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

                                   FORM 10-QSB

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

               For the quarterly period ended September 30, 2000;

                                       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
                 (Name of Small Business Issuer in Its Charter)


                  Utah                                  87-0401400
      (State or Other Jurisdiction of       (I.R.S. Employer Identification No.)
       Incorporation or Organization)

                     2035 N.E. 181st, Portland, Oregon 84115
               (Address of Principal Executive Offices) (Zip Code)

                                 (503) 492-1500
                (Issuer's Telephone Number, Including Area Code)


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


         As of November 10, 2000, the Registrant had outstanding 4,008,730
shares of Common Stock.

         Transitional Small Business Disclosure Format (check one):

                                 Yes [ ] No [X]

                                       1
<PAGE>

Item 1:    Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets - September 30, 2000 and March
  31, 2000                                                                   3

Condensed Consolidated Statements of Operations -Six months ended
  September 30, 2000 and 1999 and Three months ended September 30,
  2000 and 1999                                                              5

Statements of Stockholders' Equity                                           7

Condensed Consolidated Statements of Cash Flows - Six months ended
  September 30, 2000 and 1999 and Three months ended September 30,
  2000 and 1999                                                              9

Notes to Condensed Consolidated Financial Statements - September 30,
  2000                                                                      11


Item 2:    Management's Discussion and Analysis or Plan of Operation        22

Item 1.    Legal Proceedings                                                25

Item 2.    Changes in Securities                                            25

Item 3.    Defaults upon Senior Securities                                  25

Item 4.    Submission of Matters to a Vote of Security Holders              25

Item 5.    Other Information                                                25

Item 6.    Exhibits and Reports on Form 8-K                                 26

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

                                     ASSETS

                                                                             September 30,         March 31,
                                                                                 2000                2000
                                                                           ------------------  -----------------
CURRENT ASSETS
<S>                                                                        <C>                 <C>
   Cash and cash equivalents                                               $            9,736  $           8,914
   Accounts receivable, net (Note 1)                                                  521,455            586,829
   Inventory (Note 1)                                                                 328,191            232,310
   Prepaid and other current assets                                                     8,000            102,359
   Marketable securities (Note 1)                                                      -                   2,485
                                                                           ------------------  -----------------

     Total Current Assets                                                             867,382            932,897
                                                                           ------------------  -----------------

PROPERTY AND EQUIPMENT (NOTE 1)
   Furniture, fixtures and equipment                                                  460,384            404,322
   Capital leases                                                                   1,277,899          1,277,899
                                                                           ------------------  -----------------

     Total depreciable assets                                                       1,738,283          1,682,221
     Less: accumulated depreciation                                                  (736,838)          (597,131)
                                                                           ------------------  -----------------

     Net Property and Equipment                                                     1,001,445          1,085,090
                                                                           ------------------  -----------------

OTHER ASSETS

   Deposits                                                                            73,618             62,733
                                                                           ------------------  -----------------

   Total Other Assets                                                                  73,618             62,733
                                                                           ------------------  -----------------

   TOTAL ASSETS                                                            $        1,942,445  $       2,080,720
                                                                           ==================  =================
</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)

                                                                             September 30,         March 31,
                                                                                 2000                2000
                                                                           ------------------  -----------------
CURRENT LIABILITIES
<S>                                                                        <C>                 <C>
   Accounts payable                                                        $          910,329  $         449,011
   Accrued expenses and other current liabilities                                     927,254            822,780
   Deferred revenue                                                                     7,000             20,000
   Line of credit (Note 3)                                                            188,231            416,171
   Current portion of notes payable (Note 4)                                          390,414            546,542
   Current portion of notes payable, related parties (Note 5)                         101,732             69,797
   Current portion of capital lease obligations (Note 6)                              301,340            302,551
                                                                           ------------------  -----------------

   Total Current Liabilities                                                        2,826,300          2,626,852
                                                                           ------------------  -----------------

LONG-TERM DEBT
   Reserve for discontinued operations (Note 2)                                       734,988            734,988
   Notes payable (Note 4)                                                             247,084             62,981
   Notes payable, related parties (Note 5)                                          1,307,509          1,224,049
   Capital lease obligations (Note 6)                                                 231,167            389,275
                                                                           ------------------  -----------------

     Total Long-Term Debt                                                           2,520,748          2,411,293
                                                                           ------------------  -----------------

     Total Liabilities                                                              5,347,048          5,038,145
                                                                           ------------------  -----------------

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: 5,483,730
    shares issued and 4,008,730 outstanding.  (Note 9)                                  4,008              3,876
   Additional paid-in capital                                                       7,713,971          7,640,045
   Accumulated deficit                                                            (11,122,827)       (10,601,591)
                                                                           ------------------  -----------------

      Total Stockholders' Equity (Deficit)                                         (3,404,603)        (2,957,425)
                                                                           ------------------  -----------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)                                                            $        1,942,445  $       2,080,720
                                                                           ==================  =================
</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 Six Months Ended        For the Three Months Ended
                                                                         September 30,                      September 30,
                                                               ---------------------------------  ---------------------------------
                                                                     2000              1999              2000             1999
                                                               ---------------   ---------------  ----------------  ---------------
<S>                                                            <C>               <C>              <C>               <C>
NET SALES                                                      $     2,700,297   $     2,069,089  $      1,338,775  $       941,000

COST OF SALES                                                        2,083,045         1,561,885         1,136,801          726,537
                                                               ---------------   ---------------  ----------------  ---------------

GROSS PROFIT                                                           617,252           507,204           201,974          214,463
                                                               ---------------   ---------------  ----------------  ---------------

GENERAL AND ADMINISTRATIVE EXPENSES
   Depreciation and amortization                                         6,417            15,618             2,908            6,606
   General expenses                                                    829,930           713,395           368,038          386,065
                                                               ---------------   ---------------  ----------------  ---------------

     Total General and Administrative Expenses                         836,347           729,013           370,946          392,671
                                                               ---------------   ---------------  ----------------  ---------------

GAIN (LOSS) FROM OPERATIONS                                          (219,095)          (221,809)        (168,972)        (178,208)
                                                               --------------   ----------------  ----------------  ---------------

OTHER INCOME AND (EXPENSES)
   Other income and expenses                                            10,032            20,981             (939)           17,002
   Interest expense                                                  (312,173)          (278,417)        (146,622)        (132,311)
                                                               --------------    ---------------  ---------------   ---------------

     Total Other Income and (Expenses)                               (302,141)          (257,436)        (147,561)         (115,309)
                                                               --------------    ---------------  ---------------   ---------------

LOSS BEFORE INCOME TAXES AND
 DISCONTINUED OPERATIONS                                             (521,236)          (479,245)        (316,533)         (293,517)
                                                               --------------    ---------------  ---------------   ---------------

DISCONTINUED OPERATIONS
   Gain from sale of USPA                                                -              869,336              -               55,947
   Loss from operations of USPA                                          -               (5,871)             -               -
                                                               --------------    ---------------  ---------------   ---------------

     Total Discontinued Operations                                       -               863,465             -               55,947
                                                               --------------    ---------------  ---------------   ---------------

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

NET INCOME (LOSS)                                              $     (521,236)   $       384,220  $      (316,533)  $      (237,570)
                                                               ===============   ===============  ===============   ===============

OTHER COMPREHENSIVE GAIN (LOSS)
   Gain (loss) on valuation of marketable securities           $         -       $      (725,438) $          -      $        72,406

     Total Other Comprehensive Gain (Loss)                               -              (725,438)            -               72,406
                                                               --------------    ---------------  ---------------   ---------------

NET COMPREHENSIVE GAIN (LOSS)                                  $      (521,236)  $      (341,218) $      (316,533)  $      (165,164)
                                                               ===============   ===============  ===============   ===============
</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 Operations (Continued)


                                                                   For the Six Months Ended        For the Three Months Ended
                                                                         September 30,                      September 30,
                                                               ---------------------------------  ---------------------------------
                                                                     2000              1999              2000             1999
                                                               ---------------   ---------------  ----------------  ---------------
<S>                                                            <C>               <C>              <C>               <C>
BASIC LOSS PER SHARE
 OF COMMON STOCK -
 CONTINUING OPERATIONS                                         $         (0.13)  $          (.14) $         (0.08)  $          (.08)
                                                               ===============   ===============  ===============   ===============

BASIC LOSS PER SHARE
 OF COMMON STOCK
 DISCONTINUED OPERATIONS                                       $          -      $           .25  $         -       $           .02
                                                               ===============   ===============  ===============   ===============
</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
                                                        September 30, 2000 and 1999



                                       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, 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)

Stock issued for Quade
 acquisition (Note 2)              451,667            452             -        -                 -             144,099            -

Stock issued for consulting
 services                          250,000            250             -        -                 -             181,384

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

Recognition of loss on
 valuation of marketable
 securities                              -              -             -        -           435,188                   -             -

Net loss for the year ended
 March 31, 2000                          -              -             -        -                 -                   -   (1,421,111)
                                 ---------       --------       -------  -------       -----------       ------------- ------------
Balance, March 31, 2000          3,875,953       $  3,876       244,953  $   245       $         -       $   7,640,045 $(10,601,591)
                                 =========       ========       =======  =======       ===========       ============= ============
</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 Stockholders' Equity (Continued)
                                                        September 30, 2000 and 1999



                                       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, 2000          3,875,953       $  3,876       244,953  $   245       $         -       $   7,640,045  (10,601,591)
                                 =========       ========       =======  =======       ===========       ============= ============
Stock issued for consulting
 services                           32,777             32             -        -                 -              34,028            -

Expense recognized for
 vested options                          -              -             -        -                 -               8,748            -

Stock issued for interest
 on notes payable                  100,000            100             -        -                 -              31,150            -

Net loss for the six months
 ended September 30, 2000                -              -             -        -                 -                   -     (521,236)

Balance at
  September 30, 2000             4,008,730       $  4,008       244,953  $   245       $         -       $   7,713,971 $(11,122,827)
                                 =========       ========       =======  =======       ===========       ============= ============
</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

                                                                For the Six Months Ended           For the Three Months Ended
                                                                        September 30,                      September 30,
                                                              ---------------------------------  ---------------------------------
                                                                    2000              1999             2000              1999
                                                              ---------------   ---------------  ---------------   ---------------
OPERATING ACTIVITIES
<S>                                                           <C>               <C>              <C>               <C>
  Net income (loss)                                           $     (521,236)   $      384,220   $      (316,533)  $      (165,164)
  Adjustments to reconcile net income to net cash
   rovided by operating activities:
    Gain on sale of USPA, Ltd.                                             -          (869,336)                -                 -
    Depreciation and amortization                                    140,307           141,706            72,110            69,694
    Common stock issued for services and interest                    118,669            10,983             4,374             6,609
    Gain (loss) on sale of marketable securities                           -                 -                 -                 -
  Changes in operating assets and liabilities net of
    Quade acquisition:
    (Increase) decrease in inventory                                 (96,097)           15,251          (118,563)            5,254
    (Increase) decrease in accounts receivable                        65,301           (52,712)           12,536          (188,259)
    (Increase) decrease in other current assets                       (9,815)            5,499           (12,815)          (15,213)
    Increase (decrease) in accounts payable                          419,240            69,226           526,152            35,904
    Increase (decrease) in other current liabilities                 243,340           301,117           103,318           221,172
                                                              ---------------   ---------------  ---------------   ---------------

      Net Cash Provided (Used) by Operating Activities               359,709             5,954           270,579           (30,003)
                                                              ---------------   ---------------  ---------------   --------------

INVESTING ACTIVITIES
  Proceeds from sale of marketable securities                          2,485                 -                 -                 -
  Proceeds from sale of USPA, Ltd.                                         -           221,470                 -                 -
  Purchases of property and equipment                                (10,662)                -            (6,412)                -
                                                              ---------------   ---------------  ----------------- ----------

      Net Cash Provided (Used) by Investing Activities                (8,177)          221,470            (6,412)                -
                                                              ---------------   ---------------  ----------------- ----------

FINANCING ACTIVITIES

  Payments on capital lease obligations                             (159,319)         (147,273)          (81,566)          (79,685)
  Proceeds (payments) from notes payable                             (10,151)                -                 -           (12,694)
  Borrowings (payments) from related party debt                       46,700           (68,664)           15,310           (23,939)
  Net borrowings (payments) on factoring line of credit             (227,940)          (52,264)         (188,524)           60,036
                                                              --------------- -----------------  ---------------   ---------------

      Net Cash Provided (Used) by Financing Activities              (350,710)         (268,201)         (254,780)          (56,282)
                                                              ---------------   ---------------  ---------------   ---------------

INCREASE (DECREASE) IN CASH                                              822           (40,777)            9,387           (86,285)

CASH, BEGINNING OF PERIOD                                              8,914            41,967               349            87,475
                                                              ---------------   ---------------  ---------------   ---------------

CASH, END OF PERIOD                                           $        9,736    $        1,190   $         9,736   $         1,190
                                                              ===============   ===============  ===============   ===============
</TABLE>
        The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       9
<PAGE>
<TABLE>
<CAPTION>
                                  AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                Consolidated Statements of Cash Flows (Continued)


                                                                For the Six Months Ended           For the Three Months Ended
                                                                        September 30,                      September 30,
                                                              ---------------------------------  ---------------------------------
                                                                    2000              1999             2000              1999
                                                              ---------------   ---------------  ---------------   ---------------
<S>                                                           <C>               <C>              <C>               <C>
CASH PAID FOR
  Interest                                                    $      123,060    $      195,298   $        72,771   $        87,253
  Income taxes                                                $            -    $            -   $             -   $             -

NON-CASH FINANCING ACTIVITIES
  Common stock issued for services                            $      118,669    $       10,983   $         4,374   $         6,609
  Equipment purchased through capital
     lease obligation                                         $            -    $            -   $             -   $             -

</TABLE>
        The accompanying notes are an integral part of these consolidated
                              financial statements.

                                       10
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999


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 2000 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.  Effective for fiscal quarters ending after March 15, 2000,
               the Securities and Exchange  Commission  adopted a rule requiring
               companies'  independent  auditors review the companies' financial
               information prior to the companies filing their Quarterly Reports
               on Form 10-QSB with the Commission.  The Company's  September 30,
               2000 Form  10-QSB was not  reviewed  prior to  submission  to the
               Commission. A Form 8-K will be filed when the review is completed
               by the independent auditors.

               b. Principles of Consolidation

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

               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. Inventory consists of items available
               for resale.

                                       11
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999

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.  Accounts Receivable

               Accounts  receivable are shown net of the allowance for bad debts
               of $63,822 at March 31, 2000.

               i. 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.

               At March 31, 2000, the Company held 1,045,000 shares of GCA stock
               (See Note 2).  Because of GCA filing  for  bankruptcy  in July of
               1999,  substantial  doubt  exists  regarding  the  ability of the
               Company to recover its  investment in GCA. At July 14, 2000,  GCA
               was still in Chapter 11 bankruptcy and its market value was $0.06
               per share.  Furthermore,  the majority of the Company's  stock in
               GCA is  restricted  and the Company  does not have the ability to
               have the  restriction  removed  because GCA is not current in its
               SEC filings.  As a result,  the Company wrote off its cost in GCA
               at March 31, 2000 and incurred a loss of $1,434,239.

               j. 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.

               k. 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.

               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 $(0.08) and
               $(.08)

                                       12
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999


NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES (Continued)

               k. Basic Loss Per Common Share (Continued)

               for  the  three  months  ended   September  30,  2000  and  1999,
               respectively.   Basic  net  (loss)   income   from   discontinued
               operations   per  common   share  and   diluted   net  loss  from
               discontinued  operations  per  common  share were $0.00 and $.02,
               respectively.  Weighted  average common shares  outstanding  were
               4,008,730 and 3,618,779 for the three months ended  September 30,
               2000 and 1999, respectively.

               l.  Revenue Recognition

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

               m. Goodwill

               On March 31, 1998, the Company 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.

               n. 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.

               o. Advertising

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

               p. Prior Period Reclassification

               Certain  1999 amounts  have been  reclassified  to conform to the
               presentation of the 2000 consolidated financial statements.

                                       13
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999

NOTE 2 -       MERGERS AND ACQUISITIONS

               Golf Ventures, Inc.
               -------------------
               In  November  1997,   Golf  Ventures,   Inc.,  a  former  Company
               subsidiary,   merged  with  U.S.  Golf  Communities.   U.S.  Golf
               Communities  was  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.

               The Company has a reserve for discontinued operations of $734,988
               at March 31, 2000.

               Pacific Print and Embroidery, LLC (aka Pacific Print Works)
               -----------------------------------------------------------
               In May 1998, the Company  acquired 83% of the outstanding  shares
               of Pacific Print Works (PPW).  The  acquisition was accounted for
               by the  purchase  method  of  accounting,  and  accordingly,  the
               purchase price was 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.  In addition,  depending on
               PPW's  performance  from April 1, 1998  through  March 31,  2001,
               additional  shares of the Company's  common stock would be issued
               to the Sellers if minimum  earnings levels were met. Based on the
               $5.00  guarantee and the Company's  share value from October 1998
               through March 1999, the Company is obligated to issue  additional
               shares of common  stock to the  Sellers.  An amendment to the PPW
               Stock  Purchase  Agreement is being  evaluated by the Company and
               the Sellers in which the  Company  would  issue  another  854,000
               shares  of the  Company's  common  stock to the  Sellers  and any
               additional  earnings  requirements  by  PPW or  per  share  value
               guarantee by the Company would be eliminated.

               Quade, Inc. and U.S. Polo Association, Ltd.
               -------------------------------------------
               In 1997, Quade, Inc. acquired from the U.S. Polo Association ("US
               Polo") the exclusive  master  license  rights to the US Polo name
               for the United States and Canada.  On July 23, 1998,  the Company
               purchased Quade by issuing 238,333 shares of its common stock.

               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 owned 50% of US Polo and
               management  and the Board of  Directors  for US Polo were  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.
               The Company's  investment in this joint venture was 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.

                                       14
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999

NOTE 2 -       MERGERS AND ACQUISITIONS (Continued)

               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   another  $70,000  upon  the
               collection of U.S. Polo royalties earned through May 31, 1999.

               The results of  operations  of Quade,  Inc. and U.S. Polo for the
               year ended  March 31,  1999 has  generated  a loss of $252,972 on
               sales  of  $232,712.  A gain on the  disposal  of U.S.  Polo  for
               $867,587 was recognized for year ending March 31, 2000. No income
               tax benefit or expense  has been  attributed  to the  disposal of
               U.S. Polo.

               In addition,  the Company and the former  owner of Quade  amended
               the original stock purchase  agreement.  Under the amendment,  an
               additional  451,667  shares of common  stock  were  issued to the
               former owner of Quade and to a Quade  creditor and the additional
               earnings requirements by Quade or U.S. Polo to receive additional
               Company  common stock was  eliminated.  In return,  the $5.00 per
               share guaranteed value of the initial common shares issued to the
               Quade shareholder was removed.

NOTE 3 -       LINE OF CREDIT

               In November 1998, the Company entered into an accounts receivable
               financing  agreement to sell, with recourse,  up to $1 million 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  September 30 and March 31,
               2000,  the  Company  had a  payable  of  $188,231  and  $416,171,
               respectively,   for  net  funds   advanced   from  this  accounts
               receivable line of credit.  The Company  received  $2,242,992 and
               $1,640,063  from the sale of receivables for the six months ended
               September 30, 2000 and 1999 and recognized $60,386 and $42,863 in
               interest expense from the discount of selling these  receivables,
               respectively.

NOTE 4 -       NOTES PAYABLE

               Notes payable are comprised of the following:       September 30,
                                                                        2000
                                                                   ------------
               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

               Note payable to shareholder of PPW, unsecured.
                 Modified in August 1998. Modified agreement
                 requires payments of $190,000 through February
                 2000 without interest. Note will default to
                 $327,084 if payments are not made timely plus 9%
                 interest less payments made subsequent to
                 modified agreement. A gain on the modification
                 of debt for $137,084 will be recorded when there
                 is no risk of default on this debt.                    327,084

               Note payable to former shareholder of PPW,
                 interest rate of 10%, due on demand, unsecured.         96,811
                                                                   ------------
               Subtotal                                                 637,498

                               15
<PAGE>

            AMERICAN RESOURCES AND DEVELOPMENT COMPANY
          Notes to the Consolidated Financial Statements
                   September 30, 2000 and 1999


NOTE 4 -      NOTES PAYABLE (Continued)

               Less current portion                                    (390,414)
                                                                   ------------
              Long-term portion                                    $    247,084
                                                                   ============

              Maturities of long-term debt are as follows:

                    September 30, 2001                             $    390,414
                    September 30, 2002                                  247,084
                                                                   ------------
                                                                   $    637,498

NOTE 5 -      NOTES PAYABLE, RELATED PARTIES
                                                                  September 30,
                                                                       2000
               Notes payable to Miltex Industries, secured by
                 700,000 shares of GCA and 1,475,000 shares of
                 the Company's common stock. Interest at 15% with
                 monthly principal and interest payments of
                 $11,000 with a final balloon payment December
                 31, 2001.                                         $    770,054

               Note payable to a shareholder, secured by GCA
                 stock. Interest payable monthly at 13.5% with
                 interest and principal payments of $5,000 per
                 month. Due October 31, 2001.                           315,859

               Note payable to a Company owned by a shareholder.
                 Interest payable at 72% with interest and
                 principal payments due currently.                       76,377

               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.                      246,951
                                                                   ------------

               Subtotal                                               1,409,241

               Less current portion                                    (101,732)
                                                                   ------------
               Long-term portion                                   $  1,307,509
                                                                   ============

              Maturities of notes payable, related parties are as follows:

                       September 30, 2001                          $    105,841
                       September 30, 2002                             1,056,449
                       September 30, 2003                               246,951
                                                                   ------------
                                                                   $  1,409,241

                               16
<PAGE>

            AMERICAN RESOURCES AND DEVELOPMENT COMPANY
          Notes to the Consolidated Financial Statements
                   September 30, 2000 and 1999



NOTE 6 -      CAPITAL LEASES

               Property and equipment payments under capital leases as of March
               31, 2000 is summarized as follows:

                                  Year End
                                  March 31,
                                -----------
                                   2001                        $     373,124
                                   2002                              225,438
                                   2003                              123,785
                                   2004                               88,308
                                   2005                               32,378
                                                               -------------

              Total minimum lease payments                           843,033
              Less interest and taxes                               (151,207)
                                                               -------------

              Present value of net minimum lease payments            691,826
              Less current portion                                  (302,551)
                                                               -------------

              Long-term portion of capital lease obligations   $     389,275
                                                               =============

               The Company recorded  depreciation on capitalized lease equipment
               expense of $232,589  and  $196,606  for the years ended March 31,
               2000 and 1999, respectively.

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, 2000,  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,
               2000,  there  is a  total  of  $406,620  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.

                                       17
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999

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 1,475,000 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.  Options are granted at a price and with vesting terms
               as determined by the Board of Directors.

               In  August  1999,  the  Board of  Directors  granted  options  to
               purchase  696,291 shares of common stock at $0.25.  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.

               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  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.

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

               Pro forma expense in year 1 would be $77,660,  $52,402 and $5,646
               in years 2 and 3,  respectively,  with an  increase  in pro forma
               expenses  per share of $0.02 in year 1, $0.05 in year 2 and $0.00
               in year 3.

                                       18
<PAGE>

                 AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999

NOTE 10 -      STOCK OPTIONS (Continued)

               On March 1, 2000,  the  Company  granted  options to a company to
               purchase up to 340,000 shares of the Company's common stock. This
               company is to provide various investor  relations  services.  The
               Company is recognizing a $32,385 expense over 4 months based upon
               the value of the  options as  calculated  from an option  pricing
               model.

               The options expire September 1, 2001, are not  transferrable  and
               are exercisable at any time at the following rates:

                        85,000 share s        at      $1.08 per share;
                        85,000 shares         at      $1.32 per share;
                        85,000 shares         at      $1.49 per share;
                        85,000 shares         at      $1.72 per share.

               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.

               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,
                                                                 2000
                                                                 ----
                    Expected dividend yield                        0%
                    Expected stock price volatility               70%
                    Risk-free interest rate                      6.5%
                    Expected life of options (in years)           10

                                       19
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                           September 30, 2000 and 1999


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 a retail store in
               Oregon.  Lease  commitments  for the years  ended  March 31, 2001
               through  March  31,  2003 are  $467,478,  $421,671  and  $67,574,
               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.

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.  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." 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 Six
                                              Months Ended             Pacific                                 Corporate
                                              September 30,           Print Works      Fan-Tastic             Unallocated
                                              -------------           -----------      ----------             -----------
<S>                                               <C>              <C>               <C>                   <C>
Net sales                                         2000             $     2,610,953  $        89,344
                                                  1999                   1,886,860          182,228
Operating income (loss)
applicable to industry
segment                                           2000                      93,501         (126,932)
                                                  1999                       2,450         (110,098)

General corporate expenses
not allocated to industry
segments                                          2000                                                      $     185,664
                                                  1999                                                            114,160

                                       20
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                          September 30, 2000 and 1999


NOTE 13 -     BUSINESS SEGMENTS (Continued)
<CAPTION>

                                              For the Six
                                              Months Ended             Pacific                                 Corporate
                                              September 30,           Print Works      Fan-Tastic             Unallocated
                                              -------------           -----------      ----------             -----------
<S>                                               <C>              <C>               <C>                   <C>
Interest expense                                  2000                    (198,842)          (24,442)             (88,889)
                                                  1999                    (159,185)          (19,278)             (99,954)

Other income (expenses)                           2000                        (968)                -               11,000
                                                  1999                      17,888             3,093                    -
Income (loss) from
 discontinued operations                          2000                           -                 -                    -
                                                  1999                           -                 -       $      867,215

Assets                                            2000             $     1,904,248   $        33,938                4,259

Depreciation and
 amortization                                     2000                     135,890             3,936                  481
                                                  1999                     134,860             6,497                2,378
Property and equipment
 acquisitions                                     2000                      10,662                 -                    -
                                                  1999                           -                 -                    -
</TABLE>

NOTE 14 -      SUBSEQUENT EVENTS

               On June 7, 2000, the Company announced the signing of a letter of
               intent to merge with Royal  Avalon S.A. De C.V.,  a Mexico  based
               apparel   manufacturer.   Royal  Avalon  has  been  manufacturing
               T-shirts in Mexico for the past five years.  The letter of intent
               between  the Company  and Royal  Avalon  calls for the Company to
               issue  its  common  stock to Royal  Avalon  shareholders  for the
               purchase of the business.

               During the past six months the Company has performed  significant
               due diligence  relating to the viability of the merger with Royal
               Avalon. Although originally the Company's management believed the
               merger would be finalized by August 2000,  the Company  continues
               to conduct due diligence  and will not finalize this  transaction
               until the Company's  management and board of directors is certain
               the merger is in the best interest of its shareholders.  There is
               no timetable to complete the merger.


<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>
                                                           Three Months                          Six Months
                                                        Ended September 30,                  Ended September 30,
                                                        -------------------                  -------------------
                                                       2000             1999                2000             1999
                                                       ----             ----                ----             ----
<S>                                                   <C>               <C>                <C>              <C>
Net sales                                             100.0%            100.0%             100.0%           100.0%
Cost of sales                                          84.9%             77.2%              77.4%           -75.5%
Gross profit                                           15.1%             22.8%              22.9%            24.5%
General expenses                                       27.5%             41.0%              30.7%            34.5%
Depreciation and amortization                           0.2%              0.7%               0.2%             0.8%
Loss from operations                                  -12.6%            -18.9%              -8.1%           -10.7%
Other income and expenses                              -0.1%              1.8%               0.4%             1.0%
Interest expense                                      -11.0%            -14.1%             -11.6%           -13.5%
Loss before income taxes
  and discontinued operations                         -23.6%            -31.2%             -19.3%           -23.2%
Discontinued operations                                 0.0%              5.9%               0.0%            41.7%
Income taxes                                            0.0%              0.0%               0.0%             0.0%
Net Income (loss)                                     -23.6%            -25.2%             -19.3%            18.6%
</TABLE>

For the three months ended  September 30, 2000 ("second  quarter  fiscal 2001"),
compared to the three months ended  September 30, 1999 ("second  quarter  fiscal
2000"):

Sales for the three months ended September 30, 2000 were $1,338,775  compared to
$941,000 for the three  months ended  September  30, 1999.  Pacific  Print Works
("PPW") sales for the second  quarter  fiscal 2001 were  $1,300,605  compared to
$851,386  for the second  quarter  fiscal 2000.  The $449,219  increase in PPW's
revenue was primarily  due to a $412,000  increase in sales to a customer in the
second quarter fiscal 2001 compared to the second quarter fiscal 2000.  Sales to
this customer in the second quarter fiscal 2001 included T-shirts in addition to
screen  printing  revenue and accounted for 38% of total second  quarter  fiscal
2001  revenue.  The  increase  with this  customer  is largely due to PPW's high
density printing capabilities in addition to the overall quality of the printing
and related services.


<PAGE>

Gross  profit and the gross  profit as a  percentage  of sales  declined for the
second  quarter  fiscal  2001 as  compared to the second  quarter  fiscal  2000,
$201,974 and 15.1%  compared to $214,463 and 22.8%.  The decline in gross profit
was primarily due to an increase in production  salaries and wages,  an increase
in materials for garment finishing,  screen and freight costs and an increase in
rent costs.  Production  salaries and wages increased $34,000 due to an increase
of 5% in  production  volume  and a pay  increase  to the top  three  production
management employees. Materials used for garment finishing and screens increased
$25,000  due to the  increase in  production.  Rent costs  increased  by $39,000
because  PPW  required  extra  space  due  to the  increase  in  revenue  (i.e.,
$1,338,775  for second  quarter  fiscal 2001  compared  to  $941,000  for second
quarter fiscal 2000.)

General  and  administrative  expenses  for the first  quarter  fiscal 2001 were
$368,038 as compared to $386,065 for the second quarter fiscal 2000.

The gain (loss) from operations  before other income and expenses for the second
quarter  fiscal 2001 was a loss of $168,972 as opposed to a loss of $178,208 for
the second quarter fiscal 2000.

Interest  expense for the second  quarter  fiscal 2001 was $146,622  compared to
$132,311 for the prior year.

For the six months ended September 30, 2000 ("YTD fiscal 2001"), compared to the
six months ended September 30, 1999 ("YTD fiscal 2000"):

Sales for the six months ended  September 30, 2000 were  $2,700,297  compared to
$2,069,089  for the six months ended  September  30, 1999.  Pacific  Print Works
("PPW") sales YTD fiscal 2001 were $2,610,953 compared to $1,886,860 for the YTD
fiscal 2000 sales. The $724,093 increase in PPW's revenue was primarily due to a
$412,000  and  $366,000  increase  in sales to PPW's two largest  customers  YTD
fiscal 2001  compared to YTD fiscal  2000.  The  increase to these  customers is
largely  due to PPW's high  density  printing  capabilities  in  addition to the
overall quality of the printing and related services.

Gross profit  increased and the gross profit as a percentage  of sales  declined
slightly  for YTD fiscal 2001 as compared to the YTD fiscal  2000,  $617,252 and
22.9%  compared to $507,204 and 24.5%.  The decline in gross  profit  margin was
primarily  due to an increase in production  salaries and wages,  an increase in
materials  for garment  finishing,  screen and freight  costs and an increase in
rent costs. Rent costs increased by $78,000 because PPW required extra space due
to the  increase  in  revenue  (i.e.,  $2.7  million  for the six  months  ended
September 30, 2000  compared to $2.1 million for the six months ended  September
30, 1999.)

General and  administrative  expenses  for the YTD fiscal 2001 were  $829,930 as
compared  to  $713,395  for the YTD fiscal  2000.  The  increase  in general and
administrative  expenses is  primarily  due to  $110,000  in  investor  relation
expenses incurred in the first quarter fiscal 2001.

The gain (loss) from  operations  before  other  income and expenses for the YTD
fiscal 2001 was a loss of $219,095 as opposed to a loss of $221,809  for the YTD
fiscal  2000.  The YTD fiscal  2001 loss was similar to the YTD fiscal 2000 loss
because  the  increase  in gross  profit was offset by the  increase  in general
administrative costs.

Interest  expense for the YTD fiscal 2001 was $312,173  compared to $278,417 for
the prior year.

The Company had a $869,336  gain from the sale of its 50% ownership in USPA Ltd.
in the YTD fiscal 2000 without any similar gain for YTD fiscal 2001.

For the three months ended September 30, 1999 ("second quarter 99"), compared to
the three months ended September 30, 1998 ("second quarter 98"):

Sales for the three months ended  September 30, 1999 were  $941,000  compared to
$926,334 for the three  months ended  September  30, 1998.  Pacific  Print Works
("PPW")  sales for the three  months  ended  September  30,  1999 were  $851,386
compared to $710,549 for the three months ended September 30, 1998. The $140,837
increase  in PPW's  revenue was  primarily  due to an increase in sales to PPW's
four  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.  PPW expects a similar or larger increase in
sales over the next two  quarters  based on its  relationship  and  orders  with
existing customers in addition to PPW samples with potential new customers.


<PAGE>

Sales for  Fan-Tastic  declined by $126,171  which was  primarily  due to second
quarter  99 sales  coming  from four  stores as  opposed to six stores in second
quarter 98 and franchise sales of $78,000 in the second quarter 98 as opposed to
zero in the second quarter 99.

Gross  profit and the gross  profit as a  percentage  of sales  declined for the
second quarter 99 compared to the second quarter 98, $214,463 and 22.8% compared
to $240,324 and 25.9%.  The decrease in gross  profit was  primarily  due to the
decline in Fan-Tastic  franchise sales as noted above. The gross profit from PPW
operations increased by approximately $60,000.

General and  administrative  expenses for the second quarter 99 were $386,065 as
compared to $502,147  for the second  quarter  98.  Fan-Tastic  saw a decline in
general and  administrative  expenses of approximately  $50,000 due to less rent
and payroll expenses resulting from the closure of 2 stores. The Company expects
general and  administrative  expenses over the next two quarter to be similar to
the second quarter 99 amount.

Depreciation  and  amortization  expenses  were $6,016 in the second  quarter 99
compared to $57,523 for the second quarter 98. This decrease is primarily due to
zero goodwill amortization in the second quarter 99 as the Company wrote off all
goodwill from the PPW acquisition at March 31, 1999.

The loss from  operations  for the  second  quarter 99 was  reduced to  $178,208
compared to $319,546  for the second  quarter 98. 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 second quarter 99 was $132,311 compared to $135,323 for
the prior year.

The Company had a $55,947  gain from the sale of its 50%  ownership in USPA Ltd.
in the second  quarter  99. 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.

For the six months  ended  September  30, 1999 ("YTD  99"),  compared to the six
months ended September 30, 1998 ("YTD 98"):

Sales for the six months ended  September 30, 1999 were  $2,069,089  compared to
$1,735,368  for the six months ended  September  30, 1998.  Pacific  Print Works
("PPW")  sales for the six  months  ended  September  30,  1999 were  $1,886,860
compared to $1,335,507 for the six months ended September 30, 1998. The $551,353
or 41% increase in PPW's  revenue was  primarily  due to an increase in sales to
PPW's four 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.  PPW expects a similar or larger increase
in sales over the next six quarters  based on its  relationship  and orders with
existing customers in addition to PPW samples with potential new customers.

Sales for  Fan-Tastic  declined by $217,663  which was  primarily  due to YTD 99
sales  coming from four stores as opposed to six stores in YTD 98 and  franchise
sales of  $112,000  YTD 98 as opposed to zero for YTD 98.  Franchise  sales from
October 1999 through  March 31, 2000 are expected to increase  compared to April
1, 1999 through  September 30, 1998 but  franchise  sales beyond fiscal 2000 are
based upon the amount of advertising incurred.

Gross profit and the gross profit as a percentage of sales increased for the YTD
99 compared to the YTD 98,  ($507,204 and 24.5% compared to $411,803 and 23.7%).
The increase in gross profit was  primarily due to the increase in PPW sales and
gross profit for the YTD 99 compared to YTD 98 ($417,000 vs.  $246,000) that was
partially reduced by a decline in Fan-Tastic franchise sales as noted above.

General and administrative  expenses for the YTD 99 were $713,395 as compared to
$976,692 for the YTD 98. Fan-Tastic saw a decline in general and  administrative
expenses  of  approximately  $10,000  due to  less  rent  and  payroll  expenses
resulting  from the  closure  of 2  stores.  The  Company  expects  general  and
administrative  expenses  over the next six  months to be  similar to the YTD 99
amount.


<PAGE>

Depreciation  and amortization was $15,618 in the YTD 99 compared to $66,735 for
the YTD 98. This decrease is primarily due to zero goodwill  amortization in the
YTD 99 as the Company wrote off all goodwill from the PPW  acquisition  at March
31, 1999.

The loss from  operations  for the YTD 99 was  reduced to  $221,809  compared to
$667,558  for the YTD 98.  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 second 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
99.

The Company had a $869,336  gain from the sale of its 50% ownership in USPA Ltd.
in the YTD 99. 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  September  30,  2000,  the Company  had total  assets of  $1,942,445,  total
liabilities of $5,647,048 and total stockholders' deficit of $3,404,603 compared
with total assets of  $2,080,720,  total  liabilities  of  $5,038,145  and total
stockholders  deficit of  $2,957,425  at March 31, 2000.  The changes in assets,
liabilities and  stockholders  equity is due primarily to losses from operations
and interest  expense.  At September  30, 2000 the  Company's  current ratio was
approximately .307 current assets to 1 current liabilities.

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 to equity. 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.

Item 4.  Submission of Matters to a Vote of Security Holders
                 Not applicable.

Item 5.  Other Information

                  Effective for fiscal quarters ending after March 15, 2000, the
Securities  and  Exchange   Commission  adopted  a  rule  requiring   companies'
independent  auditors review the companies'  financial  information prior to the
companies filing their Quarterly Reports on Form 10-QSB with the Commission. The
Company's September 30, 2000 Form 10-QSB was not reviewed prior to submission to
the  Commission.  A Form 8-K will be filed when the review is  completed  by the
independent auditors.

<PAGE>

Item 6.  Exhibits and Reports on Form 8-K Not applicable.

                  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         November 10, 2000
-----------------------     Officer and Director
    B. Willes Papenfuss     (Principal Executive
                            Officer)




/s/ Timothy M. Papenfuss    Secretary/Treasurer and            November 10, 2000
------------------------    Director (Chief Financial
 Timothy M. Papenfuss       Officer, Chief Accounting
                            Officer and Controller)