal procedures.   Nevertheless, OSHA, the EPA, the CDRH and othergovernmental agencies, both in the United States and in foreign countries, may adopt additional rules and regulations that mayaffect us and our products. Additionally, our arrangements with our customers and affiliates may subject our products to export andimport control regulations of the U.S. and other countries. The cost of compliance with these regulations has not been significantin the past and is not expected to be material in the future.

In the past, a portion ofour  revenues have consisted of reimbursement of expenditures under U.S. government contracts. We recognized $254,152 ofrevenue in 2002 and $466,680 in 2001 related to government contracts. These reimbursements represent a portion of the costsassociated with such contracts. As of December 31, 2002, we have no grants in process. Government contracts are subject to delaysand risk of cancellation. Also, government contractors generally are subject to various kinds of audits and investigations bygovernment agencies. These audits and investigations involve review of a contractor's performance on its contracts, as well as itspricing practices, the costs it incurs and its compliance with all applicable laws, regulations and standards. We are, and in thefuture expect to be, audited by the government.

Page 7
   
Tableof Contents

**EXECUTIVE OFFICERS**

The namesof executive officers of the Company and certain information with respect to each of them are set forth below.

Name

Age

Position

Marc W. Eller

Zvi Yaniv 

Douglas P. Baker

Tracy Vaught

47 

 56

 46

46

Chairman  and Chief Executive Officer 

President and Chief Operating Officer

Vice President and Chief Financial Officer

Vice President and Chief Accounting Officer

Marc W. Eller has served asthe Company’s Chief Executive Officer since July 29, 1996. Mr. Eller is Chairman of the Board of Directors and has been aDirector since November 1995. Prior to becoming CEO, Mr. Eller was involved in commercial real estate investment and in investmentbanking activities for publicly traded companies. Mr. Eller has a B.A. degree in Economics.

Dr.Zvi Yaniv has served as the Company’s President and Chief Operating Officer since July 29, 1996. Dr. Yaniv has degrees inphysics, mathematics, and electro-optics as well as a Ph.D. in Physics. Prior to joining the Company, in May 1996, Dr. Yanivoperated a consulting practice and previously was President and CEO of OIS Optical Imaging Systems Inc., a supplier of flat panelcolor liquid crystal displays to the avionics and defense industries.

Douglas P. Baker has been with the Company since June 17, 1996. Mr. Baker is a C.P.A. and has both a B.B.A. and a M.B.A. Immediatelyprior to joining SI Diamond Technology, Inc., Mr. Baker was a divisional controller for MascoTech, Inc. from 1991 to 1996. Mr.Baker also has experience in public accounting and as CFO of a privately held company.

Tracy Vaught has been Vice President since March 10, 2000. Ms. Vaught became a CPA in 1983 and received a B.A. from the Universityof Texas at Austin in 1977. Prior to becoming an officer of the Company,  Ms. Vaught had served as controller of SBOA since1994. She also has public accounting experience at both a local CPA firm in Austin, Texas and Coopers & Lybrand in Houston,Texas.

**Item 2.  *Properties***

We leasea 10,000 square foot facility in Austin that is used for our corporate headquarters and research and development activities under alease expiring in June 2003. The monthly rental is approximately $7,000.  We also lease a 2,000 square foot warehouse inAustin for approximately $1,500 per month under a lease expiring in March 2004 and an 800 square foot office in Dallas forapproximately $900 per month until August 2005.

Webelieve that these facilities will be adequate for our anticipated research, development, and manufacturing activities untiladditional products or alternative applications are developed.  If and when such additional products or alternativeapplications are developed, we may be required to establish additional facilities or enter into manufacturing agreements withothers.

We do notcurrently invest in real estate or interests in real estate, real estate mortgages, or securities of or interests in personsprimarily engaged in real estate activities. However, the Company has no policy, either for or against, making suchinvestments.

Page 8
   
Tableof Contents

** Item 3.  *Legal Proceedings***

The Company previously had a royalty agreement with Texas Digital Systems, Inc. (TDS) which was terminated by TDS pursuant to theterms of the agreement as of December 31, 1999.  Under the terms of the agreement, TDS was prohibited from using theCompany’s technology after the termination of the agreement. The Company believed that TDS was continuing to ship productsusing our technology and contacted TDS. TDS responded, in part, by filing suit against the Company and EBT for breach ofcontract  in the 272nd Judicial District Court in Brazos County Texas on July  26, 2000. The Company was notserved with notice of this suit until December 5, 2000. The Company filed a counterclaim against TDS and sought substantial damagesand an injunction against TDS for continuing to use the Company’s technology in TDS products after the termination of theagreement. The case was settled in September 2002 and an 8K was filed as a result of that settlement. All parties agreed to dropall claims against other parties to the lawsuit with no admission of liability by any party. The Company has no further potentialliability in conjunction with this case. The amount of income recorded in other income under the caption “lawsuitsettlement” results from the settlement of this lawsuit.

On July 20, 1998, TFI Telemark, Inc., a formervendor of Plasmatron, filed a complaint in the County Court at Law No. 2 of Travis County, Texas against us for debts ofPlasmatron. We were served with notice of this suit on August 5, 1998. The plaintiff seeks damages of approximately $25,000. Allamounts claimed as owing by TFI are recorded as liabilities in the consolidated financial statements. We believe that the ultimateresolution of this matter will not have a material impact on our consolidated financial statements.

From time to time the Company and its subsidiaries are also defendants in various lawsuits that may arise related to thenon-payment of invoices when due, or minor employment matters. It is expected that all such lawsuits will be settled for an amountno greater than the liability recorded in the financial statements for such matters. If resolution of any of these suitsresults in a liability greater than that recorded, it could have a material impact on us.

**Item 4.  *Submission of Matters to a Vote of Security Holders***

There were no matterssubmitted to a vote of security holders during the fourth quarter of 2002.

Page 9
   
Tableof Contents

**PART II**

 

**Item 5.  *Market for Registrant's Common Stock and Related StockholderMatters***

Ourcommon stock, $0.001 par value trades on the OTC Bulletin Board system under the symbol “SIDT”. The following tablesets forth, on a per share basis for the periods indicated, the high and low sale prices for the common stock as reported by theOTC Bulletin Board system. These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and maynot represent actual transactions.
**High****Low**
**2001**

 FirstQuarter

$1.23

$0.39
 SecondQuarter $1.65$0.76 ThirdQuarter$1.23$0.74 FourthQuarter $1.01 $0.45    **2002** FirstQuarter $0.87 $0.56 SecondQuarter$0.74$0.42 ThirdQuarter  $0.47 $0.25 FourthQuarter $0.33  $0.14    **2003**First Quarter (through March 11,2003)$0.41 $0.16
OnMarch 11, 2003, the closing sale price for our common stock as reported on the OTC Bulletin Board system was $0.35.  As ofMarch 11, 2003, there were approximately 325 shareholders of record for our common stock.

We havenever paid cash dividends on our common stock, nor do we have any plans to pay dividends. Our board of directors currently intendsto invest future earnings, if any, to finance expansion of our business. Any payment of cash dividends in the future will bedependent upon our earnings, financial condition, capital requirements, and other factors deemed relevant by our board ofdirectors. It is unlikely that any dividends on the common stock will be paid in the foreseeable future.

Information required in this Item 5 of our Annual Report on Form 10-KSB concerning information as to all equity securitiesissued by us during the last three fiscal years that were not registered under the Securities Act of 1933 is presented below.Additional information is contained in “Item 6. Management’s Discussion and Analysis of Financial Condition and Resultsof Operations - Financial Condition,” or in Note 11 to the Notes to the Consolidated Financial Statements contained in thisAnnual Report on Form 10-KSB.

**Minority Interest in Subsidiary**

In February 2000, we issued 200,000 shares of its common stock to Nomura Holding Company to acquire the shares of stock in theCompany’s ANI subsidiary held by Nomura Holding Company. These shares were included on a registration statement filed in June2000.

**Note Conversions**

We issued 1,527,308 shares of commonstock in 2002 as the result of the conversion of notes payable and accrued interest in the amount of $699,058 asfollows:

 JamesWikert

 1,009,911

Pinnacle Fund,L.P.

 517,397

Page 10
   
Tableof Contents

**Marketing Agreement**

We issued 75,000 shares of common stock to Western National Marketing, LLC in connection with the termination of a marketingagreement in 2002.

**Accounts Payable**

We issued 655,000 shares of common stock in payment of accounts payable in the amount of $157,250 in 2002 as follows:

 Winstead, Sechrest, &Minnick

 625,000

Donald T.Locke

30,000

**Patents**

We issued 523,729 shares to Till Keesman in 2002 in connection with minimum payments due under a patent licenseagreement.

**2000 Private Placements**

During 2000, in a series of private placements only to accredited investors under Rule 506 of Regulation D ofthe Securities Act of 1933, we issued a total of 3,992,242 shares of our common stock in exchange for $3,455,000. The shares wereissued at a slight discount to the market price of our common stock at the time of issuance. We paid no commissions relating to thesale of these securities. The Company filed registration statements in June and November 2000 to register these shares and toupdate the registration of other previously registered shares. Following is a listing of thoseshares:

 Shareholder
  
Common sharesissued
    
MSB Family Trust
  
                        700,000

Pinnacle Fund
  
                        250,000

Michael Denton Jr.
  
                        250,000

Zachary Q. Carlile
  
                        100,000

Robert Berman
  
                        200,000

Bill Clement
  
                        250,000

Pacific Northern
  
                        250,000

Alpine Capital
  
                        312,500

Carlton Neel
  
                        150,000

Street Search Advisors
  
                        250,000

D. Craig Valassis
  
                        434,028

First London Securities
  
                        845,714

Page 11
   
Tableof Contents

**2001 Private Placements**

During 2001, in a series of private placementsof the Company’s common stock in exempt offerings only to accredited investors under Rule 506 of Regulation D of theSecurities Act of 1933, the Company issued 5,713,821 shares of its common stock and received proceeds of $3,441,604. These shareswere issued at prices which represented a slight discount to the market price of the stock at the time of the offerings. We paid$84,173 in commissions related to sales of some of these shares of our common stock. A registration statement covering these shareswas declared effective August 24, 2001. Following is a listing of those shares:

Shareholder  
Common sharesissued
       
First London Securities, Inc.
  
                   991,087

Atlas Capital Master Fund
  
                   622,711

Calvin Nickal
  
                   509,289

Dan Gilbert
  
                  438,597

Waveland Capital
  
                   347,222

George Fetterman
  
                   346,000

Carlton Neel
  
                   285,714

Pinnacle Fund
  
                   263,158

Westpark Capital
  
                   246,914

Patrick Dolan
  
                  212,766

Charlie Bankhead
  
                   175,439

Lakeshore Harbor Fund
  
                   125,000

Southwell Partners
  
                   123,457

Joel Shepherd
  
                   105,264

Ronald Pederson
  
                   105,264

William Joplin
  
                   105,264

T. McCullough Strother
  
                    87,720

Robin Eisenberg
  
                    87,719

Mark Wagner
  
                    55,556

Charles Simpson
  
                    52,632

Elizabeth Bankhead Trust
  
                    52,632

Grace K. Bankhead
  
                    52,632

Internet Venture
  
                    52,632

Fred Mueller
  
                    50,000

Jack Liston
  
                    43,860

James V. Carroll
  
                    43,860

Donald Miller
  
                    21,277

Miles King
  
                    21,277

Dario Duany Jr.
  
                    21,053

Kevin Urrutia
  
                    21,053

William Frisco
  
                    20,000

Stuart Tiplitsky
  
                    18,000

Gordon Snyder
  
                      8,772

Page 12
   
Tableof Contents

**2002 Private Placements**

During 2002, in a series of private placementsof the Company’s common stock in exempt offerings only to accredited investors under Rule 506 of Regulation D of theSecurities Act of 1933, the Company issued 5,792,554 shares of its common stock and received net proceeds of $1,983,902. Theseshares were issued at prices which represented a slight discount to the market price of the stock at the time of the offerings. Wepaid $19,508 in commissions related to sales of some of these shares of our common stock. A registration statement covering theseshares was declared effective November 8, 2002. Following is a listing of those shares:

Shareholder  
Common sharesissued

 
  
 
    
Delta Traders
  
               1,000,000

First London Securities, Inc.
  
                   995,833

Patrick Dolan
  
                  608,333

James Wikert
  
                   500,000

Robert Sprotte Pension Plan
  
                   400,000

Cal Nickal
  
                   375,000

August Pellizzi
  
                   333,333

Atlas Capital
  
                   300,000

Carlton Neel
  
                   250,000

D. Craig Valassis
  
                   216,666

Ralph Parry
  
                   200,000

D. Craig Valassis
  
                   200,000

George Fetterman
  
                   162,000

Daniel & Louise Cafolla
  
                    92,500

Dan Cafolla & Associates Pension Plan
  
                    82,500

Bob Leonard
  
                    55,556

Donald Miller
  
                    20,833

               

Page 13
   
Tableof Contents

***Item 6.  ****** Management’s Discussion and Analysis of Financial Condition andResults of Operations***

Thefollowing discussion should assist in understanding our financial condition and results of operations for the years ended December31, 2002 and 2001 and our liquidity and capital resources for 2003. The Notes to our Consolidated Financial Statements includedlater in this report contain detailed information that should also be read in conjunction with this discussion.

**OUTLOOK**

Weexpect our cash needs for 2003 to be approximately $2.5 million plus any funds required for capital expenditures and theacquisition of third party patents, including the Till Keesman patents. We intend to fund those needs through a combination ofsales, reimbursements for research, license agreements, and issuance of debt and equity securities. We have commitments at thistime that should result in at least $650,000 in revenue and we have identified numerous other revenue opportunities for 2003. Wehave developed a plan to enable us to achieve breakeven on a cash basis with approximately $2.5 million of revenue. We have raisedapproximately $350,000 in equity so far in 2003 to cover operating expenses due to the timing of the receipt of revenues. To theextent our revenues do not allow us to breakeven, or if the timing of revenues is weighted toward the latter part of the year, wemay be required to raise additional funds through the issuance of debt or equity securities to enable us to maintain operations atthe present level.

Our planis to generate sufficient revenues in 2003 to achieve breakeven or better, however losses may continue as we continue to fund thedevelopment of our carbon nanotube field emission technology. There can be no assurance that we will be profitable in thefuture.  Full commercial development of our technology may require additional funds that may not be available at termsacceptable to us.   We expect to continue our concentrated research and development of ANI’s technology in2003.

We havedeveloped a plan to allow ourselves to maintain operations until we are able to sustain ourselves on our own revenue. Our plan isprimarily dependent on raising funds through the licensing of our technology and through additional debt and equity offerings.However, our current cash is only sufficient to allow us to maintain operations for approximately 2 to 4 weeks. We believe that wehave the ability to continue to raise short term funding, as needed, to enable us to continue operations until our plan can becompleted.

This plan isbased on current development plans, current operating plans, the current regulatory environment, historical experience in thedevelopment of electronic products and general economic conditions. Changes could occur which would cause certain assumptions onwhich this plan is based to be no longer valid. Our plan is primarily dependent on increasing revenues and raising fundsthrough additional debt and equity offerings. Although we do not expect funding our operations to be a problem, if adequate fundsare not available from operations, or additional sources of financing, we may have to eliminate, or reduce substantially,expenditures for research and development, testing of our products, or obtain funds through arrangements with other entities thatmay require us to relinquish rights to certain of its technologies or products. Such results would materially and adversely affectus.

 

 

Page 14
   
Tableof Contents

**RESULTS OF OPERATIONS**

                   2002Compared to 2001. The Company had $1,414,848 in revenues during 2002, as compared with $1,101,951 during 2001. Commercial(non-governmental) sales accounted for $1,160,696 of the 2002 revenue and $635,271 of the 2001 revenue.  Our 2002 commercialrevenue included $1,030,310 from ANI, and $130,386 from EBT. The 2001 commercial revenue came from ANI and EBT in the amounts of$625,271 and $10,000, respectively. The ANI revenues in both years were primarily the result of reimbursed research expenditures.ANI had funded research revenues from Futaba Corporation, a large Japanese display maker in the amount of $1,000,000 in 2002 and$600,000 in 2001. Futaba has also committed to a minimum of $400,000 in research funding in 2003. EBT revenues in both years arethe result of the sale of miscellaneous display products and payments by customers for test products. We recognized revenue fromgovernment-funded projects of  $254,152 in 2002 and $466,680 in 2001. We may seek additional research grants in the future ifsuch grants are directly related to projects that we are already working on in conjunction with our strategicobjectives.

                    We expectto generate minimum revenues in 2003 of $2,000,000 at ANI, however revenues could increase substantially above these minimum levelsas a result of royalty agreements or additional research revenues. We had a revenue backlog of $400,000 at December 31, 2002 ascompared with a revenue backlog of $279,456 at December 31, 2001. The 2002 backlog was composed of a private research grant from alarge Japanese display manufacturer. The 2001 backlog was composed government grants.

                       In 2002, our cost of sales was $925,328, or a margin of 35%. For 2001, our cost of sales was $895,195, or a margin of19%.  In 2002, we had a much higher percentage of revenue from private sources and a much lower percentage from governmentsources. Since government programs have relatively low margins, the decrease in government funding resulted in overall highermargins. We would expect margins in 2003 to continue at 2002 levels or higher, depending upon the overall revenue mix.

                    Ourselling, general and administrative expenses increased to $3,119,401 in 2002 from $2,459,835 in 2001, an increase of approximately$650,000. Expenses were higher in 2002, primarily because of payroll, occupancy, and marketing expenses associated with EBT. Weexpect selling, general and administrative expense in 2003 to decrease from the 2002 level to approximately $1.5 million since weare no longer marketing EBT products, but rather focusing on licensing its technology.

                Company sponsored research anddevelopment expenses decreased from $2,368,744 in 2001 to $1,616,634 in 2002, because of increased outside funding of research atANI and decreased research and development at EBT. The decrease in research and development at EBT was the result of its transitionearly in 2002 from the development stage to marketing its products and later in the year to narrowing its focus to licensing itstechnology. We expect to incur substantial expenses in support of additional research and development activities related to thecommercial development of our carbon nanotube field emission and electronic display technologies, however we expect research anddevelopment expenditures to be substantially reduced from 2002 levels for two reasons. First, we expect the external funding ofresearch at ANI to continue to grow. Second, we expect to incur no further research and development expense at EBT. Any furtherdevelopment work would be customer specific and would not be undertaken without adequate funding. We may apply for other governmentgrants, but only if those grants are specifically related to activities we are already pursuing to accomplish our own strategicobjectives. We spent $1.6 million on unreimbursed research and development in 2002 but expect to spend less than $1 million in 2003on unreimbursed research and development.

                    Thelargest single component of cost that we incur is payroll related expense. In 2002, we incurred approximately $3.7 million ofpayroll related expense spread throughout cost of sales, selling, general and administrative expense, research and development, anddiscontinued operations. As a result of the sale of  SBOA, restructuring at EBT, and other cost reductions, we expect payrollrelated expense to decline to approximately $1.4 million in 2003. For much of 2002, up until the time of the EBT restructuring andSBOA sale, our burn rate, or cash usage rate, approximated $450,000 per month. Our expected burn rate for 2003 is $200,0000 to$225,000 per month, excluding revenues. Based on this we believe we can breakeven at a revenue level of $2.7 million orless.

Page 15
   
Tableof Contents

                     Asdiscussed in greater detail in Note 5 to the financial statements, our operating results for 2002 included $176,286 in impairmentcharges related to the restructuring at EBT. We did not have any impairment charges in 2001 and do not expect to have anyimpairment charges in the future. We also had other income of $435,240 from the settlement of a lawsuit in 2002. Interest expenseincreased substantially in 2002 to $711,331 from $206,854 in 2001 because we financed a greater percentage of our operations withdebt than in prior years. A substantial portion of the interest expense ($461,698) resulted from the amortization of the value ofbeneficial conversion features associated with convertible debt. We expect our interest expense to decline substantially toapproximately $100,000 in 2003. We had miscellaneous equipment sales in both years that resulted in $18,418 in gains in 2002 and$9,000 in losses in 2001. We incurred net realized and unrealized losses on marketable securities of $3,397 and $21,642 in 2002 and2001, respectively. We expect no gains or losses from marketable securities in 2003.

 A summary of our contractual cash obligations at December 31, 2002 is asfollows:

**Contractual Obligations**

**Total**

**2003**

**2004**

**2005**

**2006**

Notes payable including interest

$1,715,767   

$1,715,767  

$        0   

$         0    

$       0    

Long-term debt including interest

41,841   

41,841  

0   

0    

0    

Operating leases

94,412   

73,912  

14,100   

6,400    

0    

Capital leases including interest

75,596   

23,184  

23,184   

23,184    

6,044    

**Total contractual cash obligations**

$1,927,616   

$1,854,704  

$37,284   

$29,584    

$6,044    

 

The notespayable and related interest are convertible into our common stock at the option of the note holders. We expect the majority, ifnot all, of these notes to be convert into shares of our common stock and not require cash for payment. We believe that we haveability to raise funds to meet our cash requirements for fiscal 2003 regardless of whether the notes are converted ornot.

**Critical Accounting Policies**

Our significant accounting policies are summarized in the footnotes to ourfinancial statements. Some of the most critical policies are also discussed below.

As a matter of policy, we review our major assets for impairment. Our majoroperating assets are accounts receivable, and property and equipment. We depreciate our property and equipment over their estimateduseful lives. We recorded impairment charges in 2002, but did not identify any impaired items in 2001. We have not experiencedsignificant bad debts expense and we do not believe that we need an allowance for doubtful accounts for any exposure to loss in ourDecember 31, 2002 accounts receivable.      

**LIQUIDITY AND CAPITAL RESOURCES**

Our cashposition decreased from $261,861 at December 31, 2001 to $15,868 at December 31, 2002. Net cash used in operating activities was$2,915,612 in 2002, as compared with $4,280,755 in 2001. The cash used in operations was primarily the result of the net lossesincurred in each year. The decrease in cash used in operating activities was primarily the result of working capital management,including the payment of some liabilities with common stock.

Cash provided byinvesting activities was $82,956 in 2002 as compared with cash used in investing activities of $305,270 in 2001. The cashused in investing activities in 2001 was primarily related to the acquisition of capital assets and a loan to a corporate officer.The cash provided by investing activities in 2002 was the result of the sale of our SBOA subsidiary and the proceeds from the saleof excess EBT assets, offset by capital expenditures during the year. No material commitments exist as of December 31, 2001 forfuture purchases of capital assets.

In  2002 and 2001, we had cash provided by financing activities of $2,586,663 and $4,839,068, respectively. These funds wereprimarily the result of the sale of equity securities and the issuance of debt and were primarily used to fund our operatinglosses.

Page 16
   
Tableof Contents

As of December 31, 2002,our current liabilities exceeded our current assets by approximately $2.6 million, with a current ratio of 0.05 to 1, compared to aworking capital deficit of approximately $1.5 million and a current ratio of 0.4 to 1 as of December 31, 2001. Current liabilitiesremained relatively constant between the two years, however current assets declined by approximately $1.0 million. This reductionin current assets is primarily the result of the sale of SBOA. The decline in current liabilities resulting from the SBOA sale wasoffset by increased debt used to fund operations and related accrued interest. We expect the majority, if not all, of our shortterm debt, which is convertible into common stock, to be converted into equity when due in 2003, rather than paid in cash. If allconvertible debt and related accrued interest had been converted into equity as of December 31, 2002, out working capital deficitwould have been reduced by approximately $1.7 million.

Based on the developmental stagesof our technology, it is likely that additional financing will be necessary in the future. If all of our warrants that wereoutstanding as of December 31, 2002 were exercised, we would collect proceeds of approximately $233,000. (See Note 13 to theConsolidated Financial Statements.) Given that the current price of our common stock is below the exercise price of our outstandingwarrants, it is unlikely that any of the outstanding warrants will be exercised in the near future. We may also receive proceedsfrom the exercise of stock options. At the present time, it is also unlikely that significant amounts of options will be exercised,since for current in-the-money options, the current market price of our common stock does not exceed the exercise price of thoseoptions by a significant amount.

The principal source of our liquidity has been funds received from exemptofferings of common and preferred stock. We may receive additional funds from the exercise of warrants, although there is noassurance that such warrants will be exercised. In the event that we need additional funds, we may seek to sell additional debt orequity securities. We may seek to increase our liquidity through bank borrowings or other financings. While we expect to be able toobtain any funds needed for operations, there can be no assurance that any of these financing alternatives can be arranged oncommercially acceptable terms. We believe that our success in reaching profitability will be dependent upon the viability of ourproducts and their acceptance in the marketplace, and our ability to obtain additional debt or equity financings in the future. Ourindependent auditors, Sprouse & Anderson, L.L.P., expressed uncertainty as to the ability of the Company to continue as a goingconcern based on accumulated past losses from operations. See “Independent Auditor’s Report.”

Following is a summary of debtand equity proceeds that the Company has received from January 1, 2001 through the date of this filing:

**Private Placements**

During 2001, in a series of private placements of our common stock in exempt offerings under Regulation D of the Securities act of1933, we issued 5,713,821 shares of our common stock and received proceeds of $3,441,604. These shares were issued at prices thatrepresented a slight discount to the market price of the stock at the time of the offerings.  A registration statementcovering these shares was declared effective August 24, 2001.

During 2002, in a series of private placements of our common stock in exempt offeringsunder Regulation D of the Securities act of 1933, we issued 5,792,554 shares of our common stock and received proceeds of$1,983,902. These shares were issued at prices that represented a slight discount to the market price of the stock at the time ofthe offerings.  A registration statement covering these shares was declared effective November 8,2002.

**Notes Payable**

During 2001, we issued notes, totaling $1,300,000 that are convertible into our commonstock when. In 2002, we issued an additional $600,000 of convertible notes. A total of $1,600,000 of these notes remainedoutstanding at 12/31/2002. It is expected that the majority of these notes will be converted under the terms described in Note 9 tothe consolidated financial statements. A registration statement covering the shares issuable upon conversion of these notes wasdeclared effective  November 8, 2002.

Page 17
   
Tableof Contents

**Common Stock for Services**

We issued 75,000 shares of common stock to Western National Marketing, LLC in connectionwith the termination of a marketing agreement in 2002.

**Patent Acquisition**

We issued 523,729 shares to Till Keesman in 2002 in connection with minimum payments due under a patent license agreement.Additional information related to these shares and the related patent agreement is included in Note 15 to the financialstatements.

**Accounts Payable**

We issued 655,000 shares of common stock in payment of accounts payable in the amount of$157,250 in 2002.

**SEASONALITY AND INFLATION**

SI Diamond's business is not seasonal in nature. Management believes that SI Diamond's operations have not been affected byinflation.

**ACCOUNTING PRONOUNCEMENTS**
In September 2001, the FASB issued Statement 143, Asset Retirement Obligations. ThisStatement addresses financial accounting and reporting for obligation associated with the retirement of tangible long-lived assetsand the associated asset retirement costs. The Statement will be effective for the Company's fiscal year ending December2003.  The Company does not believe that the adoption of this pronouncement will have a material effect on its financialstatements.

In August 2001, the FASB issued Statement 144, Accounting for Impairment or Disposalof Long-Lived Assets. This Statement addresses financial accounting and reporting for the impairment or disposal of long-livedassets. The Statement was effective for the Company's fiscal year ending December 2002.  Adoption of this pronouncement had nomaterial effect on the financial statements.

In  April 2002, the FASB issued Statement 145, Recision of FASB Statements  4,44, and 64 and Amendment of FASB 13. This Statement addresses financial accounting and reporting associated with the extinguishmentof certain debts and leases. The Company does not believe that the adoption of this pronouncement will have a material effect onits financial statements.

In June 2002, the FASB issued Statement 146, Accounting for Costs Associated with Exitor Disposal Activities. This Statement will be effective after December 31, 2002. The Company does not believe that the adoption ofthis pronouncement will have a material effect on its financial statements.

In October 2002, the FASB issued Statement 147, Acquisitions of Certain FinancialInstitutions. This Statement will be effective October 1, 2002, but will have no effect on the Company’s financialstatements.

In December 2002, the FASB issued Statement 148, Accounting for Stock BasedCompensation, an amendment of FASB 123. This statement is effective for the current fiscal year ended December 31, 2002. It wasimplemented and there was no material effect on the financial statements.
 
Page 18
   
Tableof Contents

**Item 7.  *Financial Statements***

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTSOF SI DIAMOND TECHNOLOGY, INC.**

 
**CONSOLIDATED FINANCIAL STATEMENTS:**  
Independent Auditor’s Report

20

Consolidated Balance Sheets - December 31, 2002 and2001

 21

Consolidated Statements of Operations - Years Ended December 31, 2002 and2001

 22

Consolidated Statements of Shareholders' Equity (Deficit)         - Years Ended December31,  2002 and 2001

 23

Consolidated Statements of Cash Flows - Years Ended December 31, 2002 and2001

 25

Notes to Consolidated FinancialStatements

 26

 

 

 

 

 

Page 19
   
Tableof Contents

**INDEPENDENT AUDITOR’S REPORT**

To the Board of Directors and ShareholdersSI Diamond Technology, Inc.Austin, Texas

We have audited the accompanying consolidated balance sheets of SI Diamond Technology,Inc. and Subsidiaries (collectively, the “Company”) as of December 31, 2002 and 2001 and the related consolidatedstatements of operations, shareholders’ equity and cash flows for the years then ended.  These consolidated financialstatements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financialstatements based on our audits.

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

In our opinion, the consolidated financial statements referred to abovepresent fairly, in all material respects, the financial position of SI Diamond Technology, Inc. and Subsidiaries as of December 31,2002 and 2001, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generallyaccepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that theCompany will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, the Company hassuffered recurring losses from operations and has a working capital deficiency. The Company has relied primarily on capital raisedthrough offerings of common stock, preferred stock, and convertible debt securities to fund its operations.  It is uncertainwhether the Company will be able to secure additional capital to fund its operations and this raises substantial doubt about theCompany's ability to continue as a going concern.  The consolidated financial statements do not include any adjustments thatmight result from the outcome of this uncertainty.

 

Sprouse & Anderson, L.L.P.Austin, TexasFebruary 3, 2003
****
Page 20
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS**

**ASSETS**   
**December          31,**   
**2002** 
**2001**        Current assets:  
 
Cash and cash equivalents

  $
15,868 
 $
261,861 
 Marketable equity securities 
—   
 23,850 
 Accounts receivable, trade – net ofallowance for doubtful accounts                    of $0 and$47,581 in 2002 and 2001, respectively
 
32,316 

  528,147 
Inventories 
—   
 232,389 
 Prepaid expenses and other currentassets 
95,232  
 94,189    
Total current assets 143,416   1,140,436        
Officer receivable 62,500   62,500 
Property and equipment, net 115,239  557,431 
Intangible assets, net 
—    70,000 
Other          assets 800    8,688    
 Totalassets
 $ 321,955 
 $ 1,839,055
 **LIABILITIES          AND SHAREHOLDERS' EQUITY (DEFICIT)**  Current liabilities:  
 Accountspayable
$584,878 
  $ 705,458 
 Notes payable  1,600,000  1,398,302 
Current portion oflong-term debt  39,832   64,431 
 Obligations under capitallease 17,993   19,987 
 Accruedliabilities 493,564   263,050 
 Customer deposits and other currentliabilities
—    211,790    
 Totalcurrent liabilities  2,736,267   2,663,018    Note payable,long-term 
—   39,832   Obligations under capital lease,long-term  46,283  81,819    Commitments and contingencies
—  
—     
 Totalliabilities 
 
2,782,550 
 
 2,784,669 Shareholders' equity (deficit):  
 Convertible preferred stock, $1.00 par value,2,000,000 shares authorized;                 850 shares issued andoutstanding at December 31, 2001 
—   850 
Common stock, 120,000,000 shares authorized,$.001 par value,                 76,970,792 and66,899,584 shares issued and outstanding, respectively 76,971  66,900 
 Additional paid-in          capital 68,709,621  65,324,967 
 Accumulateddeficit (71,247,187) (66,338,331)   
 Totalshareholders' equity  (deficit)  (2,460,595)  (945,614)   
 Totalliabilities and shareholders' equity (deficit)$ 321,955 
 $ 1,839,055 
See notes to consolidated financial statements.

Page 21
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES****CONSOLIDATED STATEMENTS OF OPERATIONS**
                  
**Year  ended December 31,**    
**2002** 
**2001**    
Revenues

   

   
 
 
Contract          research

$

1,000,000 

$

600,000 

Government contracts 
254,152  
466,680 
Other 
160,696  
 35,271     
Total Revenues
 
1,414,848 
 
 1,101,951 Cost of sales 
925,328  
 895,195 Selling, general and administrativeexpenses 
3,119,401  
 2,459,835 Research and development  
1,616,634  
 2,368,744 Impairmentcharge 
 176,286  
— 
    
 Operating costs andexpenses 
5,837,649  
 5,723,774     
 Income (loss) fromoperations
 

(4,422,801) 
 

 (4,621,823)    
Other income (expense):    
Gain (loss) on disposal of assets  
 18,418  
 (9,000)
Net realized and unrealized gains (losses) on marketablesecurities  
 (3,397) 
(21,642)
Interest expense 
(711,331) 
 (206,854)
Lawsuit Settlement 
 435,240  
— 

Other income 
452   
8,549     
Loss from continuing operations beforetaxes
 
(4,683,419)
 
 (4,850,770)Provision fortaxes 
— 
 
— 
    
Income (loss) before taxes 
 
(4,683,419)
 
 (4,850,770)Provision fortaxes  
— 
 
— 
    
Loss from continuing operations
 
(4,683,419)
 
 (4,850,770)Discontinued operations    
Loss from the operation of Sign Builders of America, Inc. 
 (90,941) 
 (230,789)
Loss on disposal of Sign Builders of America, Inc. 
 (134,496) 
— 
    
Net        loss
 
(4,908,856)
 
 (5,081,559)Accretion on convertible preferred stock  
 (37,495) 
 (85,000)    Net income (loss) applicable to commonshareholders
 $
(4,946,351)
 $
(5,166,559)
Earnings (loss) per share    
Basic and diluted 
 $
(0.07)
 $
(0.08)
Weighted average common shares outstanding
Basic and diluted 
 $
 71,829,575 
 $
64,716,156 
 See notes to consolidated financial statements.

Page 22
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED  STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)**

**Preferred**
**Common**     
**Shares**
**Amount**
**Shares**
**Amount**
**Additional        Paid-In        Capital**  **Accumulated        Deficit****Total**Balance, January 1,        2002850 
$
850 66,899,584
$
66,900
$65,324,967 $(66,338,331)$(945,614)
Issuance of common        stock               as compensation

— 

 
— 

75,000
 
75

20,925 

— 

21,000 
Issuance of common        stock               for patents

— 

 
— 

523,729
 
524
 
85,891 

— 
 
86,415 
Issuance of common        stock             as a result of the exercise             of employee stock options

— 

— 

230,000

230

136,020 

— 

136,250 

Issuance of common        stock             for cash

— 

— 

5,792,554

5,793

1,978,109 

—  

1,983,902 

Issuance of common        stock in               payment of accounts               payable

— 

— 

655,000

655

156,595 

— 

157,250 

Issuance of common        stock as               a result of convertible               notes payable

— 

— 
1,527,308

1,527

697,531 

— 

699,058 
Conversion of Series        G               Preferred to common               stock

(850)

(850)
1,267,617

1,267

(417)

— 

—  Conversion value of        debt             issued—— — — 310,000 —  310,000 Net (loss)—— — — –— (4,908,856)(4,908,856)Balance, December        31, 2002—
$
— 76,970,792$76,97168,709,621$(71,247,187)(2,460,595)
See notes to consolidated financial statements.

Page 23
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (CONTINUED)**
 

**Preferred**
**Common**
**Shares**
**Amount**
**Shares**
**Amount**
**Additional        Paid-In        Capital****Accumulated        Deficit****Stock        Subscription****Total**
Balance, January 1,        2001

850

$

850

60,518,983

$

60,519

$
61,272,028

$

(61,256,772)

$

(10,850)

$

65,775

Warrants exercised

 — 

 

— 

36,500

37

34,463

— 

— 

34,500

Issuance of common        stock             as a result of the exercise             of employee stock options

— 

— 

630,280 

630

311,007

— 

10,850 

322,487

Issuance of common        shares             for cash

— 

— 

5,713,821 

5,714

3,435,890

— 

— 

3,441,604

Repricing of options        for             Non-employees

— 

— 

— 

— 

5,000

— 

— 

5,000

Conversion value of        debt             issued

— 

— 

— 

— 

266,579

— 

— 

266,579

Net (loss)

— 

— 

— 

— 

— 

(5,081,559)

— 

(5,081,559)
Balance, December        31, 2001850
$
85066,899,584
$
66,900 65,324,967
$
(66,338,331)— 
$
(945,614)
Page 24
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF  CASH FLOWS**
Year        Ended        December 31,  2002 2001 Cash flows from operating activities:    
 Net loss
$
 (4,908,856)
$
 (5,081,559) Adjustments to reconcile loss to net                cash used in operating activities:    
 Depreciation and amortizationexpense 
 278,949  
  706,710 
 Amortization of discount on debt 
461,698  
 114,881 
 (Gain) loss on disposal ofassets 
(17,952) 
 9,000 
Non-cash loss on disposal ofSBOA 
106,572  
– 
 Stock issued for        services 
 21,000  
— 
 Stock issued for patent        option 
 86,415  
— 
 Repricing of non-employeeoptions 
—  
 5,000
 Impairmentcharge 
 176,286 
— 
 Net realized and unrealized losses on marketablesecurities 
3,397  
 21,642 
 Changes in assets and liabilities:    
 Accounts receivable,        trade 
174,504  
 (174,993)
Inventories 
(46,739) 
(79,145)
 Prepaidexpenses and other assets 
 6,845  
 (3,422)
 Accountspayable 
 232,226  
 238,044 
 Accruedexpenses 
495,631  
 (78,908)
 Customer deposits and other currentliabilities 
 14,412  
41,995    
 Total        adjustments
 
 1,993,244
 
 800,804   
 Net cash used in operatingactivities 
 (2,915,612). 
 (4,280,755)   
Cash flows from investing activities:    
Increase in officer receivable 
–  
 (62,500)
 Purchase of marketablesecurities 
 (25,860) 
 (37,487)
 Sale of marketablesecurities 
 46,313  
 62,308 
Capital        expenditures 
 (231,880) 
 (282,591)
 Proceeds from the sale of SBOA 
 250,000  
– 
 Proceeds from sale of assets 
 44,383   
15,000    
 Net cash provided by (used in) investingactivities
 

 82,956 
 

 (305,270)   
Cash flows from financing activities:    
 Proceeds from short-term notes payable 
1,150,000  
 1,300,000 
 Repayment of short-term notes payable 
(600,000) 
 (125,000)
 Proceeds from issuance of common        stock 
2,120,152  
 3,798,591 
 Repayment of long-term notes payable and capital lease              obligations 
 (83,489) 
(134,523)   
Net cash provided by financingactivities
 
 2,586,663
 
 4,839,068   
Net increase (decrease) in cash and cash        equivalents
 
(245,993)
 
 253,043 Cash and cash equivalents, beginning of year  
261,861  
 8,818    Cash and cash equivalents, end of        year
 $
 15,868 
 $
261,861 
See notes to consolidated financial statements.

Page 25
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES**

 **NOTES****TO CONSOLIDATED FINANCIAL STATEMENTS**

 

**1.       Organization, Operations, andLiquidity:**

       SI Diamond Technology, Inc. and itssubsidiaries (“the Company”) are engaged in the development of products for applications using proprietary carbonnanotube field emission technology and perform significant research in that area. The Company has also developed patentedelectronic sign technology, has sold products using that technology, and is now focused on licensing that technology toothers.

       In 2002, the Company narrowed its focus tolicensing its technology. It is no longer marketing its electronic display products directly to end users, but rather attempting tolicense its proprietary technology to others who will market the products. In addition, the Company sold the assets of its SignBuilders of America, Inc. subsidiary and is now solely focused on licensing and technology development. The Company has a plan togenerate sufficient revenues in 2003 to achieve breakeven or better. Until the Company is able to operate profitably as a result ofrevenues from either reimbursed research or license agreements, it will continue to seek additional funds through the equitymarkets, or raise funds through debt instruments to allow it to maintain operations. There is no assurance that license agreementswill be signed, that commercialization of the Company’s technology and products will result in income from operations, orthat funds will be available in the equity or debt markets. Management believes it will continue to be able to secure additionalshort term funding to allow the Company to continue operations until it achieves profitability. Full commercial development of theCompany's carbon nanotube field emission technology may require additional funds that may not be available at terms acceptable tothe Company.

       The principal source of the Company's liquiditysince the time of its initial public offering in 1993 has been from the funds received from exempt offerings of common stock,preferred stock, and convertible debt securities.  The Company may receive additional funds from the exercise of warrants oroptions, although it is unlikely that significant funds will be received from the exercise of any such warrants or options in thenear future. The Company may also seek to increase its liquidity through bank borrowings or other financings.  There can be noassurance that any of these financing alternatives can be arranged on commercially acceptable terms. The Company believesthat its success in reaching profitability will depend on the viability of its products and technology, their acceptance in themarketplace, and its ability to obtain additional debt or equity financings in the future.

       A portion of the Company's research anddevelopment has been funded by others.  To the extent that other funding is not available, the research and developmentperformed is being internally funded by the Company.

         The accompanying financial statements have beenprepared in conformity with generally accepted accounting principles,  which contemplates continuation of the Company as agoing concern. However the Company has a working capital deficiency, has sustained substantial operating losses since inception andcontinues to sustain losses. In view of this, realization of a portion of the assets in the accompanying balance sheet is dependentupon continued operations of the Company. Management believes that actions currently being taken will allow it to achieveprofitability and allow the Company to continue as a going concern.

**2.     Summary of Significant AccountingPolicies:**

Principles of consolidation

         The accompanying consolidated financialstatements include the accounts of the Company and its subsidiaries, AppliedNanotech, Inc. (“ANI”), ElectronicBillboard Technology, Inc. (“EBT”), and Sign Builders of America, Inc. (“SBOA”), after the elimination ofall significant intercompany accounts and transactions. ANI is primarily involved in developing products for applications using theCompany’s proprietary carbon nanotube field emission technology. EBT was primarily involved in the commercialization ofelectronic digitized sign technology and is now focused on licensing that technology.  SBOA was a manufacturer of customsignage, but is now included as a discontinued operation.

 

Page 26
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

 

**2.     Summary of Significant Accounting Policies(continued):**

Revenue recognition

         The Company's revenues includereimbursements under agreements to perform research and development for others. Revenue under these contracts is recognized when itis earned pursuant to the terms of the contract. The agreements with federal government agencies generally provide that, uponcompletion of a technology development program, the funding agency is granted a royalty-free license to use the newly developedtechnology for its own purposes.  The Company retains all other rights to use, develop, and commercialize the technology andrecognizes revenue when it is billed pursuant to the terms of the contract. Agreements with other entities generally allow theother entity to license the Company’s technology upon completion of the project.

        The Company recognizes royalty revenue at the time the underlying product upon which theroyalty is based is shipped by the entity paying the royalty. License revenue from licensing the Company’s product isrecognized as revenue when earned under the terms of the agreement. Revenue from the sale of products is recognized at the time ofshipment.

 Cash and cash equivalents

       The Company considers all highly liquidinvestments purchased with an original maturity of three months or less to be cash equivalents.

Marketable equity securities

       The Company’s securities investments thatare bought and held principally for the purpose of selling them in the near term are classified as trading securities. Trading securities are recorded at fair value on the balance sheet in current assets, with the change in fair value during theperiod included in earnings.

Accounts receivable

       The Company occasionally sells products toothers on credit, however most sales are to large financially stable companies, or the Federal government. The Company’s SBOAsubsidiary previously sold custom signs, but generally required deposits to minimize credit losses.   It is the Company'spolicy to record reserves for potential credit losses.  Since inception, the Company has experienced minimallosses.

Inventories

       Inventories are accounted for under the firstin, first out method and are recorded at the lower of cost or market. Inventories consist of purchased components andwork-in-process at December 31, 2001.

Property and equipment

       Property and equipment arerecorded at cost, net of accumulated depreciation and amortization. Depreciation is provided on the straight-line method over theestimated useful lives of the assets, which range from two to seven years, or the lease term for leasehold improvements, ifless.  Expenses for major renewals and betterments that extend the original estimated economic useful lives of the applicableassets are capitalized. Expenses for normal repairs and maintenance are charged to operations as incurred.  The cost andrelated accumulated depreciation or amortization of assets sold or otherwise disposed of are removed from the accounts, and anygain or  loss is included in income.

Page 27
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

 

**2.     Summary of Significant Accounting Policies(continued):**

Intangible assets

       The Company has applied to obtain certainUnited States patents, which are currently pending. The majority of patent costs, which consist primarily of legal fees, areexpensed as incurred. The Company has capitalized the acquisition cost of patents acquired in 2000 and amortized the cost of thosepatents over a period of 25 months.

Impairment

     At each balance sheet date, theCompany evaluates the carrying amount and the amortization period for its intangible assets and for its long-lived assets. If anindicator of impairment exists, it is recorded at that time. During 2002 property and equipment related to the EBT operation wereconsidered impaired and written down in September 2002. See Note 5 for details related to the impairment write down.

Income taxes

       The Company accounts for income taxes using theliability method pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 109.  Under this method,deferred income taxes are recorded to reflect the tax consequences on future years of temporary differences between the tax basisof the assets and liabilities and their financial amounts at year-end.  The Company provides a valuation allowance to reducedeferred tax assets to their net realizable value.

Research and development expenses

       Costs of research and development forCompany-sponsored projects are expensed as incurred.

Accretion on convertible preferred stock

       The Company’s Series G ConvertiblePreferred stock bears a 10% accretion payable in common stock at the date of conversion. Under the terms of the Series G Preferredstock, all unconverted shares of the Series G Preferred Stock that remained unconverted as of June 10, 2002 automatically wereconverted at that date. All accretions paid in common stock   at June 10, 2002 and all accretions payable in common stock ifthe shares had been converted as of December 31, 2001 have been treated as preferred dividends. The entire amount reflected asaccretion on convertible preferred stock on the income statement relates to the Series G Preferred stock accretion.

Income (loss) per common share

       Basic per share amounts are computed,generally, by dividing net income or loss by the weighted average number of common shares outstanding.  Diluted per-shareamounts assume the conversion, exercise, or issuance of all potential common stock instruments unless the effect isanti-dilutive,thereby reducing the loss or increasing the income per common share.  As described in Notes 11, 12 and 13, at December 31,2002, the Company had convertible notes payable, options and warrants outstanding to purchase a total of 8,682,972; 6,746,805; and155,000 shares of common stock, respectively, at a weighted average exercise price of approximately $0.45.  At December 31,2001, the Company had convertible preferred shares, options and warrants outstanding to purchase a total of 1,230,122; 5,813,212;and 330,000 shares of common stock, respectively, at a weighted average exercise price of approximately $0.82.  However,because the Company incurred losses in both 2002 and 2001, the inclusion of those potential common shares in the calculation ofdiluted loss per-share would have an anti-dilutive effect.  Therefore, basic and diluted per-share amounts are the same inboth 2002 and 2001.

       In calculating the basic (income) loss percommon share, the premium earned by the preferred shareholders, ($37,495 in 2002 and $85,000 in 2001) increased the net loss inboth years.

 

Page 28
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

 

**2.     Summary of Significant Accounting Policies(continued):**

Stock-based employee compensation

        The Company uses the intrinsic value method toaccount for stock-based employee compensation. During 2002 and 2001, the Company did not incur any compensation cost for optionsgranted under the Plans as required under APB No. 25. Had the compensation cost for the Company’s compensation plans beendetermined consistent with SFAS No. 123 and SFAS no. 148 using the fair value method, the Company’s net loss and net loss percommon share for 2002 and 2001 would approximate the pro forma amounts as shown below:

 
  20022001Net      Loss  
As      reported $(4,908,856) $(5,081,559)
 SFAS No. 123Charge
544,034  
937,874 
 Pro Forma
 (5,452,890) 
 (6,019,433)Net income (loss) per common           share – basic anddiluted  
 As reported
 $(0.07) 
 $(0.08) 
 Pro Forma 
 $(0.08) 
 $(0.09)
     The effects of applying SFAS No. 123in this pro forma disclosure are not indicative of future amounts. SFAS No. 123 does not apply to awards prior to 1995 and theCompany anticipates making awards in the future under its compensation plans.

       The fair value of each stock option granted in2002 and 2001 is estimated on the date of grant using the Black-Scholes option pricing-model with the following weighted-averageassumptions: no dividend yield for 2002 and 2001; risk-free interest rate of 3.00% and 4.00% for 2002 and 2001, respectively; theexpected lives of the options are five years for 2002 and 2001; and volatility of 111% and 124% for 2002 and 2001,respectively.

       TheBlack-Scholes option valuation model andother existing models were developed for use  in estimating the fair value of traded options that have no vesting restrictionsand are fully transferable. In addition, option valuation models require the input of and are highly sensitive to subjectiveassumptions including the expected stock price volatility. SI Diamond Technology, Inc.’s stock options have characteristicssignificantly different from those of traded options, and changes in the subjective input assumptions can materially affect thefair value estimate.

Reclassifications

       Certain reclassifications were made topreviously reported amounts in the accompanying consolidated financial statements and notes to make them consistent with thecurrent year presentation format.

Management’s estimates

       The preparation of financial statements inconformity with generally accepted accounting principles requires management to make estimates and assumptions that affect thereported amounts of assets, liabilities, revenues, and expenses, as well as the disclosure of contingent assets and liabilities.Actual results could differ from those estimates. Significant estimates include NOL reserves, warranty reserves, bad debt reserves,impairment reserves, and litigation reserves.

Page 29
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**

 

**2.     Summary of Significant Accounting Policies(continued):**

Disclosures about fair value of financial instruments

       The following methods and assumptions were usedto estimate the fair value of each class of certain financial instruments for which it is practicable to estimate that fair value.For cash equivalents,  the carrying amount approximates fair value because of the short-term nature of these instruments. Thefair value of the Company’s notes payable and capital lease obligations is estimated based on the quoted market prices forthe same, or similar, issues, or on the current rates offered to the Company for debt of the same remaining maturities with similarcollateral requirements. At December 31, 2002 and 2001, the fair value of the Company’s notes payable and capital leaseobligations approximates their carrying values. See Note 4 for information on the fair value of marketable securities.

Recently issued accounting pronouncements

       In September 2001, the FASB issuedStatement 143, Asset Retirement Obligations. This Statement addresses financial accounting and reporting for obligation associatedwith the retirement of tangible long-lived assets and the associated asset retirement costs. The Statement will be effective forthe Company's fiscal year ending December 2003.  The Company does not believe that the adoption of this pronouncement willhave a material effect on its financial statements.

       In August 2001, the FASB issuedStatement 144, Accounting for Impairment or Disposal of Long-Lived Assets. This Statement addresses financial accounting andreporting for the impairment or disposal of long-lived assets. The Statement was effective for the Company's fiscal year endingDecember 2002.  Adoption of this pronouncement had no material effect on the financial statements.

       In  April 2002, the FASBissued Statement 145, Recision of FASB Statements  4, 44, and 64 and Amendment of FASB 13. This Statement addresses financialaccounting and reporting associated with the extinguishment of certain debts and leases. The Company does not believe that theadoption of this pronouncement will have a material effect on its financial statements.

       In June 2002, the FASB issuedStatement 146, Accounting for Costs Associated with Exit or Disposal Activities. This Statement will be effective after December31, 2002. The Company does not believe that the adoption of this pronouncement will have a material effect on its financialstatements.

       In October 2002, the FASB issuedStatement 147, Acquisitions of Certain Financial Institutions. This Statement will be effective October 1, 2002, but will have noeffect on the Company’s financial statements.

       In December 2002, the FASB issuedStatement 148, Accounting for Stock Based Compensation, an amendment of FASB 123. This statement is effective for the currentfiscal year ended December 31, 2002 and no material effect on the financial statements.

**3.**   **Other Income**

       The gain on disposal of assets included inother income (expense) in 2002 was primarily the result of the sale of equipment related to the EBT operation. Sales proceedsexceeded the amount estimated at the time the impairment of the equipment was recorded in September 2002. The loss in 2001 resultedfrom loss of equipment, less insurance proceeds, located in the World Trade Center at the time of its collapse on September 11,2001. The income from the lawsuit settlement is the result of the settlement of the TDS lawsuit described in greater detail in Note15.

Page 30
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**

 

**4.**   **Marketable EquitySecurities**

       From time to time, the Company has invested aportion of its working capital in marketable equity   securities. All such equity securities are classified as tradingsecurities.  The fair market value of marketable securities, at December 31, was determined as follows:

 
**2002****2001** 
         Cost basis

$
  —        
$

37,487 

         Unrealized gains (losses)

$
  —        
$

(13,637)
   
         Fair market value

$
  —
$

23,850 

       The net realized and unrealized gains (losses)on marketable equity securities consists of the following for the years ended December 31:
**2002****2001** 
         Unrealized (gains) losses - prior year

$
13,637 
$

(3,193)

         Realized gains

$
  — 
$

  — 
         Realized losses(17,034)(4,812)         Unrealized gains (losses) - end of year  — (13,637)   
         Net realized and unrealized gains  (losses)

$
(3,397)
$

(21,642)

**5.     Impairment of Assets :**

       The impairment charge for 2002 consists of thefollowing:

 Personal property andequipment

 $

 92,886
 Leaseholdimprovements 83,400  Total impairment ofassets$  176,286
       In August 2002, the Company made the decisionto restructure its Electronic Billboard Technology, Inc. subsidiary and focus on licensing its technology to others instead ofdirectly marketing and installing products using the technology. As a result of this decision, the Company recorded an impairmentcharge of $176,286 in the quarter ended September 30, 2002 to reduce the value of fixed assets, including leasehold improvementsand personal property owned by EBT. These assets were all disposed of by December 31, 2002. There were no impairment charges in2001.

**6.     Operating Lease Obligations :**

       The Company leases various facilities andequipment under operating lease agreements having terms expiring at various dates through 2004. Rental expense was $211,686 and$271,156 for the years ended December 31, 2002 and 2001,  respectively.

       Future minimum lease payments under operatingleases that have initial or remaining noncancelable lease terms in excess of one year at December 31, 2002, were asfollows:

2003

$

73,912
2004  14,1002005 and thereafter  6,400 Total future minimum lease payments$ 94,412
 

Page 31
   
Tableof Contents

**SI DIAMOND TECHNOLOGY, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)**

 

**7.     Capital Lease Obligations :**

        Capital leases payable at December 31, 2002 and2001 consisted of the following:
20022001Capital leases for copier equipment due          in          monthly installments  totaling $1,932 through 2006.  The equipment value and lease obligation was determined  using a discount rate of 10%.  The equipment is included in  office equipment at December 31, 2002 at a cost of $94,383          and with accumulated amortization of $35,580.$
75,596
$
126,617   
   Less interest 
  11,320 
24,811    
   Less current portion 
  17,993 
19,987          Capital Lease Obligations,  long-term$
46,283
$
81,819
        Scheduled maturities for long-term debt andcapital lease obligations for the years ended December 31, are as follows:
 2003
$
 17,9932004 
19,380
2005 
21,410
2006  5,493  Total
$64,276 
**8.     Details of Certain Balance SheetAccounts:**

       Additional information regarding certainbalance sheet accounts at December 31, 2002 and 2001 is as follows:
  
**December 31,** ** ** ** ****2002****2001**** **** **Property and equipment:    
 Plant andequipment

 $

 663,219 

 $

 879,925 

 Electronic display        units  —  474,470 
 Furniture and office        equipment163,630  405,889 
Vehicles  —  103,079 **  **** ** 
 Total carrying        cost826,849  1,863,363 
 Less accumulated        depreciation (711,610)(1,305,932)**  **** **   
$  115,239 
$  557,431
Intangible assets:
 Patents$  — $ 250,000
Less accumulated amortization  — (180,000)        
$   — 
$ 70,000
Accrued liabilities:
 Payroll and related        accruals $303,776  $ 90,026
 Accrued        Interest115,767 93,520
Other74,021 79,504        Total 
$ 493,564 
$ 263,050
Page 32
   
Tableof Contents

****

****

 

****

       Short-term notes payable at December 31, 2002and 2001 consisted of the following: |
|------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|