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, 1999, 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 Gresham, Oregon 97230
- -----------------------------------------------------------------------------
    (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 $3,996,739

         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 7, 1999 was $370,245.

         The number of shares  outstanding of the issuer's common equity,  as of
July 7, 1999 was 3,174,286.

                       Documents Incorporated by Reference

                                      None

         Transitional Small Business Disclosure Format:
Yes              No      X
     -------         ---------

<PAGE>

                                TABLE OF CONTENTS


                                     PART I


ITEM 1.  DESCRIPTION OF BUSINESS                                              3

ITEM 2.  DESCRIPTION OF PROPERTY                                              9

ITEM 3.  LEGAL PROCEEDINGS                                                   10

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 10


                                     PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS            11


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN
         OF OPERATION                                                        13

ITEM 7.  FINANCIAL STATEMENTS                                                16


ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
         AND FINANCIAL DISCLOSURE                                            16

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE  OFFICERS, PROMOTERS AND CONTROL PERSONS;
         COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT                   16

ITEM 10. EXECUTIVE COMPENSATION                                              19

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT      20

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                      22

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K                                    22

                                       2
<PAGE>

         The information contained in this Form 10-KSB for the fiscal year ended
March 31,  1999,  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, Gresham,  Oregon 97230 and its
telephone  number is (503)  492-1500.  As of July 7, 1999,  the  Company had one
hundred five (105) full time employees and twelve part time employees.  On March
27,  1997,  the  Company  effected a 1 for 20 reverse  stock split of its common
stock.

FAN-TASTIC, INC.

         In March,  1997, the Company acquired 80% of the outstanding  shares of
Fan-Tastic,  Inc., a Utah Corporation  ("Fan-Tastic") and acquired the remaining
20% in June 1998, effective March 31, 1998. 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 7, 1999,  Fan-Tastic owned 2 of its own stores Oregon
and had 13 franchisees in the states of Arkansas, Louisiana, New York, 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:
Disney,  Warner Brothers,  Nickelodeon,,  World Wrestling  Federation,  National
Football League, National Basketball Association, Major League Baseball, 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 is also 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:

                                       3
<PAGE>

        -         Site evaluation, selection and lease negotiation.
        -         Store design, merchandise and display plans.
        -         Reduction in inventory costs resulting from chain-wide  volume
                  pricing and simplified buying.  through a consolidated  buying
                  program.
        -         Inventory  control  through  a  consolidated   point  of  sale
                  software  and  chain  wide   identification   of  hot  selling
                  products.
        -         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.

         International Franchising

         Fan-Tastic's  marketing efforts have resulted in international interest
in the concept, with a first store opening in Bridgetown, Barbados, in December,
1996, and the signing of a master  franchise  agreement with a Japanese  company
that opened its first store in December 1997.

         Seasonality

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

         Suppliers

         Fan-Tastic  purchases product from a number of national licensed sports
and entertainment  manufacturers  including  Starter,  Inc., 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.

                                       4
<PAGE>

         Employees

         As of July 7,  1999,  Fantastic  had seven  full-time  employees  and 9
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  with a guaranteed share
value of  $5.00.  Depending  on PPW's  performance  over the next  three  years,
additional  shares  of the  Company's  common  stock  will be  issued  for  this
acquisition  if minimum  earnings  levels  are met (See Note 2 to the  financial
statements.)  Based on the $5.00  guarantee and the  Company's  share value from
October  1998  through  March  1999,  the  Company  may be  obligated  to  issue
approximately  1.7  million  shares  of  common  stock to the PPW  shareholders.
However,  an amendment to the PPW Stock Purchase Agreement is being evaluated by
the  Company and PPW  shareholders  in which the  Company  would  issue  another
213,472  shares  of the  Company's  common  stock  to PPW  shareholders  and the
guaranteed  share value of $5.00 would be deferred  until the year 2000.  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; and (vi) the
increased  use of  "attitude"  apparel.  PPW believes  that these trends  should
continue to drive industry growth.

         Business Strategy

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 new product focus during the
past 18 months has been on  high-density  printing.  High-density  printing is a

                                       5
<PAGE>

screenprinting  term for a process  that  leaves a 3-D,  sharp-edged  print with
excellent detail.  PPW hired an industry expert in March 1998,  Michael Beckman,
PPW Vice President of Operations,  who oversees PPW's high-density printing. Mr.
Beckman has been  honored by industry  experts with  significant  awards for his
creative  designs  and  inks.  PPW has also been  able to grow its  business  by
specializing in reflective inks, and environmentally safe water based printing.

         Private Label Products.

PPW  manufactures  private  label  products  for  certain of its  larger  retail
customers.  PPW designs each  private  label  product by working  closely with a
customer,  creating a unique  decorated  sportswear line that is sold under that
customer's label.

         Other.

Other products include printing on athletic uniforms for Nike's Organized 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
six external and two  internal  sales 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,  Speedo, K-Swiss and
Jantzen. In fiscal 1999, PPW's sales to major customers that exceeded 10% of its
total sales were as follows: Customer A 24%, Customer B 20.4%.

         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.  The majority of blank apparel screen printed and
embroidered is provided by its customers.

         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.

                                       6
<PAGE>

PPW operates  seven  automatic  screen  printing  presses and five manual screen
printing presses.  Most of 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.  PPW believes that its capacity is
sufficient for its needs and that during  seasonal peaks  sufficient  sources of
outside  production  are  available  to PPW to meet  its  production  needs,  as
necessary.

         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.

                                       7
<PAGE>

         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 7, 1999, PPW employed approximately 98 full-time employees. PPW believes
that its employee relations are good.

QUADE, INC.

     On March,  17, 1998,  the Company  signed a Letter of Intent to acquire one
hundred  percent (100%) of the outstanding  common stock of Quade,  Inc. On July
23, 1998 the Company  completed its purchase of Quade,  Inc. by issuing  213,333
shares of its common stock and by loaning Quade  $115,000.  These shares include
32,000  shares  that have a  guarantee  of $5.00 per share  based on the average
asking  price of the  Company's  common stock for the six months ended March 31,
1999.  Depending on Quade's  performance  over the next three years,  additional
shares of the  Company's  common  stock will be issued for this  acquisition  if
minimum earnings levels are met as follows:

Fiscal   Earnings Before Income Taxes               Common Shares Issuable
 Year          Low             High                  Minimum       Maximum

1999          $27,671         $81,500                  47,408      142,222
2000         $251,166        $754,000                  47,376      142,222
2001         $499,900      $1,499,200                  47,423      142,222

The  additional  shares that are issued to Quade,  Inc.  also have a  guaranteed
value of $5.00.

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.  For the last  year  Quade,  Inc.,  has been  developing  this  property
including signing  agreements with four  sub-licensees,  and serving as licensee
for knit tops including t-shirts, fleece and polo shirts.

Effective  October 8, 1998,  the Company and Jordache  Enterprises,  through its
affiliate,  Iron Will, Inc. ("Iron Will") formed a joint venture  company,  U.S.
Polo  Association,  Ltd. (US Polo), to hold the master license granted by the US
Polo Association and to perform all licensing activities relating to the US Polo
Association  licenses  and  trademarks  for the United  States and  Canada.  The
Company  and Iron Will each own 50% of US Polo and  management  and the Board of
Directors  for US Polo is shared  equally by the Company and Iron Will.  For its
ownership in US Polo, the Company  contributed,  through Quade, Inc., all assets
and  liabilities  relating to the business of the licensing of US Polo including
the master license and sublicense agreements in the US Polo name and trademarks.
Iron Will contributed $900,000.

                                       8
<PAGE>

In March 1999, the Company's  Board of Directors made a decision to sell its 50%
ownership in U.S. Polo to Iron Will. In June 1999,  the Company  closed its sale
of U.S.  Polo  ownership to Iron Will.  For its sale of U.S.  Polo,  the Company
received the cancellation of $1,000,000 in debt from Jordache  Enterprises,  the
cancellation  of $13,185 in interest  and cash of  $221,470.  In  addition,  the
Company  could receive up to another  $103,942 upon the  collection of U.S. Polo
royalties earned through May 31, 1999. See Note 2 of the financial statements.

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 7, 1999, the Company owned 1,160,000
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  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.

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

Item 2.  Description of Property.

     The Company's and  Fan-Tastic's  executive  offices and warehouse space are
located  at 3855  South 500 West,  Suite R, Salt Lake  City,  Utah  84115 and is
approximately 4,000 square feet of combined space. Fan-Tastic leases retail mall
space for its four stores that average  approximately  2,000  square  feet.  PPW
rents a 45,000  square  foot  office and  screenprinting/embroidery  facility in
Portland,  Oregon.  Lease  commitments  from fiscal 2000 through fiscal 2003 are
$269,526, $270,198, $224,391 and $34,698, respectively.

                                       9
<PAGE>

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 is seeking a judgment
of $5,000,000  compensatory damages,  $10,000,000 punitive damages and rescision
of the  Agreement.  Jenna Lane's  complaint  alleges the Company owes it damages
resulting from, among other things, breach of contract and tortious interference
with  contractual  relationships.  The Company has moved to stay the  litigation
pending a  determination  of claims  commenced by the Company against Jenna Lane
before the American Arbitration Association. As of July 7, 1999, the parties had
not engaged in any discovery,  nor had they exchanged any documents  relating to
their respective  claims.  At this time it is to early to determine the ultimate
outcome  of this legal  matter,  however,  in the  opinion  of  management,  the
ultimate  outcome of this matter will not have a material  adverse effect on the
Company's financial position, results of operations, or liquidity.

         On  December  18,  1997,  the   Securities   and  Exchange   Commission
(hereinafter  the  "Commission")  filed a civil  enforcement  action  complaint,
2:97CV  0963K in the United  States  District  Court for the  district  of Utah,
Central Division,  against George Badger,  former president of the Company, Karl
Badger, former president of the Company, and others,  alleging violations of the
generalanti-fraud  provisions  of the federal  securities  laws.  The  complaint
alleges  that  George  Badger  directed  a scheme to  manipulate  the market for
securities  issued  by  GVI  through  payments  to  various  broker-dealers  and
registered representatives.  The complaint alleges that Mr. Karl Badger arranged
for some of these payments.  The complaint seeks a permanent  injunction against
future violations of the federal  securities laws, a court order prohibiting the
defendants  from  future   participation   in  offerings  of  penny  stocks  and
disgorgement  of alleged  profits.  Mr.  Karl  Badger has filed an answer to the
complaint  denying  the  material  allegations  thereof,  and filed  Motions  to
Dismiss,  and intends to vigorously  defend the action.  On July 14, 1998,  Karl
Badger  resigned as  President  of the  Company and  accepted a position as Vice
President.

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

         None.

                                       10
<PAGE>

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

1996
----
1st Quarter                         3.80              1.20
2nd Quarter                         3.80              1.20
3rd Quarter                         3.00              1.20
4th Quarter                         2.50              0.60

1997
----
1st Quarter                         6.50              2.50
2nd Quarter                         5.50              2.75
3rd Quarter                         5.25              2.00
4th Quarter                         1.75               .875

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
                                    ========================


         As of July 7, 1999,  the  Company  had  3,174,286  shares of its common
stock issued and outstanding, and there were approximately 1,300 shareholders of
record.

                                       11
<PAGE>

         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 over 80% 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.

                                       12
<PAGE>

         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).

         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 in 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).

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, 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
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.

                                       13
<PAGE>

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.

                                       14
<PAGE>

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  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, 1999, the Company had total assets of $3,295,534, total liabilities
of $5,610,717 and total stockholders deficit of $2,315,183,  compared with total
assets of $5,436,635,  total liabilities of $5,606,776,  and total  stockholders
equity of  $2,302,241  at March 31,  1998.  The  significant  changes in assets,
liabilities and stockholders  equity is due primarily to the Company's write-off
of goodwill from the PPW acquisition,  the reduction in stockholders  equity due
to losses from  operations and the decline in value of the Company's  investment
in GVI.. At March 31, 1998 the Company's  current ratio was  approximately  .502
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,
seeking the conversion of debt and preferred stock to common stock,  and sale of
the Company's investment in GVI.

Year 2000 Issues:

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

                                       15
<PAGE>

timely basis. However, the readiness of the Company's suppliers relating to year
2000 may vary. It is possible that any significant  supplier failures could have
a material adverse impact on the Company's operations and financial results.

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.

         None.

                                    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.

                                       16
<PAGE>


NAME                       AGE     POSITION HELD
--------------------------------------------------------------------------------
B. Willes Papenfuss         40     President, Chief Executive Officer and
                                   Director
Jeffrey S. Harden           54     Vice President and Director, President of
                                   Pacific Print Works
Karl F. Badger              44     Vice-President
Barry L. Papenfuss          38     Vice President, President of Fan-Tastic, Inc.
Timothy Papenfuss           39     Secretary/Treasurer, Chief Financial Officer
                                   and Director
Robert Mintz                53     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.

         KARL F. BADGER,  Vice  President  has been with the Company since 1992.
Prior to 1992,  Mr. Badger was a licensed  broker/principle  for Rocky  Mountain
Securities  and  Investments.  On December 18, 1997, the Securities and Exchange
Commission  filed  a  civil   enforcement   action  complaint   against  certain
individuals   including   Mr.  Karl  Badger  (See   Significant   Employees  and
Consultants.)

         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.

                                       17
<PAGE>

         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 and founder of Quade, Inc. since
1996. 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.

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.

         On  December  18,  1997,  the   Securities   and  Exchange   Commission
(hereinafter  the  "Commission")  filed a civil  enforcement  action  complaint,
2:97CV  0963K in the United  States  District  Court for the  district  of Utah,
Central Division,  against George Badger,  former president of the Company, Karl
Badger, former president of the Company, and others,  alleging violations of the
general  anti-fraud  provisions of the federal  securities  laws.  The complaint
alleges  that  George  Badger  directed  a scheme to  manipulate  the market for
securities  issued  by  GVI  through  payments  to  various  broker-dealers  and
registered representatives.  The complaint alleges that Mr. Karl Badger arranged
for some of these payments.  The complaint seeks a permanent  injunction against
future violations of the federal  securities laws, a court order prohibiting the
defendants  from  future   participation   in  offerings  of  penny  stocks  and
disgorgement  of alleged  profits.  Mr.  Karl  Badger has filed an answer to the
complaint denying the material allegations thereof, has filed Motions to Dismiss
the complaint, and intends to vigorously defend the action.

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

                                       18
<PAGE>

         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, 1999, and written  representations of certain of its
directors and executive  officers that no Forms 5 were required to be filed, all
directors  and  executive  officers  have filed with the  Commission on a timely
basis all reports required to be filed under Section 16(a) of the Exchange Act.

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,
1999, 1998 and 1997 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").


                                             SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>

===================================================================================================================================
                                         Annual Compensation                               Long-Term Compensation
                                --------------------------------------------  ----------------------------------------
                                                                                         Awards              Payouts
                                                                              --------------------------- ------------
                                                                                             Securities
                                                               Other          Restricted     Underlying
Name and Principal                                             Annual           Stock         Options/       LTIP       All Other
Position               Year        Salary        Bonus       Compensation       Award(s)        SARs        Payouts     Compensation
                                     ($)          ($)            ($)              ($)           (#)           ($)          ($)
==================== ========== ============== ========== =================== ============= ============= ============ ============
<S>                  <C>           <C>          <C>            <C>              <C>           <C>           <C>          <C>
B. Willes Papenfuss, 1999          $38,000        -0-            -0-              -0-           -0-           -0-          -0-
Chief Executive      1998          $48,000        -0-            -0-              -0-           -0-           -0-          -0-
Officer(1)           1997          $48,000        -0-            -0-              -0-           -0-           -0-          -0-
==================== ========== ============== ========== =================== ============= ============= ============ ============
</TABLE>

                                       19
<PAGE>

Employment Agreements.

         None of the Company's  officers or directors has any written employment
agreement with the Company.  Messrs. Barry and Timothy Papenfuss have employment
agreements with Fan-Tastic.

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

Option/SAR Grants in Last Fiscal Year:

There were no option or SAR grants for the year ended March 31, 1999.

Aggregated Option Exercises and Fiscal Year-End Option Values:

There were no options exercised for the year ended March 31, 1999. There were no
options at March 31, 1999 in which the exercise  price was lower than the bid or
ask price of the Company's stock at March 31, 1999.

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 7, 1999,  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.


NAME AND ADDRESS OF                            NUMBER OF             PERCENT
BENEFICIAL OWNER                              SHARES OWNED           OF CLASS
----------------                              ------------           --------
Banque SCS Alliance SA                          591,472(1)             18.63%
11 Route De Florissant Case Portal 3733
12111 Geneva 3, Switzerland

George H. Badger                                610,987(2)             19.25%
550 Northmont Way
Salt Lake City, UT  84103-3323

Don Pickett, agent for                          151,024                 4.76%
Mindon Investment and The Stella Trust
1150 Augusta Way
Salt Lake City, UT  84108

                                       20
<PAGE>

Karl F. Badger                                   71,320(3)              1.6%
1041 E. Dugger Lane
Bountiful, UT  84010

Barry L. Papenfuss                              158,048(4)              4.65%
3855 South 500 West #R
Salt Lake City, UT 84115

Timothy M. Papenfuss                             89,144(5)              2.49%
3855 South 500 West #R
Salt Lake City, UT 84115

B. Willes Papenfuss                              78,108(6)              1.66%
12313 SE Wagner Street
Portland, OR   97236

Jeffrey S. Harden                               151,809                 4.78%
17942 St. Clair Dr.
Lake Oswego, OR  97034

Robert Mintz                                    213,333                 6.72%

All Officers and Directors as
a Group (6 persons)                             553,429                16.84
-------------------------

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 174,450 shares held by his wife
LaJuana Badger in an IRA account.  These shares also include 300,000 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.

4 Mr. Barry  Papenfuss is the owner of vested options to purchase  10,000 of the
Company's  common  stock at  $2.00 a share.  Messrs.  Barry  Papenfuss,  Timothy
Papenfuss and B. Willes Papenfuss are brothers.

5 Mr. Timothy Papenfuss is the owner of vested options to purchase 10,000 shares
of the Company's common stock at $2.00 a share.

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
additionally can receive stock options as a finder's fee for company.

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.

                                       21
<PAGE>

Item 12. Certain Relationships and Related Transactions.

         George Badger, a shareholder and former Company  President,  and father
to former Company President Karl Badger, had loaned the Company $563,210.00 from
February 1997 to March 1998.  The terms of these loans are as follows:  Loan for
$358,000  which was  refinanced  by Banque  SCS in July  1998  with  payment  of
interest and principal of $6,000 a month with the  remaining  principal due June
2001,  secured by Company and GVI stock;  Loan for  $130,491  secured by Company
assets with interest  payable monthly at 18% with no stated  principal  payments
required;  The loan funds were used by the Company for working capital.  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 Jones, Jensen & Company, Independent Public
                           Accountants.

                  (2)      Consolidated Balance Sheet as of March 31, 1999.

                  (3)      Consolidated  Statements  of Operation  for the years
                           ended March 31, 1999 and 1998.

                  (4)      Statement  of  Stockholders'  Equity  for the  period
                           March 31, 1997 through March 31, 1999.

                  (5)      Consolidated Statements of Cash Flows for years ended
                           March 31, 1999 and 1998.

                  (6)      Notes to Financial Statements.


         (d)      Exhibits


                                       22
<PAGE>

                  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

                                       23
<PAGE>

Exhibit No.       Exhibit Name
-----------       ------------
21.               Subsidiaries
23.               Consent of Independent Auditor
99.1 (2)          List of Third Party Loans to TechKNOWLOGY, Inc.
(28.1)*
99.2 (2)          Lease of LTI Office
(28.2)*
99.3 (2)          Financial Statements for years ended March 31, 1989, 1988 and
                  1987, and
(28.3)*           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.

                                  24
<PAGE>


                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY

                        Consolidated Financial Statements

                             March 31, 1999 and 1998


                                      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-10

Notes to the Consolidated Financial Statements ......................  F-12


                                      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, 1999 and the
related consolidated  statements of operations,  stockholders' equity (deficit),
and cash flows for the years ended March 31, 1999 and 1998.  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, 1999
and the  results of their  operations  and their cash flows for the years  ended
March  31,  1999 and  1998 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.




Jones, Jensen & Company
Salt Lake City, Utah
June 25, 1999

                                      F-3
<PAGE>
<TABLE>
<CAPTION>



                                    AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                            Consolidated Balance Sheet


                                                      ASSETS

                                                                                                    March 31,
                                                                                                     1999
                                                                                               -----------------
CURRENT ASSETS
<S>                                                                                            <C>
   Cash and cash equivalents                                                                   $          41,967
   Accounts receivable, net (Note 1)                                                                     516,660
   Inventory (Note 1)                                                                                    293,768
   Prepaid and other current assets                                                                       15,400
   Marketable securities (Note 1)                                                                        157,500
                                                                                               -----------------
     Total Current Assets                                                                              1,025,295
                                                                                               -----------------

PROPERTY AND EQUIPMENT (NOTE 1)

   Furniture, fixtures and equipment                                                                     395,253
   Capital leases                                                                                      1,090,032
                                                                                               -----------------
     Total depreciable assets                                                                          1,485,285
     Less: accumulated depreciation                                                                     (355,492)
                                                                                               -----------------
     Net Property and Equipment                                                                        1,129,793
                                                                                               -----------------
OTHER ASSETS

   Marketable securities (Note 1)                                                                        857,938
   Net assets of discontinued operations (Note 14)                                                       282,508
                                                                                               -----------------
   Total Other Assets                                                                                  1,140,446
                                                                                               -----------------
   TOTAL ASSETS                                                                                $       3,295,534
                                                                                               =================
</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,
                                                                                                     1999
                                                                                               -----------------
CURRENT LIABILITIES
<S>                                                                                            <C>
   Accounts payable                                                                            $         366,028
   Accrued expenses and other current liabilities                                                        397,800
   Line of credit (Note 3)                                                                               367,845
   Current portion of notes payable (Note 4)                                                             587,323
   Current portion of notes payable, related parties (Note 5)                                             47,104
   Current portion of capital lease obligations (Note 6)                                                 282,497
                                                                                               -----------------
   Total Current Liabilities                                                                           2,048,597
                                                                                               -----------------
LONG-TERM DEBT

   Deferred revenue                                                                                       10,000
   Reserve for discontinued operations (Note 2)                                                          660,123
   Notes payable (Note 4)                                                                              1,001,819
   Notes payable, related parties (Note 5)                                                             1,395,148
   Capital lease obligations (Note 6)                                                                    495,030
                                                                                               -----------------
     Total Long-Term Debt                                                                              3,562,120
                                                                                               -----------------
     Total Liabilities                                                                                 5,610,717
                                                                                               -----------------
COMMITMENTS AND CONTINGENCIES (Note 11)

STOCKHOLDERS' EQUITY (DEFICIT)

   Preferred stock, par value $0.001 per share: 10,000,000
    shares authorized; issued and outstanding: 94,953
    Series B shares, 150,000 Series C shares                                                                 245
   Common stock, par value $0.001 per share: 125,000,000
    shares authorized; issued and outstanding: 3,935,106
    shares issued and  3,174,286 outstanding.  (Note 9)                                                    3,174
   Other comprehensive losses                                                                           (435,188)
   Additional paid-in capital                                                                          7,297,066
   Accumulated deficit                                                                                (9,180,480)
                                                                                               -----------------
      Total Stockholders' Equity (Deficit)                                                            (2,315,183)
                                                                                               -----------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                     $       3,295,534
                                                                                               =================
</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,
                                                                               1999                 1998
                                                                          ------------------   -----------------
SALES
<S>                                                                       <C>                  <C>
  Sales                                                                   $        3,996,739   $       1,093,110
  Cost of sales                                                                    3,129,642             774,405
                                                                          ------------------   -----------------
     Gross Profit                                                                    867,097             318,705
                                                                          ------------------   -----------------
EXPENSES

  General and marketing expenses                                                   1,772,155           1,540,460
  Depreciation and amortization                                                      169,420              31,814
                                                                          ------------------   -----------------
     Total Expenses                                                                1,941,575           1,572,274
                                                                          ------------------   -----------------
LOSS FROM OPERATIONS                                                              (1,074,478)         (1,253,569)
                                                                          ------------------   -----------------
OTHER INCOME AND (EXPENSES)

  Writedown of goodwill                                                           (1,568,215)           (756,797)
  Other income (expenses)                                                            (50,457)             15,387
  Interest income                                                                        318                   5
  Gain on sale of assets                                                              45,639             139,906
  Interest expense                                                                  (561,335)           (133,339)
                                                                          ------------------   -----------------
       Total Other Income and (Expenses)                                          (2,134,050)           (734,838)
                                                                          ------------------   -----------------
 LOSS BEFORE INCOME TAXES AND
  DISCONTINUED OPERATIONS                                                         (3,208,528)         (1,988,407)

DISCONTINUED OPERATIONS

  Loss from operations of GVI, FCC and Quade (Note 2)                               (252,972)           (172,728)
  Gain on disposal of GVI, FCC (Note 2)                                               -                1,720,387
                                                                          ------------------   -----------------
        Total Discontinued Operations                                               (252,972)          1,547,659
                                                                          ------------------   -----------------
INCOME TAXES                                                                          -                   -
                                                                          ------------------   -----------------
NET LOSS                                                                          (3,461,500)           (440,748)
                                                                          ------------------   -----------------
OTHER COMPREHENSIVE LOSS

   Loss on valuation of marketable securities                                       (435,188)             -
                                                                          ------------------   -----------------
     Total Other Comprehensive Loss                                                 (435,188)             -
                                                                          ------------------   -----------------
NET COMPREHENSIVE LOSS                                                    $       (3,896,688)  $        (440,748)
                                                                          ==================   =================
</TABLE>

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

                                       F-6
<PAGE>
<TABLE>
<CAPTION>

                                     AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                  Consolidated Statements of Operations (Continued)


                                                                                    For the Years Ended
                                                                                         March 31,
                                                                               1999                 1998
                                                                          ------------------   -----------------
<S>                                                                      <C>                  <C>
BASIC LOSS PER SHARE OF COMMON
  STOCK-CONTINUING OPERATIONS                                             $            (1.03)  $           (1.07)
                                                                          ==================   =================
BASIC INCOME (LOSS) PER SHARE OF COMMON STOCK -
DISCONTINUED OPERATIONS                                                   $            (0.08)  $            0.83
                                                                          ==================   =================
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING                                      3,124,224           1,864,113
                                                                          ==================   =================
</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 (Deficit)
                                               March 31, 1999 and 1998



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

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

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

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

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

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

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

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

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

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

Net loss for the year ended
 March 31, 1998                        -              -            -            -                 -             -          (440,748)
                                    ---------   ------------      -------  -----------     ----------     ------------  -----------
Balance, March 31, 1998             2,929,263   $      2,929      244,953  $       245     $      -       $  7,026,260  $(5,718,980)
                                    ---------   ------------      -------  -----------     ----------     ------------  -----------
</TABLE>

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

                                      F-8
<PAGE>
<TABLE>
<CAPTION>



                   AMERICAN RESOURCES AND DEVELOPMENT COMPANY
           Consolidated Statements of Stockholders' Equity (Continued)
                             March 31, 1999 and 1998



                                                                                               Other      Additional
                                         Common Stock               Preferred Stock       Comprehensive     Paid-In     Accumulated
                                     Shares         Amount        Shares       Amount           Loss        Capital        Deficit
                                    ---------   ------------      -------  -----------     ----------     ------------  -----------
<S>                                 <C>         <C>               <C>      <C>            <C>             <C>           <C>
Balance, March 31, 1998             2,929,263   $      2,929      244,953  $       245    $       -       $  7,026,260  $(5,718,980)

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

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

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

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

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

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

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

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

                                      F-9
<PAGE>
<TABLE>
<CAPTION>



                                    AMERICAN RESOURCES AND DEVELOPMENT COMPANY
                                       Consolidated Statements of Cash Flows

                                                                                    For the Years Ended
                                                                                         March 31,
                                                                                  1999             1998
                                                                          ------------------   -----------------
OPERATING ACTIVITIES
<S>                                                                       <C>                  <C>
   Net loss                                                               $       (3,461,500)  $        (440,748)
   Adjustments to reconcile net loss to net cash
   (used) by operating activities, net of effect of
    mergers:
     Depreciation and amortization                                                   449,553              34,371
     Write-down of goodwill                                                        1,568,215             756,797
     Stock option and stock for services                                              19,683             441,315
     Gain on GVI settlement                                                           -               (1,699,682)
     Gain on sale of marketable securities                                            45,639              -
   Changes in operating assets and liabilities:
     (Increase) in accounts receivable                                              (294,785)            (10,095)
     Decrease in inventory, real estate                                               -                  179,308
     (Increase) decrease in inventory merchandise                                    143,235             (30,763)
     Decrease in other assets                                                         97,103               7,754
     Increase (decrease) in accounts payable and other
      current liabilities                                                           (106,046)            355,969
     Increase in deferred revenue                                                     10,000              -
     Increase in reserve for discontinued operations                                  67,794              -
                                                                          ------------------   -----------------
       Net Cash (Used) by Operating Activities                                    (1,461,109)           (405,774)
                                                                          ------------------   -----------------
INVESTING ACTIVITIES

   Proceeds from sale of marketable securities                                       255,798              -
   Purchases of property and equipment                                              (309,006)            (50,925)
   Investment in land held for development                                            -                 (411,892)
                                                                          ------------------   -----------------
     Net Cash (Used) by Investing Activities                                         (53,208)           (462,817)
                                                                          ------------------   -----------------
FINANCING ACTIVITIES

   Net proceeds on line of credit                                                    367,845              -
   Marketable securities from merger of GVI                                           -                  622,182
   Loan to acquired company prior to acquisition                                      -                 (115,000)
   Cash from acquisition of subsidiary                                                -                    9,699
   Payments on long-term debt and capital lease obligations                         (680,294)            (45,317)
   Long-term borrowings                                                            1,794,070             333,840
   Issuance of common stock for cash                                                  60,000              30,000
                                                                          ------------------   -----------------
     Net Cash Provided by Financing Activities                                     1,541,621             835,404
                                                                          ------------------   -----------------
INCREASE (DECREASE) IN CASH                                                           27,304             (33,187)

CASH, BEGINNING OF YEAR                                                               14,663              47,850
                                                                          ------------------   -----------------
CASH, END OF YEAR                                                         $           41,967   $          14,663
                                                                          ==================   =================
</TABLE>

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

                                      F-10
<PAGE>
<TABLE>
<CAPTION>

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


                                                                                   For the Years Ended
                                                                                         March 31,
                                                                                 1999                      1998
                                                                         -----------------     -----------------
CASH PAID FOR
<S>                                                                      <C>                   <C>
  Interest                                                               $         233,133     $         135,644
  Income taxes                                                           $          -          $          -

NON CASH FINANCING ACTIVITIES

  Common stock issued for services and options                           $          19,683     $         388,660
</TABLE>


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

                                      F-11
<PAGE>

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


NOTE 1 -      SIGNIFICANT ACCOUNTING POLICIES

              a. Principles of Consolidation

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

              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 $48,787 at March 31, 1999.

                                      F-12
<PAGE>

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


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.

              Marketable securities represent 145,000 shares of free trading GVI
              stock  valued  at  $157,500,  and  1,015,000  shares  of GVI stock
              pledged as  collateral on notes  payable  valued at $857,938.  Any
              change in market value from period to period will be reported as a
              separate component of stockholders' equity until realized.

              There was an unrealized loss of $435,188 in marketable  securities
              at  March  31,  1999  due to a  $0.375  decline  in GVI  Company's
              recorded cost for GVI shares.

              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 $(1.03) and
              ($1.07) for the years ended March 31, 1999 and 1998, respectively.
              Basic net (loss) income from  discontinued  operations  per common
              share and diluted net loss from discontinued operations per common
              share was $(0.08) and $0.83, respectively. Weighted average common
              shares  outstanding  were  3,124,224  and  1,864,113 for the years
              ended March 31, 1999 and 1998, respectively.

                                      F-13
<PAGE>

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


NOTE 1 -      SIGNIFICANT ACCOUNTING POLICIES (Continued)

              k. Revenue Recognition for Franchise Operations

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

              l. Goodwill

              The excess of the Company's  acquisition  cost over the fair value
              of the net assets of the FTI acquisition  resulted in a write-down
              of  goodwill of $756,797  for the year ended  March 31,  1998.  On
              March 31, 1998, the Company also recognized goodwill of $1,696,412
              from the purchase of Pacific Print Works (aka Pacific Printing and
              Embroidery LLC). The Company  amortized  $128,198 of goodwill from
              the PPW  acquisition  in fiscal  1999.  In the  fourth  quarter of
              fiscal 1999, the Company wrote-off its remaining goodwill from the
              PPW  acquisition  due to a permanent  impairment,  resulting in an
              additional expense of $1,568,215.  The Company recognizes goodwill
              from the excess of the purchase price of its acquisitions over the
              fair value of the net assets acquired.

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

              m. Recent Accounting Pronouncements

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

              n. Advertising

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

                                      F-14
<PAGE>

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


NOTE 1 -      SIGNIFICANT ACCOUNTING POLICIES (Continued)

              o.  Prior Period Reclassification

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

NOTE 2 -      MERGERS AND ACQUISITIONS

              Golf Ventures, Inc.

              In November  1997,  Golf  Ventures,  Inc.  merged  with U.S.  Golf
              Communities.  U.S. Golf Communities is the controlling  company in
              this merger and  subsequent  to the merger the combined  company's
              name changed to Golf  Communities  of America  (GCA).  This merger
              resulted in a less than 20% American Resources'  ownership in GVI.
              Therefore,  subsequent to the merger, the Company's  investment in
              GVI is reflected as an  investment in  accordance  with  Financial
              Accounting Standards Board Statement No. 121. Pro forma results of
              operations  if the GVI merger would have occurred at the beginning
              of fiscal  1997 would have  resulted  in a decrease in net loss of
              $172,728 for the year ended March 31, 1998 and $0.83 per share.

              In connection with the Company's  management  services relating to
              the  merger of GVI with U.S.  Golf  Communities  and to settle all
              claims,  and  obligations  with the  Company,  GVI issued  862,000
              shares of its  restricted  common  stock to the Company in July of
              1998. A gain of  $1,720,387,  net of expenses,  was recognized for
              the year ended March 31, 1998. This gain was recognized for fiscal
              1998 because it related to prior year activities.  The Company has
              a reserve  for  discontinued  operations  of $660,123 at March 31,
              1999.

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

              In December 1997, the Company  entered into a letter of intent for
              the purchase of a contract screen printing and embroidery company,
              Pacific  Print Works (PPW).  At March 31, 1998,  $115,000 had been
              advanced to PPW in the form of a note receivable. In May 1998, the
              Company  acquired over 80% of the  outstanding  shares of PPW. The
              merger is effective as of March 31, 1998 as the Board of Directors
              of PPW had agreed to transfer  control of PPW effective  March 31,
              1998,  except for  restrictions  based on  significant  changes to
              operations.  The  acquisition  was  accounted  for by the purchase
              method of accounting, and accordingly, the purchase price has been
              allocated to assets  acquired  and  liabilities  assumed  based on
              their fair market  value at the date of  acquisition.  Liabilities
              assumed in excess of assets  acquired  was  $629,252  and  213,472
              shares  of  the   Company's   common  stock  were  issued  to  PPW
              shareholders  with a guaranteed  share value of $5.00 resulting in
              goodwill of $1,686,411.  Depending on PPW's  performance  over the
              next three years,  additional shares of the Company's common stock
              will be issued for this acquisition if minimum earnings levels are
              met.

              Fiscal  Earnings Before Income Taxes       Common Shares Issuable
              Year     Low               High             Minimum     Maximum

              1999   $ 179,480      $   538,200           28,754       86,261
              2000     269,020          807,300           28,754       86,261
              2001     357,900        1,073,700           28,754       86,261

                                      F-15
<PAGE>

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


NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)

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

              Earnings  before  income  taxes  above the low level but below the
              high level will result in common  shares being issued based on the
              percentage of actual  earnings to the high earnings  multiplied by
              the maximum shares issuable for that year. For example,  in fiscal
              1999, earnings of $300,000 would result in 48,083 shares of common
              stock being issued to the PPW shareholders.

              The  following  tables  set  forth  certain  unaudited  pro  forma
              condensed combined  financial  information for the Company and PPW
              accounted for under the purchase method of accounting.

              The pro forma condensed combined  statements of operations for the
              year  ended  March 31,  1998 was  prepared  using  the  historical
              statements of operations of the Company and PPW.

              The  pro  forma  condensed  combined  financial   information  was
              included for comparative  purposes only and does not purport to be
              indicative of the results of operations  that actually  would have
              been  obtained  if the  merger  had  been  effected  at the  dates
              indicated  or results of  operations  that may be  obtained in the
              future.

                                      F-16
<PAGE>

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


NOTE 2 -      MERGERS AND ACQUISITIONS (Continued)

                   American Resources and Development Company
            Consolidated Pro Forma Combined Statements of Operations
                                 March 31, 1998
<TABLE>
<CAPTION>
                                                               American                           Pro Forma
                                                               Resources           PPW           Adjustments        Combined
                                                               ---------           ---           -----------        --------
              SALES
             <S>                                            <C>              <C>               <C>              <C>
                Sales - screenprinting and embroidery       $      -         $   2,389,970     $      -         $    2,389,970
                Sales - merchandise and franchise fees          1,093,110           -                 -              1,093,110
                                                            -------------    -------------     -------------    --------------
                        Total Sales                             1,093,110        2,389,970            -              3,483,080
                                                            -------------    -------------     -------------    --------------
              COST OF SALES

                Cost of sales - screenprinting and embroidery      -             1,784,167            -              1,784,167
                Cost of sales - merchandise                       774,405           -                 -                774,405
                                                            -------------    -------------     -------------    --------------
                        Total Cost of Sales                       774,405        1,784,167            -              2,558,572
                                                            -------------    -------------     -------------    --------------
                        Gross Profit                              318,705          605,803            -                924,508
                                                            -------------    -------------     -------------    --------------
              EXPENSES

                 General and administrative expenses            1,447,285          771,624           121,229         2,340,138
                 Writedown of goodwill                            756,797           -                 -                756,797
                 Sales and marketing expenses                      93,175           -                 -                 93,175
                 Depreciation                                      31,814          194,523            -                226,337
                                                            -------------    -------------     -------------    --------------
                        Total Expenses                          2,329,071          966,147           121,229         3,416,447
                                                            -------------    -------------     -------------    --------------
              Loss From Operations                             (2,010,366)        (360,344)         (121,229)       (2,491,939)
                                                            -------------    -------------     -------------    --------------
              Other Income and (Expenses)

                 Other income                                      15,387            1,847            -                 17,234
                 Interest revenue                                       5           -                 -                      5
                 Gain on sale of assets                           139,906           -                 -                139,906
                 Interest expense                                (133,339)        (183,385)           -               (316,724)
                                                            -------------    -------------     -------------    --------------
                   Total Other Income and (Expenses)               21,959         (181,538)           -               (159,579)
                                                            -------------    -------------     -------------    --------------
              LOSS BEFORE INCOME TAXES AND
               DISCONTINUED OPERATIONS

                 Loss from operations of GVI, FCC                (172,728)          -                 -               (172,728)
                 Gain on disposal of GVI, FCC                   1,720,387           -                 -              1,720,387
                                                            -------------    -------------     -------------    --------------
                   Total Discontinued Operations                1,547,659           -                 -              1,547,659
                                                            -------------    -------------     -------------    --------------
              INCOME TAXES                                         -                -                 -                 -
                                                            -------------    -------------     -------------    --------------
              Net Loss                                      $    (440,748)   $    (541,882)    $    (121,229)   $   (1,103,859)
                                                            =============    =============     =============    ==============
              Loss Per Share                                $       (0.57)   $       (2.07)    $      -         $        (0.80)
                                                            =============    =============     =============    ==============

</TABLE>
                                      F-17
<PAGE>

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


NOTE 2        MERGERS AND ACQUISITIONS (Continued)

              Quade, Inc.

              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.  For the last year Quade,  Inc.
              has been developing  this property  including  signing  agreements
              with four  sub-licensees,  and serving as  licensee  for knit tops
              including t-shirts, fleece and polo shirts.

              On March  17,  1998,  the  Company  signed a Letter  of  Intent to
              acquire one hundred percent (100%) of the outstanding common stock
              of  Quade,  Inc.  On July 23,  1998,  the  Company  completed  its
              purchase of Quade by issuing  213,333  shares of its common  stock
              and by loaning Quade $115,000, of which $40,000 had been loaned by
              June 30, 1998.  These  shares  include  32,000  shares that have a
              guarantee of $5.00 per share based on the average  asking price of
              the  Company's  common  stock for the six months  ended  March 31,
              1999. The Company also guaranteed a note payable of Quade, Inc. to
              its former partner, with a discounted value of $613,384 and issued
              25,000 shares of common stock to Quade's former partner. Depending
              on  Quade's  performance  over the next  three  years,  additional
              shares of the  Company's  common  stock  will be  issued  for this
              acquisition if minimum earnings levels are met as follows:


              Fiscal    Earnings Before Income Taxes     Common Shares Issuable
              Year         Low            High            Minimum      Maximum

              1999       $ 27,671      $   81,500         47,408       142,222
              2000       $251,166      $  754,000         47,376       142,222
              2001       $499,900      $1,499,200         47,423       142,222

              The  additional  contingent  shares  that  could be  issued to the
              Quade, Inc. shareholder also have a guaranteed value of $5.00.

              The  following  tables  set  forth  certain  unaudited  pro  forma
              condensed  combined  financial  information  for the  Company  and
              Quade, Inc. accounted for under the purchase method of accounting.

              The pro forma condensed  combined balance sheet was prepared using
              the historical balance sheets of the Company and Quade, Inc. as of
              March 31, 1998.  The pro forma  condensed  combined  statements of
              operations  for Quade,  Inc. for the year ended March 31, 1998 was
              prepared  using the  historical  statements  of  operations of the
              Company and Quade.

              The  pro  forma  condensed  combined  financial   information  was
              included for comparative  purposes only and does not purport to be
              indicative of the results of operations or financial position that
              actually  would have been obtained if the merger had been effected
              at the dates  indicated  of the  financial  position or results of
              operations that may be obtained in the future.

                                      F-18
<PAGE>

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


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 own 50% of US Polo and
              management  and the  Board  of  Directors  for US  Polo is  shared
              equally by the  Company  and Iron Will.  For its  ownership  in US
              Polo, the Company contributed, through Quade, Inc., all assets and
              liabilities  relating to the business of the  licensing of US Polo
              including the master license and  sublicense  agreements in the US
              Polo name and trademarks.  Iron Will contributed $900,000. US Polo
              used $613,384 of the $900,000 equity  contribution to pay the note
              payable  to the  former  partner  of  Quade,  Inc.  The  Company's
              investment in this joint venture is accounted for under the equity
              method of  accounting.  The  Company's  share of losses  from this
              joint venture for the year ended March 31, 1999 were $127,268.

                                      F-19
<PAGE>

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

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

                                      American Resources and Development Company
                               Consolidated Unaudited Pro Forma Combined Balance Sheets
                                                    March 31, 1998

                                             American                                Pro Forma
                                            Resources             Quade             Adjustments         Combined
                                          ----------------    ---------------     ---------------    ----------------
              CURRENT ASSETS
              <S>                         <C>                 <C>                 <C>                <C>
              Cash                        $         14,663    $        -          $        -         $         14,663
              Marketable Securities                622,182             -                   -                  622,182
              Accounts receivable                  221,875             -                   -                  221,875
              Inventory, merchandise               437,003             23,456              -                  460,459
              Notes receivable                      -                  -                   -                   -
              Prepaid and other current
                assets                              44,882            109,779              -                  154,661
                                          ----------------    ---------------     ---------------    ----------------
                   Total Current Assets          1,340,605            133,235              -                1,473,840
                                          ----------------    ---------------     ---------------    ----------------
              PROPERTY AND
               EQUIPMENT

              Furniture, fixtures and
                equipment                          383,638             -                   -                  383,638
              Leased equipment                     859,185             -                   -                  859,185
                                          ----------------    ---------------     ---------------    ----------------
              Total depreciable assets           1,242,823             -                   -                1,242,823
              Less: accumulated
                depreciation                      (118,889)            -                   -                 (118,889)
                                          ----------------    ---------------     ---------------    ----------------
              Net Property and
               Equipment                         1,123,934             -                   -                1,123,934
                                          ----------------    ---------------     ---------------    ----------------
              OTHER ASSETS

              Royalties receivable                  -                 120,000              -                  120,000
              Investments                        1,077,500             -                   -                1,077,500
              Intangible assets                  1,826,492             -                  989,129           2,815,621
              Deposit                               68,104             -                   -                   68,104
                                          ----------------    ---------------     ---------------    ----------------
                   Total Other Assets            2,972,096            120,000             989,129           4,081,225
                                          ----------------    ---------------     ---------------    ----------------
                   TOTAL ASSETS           $      5,436,635    $       253,235     $       989,129    $      6,678,999
                                          ================    ===============     ===============    ================
</TABLE>

                                      F-20
<PAGE>

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

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

                                          American Resources and Development Company
                                   Consolidated Unaudited Pro Forma Combined Balance Sheets
                                                        March 31, 1998

                                                        American                           Pro Forma
                                                        Resources          Quade          Adjustments        Combined
                                                     -------------     -------------    -------------     -------------
              CURRENT LIABILITIES
              <S>                                    <C>               <C>              <C>               <C>
              Accounts payable                       $     688,021     $      -         $      -          $     688,021
              Accrued expenses and
               other current liabilities                   393,494           244,411           -                637,905
              Current portion of notes payable             419,781           651,868          (92,454)          979,195
              Current portion of notes
               payable - related parties                   184,974            -                -                184,974
              Current portion of capital
               lease obligations                           303,475            -                -                303,475
                                                     -------------     -------------    -------------     -------------
                  Total Current Liabilities              1,989,745           896,279          (92,454)        2,793,570
                                                     -------------     -------------    -------------     -------------
              LONG-TERM DEBT

              Reserve for discontinued
                operations                                 450,782            -                -                450,782
              Long-term portion of notes payable            14,155            -                -                 14,155
              Long-term portion of capital
                lease obligations                          579,963            -                -                579,963
              Notes payable, related parties             1,091,536            -                -              1,091,536
                                                     -------------     -------------    -------------     -------------
                   Total Long-Term Debt                  2,136,436            -                -              2,136,436
                                                     -------------     -------------    -------------     -------------
              STOCKHOLDERS' EQUITY

              Preferred stock                                  245            -                -                    245
              Common stock                                   2,929             1,000             (762)            3,167
              Additional paid-in capital                 7,026,260            -               438,301         7,464,561
              Accumulated deficit                       (5,718,980)         (644,044)         644,044        (5,718,980)
                                                     -------------     -------------    -------------     -------------
                 Total Stockholders' Equity              1,310,454          (643,044)       1,081,583         1,748,993
                                                     -------------     -------------    -------------     -------------
                 TOTAL LIABILITIES AND
                  STOCKHOLDERS' EQUITY               $   5,436,635     $     253,235    $     989,129     $   6,678,999
                                                     =============     =============    =============     =============
</TABLE>

                                      F-21
<PAGE>

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


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

                   American Resources and Development Company
       Consolidated Unaudited Pro Forma Combined Statements of Operations
                                 March 31, 1998

                                                               American                           Pro Forma
                                                               Resources        Quade            Adjustments        Combined
                                                            -------------    -------------     -------------    --------------
              <S>                                           <C>              <C>               <C>              <C>
              SALES                                         $   1,093,110    $     206,391     $      -         $    1,299,501

              COST OF SALES                                       774,405          219,618            -                994,023
                                                            -------------    -------------     -------------    --------------
                        Gross Profit (Loss)                       318,705          (13,227)           -                305,478
                                                            -------------    -------------     -------------    --------------
              EXPENSES

                 General and administrative expenses            1,447,285          535,841            -              1,983,126
                 Writedown of goodwill                            756,797           -                 -                756,797
                 Sales and marketing expenses                      93,175           -                 -                 93,175
                 Depreciation and amortization                     31,814           -                 72,831           104,643
                                                            -------------    -------------     -------------    --------------
                        Total Expenses                          2,329,071          535,841            72,831         2,937,741
                                                            -------------    -------------     -------------    --------------
              Loss From Operations                             (2,010,366)        (549,068)          (72,831)       (2,632,265)
                                                            -------------    -------------     -------------    --------------
              Other Income and (Expenses)

                 Other income                                      15,387           -                 -                 15,387
                 Interest revenue                                       5           -                 -                      5
                 Gain on sale of assets                           139,906           -                 -                139,906
                 Interest expense                                (133,339)         (41,660)           -               (174,999)
                                                            -------------    -------------     -------------    --------------
                   Total Other Income and Expenses                 21,959          (41,660)           -                (19,701)
                                                            -------------    -------------     -------------    --------------
              LOSS BEFORE INCOME TAXES AND
               DISCONTINUED OPERATIONS

                 Loss from operations of GVI, FCC                (172,728)          -                 -               (172,728)
                 Gain on disposal of GVI, FCC                   1,720,387           -                 -              1,720,387
                                                            -------------    -------------     -------------    --------------
                   Total Discontinued Operations                1,547,659           -                 -              1,547,659
                                                            -------------    -------------     -------------    --------------
              INCOME TAXES                                         -                -                 -                 -
                                                            -------------    -------------     -------------    --------------
              Net Loss                                      $    (440,748)   $    (590,728)    $     (72,831)   $   (1,104,307)
                                                            =============    =============     =============    ==============

              Loss Per Share                                $       (0.24)   $       (0.35)    $      -         $        (0.59)
                                                            =============    =============     =============    ==============
</TABLE>


              Pro forma adjustments  include a $1,061,960 addition to intangible
              assets for  license  and  trademark  rights net of fiscal 1998 pro
              forma accumulated  amortization of $72,831.  License and trademark
              rights were valued based on acquired  liabilities over assets plus
              the value of the  Company's  stock  issued  for  Quade.  Pro forma
              adjustment  for  additional   paid-in  capital  and  common  stock
              represent  the value of common stock  issued for the  acquisition.
              Pro forma adjustment for notes payable was made to impute the note
              from Quade's former partner to its present value at a 10% interest
              rate.

                                      F-22
<PAGE>

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



NOTE 3 -      LINE OF CREDIT

              In November 1998, the Company entered into an accounts  receivable
              financing agreement to sell, with recourse,  up to $1.4 million of
              receivables,  net of a 15%  collection  reserve.  The  Company  is
              charged .065% daily for all receivables sold and uncollected under
              this  financing  agreement.  At March 31, 1999,  the Company had a
              payable of  $367,845  for net funds  advanced  from this  accounts
              receivable line of credit.  The Company  received  $1,163,873 from
              the sale of  receivables  for the year  ended  March 31,  1999 and
              recognized  $24,560  in  interest  expense  from the  discount  of
              selling these receivables.

 NOTE 4 -     NOTES PAYABLE
<TABLE>
<CAPTION>

              Notes payable are comprised of the following:
                                                                                                    March 31,
                                                                                                     1999
                                                                                               -----------------
             <S>                                                                              <C>
              Note payable, unsecured, bearing interest at 12%, payable
               in monthly installments of $7,000, including interest.  Due on
               demand.                                                                         $          26,210

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

              Trade drafts  payable,  secured  with  inventory,  payable in five
               monthly installments beginning April 1999, with payments from
               $10,904 to $2,030 per month.                                                               34,684

              Notes payable to a shareholder of PPW.  Interest rates
               average 10%, due on demand, unsecured.                                                    291,819

              Notes payable with three vendors with interest rates averaging
               12%; partially secured by equipment, due in 2000.                                          49,429

              Note payable to business partner in U.S. Polo Association, Ltd.
               Interest is payable quarterly at the prime rate as published by
               the Wall Street Journal plus 1% per annum.   Note was canceled
               in June 1999 with the sale of U.S. Polo Association to business
               partner.                                                                                1,000,000
                                                                                               -----------------
              Subtotal                                                                                 1,589,142

              Less current portion                                                                      (587,323)
                                                                                               -----------------
              Long-term portion                                                                $       1,001,819
                                                                                               =================
</TABLE>

                                      F-23
<PAGE>

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


NOTE 4 -      NOTES PAYABLE (Continued)
<TABLE>
<CAPTION>
              Maturities of long-term debt are as follows:
                                            <S>                                               <C>
                                            March 31, 2000                                     $         587,323
                                            March 31, 2001                                               501,819
                                            March 31, 2002                                               250,000
                                            March 31, 2003                                               250,000
                                                                                               -----------------
                                                                                               $       1,589,142
                                                                                               =================
NOTE 5 -      NOTES PAYABLE, RELATED PARTIES
<CAPTION>

                                                                                                   March 31,
                                                                                                     1999
                                                                                               -----------------
             <S>                                                                              <C>
              Note payable to Miltex  Industries,  secured by 700,000  shares of
               GVI and 600,000 shares of the Company's common stock. Interest at
               15% with monthly principal and interest payments
               of $11,000 with a final balloon payment September 2000.                         $         728,162

              Note payable to a shareholder, secured by GVI stock.  Interest
               payable monthly at 13.5% with interest and principal payments
               of $5,000 per month.  Due September 2000.                                                 327,497

              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.                                                                               386,593
                                                                                               -----------------
                                            Subtotal                                                   1,442,252

                                            Less current portion                                         (47,104)
                                                                                               -----------------
                                            Long-term portion                                  $       1,395,148
                                                                                               =================
              Maturities of notes payable, related parties are as follows:

                                            March 31, 2000                                     $          47,104
                                            March 31, 2001                                             1,008,555
                                            March 31, 2002                                               386,593
                                                                                               -----------------
                                                                                               $       1,442,252
                                                                                               =================
</TABLE>

                                      F-24
<PAGE>

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


NOTE 6 -      CAPITAL LEASES
<TABLE>

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

NOTE 7 -      INCOME TAXES

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

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

NOTE 8 -      PREFERRED STOCK

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

              SERIES B:

              At March 31, 1999,  there are 94,953  shares of series B preferred
              stock  issued  and  outstanding.  The  holders  of these  series B
              preferred  shares  are  entitled  to  an  annual  cumulative  cash
              dividend  of not less than  sixty  cents per  share.  At March 31,
              1999, there is a total of $352,589 of accrued and unpaid dividends
              related to the series B preferred  stock which have been  included
              in  the  accompanying  consolidated  financial  statements.  These
              series B  preferred  shares  were  convertible  into shares of the
              Company's common stock which  conversion  option expired March 31,
              1995.

                                      F-25
<PAGE>

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


NOTE 9 -      COMMON STOCK ISSUED BUT NOT OUTSTANDING

              The Company has issued  160,820  shares of common  stock which had
              been  offered to the holders of the Series B  preferred  stock and
              the  debentures.  The shares have not been accepted by the holders
              of those investments as of the date of the consolidated  financial
              statements. Additionally, the Company has issued 600,000 shares of
              common  stock as  collateral  for the note  payable  to Banque SCS
              (Note 5).

NOTE 10 -     STOCK OPTIONS

              In August 1997, the Company's Board of Directors approved the 1997
              American  Resources  and  Development  Company  Stock  Option Plan
              (Option  Plan).  Under  the  Option  Plan,  500,000  shares of the
              Company's  common stock are reserved for issuance to Directors and
              employees.  Options are granted at a price and with vesting  terms
              as  determined by the Board of  Directors.  In October  1997,  the
              Board of Directors  granted options to purchase  140,000 shares of
              stock at $2.00. These options are exercisable  beginning March 31,
              1998,   over  staggered   periods  and  expire  after  ten  years.
              Compensation  expense of $1,458 per month will be  recognized  for
              40,000 of the  options  issued  over a 4 year  vesting  period and
              $1,458 per month will be  recognized  for  100,000 of the  options
              over a 10  year  vesting  period.  In  July  1998,  the  Board  of
              Directors changed the terms of the 100,000 options vesting over 10
              years. 25,000 of these options were fully vested and the remainder
              of the options were canceled. As a result, compensation expense of
              $52,498 was  recognized  for the year ended March 31, 1998 for the
              vesting of these options.

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

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

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

                                      F-26
<PAGE>

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


NOTE 10 -      STOCK OPTIONS (Continued)

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

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

               For the pro forma disclosures,  the options' estimated fair value
               was amortized over their  expected  ten-year life. The fair value
               for these  options  was  estimated  at the date of grant using an
               option  pricing  model which was  designed  to estimate  the fair
               value of options which,  unlike  employee  stock options,  can be
               traded at any time and are fully transferable.  In addition, such
               models  require  the  input  of  highly  subjective  assumptions,
               including the expected volatility of the stock price.  Therefore,
               in  management's  opinion,  the existing  models do not provide a
               reliable  single  measure of the value of employee stock options.
               The following weighted-average  assumptions were used to estimate
               the fair value of these options:
                                                                     March 31,
                                                                       1999
                                                                     ---------
                     Expected dividend yield                            0%
                     Expected stock price volatility                   70%
                     Risk-free interest rate                          6.5%
                     Expected life of options (in years)               10

NOTE 11 -     COMMITMENTS AND CONTINGENCIES

              Office Lease

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

              Legal Proceedings

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

                                      F-27
<PAGE>

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


NOTE 12 -     GOING CONCERN

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

NOTE 13 -     BUSINESS SEGMENTS

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

              Certain financial information  concerning the Company's operations
              in different industries is as follows:
<TABLE>
<CAPTION>
                                                 For the
                                                Years Ended               Pacific                          Corporate
                                                 March 31,              Print Works       Fan-Tastic      Unallocated
                                                 ---------              -----------      -----------     -------------
             <S>                                  <C>                   <C>              <C>              <C>
              Net sales                           1999                  $ 3,223,417      $   773,322
                                                  1998                                     1,093,110

              Operating loss applicable to
               industry segment                   1999                      307,406          355,182
                                                  1998                                       392,069

              General corporate expenses
               not allocated to industry
               segments                           1998                                                    $    411,890
                                                  1999                                                         861,500

              Writedown of goodwill               1999                                                      (1,568,215)
                                                  1998                                                        (756,797)

              Interest expense                    1999                     (269,949)         (60,442)         (229,944)
                                                  1998                                       (61,568)          (71,771)

              Other income (expenses)
               including interest and gain
               on sale of securities              1999                      (34,493)          29,167             5,144
                                                  1998                                        34,480           120,818
</TABLE>

                                      F-28
<PAGE>

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


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

                                                 For the
                                                Years Ended               Pacific                          Corporate
                                                 March 31,              Print Works       Fan-Tastic      Unallocated
                                                 ---------              -----------      -----------     -------------
             <S>                                  <C>                   <C>              <C>              <C>
              Loss from discontinued
               operations                         1999                                                     $  (252,972)
                                                  1998                                                        (172,728)

              Assets                              1999                  $ 1,098,406      $   197,186         1,999,942

              Depreciation and
               amortization                       1999                      261,925           34,180           153,448
                                                  1998                                        28,398             5,973
              Property and equipment
               acquisitions                       1999                      301,400            7,606
</TABLE>

NOTE 14 -     NET ASSETS OF DISCONTINUED OPERATIONS

              In March 1999, the Company's Board of Directors made a decision to
              sell its 50%  ownership in U.S.  Polo to Iron Will.  In June 1999,
              the Company  closed its sale of U.S. Polo  ownership to Iron Will.
              For its sale of U.S. Polo, the Company  received the  cancellation
              of $1,000,000 in debt from Jordache  Enterprises (see Note 4), the
              cancellation  of  $13,185 in  interest  and cash of  $221,470.  In
              addition,  the Company could  receive up to another  $103,942 upon
              the collection of U.S. Polo royalties earned through May 31, 1999.

              The results of  operations  of Quade,  Inc. and U.S.  Polo for the
              year ended  March 31,  1999 has  generated  a loss of  $252,972 on
              sales of $232,712.  The net assets of the discontinued  operations
              at March 31, 1999 are included in the  consolidated  balance sheet
              as a  single  amount  of  $282,508  which  consists  primarily  of
              receivables,  inventories,  accounts  payable  and  the  Company's
              investment  accounted for under the equity method in U.S.  Polo. A
              gain on the disposal of U.S.  Polo will be recognized in the first
              quarter of the year ending March 31,  2000.  No income tax benefit
              or expense has been attributed to the disposal of U.S. Polo.

                                      F-29
<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 7, 1999

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.



                                       25
<PAGE>


      Signature                      Title                           Date
      ---------                      -----                           ----


/s/ B. Willes Papenfuss
--------------------------     President, Chief Executive        July 7, 1999
    B. Willes Papenfuss        Officer and Director
                               (Principal Executive
                               Officer)


/s/ Timothy M. Papenfuss
--------------------------     Secretary / Treasurer and         July 7, 1999
 Timothy M. Papenfuss          Director (Chief Financial
                               Officer, Chief Accounting
                               Officer and Controller)

                                       26