U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-KSB

[X]      Annual report under Section 13 or 15(d) of the Securities Exchange Act
         of 1934 For the fiscal year ended March 31, 2000, or

[ ]      Transition report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 For the Transition period from ___________ to ____________

                         Commission file number 0-18865

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


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

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

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

         Securities registered under Section 12(b) of the Act:

         Title of each class           Name of each Exchange on which Registered
                None                                     None

         Securities registered under Section 12(g) of the Act:

                         Common Stock, $0.001 par value
                                (Title of class)

         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[ ]

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

         Issuer's revenues for its most recent fiscal year was $4,828,053

         The aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the average bid and asked prices
of such stock, as of July 14, 2000 was $1,257,211

         The number of shares outstanding of the issuer's common equity, as of
July 14, 2000 was 3,908,730.

         Documents Incorporated by Reference:           None

         Transitional Small Business Disclosure Format: Yes [ ] No [X]

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                                TABLE OF CONTENTS

                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS                                           3
ITEM 2.  DESCRIPTION OF PROPERTY                                           8
ITEM 3.  LEGAL PROCEEDINGS                                                 9
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS               9


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS          9
ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
         OF OPERATION                                                     11
ITEM 7.  FINANCIAL STATEMENTS                                             14
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE                                         14

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE  OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT               15
ITEM 10. EXECUTIVE COMPENSATION                                          16
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT  17
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                  19
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                19

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         The information contained in this Form 10-KSB for the fiscal year ended
March 31,  2000,  is as of the latest  practicable  date  except  for  financial
information which relates to the fiscal year.

                                     PART I

Item 1.  Description of Business.

GENERAL

         American  Resources and Development  Company ("ARDCO" or the "Company")
through   various   subsidiaries,   owns  a  franchisor   and  owner  of  retail
entertainment and sports stores,  and a screen printing and embroidery  company.
When used throughout this report,  the Company shall include the subsidiaries of
the Company  unless the  context  indicates  otherwise.  The  Company's  present
executive offices are located at 2035 N.E. 181st, Portland, Oregon 97230 and its
telephone  number  is (503)  492-1500.  As of July 14,  2000,  the  Company  had
eighty-three (83) full time employees and twelve part time employees.

PACIFIC PRINT WORKS

      In May 1998, the Company  acquired  approximately  83% of the  outstanding
shares of Printworks,  Inc. ("Pacific Print Works" or "PPW").  213,472 shares of
the Company's  common stock were issued to PPW  shareholders  ("Sellers") with a
guaranteed  share value of $5.00.  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.  PPW is active in the contract  screenprinting  and
embroidery business and is based in Portland, Oregon.

      Industry Trends

      PPW performs contract  screenprint,  embroidery and finishing services for
customers,  the majority of whom are in the  decorated  sportswear  market.  The
decorated   sportswear   market,   based  upon  industry  data,   accounted  for
approximately  $14.3 billion of retail level sales in the United States in 1996,
with a  compounded  annual  growth rate of  approximately  8.8% since 1991.  PPW
believes  growth in the decorated  sportswear  market has resulted  from: (i) an
increased  preference for  comfortable  apparel  selections;  (ii) more flexible
dress codes,  including  greater  acceptance of casual clothes in the workplace;
(iii)  a  heightened   emphasis  on  physical   fitness,   including   increased
participation  in  sports;  (iv)  improved  characteristics  that have  enhanced
consumer   appeal,   including   improvements  in  fabric  weight,   blends  and
construction,  and  increased  offerings  of  size,  color  and  style;  (v) the
enhancement  of  screenprinted   graphics  and  embroidered   designs  primarily
resulting from more advanced manufacturing equipment and processes. PPW believes
that these trends should continue to drive industry growth.

      Business Strategy

      PPW's  success  in  expanding  its  business  is a  function  of three key
factors: 1) quality of printing,  2) ability to meet customer deadlines,  and 3)
ability  to  create  and  produce  innovative  designs.  PPW has a  demonstrated
excellence  in each of these areas with a strong  reputation in the industry for
its quality  printing.  In fact,  PPW's second largest  customer was obtained in
January  1999 when  another  screenprinter  was unable to produce an order which
incorporated the latest technology,  high-density  printing.  Historically,  the
Company  has  been  able  to  produce  at  less  than  a  .75%  misprint  ratio,
considerably better than the industry standard of 2.0%.

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      Timeliness of product  delivery is another  crucial  component of business
retention  and  growth.  PPW also  excels  in this  area as  evidenced  by their
excellent  reputation for timely  delivery.  In fact, PPW has never had an order
canceled for failing to achieve a deadline.

      Lastly, PPW is recognized in the  screenprinting  industry as an innovator
who is constantly  working on new processes  and  techniques.  This is extremely
important to PPW customers,  all of whom are looking for the newest applications
in  order  to  bring  fresh  products  to  the  market.   PPW's  expertise  with
high-density printing is a good example of a new technique which has received an
enthusiastic reception from the apparel marketplace. The Company is committed to
continuing its research and development work in order to stay in front of trends
in the  screenprinting  industry and is convinced  this will enable it to expand
business  with  existing  customers  in addition to  acquiring  other  customers
presently targeted.

      Another  opportunity for PPW results from the changing  business model for
screenprinters. Historically, the Company has done contract screenprinting where
customers purchase unprinted garments and deliver them to PPW for embellishment.
Several existing  customers are now asking the Company to do package deals where
PPW assumes responsibility for purchase and receipt of the unprinted garment and
then  does  the  screenprinting  and  embroidery.  This  model  will  result  in
significant increases in both revenue and profits. For example, in the new model
revenue per unit will climb from the current  $.50 to $1.00 per unit to $3.50 to
$4.50 per unit.  To be  successful  with the  package  program,  the Company has
signed a letter of intent to merge  with a T-shirt  manufacturing  company  from
Mexico City, Mexico.

      PPW intends to increase  its  revenues  and  position  itself as a leading
national  screen print and  embroidery  contractor  by  continuing to pursue the
following business strategies:

      Contract Services

      PPW designs graphics for its larger apparel  customers that are sold under
particular  customers'  labels.  PPW will then  screenprint  or embroider  these
designs on blanks  provided by the  customers.  PPW's  product focus has been on
high-density  printing.  High-density  printing is a  screenprinting  term for a
process that leaves a 3-D, sharp-edged print with excellent detail. PPW has also
been  able  to grow  its  business  by  specializing  in  reflective  inks,  and
environmentally safe water based printing.

      Other.

      Other  products  include  printing  on athletic  uniforms  for Nike's Team
Sports Division.  PPW also produces custom designed graphics and  screenprinting
for corporate accounts.

      Design  And Sales Staff.

      PPW employs a staff of  approximately  3 graphic  design  artists who work
closely with customers to create designs for its customers sportswear lines. PPW
employs two internal  sales people and three  customer  service  people who work
closely with existing and new customers to ensure customer needs are met.

      Customers

      PPW's primary sales are through national  decorated  sportswear  companies
including:  Nike,  Columbia  Sportswear,  Chaps Ralph Lauren,  Nautica,  Brooks,
K-Swiss  and Karl Kani.  In fiscal  2000,  PPW's sales to major  customers  that
exceeded  10% of its total sales were as follows:  Customer A 54.8%,  Customer B
11.2%.

      Sources of Raw Materials

      PPW does not enter into long-term  contracts with its suppliers.  PPW buys
its inks and embroidery thread from  approximately  eight suppliers.  PPW is not
dependent on any one supplier.  Currently,  the majority of blank apparel

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screen  printed  and  embroidered  is  provided by its  customers  although,  as
mentioned  under  "Business  Strategy," PPW plans on providing  package deals to
many of its customers in the near future.

      Production and Manufacturing

      PPW  is   committed  to   controlling   costs  and   improving   operating
efficiencies.  PPW concentrates on the high value-added  production processes of
custom design,  screen  printing and embroidery at its  manufacturing  facility.
Production of PPW's  products  requires  applying  garment  decorations  through
screen printing or embroidery.

      Screen Printing.

      The screen  printing  process  begins with the  preparation of a design by
PPW's  artists.  PPW tests new designs for  printability  and color dynamics and
produces sales and production  samples.  PPW also stocks over 140 pigment colors
and  numerous  ink bases,  which  allows  for  in-house  development  of new ink
applications and techniques.  In the printing process, screens are positioned in
automatic  printing  presses where inks are pressed through the screen to create
the design on the garment. Garments bearing designs on different portions of the
garment may move through the printing process several times. Following printing,
the  garments  run through a dryer,  making the  printed  design  permanent  and
washable.

      PPW  operates  seven  automatic  screen  printing  presses and five manual
screen printing  presses.  The automatic presses are color printing presses with
eight to  eighteen  stations  available.  Each  press is  operated  by a team of
employees.  PPW believes  that this  approach  contributes  to the  flexibility,
quality and speed of its production process.

      Embroidery.

      The embroidery  process  begins with the  preparation of a design by PPW's
artists.  PPW tests new designs for  embroiderability as it relates primarily to
stitch count and color  selection  and produces  sales and  production  samples.
After a design is approved,  the design that is to be  embroidered  is formatted
onto  a  computer  disk,  and  programmed  into  the  embroidery  machine.  Each
embroidery  machine has  multiple  sewing  heads,  permitting  two to  sixty-one
garments to be embroidered at one time. After the stitching is complete garments
are trimmed, packed in PPW's warehouse and shipped directly to the customer. PPW
operates seven fully automated machines with sixty-one single heads.

      Quality Control.

      PPW maintains several quality control checkpoints monitoring all phases of
production  and  ensuring  that  garments  meet the quality  standards  of PPW's
customers.

      Product Shipment.

      PPW  believes  responding  quickly to  customer  requirements  and meeting
delivery schedules consistently are important factors in its business. Customers
generally  select the  specific  art  designs to be printed on ordered  garments
periodically  for  delivery  within  as few as one  week  following  the  design
selection.  PPW can place garments on hangers before shipping,  affix price tags
and other product information, and can ship garments polybagged or folded. These
services  reduce the time  required  to prepare  the  garments  for  display and
thereby  enable  customers to stock their stores more quickly.  PPW's  customers
generally bear all shipping costs.

      Regulation

      PPW is  subject  to  federal,  state  and  local  environmental  laws  and
regulations,  including laws relating to employee knowledge of, exposure to, and
disposal of inks,  dyes,  photographic  chemicals  and  cleaning  solvents.  PPW
believes that its  operations  comply in all material  respects with  applicable
environmental  laws and  regulations.  Although  PPW  continues  to make capital
expenditures  for  environmental   protection,   it  does  not  anticipate  that
significant   expenditures  will  be  required  to  remain  in  compliance  with
environmental  requirements.  There can be no  assurance,  however,  that future
changes in such laws and  regulations  will not have a material  effect on PPW's
operations.

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      Competition

      The screen  printing  industry is highly  competitive.  PPW competes  with
numerous screen printing and manufacturing  vendors,  including those with their
own  line  of  licensed  and  branded  product.  PPW  also  competes  through  a
combination of graphics and decorating  techniques.  Competitive factors include
product quality,  access to popular  licenses,  price,  ability to meet delivery
requirements  and other  aspects  of  customer  service,  changes  in styles and
consumer preferences.

      Employees

      At July 14, 2000, PPW employed  approximately 77 full-time and 9 part-time
employees. PPW believes that its employee relations are good.

FAN-TASTIC, INC.

         Acquired  in 1997,  Fan-Tastic  is a  franchisor  and  owner of  retail
entertainment  and sports stores,  dba Fan-A-Mania,  based in regional  shopping
malls. As of July 14, 2000,  Fan-Tastic  owned 1 of its own stores in Oregon and
had 13  franchisees  in the  states  of  Arkansas,  Missouri,  New  York,  North
Carolina,  Virginia,  Wyoming,  Pennsylvania,  Texas, and countries of Barbados,
Canada and Japan. Fan-Tastic opened its first Fan-A-Mania store in August 1995.

         Fan-A-Mania  stores  carry a broad  range of sports  and  entertainment
products   purchased  from  national  vendors  who  are  licensed  with  various
organizations  including  the  following  entertainment  and  sports  companies:
Pokemon, Disney, Warner Brothers, Marvel Comics,  Nickelodeon,   World Wrestling
Federation,  National Football League,  National Basketball  Association,  Major
League  Baseball,  College and the  National  Hockey  League.  Products  carried
include  apparel for ages  ranging  from  toddlers to adults,  collectibles  and
souvenirs for fans of entertainment and sports.

           Fan-Tastic  advertises  nationally to promote the Fan-A-Mania  stores
primarily in business  periodicals.  Limited additional  marketing has also been
done at specific  business shows held in strategic regions of the United States,
and through direct marketing, and internet advertising.

         With  the  sales  of each  franchise  unit to a new  owner,  Fan-Tastic
receives a franchise  fee of $19,500,  and a royalty on ongoing sales of 3 1/2%.
Principal services Fan-Tastic provides to its franchisees are as follows:

o        Site evaluation, selection and lease negotiation.

o        Store design, merchandise and display plans.

o        Reduction in inventory costs resulting from chain-wide volume pricing
         and simplified buying. through a consolidated buying program.

o        Inventory control through a consolidated point of sale software and
         chain wide identification of hot selling products.

o        Four days of initial training at the corporate office covering all
         phases of store operations; product purchasing, store promotions, etc.
         using the proprietary Fan-A-Mania operations manual. This initial
         training is followed closely with four days of training at the opening
         of the store and on-going follow-up training.

         Seasonality

         Approximately  43% of annual  Fan-Tastic  retail sales have occurred in
the months of November and December.

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       Suppliers

         Fan-Tastic  purchases product from a number of national licensed sports
and entertainment manufacturers including New Era, Champion, Applause, Giant and
Changes. Fan-Tastic is not dependent upon any one supplier.

         Competition

         The entertainment  and sports products  industry is quite  competitive.
Most mass merchants  carry  entertainment  and sports  products and thus provide
competition.  However,  management believes service and atmosphere differentiate
Fan-A-Mania stores from those mass merchants.  Direct competition in malls where
Fan-A-Mania  stores are located comes  primarily  from  national  chains such as
Disney, Warner Brothers, Champs, and department stores. Management believes that
Fan-A-Mania has  differentiated  itself from these  competitors by merchandising
both entertainment and sports products and by having an attractive appearance.

         Fan-Tastic competes with other franchisers for prospective franchisees.
However,  there is little direct  competition for prospective  franchisees since
Fan-A-Mania is currently the only entertainment and sports apparel,  collectible
and souvenir oriented  franchisor known to management.  Fan-Tastic also competes
for suitable store  locations in malls and outlet centers from a wide variety of
retailers.

         Trademarks

         Fan-Tastic owns the registered  mark,  "Fan-A-Mania"  for retail stores
featuring entertainment and sports memorabilia and clothing.

         Employees

         As of July 14, 2000,  Fantastic had six  full-time  employees and three
part-time employees.

LETTER OF INTENT TO MERGE WITH ROYAL AVALON S.A.

         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.  Under terms of the deal,  the newly merged entity will be renamed
Royal  Pacific  Apparel,  Group,  Inc. and will  continue  all present  business
activities as well as constructing new garment dyeing and printing facilities at
Royal Avalon's manufacturing plants in Mexico.

         Royal  Avalon has been  manufacturing  T-shirts  in Mexico for the past
five years.  The Company has two  production  facilities  located  northeast  of
Mexico City.  During  calendar  1999 Royal Avalon  achieved  over $12 million in
revenue.  This merger  will allow the Company to present a vertical  solution to
our  customers.  The merger will result in an increase in revenues as well as an
increase in the Company's gross and operating profits.

         The present  agreement  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.  The deal is contingent on satisfactory  due diligence
findings,  board approvals and execution of a definitive  agreement.  Management
from the companies  believe the merger will be consummated by the end of August,
2000.  Additionally,  the Company is presently soliciting  additional funding in
order to establish  screenprinting and garment dyeing at Royal Avalon's facility
as well as increasing T-shirt manufacturing capacity.

QUADE, INC. AND US POLO ASSOCIATION, LTD.

         In 1997,  Quade,  Inc.,  acquired from the U.S. Polo  Association  ("US
Polo") the exclusive  master  licenses rights to the US Polo name for the United
States and Canada.  In July 1998, the Company  purchased Quade,  Inc. by issuing
213,222 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

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US Polo Association and to perform all licensing  activities  relating to the US
Polo Association licenses and trademarks for the United States and Canada.

         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. See Note 2 of the financial statements.

         In addition,  the Company and the former owner of Quade,  Inc.  amended
the original  stock  purchase  agreement.  Under the  amendment,  an  additional
426,667  shares of common stock were issued to the former owner of Quade without
any  additional  earnings  requirements  by Quade or U.S. Polo and the $5.00 per
share guarantee value of the initial common shares issued to Quade was removed.

GOLF VENTURES, INC.

          As of April 6, 1998,  the Company owned 502,746 shares of common stock
of Golf Ventures, Inc. (hereinafter "GVI"), a publicly held Utah corporation. As
of April 6, 1998, such shares  represented  approximately 5.3% of the issued and
outstanding  common stock of GVI. This percentage was prior to the conversion of
U.S.  Golf  Communities  Preferred  Stock into common  stock,  which  conversion
occurred by July 1998 and reduced the Company's  holdings to approximately  1.4%
of the issued and  outstanding  Common  Stock of GVI. In  connection  with GVI's
merger with U.S.  Golf  Communities,  Inc.  described  below,  and to settle all
services  provided  by the  Company to GVI,  and for the  assumption  of certain
contingent  liabilities  by the Company,  GVI, in July 1998,  issued the Company
862,000 shares of common stock. As of July 14, 2000, the Company owned 1,045,000
shares of common stock of Golf Ventures,  Inc. which  represents less than 3% of
the outstanding shares of GVI.

         Until  December,   1997,   GVI's  assets  consisted  of  the  Red  Hawk
International  Golf & Country Club (hereinafter  "Red Hawk"),  Cotton Manor, and
Cotton Acres, real estate developments located near St. George, Utah.

         On November 25, 1997, GVI announced that it had completed a merger with
U.S. Golf Communities, Inc. ("U.S. Golf Communities"), an Orlando based group of
affiliated  companies  principally  engaged in the acquisition,  development and
operations management of public, private and resort golf properties and adjacent
residential real estate  throughout the United States.  The combined company was
renamed to Golf Communities of America  ("GCA").  The transaction was structured
as a reverse merger with the assets of U.S. Golf  Communities  being merged into
GVI in exchange for the issuance by GVI of  convertible  preferred  stock to the
current  owners  of U.S.  Golf  Communities.  GVI  issued  sufficient  shares of
preferred  stock to the  shareholders  of U.S.  Golf  Communities  so that  when
converted,  such  shareholders  would own  approximately  81% of the outstanding
common stock of GVI. In July 1999, GCA filed for chapter 11 bankruptcy.  At July
15, 2000, GCA was still in chapter 11 bankruptcy and the Company's investment in
GCA was written off (see Note 1 to the Financial Statements.)

         Additional  information  regarding  the business of GCA can be found in
GCA's  reports  filed with the  Securities  and Exchange  Commission.  Since the
Company has no control over GCA, its interest in GCA after November 25, 1997, is
that of a passive shareholder.

Item 2.  Description of Property.

         PPW rents an 85,000  square foot  office and  screenprinting/embroidery
facility  in  Portland,  Oregon.  Fan-Tastic's  offices are located in Salt Lake
City,  Utah and is  approximately  4,000  square  feet of  combined  office  and
warehouse  space.   Fan-Tastic  leases  retail  mall  space  for  its  store  of
approximately  2,000 square  feet.  Lease  commitments  from fiscal 2001 through
fiscal 2003 are $467,478, $421,671 and $67,574, respectively.

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Item 3.   Legal Proceedings.

         On February 8, 1998,  Quade,  Inc. entered into a Sublicense  Agreement
("Agreement")  with Jenna Lane Kids,  Inc.,  licensing  Jenna Lane Kids, Inc. to
sell various categories of sportswear apparel in misses,  petite, and plus sizes
with the United States Polo Association  trademarks with guaranteed royalties to
Quade of $600,000 over the life of the agreement.

         On March 1, 1999,  Jenna Lane,  Inc.  and Jenna Lane Polo  Association,
Ltd.  (hereafter  referred to as Jenna  Lane),  filed a complaint in the Supreme
Court of the State of New York against the Company and various other  defendants
including, Quade, Inc., U.S. Polo Association, Ltd., Robert Mintz, United States
Polo  Association  and  Jordache  Enterprises,  Inc.  Jenna  Lane was  seeking a
judgment of $5,000,000 compensatory damages and $10,000,000 punitive damages and
rescision of the Agreement.  Jenna Lane's complaint  alleged the Company owed it
damages  resulting  from,  among other  things,  breach of contract and tortious
interference with contractual relationships.  In May 1999, the Company and other
parties  commenced an  arbitration  against Jenna Lane for,  among other things,
breach of  contract.  In  October  1999 the  Company  and other  parties  to the
complaint reached a Settlement  Agreement  ("Settlement") with Jenna Lane. Under
the Settlement,  the Company  received  approximately  $67,000,  net of attorney
fees, in full and complete  settlement of all claims relating to the arbitration
against  Jenna Lane.  The Company and the other  parties to the  complaint  also
received a release from the complaint  from Jenna Lane.  In return,  the Company
and other parties to the complaint  issued  releases  related to the arbitration
and a stipulation discontinuing the arbitration. In addition, the parties to the
Settlement  agreed the license for Jenna Lane to sell product with United States
Polo Association trademarks was terminated.

Item 4.   Submission of Matters to a Vote of Security Holders.  None.

                                     PART II

Item 5.  Market for Common Equity & Related Stockholder Matters.

         The Company's common stock is currently traded in the  over-the-counter
market on the  Electronic  Bulletin  Board under the symbol ADCO.  The following
table  sets  forth for the  respective  period  indicated,  the high and low bid
quotations,  as adjusted  for stock splits of the  Company's  common  stock,  as
reported by the National Quotation Bureau and represents prices between dealers,
does not include retail markups, markdowns or commissions, and may not represent
actual transactions:

Calendar Quarters                    High Bid                Low Bid

1998

1st Quarter                          3.00                     1.00
2nd Quarter                          2.625                    1.0625
3rd Quarter                          1.4375                    .3125
4th Quarter                            .6875                   .25

1999

1st Quarter                            .875                    .1875
2nd Quarter                            .5                      .1875
3rd Quarter                           1.906                    .156
4th Quarter                           1.50                     .625

2000

1st Quarter                           1.312                    .625
2nd Quarter                           1.531                    .656

                                       9
<PAGE>

         As of July 14,  2000,  the Company had  3,908,330  shares of its common
stock issued and outstanding, and there were approximately 1,300 shareholders of
record.

         As of the date  hereof,  the Company has not paid or declared  any cash
dividends.  Future  payment  of  dividends  by the  Company,  if any,  is at the
discretion of the Board of Directors and will depend, among other criteria, upon
the Company's  earnings,  capital  requirements,  and its financial condition as
well as other relative factors.  Management has followed the policy of retaining
any and all earnings to finance the  development of its business.  Such a policy
is likely to be maintained as long as necessary to provide  working  capital for
the Company's operations.

RECENT SALES OF UNREGISTERED SECURITIES

         On March 17, 1997, the Company  acquired 80% of the outstanding  shares
of Fan-Tastic for 100,000 shares of the Company's Series D Convertible Preferred
Stock.  These shares were issued to the 8 shareholders  of  Fan-Tastic,  each of
which signed an  investment  letter.  The Company  believes that the issuance of
these  shares was exempt  from  registration  under the  Securities  Act of 1933
pursuant to Section  4(2). On May 29, 1998,  the Company  acquired the remaining
20% of Fan-Tastic and exchanged the 100,000  shares of Series D preferred  stock
for 400,000 shares of its common stock.

         On May 20, 1997 the Company  entered into an agreement  with William R.
Vowell to form Finally  Communities,  Inc. In consideration of Mr. Vowell's time
and effort to develop  the  Finally  business,  the  Company  issued Mr.  Vowell
500,000 shares of Series E Convertible  Preferred  Stock.  The Company  believes
that the  issuance  of these  shares  was  exempt  from  registration  under the
Securities  Act of 1933  pursuant  to  Section  4(2).  In  connection  with  the
Company's  sale of its shares in Finally  Communities,  Inc. in February,  1998,
these shares were returned to the Company.

        In June 1997,  the Company issued 16,000 shares to two  consultants  for
promotional and  advertising  services.  Based on the knowledge,  experience and
economic strength of these persons,  the Company believes these two transactions
were exempt  from  registration  under the  Securities  Act of 1933  pursuant to
Section 4(2).

        On March 10, 1998,  the Company  sold 24,000  shares of its common stock
for $30,000 to an  investor.  The Company  believes  that the shares were exempt
from  registration  under the  Securities  Act of 1933  pursuant  to Rule 505 of
Regulation D promulgated thereunder.

        In April 1998,  the Company  sold 36,000  shares of its common stock for
$45,000 to an  investor.  The shares  were exempt  from  registration  under the
Securities  Act of  1933  pursuant  to  Rule  505 of  Regulation  D  promulgated
thereunder.

        In  May  1998,   effective   March  31,  1998,   the  Company   acquired
approximately  83% of the  outstanding  shares of Printworks,  Inc., for 213,472
shares of the Company's  common stock.  The issuance of these shares were exempt
from registration pursuant to Section 4 (2) of the Securities Act of 1933.

        On July 14, 1998 the Company  issued 300,000 shares to Mr. George Badger
for prior services. Based on the knowledge,  experience and economic strength of
Mr.  George  Badger,  the  Company  believes  this  transaction  is exempt  from
registration  with the  Commission  under Section 4(2) of the  Securities Act of
1933.

        On July 14, 1998 the Company issued 56,000 shares to Mr. Don Pickett for
prior services. Based on the knowledge,  experience and economic strength of Mr.
Pickett, the Company believes this transaction is exempt from registration under
the Securities Act of 1933 Section 4(2).

         In July 1998, the Company  acquired 100% of the  outstanding  shares of
Quade,  Inc., for 238,333 shares of the Company's  common stock. The issuance of
these  shares  were exempt  from  registration  pursuant to Section 4 (2) of the
Securities Act of 1933. The purchase agreement with Quade, Inc. provided a $5.00
per share guarantee for shares issued to the Quade, Inc. shareholder.  In August
2000, the original  purchase  agreement  with the Quade,  Inc.  shareholder  was
amended  and  451,667  shares of  common  stock was  issued to the  Quade,  Inc.
shareholder and a former Quade, Inc.  creditor.  In return,  the $5.00 per share
guarantee  was  rescinded.  The  issuance  of  these  shares  were  exempt

                                       10
<PAGE>

from  registration  pursuant to Section 4 (2) of the Securities Act of 1933. The
issuance of these shares were exempt from registration pursuant to Section 4 (2)
of the Securities Act of 1933.

          On January 22, 1999, the Company granted options to Mr. James Stock to
purchase up to 160,000  shares of the Company's  common  stock.  Mr. Stock is to
provide various investor and public relations  services through January 21, 2000
and the options expire December 31, 2001. The options are not transferable,  are
exercisable  at any time  between  $.50 and $3.00 per share  (See Note 10 to the
financial statements.) Based on the knowledge,  experience and economic strength
of Mr. Stock, the Company believes this transaction is exempt from  registration
under the Securities Act of 1933 Section 4(2).

          In August  1999,  the Company  issued  15,000  shares to a company for
investor and public relations services.  Based on the knowledge,  experience and
economic  strength of this company,  the Company  believes this  transaction was
exempt from  registration  under the  Securities Act of 1933 pursuant to Section
4(2).

          In March and May 2000,  the Company  issued 235,000 and 28,777 shares,
respectively to a company for investor and public relations  services.  In March
2000,  the Company also  granted  options to this same company to purchase up to
340,000  shares of the Company's  common stock.  The options expire in September
2001.  The options are not  transferable,  are  exercisable  at any time between
$1.08 and $1.72 per share (See Note 10 to the  financial  statements.)  Based on
the  knowledge,  experience and economic  strength of this company,  the Company
believes this transaction was exempt from registration  under the Securities Act
of 1933 pursuant to Section 4(2).

           In May 2000,  the  Company  issued  4,000  shares  to a  company  for
financial consulting services.  Based on the knowledge,  experience and economic
strength of this company,  the Company believes this transaction was exempt from
registration under the Securities Act of 1933 pursuant to Section 4(2).

Item 6. Management's  Discussion & Analysis of Financial  Condition & Results of
Operations.

         The following information,  on a fiscal year basis, is derived from the
consolidated  financial  statements of the Company.  Such  financial  statements
include the Company and its subsidiaries.

RESULTS OF OPERATIONS

For the Fiscal Year Ended March 31, 2000 ("Fiscal 2000"), Compared to the Fiscal
Year Ended March 31, 1999 ("Fiscal 1999).

                                              Year Ended March 31,
                                             2000               1999
                                             ----               ----
         Net sales                           100.0%             100.0%
         Cost of sales                        75.4%              78.3%
         Gross profit                         24.6%              21.7%
         General expenses                     29.9%              44.3%
         Depreciation and amortization         0.4%               4.2%
         Loss from operations                 -5.7%             -26.9%
         Other income and expenses             0.1%              -1.3%
         Gain on sale of assets                0.0%               1.1%
         Loss on write-off of GCA            -29.7%               0.0%
         Interest expense                    -12.1%             -14.0%

                                       11
<PAGE>

         Loss before income taxes
            and discontinued operations      -46.5%             -80.3%
         Discontinued operations              18.0%              -6.3%
         Income taxes                          0.0%               0.0%
         Net loss                            -29.4%             -86.6%


Sales  for the year  ended  March  31,  2000  were  $4,828,053  as  compared  to
$3,996,739 for the year ended March 31, 1999.  Pacific Print Works ("PPW") sales
for Fiscal 2000 were $4,415,801  compared to $3,223,417 for Fiscal 1999. The 37%
increase  in PPW's  revenue was  primarily  due to an increase in sales to PPW's
five largest  customers  with 73% of the increase in the five largest  customers
coming from PPW's largest customer. The increase with these customers is largely
due to PPW's high  density  printing  capabilities  in  addition  to the overall
quality of the printing and related services.  Sales for Fan-Tastic  declined by
approximately  $361,070  which was  primarily due to 1) Fiscal 2000 sales coming
from the equivalent of 2.1 stores over Fiscal 2000 as opposed to 4.5 stores over
the Fiscal 1999 and 2) franchise  sales and  royalties of $96,958 in Fiscal 2000
as opposed to $199,834 for Fiscal 1999 due to fewer new franchisee fees.

Gross profit for Fiscal 2000 was  $1,187,465  compared to $867,097 for the prior
year with a Company wide gross profit margin of 24.6% in Fiscal 2000 compared to
21.7% in Fiscal  1999.  The  increase in gross  profit was  primarily  due to an
increase  in gross  profit  from PPW for Fiscal  2000 of  $497,000.  PPW's gross
profit  increase was due to the increase in sales while the gross profit  margin
improved  due to the  increase in sales  reducing  fixed  production  costs as a
percentage of sales.

General  expenses for Fiscal 2000 were  $1,442,181 as compared to $1,772,155 for
the prior year.  The  decrease  was  primarily  attributable  to a reduction  of
$104,000 and $95,000 in Fan-Tastic rent and payroll expenses,  respectively, due
to store closures.

Depreciation  and amortization  expenses  included in total general expenses for
Fiscal 2000 was $18,929  compared to $169,420  Fiscal 1999. This decrease is due
to the  amortization  of the goodwill from the PPW  acquisition  in Fiscal 1999.
There was no  amortization  from the PPW  acquisition  goodwill  in Fiscal  2000
because this goodwill was completely written off at the end of Fiscal 1999 which
resulted in a $1,434,239 expense.  PPW had depreciation of $275,260 and $257,925
for Fiscal  2000 and Fiscal  1999,  respectively  which was  included in cost of
sales.

The  Company's  loss from  operations in Fiscal 2000 was $273,645 in Fiscal 2000
compared to $1,074,478 in Fiscal 1999.  The  improvement in operations is due to
the increase in PPW revenues as discussed above.

Interest  expense for Fiscal 2000 was  $584,355  compared to $561,335 for Fiscal
1999. The Company  expected  interest  expense to be similar between Fiscal 2000
and Fiscal  1999  because  the average  debt  outstanding  for the two years was
similar.  The Company also incurred a loss of  $1,434,239  from its write-off of
Golf Communities marketable securities (see Note 1 to the Financial Statements).
As these marketable securities were written completely off, no additional charge
will be incurred in future years.

In Fiscal 2000, the Company sold its 50% ownership in US Polo Association,  Ltd.
which resulted in a gain on sale of  discontinued  operations for Fiscal 2000 of
$867,587.  In Fiscal 1999 the Company incurred a loss of $252,972 from its Quade
and US Polo Association, Ltd. operations.

For the Fiscal Year Ended March 31, 1999 ("Fiscal 1999"), Compared to the Fiscal
Year Ended March 31, 1998 ("Fiscal 1998).

Sales  for the year  ended  March  31,  1999  were  $3,996,739  as  compared  to
$1,093,110  for the  year  ended  March  31,  1998.  The  increase  in  sales is
attributable  to the  acquisition  of Pacific Print Works ("PPW") (see Note 2 to
the Financial Statements) as PPW contributed sales of $3,223,417 for the current
fiscal  year.  The  Company's  acquisition  of PPW was  accounted  as a purchase
combination, and therefore, no PPW revenue was recorded by the Company in fiscal

                                       12
<PAGE>

1998. Pro Forma audited revenue for PPW Fiscal 1998 was $2,389,970. The $833,447
increase  in PPW's  revenue  for Fiscal  1999  compared to Fiscal 1998 pro forma
revenue was primarily due to:

      1) An increase of  approximately  $1,370,000  in Fiscal 1999 from existing
         customers in Fiscal 1998.

      2) Sales of approximately $535,000 to new customers for Fiscal 1999.

      3) A sales  decline  of  approximately  $1,140,000  in  fiscal  1999  from
         existing customers in Fiscal 1998.

The PPW Fiscal 1999 sales  include  approximately  $450,000 of garment  sales as
opposed to pro forma garment sales of $189,000 in Fiscal 1998.  The  improvement
in sales to existing  customers  and to new  customers is primarily due to PPW's
expertise in the area of high density printing.  PPW expects a similar or larger
increase in sales for the year ended  March 31,  2000 based on its  relationship
and orders with existing customers in addition to PPW samples with potential new
customers.  Approximately 40% of the decline in sales with existing customers is
due to 1) a  decrease  of  $350,000  from a  customer  that is moving out of the
T-shirt and  sweatshirt  business and 2) a reduction of $115,000 from a customer
whose production was moved to its new parent company.

Sales for  Fan-Tastic  declined by $319,778  which was due to a decline in store
sales of $390,962  due to the closure of two stores in June 1998 and an increase
in franchise and royalty fees of $71,184.

Gross profit for the fiscal year ended March 31, 1999 was  $867,097  compared to
$318,705  for  the  prior  year.  The  increase  in  gross  profit  was due to a
contribution  in  gross  profit  from PPW for  Fiscal  1999 of  $497,083  and an
increase in Fan-Tastic gross profit for Fiscal 1999 of approximately $52,000.

General  and  marketing  expenses  for the fiscal year ended March 31, 1999 were
$1,772,155  as  compared to  $1,540,460  for the prior year.  The  increase  was
primarily  attributable  to general and  marketing  expenses from PPW for Fiscal
1999 of  approximately  $790,000  which was offset by a decline  in general  and
marketing costs from the Company's corporate offices of approximately  $620,000.
The decline in the corporate  office expenses was primarily due to approximately
$425,000 in expenses for stock issued to consultants in Fiscal 1998 with none in
Fiscal 1999.

Depreciation  and amortization  expenses  included in total general expenses for
the fiscal year ended March 31,  1999 was  $169,420  compared to $31,814 for the
prior year.  This increase is due to the  amortization  of the goodwill from the
PPW acquisition  which was being amortized over 15 years.  The remainder of this
goodwill  was written off at the end of Fiscal 1999 and  therefore we expect the
Fiscal 2000 general amortization expenses to be similar to the amount for Fiscal
1998.

The Company's loss before  discontinued  operations include a one time write-off
of goodwill from the Pacific Print Works  acquisition  for $1,568,215 as opposed
to a write-off  of goodwill  from the  Fan-Tastic  acquisition  of $756,797  for
Fiscal 1998.

Interest expense for the fiscal year ended March 31, 1999 was $561,335  compared
to $133,339  for the prior  year.  The  increase in interest  expense was due to
approximately  $230,000  of  interest  from PPW  lease  and  notes  payable  and
additional debt in Fiscal 1999 that was used for working capital purposes and to
fund losses from operations.

The  Company  had a loss on  discontinued  operations  for the year ended  March
31,1999 of  $252,972  from its Quade and US Polo  Association,  Ltd.  operations
compared  to  a  $172,728  loss  from  Golf  Ventures  and  Finally  Communities
operations  from the prior year and a  $1,720,387  gain on the  disposal of Golf
Ventures  operations  in the prior year.  The Company  will record a gain in the
first  quarter  of  Fiscal  2000  for its sale of its 50%  ownership  in US Polo
Association, Ltd.

The Pacific Print Works ("PPW") acquisition  involves  contingent  consideration
that could result in PPW shareholders  receiving additional shares over the next
two years  based on PPW  achieving  specified  earnings  (see  footnote 2 to the
financial  statements).  For example,  if PPW  achieves  earnings of $300,000 in
fiscal 2000,  48,083 shares of common stock would be issued to PPW  shareholders
with a guaranteed  value of $5.00 which would  result in $240,415 of

                                       13
<PAGE>

additional  goodwill.  This goodwill would result in additional  amortization by
the Company of $16,028 per year or $.005 per share over 15 years.

The unaudited pro forma summary information  combining the results of operations
of the Company and PPW is represented as if the  acquisition had occurred at the
beginning of fiscal 1998, after giving effect to certain adjustments,  including
the  amortization of $121,229 of goodwill over 15 years.  This pro forma summary
does not  necessarily  reflect the results of operations as they would have been
if the Company and PPW had constituted a single entity during such periods.

                                                Fiscal 1998

          Net Revenue                           $ 3,483,080
          Net Loss                               (1,103,859)
          Net Loss per share                           (.80)


LIQUIDITY AND CAPITAL RESOURCES

         At March 31, 2000,  the Company had total assets of  $2,080,720,  total
liabilities of $5,038,145 and total stockholders  deficit of $2,957,425 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 significant changes in
assets,  liabilities and  stockholders  equity is due primarily to the Company's
write-off of Golf Communities of America stock and the reduction in stockholders
equity due to losses from operations and interest expense. At March 31, 2000 the
Company's  current  ratio was  approximately  .358  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.

PLAN OF OPERATIONS

         Statements  made or  incorporated  in this  report  include a number of
forward-looking statements within the meaning of Section 27(a) of the Securities
Act  of  1933  and  Section  21(e)  of the  Securities  Exchange  Act  of  1934.
Forward-looking  statements include,  without limitation,  statements containing
the words anticipates,  believes, expects, intends, future, and words of similar
import which express management's  belief,  expectations or intentions regarding
the Company's  future  performance  or future events or trends.  Forward-looking
statements  may not reflect  actual  operations  because they involve  known and
unknown risks,  uncertainties and other factors, which may cause actual results,
performance or achievements of the Company to differ materially from anticipated
future  results,  performance  or  achievements  expressly  or  implied  by such
forward-looking statements. In addition, the Company undertakes no obligation to
publicly update or revise any forward-looking statement,  whether as a result of
new information, future events or otherwise.

Item 7.  Financial Statements and Supplementary Data.

         See Item 13. Exhibits and Reports on Form 8-K.

Item 8.  Changes in and  Disagreements  with  Accountants  on Accounting  and
         Financial Disclosure.

         There have been no  disagreements  with  accountants  on accounting and
financial  disclosure.  Effective May 1, 2000, Jones, Jensen and Company changed
its name to HJ & Associates, LLC.

                                       14
<PAGE>

                                    PART III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
With Section 16(a) of the Exchange Act.

Directors and Executive Officers

         The  following  table sets forth the name,  age and office held by each
director  and  officer  of the  company,  followed  by a  brief  resume  of each
individual.

NAME                       AGE     POSITION HELD

B. Willes Papenfuss        42      President, Chief Executive Officer and
                                   Director
Jeffrey S. Harden          55      Vice President and Director, President of
                                   Pacific Print Works
Barry L. Papenfuss         39      Vice President, President of Fan-Tastic, Inc.
Timothy Papenfuss          40      Secretary/Treasurer, Chief Financial Officer
                                   and Director
Robert Mintz               54      Vice President and Director, President
                                   of Quade, Inc

         B.  WILLES  PAPENFUSS,  President  and  Director  of the  Company,  was
appointed  Executive  Vice-President,  of the  Company in  December,  1997.  Mr.
Papenfuss joined Fan-Tastic, Inc. as Vice-President  International in May, 1995.
He was Vice-President of U.S. Bank from 1991 to 1993, and Senior  Vice-President
of U.S. Bank from 1993 to 1995. Mr.  Papenfuss  graduated from the University of
Washington with a Masters of Business  Administration  in 1985. Mr. Papenfuss is
the brother of Barry Papenfuss,  Vice-President  of the Company,  and of Timothy
Papenfuss, Chief Financial Officer and Director of the Company.

         JEFFREY S. HARDEN, Vice President and Director of the Company,  and has
been with the Company  since  Pacific  Print Works was  acquired by ARDCO in May
1999.  President of Pacific Print Works since 1993.  Division Vice  President of
West Coast sales with London Fog from 1987 to 1993.  Sales  Manager with Jantzen
from 1979 to 1987.  Education  includes two years at Texas A & M and three years
at Ohio Wesleyan.

         BARRY L. PAPENFUSS,  Vice President and is the President of Fan-Tastic,
which  position  he has held since  1994,  and has been with the  Company  since
Fan-Tastic  was acquired by ARDCO in March,  1997. Was a Director of the Company
from March 1997 through July 14, 1998.  From  1990-1994,  Mr.  Papenfuss was the
controller of The Pro Image, a sports apparel company and from 1985-1990,  was a
consultant  with Deloitte and Touche,  an  international  accounting  firm.  Mr.
Papenfuss  graduated from Brigham Young  University.  Mr. Barry Papenfuss is the
brother of Mr. Timothy Papenfuss,  Secretary/Treasurer,  Chief Financial Officer
and a director  of the  Company and of B.  Willes  Papenfuss,  President  of the
Company and a director of the Company.

         TIMOTHY M.  PAPENFUSS,  chief  financial  officer  and  director of the
Company,  is chief financial officer of Fan-Tastic,  Inc., which position he has
held since April,  1994. Mr. Papenfuss was appointed chief financial officer and
a  director  of  the  Company  in  August,  1997.  From  1990  to  April,  1994,
Mr. Papenfuss was a  manager  and  senior  manager  with  Ernst and  Young.  Mr.
Papenfuss  has 9 years of  professional  accounting  experience.  Mr.  Papenfuss
graduated  from  Brigham  Young  University  in 1983 with a bachelors  degree in
accounting.  Mr. Papenfuss is the brother of Barry Papenfuss,  vice president of
the Company and of B. Willes Papenfuss,  President of the Company and a director
of the Company.

         ROBERT  MINTZ,  Director  of the  Company  since July 23, 1998 upon the
Company's  acquisition of Quade, Inc.  President of U.S. Polo Association,  Ltd.
since  October 1998.  President and founder of Quade,  Inc. from 1996 to October
1998. Director of Women's Apparel at London Fog from 1994 to 1995.  President of
Bugle Boy  Womens  from 1987 to 1993.  Division  President  for  Lizwear  at Liz
Claibourne  from 1984 to 1987. Mr. Mintz has a bachelors  degree in anthropology
from the University of Pittsburgh.

                                       15
<PAGE>

Significant Employees and Consultants

         The  following  individual  was a  consultant  to the Company from 1997
through June 1998.

         GEORGE H. BADGER, resigned as President,  Chief Executive Officer and a
Director of the Company on December 31, 1996.  Mr.  Badger  served as a director
since June 1992,  and was  President  since 1995.  Mr.  Badger was indicted on a
number of charges and was arraigned in the U.S.  Federal  District Court for the
Southern  District of New York on October 9, 1996.  The Company has been advised
that the indictment related to alleged unlawful and undisclosed  compensation to
securities  brokers and promoters to induce them to cause  customers to purchase
securities  issued by GVI and the  Company.  The Company has been  advised  that
Mr. Badger has pleaded guilty to counts of: (i) conspiracy to commit  securities
fraud; (ii) securities fraud; (iii) criminal contempt; and (iv) perjury.

         Compliance  with Section 16(a) of the Securities Act of 1934 by Company
Officers, Directors and 10% Shareholders.

         Section  16(a) of the  Securities  Exchange Act of 1934 (the  "Exchange
Act") requires the Company's directors and executive  officers,  and persons who
own more than ten percent (10%) of a registered  class of the  Company's  equity
securities to file with the Commission  initial reports of beneficial  ownership
and reports of changes in beneficial  ownership of Common Stock and other equity
securities of the Company. The rules promulgated by the Commission under Section
16(a) of the  Exchange  Act require  those  persons to furnish the Company  with
copies of all reports filed with the Commission pursuant to Section 16(a).

         Based  solely  upon a  review  of  Forms  3,  Forms  4 and  Forms 5 and
amendments thereto furnished to the Company pursuant to Rule 16a-3(e) during the
fiscal year ended March 31, 2000, Forms 4 and 5 were required to be filed by all
directors  and  executive  officers  by  September  15,  1999  and May 15,  2000
respectively and were not filed until July 25, 2000 except for Form 4 by Mr. Tim
Papenfuss,  which was filed on  February  15, 2000 and Forms 4 and 5 by Mr. Karl
Badger,  which  were  filed  both filed on May 11,  2000.  The  Company  has not
received any Forms 4 and 5 from any  shareholder who owns more than five percent
of the Company's outstanding common stock..

Item 10.  Executive Compensation.

         The  Company  has  not  had  a  bonus,   profit  sharing,  or  deferred
compensation plan for the benefit of its employees, officers of directors.

         The following table sets forth the annual compensation paid and accrued
by the Company for  services  rendered  during the fiscal  years ended March 31,
2000, 1999 and 1998 to (i) the Company's  Chief Executive  Officer and (ii) each
other executive  officer of the Company or its subsidiary  serving at the end of
the last completed  fiscal year whose salary and bonus exceeded  $100,000 during
the last fiscal year ("Named Executive Officer").
<TABLE>
<CAPTION>
                           SUMMARY COMPENSATION TABLE
                                     Annual Compensation      Long-Term Compensation
                                                                 Awards                 Payouts
                                                             ----------------------   ------------------------
                                                                                      Securities
                                                               Other                   Underly-
                                                               Annual    Restricted     ing Op-                 All Other
                                                              Compen-       Stock       tions/        LTIP       Compen-
   Name And Principal       Fiscal     Salary       Bonus      sation       Award        SARs       Payouts      sation
        Position             Year         $           $          $            $           (#)         ($)          ($)
-------------------------- --------- ------------ ---------- ----------- ------------ ------------ ----------- ------------
<S>                          <C>       <C>            <C>        <C>          <C>       <C>            <C>          <C>
B. Willes Papenfuss,         2000      $24,930        0          0            0         102,112        0            0
   Chief Executive           1999      $38,000        0          0            0            0           0            0
   Officer                   1998      $48,000        0          0            0            0           0            0
-------------------------- --------- ------------ ---------- ----------- ------------ ------------ ----------- ------------
Jeffrey S. Harden            2000      $96,000     $43,094       0            0         34,424         0            0
   President of PPW
-------------------------- --------- ------------ ---------- ----------- ------------ ------------ ----------- ------------
</TABLE>

                                       16
<PAGE>

Employment Agreements.

         None of the Company's  officers or directors has any written employment
agreement with the Company.

Director Compensation

         Directors of the Company have been  partially  reimbursed  for expenses
incurred  by them on  behalf of the  Company.  No salary or fee has been paid to
directors.  It is  anticipated  that the  Company  may  establish  some fees for
directors  at such  time as the  Company  has  sufficient  funds  to pay fees to
directors.

Stock Options
<TABLE>
<CAPTION>
                      Option/SAR Grants in Last Fiscal Year

                                  Number of      Percent of total
                                  Securities      Exerscise or
                                 Options/SARs       Granted to        Base price         Expiration date
            Name                 Underlying        Employees in         ($/Sh)
                                Options/SARs       Fiscal year
                                 Granted (#)
----------------------------- ------------------ ----------------- ----------------- ------------------------
<S>                                <C>                <C>               <C>                     <C> <C>
B. Willes Papenfuss                172,566            24.8%             $0.25            August 20, 2002
----------------------------- ------------------ ----------------- ----------------- ------------------------
Jeffrey S. Harden                  111,793            16.1%             $0.25            August 20, 2002
----------------------------- ------------------ ----------------- ----------------- ------------------------
</TABLE>

<TABLE>
<CAPTION>
                         Aggregated Option Exercises and Fiscal Year-End Option Values:

                                                                        Number of
                                                                        Securities            Value of
                                                                        Underlying         Unexercised in-
                                   Shares                              Unexercised            the-money
            Name                 Acquired on      Value realized     Options/SARs at       Options/SARs at
                                Exercise (#)           ($)              FY-end (#)           FY-end ($)
                                                                       Exercisable/         Exercisable/
                                                                      Unexercisable         Unexercisable
----------------------------- ------------------ ----------------- --------------------- --------------------
<S>                                   <C>               <C>           <C>     <C>          <C>     <C>
B. Willes Papenfuss                   0                 0             111,283/86,283       $91,633/$91,633
----------------------------- ------------------ ----------------- --------------------- --------------------
Jeffrey S. Harden                     0                 0             55,896/55,897        $59,362/59,363
----------------------------- ------------------ ----------------- --------------------- --------------------
</TABLE>

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The  following  table  sets  forth  information,  to the best  knowledge  of the
Company,  as of July 14, 2000,  with respect to the beneficial  ownership of the
Company's  Common  Stock  by (i) each  person  known  by the  Company  to be the
beneficial owner of more than 5% of the Company's outstanding Common Stock; (ii)
each  director;  and (iii) all current  directors  and  executive  officers as a
group.

                                       17
<PAGE>

NAME AND ADDRESS OF                           NUMBER OF              PERCENT
BENEFICIAL OWNER                              SHARES OWNED           OF CLASS

Banque SCS Alliance SA                          858,515 (1)           21.96%
11 Route De Florissant Case Portal 3733
12111 Geneva 3, Switzerland

George H. Badger                                519,852 (2)           13.3%
550 Northmont Way
Salt Lake City, UT  84103-3323

Stockbroker Presentations, Inc.                 603,777  (9)          14.21%
2232 East Semeran Blvd.
Apopks, FL  32703

Don Pickett, agent for                          183,250                4.69%
Mindon Investment and The Stella Trust
1150 Augusta Way
Salt Lake City, UT  84108

Karl F. Badger                                   71,193 (3)            1.79%
1041 E. Duffer Lane
Bountiful, UT  84010

Barry L. Papenfuss                              290,175 (4)            7.1%
9659 S. Chavez Dr.
S. Jordan, UT 84095

Timothy M. Papenfuss                            263,756 (5)            6.4%
3441 S. Medford Dr.
Bountiful, UT 84010

B. Willes Papenfuss                             250,674 (6)            6.1%
12313 SE Wagner Street
Portland, OR   97236

Jeffrey S. Harden                               253,602 (7)            6.56%
17942 St. Clair Dr.
Lake Oswego, OR  97034

Robert Mintz                                    588,000 (8)           14.97%
30 Otter Trail
Westport, CT  06880

All Officers and Directors as
a Group (6 persons)                           1,727,400               36.87%


1        Banque SCS Alliance SA disclaims  beneficial ownership but has provided
no additional information to the Company to identify the beneficial owners.

2        Mr. George Badger is the beneficial owner of 130,987 shares held by his
wife LaJuana Badger in an IRA account and 120,000 shares held by his wife. These
shares also include 265,000 shares held in an irrevocable  trust for the benefit
of Mr.  Badger's  children,  for which he does not act as  trustee.  Mr.  Badger
disclaims beneficial ownership of these shares.

3        Mr.  Karl  Badger is the owner of vested  options  to  purchase  25,000
shares of the Company's  common stock at $2.00 a share.  Mr. Karl Badger also is
the owner of options to purchase 34,193 shares of the Company's  common stock at
$.25 per share,  of which  fifty  percent are vested  with the  remaining  fifty
percent vesting in August 2000.

                                       18
<PAGE>

4        Mr. Barry  Papenfuss is the owner of vested options to purchase  15,000
of the Company's  common stock at $2.00 a share. Mr. Barry Papenfuss also is the
owner of options to purchase  163,127  shares of the  Company's  common stock at
$.25 per share,  of which  fifty  percent are vested  with the  remaining  fifty
percent vesting in August 2000. Messrs.  Barry Papenfuss,  Timothy Papenfuss and
B. Willes Papenfuss are brothers.

5        Mr. Timothy Papenfuss is the owner of vested options to purchase 15,000
shares of the Company's  common stock at $2.00 a share.  Mr.  Timothy  Papenfuss
also is the owner of options to purchase  194,612 shares of the Company's common
stock at $.25 per share,  of which fifty  percent are vested with the  remaining
fifty percent vesting in August 2000.

6        Mr. B.  Willes  Papenfuss  is the owner of vested  options to  purchase
25,000  shares of the  Company's  common  stock at $2.00 a share.  Mr. B. Willes
Papenfuss  also is the  owner of  options  to  purchase  172,566  shares  of the
Company's common stock at $.25 per share, of which fifty percent are vested with
the remaining fifty percent vesting in August 2000.

7        Mr.  Jeffrey  Harden's  shares  include  82,030 held by his wife,  Lynn
Harden,  and 2,413 and 2,413  shares held by his  children,  Brittany  and Blake
Harden,  respectively.  Mr.  Jeffrey  Harden  also is the  owner of  options  to
purchase  111,793  shares of the  Company's  common stock at $.25 per share,  of
which fifty  percent  are vested with the  remaining  fifty  percent  vesting in
August 2000.

8        Mr.  Robert  Mintz is the owner of vested  options to  purchase  20,000
shares of the Company's common stock at $.25 a share, of which fifty percent are
vested with the remaining fifty percent vesting in August 2000.

9        Stockbroker Presentations, Inc., in March 2000, was granted warrants to
purchase  340,000  shares  of  common  stock.  The  warrants  can  be  exercised
immediately,  expire  September 2001 and were issued with grant prices of $1.08,
$1.32, $1.49 and $1.72 per share for 85,000 shares of common stock each.

Item 12. Certain Relationships and Related Transactions.

George Badger, a shareholder and former Company President,  and father to former
Company President Karl Badger,  has provided loans to the Company.  At March 31,
2000, the Company owed Mr. Badger  $316,501 with interest and principal  payment
of $5,000 per month.  This note is due  October 31,  2001.  On July 14, 1998 the
Company issued 300,000 shares to Mr. George Badger for prior services.

Item 13.  Exhibits and Reports on Form 8-K.

         The following financial statements, schedules, reports and exhibits are
filed with this Report:

         (a) FINANCIAL STATEMENTS

                  (1) Report of HJ & Associates, LLC, Independent
                      Public Accountants.                                   F-3

                  (2) Consolidated Balance Sheet as of March 31, 2000.      F-4

                  (3) Consolidated Statements of Operation for the
                      years ended March 31, 2000 and 1999.                  F-6

                  (4) Statement of Stockholders' Equity for the period
                      March 31, 1998 through March 31, 2000.                F-8

                  (5) Consolidated Statements of Cash Flows for years
                      ended March 31, 2000 and 1999.                        F-9

                  (6) Notes to Financial Statements.                       F-11

                                       19
<PAGE>

         (d) Exhibits

         The  following  exhibits  are filed  herewith  or are  incorporated  by
reference  to  exhibits  previously  filed  with  the  Securities  and  Exchange
Commission.  The Company shall furnish  copies of exhibits for a reasonable  fee
(covering the expense of furnishing copies) upon request.

Exhibit No.       Exhibit Name

3.1 (1)           Articles of Incorporation
3.2 (2)           Amendment to Articles of Incorporation
3.3 (1)           By-Laws
3.4 (7)           Amendment on name change
3.5 (7)           Amendment on Series D designation
3.6 (7)           Amendment on Series E designation
10.1 (1)          Agreement with TechKNOWLOGY, Inc.
10.2 (1)          Financing Agreement
10.3 (1)          Exchange of Shares Agreement
10.4 (1)          Option Contract
10.5 (1)          Extension to Option Contract
10.6 (1)          Further Amendment to Option Agreement
10.7 (1)          Purchase Agreement
10.8 (1)          Amendment to Purchase Agreement
10.9 (1)          Addendum to Purchase Agreement
10.10 (1)         Purchase Agreement (Stella Trust)
10.11 (2)         Agreement of Joint Project
10.12 (2)         Amendment to Agreement of Joint Project
10.13 (2)         Dynamic American Option
10.14 (2)         Land Sale Agreement
10.15 (2)         Assignment of Trust Deed and Trust Deed Note
10.16 (2)         Promissory Note (Johnson)
10.17 (3)         TKI Dealer Agreement
10.18 (4)         Modification Agreement
10.19 (4)         Land Sales Agreement (Mindon)
10.20 (4)         Sales Agreement (Property Alliance)
10.21 (5)         Assignment Agreement
10.22 (6)         Agreement with The Stella Trust and Mindon Investments
                  (Pickett Group)
10.23 (6)         Acquisition Agreement with Golf Ventures, Inc.
10.24 (6)         Settlement Agreement and General Release (TKI)
10.25 (7)         Stock Purchase Agreement (Fantastic)
10.26 (7)         Agreement (Vowell/Finally)
10.27             Termination Agreement (Vowell/The Company)
10.28             Stock Exchange Agreement (Pacific Print Works)
10.29             Stock Exchange Agreement (Quade, Inc.)
10.30             Employee Stock Option Plan
10.31             Funding Fee Agreement (Badger)
10.32             GVI Settlement Agreement
10.33             U.S. Polo Association Shareholders' Agreement
10.34             Secured Promissory Note with Jordache Enterprises, Inc.
10.35             U.S. Polo Association Ltd. Stock Redemption Agreement
10.36             Promissory Note with Miltex Industries
10.37             Promissory Note with George Badger
10.38             Alliance Financial accounts receivable factor Agreement
16.1 (2)          Letter Regarding Change in Certifying Public Accountant
21.               Subsidiaries
23.               Consent of Independent Auditor
27.               Financial Data Schedules
99.1 (2)          List of Third Party Loans to TechKNOWLOGY, Inc.
(28.1)*

                                       20
<PAGE>

99.2 (2)          Lease of LTI Office
(28.2)*
99.3 (2)          Financial  Statements for years ended March 31, 1989,  (28.3)*
                  1988 and 1987, and quarter ended June 30, 1989, as prepared by
                  Dale K. Barker Co., P.C.
99.4 (4)          Class "A" Preferred Stock
(28.4)*
99.5 (4)          Debenture
(28.5)*

         (1)               Incorporated  by  reference  to the Form 10
                  Registration  Statement  filed  with the  Commission
                  October 16, 1990, File No.0-18865.

         (2)               Incorporated  by reference to Amendment No.
                  1 to Form 10  Registration  Statement filed with the
                  Commission May 23, 1991, File No. 0-18865.

         (3)               Incorporated  by reference to Amendment No.
                  2 to  Form  10  Registration  Statement  filed  with
                  the Commission August 12, 1991, File No. 0-18865.

         (4)               Incorporated  by reference to Amendment No.
                  3 to Form 10  Registration  Statement filed with the
                  Commission November 13, 1991, File No. 0-18865.

         (5)               Incorporated  by reference to Amendment No.
                  4 to Form 10  Registration  Statement filed with the
                  Commission February 13, 1992, File No. 0-18865.

         (6)               Incorporated  by reference to Form 10-K for
                  the year ended March 31, 1993

         (7)               Incorporated  by  reference  to form 10-KSB
                  for the year  ended  March 31,  1997.  (*)  Exhibits
                  previously  filed as Exhibits  28.1 through 28.5 are
                  now depicted as 99.1 through 99.5.


(b) The  Registrant  filed a report on Form 8-K on March 17, 1997  outlining the
acquisition  by the Company of Fan-Tastic,  Inc. on March 17, 1997,  identifying
the Company's name change from Leasing  Technology,  Inc. to American  Resources
and Development Company and a one for twenty (1:20) reverse stock split effected
on the Company's common stock.

                                  21
<PAGE>

                              SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                     AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                     (Registrant)

                                     By:  /s/ Timothy M. Papenfuss
                                          --------------------------------
                                          Timothy M. Papenfuss

Dated: July 25, 2000

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the date indicated.

      Signature                         Title                         Date

/s/ B. Willes Papenfuss       President, Chief Executive         July 25, 2000
-----------------------       Officer and Director
    B. Willes Papenfuss       (Principal Executive
                              Officer)


/s/ Timothy M. Papenfuss     Secretary / Treasurer and          July 25, 2000
------------------------     Director (Chief Financial
 Timothy M. Papenfuss        Officer, Chief Accounting
                             Officer and Controller)


                                  22
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                        Consolidated Financial Statements
                             March 31, 2000 and 1999

                                      F-1
<PAGE>

                                 C O N T E N T S

Independent Auditors' Report .............................................. F-3

Consolidated Balance Sheet ................................................ F-4

Consolidated Statements of Operations ..................................... F-6

Consolidated Statements of Stockholders' Equity (Deficit).................. F-8

Consolidated Statements of Cash Flows ......................................F-9

Notes to the Consolidated Financial Statements ........................... F-11

                                      F-2
<PAGE>

                          INDEPENDENT AUDITORS' REPORT

Shareholders and Board of Directors
American Resources and Development Company and Subsidiaries
Salt Lake City, Utah

We  have  audited  the  accompanying  consolidated  balance  sheet  of  American
Resources and  Development  Company and  Subsidiaries  at March 31, 2000 and the
related consolidated  statements of operations,  stockholders' equity (deficit),
and cash flows for the years ended  March 31,  2000 and 1999 These  consolidated
financial  statements are the  responsibility of the Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
American  Resources and Development  Company and  Subsidiaries at March 31, 2000
and the  results of their  operations  and their cash flows for the years  ended
March  31,  2000 and  1999 in  conformity  with  generally  accepted  accounting
principles.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will  continue as a going  concern.  As discussed in Note 12 to
the consolidated financial statements, the Company has suffered recurring losses
from operations and its total liabilities exceed its total assets,  which raises
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 12. The consolidated
financial  statements do not include any adjustments  that might result from the
outcome of this uncertainty.

HJ & Associates, LLC
Salt Lake City, Utah
July 28, 2000

                                       F-3
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                           Consolidated Balance Sheet

                                     ASSETS

                                                                                                    March 31,
                                                                                                       2000
                                                                                               -----------------
CURRENT ASSETS
<S>                                                                                            <C>
   Cash and cash equivalents                                                                   $           8,914
   Accounts receivable, net (Note 1)                                                                     586,829
   Inventory (Note 1)                                                                                    232,310
   Prepaid and other current assets                                                                      102,359
   Marketable securities (Note 1)                                                                          2,485
                                                                                               -----------------
     Total Current Assets                                                                                932,897
                                                                                               -----------------
PROPERTY AND EQUIPMENT (NOTE 1)
   Furniture, fixtures and equipment                                                                     404,322
   Capital leases                                                                                      1,277,899
                                                                                               -----------------
     Total depreciable assets                                                                          1,682,221
     Less: accumulated depreciation                                                                     (597,131)
                                                                                               -----------------
     Net Property and Equipment                                                                        1,085,090
                                                                                               -----------------

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

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

                                       F-4
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                     Consolidated Balance Sheet (Continued)
                 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

                                                                                                    March 31,
                                                                                                       2000
                                                                                               -----------------
CURRENT LIABILITIES
<S>                                                                                            <C>
   Accounts payable                                                                            $         449,011
   Accrued expenses and other current liabilities                                                        822,780
   Line of credit (Note 3)                                                                               416,171
   Current portion of notes payable (Note 4)                                                             546,542
   Current portion of notes payable, related parties (Note 5)                                             69,797
   Current portion of capital lease obligations (Note 6)                                                 302,551
   Deferred revenue                                                                                       20,000
                                                                                               -----------------
   Total Current Liabilities                                                                           2,626,852
                                                                                               -----------------
LONG-TERM DEBT
   Reserve for discontinued operations (Note 2)                                                          734,988
   Notes payable (Note 4)                                                                                 62,981
   Notes payable, related parties (Note 5)                                                             1,224,049
   Capital lease obligations (Note 6)                                                                    389,275
                                                                                               -----------------
     Total Long-Term Debt                                                                              2,411,293
                                                                                               -----------------
     Total Liabilities                                                                                 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
   Common stock, par value $0.001 per share: 125,000,000
    shares authorized; issued and outstanding: 4,475,953
    shares issued and  3,875,953 outstanding (Note 9)                                                      3,876
   Additional paid-in capital                                                                          7,640,045
   Accumulated deficit                                                                               (10,601,591)
                                                                                               -----------------
      Total Stockholders' Equity (Deficit)                                                            (2,957,425)
                                                                                               -----------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                     $       2,080,720
                                                                                               =================
</TABLE>
        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       F-5
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                      Consolidated Statements of Operations

                                                                                    For the Years Ended
                                                                                         March 31,
                                                                          --------------------------------------
                                                                                 2000                 1999
                                                                          ------------------   -----------------
SALES
<S>                                                                       <C>                  <C>
  Sales                                                                   $        4,828,053   $       3,996,739
  Cost of sales                                                                    3,640,588           3,129,642
                                                                          ------------------   -----------------
     Gross Profit                                                                  1,187,465             867,097
                                                                          ------------------   -----------------
EXPENSES
  General and marketing expenses                                                   1,442,181           1,772,155
  Depreciation and amortization                                                       18,929             169,420
                                                                          ------------------   -----------------
     Total Expenses                                                                1,461,110           1,941,575
                                                                          ------------------   -----------------
LOSS FROM OPERATIONS                                                                (273,645)         (1,074,478)
                                                                          ------------------   -----------------
OTHER INCOME AND (EXPENSES)
  Loss on write-off of GCA                                                        (1,434,239)             -
  Writedown of goodwill                                                               -               (1,568,215)
  Other income (expenses)                                                              3,541             (50,139)
  Gain on sale of assets                                                              -                   45,639
  Interest expense                                                                  (584,355)           (561,335)
                                                                          ------------------   -----------------
       Total Other Income and (Expenses)                                          (2,015,053)         (2,134,050)
                                                                          ------------------   -----------------
LOSS BEFORE INCOME TAXES AND
  DISCONTINUED OPERATIONS                                                         (2,288,698)         (3,208,528)
                                                                          ------------------   -----------------
DISCONTINUED OPERATIONS
  Loss from operations of Quade and USPA (Note 2)                                     -                 (252,972)
  Gain on disposal of USPA (Note 2)                                                  867,587              -
                                                                          ------------------   -----------------
        Total Discontinued Operations                                                867,587            (252,972)
                                                                          ------------------   -----------------
INCOME TAXES                                                                          -                   -
                                                                          ------------------   -----------------
NET LOSS                                                                          (1,421,111)         (3,461,500)
                                                                          ------------------   -----------------
OTHER COMPREHENSIVE LOSS
   Loss on valuation of marketable securities                                         -                 (435,188)
                                                                          ------------------   -----------------
     Total Other Comprehensive Loss                                                   -                 (435,188)
                                                                          ------------------   -----------------
NET COMPREHENSIVE LOSS                                                    $       (1,421,111)  $      (3,896,688)
                                                                          ==================   =================
        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       F-6
<PAGE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                Consolidated Statements of Operations (Continued)

                                                                                    For the Years Ended
                                                                                         March 31,
                                                                          --------------------------------------
                                                                                 2000                 1999
                                                                          ------------------   -----------------
BASIC LOSS PER SHARE OF COMMON STOCK -
<S>                                                                       <C>                  <C>
  CONTINUING OPERATIONS                                                   $            (0.64)  $           (1.03)
                                                                          ==================   =================
BASIC INCOME (LOSS) PER SHARE OF COMMON STOCK -
  DISCONTINUED OPERATIONS                                                 $             0.24   $           (0.08)
                                                                          ==================   =================
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                                      3,549,495           3,124,224
                                                                          ==================   =================
</TABLE>
        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                       F-7
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Consolidated Statements of Stockholders' Equity
                             March 31, 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.

                                       F-8
<PAGE>
<TABLE>
<CAPTION>
                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                      Consolidated Statements of Cash Flows

                                                                                    For the Years Ended
                                                                                          March 31,
                                                                          --------------------------------------
                                                                                  2000                1999
                                                                          ------------------   -----------------
OPERATING ACTIVITIES
<S>                                                                       <C>                  <C>
   Net loss                                                               $       (1,421,111)  $      (3,461,500)
   Adjustments to reconcile net loss to net cash
   (used) by operating activities, net of effect of
    mergers:
     Gain on sale of USPA, Ltd.                                                     (867,587)             -
     Depreciation and amortization                                                   294,188             449,553
     Write-down of goodwill                                                           -                1,568,215
     Stock option and stock for services                                             107,927              19,683
     Loss on write-off of GCA marketable securities                                1,434,239              -
     Gain on sale of marketable securities                                            -                   45,639
   Changes in operating assets and liabilities:
     (Increase) in accounts receivable                                               (70,169)           (294,785)
     Decrease in inventory                                                            61,458             143,235
     (Increase) decrease in other assets                                             (86,959)             97,103
     Increase (decrease) in accounts payable and other
      current liabilities                                                            497,577            (106,046)
     Increase in deferred revenue                                                     10,000              10,000
     Increase in reserve for discontinued operations                                  74,865              67,794
                                                                          ------------------   -----------------
       Net Cash (Used) by Operating Activities                                        34,428          (1,461,109)
                                                                          ------------------   -----------------

INVESTING ACTIVITIES
   Proceeds from sale of USPA, Ltd.                                                  221,470              -
   Proceeds from sale of marketable securities                                        33,059             255,798
   Purchases of property and equipment                                               (62,876)           (309,006)
                                                                          ------------------   -----------------
     Net Cash (Used) by Investing Activities                                         191,653             (53,208)
                                                                          ------------------   -----------------
FINANCING ACTIVITIES
   Net proceeds on line of credit                                                     48,326             367,845
   Payments on long-term debt and capital lease obligations                         (347,260)           (680,294)
   Note payable borrowings                                                            39,800           1,794,070
   Issuance of common stock for cash                                                  -                   60,000
                                                                          ------------------   -----------------
     Net Cash Provided by Financing Activities                                      (259,134)          1,541,621
                                                                          ------------------   -----------------

INCREASE (DECREASE) IN CASH                                                          (33,053)             27,304
CASH, BEGINNING OF YEAR                                                               41,967              14,663
                                                                          ------------------   -----------------
CASH, END OF YEAR                                                         $            8,914   $          41,967
                                                                          ==================   =================

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

                                       F-9
<PAGE>

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

                                                                                    For the Years Ended
                                                                                          March 31,
                                                                          --------------------------------------
                                                                                  2000                1999
                                                                          ------------------   -----------------
CASH PAID FOR
<S>                                                                      <C>                   <C>
  Interest                                                               $         344,901     $         233,133
  Income taxes                                                           $          -          $          -

NON CASH FINANCING ACTIVITIES
  Common stock issued for services and options                           $         107,927     $          19,683
</TABLE>

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

                                      F-10
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES

               a. 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).

               b. 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.

               c. 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.

               d. 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.

               e. 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.

               f. 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.

               g. Accounts Receivable

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

                                      F-11
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999

NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES (Continued)

               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.

               At March 31,  2000,  the  Company  held  1,045,000  shares of GCA
               stock.  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.

               i. Income Taxes

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

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

               j. Basic Loss Per Common Share

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

               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 $(0.64) and
               $(1.03)   for  the  years   ended   March  31,   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 $0.24 and $(0.08),
               respectively.  Weighted  average common shares  outstanding  were
               3,549,495  and  3,124,224  for the years ended March 31, 2000 and
               1999, respectively.

                                      F-12
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES (Continued)

               k. Revenue Recognition for Franchise Operations

               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.

               l. 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.

               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.

               n. Advertising

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

                                      F-13
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


NOTE 1 -       SIGNIFICANT ACCOUNTING POLICIES (Continued)

               o. Prior Period Reclassification

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

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  licenses 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.

                                      F-14
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


NOTE 2 -       MERGERS AND ACQUISITIONS (Continued)

               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.

               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 March 31, 2000, the Company
               had a  payable  of  $416,171  for net  funds  advanced  from this
               accounts   receivable  line  of  credit.   The  Company  received
               $3,892,926  and $1,163,873  from the sale of receivables  for the
               year ended  March 31,  2000 and 1999 and  recognized  $95,606 and
               $24,560 in interest  expense from the  discount of selling  these
               receivables, respectively.

                                      F-15
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999

NOTE 4 -       NOTES PAYABLE

               Notes payable are comprised of the following:
<TABLE>
<CAPTION>
                                                                                                    March 31,
                                                                                                       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

              Notes payable to shareholders of PPW.  Interest rates
               average 10%, primarily due on demand, unsecured.                                          341,008

              Notes payable with three vendors with interest rates averaging
               12%; partially secured by equipment, due in 2000.                                          54,912
                                                                                               -----------------
              Subtotal                                                                                   609,523

              Less current portion                                                                      (546,542)
                                                                                               -----------------
              Long-term portion                                                                $          62,981
                                                                                               =================

              Maturities of long-term debt are as follows:

                                            March 31, 2001                                     $         546,542
                                            March 31, 2002                                                62,981
                                                                                               -----------------
                                                                                               $         609,523
</TABLE>

NOTE 5 -      NOTES PAYABLE, RELATED PARTIES
<TABLE>
<CAPTION>
                                                                                                   March 31,
                                                                                                     2000
                                                                                               -----------------
              <S>                                                                             <C>
              Note 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.                      $         723,494

              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.                         45,204

              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.                                         209,289
                                                                                               -----------------
                                            Subtotal                                                   1,293,846

                                            Less current portion                                         (69,797)
                                                                                               -----------------
                                            Long-term portion                                  $       1,224,049
                                                                                               =================
</TABLE>
                                      F-16
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


NOTE 5 -       NOTES PAYABLE, RELATED PARTIES (Continued)

               Maturities of notes payable, related parties are as follows:

                      March 31, 2001               $          69,797
                      March 31, 2002                       1,039,353
                      March 31, 2003                         114,899
                                                   -----------------
                                                   $       1,224,049

NOTE 6 -       CAPITAL LEASES

               Property and equipment  payments under capital leases as of March
               31, 2000 is summarized as follows:
<TABLE>
<CAPTION>
               Year End
               March 31,

               <S>                                                <C>
               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
                                                                  ============
</TABLE>

               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.

                                      F-17
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


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.

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  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.

                                      F-18
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999

NOTE 10 -      STOCK OPTIONS (Continued)

               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.

               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.

                                      F-19
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


NOTE 10 -      STOCK OPTIONS (Continued)

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

                                                                    March 31,
                                                                     2000

                    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 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.  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.

                                      F-20
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


NOTE 13 -      BUSINESS SEGMENTS (Continued)

               Certain financial information concerning the Company's operations
               in different industries is as follows:
<TABLE>
<CAPTION>
                                                 For the
                                                 Years Ended          Pacific                            Corporate
                                                 March 31,            Print Works      Fan-Tastic        Unallocated
                                                 ---------            -----------      ----------        -----------
<S>                                               <C>              <C>               <C>                 <C>
              Net sales                           2000             $      4,415,801  $       412,252
                                                  1999                    3,223,417          773,322

              Operating income (loss)
               applicable to industry
               segment                            2000                      181,348         (202,951)
                                                  1999                     (307,406)        (355,182)

              General corporate expenses
               not allocated to industry
               segments                           2000                                                 $       252,041
                                                  1999                                                         411,890

              Writedown of goodwill               2000
                                                  1999                                                      (1,568,215)

              Interest expense                    2000                     (339,253)         (38,746)         (206,356)
                                                  1999                     (269,949)         (60,442)         (229,944)

              Other income (expenses)
               including interest and gain
               and loss on write-down of
               marketable securities              2000                        7,469           (4,174)       (1,433,994)
                                                  1999                      (34,493)          29,167             5,144

              Income (loss) from
               discontinued operations            2000                                                         867,587
                                                  1999                                                        (252,972)

              Assets                              2000                    1,893,576           84,391           102,753

              Depreciation and
               amortization                       2000                      279,260           12,013             2,915
                                                  1999                      261,925           34,180           153,448

              Property and equipment
               acquisitions                       2000                      272,468            6,007
                                                  1999                      301,400            7,606
</TABLE>

                                      F-21
<PAGE>

                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                 Notes to the Consolidated Financial Statements
                             March 31, 2000 and 1999


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.  Under terms of the deal, the newly merged
               entity will be renamed Royal Pacific Apparel Group, Inc. and will
               continue all present business  activities as well as constructing
               new  garment  dying and  printing  facilities  at Royal  Avalon's
               manufacturing plants in Mexico.

               Royal  Avalon has been  manufacturing  T-shirts in Mexico for the
               past five years.  During calendar 1999 Royal Avalon achieved over
               $12 million in revenue.

               The present  agreement 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.  The  deal is
               contingent  on  satisfactory   due  diligence   findings,   board
               approvals  and  execution of a definitive  agreement.  Management
               from the companies  believe the merger will be consummated by the
               end of  August  2000.  Additionally,  the  Company  is  presently
               soliciting    additional    funding   in   order   to   establish
               screenprinting  and garment dying at Royal  Avalon's  facility as
               well as increasing T- shirt manufacturing capacity.

                                      F-22