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 December 31, 1999;

                                       or

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

        For transition period from ________________ to _________________



                   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.)

                                 --------------



          2035 N.E. 181st,  Gresham, OR                      97230
          -----------------------------                      -----
      (Address of principal executive offices)             (Zip Code)

        Registrant's telephone number, including area code (503) 492-1500

         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 February 10,  2000,  the  Registrant  had  outstanding  3,640,953
shares of Common Stock.

         Transitional Small Business Disclosure Format (check one):

                                 Yes [ ] No [X]

<PAGE>

Item 1:    Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets - December 31, 1999 and
  March 31, 1999                                                             3

Condensed Consolidated Statements of Operations - Nine months ended
 December 31, 1999 and 1998 and Three months ended December 31, 1999
 and 1998                                                                    5

Statements of Stockholders' Equity                                           6

Condensed Consolidated Statements of Cash Flows - Nine months ended
 December 31, 1999 and 1998 and Three months ended December 31, 1999
 and 1998                                                                    8

Notes to Condensed Consolidated Financial Statements - December
 31, 1999                                                                   10



Item 2:    Management's Discussion and Analysis or Plan of Operation        27


Item 1.    Legal Proceedings                                                29

Item 2.    Changes in Securities                                            29

Item 3.    Defaults upon Senior Securities                                  29

Item 4.    Submission of Matters to a Vote of Security Holders              30

Item 5.    Other Information                                                30

Item 6.    Exhibits and Reports on Form 8-K                                 30

                                       2
<PAGE>
<TABLE>
<CAPTION>
                                     AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                             Consolidated Balance Sheet

                                                       ASSETS

                                                                              December 31,          March 31,
                                                                                  1999                1999
                                                                           ------------------  -----------------
CURRENT ASSETS
<S>                                                                        <C>                 <C>
   Cash and cash equivalents                                               $           24,146  $          41,967
   Accounts receivable, net (Note 1)                                                  556,863            516,660
   Inventory (Note 1)                                                                 283,433            293,768
   Prepaid and other current assets                                                    14,193             15,400
   Marketable securities (Note 1)                                                       9,063            157,500
   Net assets of discontinued operations (Note 14)                                          -            282,508
                                                                           ------------------  -----------------
     Total Current Assets                                                             887,698          1,307,803
                                                                           ------------------  -----------------

PROPERTY AND EQUIPMENT (NOTE 1)
   Furniture, fixtures and equipment                                                  433,202            395,253
   Capital leases                                                                   1,251,390          1,090,032
                                                                           ------------------  -----------------
     Total depreciable assets                                                       1,684,592          1,485,285
     Less: accumulated depreciation                                                  (550,033)          (355,492)
                                                                           ------------------  -----------------
     Net Property and Equipment                                                     1,134,559          1,129,793
                                                                           ------------------  -----------------
OTHER ASSETS
   Deposits                                                                            14,047                  -
   Marketable securities (Note 1)                                                      63,469            857,938
                                                                           ------------------  -----------------
   Total Other Assets                                                                  77,516            857,938
                                                                           ------------------  -----------------
   TOTAL ASSETS                                                            $        2,099,773  $       3,295,534
                                                                           ==================  =================
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       3
<PAGE>
<TABLE>
<CAPTION>
                                      AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                        Consolidated Balance Sheet (Continued)


                                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                              December 31,          March 31,
                                                                                 1999                 1999
                                                                           ------------------  -----------------
CURRENT LIABILITIES
<S>                                                                        <C>                 <C>
   Accounts payable                                                        $          371,083  $         366,028
   Accrued expenses and other current liabilities                                     796,929            397,800
   Line of credit (Note 3)                                                            377,166            367,845
   Current portion of notes payable (Note 4)                                          272,885            587,323
   Current portion of notes payable, related parties (Note 5)                       1,082,674             47,104
   Current portion of capital lease obligations (Note 6)                              303,595            282,497
                                                                           ------------------  -----------------
   Total Current Liabilities                                                        3,204,332          2,048,597
                                                                           ------------------  -----------------
LONG-TERM DEBT
   Deferred revenue                                                                    10,000             10,000
   Reserve for discontinued operations (Note 2)                                       718,225            660,123
   Notes payable (Note 4)                                                             244,197          1,001,819
   Notes payable, related parties (Note 5)                                            302,514          1,395,148
   Capital lease obligations (Note 6)                                                 419,788            495,030
                                                                           ------------------  -----------------
     Total Long-Term Debt                                                           1,694,724          3,562,120
                                                                           ------------------  -----------------
     Total Liabilities                                                              4,899,056          5,610,717
                                                                           ------------------  -----------------
COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS' EQUITY (DEFICIT)
   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: 4,376,773
    shares issued and  3,640,953 outstanding.  (Note 9)                                 3,640              3,174
   Other comprehensive losses                                                      (1,378,095)          (435,188)
   Additional paid-in capital                                                       7,456,522          7,297,066
   Accumulated deficit                                                             (8,881,595)        (9,180,480)
                                                                           ------------------  -----------------
      Total Stockholders' Equity (Deficit)                                         (2,799,283)        (2,315,183)
                                                                           ------------------  -----------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                 $        2,099,773  $       3,295,534
                                                                           ==================  =================
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       4
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                      Consolidated Statements of Operations

                                                                   For the Nine Months Ended          For the Three Months Ended
                                                                          December 31,                       December 31,
                                                                     1999              1998              1999             1998
                                                               ---------------   ---------------  ----------------  ---------------
<S>                                                            <C>               <C>              <C>               <C>
NET SALES                                                      $     3,466,627   $     2,847,151  $      1,397,538  $     1,094,036
COST OF SALES                                                        2,551,360         2,337,293           989,471          820,871
                                                               ---------------   ---------------  ----------------  ---------------
GROSS PROFIT                                                           915,267           509,858           408,067          273,165
                                                               ---------------   ---------------  ----------------  ---------------
GENERAL AND ADMINISTRATIVE EXPENSES
   Depreciation and amortization                                        22,694           148,380             7,077           62,156
   General expenses                                                  1,053,039         1,351,185           335,893          388,387
                                                               ---------------   ---------------  ----------------  ---------------
     Total General and Administrative Expenses                       1,075,733         1,499,565           342,970          450,543
                                                               ---------------   ---------------  ----------------  ---------------
GAIN (LOSS) FROM OPERATIONS                                          (160,466)          (989,707)           65,097         (177,378)
                                                               --------------   ----------------  ----------------  ---------------
OTHER INCOME AND (EXPENSES)
   Other income and expenses                                            20,359            50,964             (444)            3,140
   Gain on sale of assets                                               -                 48,100            -                -
   Interest expense                                                   (428,223)         (383,963)         (149,807)        (141,606)
                                                               ---------------   ---------------  ----------------  ---------------
     Total Other Income and (Expenses)                                (407,864)         (284,899)         (150,251)        (138,466)
                                                               ---------------   ---------------  ----------------  ---------------
LOSS BEFORE INCOME TAXES AND
 DISCONTINUED OPERATIONS                                              (568,330)       (1,274,606)          (85,154)        (315,844)
                                                               ---------------   ---------------  ----------------  ---------------
DISCONTINUED OPERATIONS
   Gain from sale of USPA                                              873,086           -                  -                -
   Loss from operations of USPA                                         (5,871)         (47,289)            -               (57,490)
                                                               ---------------   ---------------  ----------------  ---------------
     Total Discontinued Operations                                     867,215          (47,289)            -               (57,490)
                                                               ---------------   ---------------  ---------------- ---------------
INCOME TAXES                                                            -                -                  -                -
                                                               ---------------   ---------------  ----------------  ---------------
NET INCOME (LOSS)                                              $       298,885   $    (1,321,895) $        (85,154) $      (373,334)
                                                               ===============   ===============  ================  ===============
OTHER COMPREHENSIVE GAIN (LOSS)
   Gain (loss) on valuation of marketable securities           $      (942,907)  $     (603,872)  $      (232,313)  $    (1,056,776)
     Total Other Comprehensive Gain (Loss)                            (942,907)        (603,872)         (232,313)       (1,056,776)
                                                               ---------------   ---------------  ----------------  ----------------
NET COMPREHENSIVE GAIN (LOSS)                                  $      (644,022)  $   (1,925,767)  $      (317,467)  $    (1,430,110)
                                                               ===============   ==============   ===============   ===============
BASIC LOSS PER SHARE
 OF COMMON STOCK -
 CONTINUING OPERATIONS                                         $        (0.16)   $        (0.41)  $         (0.02)  $          (.13)
                                                               ===============   ==============   ===============   ===============
BASIC LOSS PER SHARE
 OF COMMON STOCK
 DISCONTINUED OPERATIONS                                       $          .24    $          (02)  $           -     $         (0.02)
                                                               ===============   ==============   ===============   ===============
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       5
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
            Consolidated Statements of Stockholders' Equity (Deficit)
                           December 31, 1999 and 1998

                                       Common Stock              Preferred Stock           Other          Additional
                               ----------------------------  ------------------------  Comprehensive        Paid-In     Accumulated
                                    Shares        Amount        Shares      Amount          Loss            Capital        Deficit
                               --------------  ------------  -----------  -----------  ----------------  ------------  -------------
<S>                                 <C>        <C>               <C>      <C>          <C>               <C>           <C>
Balance, April 1, 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 for the year ended
 March 31, 1998                             -             -            -            -            -                  -      (440,748)
                                  -----------  ------------      -------  -----------  -----------       ------------  ------------
Balance, March 31, 1998             2,929,263  $      2,929      244,953  $       245  $         -       $  7,026,260  $ (5,718,980)
                                  -----------  ------------      -------  -----------  -----------       ------------  ------------
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       6
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
           Consolidated Statements of Stockholders' Equity (Continued)
                           December 31, 1999 and 1998

                                       Common Stock              Preferred Stock           Other          Additional
                               ----------------------------  ------------------------  Comprehensive        Paid-In     Accumulated
                                    Shares        Amount        Shares      Amount          Loss            Capital        Deficit
                               --------------  ------------  -----------  -----------  ----------------  ------------  -------------
<S>                                 <C>        <C>               <C>      <C>          <C>               <C>           <C>
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            -            -            -             59,954             -

Stock issued for Quade
 acquisition (Note 2)                 238,333           238            -            -            -            417,678             -

Stock adjustment on PPW
 acquisition (Note 2)                 (45,310)          (45)           -            -            -           (226,505)            -

Expense recognized for
 vested options                             -             -            -            -            -             17,496             -

Stock issued for loan                   4,000             4            -            -            -              2,183             -

Loss on valuation of
 marketable securities                      -             -            -            -     (435,188)                 -             -

Net loss for the year ended
 March 31, 1999                             -             -            -            -            -                  -    (3,461,500)
                                  -----------  ------------      -------  -----------  -----------       ------------  ------------
Balance, March 31, 1999             3,174,286         3,174      244,953          245     (435,188)         7,297,066    (9,180,480)

Loss on valuation of
 marketable securities                      -             -            -            -     (942,907)                 -             -

Expense recognized for
 vested options                             -             -            -            -            -             13,122             -

Stock issued for Quade
 acquisition (Note 2)                 451,667           451            -            -            -            144,099             -

Stock issued for consulting
 services                              15,000            15            -            -            -              2,235             -

Net income for the nine months
 ended December 31, 1999                    -             -            -            -            -                  -       298,885
                                  -----------  ------------      -------  -----------  -----------       ------------  ------------
Balance, December 31, 1999          3,640,953   $     3,640      244,953  $       245  $(1,378,095)       $ 7,456,522  $ (8,881,595)
                                    =========   ===========      =======  ===========  ===========        ===========  ============
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       7
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                        Consolidated Statements of Cash Flows

                                                                 For the Nine Months Ended       For the Three Months Ended
                                                                         December 31,                      December 31,
                                                                    1999              1998             1999              1998
                                                              ---------------   ---------------  ---------------   ---------------
OPERATING ACTIVITIES
<S>                                                           <C>               <C>              <C>               <C>
  Net income (loss)                                           $       298,885   $    (1,321,895) $       (85,154)  $      (373,334)
  Adjustments to reconcile net income
   to net cash provided by operating activities:
    Gain on sale of USPA, Ltd.                                       (869,336)           -                -                 -
    Depreciation and amortization                                     211,860           340,818           70,160           112,641
    Common sock issued for services and interest                       15,357             6,557            4,374            -
    Gain (loss) on sale of marketable securities                       -                (48,100)          -                 -
  Changes in operating assets and liabilities net of
   Quade acquisition:
    (Increase) decrease in inventory                                   10,335            52,052           (4,915)           48,770
    (Increase) decrease in accounts receivable                        (40,203)         (100,176)           3,184           (70,826)
    Increase (decrease) in other current assets                         1,207            76,996           (4,293)           -
    Increase (decrease) in accounts payable                             5,055          (200,182)          12,559          (352,667)
    Increase (decrease) in other current liabilities                  540,152           150,169           94,833           (19,845)
                                                              ---------------   ---------------  ---------------   ---------------
      Net Cash Provided (Used) by Operating Activities                173,312        (1,043,761)          90,748          (655,261)
                                                              ---------------   ---------------  ---------------   ---------------
INVESTING ACTIVITIES
  Proceeds from sale of marketable securities                          -                232,304           -                 -
  Proceeds from sale of USPA, Ltd.                                    221,470            -                -                 -
  Purchases of property and equipment                                 (37,949)         (211,553)         (19,505)          (24,443)
                                                              ---------------   ---------------  ---------------   ---------------
      Net Cash Provided (Used) by Investing Activities                183,521           (20,751)         (19,505)          (24,443)
                                                              ---------------   ---------------  ---------------   ---------------
FINANCING ACTIVITIES
  Stock issued for cash                                                -                 60,000           -                 -
  Payments on notes payable and capital lease obligations            (281,707)         (720,992)         (89,946)         (564,448)
  Proceeds from long-term borrowings                                   -              1,199,077           -              1,049,073
  Borrowings (payments) from related party debt                      (102,268)          390,000          (19,926)           68,300
  Net (borrowings) payments on factoring line of credit                 9,321           168,531           61,585           168,531
                                                              ---------------   ---------------  ---------------   ---------------
      Net Cash Provided (Used) by Financing Activities               (374,654)        1,096,616          (48,287)          721,456
                                                              ---------------   ---------------  ---------------   ---------------
INCREASE (DECREASE) IN CASH                                           (17,821)           32,104           22,956            41,752
CASH, BEGINNING OF PERIOD                                              41,967            14,663            1,190             5,015
                                                              ---------------   ---------------  ---------------   ---------------
CASH, END OF PERIOD                                           $        24,146   $        46,767  $        24,146   $        46,767
                                                              ===============   ===============  ===============   ===============
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       8
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                Consolidated Statements of Cash Flows (Continued)

                                                                 For the Nine Months Ended       For the Three Months Ended
                                                                         December 31,                      December 31,
                                                                    1999              1998             1999              1998
                                                              ---------------   ---------------  ---------------   ---------------
CASH PAID FOR
<S>                                                           <C>               <C>              <C>               <C>
  Interest                                                    $       314,321   $       268,845  $        88,494   $        98,106
  Income taxes                                                $        -        $        -       $        -        $        -

NON-CASH FINANCING ACTIVITIES

  Common stock issued for services                            $        15,357   $        6,557   $         4,374   $         4,374
  Equipment purchased through capital
     lease obligation                                         $       168,500   $       144,312  $       168,500   $        -
</TABLE>
              The accompanying notes are an integral part of these
                       consolidated financial statements.

                                       9
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

         a. 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
         1999 financial  statements in Form 10-KSB.  These statements do include
         all normal recurring  adjustments which the Company believes  necessary
         for a  fair  presentation  of the  statements.  The  interim  operating
         results are not necessarily indicative of the results for a full year.

         b. 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)

         c. Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities  and  disclosure  of  contingent  assets  of  revenues  and
         expenses during the reporting period.  Actual results could differ from
         those estimates.

         d. Cash and Cash Equivalents

         The Company considers all highly liquid  investments with a maturity of
         three months or less when purchased to be cash equivalents.

         e. Concentrations of Risk

         The Company  maintains its cash in bank deposit accounts at high credit
         quality  financial  institutions.  The balances,  at times,  may exceed
         federally insured limits.

         In the normal  course of business,  the Company  extends  credit to its
         customers.

         f. Inventories

         Inventories  are  stated  at the  lower  of cost or  market  using  the
         first-in, first-out method.

                                       10
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

         g. Property and Equipment

         Property,  equipment  and capital  leases are  recorded at cost and are
         depreciated or amortized over the estimated  useful life of the related
         assets,  generally  three to seven  years.  When  assets are retired or
         otherwise  disposed of, the cost and related  accumulated  depreciation
         are  removed  from  the  accounts,  and any  resulting  gain or loss is
         reflected in income for the period.

         The costs of maintenance and repairs are charged to income as incurred.
         Renewals and betterments  are  capitalized  and depreciated  over their
         estimated useful lives.

         h. 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  145,000  shares of free  trading GVI
         stock  valued at $9,062 and  1,015,000  shares of GVI stock  pledged as
         collateral  on notes  payable  valued at $72,531.  Any change in market
         value from period to period will be reported as a separate component of
         stockholders' equity until realized.

         There was an unrealized loss of $1,378,094 in marketable  securities at
         December 31, 1999 due to a $1.00 decline in the Company's recorded cost
         per GVI share.

         i. 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.

         j. Basic Loss Per Common Share

         Basic loss per common share is computed based on the  weighted  average
         number of common shares outstanding during the period. The common stock
         equivalents are antidilutive and, accordingly,  are not used in the net
         loss per common share computation.  Fully diluted loss per share is the
         same as the basic loss per share because of the antidilutive  nature of
         common stock equivalents.

                                       11
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998


NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

         j. Basic Loss Per Common Share (Continued)

         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 ($0.02) and ($0.13) for
         the quarters ended December 31, 1999 and 1998, respectively.  Basic net
         income (loss) from  discontinued  operations per common share was $0.00
         and ($0.02),  respectively.  Weighted average common shares outstanding
         were  3,640,953 and 3,218,982 for the quarters  ended December 31, 1999
         and 1998, respectively.

         k. Revenue Recognition for Franchise Operations

         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
         screen  printing,  embroidery and product sales are recognized when the
         goods have been shipped.

         l. Goodwill

         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  $1,696,412  from the purchase of
         Pacific  Print Works (aka Pacific  Printing and  Embroidery  LLC).  The
         Company  amortized  $128,198 of goodwill  from the PPW  acquisition  in
         fiscal  1999.  In the  fourth  quarter  of  fiscal  1999,  the  Company
         wrote-off its  remaining  goodwill  from the PPW  acquisition  due to a
         permanent impairment, resulting in an additional expense of $1,568,215.
         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  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.

         m. Recent Accounting Pronouncements

         The Company adopted Statement of Financial  Accounting Standards (SFAS)
         No. 130, "Reporting  Comprehensive  Income" during the year ended March
         31, 1999. SFAS No. 130 established  standards for reporting and display
         of comprehensive income (loss) and its components (revenues,  expenses,
         gains  and  losses)  in  a  full  set  of  general  purpose   financial
         statements.  This statement requires that an enterprise  classify items
         of other comprehensive  income by their nature in a financial statement
         and  display  the  accumulated  balance of other  comprehensive  income
         separately from retained earnings and additional paid-in capital in the
         equity section of a balance sheet. SFAS No. 130 is effective for fiscal
         years beginning after December 15, 1997. The Company has  retroactively
         applied  the  provisions  of this new  standard  by  showing  the other
         comprehensive income (loss) for all years presented.

                                       12
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)

         n. Advertising

         The Company  follows the policy of charging the costs of advertising to
         expense as incurred.

         o. Prior Period Reclassification

         Certain  1998  balances  have  been  reclassified  to  conform  to  the
         presentation of the 1999 consolidated financial statements.

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 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 for the year ended March 31, 1998
         and $0.83 per share.

         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.  The Company has a reserve for  discontinued
         operations of $660,123 at March 31, 1999.

         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
         $629,252 and 213,472  shares of the Company's  common stock were issued
         to PPW shareholders with a guaranteed share value of $5.00 resulting in
         goodwill of $1,686,411.  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.

                                       13
<PAGE>

                  AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 2 - MERGERS AND ACQUISITION (Continued)
         Pacific Print and Embroidery, LLC (aka Pacific Print Works) (Continued)

           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.

         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  statements of operations for the year
         ended March 31, 1998 was 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  that  actually  would have been obtained if the
         merger  had  been  effected  at  the  dates  indicated  or  results  of
         operations that may be obtained in the future.

                                       14
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998


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>

                                       15
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 2 - MERGERS AND ACQUISITIONS (Continued)

         Quade, Inc.

         In 1997,  Quade,  Inc.  acquired  from the U.S.  Polo  Association  the
         exclusive  master  licenses  rights to the US Polo name for the  United
         States and Canada. From its inception,  Quade, Inc. had 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 one
         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.

         Effective  October 8,  1998,  the  Company  and  Jordache  Enterprises,
         through its  affiliate,  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. The  Company's  investment  in this
         joint venture is accounted  for under the equity method of  accounting.
         The  Company's  share of losses  from this joint  venture  for the year
         ended March 31, 1999 were $127,268.

         In June 1999,  the Company  sold its 50%  ownership  in US Polo to Iron
         Will (See Note 14). In  addition,  the Company and the former  owner of
         Quade  amended  the  original  stock  purchase  agreement.   Under  the
         amendment, the additional 426,667 shares of common stock were issued to
         the former owner of Quade without any additional earnings  requirements
         by Quade or US Polo and the $5.00  guarantee value of the common shares
         issued to Quade was removed.

         The following  tables set forth certain  unaudited 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.

                                       16
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 2 - MERGERS AND ACQUISITIONS (Continued)
<TABLE>
<CAPTION>
                                       American Resources and Development Company
                                Consolidated Unaudited Pro Forma Combined Balance Sheets
                                                      March 31, 1998

                                              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>

                                       17
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998


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

                   American Resources and Development Company
            Consolidated Unaudited 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>

                                       18
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998


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

                                                  American Resources and Development Company
                                       Consolidated Unaudited 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 (Loss)                       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)           -               (174,999)
                                                            -------------    -------------     -------------    --------------
                   Total Other Income and Expenses                 21,959          (41,660)           -                (19,701)
                                                            -------------    -------------     -------------    --------------
              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)   $       (0.35)    $      -         $        (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.

                                       19
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 3 - LINE OF CREDIT

         In November  1998,  the  Company  entered  into an accounts  receivable
         financing  agreement  to  sell,  with  recourse,  up to  $1,000,000  of
         receivables,  net of a 15% collection  reserve.  The Company is charged
         .065%  daily  for all  receivables  sold  and  uncollected  under  this
         financing  agreement.  At March 31, 1999 and  December  31,  1999,  the
         Company had a payable of $367,845 and $377,166,  respectively,  for net
         funds  advanced  from this  accounts  receivable  line of  credit.  The
         Company  received  $1,163,873 from the sale of receivables for the year
         ended March 31, 1999 and  recognized  $24,560 in interest  expense from
         the discount of selling these receivables.

NOTE 4 - NOTES PAYABLE
<TABLE>
<CAPTION>
         Notes payable are comprised of the following:

                                                                                                      December 31,
                                                                                                          1999
                                                                                                  -------------------
             <S>                                                                                  <C>
              Note payable, unsecured, bearing interest at 12%, payable
               in monthly installments of $7,000, including interest.  Due on
               demand.                                                                            $            26,603

              Convertible subordinated debentures, originally due June 30, 1996
               bearing interest at 12% per annum.  Interest payable
               quarterly.                                                                                     187,000

              Trade  drafts  payable,  secured  with  inventory,  payable in six
               monthly installments beginning August 1999, with payments from
               $1,909 to $3,021 per month.                                                                     10,329

              Notes payable to a shareholder of PPW.  Interest rates
               average 10%, due on demand, unsecured.                                                         244,196

              Notes payable with three vendors with interest rates averaging
               12%; partially secured by equipment, due in 2000.                                               48,954
                                                                                                  -------------------
              Subtotal                                                                                        517,082
              Less current portion                                                                           (272,885)
                                                                                                  -------------------
              Long-term portion                                                                   $           244,197
                                                                                                  ===================
</TABLE>

                                       20
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 4 - NOTES PAYABLE (Continued)

         Maturities of long-term debt are as follows:

               March 31, 2000                   $    272,885
               March 31, 2001                        244,197
               March 31, 2002                         -
               March 31, 2003                         -
                                                ------------
                                                $    517,082

NOTE 5 - NOTES PAYABLE, RELATED PARTIES
<TABLE>
<CAPTION>

                                                                                                 December 31,
                                                                                                      1999
                                                                                               -----------------
              <S>                                                                              <C>
              Note payable to Miltex  Industries,  secured by 700,000  shares of
               GVI and 600,000 shares of the Company's common stock. Interest at
               15% with monthly principal and interest payments
               of $11,000 with a final balloon payment September 2000.                         $         721,970

              Note payable to a shareholder, secured by GVI stock.  Interest
               payable monthly at 13.5% with interest and principal payments
               of $5,000 per month.  Due September 2000.                                                 315,501

              Note payable to a shareholder, interest payable monthly at 72%.

               Due on demand.                                                                             45,203

              Notes payable to shareholders (includes officers
               and directors of the Company).  Interest rates average 10.5%.
               Unsecured, due on demand, but not expected to be repaid
               until 2003.                                                                               302,514
                                                                                               -----------------

                                            Subtotal                                                   1,385,188

                                            Less current portion                                      (1,082,674)
                                                                                               -----------------

                                            Long-term portion                                  $         302,514
                                                                                               =================
</TABLE>

         Maturities of notes payable, related parties are as follows:

               March 31, 2000                      $          57,284
               March 31, 2001                              1,025,390
               March 31, 2002                                302,514
                                                   -----------------
                                                   $       1,385,188

                                       21
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 6 - CAPITAL LEASES

         Property and equipment  payments  under capital  leases as of March 31,
         1999 is summarized as follows:
<TABLE>
<CAPTION>
                                 Year End
                                 March 31,
                                ---------
<S>                                                                                            <C>
                                   2000                                                        $         357,482
                                   2001                                                                  318,944
                                   2002                                                                  158,568
                                   2003                                                                   61,669
                                   2004                                                                   33,381
                                                                                               -----------------
              Total minimum lease payments                                                               930,044
              Less interest and taxes                                                                   (152,517)
                                                                                               -----------------
              Present value of net minimum lease payments                                                777,527
              Less current portion                                                                      (282,497)
                                                                                               -----------------
              Long-term portion of capital lease obligations                                   $         495,030
                                                                                               =================
</TABLE>
         The Company  recorded  depreciation  expense of  $196,606  for the year
         ended March 31, 1999.

NOTE 7 - 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   $7,500,000  to  offset  future  tax
         liabilities. The loss carry-forwards will begin to expire in 2014.

         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 8 - 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 March 31, 1999,  there are 94,953 shares of series B preferred stock
         issued 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 March 31, 1999,  there is a total of $352,589
         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.

                                       22
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 9 - COMMON STOCK ISSUED BUT NOT OUTSTANDING

         The Company has issued  160,820  shares of common  stock which had 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.
         Additionally,  the Company has issued 600,000 shares of common stock as
         collateral for the note payable to Banque SCS (Note 5).

NOTE 10 -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.  In August
         1999,  the Option Plan was  amended to allow for  issuance of up to one
         million  shares  of  the  Company's   common  stock  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.

         In August  1999,  the Board of  Directors  granted  options to purchase
         696,291  shares of stock at $.25.  Fifty  percent of these options vest
         immediately  and the  remainder  vest in August 2000.  The options were
         issued to  various  officers  and  directors  of the  Company  for past
         services,  risk  associated  with various debt incurred by officers for
         the Company and guarantees by officers, of Company debt, and for future
         services.  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 for options issued in 1998 would be $30,904,  in year
         1 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. Pro forma expense for options issued in August 1999 would be $45,413
         in fiscal 2000 and fiscal 2001,  with an increase in pro forma expenses
         per share of $.01 in fiscal 2000 and fiscal 2001, respectively.

                                       23
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 10- 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:

                                                                 March 31,
                                                                   1999
                                                                 ---------
                     Expected dividend yield                         0%
                     Expected stock price volatility                70%
                     Risk-free interest rate                       6.5%
                     Expected life of options (in years)            10

         On January 22, 1999,  the Company  granted  options to a consultant  to
         purchase  up to  160,000  shares of the  Company's  common  stock.  The
         consultant is to provide various investor and public relations services
         through  January 21, 2000 and the Company is  recognizing an expense of
         $6,000  over  the term of the  services  based  upon  the  value of the
         options as calculated from an option pricing model.  The options expire
         in December 31, 2001, are not  transferrable and are exercisable at any
         time at the following rates:

                     40,000  shares at $0.50 per share;  40,000  shares at $1.00
                     per share;  40,000 shares at $2.00 per share; 40,000 shares
                     at $3.00 per share.

NOTE 11- COMMITMENTS AND CONTINGENCIES

         Office Lease

         The Company leases office and warehouse  space in Salt Lake City,  Utah
         and  Portland,  Oregon  and leases  space for retail  stores in various
         locations. Lease commitments for the years ended March 31, 2000 through
         March  31,  2003  are  $269,526,   $270,198,   $224,391,  and  $34,698,
         respectively.

         Legal Proceedings

         The Company is involved in various claims and legal actions  arising in
         the ordinary  course of  business.  In the opinion of  management,  the
         ultimate  disposition of these matters will not have a material adverse
         effect on the Company's financial position,  results of operations,  or
         liquidity.

                                       24
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

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.

NOTE 13- BUSINESS SEGMENTS

         Effective March 31, 1999, the Company adopted SFAS No. 131, "Disclosure
         about Segments of an Enterprise and Related  Information." Prior period
         amounts  have been  restated  to  conform to the  requirements  of this
         statement.  The Company  conducts  its  operations  principally  in the
         contract  screen  printing and  embroidery  industry with Pacific Print
         works, Inc. and the retail franchise industry with Fan-Tastic, Inc.

         Certain financial  information  concerning the Company's  operations in
         different industries is as follows:
<TABLE>
<CAPTION>
                                                 For the
                                               Nine Months
                                                  Ended                 Pacific                              Corporate
                                               December 31,            Print Works      Fan-Tastic          Unallocated
                                               ------------            -----------      ----------          -----------
<S>                                               <C>              <C>               <C>                  <C>
              Net sales                           1999             $      3,104,767  $       361,860
                                                  1998                    2,167,054          680,097
              Operating income (loss)
               applicable to industry
               segment                            1999                       97,774         (110,389)
                                                  1998                     (415,998)        (215,647)
              General corporate expenses
               not allocated to industry
               segments                           1999                                                     $       147,848
                                                  1998                                                             355,876

              Interest expense                    1999                     (244,729)         (28,420)             (154,830)
                                                  1998                     (175,094)         (40,527)             (168,342)

              Other income (expenses)
               including interest and gain
               on sale of securities              1999                       18,365            1,749                     -
                                                  1998                       23,222           (4,163)               80,005
</TABLE>

                                       25
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           December 31, 1999 and 1998

NOTE 13- BUSINESS SEGMENTS (Continued)
<TABLE>
<CAPTION>
                                                 For the
                                               Nine Months
                                                  Ended                 Pacific                              Corporate
                                               December 31,            Print Works      Fan-Tastic          Unallocated
                                               ------------            -----------      ----------          -----------
<S>                                               <C>              <C>               <C>                  <C>
              Gain from discontinued
               operations                         1999                                                 $       867,215
                                                  1998                                                        (47,289)
<CAPTION>
                                                   As of
                                                December 31,
                                               1999 and for
                                              The Nine Months
                                                Then Ended
                                               ------------
<S>                                               <C>              <C>               <C>                  <C>
              Assets                              1999             $      1,848,597  $       174,105       $        62,227

              Depreciation and
               amortization                       1999                      199,229            9,065                 3,566
                                                  1998                      202,567           25,153               113,098
              Property and equipment
               acquisitions                       1999                      218,987           -                        961
</TABLE>

NOTE 14- NET ASSETS OF DISCONTINUED OPERATIONS

         In March 1999, the Company's Board of Directors made a decision to sell
         its 50% ownership in U.S. Polo to Iron Will. In June 1999,  the Company
         closed its sale of U.S.  Polo  ownership to Iron Will.  For its sale of
         U.S. Polo, the Company  received the cancellation of $1,000,000 in debt
         from Jordache Enterprises,  the cancellation of $13,185 in interest and
         cash of $221,470. In addition,  the Company received $74,040 in October
         1999 from the collection of U.S. Polo royalties  earned through May 31,
         1999, and could receive up to another $30,000.

         The results of  operations  of Quade,  Inc. and U.S.  Polo for the year
         ended March 31, 1999 generated a loss of $252,972 on sales of $232,712.
         The net assets of the  discontinued  operations  at March 31,  1999 are
         included  in the  consolidated  balance  sheet  as a single  amount  of
         $282,508 which consists primarily of receivables, inventories, accounts
         payable and the  Company's  investment  accounted  for under the equity
         method in U.S. Polo. A gain on the disposal of U.S. Polo was recognized
         for the nine months ended  September 30, 1999 for  $873,086.  No income
         tax  benefit or expense  has been  attributed  to the  disposal of U.S.
         Polo.

                                       26
<PAGE>

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

Forward Looking Statements

The statements in this report  concerning  certain expected future expenses as a
percentage of net sales,  future financing and working capital  requirements and
availability  constitute  forward - looking statements that are subject to risks
and  uncertainties.  These risks could cause  actual  results or  activities  to
differ materially from those expected.  Factors that could adversely affect cost
of sales and general expenses as a percentage of net sales include,  but are not
limited to, increased competitive factors,  changes in consumer preferences,  as
well as an inability to increase sales. Other factors could include a failure to
adequately fund operations.  In addition,  unfavorable business  conditions,  or
changes in the general  economy could have adverse  effects.  Factors that could
materially affect future financing requirements include, but are not limited to,
the ability to obtain  additional  financing on acceptable  terms.  Factors that
could materially affect future working capital requirements include, but are not
limited  to, the  factors  listed  above and the  industry  factors  and general
business conditions noted above.

The following  table sets forth,  for the periods  indicated,  selected  Company
income statement data expressed as a percentage of net sales.

<TABLE>
<CAPTION>
                                               Quarter Ended December 31,        Nine Months Ended December 31,
                                               --------------------------        ------------------------------
                                                1999              1998               1999               1998
                                                ----              ----               ----               ----
<S>                                             <C>                <C>                <C>               <C>
Net sales                                       100.0%             100.0%             100.0%            100.0%
---------------------------------------------------------------------------------------------------------------
Cost of sales                                    70.8%              75.0%              73.6%             82.1%
---------------------------------------------------------------------------------------------------------------
Gross profit                                     29.2%              25.0%              26.4%             17.9%
---------------------------------------------------------------------------------------------------------------
General expenses                                 24.0%              35.5%              30.4%             47.5%
---------------------------------------------------------------------------------------------------------------
Depreciation and amortization                     0.5%               5.7%               0.7%              5.2%
---------------------------------------------------------------------------------------------------------------
Loss from operations                              4.7%             -16.2%              -4.6%            -34.8%
---------------------------------------------------------------------------------------------------------------
Other income and expenses                         0.0%               0.3%               0.6%              1.8%
---------------------------------------------------------------------------------------------------------------
Gain on sale of assets                            0.0%               0.0%               0.0%              1.7%
---------------------------------------------------------------------------------------------------------------
Interest expense                                -10.7%             -12.9%             -12.4%            -13.5%
---------------------------------------------------------------------------------------------------------------
Loss before income taxes
   and discontinued operations                   -6.1%             -28.9%             -16.4%            -44.8%
---------------------------------------------------------------------------------------------------------------
Discontinued operations                           0.0%              -5.3%              25.0%             -1.7%
---------------------------------------------------------------------------------------------------------------
Income taxes                                      0.0%               0.0%               0.0%              0.0%
---------------------------------------------------------------------------------------------------------------
Net income                                       -6.1%             -34.1%               8.6%            -46.4%
---------------------------------------------------------------------------------------------------------------
</TABLE>


For the three months ended  December 31, 1999  ("third  quarter  fiscal  2000"),
compared to the three months ended  December  31, 1998  ("third  quarter  fiscal
1999"):

Sales for the three months ended December 31, 1999 were  $1,397,538  compared to
$1,094,036  for the three months ended  December 31, 1998.  Pacific  Print Works
("PPW")  sales for the three  months  ended  December  31, 1999 were  $1,217,906
compared to $832,586 for the three months ended  December 31, 1998. The $385,320
increase in PPW's revenue was primarily due to an increase in sales to PPW's two
largest  customers.  The increase  with these  customers is largely due to PPW's
high density  printing  capabilities  in addition to the overall  quality of the
printing and related services.

                                       27
<PAGE>


Sales for  Fan-Tastic  declined  by  $81,817  which was  primarily  due to third
quarter  fiscal  2000 sales  coming from two stores as opposed to four stores in
third quarter.

Gross  profit and the gross profit as a percentage  of sales  increased  for the
third quarter  fiscal 2000 compared to the third quarter  fiscal 1999,  $408,067
and 29.2%  compared  to  $273,165  and 25%.  The  increase  in gross  profit was
primarily  due to the increase in PPW revenues as noted above.  The gross profit
from PPW operations increased by approximately $226,000.

General  and  administrative  expenses  for the third  quarter  fiscal 2000 were
$335,893 as compared to $388,387 for the third quarter  fiscal 1999.  Fan-Tastic
saw a decline in general and  administrative  expenses of approximately  $41,000
due to less rent and payroll expenses resulting from the closure of 2 stores.

Depreciation and  amortization  expenses were $7,077 in the third quarter fiscal
2000  compared to $62,156 for the third  quarter  fiscal 1999.  This decrease is
primarily due to zero goodwill  amortization in the third quarter fiscal 2000 as
the Company wrote off all goodwill from the PPW acquisition at March 31, 1999.

The gain (loss) from  operations  before other income and expenses for the third
quarter fiscal 2000 improved to a gain of $65,097 compared to a loss of $177,378
for the third  quarter  fiscal 1999.  The  improvement  is primarily  due to the
increase in sales and the  reduction in general and  administrative  expenses as
discussed above.

Interest  expense for the third  quarter  fiscal 2000 was  $149,807  compared to
$141,606 for the prior year.

For the nine months ended December 31, 1999 ("YTD FISCAL 2000"), compared to the
nine months ended December 31, 1998 ("YTD FISCAL 1999"):

Sales for the nine months ended  December 31, 1999 were  $3,466,627  compared to
$2,847,151  for the nine months ended  December 31,  1998.  Pacific  Print Works
("PPW")  sales for the nine  months  ended  December  31,  1999 were  $3,104,767
compared to $2,167,054 for the nine months ended December 31, 1998. The $937,713
or 43% increase in PPW's  revenue was  primarily  due to an increase in sales to
PPW's two largest customers. The increase with these customers is largely due to
PPW's high density  printing  capabilities in addition to the overall quality of
the printing and related services.

Sales for Fan-Tastic declined by approximately  $318,000 which was primarily due
to 1) YTD FISCAL  2000 sales  coming  from the  equivalent  of 2.4 stores over 9
months as opposed to 4.7 stores over the 9 months ended December 31, 1998 and 2)
franchise  sales of  $68,000 in YTD  Fiscal  2000 as opposed to 122,000  for YTD
Fiscal 1999.

Gross profit and the gross profit as a percentage of sales increased for the YTD
Fiscal L 2000 compared to the YTD Fiscal 1999,  ($915,267 and 26.4%  compared to
$509,858  and 17.9%).  The  increase in gross  profit was  primarily  due to the
increase in PPW gross profit for the YTD Fiscal 2000 compared to YTD Fiscal 1999
($720,601 vs.  $168,337)  that was partially  reduced by a decline in Fan-Tastic
sales and gross profit as noted above.

                                       28
<PAGE>

General and  administrative  expenses for the YTD Fiscal 2000 were $1,053,039 as
compared to  $1,351,185  for the YTD Fiscal  1999.  Fan-Tastic  saw a decline in
general and administrative  expenses of approximately  $236,000 due to less rent
and payroll  expenses  resulting  from the closure of the  equivalent 2.3 stores
over the nine months ended December 31, 1999. The Company also expensed  $55,000
in debt acquisition  costs in the YTD Fiscal 1999 that were not recurring in the
YTD Fiscal 2000.

Depreciation  and  amortization  was $22,694 in the YTD Fiscal 2000  compared to
$148,380  for the YTD  Fiscal  1999.  This  decrease  is  primarily  due to zero
goodwill  amortization  in the YTD  Fiscal  2000 as the  Company  wrote  off all
goodwill from the PPW acquisition at March 31, 1999.

The loss  from  operations  for the YTD  Fiscal  2000 was  reduced  to  $160,463
compared to  $989,707  for the YTD Fiscal  1999.  The  reduction  in the loss is
primarily  due to the  increase  in  sales  and the  reduction  in  general  and
administrative expenses as discussed above.

Interest expense for the third quarter 99 was $278,417  compared to $242,365 for
the prior year,  which was due to a greater amount of debt  outstanding  for YTD
Fiscal 2000.

The Company had a $873,086  gain from the sale of its 50% ownership in USPA Ltd.
in the YTD  Fiscal  2000.  For its sale of USPA Ltd.,  in June 1999 the  Company
received the cancellation of $1,000,000 in debt from Jordache  Enterprises,  the
cancellation  of $13,185 in interest  and cash of  $221,470.  In  addition,  the
Company  received  $74,040  in October  1999 from the  collection  of U.S.  Polo
royalties earned through May 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES

At  December  31,  1999 the  Company  had  total  assets  of  $2,099,773,  total
liabilities of $4,899,056 and total stockholders  deficit of $2,799,283 compared
with total assets of  $3,295,534,  total  liabilities  of  $5,610,717  and total
stockholders  deficit of  $2,315,183  at March 31, 1999.  The changes in assets,
liabilities and stockholders deficit is due primarily to the decline in value of
the Company's  investment in GVI. At March 31, 1999 the Company's  current ratio
was  approximately .47 current assets to 1 current  liabilities  compared to .28
current assets to 1 current liabilities at December 31, 1999. The decline in the
Company's  current ratio is primarily due to $990,000 notes payable with related
parties becoming current at September 30, 1999. 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 private  placement of the Company's  common stock and
seeking the conversion of debt and preferred stock to common stock.  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.


                          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.

                                       29
<PAGE>

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

         Not applicable.



                                   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)

/s/ B. Willes Papenfuss       President, Chief Executive       February 9, 2000
-----------------------         Officer and Director
B. Willes Papenfuss             (Principal Executive
                                     Officer)


/s/ Timothy M. Papenfuss       Secretary / Treasurer and       February 9, 2000
------------------------        Director (Chief Financial
 Timothy M. Papenfuss           Officer, Chief Accounting
                                 Officer and Controller)

                                       30