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

                                   FORM 10-QSB

     [X]      Quarterly  Report  Under  Section 13  or  15(d) of the
              Securities Exchange Act of 1934

               For the quarterly period ended September 30, 1998;

                                       or

     [ ]     Transition Report  Under  Section 13 or  15(d) of  the
             Securities  Exchange Act of 1934

        For transition period from ________________ to _________________

                         Commission file number 0-18865
                                ----------------

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
             (Exact name of registrant as specified in its charter)
                                ----------------
             UTAH                                          87-0401400
(State or other jurisdiction of                       (I.R.S. Employer
Incorporation or Organization)                        Identification No.)
                                 ---------------

            3855 S. 500 W.
                Suite R
            Salt Lake City, Utah                         84115
(Address of principal executive offices)              (Zip Code)

        Registrant's telephone number, including area code (801) 288-9120

     Check  whether  the issuer:  (1) filed all reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days. Yes [X] No[ ]

     As of November 17, 1998, the Registrant had outstanding 3,215,596 shares of
Common Stock.

           Transitional Small Business Disclosure Format (check one):

                                 Yes [ ] No [X]


<PAGE>

Part I     Financial Information

Item 1:    Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets - September 30, 1998 and 
March 31, 1998.............................................................   1

Condensed Consolidated Statements of Operations - Six months ended
September 30, 1998 and 1997 and Three Months
Ended September 30, 1998 and 1997..........................................   3

Statements of Stockholders' Equity.........................................   4

Condensed Consolidated Statements of Cash Flows - Six months ended
September 30, 1998 and 1997 and Three Months
Ended September 30, 1998 and 1997..........................................   5

Notes to Condensed Consolidated Financial Statements - September 30, 1998..   9

Item 2:    Management's Discussion and Analysis or Plan of Operation.......


Part II    Other Information

Item 1.    Legal Proceedings...............................................

Item 2.    Changes in Securities...........................................

Item 3.    Defaults upon Senior Securities.................................

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

Item 5.    Other Information ..............................................

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

                                        i
<PAGE>
<TABLE>
<CAPTION>
              
                                    AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                            Consolidated Balance Sheet


                                                      ASSETS

                                                                             September 30,          March 31,
                                                                               1998                  1998
                                                                         -----------------     -----------------
CURRENT ASSETS
<S>                                                                      <C>                   <C>              
   Cash                                                                  $           5,015     $          14,663
   Accounts receivable                                                             377,063               221,875
   Inventory (Note 1)                                                              445,693               437,003
   Marketable securities                                                         1,962,587               622,182
   Prepaid and other current assets                                                 25,900                44,882
                                                                         -----------------     -----------------

     Total Current Assets                                                        2,816,258             1,340,605
                                                                         -----------------     -----------------

PROPERTY AND EQUIPMENT (Note 1)

   Furniture, fixtures and equipment                                               426,426               383,638
   Capital leases                                                                1,003,507               859,185
                                                                         -----------------     -----------------

     Total depreciable assets                                                    1,429,933             1,242,823
     Less: accumulated depreciation                                               (274,146)             (118,889)
                                                                         -----------------     -----------------

     Net Property and Equipment                                                  1,155,786             1,123,934
                                                                         -----------------     -----------------

OTHER ASSETS

   Investments (Note 1)                                                             -                  1,077,500
   Intangible assets (Note 1)                                                    2,932,399             1,826,492
   Deposits                                                                          4,694                68,104
                                                                         -----------------     -----------------

     Total Other Assets                                                          2,937,093             2,972,096
                                                                         -----------------     -----------------

     TOTAL ASSETS                                                        $       6,909,137     $       5,436,635
                                                                         =================     =================
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>


                                    AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                      Consolidated Balance Sheet (Continued)


                                       LIABILITIES AND STOCKHOLDERS' EQUITY

                                                                             September 30,          March 31,
                                                                               1998                  1998
                                                                         -----------------     -----------------
CURRENT LIABILITIES
<S>                                                                      <C>                   <C>              
   Accounts payable                                                      $         819,712     $         688,021
   Accrued expenses and other current liabilities                                  636,432               393,494
   Current portion of notes payable (Note 3)                                       853,703               419,781
   Current portion of notes payable, related parties (Note 4)                      255,084               184,974
   Current portion of capital lease obligations (Note 5)                           257,395               303,475
                                                                         -----------------     -----------------

     Total Current Liabilities                                                   2,822,326             1,989,745
                                                                         -----------------     -----------------

LONG-TERM DEBT

   Reserve for discontinued operations                                             450,782               450,782
   Notes payable (Note 3)                                                          378,884                14,155
   Capital lease obligations (Note 5)                                              565,072               579,963
   Notes payable, related parties (Note 4)                                       1,399,459             1,091,536
                                                                         -----------------     -----------------

     Total Long-Term Debt                                                        2,794,197             2,136,436
                                                                         -----------------     -----------------

     Total Liabilities                                                           5,616,523             4,126,181
                                                                         -----------------     -----------------

COMMITMENTS AND CONTINGENCIES (Note 10)

STOCKHOLDERS' EQUITY

   Unrealized gain on marketable securities and investments                        452,905                -
   Preferred stock, par value $0.001 per share: 10,000,000
    shares authorized; issued and outstanding: 94,953
    Series B shares, 150,000 Series C shares                                           245                   245
   Common stock, par value $0.001 per share: 125,000,000
    shares authorized; issued and outstanding; 3,215,596 and
    2,929,263 shares issued and outstanding (Note 8)                                 3,215                 2,929
   Additional paid-in capital                                                    7,503,890             7,026,260
   Accumulated deficit                                                          (6,667,541)           (5,718,980)
                                                                         -----------------     -----------------

     Total Stockholders' Equity                                                  1,292,714             1,310,454
                                                                         -----------------     -----------------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                          $       6,909,137     $       5,436,635
                                                                         =================     =================
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.


<PAGE>
<TABLE>
<CAPTION>


                                    AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                       Consolidated Statements of Operations


                                          For the Six Months Ended              For the Three Months Ended
                                                September 30,                          September 30,
                                          1998                1997                1998               1997
                                      ---------------     ---------------    ----------------    ---------------
<S>                                   <C>                 <C>                <C>                 <C>            
NET SALES                             $     1,816,924     $       382,124    $      1,007,890    $       220,963

COST OF SALES                               1,131,510             173,966             631,640             95,826
                                      ---------------     ---------------    ----------------    ---------------

GROSS PROFIT                                  685,414             208,158             376,250            125,137
                                      ---------------     ---------------    ----------------    ---------------

GENERAL AND ADMINISTRATIVE EXPENSES

  Depreciation and amortization               228,177              25,057             123,232             13,568
  General expenses                          1,222,951             507,346             670,721            261,008
                                      ---------------     ---------------    ----------------    ---------------

    Total General and
     Administrative Expenses                1,451,128             532,403             793,953            274,576
                                      ---------------     ---------------    ----------------    ---------------

    Net Loss                                 (765,714)           (324,245)           (417,703)          (149,439)
                                      ---------------     ---------------    ----------------    ---------------

OTHER INCOME AND (EXPENSES)

  Other income and expenses                    11,418              40,823             (12,694)            -
  Gain of sale of assets                       48,100              -                   28,695             -
  Interest expense                           (242,365)            (49,815)           (135,323)           (37,777)
                                      ---------------     ---------------    ----------------    ---------------

    Total Other Income and
      (Expenses)                             (182,847)             (8,992)           (119,322)           (37,777)
                                      ---------------     ---------------    ----------------    ---------------

LOSS BEFORE INCOME TAXES
 AND DISCONTINUED OPERATIONS                 (948,561)           (333,237)           (537,025)          (187,216)
                                      ---------------     ---------------    ----------------    ---------------

DISCONTINUED OPERATIONS

  Loss from operations of GVI, FCC             -                 (157,595)             -                  95,611
                                      ---------------     ---------------    ----------------    ---------------


  Net (Loss) Before Income Tax               (948,561)           (490,832)           (537,025)           (91,605)
                                      ---------------     ---------------    ----------------    ---------------

  Net Loss Before Income Tax                 (948,561)           (490,832)           (537,025)           (91,605)
  Less: Provisions for (Income
   Tax)                                        -                   -                   -                  -
                                      ---------------     ---------------    ----------------    ---------------

NET LOSS PER SHARE OF
 COMMON STOCK FOR
 CONTINUING OPERATIONS                $         (0.31)    $         (0.18)   $          (0.17)   $         (0.10)
                                      ===============     ===============    ================    ===============

NET INCOME (LOSS) PER SHARE
 OF COMMON STOCK FOR
 DISCONTINUED OPERATIONS              $        -          $         (0.09)   $         -         $          0.05
                                      ===============     ===============    ================    ===============

WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING                      3,051,814           1,817,896           3,153,795          1,832,100
                                      ===============     ===============    ================    ===============
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.



<PAGE>
<TABLE>
<CAPTION>


                                        AMERICAN RESOURCES AND DEVELOPMENT
                                        Statements of Stockholders' Equity







                                                                                                   Additional
                                         Common Stock                  Preferred Stock              Paid-in        Accumulated
                                    Shares           Amount         Shares          Amount          Capital          Deficit
                                 ------------    -----------     -----------    -------------    --------------    ---------------
<S>                                 <C>          <C>                 <C>        <C>              <C>               <C>             
Balance, March 31, 1996             1,835,486    $     1,835         252,220    $         252    $   11,910,212    $    (8,941,298)

Capital contributions by stock
  issuances of a subsidiary            -              -               -                -              1,111,509             -

Net loss                               -              -               -                -                 -              (1,024,802)
                                 ------------    -----------     -----------    -------------    --------------    ---------------

Balance, March 31, 1997             1,835,486          1,835         252,220              252        13,021,721         (9,966,100)

Stock issuance of a subsidiary
 for payment of interest               -              -               -                -                143,166             -

Preferred B stock conversion
 into common stock                     11,995             12          (7,267)              (7)           -                  -

Common stock issued for
 services                             399,000            399          -                -                388,261             -

Expense recognized for
 vested stock options                  -              -               -                -                 52,498             -

Eliminate GVI equity for
 merger with U.S. Golf
 Communities (Note 2)                  -              -               -                -             (8,406,498)         4,687,868

Stock issued for cash                  24,000             24          -                -                 29,976             -

Stock issued for PPW
 acquisition (Note 2)                 258,782            259          -                -              1,293,651             -

Stock issued to FTI
 shareholders (Note 2)                400,000            400          -                -                499,600             -

Stock options issued to FTI
 shareholders                          -              -               -                -                  3,885             -

Net loss                               -              -               -                -                 -                (440,748)
                                 ------------    -----------     -----------    -------------    --------------    ---------------

Balance, March 31, 1998             2,929,263          2,929         244,953              245         7,026,260         (5,718,980)

Stock issued for cash                  48,000             48          -                -                 59,952             -

Stock issued for Quade
 acquisition                          238,333            238          -                -                417,678             -

Net loss                               -              -               -                -                 -                (948,561)
                                 ------------    -----------     -----------    -------------    --------------    ---------------

Balance, September 30, 1998         3,215,596    $     3,215         244,953    $         245    $    7,503,890    $    (6,667,541)
                                 ============    ===========     ===========    =============    ==============    =============== 

</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                      Consolidated Statements of Cash Flows




                                                           For the Six Months Ended           For the Three Months Ended
                                                                 September 30,                       September 30,
                                                          1998               1997                1998              1997
                                                       --------------    ---------------     ---------------    --------------
OPERATING ACTIVITIES
<S>                                                    <C>               <C>                 <C>                <C>            
  Net Loss                                             $     (948,561)   $      (490,832)    $      (537,025)   $      (91,605)
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Depreciation and amortization                             228,177             27,164             123,232            12,510
    Common stock issued for services and interest              -                  30,000              -                 30,000
    Gain on sale of marketable securities                     (48,100)            -                  (28,695)           -
  Changes in operating assets and liabilities net 
   of Quade acquisition:
    (Increase) decrease in inventory                            3,282           (118,302)            (70,734)           25,471
    (Increase) decrease in notes and accounts
     receivable                                              (150,921)           (35,771)            (73,752)          (25,697)
    Increase (decrease) in other current assets                53,287              2,069              75,441            (3,881)
    Increase (decrease) in accounts payable                   122,485            107,581              81,966             7,603
    Increase (decrease) in other current liabilities          101,999            206,780             127,603            42,735
                                                       --------------    ---------------     ---------------    --------------

     Net Cash Provided (Used) by Operating Activities        (638,352)          (271,311)           (301,964)           (2,864)
                                                       --------------    ---------------     ---------------    --------------

INVESTING ACTIVITIES

  Proceeds from sale of marketable securities                 232,304             -                   91,194            -
  Purchases of property and equipment                         (74,110)            (8,823)             (4,934)           (8,042)
  Investment in land held for development                      -                (364,261)             -               (124,599)
                                                       --------------    ---------------     ---------------    --------------

     Net Cash Provided (Used) by Investing Activities         158,194           (373,084)             86,260          (132,641)
                                                       --------------    ---------------     ---------------    --------------

FINANCING ACTIVITIES

  Stock issued for cash                                        60,000             -                   15,000            -
  Payments on long-term debt and capital lease
    obligations                                              (207,338)           (61,170)           (121,091)           (9,130)
  Proceeds from notes payable                                 150,000            245,266              -                 30,282
  Net borrowings on line of credit arrangement                 67,848             -                   10,161            -
  Borrowings from related parties                             400,000            452,610             300,000           124,635
                                                       --------------    ---------------     ---------------    --------------

     Net Cash Provided (Used) by Financing Activities         470,510            636,706             204,070           145,787
                                                       --------------    ---------------     ---------------    --------------

INCREASE (DECREASE) IN CASH                                    (9,648)            (7,689)            (11,634)           10,282

CASH, BEGINNING OF PERIOD                                      14,663             47,850              16,649            29,879
                                                       --------------    ---------------     ---------------    --------------

CASH, END OF PERIOD                                    $        5,015    $        40,161     $         5,015    $       40,161
                                                       ==============    ===============     ===============    ==============
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>
<TABLE>
<CAPTION>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                Consolidated Statements of Cash Flows (Continued)
                                   (Unaudited)





                                               For the Six Months Ended
                                                     September 30,
                                               1998               1997
                                         ----------------   ------------------ 
CASH PAID FOR
<S>                                      <C>                <C>               
  Interest                               $          -       $          190,836
  Income taxes                           $          -       $           -

NON-CASH FINANCING ACTIVITIES

  Common stock issued for services       $          -       $           30,000
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements.

<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 1 -      SIGNIFICANT ACCOUNTING POLICIES

              Quarterly Financial Statements

              The  preparation  of  financial   statements  in  conformity  with
              generally accepted  accounting  principles  requires management to
              make estimates and assumptions that affect the amounts reported in
              the financial  statements and accompanying  notes.  Actual results
              could differ from those estimates.  The accompanying  consolidated
              unaudited  condensed  financial  statements  have been prepared in
              accordance with the instructions to Form 10-QSB but do not include
              all  of  the  information  and  footnotes  required  by  generally
              accepted  accounting  principles and should therefore,  be read in
              conjunction with the Company's fiscal 1998 financial statements in
              Form  10-KSB.  These  statements  do include all normal  recurring
              adjustments  which the Company  believes are  necessary for a fair
              presentation of the statements.  The interim operating results are
              not necessarily indicative of the results for a full year.

              b.  Organization

              American  Resources  and  Development  Company  (the  Company) was
              formed as a Utah  company on March 31, 1983 under the name Leasing
              Technologies.  In March  1997,  the  shareholders  of the  Company
              approved  a name  change to  American  Resources  and  Development
              Corporation. In addition, the shareholders also approved a reverse
              split of its  common  stock on a 1 share for 20 share  basis.  The
              accompanying  consolidated financial statements have been restated
              to reflect this reverse split retroactively.

              Effective  march 17, 1997, the Company  acquired 80% of the issued
              and  outstanding  common stock of Fan-Tastic,  Inc.  (FTI), a Utah
              corporation, in exchange for 100,000 shares of the Company's Class
              D preferred stock.  Effective March 31, 1998, the Company acquired
              the  remaining 20% of the issued and  outstanding  common stock of
              FTI. This  acquisition  has been  accounted for using the purchase
              method in the accompanying consolidated financial statements.  See
              Note 2 for further discussion regarding this transaction.

              Effective March 31, 1998, the Company acquired  approximately  83%
              of the issued and outstanding common stock of Pacific Printing and
              Embroidery.

              Effective July 23, 1998,  the Company  acquired 100% of the issued
              and outstanding common stock of Quade, Inc. ("Quade"). Quade  owns
              the  master   licensing   rights  of  the  U.S.  Polo  Association
              trademarks for the United States and Canada (see Note 5).

              c.  Principles of Consolidation

              The  accompanying   consolidated   financial   statements  include
              American  Resources and Development  company and its subsidiaries,
              Fan-Tastic,  Inc, (FTI),  Pacific  Printing and Embroidery  L.L.C.
              (PPW) and Quade, Inc.
              (Quade).


<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 1 -      SIGNIFICANT ACCOUNTING POLICIES (Continued)

              d.  Financial instruments

              Statement of Financial Accounting Standards No. 107,  "Disclosures
              about Fair Value of Financial  Instruments" requires disclosure of
              the fair value of financial  instruments held by the Company, SFAS
              107 defines the fair value of a financial instrument as the amount
              at  which  the   instrument   could  be  exchanged  in  a  current
              transaction  between willing  parties.  The following  methods and
              assumptions were used to estimate fair value.

              The carrying amount of cash equivalents,  accounts  receivable and
              accounts  payable  approximate  fair value due to their short-term
              nature.

              Marketable  securities  represent  1,207,746 and 497,746 shares of
              GVI  unrestricted  stock at September 30, 1998 and March 31, 1998,
              respectively,   which  are  classified  as  marketable  securities
              available for sale and are carried at market value.  Any change in
              market  value from period to period will be reported as a separate
              component of stockholders' equity until realized.

              Investments  represent  862,000 shares of GVI restricted  stock at
              March 31, 1998, which were classified as investments available for
              sale.  These shares were  classified as  marketable  securities at
              September 30, 1998 as restrictions for resale expire in July 1999.

              There was an unrealized gain of $452,905 in marketable  securities
              at  September  30, 1998 due to a $0.375  increase in GVI per share
              value at September  30, 1998  compared to the  Company's  recorded
              cost for GVI shares.

              e.  Income Taxes

              Income taxes consist of Federal Income and State Franchise  taxes.
              The Company has elected a March 31 fiscal  year-end  for both book
              and income tax purposes.

              The Company  accounts  for income  taxes under the  provisions  of
              Statement  of  Financial  Accounting  Standards  No. 109 (SFAS No.
              109).  "Accounting for Income Taxes," which requires the asset and
              liability method of accounting for tax deferrals.



<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 1 -      SIGNIFICANT ACCOUNTING POLICIES (Continued)

              f.  Net Loss Per Common Share

              Net  loss  per  common  share is  computed  based on the  weighted
              average number of common shares outstanding during the period. The
              common stock equivalents are anti-dilutive and,  accordingly,  are
              not used in the net loss per common share computation.

              In February 1997, the Financial  Accounting Standards Board issued
              Statement  No. 128,  Earnings  per Share,  (SFAS  128),  which was
              required to be adopted on December 31,  1997.  SFAS 128 requires a
              change in the method  currently used to compute earnings per share
              and to restate all prior  periods to  disclose  diluted net income
              per common  share in addition to its current  basic net income per
              common share. Basic net loss from continuing operations per common
              share and diluted net loss from  continuing  operations per common
              share  amounts,  calculated  in  accordance  with SFAS  128,  were
              $(0.17) and $(0.10) for the quarters ended  September 30, 1998 and
              1997,  respectively.  Basic net loss from discontinued  operations
              per common share and diluted net loss from discontinued operations
              per common share for the  quarters  ended  September  30, 1998 and
              1997 was $-0- and $0.05,  respectively.  Weighted  average  common
              shares  outstanding  were 3,153,795 and 1,832,100 for the quarters
              ended June 30, 1998 and 1997, respectively.

              g.  Revenue Recognition

              Franchise  fees  are  recognized  as  revenue  when  all  material
              services relating to the sale have been substantially performed by
              FTI.  Material  services  relating to the  franchise  sale include
              assistance  in the  selection of a site and  franchisee  training.
              Revenue for contract screenprinting,  embroidery and product sales
              are recognized  when the goods have shipped.  Royalty revenue from
              sublicensee  royalty  guarantees are  recognized  equally over the
              life of the contracts.

              h.  Intangible Assets

              The excess of the Company's  acquisition  cost over the fair value
              of the net assets of the FTI acquisition  resulted in a write-down
              of  goodwill of $756,797  for the year ended  March 31,  1998.  On
              March 31, 1998, the Company also recognized goodwill of $1,826,492
              from the purchase of Pacific Print Works (a.k.a.  Pacific Printing
              and  Embroidery  LLC).  The Company  recognizes  goodwill from the
              excess of the  purchase  price of its  acquisitions  over the fair
              value of the net assets  acquired.  The  Company  also  recognized
              $1,092,473 of license and trademark  rights from the July 23, 1998
              purchase of Quade,  Inc.  The  Company  amortizes  its  intangible
              assets over a 15 year life.

              The Company  evaluates the  recoverability of goodwill and reviews
              the  amortization  period on an annual basis.  Several factors are
              used  to  evaluate   goodwill,   including  but  not  limited  to:
              management's plans for future operations, recent operating results
              and  projected,  undiscounted  cash flows.  The primary  method is
              projected, undiscounted cash flows.


<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2        MERGERS AND ACQUISITIONS

              Golf Ventures, Inc.

              In November  1997,  Golf  Ventures,  Inc.  merged  with U.S.  Golf
              Communities.  U.S. Golf Communities is the controlling  company in
              this merger and  subsequent  to the merger the combined  company's
              name will be changed to Golf  Communities of America  (GCA).  This
              merger resulted in a less than 20% American  Resources'  ownership
              in  GVI.  Therefore,  subsequent  to  the  merger,  the  Company's
              investment in GVI is reflected as an investment in accordance with
              Financial  Accounting Standards Board Statement No. 121. Pro forma
              results of operations if the GVI merger would have occurred at the
              beginning of fiscal 1997 would have  resulted in a decrease in net
              loss of $172,728  and  $685,918 for the years ended March 31, 1998
              and 1997,  respectively,  and $0.83 and  $(0.37) per share for the
              same periods.  The following  proforma  balance sheet reflects the
              effect of this merger.



<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2 -    MERGERS AND ACQUISITIONS (Continued)

              In connection with the Company's  management  services relating to
              the  merger of GVI with U.S.  Golf  Communities  and to settle all
              claims,  and  obligations  with the  Company,  GVI issued  862,000
              shares of its  restricted  common  stock to the Company in July of
              1998. A gain of  $1,720,387,  net of expenses,  was recognized for
              the year ended March 31, 1998. This gain was recognized for fiscal
              1998 because it related to prior year activities.
<TABLE>
<CAPTION>


                                                         Prior to              GVI                    After
                                                          Merger            Adjustments            GVI Merger
                                                   ------------------    -----------------     -----------------
CURRENT ASSETS
<S>                                                <C>                   <C>                   <C>              
   Cash                                            $           86,213    $         (10,047)    $          76,166
   Marketable securities                                       -                   692,886               692,886
   Accounts receivable                                        131,522               -                    131,522
   Inventory, real estate                                     753,131             (753,131)               -
   Inventory, merchandise                                     581,169               -                    581,169
   Notes receivable                                            75,000               -                     75,000
   Prepaid and other current assets                            33,130               -                     33,130
   Current portion of contract receivable                       1,955                                     (1,955)
                                                   ------------------    -----------------     -----------------

     Total Current Assets                                   1,662,120              (72,247)            1,589,873
                                                   ------------------    -----------------     -----------------

PROPERTY AND EQUIPMENT

   Model home and condominiums                                180,988             (134,788)               46,200
   Furniture, fixtures and equipment                          197,284              (15,456)              181,828
   Vehicles                                                    43,252               -                     43,252
                                                   ------------------    ------------------    -----------------
            

Total depreciable assets                                      421,524             (150,244)              271,280
Less: accumulated depreciation                               (124,936)               4,435              (120,501)
                                                   ------------------    -------------------   -----------------

     Net property and equipment                               296,588             (145,809)              150,779
                                                   ------------------    -----------------     -----------------

OTHER ASSETS

   Land held for development                               12,132,098          (11,886,098)              246,000
   Goodwill                                                   240,407               -                    240,407
   Long-term portion of contract
     receivable                                                55,993              (55,993)               -
   Deposit                                                      1,970               -                      1,970
                                                   -------------------   -----------------     -----------------


     Total Other Assets                                    12,430,468          (11,942,091)              488,377
                                                   ------------------    -----------------     -----------------

     TOTAL ASSETS                                  $       14,389,176    $     (12,160,147)    $       2,229,029
                                                   ==================    =================     =================
</TABLE>

<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2 -   MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>

                                                         Prior to              GVI                    After
                                                          Merger            Adjustments            GVI Merger
                                                   ------------------    -----------------     -----------------
CURRENT LIABILITIES
<S>                                                <C>                   <C>                   <C>              
   Accounts payable                                $        1,296,869    $        (898,265)    $         398,604
   Accrued expenses and other current
    liabilities                                             1,367,403             (707,474)              659,929
   Current portion of notes payable                         1,309,400             (903,924)              405,476
   Current portion of notes payable, related
    parties                                                   377,337               -                    377,337
   Current portion of capital lease
    obligations                                                14,556               -                     14,556
                                                   ------------------    -----------------     -----------------
             

     Total Current Liabilities                              4,365,565           (2,509,663)            1,855,902
                                                   ------------------    -----------------     -----------------

LONG-TERM DEBT

   Notes payable                                            6,550,550           (6,550,550)               -
   Capital lease obligations                                    4,262               -                      4,262
   Notes payable, related parties                             748,087              (75,000)              673,087
                                                   ------------------    -----------------     -----------------

      Total Long-Term Debt                                  7,302,899           (6,625,550)              677,349
                                                   ------------------    -----------------     -----------------

STOCKHOLDERS' EQUITY

   Preferred stock                                                252               -                        252
   Common stock                                                 1,868               -                      1,868
   Additional paid-in capital                              13,258,330           (8,406,498)            4,851,832
   Accumulated deficit                                    (10,539,738)           5,381,564            (5,158,174)
                                                   ------------------    -----------------     -----------------

     Total Stockholders' Equity                             2,720,712           (3,024,934)            (304,222)
                                                   ------------------    -----------------     ----------------

TOTAL LIABILITIES AND
  STOCKHOLDERS' EQUITY                             $       14,389,176    $     (12,160,147)    $       2,229,029
                                                   ==================    =================     =================
</TABLE>


<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2 -       MERGERS AND ACQUISITIONS (Continued)

               Fan-Tastic, Inc.

               In  March  1997,  the  Company  acquired  80% of the  issued  and
               outstanding  common stock of  Fan-Tastic,  Inc. (FTI) in exchange
               for the  issuance  of 100,000  shares of the  Company's  Series D
               preferred  stock.  FTI  is  a  franchiser  and  owner  of  retail
               entertainment  and sports  stores doing  business as Fan-A Mania.
               The  Acquisition  was  accounted  for by the  purchase  method of
               accounting,   and  accordingly,   the  purchase  price  has  been
               allocated to assets  acquired and  liabilities  assumed  based on
               their fair market value at the date of acquisition.  The acquired
               interest was valued at  $252,912,  which  represents  liabilities
               assumed in excess of assets  acquired which has been reflected as
               goodwill.  The FTI acquisition involved contingent  consideration
               based on FTI achieving specified earnings but was amended in June
               1998,  effective as of March 31, 1998,  as the Company  purchased
               the remaining 20% of the issued and  outstanding  common stock of
               FTI and eliminated the  contingent  consideration  by issuing the
               FTI shareholders 400,000 shares of the Company's common stock and
               by vesting  options to purchase  150,000  shares of the Company's
               common stock at $2.00 a share. These stock options expire on June
               30, 2000. The Company  recognized  $500,000 for the shares issued
               to FTI shareholders and $3,855 for the value of the options.  The
               fair value for these  options  was  estimated  at the date of the
               vesting  using an option  pricing  model  which was  designed  to
               estimate  the fair value of options  which,  unlike  these  stock
               options,  can be traded  at any time and are fully  transferable.
               The  assumptions as described in Note 9 were used to estimate the
               fair value of these options in addition to a trading price on the
               Company's  stock of $1.25 per share.  The $503,855  value for the
               shares  issued  and the  options  was  included  in the  $756,797
               writedown of goodwill for fiscal 1998.

               For the year ended March 31, 1997,  FTI  sustained  net losses of
$(101,314) on gross revenues of $875,532.

              Unaudited  proforma summary  information  combining the results of
              operations  of the  Company  and  FTI as if  the  acquisition  had
              occurred at the  beginning of fiscal 1997,  after giving effect to
              certain  adjustments,  including  amortization  of goodwill.  This
              proforma  summary  does not  necessarily  reflect  the  results of
              operations  as they  would  have been if the  Company  and FTI had
              constituted a single entity during such periods.

                                                   For the
                                                  Year ended
                                                March 31, 1997

                  Net revenue                 $        1,149,532
                  Net loss                    $       (1,142,977)
                  Net loss per share          $            (0.62)

<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2 -       MERGERS AND ACQUISITIONS (Continued)

               Finally Communities, Inc.

               In May  1997,  the  Company  issued  500,000  shares  of Series E
               preferred   stock  in  exchange   for  100%  of  the  issued  and
               outstanding common stock of Finally Communities,  Inc. (FCI). FCI
               was a new  corporation  with no  prior  operations  organized  to
               develop and sell vacation  ownership  interest in various resorts
               initially located in the State of Arkansas and develop and market
               other  new  vacation  products.  The  seller of FCI  remained  as
               President after the acquisition.

               From May 1997  through  December  31,  1997,  FCI had real estate
               sales of $67,772,  cost of sales of $27,771,  general expenses of
               $69,307  and  interest  expense of  $1,081.  In March  1998,  the
               Company's  Board  of  Directors  sold  its  shares  in FCI to the
               original seller for the return of the stock previously  issued to
               the  original  seller.  A  $30,387  gain  was  recorded  from the
               disposal of FCI.

               Pacific Print and Embroidery, LLC (aka Pacific Print Works)

               In December 1997, the Company entered into a letter of intent for
               the  purchase  of  a  contract  screen  printing  and  embroidery
               company,  Pacific Print Works (PPW). At March 31, 1998,  $115,000
               had been advanced to PPW in the form of a note receivable. In May
               1998, the Company acquired over 80% of the outstanding  shares of
               PPW. The merger is effective as of March 31, 1998 as the Board of
               Directors of PPW had agreed to transfer  control of PPW effective
               March 31,  1998,  except for  restrictions  based on  significant
               changes to operations.  The  acquisition was accounted for by the
               purchase  method of  accounting,  and  accordingly,  the purchase
               price has been  allocated  to  assets  acquired  and  liabilities
               assumed  based  on  their  fair  market  value  at  the  date  of
               acquisition. Liabilities assumed in excess of assets acquired was
               $532,582 and 258,782  shares of the  Company's  common stock were
               issued to PPW shareholders with a guaranteed share value of $5.00
               resulting   in  goodwill  of   $1,826,492.   Depending  on  PPW's
               performance over the next three years,  additional  shares of the
               Company's  common  stock will be issued for this  acquisition  if
               minimum earnings levels are met.

              Fiscal    Earnings Before Income Taxes     Common Shares Issuable
               Year             Low            High        Minimum      Maximum
               ----             ---            ----        -------      -------
                1999       $ 179,480       $  538,200       28,754       86,261
                2000         269,020          807,300       28,754       86,261
                2001         357,900        1,073,700       28,754       86,261

              Earnings  before  income  taxes  above the low level but below the
              high level will result in common  shares being issued based on the
              percentage of actual  earnings to the high earnings  multiplied by
              the maximum shares issuable for that year. For example,  in fiscal
              1999, earnings of $300,000 would result in 48,083 shares of common
              stock being issued to the PPW shareholders.
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2 -       MERGERS AND ACQUISITIONS (Continued)

               The  following  tables  set  forth  certain  unaudited  pro forma
               condensed combined financial  information for the Company and PPW
               accounted for under the purchase method of accounting.

               The pro forma condensed combined balance sheet was prepared using
               the historical  balance sheets of the Company and PPW as of March
               31,  1998.  The  pro  forma  condensed  combined   statements  of
               operations  for each of the two years  ended  March 31,  1998 and
               1997 were prepared using the historical  statements of operations
               of the Company and PPW.

               The  pro  forma  condensed  combined  financial  information  was
               included for comparative purposes only and does not purport to be
               indicative  of the results of  operations  or financial  position
               that  actually  would have been  obtained  if the merger had been
               effected  at the dates  indicated  of the  financial  position or
               results of operations that may be obtained in the future.

<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997



NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>

                                        American Resources and Development Company
                                      Consolidated Pro Forma Combined Balance Sheets
                                                      March 31, 1998



                                   American                                Pro Forma
                                   Resources             PPW              Adjustments          Combined
                              ----------------    ----------------    --------------      --------------- 
CURRENT ASSETS
<S>                           <C>                 <C>                 <C>                 <C>            
Cash                          $          4,962    $          9,699    $        -          $        14,663
Marketable Securities                  622,182              -                  -                  622,182
Accounts receivable                     51,444             170,431             -                  221,875
Inventory, merchandise                 321,934             115,071             -                  437,003
Notes receivable                       115,000            (115,000)            -                   -
Prepaid and other current
  assets                                41,289               3,593             -                   44,882
                              ----------------    ----------------    --------------      --------------- 


     Total Current Assets            1,156,811             183,794             -                1,340,605
                              ----------------    ----------------    --------------      --------------- 


PROPERTY AND
 EQUIPMENT

Furniture, fixtures and
  equipment                            158,242             271,413           (46,017)             383,638
Leased equipment                        40,650             921,713          (103,178)             859,185
                              ----------------    ----------------    --------------      --------------- 
Total depreciable assets               198,892           1,193,126          (149,195)           1,242,823
Less: accumulated
  depreciation                        (118,889)           (149,195)          149,195             (118,889)
                              ----------------    ----------------    --------------      --------------- 


Net Property and
 Equipment                              80,003           1,043,931            -                 1,123,934
                              ----------------    ----------------    --------------      --------------- 


OTHER ASSETS

Investments                          1,077,500              -                 -                 1,077,500
Goodwill                                                                   1,826,492            1,826,492
Deposit                                  1,970              66,134            -                    68,104
                              ----------------    ----------------    --------------      ---------------

     Total Other Assets              1,079,470              66,134         1,826,492            2,972,096
                              ----------------    ----------------    --------------      ---------------

     TOTAL ASSETS             $      2,316,284    $      1,293,859    $    1,826,492     $      5,436,635
                              ================    ================    ==============     ================
</TABLE>


<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2- MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>

                                          American Resources and Development Company
                                        Consolidated Pro Forma Combined Balance Sheets
                                                        March 31, 1998

                                             American                                Pro Forma
                                             Resources             PPW              Adjustments          Combined
                                        ----------------    ----------------    --------------      --------------- 

CURRENT LIABILITIES
<S>                                     <C>                 <C>                 <C>                 <C>            
Accounts payable                        $       391,985     $        296,036    $        -          $       688,021
Accrued expenses and
 other current liabilities                      288,415              105,079             -                  393,494
Current portion of notes payable                382,635              162,146             -                  544,781
Current portion of notes
 payable - related parties                       23,974               36,000             -                   59,974
Current portion of capital
 lease obligations                               19,450              284,025             -                  303,475
                                        ----------------    ----------------    --------------      --------------- 


    Total Current Liabilities                 1,106,459             883,286              -                1,989,745
                                        ----------------    ----------------    --------------      --------------- 


LONG-TERM DEBT

Reserve For Discontinued Operations             450,782              -                   -                  450,782
Long-term portion of notes payable               14,155              -                   -                  14,155
Long-term portion of capital
  lease obligations                              13,638             566,325              -                 579,963
Notes payable, related parties                  714,699             376,837              -               1,091,536
                                        ----------------    ----------------    --------------      --------------- 


     Total Long-Term Debt                     1,193,274             943,162              -               2,136,436
                                        ----------------    ----------------    --------------      --------------- 


STOCKHOLDERS' EQUITY

Preferred stock                                     245              -                   -                     245
Common stock                                      2,670              13,080             (12,821)             2,929
Additional paid-in capital                    5,732,616              -                1,293,644          7,026,260
Accumulated deficit                          (5,718,980)           (545,669)            545,669         (5,718,980)
                                        ----------------    ----------------    --------------      --------------- 

   Total Stockholders' Equity                    16,551            (532,589)          1,826,492          1,310,454
                                        ----------------    ----------------    --------------      --------------- 

   TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY                $     2,316,284     $     1,293,859     $     1,826,492     $    5,436,635
                                        ===============     ===============     ===============     ==============
</TABLE>


<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>



                                        American Resources and Development Company
                                 Consolidated Pro Forma Combined Statements of Operations
                                                  March 31, 1998

                                                American                           Pro Forma
                                                Resources           PPW           Adjustments        Combined
                                              -------------    -------------     -------------    --------------
SALES
<S>                                           <C>              <C>               <C>              <C>            
  Sales - screenprinting and embroidery       $      -         $   2,389,970     $      -         $    2,389,970
  Sales - merchandise and franchise fees          1,093,110           -                 -              1,093,110
                                              -------------    -------------     -------------    --------------

          Total Sales                             1,093,110        2,389,970            -              3,483,080
                                              -------------    -------------     -------------    --------------

COST OF SALES

  Cost of sales - screenprinting and embroidery      -             1,784,167            -              1,784,167
  Cost of sales - merchandise                       774,405           -                 -                774,405
                                              -------------    -------------     -------------    --------------
                                                    
          Total Cost of Sales                       774,405        1,784,167            -              2,558,572
                                              -------------    -------------     -------------    --------------


          Gross Profit                              318,705          605,803            -                924,508
                                              -------------    -------------     -------------    --------------

EXPENSES

   General and administrative expenses            1,447,285          771,624           121,229         2,340,138
   Writedown of goodwill                            756,797           -                 -                756,797
   Sales and marketing expenses                      93,175           -                 -                 93,175
   Depreciation                                      31,814          194,523            -                226,337
                                              -------------    -------------     -------------    --------------

          Total Expenses                          2,329,071          966,147           121,229         3,416,447
                                              -------------    -------------     -------------    --------------

Loss From Operations                             (2,010,366)        (360,344)         (121,229)       (2,491,939)
                                              -------------    -------------     -------------    --------------

Other Income and (Expenses)

   Other income                                      15,387            1,847            -                 17,234
   Interest revenue                                       5           -                 -                      5
   Gain on sale of assets                           139,906           -                 -                139,906
   Interest expense                                (133,339)        (183,385)           -               (316,724)
                                              -------------    -------------     -------------    --------------

     Total Other Income and Expenses                 21,959         (181,538)           -               (159,579)
                                              -------------    -------------     -------------    --------------


LOSS BEFORE INCOME TAXES AND
 DISCONTINUED OPERATIONS

   Loss from operations of GVI, FCC                (172,728)          -                 -               (172,728)
   Gain on disposal of GVI, FCC                   1,720,387           -                 -              1,720,387
                                              -------------    -------------     -------------    --------------

     Total Discontinued Operations                1,547,659           -                 -              1,547,659
                                              -------------    -------------     -------------    --------------

INCOME TAXES                                         -                -                 -                 -
                                              -------------    -------------     -------------    --------------


Net Loss                                      $    (440,748)   $    (541,882)    $    (121,229)   $   (1,103,859)
                                              =============    =============     =============    ==============

Loss Per Share                                $       (0.57)   $       (2.07)    $      -         $        (0.80)
                                              =============    =============     =============    ==============
</TABLE>

<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>

                                        American Resources and Development Company
                           Consolidated Pro Forma Combined Statements of Operations (Continued)
                                             For the Year ended March 31, 1997
                                                       (Unaudited)

                                                    American                           Pro Forma
                                                    Resources           PPW           Adjustments        Combined
                                                  -------------    -------------     -------------    --------------
SALES
<S>                                               <C>              <C>               <C>              <C>            
  Sales - screenprinting and embroidery           $     -          $  2,926,410      $     -          $  2,926,410

     Total Sales                                        -             2,926,410            -             2,926,410

COST OF SALES

  Cost of sales - screenprinting and embroidery         -             2,209,410            -             2,209,410

     Total Cost of Sales                                -             2,209,410            -             2,209,410

Gross profit                                            -               717,000            -               717,000

EXPENSES

  General and administrative expenses                  519,185          944,015           121,229        1,584,429
  Writedown of goodwill                                 -                -                 -                -
  Sales and marketing expenses                          -                -                 -                -
  Depreciation                                           3,124           74,815            -                77,939
                                                  -------------    -------------     -------------    --------------

     Total Expenses                                    522,309        1,018,830           121,229        1,662,368
                                                  -------------    -------------     -------------    --------------

Loss from operations                                  (522,309)        (301,830)         (121,229)        (945,368)
                                                  -------------    -------------     -------------    --------------

Other income and (Expenses)

  Other revenue                                         -                49,750            -                49,750
  Interest income                                          168           -                 -                   168
  Gain on sale of assets                               215,375           -                 -               215,375
  Interest expense                                     (32,118)         (58,350)           -               (90,468)

     Total Other Income and Expenses                   183,425           (8,600)           -               174,825

Loss before income taxes and discontinued
 operations

  Loss from discontinued operations                   (685,918)          -                 -              (685,918)

      Total Discontinued operations                   (685,918)          -                 -              (685,918)

Income Taxes                                            -                -                 -                -  

Net Loss                                          $ (1,024,802)    $   (310,430)     $   (121,229)    $ (1,456,461)
                                                  =============    =============     =============    ==============
Net loss per Share                                $      (0.56)    $      (1.20)                      $      (0.97)
                                                  =============    =============     =============    ==============
</TABLE>


<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 2        MERGERS AND ACQUISITIONS (Continued)

              Quade, Inc.

              In 1997,  Quade, Inc. acquired from the U.S. Polo Association ("US
              Polo") the exclusive  master  licenses  rights to the US Polo name
              for the United  States and Canada.  For the last year Quade,  Inc.
              has been developing  this property  including  signing  agreements
              with four  sub-licensees,  and serving as  licensee  for knit tops
              including t-shirts, fleece and polo shirts.

              On March  17,  1998,  the  Company  signed a Letter  of  Intent to
              acquire on hundred percent (100%) of the outstanding  common stock
              of  Quade,  Inc.  On July 23,  1998,  the  Company  completed  its
              purchase of Quade by issuing  213,333  shares of its common  stock
              and by loaning Quade $115,000, of which $40,000 had been loaned by
              June 30, 1998.  these  shares  include  32,000  shares that have a
              guarantee of $5.00 per share based on the average  asking price of
              the  Company's  common  stock for the six months  ended  March 31,
              1999. The Company also guaranteed a note payable of Quade, Inc. to
              its former  partner,  with a discounted  value of $613,383.65  and
              issued  25,000 shares of common stock to Quade's  former  partner.
              Depending  on  Quade's  performance  over  the next  three  years,
              additional shares of the Company's common stock will be issued for
              this acquisition if minimum earnings levels are met as follows:


               Fiscal   Earnings Before Income Taxes     Common Shares Issuable
                Year          Low              High         Minimum     Maximum
                ----          ---              ----         -------     -------
                1999       $  27,671       $    81,500       47,408      142,222
                2000       $ 251,166       $   754,000       47,376      142,222
                2001       $ 499,900       $ 1,499,200       47,423      142,222

              The  additional  contingent  shares  that  could be  issued to the
              Quade, Inc. shareholder also have a guaranteed value of $5.00.

              The following tables set forth certain audited pro forma condensed
              combined  financial  information  for the Company and Quade,  Inc.
              accounted for under the purchase method of accounting.

              The pro forma condensed  combined balance sheet was prepared using
              the historical balance sheets of the company and Quade, Inc. as of
              March 31, 1998.  the pro forma  condensed  combined  statements of
              operations  for Quade,  Inc. for the year ended March 31, 1998 was
              prepared  using the  historical  statements  of  operations of the
              Company and Quade.

              The  pro  forma  condensed  combined  financial   information  was
              included for comparative  purposes only and does not purport to be
              indicative of the results of operations or financial position that
              actually  would have been obtained if the merger had been effected
              at the dates  indicated  of the  financial  position or results of
              operations that may be obtained in the future.

<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997

NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)

                   American Resources and Development Company
                 Consolidated Pro Forma Combined Balance Sheets
                                 March 31, 1998

<TABLE>
<CAPTION>

                                American                              Pro Forma
                                Resources              Quade          Adjustments          Combined
                            -----------------   ---------------     ----------------   ----------------
CURRENT ASSETS
<S>                         <C>                 <C>                 <C>                <C>             
Cash                        $         14,663    $        -          $        -         $         14,663
Marketable Securities                622,182             -                   -                  622,182
Accounts receivable                  221,875             -                   -                  221,875
Inventory, merchandise               437,003             23,456              -                  460,459
Notes receivable                      -                  -                   -                   -
Prepaid and other current
  assets                              44,882            109,779              -                  154,661
                            -----------------   ---------------     ----------------   ----------------

     Total Current Assets          1,340,605            133,235              -                1,473,840
                            -----------------   ---------------     ----------------   ----------------
PROPERTY AND
 EQUIPMENT

Furniture, fixtures and
  equipment                          383,638             -                   -                  383,638
Leased equipment                     859,185             -                   -                  859,185
                            -----------------   ---------------     ----------------   ----------------
Total depreciable assets           1,242,823             -                   -                1,242,823
Less: accumulated
  depreciation                      (118,889)            -                   -                 (118,889)
                            -----------------   ---------------     ----------------   ----------------

Net Property and
 Equipment                         1,123,934             -                   -                1,123,934
                            -----------------   ---------------     ----------------   ----------------


OTHER ASSETS

Royalties receivable                  -                 120,000              -                  120,000
Investments                        1,077,500             -                   -                1,077,500
Intangible assets                  1,826,492             -                  989,129           2,815,621
Deposit                               68,104             -                   -                   68,104
                            -----------------   ---------------     ----------------   ----------------
     Total Other Assets            2,972,096            120,000             989,129           4,081,225
                            -----------------   ---------------     ----------------   ----------------


     TOTAL ASSETS           $      5,436,635    $       253,235     $       989,129    $      6,678,999
                            =================   ===============     ================   ================
</TABLE>

<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997

NOTE 2- MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>

                                          American Resources and Development Company
                                        Consolidated Pro Forma Combined Balance Sheets
                                                        March 31, 1998

                                          American                           Pro Forma
                                          Resources          Quade          Adjustments        Combined
                                       -------------     -------------    -------------     -------------
CURRENT LIABILITIES
<S>                                    <C>               <C>              <C>               <C>          
Accounts payable                       $     688,021     $      -         $      -          $     688,021
Accrued expenses and
 other current liabilities                   393,494           244,411           -                637,905
Current portion of notes payable             419,781           651,868          (92,454)          979,195
Current portion of notes
 payable - related parties                   184,974            -                -                184,974
Current portion of capital
 lease obligations                           303,475            -                -                303,475
                                       -------------     -------------    -------------     -------------
    Total Current Liabilities              1,989,745           896,279          (92,454)        2,793,570
                                       -------------     -------------    -------------     -------------


LONG-TERM DEBT

Reserve for discontinued
  operations                                 450,782            -                -                450,782
Long-term portion of notes payable            14,155            -                -                 14,155
Long-term portion of capital
  lease obligations                          579,963            -                -                579,963
Notes payable, related parties             1,091,536            -                -              1,091,536
                                       -------------     -------------    -------------     -------------
     Total Long-Term Debt                  2,136,436            -                -              2,136,436
                                       -------------     -------------    -------------     -------------


STOCKHOLDERS' EQUITY

Preferred stock                                  245            -                -                    245
Common stock                                   2,929             1,000             (762)            3,167
Additional paid-in capital                 7,026,260            -               438,301         7,464,561
Accumulated deficit                       (5,718,980)         (644,044)         644,044        (5,718,980)
                                       -------------     -------------    -------------     -------------

   Total Stockholders' Equity              1,310,454          (643,044)       1,081,583         1,748,993
                                       -------------     -------------    -------------     -------------


   TOTAL LIABILITIES AND
    STOCKHOLDERS' EQUITY               $   5,436,635     $     253,235    $     989,129     $   6,678,999
                                       =============     =============    =============     =============
</TABLE>


<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997

NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>

                                        American Resources and Development Company
                                Consolidated Pro Forma Combined Statements of Operations
                                                   March 31, 1998

                                                 American                          Pro Forma
                                                Resources           Quade         Adjustments         Combined
                                              -------------     -------------    -------------     -------------
<S>                                           <C>              <C>               <C>              <C>           
SALES                                         $   1,093,110    $     206,391     $      -         $    1,299,501

COST OF SALES                                       774,405          219,618            -                994,023
                                              -------------    -------------     -------------    --------------
          Gross Profit                              318,705          (13,227)           -                305,478
                                              -------------    -------------     -------------    --------------
EXPENSES

   General and administrative expenses            1,447,285          535,841            -              1,983,126
   Writedown of goodwill                            756,797           -                 -                756,797
   Sales and marketing expenses                      93,175           -                 -                 93,175
   Depreciation and amortization                     31,814           -                 72,831           104,643
                                              -------------    -------------     -------------     -------------
          Total Expenses                          2,329,071          535,841            72,831         2,937,741
                                              -------------    -------------     -------------     -------------

Loss From Operations                             (2,010,366)        (549,068)          (72,831)       (2,632,265)
                                              -------------    -------------     -------------     -------------

Other Income and (Expenses)

   Other income                                      15,387           -                 -                 15,387
   Interest revenue                                       5           -                 -                      5
   Gain on sale of assets                           139,906           -                 -                139,906
   Interest expense                                (133,339)         (41,660)           -               (316,724)
                                              -------------    -------------     -------------     -------------

     Total Other Income and Expenses                 21,959          (41,660)           -               (159,579)
                                              -------------    -------------     -------------     -------------


LOSS BEFORE INCOME TAXES AND
 DISCONTINUED OPERATIONS

   Loss from operations of GVI, FCC                (172,728)          -                 -               (172,728)
   Gain on disposal of GVI, FCC                   1,720,387           -                 -              1,720,387
                                              -------------    -------------     -------------     -------------

     Total Discontinued Operations                1,547,659           -                 -              1,547,659
                                              -------------    -------------     -------------     -------------

INCOME TAXES                                         -                -                 -                 -
                                              -------------    -------------     -------------     -------------

Net Loss                                      $    (440,748)   $    (590,728)    $     (72,831)    $  (1,104,307)
                                              =============    =============     =============     =============
Loss Per Share                                $       (0.24)   $                 $      -         $        (0.59)
                                              =============    =============     =============    ==============
</TABLE>


Pro forma  adjustments  include a $1,061,960  addition to intangible  assets for
license  and  trademark  rights  net  of  fiscal  1998  pro  forma   accumulated
amortization  of $72,831.  License  and  trademark  rights were valued  based on
acquired  liabilities  over assets plus the value of the Company's  stock issued
for Quade. Pro forma adjustment for additional  paid-in capital and common stock
represent  the value of  common  stock  issued  for the  acquisition.  Pro forma
adjustment  for notes  payable was made to impute the note from  Quade's  former
partner to its present value at a 10% interest rate.

<PAGE>
<TABLE>
<CAPTION>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 3 -      NOTES PAYABLE

              Notes payable are comprised of the following:
                                                                                                 September 30,
                                                                                                     1998
                                                                                               -----------------
<S>                                                                                           <C>         
              Note payable, unsecured, bearing interest at 12%, payable
               in monthly installments of $7,000, including interest.                          $          54,209

              Convertible subordinated debentures, due June 30, 1996
               bearing interest at 12% per annum.  Interest payable
               quarterly, secured by land.                                                               185,000

              Note payable with interest at 25%.  Interest payable in July with
               the entire note due October 24, 1998.  Secured by Company
               and GVI stock.  Note paid in full October 1998.                                           150,000

              Note payable to a bank with  interest at 3% above prime per annum.
               Secured by accounts receivable and due September 30, 1998.
               Paid in full in November 1998.                                                            229,994

              Note payable to former Quade partner.  Entire balance was
               paid in October 1998 from proceeds of Jordache investment
               (see Note 13.)                                                                            613,384
                                                                                               -----------------
              Subtotal                                                                                 1,232,587

              Less current portion                                                                       853,703
                                                                                               -----------------
              Long-term portion                                                                $         378,884
                                                                                               =================

              Maturities of long-term debt are as follows:

                                            March 31, 1999                                     $         853,703
                                            March 31, 2000                                               169,000
                                            March 31, 2001                                               209,884
                                                                                               -----------------
                                                                                               $       1,232,587
                                                                                               =================
</TABLE>

<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 4 -      NOTES PAYABLE, RELATED PARTIES
<TABLE>
<CAPTION>
                                                                                                   September 30,
                                                                                                     1998
                                                                                               -----------------
<S>                                                                                            <C> 
              Note  payable to Banque  SCS,  secured by GVI and  Company  common
               stock.  Interest  at 14%  with  monthly  principal  and  interest
               payments  of  $6,000  with a final  balloon  payment  July  2001.
               (Banque SCS is a shareholder although it disclaims
               beneficial ownership of the shares).                                            $         346,144

              Promissory  notes to Banque  SCS,  secured by GVI  stock,  bearing
               interest at 12%. Interest due monthly with the entire balance due
               on April 24, 1998. Holder of note has agreed
               to sell GVI stock securing note until note is paid in full.                               170,000

              Note payable to Banque SCS, secured by GVI and Company
               common stock.  Interest at 16% due monthly with the entire
               loan due December 7, 1999.                                                                340,000

              Note payable to a shareholder, secured by assets of the
               Company.  Interest payable monthly at 18% with no stated
               principal payments required.                                                              135,491

              Notes payable to the former owners of FTI  (includes  officers and
               directors of the Company). Interest rates average 9.5%.
               Unsecured, due upon demand.                                                               256,900

              Notes payable to the former shareholders of PPW (includes
               an officer an director of the Company).  Interest rates average
               12%.  Unsecured.                                                                          406,008
                                                                                               -----------------
                                            Subtotal                                                   1,654,543

                                            Less current portion                                        (255,084)
                                                                                               -----------------

                                            Long-term portion                                  $       1,399,459
                                                                                               =================
</TABLE>


<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 5 -      CAPITAL LEASES

              Property and equipment  payments  under capital leases as of March
              31, 1998 is summarized as follows:

                                 Year End
                                 March 31,
                                  1999                         $    368,389
                                  2000                              295,451
                                  2001                              253,347
                                  2002                               90,898
                                                               ------------

              Total minimum lease payments                        1,008,085
              Less interest and taxes                               124,647
                                                               ------------

              Present value of net minimum lease payments           883,438
              Less current portion                                  303,475
                                                               ------------
              Long-term portion of capital lease obligations   $    579,963
                                                               ============

NOTE  6 -     INCOME TAXES

              The Company had net  operating  loss  carry-forwards  available to
              offset future taxable  income.  The Company has net operating loss
              carry-forwards  of  approximately  $5,700,000 to offset future tax
              liabilities. The loss carry-forwards will begin to expire in 2008.

              Deferred income taxes payable are made up of the estimated federal
              and state income taxes on items of income and expense which due to
              temporary  differences  between books and taxes are deferred.  The
              temporary  differences  are  primarily  caused  by the  use of the
              equity  method  for  reporting  investment  in  subsidiaries.  The
              deferred  tax  asset is offset  in full by a  valuation  allowance
              because it can not be reasonably determined that the net operating
              loss will be useable.

NOTE 7 -      PREFERRED STOCK

              The shareholders of the Company have authorized  10,000,000 shares
              of  preferred  stock with a par value of $0.001.  The terms of the
              preferred  stock are to be determined  when issued by the board of
              directors of the Company.

              SERIES B:

              At  September  30,  1998,  there  are  94,953  shares  of series B
              preferred stock issue and outstanding. The holders of these series
              B  preferred  shares are  entitled  to an annual  cumulative  cash
              dividend of not less than sixty cents per share.  At September 30,
              1998, there is a total of $344,782 of accrued and unpaid dividends
              related to the series B preferred  stock which have been  included
              in  the  accompanying  consolidated  financial  statements.  These
              series B  preferred  shares  were  convertible  into shares of the
              Company's common stock which  conversion  option expired March 31,
              1995.

<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 7 -      PREFERRED STOCK (Continued)

              SERIES D:

              As  discussed  in Note 2, the  Company  issued  100,000  shares of
              Series D  preferred  stock in  exchange  for 80% of the issued and
              outstanding  common stock of FTI.  Effective  March 31, 1998,  the
              Series D stock was converted into common stock (Note 2).

NOTE  8 -     COMMON STOCK ISSUED BUT NOT OUTSTANDING

              The Company has issued  160,820  shares of common stock which have
              been  offered to the holders of the Series B  preferred  stock and
              the  debentures.  The shares have not been accepted by the holders
              of those investments as of the date of the consolidated  financial
              statements.

NOTE 9 -      STOCK OPTIONS

              In August 1997, the Company's Board of Directors approved the 1997
              American  Resources  and  Development  Company  Stock  Option Plan
              (Option  Plan).  Under  the  Option  Plan,  500,000  shares of the
              Company's  common stock are reserved for issuance to Directors and
              employees.  Options are granted at a price and with vesting  terms
              as  determined by the Board of  Directors.  In October  1997,  the
              Board of Directors  granted options to purchase  140,000 shares of
              stock at $2.00. These options are exercisable  beginning March 31,
              1998,   over  staggered   periods  and  expire  after  ten  years.
              Compensation  expense of $1,458 per month will be  recognized  for
              40,000 of the  options  issued  over a 4 year  vesting  period and
              $1,458 per month will be  recognized  for  100,000 of the  options
              over a 10  year  vesting  period.  In  July  1998,  the  Board  of
              Directors changed the terms of the 100,000 options vesting over 10
              years. 25,000 of these options were fully vested and the remainder
              of the options were canceled. As a result, compensation expense of
              $52,498 was  recognized  for the year ended March 31, 1998 for the
              vesting of these options.

              In  December  1997,  the Board of  Directors  granted  options  to
              purchase  39,000  shares  of stock at  $2.00.  These  options  are
              exercisable   beginning  March  31,  1998,  are  exercisable  over
              staggered  periods  and expire  after ten years.  No  compensation
              expense was  recognized  as the option  price was greater than the
              fair market value of the stock at the date of the option grant.

              Pro  forma  net  income  and  net  income  per  common  share  was
              determined as if the Company had accounted for its employee  stock
              options  under the fair value  method of  Statement  of  Financial
              Accounting Standards No. 123.

              Pro forma expense in year 1 would be $30,904,  and $5,646 in years
              2 and 3, respectively,  with an increase in pro forma expenses per
              share of $0.016 in year 1 and $0.003 in years 2 and 3.



<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 9 -      STOCK OPTIONS (Continued)

              For the pro forma  disclosures,  the options' estimated fair value
              was amortized  over their  expected  ten-year life. The fair value
              for these  options  was  estimated  at the date of grant  using an
              option pricing model which was designed to estimate the fair value
              of options which, unlike employee stock options,  can be traded at
              any time and are fully  transferable.  In  addition,  such  models
              require the input of highly subjective assumptions,  including the
              expected volatility of the stock price. Therefore, in management's
              opinion,  the  existing  models do not  provide a reliable  single
              measure of the value of  employee  stock  options.  The  following
              weighted-average  assumptions were used to estimate the fair value
              of these options.

                      Expected dividend yield                      0%
                      Expected stock price volatility             70%
                      Risk-free interest rate                    6.5%
                      Expected life of options (in years)         10

NOTE 10 -     COMMITMENTS AND CONTINGENCIES

              FTI leases office and warehouse  space in Salt Lake City, Utah and
              leases  space for six retail  stores in various  locations.  Lease
              commitments  for the years ended March 31, 1999 through  March 31,
              2004 are  $368,885,  $373,374,  $380,077,  $112,011  and  $30,216,
              respectively.

NOTE 11 -     ROYALTIES COMMITMENT

              U.S. Polo Association, Ltd., which is owned 50% by the Company, is
              required  to pay  royalties  to U.S.  Polo  Association  from  the
              Company's  sale  of  USPA  product  and  revenue  from  sublicense
              royalties.  Minimum  guarantees to U.S. Polo Association from July
              1999 to July 2002 are $275,000,  $350,000,  $385,000 and $425,000.
              Minimum  guarantees  from  year  6  through  10,  if  the  Company
              exercises its option for the license with U.S.  Polo  Association,
              is $550,000 to $800,000, respectively.

              The Company has entered into sublicensing  agreements with certain
              manufacturers.  Minimum  guaranteed  royalties  to be  paid to the
              Company from these manufacturers are $290,700, $547,500, $800,000,
              $450,000  and $500,000 for the years ending March 31, 1999 through
              March 31, 2003, respectively. Certain manufacturers have an option
              to renew their  license  agreement  in years after March 31, 2003.
              Such renewal would require  additional minimum guarantees from the
              manufacturers.



<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 1998 and 1997


NOTE 12 -     GOING CONCERN

              The accompanying  financial statements have been prepared assuming
              the Company will  continue as a going  concern.  In order to carry
              out  its  operating   plans,  the  Company  will  need  to  obtain
              additional funding from outside sources.  The Company has received
              funds  from a  private  placement  and debt  funding  and plans to
              continue  making private stock and debt  placements in addition to
              selling its  investment  in GVI.  There is no  assurance  that the
              Company will be able to obtain sufficient funds from other sources
              as needed or that such funds, if available,  will be obtainable on
              terms  satisfactory  to the  Company.  Management  also intends to
              renegotiate the terms of its debt for a longer repayment period.

NOTE 13 -     SUBSEQUENT EVENTS

              Effective  October 8, 1998, the Company and Jordache  Enterprises,
              through its wholly-owned subsidiary, Iron Will, Inc. ("Iron Will")
              formed a joint venture company,  U.S. Polo  Association,  Ltd. (US
              Polo),  to  hold  the  master  license  granted  by  the  US  Polo
              Association  and to perform all licensing  activities  relating to
              the US Polo  Association  licenses and  trademarks  for the United
              States and  Canada.  The  Company and Iron Will each own 50% of US
              Polo and  management  and the  Board of  Directors  for US Polo is
              shared  equally by the Company and Iron Will. For its ownership in
              US Polo, the Company contributed,  through Quade, Inc., all assets
              and  liabilities  relating to the business of the  licensing of US
              Polo including the master license and sublicense agreements in the
              US Polo name and trademarks.  Iron Will contributed  $900,000.  US
              Polo used $613,384 of the $900,000 equity  contribution to pay the
              note payable to the former partner of Quade, Inc.

              On October  14,  1998,  the  Company  was loaned  $1,000,000  from
              Jordache Enterprises.  Interest on this promissory note is payable
              quarterly from the date of the note at the prime rate as published
              by the Wall Street Journal plus 1% per annum. Principal is payable
              equally  over 4 years  beginning  October  14,  1999.  The note is
              secured by a pledge of the Company's stock in US Polo.


<PAGE>

Item 2. Management's Discussion and Analysis or Plan of Operation


RESULTS OF OPERATIONS

For the  Quarter  Ended  September  30,  1998,  Compared  to the  Quarter  Ended
September 30, 1997.

                 Total  revenue  for  the  quarter  ended   September  30,  1998
increased  $786,927,  or 356%,  to  $1,007,890,  compared  with $220,963 for the
quarter  ended  September  30,  1997.   During  the  current  period  Fan-Tastic
merchandise  sales and  franchise  fees/royalties  were  $105,332  and  $110,453
compared to $182,472 and $38,491 for the three months ended  September 30, 1997.
The increase in franchise  fees is primarily due to an increase in  Fan-Tastic's
marketing budget in fiscal 1998 as compared to fiscal 1997. Store sales declined
from the prior comparable  quarter due to the closure of two company stores that
were in temporary mall  locations.  In addition,  The Company  acquired  Pacific
Print  Works  (PPW)  effective  March  31,  1998  (see  Note 2 to the  financial
statements)  which  contributed  revenue of $710,549  for the three months ended
September  30, 1998.  Quade,  Inc. was  acquired  July 23, 1998 and  contributed
revenues  of $81,556 for the quarter  ended  September  30, 1998 from sale of US
Polo  Association  apparel to retailers and revenue from license  fees.  Revenue
from Quade,  Inc. is expected to grow in future quarter due to the growth of its
sublicensing  revenues including royalties from Iron Will, Inc., a subsidiary of
Jordache Enterprises.  Quade, Inc. is now doing business as U.S.P.A. Premier for
sale of U.S. Polo Association T-shirts and sweatshirts, and US Polo Association,
Ltd. for U.S. Polo Association licensing activities.

               Fan-Tastic  had a gross profit of $124,714 or 57.8% for the three
months ended  September  30, 1998 as compared to $125,137 or 56.6% for the three
months ended September 30, 1997. The improvement in gross profit as a percentage
of sales is due to the increase in franchise  fees and  royalties  for the three
months ended  September 30, 1998. PPW had a gross profit of $231,119 or 32.5% of
sales for the three months ended September 30, 1998.

                 Depreciation and  amortization  increased by $108,578 which was
primarily  due to  goodwill  amortization  of 30,441  from the PPW  acquisition,
amortization  of  license  and  trademark   rights  of  13,704  from  the  Quade
acquisition and $68,957 of PPW fixed assets depreciation.

         General  expenses  increased by $350,473 which was primarily due to PPW
general expenses of $284,711.  General expenses are expected to continue to grow
in future quarters due to the acquisition of Quade,  Inc. in July 1998 (see Note
12 to the financial statements).

         Interest expense increased  $102,737 for the current period compared to
the comparable 1997 period.  The increase in interest expenses was due to 1) the
Company  increased it's debt in fiscal 1998 and the three months ended September
30, 1998 in order to fund  operations  and acquire  PPW and Quade,  Inc.  and 2)
PPW's  interest  expense  from  its  bank  line  of  credit  and  capital  lease
obligations.

                 The Company experienced an increase in net loss from continuing
operations of $349,809 in the current period  compared to the three months ended
September 30, 1997 ($537,025 in the current period compared with a net loss from
continuing  operations of $187,216 in the prior period.) This increase is due to
the increase in depreciation  and  amortization,  general  expenses and interest
expense as described above and from the net loss from PPW operations.

LIQUIDITY AND CAPITAL RESOURCES

         At  September  30, 1998,  the Company had total  assets of  $6,909,137,
total  liabilities of $5,616,423 and total  stockholders'  equity of $1,292,714,
compared with total assets of  $5,436,635,  total  liabilities of $4,126,181 and
total stockholders equity of $1,310,454 at March 31, 1998. At September 30, 1998
the  Company's  current  ratio was  approximately  1 current  asset to 1 current
liability  The Company's  current ratio  improved from June 30, 1998 because the
Company's  862,000  restricted  shares  in  GVI  become  a  current  asset.  The
restriction  of sale of these  shares  expires in July 1999.  In  addition,  the
Company  will seek to convert  certain  debt to equity  which will  improve  its
current ratio.

         Management  intends to improve  its  overall  financial  structure  and
provide  operating  capital through seeking the conversion of debt and preferred
stock, private placement of the Company's common stock and sale of the Company's
investment  in GVI. In October  1998,  the Company  received  $1,000,000 in loan
proceeds that is payable  equally over 4 years  beginning one year from the date
of the loan. These loan proceeds are being used for working capital purposes and
to reduce current liabilities.



                                       17
<PAGE>


Part II   -  Other Information

Item 1. Legal Proceedings

                 Not applicable.

Item 2. Changes in Securities

                 Not applicable.

Item 3. Default upon Senior Securities

                 Not applicable.

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

                 Not applicable.

Item 5. Other Information

                 Not applicable.

Item 6. Exhibits and Reports on Form 8-K

                On October 30, 1998, the Company filed a report on 8-K regarding
its purchase of Quade, Inc.


                                       
<PAGE>



                                   SIGNATURES


                 Pursuant to the requirements of the Securities  Exchange Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.


                                   AMERICAN RESOURCES AND
                                   DEVELOPMENT COMPANY
                                      (Registrant)



Date: November 19, 1998               By: /s/ Tim Papenfuss
                                         --------------------------------------
                                         Tim Papenfuss, Chief Financial Officer