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 June 30, 1999;

                                       or

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

         For transition period from ________________ to _________________

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

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
             (Exact name of registrant as specified in its charter)

                                ----------------
                   UTAH                                   87-0401400
      (State or other jurisdiction of                 (I.R.S. Employer
       Incorporation or Organization)                 Identification No.)

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

                     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 August 11, 1999, the Registrant had outstanding  3,600,953  shares of
Common Stock.


           Transitional Small Business Disclosure Format (check one):

                                 Yes [ ] No [X]


<PAGE>

Part I     Financial Information

Item 1:    Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets - June  30, 1999 and
 March 31, 1999................................................................1


Condensed Consolidated Statements of Operations - Three months ended
 June 30, 1999 and 1998..............................................3


Statements of Stockholders' Equity.............................................5


Condensed Consolidated Statements of Cash Flows - Three Months Ended
 June 30, 1999 and 1998....................................................7

Notes to Condensed Consolidated Financial Statements - June 30, 1999.......9


Item 2:    Management's Discussion and Analysis or Plan of Operation..........17


Part II    Other Information

Item 1.    Legal Proceedings..................................................19

Item 2.    Changes in Securities..............................................19

Item 3.    Defaults upon Senior Securities....................................19

Item 4.    Submission of Matters to a Vote of Security Holders................19

Item 5.    Other Information .................................................19

Item 6.    Exhibits and Reports on Form 8-K...................................19

                                        i
<PAGE>
<TABLE>
<CAPTION>


                                    AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                            Consolidated Balance Sheet


                                                      ASSETS

                                                                                 June 30,           March 31,
                                                                                  1999               1999
CURRENT ASSETS
<S>                                                                        <C>                 <C>
   Cash and cash equivalents                                               $           87,475  $          41,967
   Accounts receivable, net (Note 1)                                                  391,521            516,660
   Inventory (Note 1)                                                                 283,771            293,768
   Prepaid and other current assets                                                    25,115             15,400
   Marketable securities (Note 1)                                                      27,187            157,500
                                                                           ------------------  -----------------

     Total Current Assets                                                             815,069          1,025,295
                                                                           ------------------  -----------------

PROPERTY AND EQUIPMENT (NOTE 1)

   Furniture, fixtures and equipment                                                  409,128            395,253
   Capital leases                                                                   1,083,340          1,090,032
                                                                           ------------------  -----------------

     Total depreciable assets                                                       1,492,468          1,485,285
     Less: accumulated depreciation                                                  (412,213)          (355,492)
                                                                           ------------------  -----------------

     Net Property and Equipment                                                     1,080,255          1,129,793
                                                                           ------------------  -----------------

OTHER ASSETS

   Marketable securities (Note 1)                                                     190,407            857,938
   Net assets of discontinued operations (Note 14)                                     -                 282,508
                                                                           ------------------  -----------------

   Total Other Assets                                                                 190,407          1,140,446
                                                                           ------------------  -----------------

   TOTAL ASSETS                                                            $        2,085,731  $       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)

                                                                                June 30,            March 31,
                                                                                 1999                1999
CURRENT LIABILITIES
<S>                                                                        <C>                 <C>
   Accounts payable                                                        $          399,350  $         366,028
   Accrued expenses and other current liabilities                                     461,410            397,800
   Line of credit (Note 3)                                                            255,544            367,845
   Current portion of notes payable (Note 4)                                          302,445            587,323
   Current portion of notes payable, related parties (Note 5)                          47,104             47,104
   Current portion of capital lease obligations (Note 6)                              280,592            282,497
                                                                           ------------------  -----------------

   Total Current Liabilities                                                        1,746,445          2,048,597
                                                                           ------------------  -----------------

LONG-TERM DEBT

   Deferred revenue                                                                    10,000             10,000
   Reserve for discontinued operations (Note 2)                                       676,458            660,123
   Notes payable (Note 4)                                                             231,027          1,001,819
   Notes payable, related parties (Note 5)                                          1,350,423          1,395,148
   Capital lease obligations (Note 6)                                                 427,442            495,030
                                                                           ------------------  -----------------

     Total Long-Term Debt                                                           2,695,350          3,562,120
                                                                           ------------------  -----------------

     Total Liabilities                                                              4,441,795          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: 4,361,773
    shares issued and  3,600,953 outstanding.  (Note 9)                                 3,600              3,174
   Other comprehensive losses                                                      (1,233,032)          (435,188)
   Additional paid-in capital                                                       7,441,814          7,297,066
   Accumulated deficit                                                             (8,558,690)        (9,180,480)
                                                                           ------------------  -----------------

      Total Stockholders' Equity (Deficit)                                         (2,356,063)        (2,315,183)
                                                                           ------------------  -----------------

      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)                                                            $        2,085,731  $       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 Three Months Ended
                                                                                         June 30,
                                                                               1999                 1998

INCOME
<S>                                                                       <C>                  <C>
   Sales                                                                  $        1,128,088   $         809,034
   Cost of sales                                                                     835,348             637,555
                                                                          ------------------   -----------------

     Gross Profit                                                                    292,740             171,479
                                                                          ------------------   -----------------

GENERAL AND ADMINISTRATIVE EXPENSES

   Depreciation and amortization                                                       9,012              44,945
   General expenses                                                                  337,330             474,545
                                                                          ------------------   -----------------

     Total General and Administrative Expenses                                       346,342             519,490
                                                                          ------------------   -----------------

LOSS FROM OPERATIONS                                                                 (53,602)           (348,011)
                                                                          ------------------   -----------------

OTHER INCOME AND (EXPENSES)

   Other income                                                                        3,979              24,112
   Gain on sale of assets                                                             -                   19,405
   Interest expense                                                                 (146,105)           (107,042)
                                                                          ------------------   -----------------

     Total Other Income and (Expenses)                                              (142,126)            (63,525)
                                                                          ------------------   -----------------

LOSS BEFORE INCOME TAXES AND
   DISCONTINUED OPERATIONS                                                          (195,728)           (411,536)
                                                                          ------------------   -----------------

DISCONTINUED OPERATIONS

Gain from sale of USPA                                                               813,389              -
Loss from operations of USPA                                                          (5,871)             -
                                                                          ------------------   -----------------

TOTAL DISCONTINUED OPERATIONS                                                        807,518              -
                                                                          ------------------   -----------------

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

NET INCOME (LOSS)                                                                    611,790            (411,536)
                                                                          ------------------   -----------------

OTHER COMPREHENSIVE GAIN (LOSS)

   Gain (loss) on valuation of marketable securities                                (797,844)            471,655
                                                                          ------------------   -----------------

     Total Other Comprehensive gain (loss)                                          (797,844)            471,655
                                                                          ------------------   -----------------

NET COMPREHENSIVE GAIN (LOSS)                                             $         (186,054)  $          60,119
                                                                          ==================   =================
</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 Three Months Ended
                                                                                         June 30,
                                                                               1999                 1998

<S>                                                                       <C>                  <C>
BASIC LOSS PER SHARE OF COMMON
  STOCK-CONTINUING OPERATIONS                                             $            (0.06)  $           (0.14)
                                                                          ==================   =================

BASIC INCOME PER SHARE OF COMMON STOCK -
DISCONTINUED OPERATIONS                                                   $             0.19   $           (0.00)
                                                                          ==================   =================

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                                      3,219,596           2,949,834
                                                                          ==================   =================
</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 (Deficit)
                                               June 30, 1999 and 1998



                                                                                           Other          Additional
                                         Common Stock               Preferred Stock   Comprehensive         Paid-In     Accumulated
                                     Shares        Amount       Shares       Amount         Loss             Capital      Deficit
                                    ---------   ------------  -----------  -----------  ------------      ------------  ------------
<S>                                 <C>         <C>               <C>      <C>          <C>               <C>           <C>
Balance, March 31, 1997             1,835,486   $      1,835      252,220  $       252  $     -           $ 13,021,721  $(9,966,100)

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

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

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

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

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

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

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

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

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

Net loss 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.

                                        7
<PAGE>
<TABLE>
<CAPTION>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
           Consolidated Statements of Stockholders' Equity (Continued)
                             June 30, 1999 and 1998



                                                                                           Other          Additional
                                         Common Stock               Preferred Stock   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                 -              -            -            -          (797,844)            -            -

Expense recognized for
 vested options                        -              -            -            -            -                   4,374       -

Stock issued for Quade
 acquisition (Note 2)                 426,667            426       -            -            -                 140,374       -

Net income for the period
 ended June 30, 1999                   -              -            -            -            -                  -           621,790
                                    ---------   ------------  -----------  -----------  ------------      ------------  ------------

Balance, June 30, 1999              3,600,953   $      3,600      244,953  $       245  $(1,233,032)      $  7,441,814  $(8,558,690)
                                    =========   ============  ===========  ===========  ============      ============  ============
</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


                                                                                        June 30,
                                                                               1999                  1998
OPERATING ACTIVITIES
<S>                                                                      <C>                   <C>
   Net income (loss)                                                     $         611,790     $        (411,536)
   Adjustments to reconcile net income to net cash
    provided by operating activities:
     Gain on sale of USPA, Ltd.                                                   (813,389)               -
     Depreciation and amortization                                                  72,012               104,945
     Common sock issued for services                                                 4,374                -
   Changes in operating assets and liabilities:
     (Increase) decrease in inventory                                                9,997                74,016
     (Increase) decrease in accounts receivable                                    125,139              (117,169)
     Increase (decrease) in other current assets                                    (9,715)                8,254
     Increase (decrease) in accounts payable and
      other current liabilities                                                     96,932               (53,149)
                                                                         -----------------     -----------------

         Net Cash Provided (Used) by Operating Activities                           97,140              (394,639)
                                                                         -----------------     -----------------

INVESTING ACTIVITIES

   Proceeds from sale of USPA, Ltd.                                                221,470                -
   Purchases of property and equipment                                              -                    (37,854)
   Sale of marketable securities, net of gain                                       -                    121,705
                                                                         -----------------     -----------------

         Net Cash Provided (Used) by Investing Activities                          221,470                83,851
                                                                         -----------------     -----------------

FINANCING ACTIVITIES

   Payments on notes payable and capital lease obligations                        (160,801)              (57,759)
   Proceeds from notes payable                                                      -                    325,533
   Common stock issued for cash                                                     -                     45,000
   Net payments on factoring line of credit                                       (112,301)               -
                                                                         -----------------     -----------------

         Net Cash Provided (Used) by Financing Activities                         (273,102)              312,774
                                                                         -----------------     -----------------

INCREASE (DECREASE) IN CASH                                                         45,508                 1,986

CASH, BEGINNING OF PERIOD                                                           41,967                14,663
                                                                         -----------------     -----------------

CASH, END OF PERIOD                                                      $          87,475     $          16,649
                                                                         =================     =================
</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)


                                                                                       June 30,
                                                                               1999                  1998
CASH PAID FOR
<S>                                                                      <C>                   <C>
   Interest                                                              $         108,045     $          99,824
   Income taxes                                                          $          -          $          -

NON-CASH FINANCING ACTIVITIES

   Common stock issued for services                                      $          -          $          30,000
   Equipment purchased through capital
     lease obligation                                                    $          -          $         144,312
</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
                             June 30, 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 1998 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 time, 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.

                                       11
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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 $27,187  and  1,015,000  shares of GVI stock
               pledged as collateral on notes  payable  valued at $190,407.  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  $1,233,032  in  marketable
               securities  at June  30,  1999  due to a  $1.063  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 los 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.

                                       12
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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 (0.06) and
               (0.14)  for  the   quarters   ended   June  30,   1999  an  1998,
               respectively.  Basic net income from discontinued  operations per
               common share was $0.19 and $0.00, respectively.  Weighted average
               common shares  outstanding  were  3,219,596 and 2,949,834 for the
               quarters ended June 30, 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.

                                       13
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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.

                                       14
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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.

                                       15
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 1999 and 1998

<TABLE>
<CAPTION>

NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)

                   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>

                                       16
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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.  For the last year Quade,  Inc. has been
              developing this property  including  signing  agreements with four
              sub-licensees,  and  serving as licensee  for knit tops  including
              t-shirts, fleece and polo shirts.

              On March  17,  1998,  the  Company  signed a Letter  of  Intent to
              acquire 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  requirments 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.

                                       17
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 1999 and 1998

<TABLE>
<CAPTION>

NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)

                                      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>

                                       18
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 1999 and 1998

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

                                          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>

                                       19
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 1999 and 1998

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

                   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.

                                       20
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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 $1.4 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 March 31, 1999 and June 30, 1999, the
              Company had a payable of $367,845 and 255,544,  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.
<TABLE>
<CAPTION>
 NOTE 4 -     NOTES PAYABLE

              Notes payable are comprised of the following:
                                                                                                        June 30,
                                                                                                          1999
              <S>                                                                                 <C>
              Note payable, unsecured, bearing interest at 12%, payable
               in monthly installments of $7,000, including interest.  Due on
               demand.                                                                            $            26,210

              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 five
               monthly installments beginning April 1999, with payments from
               $2,267 to $2,030 per month.                                                                     24,750

              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.                                               51,316
                                                                                                  -------------------

              Subtotal                                                                                        533,472

              Less current portion                                                                           (302,445)

              Long-term portion                                                                   $           231,027
                                                                                                  ===================
</TABLE>

                                       21
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 1999 and 1998


NOTE 4 -      NOTES PAYABLE (Continued)

              Maturities of long-term debt are as follows:

                     March 31, 2000                   $         302,445
                     March 31, 2001                             231,027
                     March 31, 2002                              -
                     March 31, 2003                              -
                                                      -----------------

                                                      $         533,472
<TABLE>
<CAPTION>

NOTE 5 -      NOTES PAYABLE, RELATED PARTIES
                                                                                                    June 30,
                                                                                                     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.                         $         720,189

              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.                                                 319,465

              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.                                                                               357,873

                                            Subtotal                                                   1,397,527

                                            Less current portion                                         (47,104)
                                                                                               -----------------

                                            Long-term portion                                  $       1,350,423
                                                                                               =================

              Maturities of notes payable, related parties are as follows:

                                            March 31, 2000                                     $          47,104
                                            March 31, 2001                                             1,008,555
                                            March 31, 2002                                               294,764
                                                                                               -----------------

                                                                                               $       1,350,423
</TABLE>

                                       22
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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>
             <S>                                                                               <C>
                                   Year End
                                   March 31,
                                   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.

                                       23
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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.  Options are granted at a price and with vesting  terms
              as  determined by the Board of  Directors.  In October  1997,  the
              Board of Directors  granted options to purchase  140,000 shares of
              stock at $2.00. These options are exercisable  beginning March 31,
              1998,   over  staggered   periods  and  expire  after  ten  years.
              Compensation  expense of $1,458 per month will be  recognized  for
              40,000 of the  options  issued  over a 4 year  vesting  period and
              $1,458 per month will be  recognized  for  100,000 of the  options
              over a 10  year  vesting  period.  In  July  1998,  the  Board  of
              Directors changed the terms of the 100,000 options vesting over 10
              years. 25,000 of these options were fully vested and the remainder
              of the options were canceled. As a result, compensation expense of
              $52,498 was  recognized  for the year ended March 31, 1998 for the
              vesting of these options.

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

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

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

                                       24
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 1999 and 1998


NOTE 10 -      STOCK OPTIONS (Continued)

               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,
                                                                     1999

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

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.

                                       25
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 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
                                              Quarter Ended             Pacific                          Corporate
                                                 June 30,             Print Works       Fan-Tastic      Unallocated
                                              -------------        ----------------  ---------------   --------------
              <S>                                <C>              <C>               <C>                <C>
              Net sales                           1999             $      1,035,474  $        92,614
                                                  1998                      624,958          184,077
              Operating income (loss)
               applicable to industry
               segment                            1999                       42,822          (40,840)
                                                  1998                     (143,948)         (66,202)
              General corporate expenses
               not allocated to industry
               segments                           1999                                                 $        45,584
                                                  1998                                                         137,861

              Interest expense                    1999                      (83,209)          (7,908)          (54,989)
                                                  1998                      (47,747)         (20,682)          (38,613)

              Other income (expenses)
               including interest and gain
               on sale of securities              1999                          886            3,093            -
                                                  1998                       23,108           -                 20,409
</TABLE>

                                       26
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             June 30, 1999 and 1998

<TABLE>
<CAPTION>
NOTE 13 -     BUSINESS SEGMENTS (Continued)

                                                 For the
                                              Quarter Ended             Pacific                          Corporate
                                                March 31,             Print Works       Fan-Tastic      Unallocated
                                              -------------        ----------------  ---------------   --------------
              <S>                                <C>              <C>               <C>                <C>
              Gain from discontinued
               operations                         1999                                                 $      (807,518)
                                                  1998                                                          -

              Assets                              1999             $      1,569,020  $       211,514   $       305,197

              Depreciation and
               amortization                       1999                       66,423            4,400             1,189
                                                  1998                       66,042            7,272            31,630
              Property and equipment
               acquisitions                       1999                       -                -                 -
</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 could receive up to another  $103,942 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.  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  in the first
              quarter of the year ending March 31, 2000 for $813,789.  No income
              tax benefit or expense has been attributed to the disposal of U.S.
              Polo.

                                       27
<PAGE>

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


RESULTS OF OPERATIONS


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

Sales for the three  months  ended June 30,  1999 were  $1,128,088  compared  to
$809,034 for the three months ended June 30, 1998.  Pacific  Print Works ("PPW")
sales for the three  months  ended June 30,  1999 were  $1,035,474  compared  to
$624,958  for the three months  ended June 30,  1998.  The $410,516  increase in
PPW's  revenue  was  primarily  due to an increase of over 50% in sales to PPW's
four  largest  customers.  Sales to PPW's four  largest  customers  in the first
quarter 99 exceeded  $760,000.  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.  The PPW first  quarter  99 sales also
include  approximately  $123,000  of garment  blank  sales as opposed to garment
blank sales of  approximately  $15,000 for the first quarter 98. The increase in
garment blank sales is due to PPW selling garment blanks with contract  printing
to two of its  largest  customers  in the  first  quarter  99 while in the first
quarter 98 these two  customers  provided  their own  garment  blanks to PPW for
printing.  PPW expects a similar or larger increase in sales over the next three
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  $91,463  which was  primarily  due to first
quarter  99 sales  coming  from  three  stores as opposed to six stores in first
quarter 98.

Gross profit for the first quarter 99 was $292,740  compared to $171,479 for the
first  quarter 98. The  increase in gross profit was due to an increase in sales
which also resulted in an  improvement  in gross profit as a percentage of sales
(26% compared to 21%) which was also due to additional  sales  available for the
first quarter 99 to cover direct expenses.

General and  administrative  expenses for the first  quarter 99 were $346,342 as
compared  to  $519,490  for the  first  quarter  98. A  $69,000  decline  in the
corporate office expenses was primarily due to approximately  $30,000 in reduced
goodwill  amortization and a reduction of $37,000 in consulting fees. Fan-Tastic
also saw a decline in  general  and  administrative  expenses  of  approximately
$90,000 due to less rent and payroll  expenses  resulting  from the closure of 3
stores.  The Company expects general and  administrative  expenses over the next
three quarter to be similar to the first quarter 99 amount.

Depreciation  and amortization  expenses  included in total general expenses for
the fiscal year ended March 31, 1999 was $9,012 in the first quarter 99 compared
to $44,945  for the first  quarter 98. This  decrease is  primarily  due to zero
goodwill  amortization  in the first  quarter  99 as the  Company  wrote off all
goodwill from the PPW acquisition at March 31, 1999.

The loss from  operations  for the  first  quarter  99 was  reduced  to  $53,602
compared to $348,011  for the first  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 first quarter 99 was $146,105  compared to $107,042 for
the prior year.  The increase in interest  expense for the first  quarter 99 was
due to additional debt in Fiscal 1999 that was used for working capital purposes
and to fund losses from operations.

The Company had a $813,389  gain from the sale of its 50% ownership in USPA Ltd.
in the first  quarter 99. For its sale of USPA Ltd.,  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.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 1999 the Company had total assets of $2,085,731,  total  liabilities
of $4,441,795 and total stockholders  deficit of $2,356,063  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. 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.

Year 2000 Issues:

Many computer  hardware and software  systems and  equipment  with software were
designed with two digit year codes that did not recognize century and millennium
fields.  As a result,  these systems may calculate  dates for year 2000 as 1900,
which may cause  errors in  information  or system  failures.  The  Company  has
evaluated its internal computer hardware and software systems and equipment with
software  and does not  expect  the costs to remedy  year  2000  problems  to be
material to the Company's  financial  position,  results of operations,  or cash
flows.  The Company  believes  that  necessary  modifications  will be made on a
timely basis. However, the readiness of the Company's suppliers relating to year
2000 may vary. It is possible that any significant  supplier failures could have
a material adverse impact on the Company's operations and financial results.

                                       17
<PAGE>

Part II   -  Other Information

Item 1. Legal Proceedings

                 Not applicable.

Item 2. Changes in Securities

                 Not applicable.

Item 3. Default upon Senior Securities

                 Not applicable.

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

                 Not applicable.

Item 5. Other Information

                 Not applicable.

Item 6. Exhibits and Reports on Form 8-K

                 Not applicable.


                                       19
<PAGE>

                                   SIGNATURES


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


                                   AMERICAN RESOURCES AND
                                   DEVELOPMENT COMPANY
                                      (Registrant)

Date: August 13, 1999       By:  /s/ Will Papenfuss
                                ---------------------------
                                Will Papenfuss
                                President and Chief Executive Officer

Date: August 13, 1999       By:  /s/ Tim Papenfuss
                                ---------------------------
                                Tim Papenfuss
                                Chief Financial Officer