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

                                  FORM 10-QSB/A

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

               For the quarterly period ended September 30, 2000;

                                       or

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

        For transition period from ________________ to _________________



                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 (Name of Small Business Issuer in Its Charter)


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


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

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

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


         As of February 19, 2001, the Registrant had outstanding 4,868,730
shares of Common Stock.

         Transitional Small Business Disclosure Format (check one):

                                 Yes [ ] No [X]

                                       -1-
<PAGE>

Item 1: Financial Statements (Unaudited)

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

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

Statements of Stockholders' Equity                                           7

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

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


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

Item 1.    Legal Proceedings                                                25
Item 2.    Changes in Securities                                            25
Item 3.    Defaults upon Senior Securities                                  25
Item 4.    Submission of Matters to a Vote of Security Holders              25
Item 5.    Other Information                                                25
Item 6.    Exhibits and Reports on Form 8-K                                 26

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

                                     ASSETS

                                                                              September 30,         March 31,
                                                                                   2000               2000
                                                                           ------------------  -----------------
<S>                                                                        <C>                 <C>
CURRENT ASSETS
   Cash and cash equivalents                                               $            9,736  $           8,914
   Accounts receivable, net (Note 1)                                                  521,455            586,829
   Inventory (Note 1)                                                                 177,612            232,310
   Prepaid and other current assets                                                     8,000            102,359
   Marketable securities (Note 1)                                                      -                   2,485
                                                                           ------------------  -----------------
     Total Current Assets                                                             716,803            932,897
                                                                           ------------------  -----------------

PROPERTY AND EQUIPMENT (NOTE 1)
   Furniture, fixtures and equipment                                                  460,384            404,322
   Capital leases                                                                   1,277,899          1,277,899
                                                                           ------------------  -----------------
     Total depreciable assets                                                       1,738,283          1,682,221
     Less: accumulated depreciation                                                  (736,838)          (597,131)
                                                                           ------------------  -----------------
       Net Property and Equipment                                                   1,001,445          1,085,090
                                                                           ------------------  -----------------

OTHER ASSETS
   Deposits                                                                            73,618             62,733
                                                                           ------------------  -----------------
     Total Other Assets                                                                73,618             62,733
                                                                           ------------------  -----------------
     TOTAL ASSETS                                                          $        1,791,866  $       2,080,720
                                                                           ==================  =================
</TABLE>

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

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


                                    LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                              September 30,         March 31,
                                                                                   2000               2000
                                                                           ------------------  -----------------
<S>                                                                        <C>                 <C>
CURRENT LIABILITIES
   Accounts payable                                                        $          910,329  $         449,011
   Accrued expenses and other current liabilities                                     927,254            822,780
   Deferred revenue                                                                     7,000             20,000
   Line of credit (Note 3)                                                            188,231            416,171
   Current portion of notes payable (Note 4)                                          390,414            546,542
   Current portion of notes payable, related parties (Note 5)                         101,732             69,797
   Current portion of capital lease obligations (Note 6)                              301,340            302,551
                                                                           ------------------  -----------------
     Total Current Liabilities                                                      2,826,300          2,626,852
                                                                           ------------------  -----------------
LONG-TERM DEBT
   Reserve for discontinued operations (Note 2)                                       734,988            734,988
   Notes payable (Note 4)                                                             247,084             62,981
   Notes payable, related parties (Note 5)                                          1,307,509          1,224,049
   Capital lease obligations (Note 6)                                                 231,167            389,275
                                                                           ------------------  -----------------
     Total Long-Term Debt                                                           2,520,748          2,411,293
                                                                           ------------------  -----------------
     Total Liabilities                                                              5,347,048          5,038,145
                                                                           ------------------  -----------------

COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS' EQUITY (DEFICIT)
   Preferred stock, par value $0.001 per share: 10,000,000
    shares authorized; issued and outstanding: 94,953
    Series B shares, 150,000 Series C shares                                              245                245
   Common stock, par value $0.001 per share: 125,000,000
    shares authorized; issued and outstanding: 5,483,730
    shares issued and 4,008,730 outstanding.  (Note 9)                                  4,008              3,876
   Additional paid-in capital                                                       7,713,971          7,640,045
   Accumulated deficit                                                            (11,273,406)       (10,601,591)
                                                                           ------------------  -----------------
      Total Stockholders' Equity (Deficit)                                         (3,555,182)        (2,957,425)
                                                                           ------------------  -----------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
      (DEFICIT)                                                            $        1,791,866  $       2,080,720
                                                                           ==================  =================
</TABLE>

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

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

                                                                    For the Six Months Ended         For the Three Months Ended
                                                                         September 30,                      September 30,
                                                               ---------------------------------  ---------------------------------
                                                                     2000              1999              2000             1999
                                                               ---------------   ---------------  ----------------  ---------------
<S>                                                            <C>               <C>              <C>               <C>
NET SALES                                                      $     2,700,297   $     2,069,089  $      1,338,775  $       941,000

COST OF SALES                                                        2,233,624         1,561,885         1,287,380          726,537
                                                               ---------------   ---------------  ----------------  ---------------
GROSS PROFIT                                                           466,673           507,204            51,395          214,463
                                                               ---------------   ---------------  ----------------  ---------------

GENERAL AND ADMINISTRATIVE EXPENSES
   Depreciation and amortization                                         6,417            15,618             2,908            6,606
   General expenses                                                    829,930           713,395           368,038          386,065
                                                               ---------------   ---------------  ----------------  ---------------
     Total General and Administrative Expenses                         836,347           729,013           370,946          392,671
                                                               ---------------   ---------------  ----------------  ---------------

GAIN (LOSS) FROM OPERATIONS                                           (369,674)         (221,809)         (319,551)        (178,208)
                                                               ---------------   ---------------  ----------------  ---------------

OTHER INCOME AND (EXPENSES)
   Other income and expenses                                            10,032            20,981              (939)          17,002
   Interest expense                                                   (312,173)         (278,417)         (146,622)        (132,311)
                                                               ---------------   ---------------  ----------------  ---------------
     Total Other Income and (Expenses)                                (302,141)         (257,436)         (147,561)        (115,309)
                                                               ---------------   ---------------  ----------------  ---------------
LOSS BEFORE INCOME TAXES AND
 DISCONTINUED OPERATIONS                                              (671,815)         (479,245)         (467,112)        (293,517)
                                                               ---------------   ---------------  ----------------  ---------------
DISCONTINUED OPERATIONS
   Gain from sale of USPA                                                -               869,336             -               55,947
   Loss from operations of USPA                                          -                (5,871)            -                -
                                                               ---------------   ---------------  ----------------  ---------------
     Total Discontinued Operations                                       -               863,465             -               55,947
                                                               ---------------   ---------------  ---------------- ----------------

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

NET INCOME (LOSS)                                              $      (671,815)  $       384,220  $       (467,112) $      (237,570)
                                                               ===============   ===============  ================  ===============

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

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

NET COMPREHENSIVE GAIN (LOSS)                                  $      (671,815)  $      (341,218) $       (467,112) $      (165,164)
                                                               ===============   ===============  ================  ===============

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

                                       -5-
<PAGE>
<CAPTION>
                                             AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                          Consolidated Statements of Operations (Continued)


<S>                                                            <C>               <C>              <C>               <C>
BASIC LOSS PER SHARE
 OF COMMON STOCK -
 CONTINUING OPERATIONS                                         $         (0.17)  $          (.14) $          (0.12) $          (.08)
                                                               ===============   ===============  ================  ===============

BASIC LOSS PER SHARE
 OF COMMON STOCK
 DISCONTINUED OPERATIONS                                       $          -      $            .2  $         -       $           .02
                                                               ===============   ===============  ===============  ================
</TABLE>

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

                                       -6-
<PAGE>
<TABLE>
<CAPTION>
                                               AMERICAN RESOURCES AND DEVELOPMENT COMPANY

                                             Consolidated Statements of Stockholders' Equity
                                                       September 30, 2000 and 1999


                                   Common Stock               Preferred Stock         Other           Additional
                           ----------------------------  ------------------------  Comprehensive        Paid-In      Accumulated
                              Shares          Amount        Shares     Amount          Loss             Capital        Deficit
                           -------------   ------------  -----------  -----------  ----------------  -----------------------------
<S>                            <C>         <C>               <C>      <C>          <C>               <C>            <C>
Balance, April 1, 1998         2,929,263   $      2,929      244,953  $       245  $         -       $   7,026,260  $   (5,718,980)

Stock issued for cash             48,000             48       -            -                 -              59,954          -

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

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

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

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

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

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

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

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

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

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

Net loss for the year ended
 March 31, 2000                   -              -            -            -                 -              -           (1,421,111)
                           -------------   ------------  -----------  -----------  ----------------  -------------  --------------
Balance, March 31, 2000        3,875,953   $      3,876      244,953  $       245  $         -       $   7,640,045  $  (10,601,591)
                           =============   ============  ===========  ===========  ================  =============  ==============
</TABLE>

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

                                       -7-
<PAGE>
<TABLE>
<CAPTION>
                                               AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                       Consolidated Statements of Stockholders' Equity (Continued)
                                                       September 30, 2000 and 1999


                                   Common Stock               Preferred Stock         Other           Additional
                           ----------------------------  ------------------------  Comprehensive        Paid-In      Accumulated
                              Shares          Amount        Shares     Amount          Loss             Capital        Deficit
                           -------------   ------------  -----------  -----------  ----------------  -----------------------------
<S>                            <C>         <C>               <C>      <C>          <C>               <C>            <C>
Balance, March 31, 2000        3,875,953   $      3,876      244,953  $       245  $         -       $   7,640,045  $  (10,601,591)
                           =============   ============  ===========  ===========  ================  =============  ==============

Stock issued for consulting
 services                         32,777             32        -            -                 -             34,028          -

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

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

Net loss for the six months
 ended September 30, 2000            -                   -                   --               -                    -     (671,815)

Balance at
  September 30, 2000           4,008,730      $     4,008       244,953    $  245   $         -        $ 7,713,971   $(11,273,406)
                            ============      ===========    ==========    ======   ================   ===========   =============
</TABLE>

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

                                       -8-
<PAGE>
<TABLE>
<CAPTION>
                                               AMERICAN RESOURCES AND DEVELOPMENT COMPANY

                                                  Consolidated Statements of Cash Flows

                                                                   For the Six Months Ended          For the Three Months Ended
                                                                         September 30,                     September 30,
                                                              ---------------------------------  ---------------------------------
                                                                    2000              1999             2000              1999
                                                              ---------------   ---------------  ---------------   ---------------
<S>                                                           <C>                <C>              <C>              <C>
OPERATING ACTIVITIES
  Net income (loss)                                           $      (671,815)   $      384,220   $     (467,112)  $     (165,164)
  Adjustments to reconcile net income
   to net cash provided by operating activities:
    Gain on sale of USPA, Ltd.                                         -               (869,336)          -                -
    Depreciation and amortization                                     140,307           141,706           72,110           69,694
    Common stock issued for services and interest                     118,669            10,983            4,374            6,609
    Gain (loss) on sale of marketable securities                       -                  -               -                -
  Changes in operating assets and liabilities net
   of Quade acquisition:
    (Increase) decrease in inventory                                   54,482            15,251           32,016            5,254
    (Increase) decrease in accounts receivable                         65,301           (52,712)          12,536         (188,259)
    (Increase) decrease in other current assets                        (9,815)            5,499          (12,815)         (15,213)
    Increase (decrease) in accounts payable                           419,240            69,226          526,152           35,904
    Increase (decrease) in other current liabilities                  243,340           301,117          103,318          221,172
                                                              ---------------   ---------------  ---------------   --------------
      Net Cash Provided (Used) by Operating Activities                359,709             5,954          270,579          (30,003)
                                                              ---------------   ---------------  ---------------   --------------

INVESTING ACTIVITIES
  Proceeds from sale of marketable securities                           2,485            -                -                -
  Proceeds from sale of USPA, Ltd.                                      -               221,470           -                -
  Purchases of property and equipment                                 (10,662)           -                (6,412)          -
                                                              ---------------   ---------------  ---------------   --------------
      Net Cash Provided (Used) by Investing Activities                 (8,177)          221,470           (6,412)          -
                                                              ---------------   ---------------  ---------------   --------------

FINANCING ACTIVITIES
  Payments on capital lease obligations                              (159,319)         (147,273)         (81,566)         (79,685)
  Proceeds (payments) from notes payable                              (10,151)           -                -               (12,694)
  Borrowings (payments) from related party debt                        46,700           (68,664)          15,310          (23,939)
  Net borrowings (payments) on factoring line of credit              (227,940)          (52,264)        (188,524)          60,036
                                                              ---------------   ---------------  ---------------   --------------
      Net Cash Provided (Used) by Financing Activities               (350,710)         (268,201)        (254,780)         (56,282)
                                                              ---------------   ---------------  ---------------   --------------

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

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

CASH, END OF PERIOD                                           $         9,736   $         1,190  $         9,736   $        1,190
                                                              ===============   ===============  ===============   ==============


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

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

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

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

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

                                      -10-
<PAGE>

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

NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES

               a. Quarterly Financial Statements

               The preparation of financial statements in conformity with
               generally accepted accounting principles requires management to
               make estimates and assumptions that affect the amounts reported
               in the financial statements and accompanying notes. Actual
               results could differ from those estimates. The accompanying
               consolidated unaudited condensed financial statements have been
               prepared in accordance with the instructions to Form 10-QSB but
               do not include all of the information and footnotes required by
               generally accepted accounting principles and should, therefore,
               be read in conjunction with the Company's fiscal 2000 financial
               statements in Form 10-KSB. These statements do include all normal
               recurring adjustments which the Company believes necessary for a
               fair presentation of the statements. The interim operating
               results are not necessarily indicative of the results for a full
               year. Effective for fiscal quarters ending after March 15, 2000,
               the Securities and Exchange Commission adopted a rule requiring
               companies' independent auditors review the companies' financial
               information prior to the companies filing their Quarterly Reports
               on Form 10- QSB with the Commission. The Company's September 30,
               2000 Form 10-QSB was not reviewed prior to submission to the
               Commission. A Form 8-K will be filed when the review is completed
               by the independent auditors.

               b. Principles of Consolidation

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

               c. Estimates

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

               d. Cash and Cash Equivalents

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

               e. Concentrations of Risk

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

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

               f. Inventories

               Inventories are stated at the lower of cost or market using the
               first-in, first-out method. Inventory consists of items available
               for resale.

                                      -11-
<PAGE>

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


NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES (Continued)

               g. Property and Equipment

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

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

               h. Accounts Receivable

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

               i. Financial Instruments

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

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

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

               j. Income Taxes

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

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

               k. Basic Loss Per Common Share

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

               Basic net loss from continuing operations per common share and
               diluted net loss from continuing operations per common share
               amounts, calculated in accordance with SFAS 128, were $(0.12) and
               $(.08)

                                      -12-
<PAGE>

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


NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES (Continued)

               k. Basic Loss Per Common Share (Continued)

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

               l. Revenue Recognition

               Revenue for contract screen printing, embroidery and product
               sales are recognized when the goods have been shipped. Franchise
               fees are recognized as revenue when all material services
               relating to the sale have been substantially performed by FTI.
               Material services relating to the franchise sale include
               assistance in the selection of a site and franchisee training.

               m. Goodwill

               On March 31, 1998, the Company recognized goodwill of $1,696,412
               from the purchase of Pacific Print Works (aka Pacific Printing
               and Embroidery LLC). The Company amortized $128,198 of goodwill
               from the PPW acquisition in fiscal 1999. In the fourth quarter of
               fiscal 1999, the Company wrote-off its remaining goodwill from
               the PPW acquisition due to a permanent impairment, resulting in
               an additional expense of $1,568,215. The Company recognizes
               goodwill from the excess of the purchase price of its
               acquisitions over the fair value of the net assets acquired.

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

               n. Recent Accounting Pronouncements

               The Company adopted Statement of Financial Accounting Standards
               (SFAS) No. 130, "Reporting Comprehensive Income" during the year
               ended March 31, 1999. SFAS No. 130 established standards for
               reporting and display of comprehensive income (loss) and its
               components (revenues, expenses, gains and losses) in a full set
               of general purpose financial statements. This statement requires
               that an enterprise classify items of other comprehensive income
               by their nature in a financial statement and display the
               accumulated balance of other comprehensive income separately from
               retained earnings and additional paid-in capital in the equity
               section of a balance sheet.

               o. Advertising

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

               p. Prior Period Reclassification

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

                                      -13-
<PAGE>

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


NOTE 2 -       MERGERS AND ACQUISITIONS

               Golf Ventures, Inc.

               In November 1997, Golf Ventures, Inc., a former Company
               subsidiary, merged with U.S. Golf Communities. U.S. Golf
               Communities was the controlling company in this merger and
               subsequent to the merger the combined company's name changed to
               Golf Communities of America (GCA). This merger resulted in a less
               than 20% American Resources' ownership in GVI. Therefore,
               subsequent to the merger, the Company's investment in GVI is
               reflected as an investment in accordance with Financial
               Accounting Standards Board Statement No. 121.

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

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

               In May 1998, the Company acquired 83% of the outstanding shares
               of Pacific Print Works (PPW). The acquisition was accounted for
               by the purchase method of accounting, and accordingly, the
               purchase price was allocated to assets acquired and liabilities
               assumed based on their fair market value at the date of
               acquisition. Liabilities assumed in excess of assets acquired was
               $629,252 and 213,472 shares of the Company's common stock were
               issued to PPW shareholders with a guaranteed share value of $5.00
               resulting in goodwill of $1,686,411. In addition, depending on
               PPW's performance from April 1, 1998 through March 31, 2001,
               additional shares of the Company's common stock would be issued
               to the Sellers if minimum earnings levels were met. Based on the
               $5.00 guarantee and the Company's share value from October 1998
               through March 1999, the Company is obligated to issue additional
               shares of common stock to the Sellers. An amendment to the PPW
               Stock Purchase Agreement is being evaluated by the Company and
               the Sellers in which the Company would issue another 854,000
               shares of the Company's common stock to the Sellers and any
               additional earnings requirements by PPW or per share value
               guarantee by the Company would be eliminated.

               Quade, Inc. and U.S. Polo Association, Ltd.

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

               Effective October 8, 1998, the Company and Jordache Enterprises,
               through its affiliate, Iron Will, Inc. ("Iron Will") formed a
               joint venture company, U.S. Polo Association, Ltd. (US Polo), to
               hold the master license granted by the US Polo Association and to
               perform all licensing activities relating to the US Polo
               Association licenses and trademarks for the United States and
               Canada. The Company and Iron Will each owned 50% of US Polo and
               management and the Board of Directors for US Polo were shared
               equally by the Company and Iron Will. For its ownership in US
               Polo, the Company contributed, through Quade, Inc., all assets
               and liabilities relating to the business of the licensing of US
               Polo including the master license and sublicense agreements in
               the US Polo name and trademarks. Iron Will contributed $900,000.
               The Company's investment in this joint venture was accounted for
               under the equity method of accounting. The Company's share of
               losses from this joint venture for the year ended March 31, 1999
               were $127,268.

                                      -14-
<PAGE>

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


NOTE 2 -       MERGERS AND ACQUISITIONS (Continued)

               In March 1999, the Company's Board of Directors made a decision
               to sell its 50% ownership in U.S. Polo to Iron will. In June
               1999, the Company closed its sale of U.S. Polo ownership to Iron
               Will. For its sale of U.S. Polo, the Company received the
               cancellation of $1,000,000 in debt from Jordache Enterprises, the
               cancellation of $13,185 in interest and cash of $221,470. In
               addition, the Company received another $70,000 upon the
               collection of U.S. Polo royalties earned through May 31, 1999.

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

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

NOTE 3 -       LINE OF CREDIT

               In November 1998, the Company entered into an accounts receivable
               financing agreement to sell, with recourse, up to $1 million of
               receivables, net of a 15% collection reserve. The Company is
               charged .065% daily for all receivables sold and uncollected
               under this financing agreement. At September 30 and March 31,
               2000, the Company had a payable of $188,231 and $416,171,
               respectively, for net funds advanced from this accounts
               receivable line of credit. The Company received $2,242,992 and
               $1,640,063 from the sale of receivables for the six months ended
               September 30, 2000 and 1999 and recognized $60,386 and $42,863 in
               interest expense from the discount of selling these receivables,
               respectively.

NOTE 4 -       NOTES PAYABLE
<TABLE>
<CAPTION>
               Notes payable are comprised of the following:                                      September 30,
                                                                                                      2000
                                                                                               -----------------
               <S>                                                                             <C>
               Note payable, unsecured, bearing interest at 12%, payable in
                 monthly installments of $7,000, including interest. Due on
                 demand.                                                                       $          26,603

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

               Note payable to shareholder of PPW, unsecured. Modified in August
                 2000. Modified agreement requires payments of $190,000 through
                 February 2002 without interest. Note will default to $327,084
                 if payments are not made timely plus 9% interest less payments
                 made subsequent to modified agreement. A gain on the
                 modification of debt for $137,084 will be recorded when there
                 is no risk of default on this debt.                                                     327,084

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

                                      -15-
<PAGE>

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


NOTE 4 -       NOTES PAYABLE (Continued)
<CAPTION>
               <S>                                                                             <C>
               Less current portion                                                                     (390,414)
                                                                                               -----------------

               Long-term portion                                                               $         247,084
                                                                                               =================

               Maturities of long-term debt are as follows:
                                            September 30, 2001                                 $         390,414
                                            September 30, 2002                                           247,084
                                                                                               -----------------
                                                                                               $         637,498
</TABLE>

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

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

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

               Notes payable to shareholders (includes officers and directors of
                 the Company). Interest rates average 10.5%. Unsecured, due on
                 demand, but not expected to be repaid until 2003.                                       246,951
                                                                                               -----------------
                                            Subtotal                                                   1,409,241

                                            Less current portion                                        (101,732)
                                                                                               -----------------

                                            Long-term portion                                  $       1,307,509
                                                                                               =================

               Maturities of notes payable, related parties are as follows:
                                            September 30, 2001                                 $         105,841
                                            September 30, 2002                                         1,056,449
                                            September 30, 2003                                           246,951
                                                                                               -----------------
                                                                                               $       1,409,241
</TABLE>

                                      -16-
<PAGE>

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


NOTE 6 -      CAPITAL LEASES

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

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

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

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

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

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

NOTE 7 -       INCOME TAXES

               The Company had net operating loss carry-forwards available to
               offset future taxable income. The Company has net operating loss
               carry-forwards of approximately $7,500,000 to offset future tax
               liabilities. The loss carry-forwards will begin to expire in
               2014.

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

NOTE 8 -       PREFERRED STOCK

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

               SERIES B:

               At March 31, 2000, there are 94,953 shares of series B preferred
               stock issued and outstanding. The holders of these series B
               preferred shares are entitled to an annual cumulative cash
               dividend of not less than sixty cents per share. At March 31,
               2000, there is a total of $406,620 of accrued and unpaid
               dividends related to the series B preferred stock which have been
               included in the accompanying consolidated financial statements.
               These series B preferred shares were convertible into shares of
               the Company's common stock which conversion option expired March
               31, 1995.

                                      -17-
<PAGE>

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


NOTE 9 -       COMMON STOCK ISSUED BUT NOT OUTSTANDING

               The Company has issued 160,820 shares of common stock which had
               been offered to the holders of the Series B preferred stock and
               the debentures. The shares have not been accepted by the holders
               of those investments as of the date of the consolidated financial
               statements. Additionally, the Company has issued 1,475,000 shares
               of common stock as collateral for the note payable to Banque SCS
               (Note 5).

NOTE 10 -      STOCK OPTIONS

               In August 1997, the Company's Board of Directors approved the
               1997 American Resources and Development Company Stock Option Plan
               (Option Plan). Under the Option Plan, 500,000 shares of the
               Company's common stock are reserved for issuance to Directors and
               employees. Options are granted at a price and with vesting terms
               as determined by the Board of Directors.

               In August 1999, the Board of Directors granted options to
               purchase 696,291 shares of common stock at $0.25. Fifty percent
               of these options vest immediately and the remainder vest in
               August 2000. The options were issued to various officers and
               directors of the Company for past services, risk associated with
               various debt incurred by officers for the Company and guarantees
               by officers of Company debt, and for future services. No
               compensation expense was recognized, as the option price was
               greater than the fair market value of the stock at the date of
               the option grant.

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

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

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

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

                                      -18-
<PAGE>

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


NOTE 10 -      STOCK OPTIONS (Continued)

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

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

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

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

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

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

                                                                    March 31,
                                                                     2000

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


                                      -19-
<PAGE>

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


NOTE 11 -      COMMITMENTS AND CONTINGENCIES

               Office Lease

               The Company leases office and warehouse space in Salt Lake City,
               Utah and Portland, Oregon and leases space for a retail store in
               Oregon. Lease commitments for the years ended March 31, 2001
               through March 31, 2003 are $467,478, $421,671 and $67,574,
               respectively.

               Legal Proceedings

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

NOTE 12 -      GOING CONCERN

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

NOTE 13 -      BUSINESS SEGMENTS

               Effective March 31, 1999, the Company adopted SFAS No. 131,
               "Disclosure about Segments of an Enterprise and Related
               Information." The Company conducts its operations principally in
               the contract screen printing and embroidery industry with Pacific
               Print works, Inc. and the retail franchise industry with
               Fan-Tastic, Inc.

               Certain financial information concerning the Company's operations
               in different industries is as follows:
<TABLE>
<CAPTION>
                                For the Six
                                Months Ended          Pacific                             Corporate
                                September 30,       Print Works       Fan-Tastic        Unallocated
                                -------------       -----------       ----------        -----------
<S>                                <C>            <C>                <C>                <C>
Net sales                          2000           $   2,610,953      $    89,344
                                   1999               1,886,860          182,228

Operating income (loss)            2000                 (57,078)        (126,932)
applicable to industry             1999                   2,450         (110,098)
segment

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

                                      -20-
<PAGE>

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


NOTE 13 -      BUSINESS SEGMENTS (Continued)
<CAPTION>
                                For the Six
                                Months Ended          Pacific                             Corporate
                                September 30,       Print Works       Fan-Tastic        Unallocated
                                -------------       -----------       ----------        -----------
<S>                                <C>            <C>                <C>                <C>
Interest expense                   2000               (198,842)          (24,442)            (88,889)
                                   1999                (159,185)         (19,278)            (99,954)

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

Assets                             2000           $   1,753,669      $    33,938               4,259

Depreciation and                   2000                 135,890            3,936                 481
 amortization                      1999                 134,860            6,497               2,378

Property and equipment             2000                  10,662           -                  -
 acquisitions                      1999                       -           -                  -

</TABLE>

NOTE 14 -      SUBSEQUENT EVENTS

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

               During the past seven months the Company has performed
               significant due diligence relating to the viability of the merger
               with Royal Avalon. The Company's management and board of
               directors believes the merger will not be finalized as the letter
               of intent has expired and the merger would not be in the best
               interest of the Company's shareholders.

               In January 2001 the Company issued 140,000 shares of the
               Company's common stock to two officers of the Company as payment
               of approximately $80,000 in loans and accrued salaries to the
               Company.

               In January 2001 the Company issued 220,000 shares of the
               Company's common stock to a director of the Company for services
               performed.

               In January 2001 the Company issued 500,000 shares of the
               Company's common stock to a consultant for investor and public
               relations services and debt and or capital raising efforts.

                                      -21-
<PAGE>

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

Forward Looking Statements

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

The following table sets forth, for the periods indicated, selected Company
income statement data expressed as a percentage of net sales.
<TABLE>
<CAPTION>
                                         Three Months                           Six Months
                                        Ended September 30,                 Ended September 30,
                                      2000              1999               2000              1999
                                      ----              ----               ----              ----
<S>                                 <C>                 <C>               <C>                <C>
Net sales                           100.0%              100.0%            100.0%             100.0%
Cost of sales                        96.2%               77.2%             82.7%              75.5%
Gross profit                          3.8%               22.8%             17.3%              24.5%
General expenses                     27.5%               41.0%             30.7%              34.5%
Depreciation and amortization         0.2%                0.7%              0.2%               0.8%
Loss from operations                -23.9%              -18.9%            -13.7%             -10.7%
Other income and expenses            -0.1%                1.8%              0.4%               1.0%
Interest expense                    -11.0%              -14.1%            -11.6%             -13.5%
Loss before income taxes
   and discontinued operations      -34.9%              -31.2%            -24.9%             -23.2%
Discontinued operations               0.0%                5.9%              0.0%              41.7%
Income taxes                          0.0%                0.0%              0.0%               0.0%
Net Income (loss)                   -34.9%              -25.2%            -24.9%              18.6%
</TABLE>

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

Sales for the three months ended September 30, 2000 were $1,338,775 compared to
$941,000 for the three months ended September 30, 1999. Pacific Print Works
("PPW") sales for the second quarter fiscal 2001 were $1,300,605 compared to
$851,386 for the second quarter fiscal 2000. The $449,219 increase in PPW's
revenue was primarily due to a $412,000 increase in sales to a customer in the
second quarter fiscal 2001 compared to the second quarter fiscal 2000. Sales in
the second quarter fiscal 2001 included T-shirt garments of $445,000 in addition
to screen printing revenue.

                                      -22-
<PAGE>

Gross profit and the gross profit as a percentage of sales declined for the
second quarter fiscal 2001 as compared to the second quarter fiscal 2000,
$51,395 and 3.8% compared to $214,463 and 22.8%. The decline in gross profit was
primarily due to an increase in production salaries and wages, an increase in
costs of garments sold to customers of $430,000 with a profit of $9,000 on these
garments, an increase in materials for garment finishing, screen and freight
costs and an increase in rent costs. Production salaries and wages increased
$34,000 due to an increase of 5% in production volume and a pay increase to the
top three production management employees. Materials used for garment finishing
and screens increased $25,000 due to the increase in production. Rent costs
increased by $39,000 because PPW required extra space due to the increase in
revenue (i.e., $1,338,775 for second quarter fiscal 2001 compared to $941,000
for second quarter fiscal 2000.)

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

The gain (loss) from operations before other income and expenses for the second
quarter fiscal 2001 was a loss of $319,551 as opposed to a loss of $178,208 for
the second quarter fiscal 2000.

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

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

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

Gross profit and the gross profit as a percentage of sales declined slightly for
YTD fiscal 2001 as compared to the YTD fiscal 2000, $466,673 and 17.3% compared
to $507,204 and 24.5%. The decline in gross profit margin was primarily due to
an increase in production salaries and wages, an increase in costs of garments
sold to customers of $346,000 with a profit of $16,000 on these garments, an
increase in materials for garment finishing, screen and freight costs and an
increase in rent costs. Rent costs increased by $78,000 because PPW required
extra space due to the increase in revenue (i.e., $2.7 million for the six
months ended September 30, 2000 compared to $2.1 million for the six months
ended September 30, 1999.)

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

The gain (loss) from operations before other income and expenses for the YTD
fiscal 2001 was a loss of $369,674 as opposed to a loss of $221,809 for the YTD
fiscal 2000.

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

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

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

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

                                      -23-
<PAGE>

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

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

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

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

The loss from operations for the second quarter 99 was reduced to $178,208
compared to $319,546 for the second quarter 98. The reduction in the loss is
primarily due to the increase in sales and the reduction in general and
administrative expenses as discussed above.

Interest expense for the second quarter 99 was $132,311 compared to $135,323 for
the prior year.

The Company had a $55,947 gain from the sale of its 50% ownership in USPA Ltd.
in the second quarter 99. For its sale of USPA Ltd., in June 1999 the Company
received the cancellation of $1,000,000 in debt from Jordache Enterprises, the
cancellation of $13,185 in interest and cash of $221,470. In addition, the
Company received $74,040 in October 1999 from the collection of U.S. Polo
royalties earned through May 31, 1999.

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

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

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

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

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

                                      -24-
<PAGE>

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

The loss from operations for the YTD 99 was reduced to $221,809 compared to
$667,558 for the YTD 98. The reduction in the loss is primarily due to the
increase in sales and the reduction in general and administrative expenses as
discussed above.

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

The Company had a $869,336 gain from the sale of its 50% ownership in USPA Ltd.
in the YTD 99. For its sale of USPA Ltd., in June 1999 the Company received the
cancellation of $1,000,000 in debt from Jordache Enterprises, the cancellation
of $13,185 in interest and cash of $221,470. In addition, the Company received
$74,040 in October 1999 from the collection of U.S. Polo royalties earned
through May 31, 1999.

LIQUIDITY AND CAPITAL RESOURCES

 At September 30, 2000, the Company had total assets of $1,791,866, total
liabilities of $5,347,048 and total stockholders' deficit of $3,555,182 compared
with total assets of $2,080,720, total liabilities of $5,038,145 and total
stockholders deficit of $2,957,425 at March 31, 2000. The changes in assets,
liabilities and stockholders equity is due primarily to losses from operations
and interest expense. At September 30, 2000 the Company's current ratio was
approximately .254 current assets to 1 current liabilities.

 Management intends to improve its overall financial structure and provide
operating capital through private placement of the Company's common stock and
seeking the conversion of debt to equity. There is no assurance that the Company
will be able to obtain sufficient funds from other sources as needed or that
such funds, if available, will be obtainable on terms satisfactory to the
Company.

Part II - Other Information

Item 1. Legal Proceedings
                 Not applicable.

Item 2.  Changes in Securities
                 Not applicable.

Item 3.  Default upon Senior Securities
                 Not applicable.

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

Item 5.  Other Information

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

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

                                      -25-
<PAGE>

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

AMERICAN RESOURCES AND
DEVELOPMENT COMPANY
(Registrant)



/s/ B. Willes Papenfuss     President, Chief Executive        February 19, 2001
-----------------------     Officer and Director
B. Willes Papenfuss         (Principal Executive
                            Officer)



/s/ Timothy M. Papenfuss    Secretary / Treasurer and         February 19, 2001
------------------------    Director (Chief Financial
Timothy M. Papenfuss        Officer, Chief Accounting
                            Officer and Controller)


                                      -26-