SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-K
o ANNUAL
REPORT
UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF
1934
For
the
fiscal year ended March 31, 2008
COMMISSION
FILE NO. 000-18865
or
o TRANSITION
REPORT UNDER SECTION 13
OR 15(D) OF THE SECURITIES EXCHANGE
ACT
OF
1934
For
the
transition period from ______to______
American
Resources & Development Company
(Name
of
small business issuer on its charter)
Utah
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87-0401400
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(State
or Other
Jurisdiction
of
Incorporation
or
Organization)
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|
(I.R.S.
Employer
Identification
Number)
|
5891
Sagewood
Murray,
Utah 84107
(801)
230 1030
(Address
and telephone number
of
principal executive offices and principal place of business)
Check
whether the issuer (1) filed all reports required to be filed by sections 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 No o
Check
if
disclosure of delinquent filers pursuant 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. o
Registrant's
revenue for its most recent fiscal year: $1,803,812
On
March
31, 2008 the aggregate market value of the voting stock of American Resources
& Development Company held by non-affiliates of the registrant was $466,474.
There is currently a limited public market for the registrant’s common
stock.
As
of
March 31, 2008 there were 466,770,406 outstanding shares of common stock, par
value $0.001.
Transitional
Small Business Format: Yes o No o
Documents
incorporated by reference: None.
Cautionary
Notice Regarding Forward Looking Statements
“American
Resources & Development Company,” “the Company,” “we,” “us” or “our” refers
to American Resources & Development Company, a Utah corporation, and its
subsidiaries, except where otherwise indicated or required by context. This
report contains a number of forward-looking statements that reflect management’s
current views and expectations with respect to our business, strategies, future
results and events and financial performance. All statements made in this Annual
Report other than statements of historical fact, including statements that
address operating performance, events or developments that management expects
or
anticipates will or may occur in the future, including statements related to
revenues, cash flow, profitability, adequacy of funds from operations,
statements expressing general optimism about future operating results and
non-historical information, are forward looking statements. In particular,
the
words “believe,” “expect,” “intend,” “ anticipate,” “estimate,” “may,”
variations of such words, and similar expressions identify forward-looking
statements, but are not the exclusive means of identifying such statements
and
their absence does not mean that the statement is not forward-looking. These
forward-looking statements are subject to certain risks and uncertainties,
including those discussed below. Our actual results, performance or achievements
could differ materially from historical results as well as those expressed
in,
anticipated or implied by these forward-looking statements. We do not undertake
any obligation to revise these forward-looking statements to reflect any future
events or circumstances.
Readers
should not place undue reliance on these forward-looking statements, which
are
based on management’s current expectations and projections about future events,
are not guarantees of future performance, are subject to risks, uncertainties
and assumptions (including those described below) and apply only as of the
date
of this report. Our actual results, performance or achievements could differ
materially from the results expressed in, or implied by, these forward-looking
statements. Factors that could cause or contribute to such differences include,
but are not limited to, those discussed below in “Risk Factors” as well as those
discussed elsewhere in this report, and the risks discussed in our press
releases and other communications to shareholders issued by us from time to
time
which attempt to advise interested parties of the risks and factors that may
affect our business. We undertake no obligation to publicly update or revise
ITEM
1. DESCRIPTION OF BUSINESS
(a)
Company History and Development
American
Resources & Development Company ("ARDCO" or "the Company"), formerly known
as Leasing Technology, Incorporated, was incorporated in Utah on March 21,
1983.
On February 20, 1997 it name was changed to American Resources and Development
Company. When used throughout this document, unless the context suggests
otherwise, the "Company" refers to ARDCO and/or its subsidiaries.
Leasing
Technology Incorporated
As
Leasing Technology Incorporated ("LTI”), the Company was engaged in the venture
capital business offering consulting expertise to selected business
opportunities and was engaged in developing certain residential and recreational
real estate projects. In 1990, the Company acquired the Palm Lakes real estate
development near St. George, Utah. In 1991, the name of the development was
changed to the Red Hawk(R) Country Club and in 1994, the name was again changed
to Red Hawk(R) International Golf & Country Club ("Red Hawk(R)"). Also in
1991, the Company purchased two residential developments in St. George
consisting of condominiums, cottages, and single family dwelling lots known
as
Cotton Manor and Cotton Acres respectively.
In
December 1992, the Company assigned all of its real estate holdings in Red
Hawk(R), Cotton Manor and Cotton Acres to Golf Ventures, Inc. “GVI”, a publicly
held Utah Corporation, in exchange for 3,273,728 shares of GVI common stock,
which represented approximately 86% of GVIC's total outstanding shares. GVI
further agreed to assume all obligations related to the acquired real estate.
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. In November 1997, GVI merged
with Golf Communities of America “GCA”. Golf Communities of America was the
controlling company in this merger and subsequent to the merger the combined
company’s name changed to Golf Communities of America (“GCA”). This merger
resulted in a less than 20% ownership in GVA by the Company. In 1999 GCA filed
Chapter 11 bankruptcy which was subsequently changed to Chapter 7. Since that
time the Company’s investment in GCA has been valued at $-0-.
Amendment
to Articles of Incorporation increasing capitalization to
500,000,000 shares:
On
May
10, 2004 the company amended its articles of incorporation to increase its
capitalization to 500,000,000 shares with a par value of $0.001 per share.
(b)
Business of the Company:
On
June
15th,
2004
the company acquired Springfield Finance & Mortgage, LLC (“SFM”) from
Springfield Investments, Inc., a shareholder of the Company, in exchange for
12,500,000 shares of its common stock. SFM was in the business of providing
financing for new home construction.
The
Company, through SFM, has provided financing for real estate development and
new
home construction, in Washington County, Utah by making loans secured by first
trust deeds. The Company has loaned money to contractors who are building new
homes and to developers who require financing to develop raw acreage into
sub-divisions. In addition to being secured by first trust deeds, all loans
have
required that borrowers have full insurance coverage on every project being
financed. The Company ceased engaging in real estate financing activities during
the year ended March 31, 2007.
(c)
Investment Policies
By
March
31, 2007, the real estate market in Washington County, Utah had slowed
considerably so the Company terminated its business of providing financing
for
real estate development; and focused on investing in the ‘Futures Option
market’. On April 18, 2007 the Company opened account number 396-44607 with
Infinity Brokerage Services, 111 W Jackson Blvd., Suite 2010, Chicago, IL 60604;
and engaged the services of Michael Douglas, MSI Trading, 735 Kari Ct., Byron,
IL 61010; to assist in trading Option contracts in the S & P 500 Futures
market. On May 31, 2007, the account at Infinity was transferred to Brewer
Futures Group, LLC, 200 S. Michigan Avenue, 21st
Floor,
Chicago, IL 60604.
There
are
no limitations on the percentage of the Company’s assets which the Company may
invest in any one investment, or type of investment. Any Company policy
regarding such investments may be changed without a vote of the Company’s
shareholders. It is the Company’s policy to make investments primarily for
income, though assets also may be acquired for possible capital
gain.
(d)
Description of the Option Contracts the Company has invested in:
Our
investment goal is to take advantage of trading the RANGE of the market rather
than the DIRECTION of the market. Significantly Out-of-the-Money Call and Put
Option contracts on the S&P 500 Futures (the underlying) market are
sold with 30 to 40 days remaining prior to each monthly
expiration. We take advantage of the time decay of these
Out-Of-The-Money options as the market stays between the two selected Strike
Price levels. This strategy is called The
Short Strangle.
In Option language it is called a "Combination Write". The
profit is earned through the time decay of the option contracts
(Sell High then Buy Back Low). These positions are closed out and
reset after each monthly expiration, thus there are approximately 12 trades
each year. The 30 day liquidity allows us to properly analyze the recent trading
range to keep pace with the ever changing value of the S&P 500 Futures
price. The re-positioning of the range for the next month is a critical
component in controlling risk. From a cash management perspective this
concept provides excellent liquidity. Call Option Strike Prices are usually
sold
100 pts. ABOVE the value of the underlying while Put Option Strike Prices
are usually sold 125 pts. BELOW the underlying.
Our
Executive Offices
The
Company’s principal offices are located at 5891 Sagewood, Murray, Utah 84107,
which is the residence of Thomas Stamos, the company’s president. The Company’s
president allows the Company to use space at that location for no charge. The
space and use of the facilities located at that address are donated to the
Company by its president.
Business
Strategy
The
Company believes that one of the easiest way to be consistently successful
in
the financial markets is to trade the S & P 500 Futures Options –
‘Short Strangle Strategy’. Rather than buying a stock and hoping it goes up
or picking the range that the stock will most likely trade in during a
short period of time, the Company believes that to reduce stress and anxiety
and
insure the highest probability of success is to trade the range.
The
Short
Strangle Strategy allows the opportunity to trade the RANGE of the S&P
500 market rather than the DIRECTION using Options contracts. If the market
stays between the range of the market price selected, the desired profit is
earned. The Company wants to sell high Strike Price Call Options while at
the same time selling low Strike Price Put Options. The time decay of the sold
Option contracts value during the length of time the trade is open is where
the profit comes from. We use S&P 500 Futures Options because there is
more volume and liquidity in the S&P 500 Futures Option market and because
this is the market the Institutions (Mutual Funds and Brokerage firms) use
for hedging their stock portfolios.
To
maintain liquidity for cash management requirements, the positions are reset
EVERY 30 days after the Monthly Expirations of the Option positions. This also
allows us to analyze the S&P 500 Futures trading range from
the previous 30 days to assist us in setting the anticipated trading range
for the next 30 days. We always keep pace with the market. Remember, the market
is ALWAYS right. It is the investor’s opinion of the market that will be
wrong.
We
sell
S&P 500 Futures Options, out-of-the-money, (75 to 100 pts. from the
underlying) using 30 day or 60 day Call and Put options in combination,
known as a “Combo” as a naked (uncovered) position. The Call Leg and the
Put Leg have to be monitored daily due to the risk exposure. However, the
risk can be minimized by rolling up or down using the same expiration date
should the trade get in trouble (2 pt. Stop Loss to roll the position). At
times, rolling up or down can actually yield a greater profit. Many Wall Street
Institutions do this with their own money. The goal is to earn 4 pts. per
month. Each point is worth $250. Each "combination" of a Call and a Put being
sold costs approximately $9,500 in margin for the retail customer at most
brokerage firms.
This
is a
high maintenance strategy where the risk has to be monitored intraday. To offset
any overnight catastrophe, a Long Put position may be established each
day 125 pts. O-T-M. It is then sold the following morning at a breakeven goal.
Due to the nature of S&P 500 Futures Options, where they are pit traded, it
is somewhat easy to get "your price".
There
are
two types of S&P 500 Options. The first being the S&P 500 Index
(symbol SPX) otherwise known as the "cash market." Its Options trade at a
value $100 per point. Its value is always below that of the S&P 500
Futures value until they reach the quarterly expiration date on the
3rd Friday (AM) in March, June, September and December. At
expiration, they will have the same value. The second type is the
S&P 500 Futures (quarterly symbols of SP_H, M, U, Z). Its Options trade
at a value of $250 per point.
Our
Strengths
We
believe our competitive strengths will include: Utilizing the MSI Market Trading
systems developed by Michael S. Douglas who will personally be advising us
and
recommending all trades. We have given Mr. Douglas Power of Attorney to trade
our accounts; and, we pay him a five (5%) percent fee on each month’s net
profits. Mr. Douglas has over
20
years in the financial investment field. He has built a strong foundation which
we believe can truly assist the company. Mike has extensive experience in the
financial markets, specializing in financial derivatives, as well as financial
planning. These are all skills that he applies to educating and consulting
his
clients. MSI, will provide the company with unparalleled investment
opportunities. Mike brings his philosophy that personal service is a top
priority. He believes in working very closely with clients to ensure they get
the best returns to meet their short term and long term financial objectives.
Mike has educated hundreds of satisfied clients over the years. His direct
line is 815-520-7119.
RISK
FACTORS
The
following factors affect our business and the industry in which it operates.
The
risks and uncertainties described below are not the only ones we face.
Additional risks and uncertainties not presently known or that we currently
consider immaterial may also have an adverse effect our business. If any of
the
maters discussed in the following risk factors were to occur; our business,
financial condition, results of operations, cash flows, or prospects could
be
materially adversely affected.
Risks
Relating to our Business
Futures
and options trading involve substantial risk and we are advised that they may
not be suitable for every investor. The valuation of futures and options may
fluctuate, and, as a result, the Company may lose more than its original
investment. The impact of seasonal and geopolitical events is factored into
market prices. Past results are no indication of future performance. Information
from whatever source is in no way guaranteed. No guarantee of any kind is
implied or possible where projections of future conditions are
attempted.
The
company attempts to minimize its investment risks by:
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1.
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Daily
monitoring of the S & P 500 market as well as all other related
markets that may have an impact on all trades. This is done by both
Company employees as well as Michael Douglas, our trading advisor
whose
experience and expertise we rely on. In the event any trade may be
in
trouble of loosing we always either roll up or roll down the open
positions accordingly.
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2.
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Maintaining
‘Margin amounts’ in excess of those require by either the Brokerage Firm
or the Chicago Board of Trade
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3.
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Purchasing
offsetting ‘Puts’ and ‘Calls’ whenever deemed
necessary.
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Risks
Related to Our Common Stock
There
is currently no market for our securities, and there are substantial
restrictions on the transferability of our
securities.
There
is
currently a limited market for our common stock. Accordingly, purchasers of
the
shares will be required to bear the economic consequences of holding such
securities for an indefinite period of time. An active trading market for our
common stock may not ever develop. Any trading market that does develop may
be
volatile and significant competition to sell our common stock in any such
trading market may exist which could negatively affect the price of our common
stock. As a result, the value of our common stock may decrease. Additionally,
if
a trading market does develop, such market may be highly illiquid, and our
common stock may trade at a price that does not accurately reflect the
underlying value of our net assets or business prospects. Investors are
cautioned not to rely on the possibility that an active trading market may
develop or in the prices at which our stack may trade in any market that does
develop in making an investment decision.
We
presently do not intend to pay cash dividends on our
stock.
We
currently anticipate that no cash dividends will be paid on any of our stock
in
the foreseeable future. While our dividend policy will be based on the operating
results and capital needs of the business, it is anticipated that all earnings,
if any, will be retained to finance future expansion of our business.
Our
officers and directors control approximately 12.7% of our common stock.
ITEM
2. DESCRIPTION OF PROPERTY.
The
Company’s principal offices are located at 5891 Sagewood, Murray, Utah 84107,
which is the residence of Thomas Stamos, the company’s president. The Company’s
president allows the Company to use space at that location for no charge. The
space and use of the facilities located at that address are donated to the
Company by its president.
ITEM
3:
LEGAL PROCEEDINGS.
We
are
not currently a party to any legal proceedings.
ITEM
4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No
meetings were held in during the fiscal years ended March 31, 2008 and
2007.
ITEM
5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND
SMALL
BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES
Price
Range of our Common Stock and dividend policy
As
of
March 31, 2008 there were 467,039,666 shares of our common stock outstanding,
held by approximately 1.339 shareholders of record, including shares held in
street name. Our common stock is quoted on the Pink Sheets ‘Grey Market’ under
the symbol “ADCO.” The following table sets forth, for the periods indicated,
the high and low bids for our common stock; the bids reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent
actual transactions. The last reported bid for our common stock through March
31, 2008 was $0.001 per share.
Fiscal
Year Ended March 31, 2006
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First
Quarter
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$
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0.001
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$
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0.001
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Second
Quarter
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0.001
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0.001
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Third
Quarter
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0.001
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0.001
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Fourth
Quarter
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0.001
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0.001
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Fiscal
Year Ended March 31, 2007
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First
Quarter
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$
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0.001
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$
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0.001
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Second
Quarter
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0.001
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0.001
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Third
Quarter
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0.001
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0.001
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Fourth
Quarter
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0.001
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0.001
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Fiscal
Year Ended March 31, 2008
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First
Quarter
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$
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0.001
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$
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0.001
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Second
Quarter
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0.001
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0.001
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Third
Quarter
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0.001
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0.001
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Fourth
Quarter
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0.001
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0.001
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The
stock
market has from time to time experienced significant price and volume
fluctuations that are unrelated to the operating performance of particular
companies. Like the stock prices of other small companies, the market price
of
our common stock may in the future be, subject to significant volatility.
The
Company’s common stock is currently traded on the “Pink Sheets”, and previously
has been traded on the Bulletin Board. It is the Company’s understanding that
the Company must be current on its filings with the Commission prior to
reapplying for an OTCBB trading symbol.
There
has
been no active market for the Company's stock in the last two years; although
it
continues to be reported on the Pink Sheets. Accordingly, the Company has no
range of high and low bid prices for the Company's common stock to
report.
There
were approximately 1,339
shareholders of record of the Company's common stock as of March 31, 2008.
Of
the 467,039,666 shares issued and outstanding as of March 31, 2008, 466,994,441
shares are considered ‘investment stock’ and 45,225 shares are considered
‘control stock’. They are all restricted. They have all been held for more than
one (1) year and would be available for sale under Rule 144.
The
Company has never paid cash dividends on its stock and does not intend to do
so
in the foreseeable future. The Company currently intends to retain its earnings
for the operation and expansion of its business. The Company's continued need
to
retain earnings for operations and expansion are likely to limit the Company's
ability to pay dividends in the future.
There
are
no outstanding options or warrants to purchase additional shares of the
Company’s common stock.
The
Company’s common stock is a "penny stock" as defined by the rules and
regulations promulgated by the Securities and Exchange Commission. Pursuant
to
Section 3(a)(51)(A) of the Exchange Act of 1934, as amended, any equity security
is considered to be a "penny stock" unless that security is:
·
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Registered
and traded on a national securities exchange meeting specified SEC
criteria;
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authorized
for quotation on NASDAQ;
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issued
by a registered investment company;
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excluded,
on the basis of price of the issuer's net tangible assets, from the
definition of the term by SEC rule; or
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exempted
from the definition by the SEC.
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Currently,
the Company's common stock does not fall within any of these non-penny stock
categories.
The
Commission's rules and regulations impose disclosure, reporting and other
requirements on brokers-dealers in penny stock transactions. In summary, these
requirements are as follows:
Brokers
and dealers, prior to effecting any penny stock transactions, must provide
customers with a document that discloses the risks of investing in the penny
stock market. Section 15(g)(2) requires such risk disclosure documents to:
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contain
a description of the nature and level of risk involved in the penny
stock
market;
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fully
describe the duties of the broker-dealer to the customer, and the
rights
and remedies available;
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explain
the nature of "bid" and "ask" prices in the penny stock
market;
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supply
a toll-free telephone number to provide information on disciplinary
histories;
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describe
all significant terms used in the risk disclosure
document.
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Also,
prior to the transaction, the broker-dealer must obtain from the customer a
manually signed and dated written acknowledgment of receipt of the disclosure
document. The broker-dealer is required to preserve a copy of the acknowledgment
as part of its records.
Brokers
and dealers must disclose the bid and ask prices for penny stocks, the number
of
shares to which the prices apply, and the amount and description of any
compensation received by the broker or dealer. Also, brokers and dealers are
to
provide each customer whose account contains penny stocks with a monthly
statement indicating the market value of those stocks.
ITEM
6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION
Statements
contained herein that are not historical facts are forward-looking statements,
as that term is defined by the Private Securities Litigation Reform Act of
1995.
Although the Company believes that expectation reflected in such forward-looking
statements are reasonable, the forward-looking statements are subject to risks
and uncertainties that could cause results to differ from those projected.
The
Company cautions investors that any forward-looking statements made by the
Company are not guarantees of future performance and that actual results may
differ materially from those in the forward-looking statements. Such risks
and
uncertainties include, with limitation: well established competitors who have
substantially greater financial resources and longer operating histories,
changes in the regulatory environment in which the Company competes, and access
to sources of capital.
Plan
of Operation
The
Company is no longer engaged in the construction finance industry which
generated revenues during the years prior to March 31, 2007. Accordingly, the
Company’s plan of operation for its current year is to take advantage of trading
the RANGE of the S & P 500 Futures Market
The
Company intends, through its wholly owned subsidiary, Springfield Finance and
Mortgage Company, LLC (“SFMC”), to take
advantage of intraday price momentum changes by executing trades from both
the
Long (buy) side and the Short (sell) side. To accomplish this, we have engaged
the services of Michal Douglas, to whom we pay a fee equal to five (5%) percent
of each months net profits. Douglas uses a technical market indicator known
as
the DMI (Directional Momentum Indicator) developed by Welles Wilder in 1976
which tells us when to “buy” the market or “sell” the market as an opening
position. We further filter this indicator with the TICK Indicator
before we execute any trade. The TICK gives an immediate check of the "pulse"
of
the market. The market we trade in is the S&P 500 E-Mini Futures which is
tradable 23.5 hours each day and has the best price liquidity for trade
efficiency. The S&P 500 E-Mini trades on average over 2 million contracts
per day.
The
Company will continue to finance its operations, from profits heretofore
realized from its real estate financing; profits expected from its trading
operations; and, loans from one third party. This third party is a shareholder
of the Company.
While
the
company has found that loans from one third party are currently available,
it is
possible that such third party loans may not be available in the future. In
that
event, the Company’s ability to make large investments in the Futures markets
could be substantially impaired. Investors and shareholders should be aware
of
the significant risks the company undertakes in funding its operations by
receiving and relying on third-party loans for investment; and, also that
Futures and options trading involves substantial risk and may not be suitable
for every investor and / or shareholder. The valuation of futures, and options
may fluctuate, and, as a result, the Company may lose more than its original
investment..
The
Company’s actual operating costs for the next year should be minimal. The
Company intends to use 2 part-time employees as part of its operations.
Management anticipates that operating costs for the first twelve (12) months
will total approximately $18,000.00. Such costs shall be paid for from profits
it receives from its investments in the Futures option market.
Results
of Operations
For
the
Period from March 31, 2007 through March 31, 2008.
Revenues
from continuing operations for the years ended March 31, 2008 and 2007 were
$1,803,812 and $499,313, respectively. 100% of the revenues earned in the
current year were the result of the Company’s investment short strangle
strategy, wereas revenues from the prior year resulted primarily from real
estate financing and development
Total
operating expenses for the period ending March 31, 2008 were $259,305, compared
to $202,505 in for the fiscal year ended March 31, 2007. This slight increase
in
operating expenses was largely the result of increased legal and professional
fees. We reported net income of $1,823,743, or $0.00 per share, for the period
ended March 31, 2008, an increase of $1,524,203 over the net income of $299,540,
or $0.00 per share, reported for the year ended March 31, 2007. The increase
in
net income for the year ended March 31, 2008 was largely a result of management
having a full year to devote the Company’s resources to the short strangle
investment strategy, coupled by a relatively insignificant increase in overhead
expenses.
Liquidity
and Capital Resources
At
March
31, 2008, we had cash on hand of $21,429, and short-term investments in the
amount of $3,364,330. We believe that current cash on hand is not sufficient
to
satisfy our cash requirements for the next twelve months, which we estimate
to
be approximately $600,000. Due to the fact that our limited operations have
not
generated cash flow sufficient to cover ongoing business expenses and/or we
purchase additional equipment, we may have to rely on our directors, or on
outside sources, to provide additional funds. However, we have no agreements
with anyone to provide future funds to our Company. If our directors are unable
to provide future funding, if the need arises, we may have to look at
alternative sources of funding. Presently we are attempting to raise funds
through a private placement of our shares of common stock. We do not have any
firm commitments from third parties to provide funding, and there is no
assurance that such funds will be available or, that even if they are available,
that they will be available on terms that will be acceptable to us. In the
event
we are unable to secure necessary future funding, we may have to curtail our
business or cease operations completely.
As
reported by the Company’s auditors in Note 5 of our audited financial
statements, the Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern.
At
March
31, 2008, we had total assets of $3,385,759 and stockholders' equity of
$3,385,759.
Net
Operating Loss
We
have
accumulated approximately $9,500,000 of net operating loss carryforwards as
of
March 31, 2008, which may be offset against taxable income and income taxes
in
future years. The use of these losses to reduce future income taxes will depend
on the generation of sufficient taxable income prior to the expiration of the
net operating loss carryforwards. The carry-forwards expire in the year 2028.
In
the event of certain changes in control, there will be an annual limitation
on
the amount of net operating loss carryforwards which can be used. No tax benefit
has been reported in the financial statements for the year ended March 31,
2008
because there is a 50% or greater chance that the carryforward will not be
used.
Accordingly, the potential tax benefit of the loss carryforward is offset by
a
valuation allowance of the same amount.
Forward
Looking and Cautionary Statements
This
report, including the sections entitled "Business," "Risk Factors" and
"Management's Discussion and Analysis or Plan of Operations" contains
forward-looking statements. These statements relate to future events or our
future financial performance and involve known and unknown risks and
uncertainties. These factors may cause our company's or our industry's actual
results, levels of activity, performance or achievements to be materially
different from those expressed or implied by the forward- looking statements.
These risks and other factors include those listed under "Risk Factors" and
elsewhere in this report. In some cases, you can identify forward-looking
statements by terminology such as "may," "will" "should," "expects," "intends,"
"plans," anticipates," "believes," "estimates," "predicts," "potential,"
"continue," or the negative of these terms or other comparable
terminology.
You
should be aware that a variety of factors could cause actual results to differ
materially from the anticipated results or other matters expressed in
forward-looking statements. These risks and uncertainties, many of which are
beyond our control, include:
|
|
the
sufficiency of existing capital resources and our ability to raise
additional capital to fund cash requirements for future
operations;
|
|
|
uncertainties
following any successful acquisition or merger related to the future
rate
of growth of our business and acceptance of our products and/or services;
|
|
|
volatility
of the stock market, particularly within the technology sector;
and
|
|
|
general
economic conditions.
|
Although
we believe the expectations reflected in these forward-looking statements are
reasonable, such expectations cannot guarantee future results, levels of
activity, performance or achievements.
You
are
cautioned that any forward-looking statements are not guarantees of future
performance and are subject to risks and uncertainties. Actual results may
differ materially from those included within the forward-looking statements
as a
result of various factors. Cautionary statements in the risk factors section
and
elsewhere in this report identify important risks and uncertainties affecting
our future, which could cause actual results to differ materially from the
forward-looking statements made in this report.
Recent
Accounting Pronouncements
SFAS
No. 157, Fair
Value Measurements
- This
Statement does not require any new fair value measurements, but rather, it
provides enhanced guidance to other pronouncements that require or permit assets
or liabilities to be measured at fair value. However, the application of this
Statement may change how fair value is determined. The Statement is effective
for financial statements issued for fiscal years beginning after November 15,
2007, and interim periods within those fiscal years. As of December 1, 2007
the
FASB has proposed a one-year deferral for the implementation of the Statement
for nonfinancial assets and nonfinancial liabilities that are recognized or
disclosed at fair value in the financial statements on a nonrecurring basis.
The
implementation of this pronouncement had no material effect on the Company’s
financial statements.
SFAS
No. 158, Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans - an
amendment of FASB Statements No. 87, 88, 106, and 132(R)
-
This
Statement requires that employers measure plan assets and obligations as of
the
balance sheet date. This requirement is effective for fiscal years ending after
December 15, 2008. The other provisions of the Statement were effective as
of
the end of the fiscal year ending after December 15, 2006, for public companies.
The implementation of this pronouncement had no material effect on the Company’s
financial statements.
SFAS
No. 159, The
Fair Value Option for Financial Assets and Financial Liabilities - Including
an
amendment of FASB Statement No. 115
-
This
Statement provides all entities with an option to report selected financial
assets and liabilities at fair value. The Statement is effective as of the
beginning of an entity’s first fiscal year beginning after November 15, 2007,
with early adoption available in certain circumstances. The implementation
of
this pronouncement had no material effect on the Company’s financial
statements.
SOP
No. 07-01, Clarification
of the Scope of the Audit and Accounting Guide “Investment Companies” and
Accounting by Parent Companies and Equity Method Investors for Investments
in
Investment Companies
-
SOP
07-01 provides guidance for determining whether an entity is within the scope
of
the AICPA Audit and Accounting Guide Investment
Companies. The
provisions of the SOP are effective for fiscal years beginning on or after
December 15, 2007, with earlier application encouraged. As of December 1, 2007
the FASB has proposed an indefinite deferral of this SOP. The implementation
of
this pronouncement had no effect on the Company’s financial
statements.
EITF
Issue No. 06-1, Accounting for Consideration Given by a Service Provider to
a
Manufacturer or Reseller of Equipment Necessary for an End-Customer to Receive
Service from the Service Provider
- This
consensus concludes that if the consideration given by a service provider to
a
manufacturer or reseller (that is not a customer of the service provider) can
be
linked contractually to the benefit received by the service provider's customer,
the service provider should account for the consideration in accordance with
EITF Issue 01-9. The consensus is effective for the first annual reporting
period beginning after June 15, 2007. The implementation of this pronouncement
had no effect on the Company’s financial statements.
EITF
Issue No. 06-4, Accounting for Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life Insurance
Arrangements
- This
consensus concludes that for a split-dollar life insurance arrangement within
the scope of this Issue, an employer should recognize a liability for future
benefits in accordance with FASB Statement No. 106 (if, in substance, a
postretirement benefit plan exists) or APB Opinion No. 12 (if the arrangement
is, in substance, an individual deferred compensation contract) based on the
substantive agreement with the employee. The consensus is effective for fiscal
years beginning after December 15, 2007, with early application permitted.
The
implementation of this pronouncement had no effect on the Company’s financial
statements.
EITF
Issue No. 06-8, Applicability of the Assessment of a Buyer's Continuing
Investment under FASB Statement No. 66, “Accounting for Sales of Real Estate”,
for Sales of Condominiums
- This
consensus concludes that an entity is required to evaluate the adequacy of
a
buyer’s initial and continuing investment for purposes of determining whether it
is appropriate to recognize profit from a real estate sale involving a
condominium unit or time-sharing interest under the percentage-of-completion
method under Statement No. 66. The consensus is effective for the first annual
reporting period beginning after March 15, 2007. The implementation of this
pronouncement had no effect on the Company’s financial statements.
EITF
Issue No. 06-10, Accounting for Collateral Assignment Split-Dollar Life
Insurance Arrangements
- In
this
Issue, a consensus was reached that an employer should recognize a liability
for
the postretirement benefit related to a collateral assignment split-dollar
life
insurance arrangement in accordance with either FASB Statement No. 106 or APB
Opinion No. 12, as appropriate, if the employer has agreed to maintain a life
insurance policy during the employee's retirement or provide the employee with
a
death benefit based on the substantive agreement with the employee. A consensus
also was reached that an employer should recognize and measure an asset based
on
the nature and substance of the collateral assignment split-dollar life
insurance arrangement. The consensuses are effective for fiscal years beginning
after December 15, 2007, including interim periods within those fiscal years,
with early application permitted. The implementation of this pronouncement
had
no effect on the Company’s financial statements.
EITF
Issue No. 06-11, Accounting for Income Tax Benefits of Dividends on Share-Based
Payment Awards
- In
this
Issue, a consensus was reached that a realized income tax benefit from dividends
or dividend equivalents that are charged to retained earnings and are paid
to
employees for equity-classified nonvested equity shares, nonvested equity share
units, and outstanding equity share options should be recognized as an increase
in additional paid-in capital. This Issue should be applied prospectively to
the
income tax benefits that result from dividends on equity-classified employee
share-based payment awards that are declared in fiscal years beginning after
December 15, 2007, and interim periods within those fiscal years. Early
application is permitted. The implementation of this pronouncement had no effect
on the Company’s financial statements.
EITF
Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or
Services Received for Use in Future Research and Development
Activities
- In
this
Issue, a consensus was reached that nonrefundable
advance
payments for future research and development activities should be deferred
and
capitalized. This Issue is effective for financial statements issued for fiscal
years beginning after December 15, 2007, and interim periods within those fiscal
years. Early application is not permitted. The implementation of this
pronouncement had no effect on the Company’s financial statements.
FSP
No. FAS 158-1, Conforming Amendments to the Illustrations in FASB Statements
No.
87, No. 88, and No. 106 and to the Related Staff Implementation
Guides
- This
FSP
provides conforming amendments to the illustrations in FASB Statements No.
87,
88, and 106 and to related staff implementation guides as a result of the
issuance of FASB Statement No. 158. The conforming amendments made by this
FSP
are effective as of the effective dates of Statement No. 158. The unaffected
guidance that this FSP codifies into Statements No. 87, 88, and 106 does not
contain new requirements and therefore does not require a separate effective
date or transition method. The implementation of this pronouncement had no
effect on the Company’s financial statements.
FSP
No. FIN 39-1, Amendment of FASB Interpretation No. 39
-
This
FSP
amends FASB Interpretation (FIN) No. 39, Offsetting
of Amounts Related to Certain Contracts, to
permit
a reporting entity to offset fair value amounts recognized for the right to
reclaim cash collateral or the obligation to return cash collateral against
fair
value amounts recognized for derivative instruments executed with the same
counterparty under the same master netting arrangement that have been offset
in
accordance with paragraph 10 of FIN 39. The guidance in this FSP is effective
for fiscal years beginning after November 15, 2007, with early application
permitted. The implementation of this pronouncement had no effect on the
Company’s financial statements.
FSP
No. FIN 46(R)-7, Application of FASB Interpretation No. 46(R) to Investment
Companies
- This
FSP
addresses the application of FASB Interpretation (FIN) No. 46 (revised December
2003), Consolidation
of Variable Interest Entities,
by an
entity that accounts for its investments in accordance with the specialized
accounting guidance in the AICPA Audit and Accounting Guide, Investment
Companies.
The
provisions of the FSP are effective when the entity adopts SOP 07-01. The
implementation of this pronouncement had no effect on the Company’s financial
statements.
SEC
Staff Accounting Bulletin No. 109, Written Loan Commitments Recorded at Fair
Value Through Earnings
- SAB
109
expresses the current view of the staff that the expected net future cash flows
related to the associated servicing of the loan should be included in the
measurement of all written loan commitments that are accounted for at fair
value
through earnings. SEC registrants are expected to apply the views in
Question 1 of SAB 109 on a prospective basis to derivative loan commitments
issued or modified in fiscal quarters beginning after December 15, 2007. The
implementation of this pronouncement had no effect on the Company’s financial
statements.
ITEM
7. FINANCIAL STATEMENTS
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY
AND
SUBSIDIARIES
CONSOLIDATED
FINANCIAL STATEMENTS
March
31, 2008 and 2007
C
O N T E N T S
|
19
|
|
|
Consolidated
Balance Sheet
|
20
|
|
|
Consolidated
Statements of Operations
|
21
|
|
|
Consolidated
Statements of Stockholders' Equity (Deficit)
|
22
|
|
|
Consolidated
Statements of Cash Flows
|
23
|
|
|
Notes
to the Consolidated Financial Statements
|
24
|
MOORE
& ASSOCIATES, CHARTERED
ACCOUNTANTS
AND ADVISORS
PCAOB
REGISTERED
REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To
the Board of Directors
American
Resources and Development Company and Subsidiaries
We
have
audited the accompanying consolidated balance sheets of American Resources
and
Development Company and Subsidiaries as of March 31, 2008 and 2007, and the
related consolidated statements of operations, stockholders’ equity and cash
flows for the years ended March 31, 2008, 2007 and 2006. These financial
statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based
on
our audits.
We
conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that
we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall 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 financial position of American Resources And
Development Company and Subsidiaries as of March 31, 2008 and 2007, and the
related consolidated statements of operations, stockholders’ equity and cash
flows for the years ended March 31, 2008, 2007 and 2006, in conformity with
accounting principles generally accepted in the United States of
America.
/s/
Moore & Associates, Chartered
Moore
& Associates Chartered
Las
Vegas, Nevada
July
2,
2008
2675
S. Jones Blvd. Suite 109, Las Vegas, NV 89146 (702) 253-7499 Fax (702)
253-7501
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY AND SUBSIDIARIES
Consolidated
Balance Sheets
|
|
March
31,
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
21,429
|
|
$
|
1,865,852
|
|
Notes
receivable
|
|
|
-
|
|
|
1,025,591
|
|
Notes
receivable - related parties
|
|
|
-
|
|
|
200,000
|
|
Investments
|
|
|
3,364,330
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Total
Current Assets
|
|
|
3,385,759
|
|
|
3,091,443
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
3,385,759
|
|
$
|
3,091,443
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$
|
-
|
|
$
|
2,913
|
|
|
|
|
|
|
|
|
|
Total
Current Liabilities
|
|
|
-
|
|
|
2,913
|
|
|
|
|
|
|
|
|
|
LONG-TERM
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
|
-
|
|
|
1,526,514
|
|
|
|
|
|
|
|
|
|
Total
Long Term Liabilities
|
|
|
-
|
|
|
1,526,514
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES
|
|
|
-
|
|
|
1,529,427
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY (DEFICIT)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock; $0.01 par value; 500,000,000 shares authorized; 467,039,666
shares
issued and outstanding
|
|
|
467,040
|
|
|
467,040
|
|
Additional
paid-in capital
|
|
|
11,553,822
|
|
|
11,553,822
|
|
Accumulated
deficit
|
|
|
(8,635,103
|
)
|
|
(10,458,846
|
)
|
|
|
|
|
|
|
|
|
Total
Stockholders' Equity (Deficit)
|
|
|
3,385,759
|
|
|
1,562,016
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|
$
|
3,385,759
|
|
$
|
3,091,443
|
|
The
accompanying notes are an integral part of these financial
statements.
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY AND SUBSIDIARIES
Consolidated
Statements of Operations
|
|
For
the Years Ended
|
|
|
|
March
31,
|
|
|
|
2008
|
|
2007
|
|
2006
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$
|
1,803,812
|
|
$
|
499,313
|
|
$
|
237,673
|
|
|
|
|
|
|
|
|
|
|
|
|
COST
OF SALES
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
1,803,812
|
|
|
499,313
|
|
|
237,673
|
|
|
|
|
|
|
|
|
|
|
|
|
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
and administrative
|
|
|
259,305
|
|
|
202,505
|
|
|
260,547
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
259,305
|
|
|
202,505
|
|
|
260,547
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME (LOSS)
|
|
|
1,544,507
|
|
|
296,808
|
|
|
(22,874
|
)
|
|
|
|
|
|
|
|
|
|
|
|
OTHER
INCOME (EXPENSES)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
(145,018
|
)
|
|
(44,456
|
)
|
|
(254,426
|
)
|
Interest
income
|
|
|
117,689
|
|
|
74,751
|
|
|
-
|
|
Loss
on disposal of fixed assets
|
|
|
-
|
|
|
(27,563
|
)
|
|
-
|
|
Gain
on forgiveness of debt
|
|
|
306,565
|
|
|
-
|
|
|
-
|
|
.
|
|
|
|
|
|
|
|
|
|
|
Total
Other Income (Expense)
|
|
|
279,236
|
|
|
2,732
|
|
|
(254,426
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET
INCOME (LOSS)
|
|
$
|
1,823,743
|
|
$
|
299,540
|
|
$
|
(277,300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
INCOME (LOSS)PER SHARE
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING
|
|
|
467,039,666
|
|
|
466,905,036
|
|
|
466,770,406
|
|
The
accompanying notes are an integral part of these financial
statements.
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY AND SUBSIDIARIES
Consolidated
Statements of Stockholders' Equity (Deficit)
|
|
|
|
|
|
Additional
|
|
|
|
|
|
Common
Stock
|
|
Paid-In
|
|
Accumulated
|
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2004
|
|
|
454,270,406
|
|
$
|
454,271
|
|
$
|
11,557,665
|
|
$
|
(10,477,051
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares issued in acquisition of Springfield Finance and Mortgage,
LLC
|
|
|
12,500,000
|
|
|
12,500
|
|
|
(3,574
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year ended March 31, 2005
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(4,035
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2005
|
|
|
466,770,406
|
|
|
466,771
|
|
|
11,554,091
|
|
|
(10,481,086
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss for the year ended March 31, 2006
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(277,300
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2006
|
|
|
466,770,406
|
|
|
466,771
|
|
|
11,554,091
|
|
|
(10,758,386
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
shares issued into reserve
|
|
|
269,260
|
|
|
269
|
|
|
(269
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income for the year ended March 31, 2007
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
299,540
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2007
|
|
|
467,039,666
|
|
|
467,040
|
|
|
11,553,822
|
|
|
(10,458,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income for the year ended March 31, 2008
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,823,743
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance,
March 31, 2008
|
|
|
467,039,666
|
|
$
|
467,040
|
|
$
|
11,553,822
|
|
$
|
(8,635,103
|
)
|
The
accompanying notes are an integral part of these consolidated financial
statements.
Consolidated
Statements of Cash Flows
|
|
For
the Years Ended
|
|
|
|
March
31,
|
|
|
|
2008
|
|
|
|
2006
|
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
$
|
1,823,743
|
|
$
|
299,540
|
|
$
|
(277,300
|
)
|
Adjustments
to reconcile net loss to net cash provided (used) by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
-
|
|
|
1,894
|
|
|
2,302
|
|
Loss
on disposal of fixed assets
|
|
|
-
|
|
|
13,513
|
|
|
-
|
|
Gain
on forgiveness of debt
|
|
|
(297,673
|
)
|
|
-
|
|
|
-
|
|
Change
in investments
|
|
|
(2,239,655
|
)
|
|
-
|
|
|
-
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
Increase
in accounts receivable
|
|
|
-
|
|
|
(20,407
|
)
|
|
44,316
|
|
Increase
in notes receivable
|
|
|
-
|
|
|
238,350
|
|
|
-
|
|
Increase
in notes receivable - related party
|
|
|
-
|
|
|
117,082
|
|
|
-
|
|
Increase
in other assets
|
|
|
-
|
|
|
16,482
|
|
|
(21,229
|
)
|
Increase
(decrease) in accounts payable and accrued expenses
|
|
|
115,391
|
|
|
(55,178
|
)
|
|
314,446
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided (Used) by Operating Activities
|
|
|
(598,194
|
)
|
|
611,276
|
|
|
62,535
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
paid for investments
|
|
|
(1,725,000
|
)
|
|
-
|
|
|
-
|
|
Decrease
in land
|
|
|
-
|
|
|
585,239
|
|
|
61,018
|
|
Increase
in fixed assets
|
|
|
-
|
|
|
(8,658
|
)
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided (Used) by Investing Activities
|
|
|
(1,725,000
|
)
|
|
576,581
|
|
|
61,018
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds
from short-term debt
|
|
|
-
|
|
|
64,153
|
|
|
12,500
|
|
Net
payments on notes receivable
|
|
|
1,025,591
|
|
|
(1,210,571
|
)
|
|
-
|
|
Net
proceeds from long-term debt - related party
|
|
|
(546,820
|
)
|
|
1,216,544
|
|
|
(31,655
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net
Cash Provided (Used) by Financing Activites
|
|
|
478,771
|
|
|
70,126
|
|
|
(19,155
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET
DECREASE IN CASH
|
|
|
(1,844,423
|
)
|
|
1,257,983
|
|
|
104,398
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AT BEGINNING OF PERIOD
|
|
|
1,865,852
|
|
|
607,869
|
|
|
503,471
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
AT END OF PERIOD
|
|
$
|
21,429
|
|
$
|
1,865,852
|
|
$
|
607,869
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH
PAID FOR:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Income
Taxes
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLIMENTAL
SCHEDULE OF NON-CASH AND INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition
of notes receivable and assumption of long-term debt payable to
related
parties
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
Common
stock for non-cash assets
|
|
$
|
-
|
|
$
|
-
|
|
$
|
-
|
|
The
accompanying notes are an integral part of these financial
statements.
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY AND SUBSIDIARIES
Notes
to
the Consolidated Financial Statements
March
31,
2008 and 2007
NOTE
1 -
SIGNIFICANT
ACCOUNTING POLICIES
The
accompanying consolidated financial statements include those of American
Resources and Development Company (the Company) and its wholly-owned subsidiary,
Springfield Finance and Mortgage Company, LLC (SFMC). In addition, the
consolidated financial statements include those of Sprinfield Investment,
Inc.
(SFIC) and Springfield Construction, LLC (SFCC). Both SFIC and SFCC, although
not majority owned by the Company, have been determined to be “Variable Interest
Entities” pursuant to FIN 46 and have therefore been consolidated in these
financial statements. All inter-company items and transactions have been
eliminated in consolidation.
The
Company was formed on March 21, 1983 and is now in the business of providing
debt financing to other entities involved in the development of residential
real
estate through its SFMC subsidiary. The Company obtains the capital for the
financing of real estate development from outside sources as well as certain
majority shareholders. The Company acquired 100% of the members’ interest in
SFMC through the issuance of 12,500,000 shares of its restricted common stock,
and was accounted for under FASB Statement # 141, “Business Combinations.”
b.
Accounting Method
The
Company’s consolidated financial statements are prepared using the accrual
method of accounting. The Company has elected a March 31 year-end.
c.
Recognition of Revenues
|
Investment
income is the Company’s primary earnings focus. Revenues from investments
are derived from trading securities, and unrealized gains and losses
are
recorded as earnings whether or not the underlying securities are
sold.
|
d.
Use of
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 and liabilities at the date of
the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
|
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY AND SUBSIDIARIES
Notes
to
the Consolidated Financial Statements
March
31,
2008 and 2007
NOTE
1 -
SIGNIFICANT
ACCOUNTING POLICIES (Continued)
e.
Concentration of Credit 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 addition, the Company occasionally maintains cash investments
with
institutions that are not federally insured.
|
f.
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.
|
g. Advertising
The
Company follows the policy of charging the costs of advertising to expense
as
incurred. There were no advertising charges during the periods presented
in
these financial statements.
h. Property
and Equipment
Property,
equipment, and capital leases are recorded at cost and are depreciated 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.
i.
Basic
Income (Loss) per Share
Basic
income (loss) per share is computed based on the weighted average number
of
common shares outstanding during the period. As of March 31, 2008, there
were no
common stock equivalents outstanding. Therefore, the basic and fully diluted
income (loss) per share is the same for the periods presented
herein.
|
During
fiscal 2005 the Company issued 12,500,000 shares of its restricted
common
stock in exchange for the purchase of 100% of the members’ units and net
assets of SFMC. The value of the exchange ($8,923) was deemed by
management to be equal to the net book value of the assets and
liabilities
of SFMC since the only assets acquired were cash and notes receivable
with
values substantially equal to their face values, and the only liabilities
were notes payable and accrued interest bearing terms deemed equal
to
traditional terms used in arms-length transactions. As of March
31, 2008,
the Company had 467,039,666 shares of common stock issued and
outstanding.
|
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY AND SUBSIDIARIES
Notes
to
the Consolidated Financial Statements
March
31,
2008 and 2007
NOTE 2 - |
COMMON
STOCK (Continued)
|
|
During
the year ended March 31, 2007 the Company issued 269,260 shares
of common
stock into a reserve account. These shares will be delivered to
the
Company’s former preferred stockholders when they are located by the
Company.
|
Deferred
taxes are provided on a liability method whereby deferred tax assets are
recognized for deductible temporary differences and operating loss and tax
credit carryforwards and deferred tax liabilities are recognized for taxable
temporary differences. Temporary differences are the differences between
the
reported amounts of assets and liabilities and their tax bases. Deferred
tax
assets are reduced by a valuation allowance when, in the opinion of management,
it is more likely than not that some portion or all of the deferred tax assets
will not be realized. Deferred tax assets and liabilities are adjusted for
the
effects of changes in tax laws and rates on the date of enactment.
Net
deferred tax assets consist of the following components as of March 31, 2007
and
2006:
|
|
March
31,
|
|
March
31,
|
|
|
|
2008
|
|
2007
|
|
Deferred
tax assets:
|
|
|
|
|
|
|
|
NOL
Carryover
|
|
$
|
1,280,970
|
|
$
|
1,991,490
|
|
|
|
|
|
|
|
|
|
Deferred
Tax Liabilities:
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
Valuation
allowance
|
|
|
(1,280,970
|
)
|
|
(1,991,490
|
)
|
|
|
|
|
|
|
|
|
Net
deferred tax asst
|
|
$
|
-
|
|
$
|
-
|
|
The
income tax provision differs from the amount of income tax determined by
applying the U.S. federal and state income tax rates of 39% to pretax income
from continuing operations for the periods ended March 31, 2007 and 2006
due to
the following:
|
|
March
31,
|
|
March
31,
|
|
|
|
2008
|
|
2007
|
|
Book
income (loss)
|
|
$
|
711,260
|
|
$
|
(91,890
|
)
|
|
|
|
|
|
|
|
|
Valuation
allowance
|
|
|
(711,260
|
)
|
|
91,890
|
|
|
|
|
|
|
|
|
|
|
|
$ |
-
|
|
$
|
-
|
|
At
March
31, 2008, the Company had net operating loss carryforwards of approximately
$8,700,000 that may be offset against future taxable income from the year
2008
through 2028. No tax benefit has been reported in the accompanying financial
statements since the potential tax benefit is offset by a valuation allowance
of
the same amount.
AMERICAN
RESOURCES AND DEVELOPMENT COMPANY AND SUBSIDIARIES
Notes
to
the Consolidated Financial Statements
March
31,
2008 and 2007
NOTE 3 - |
INCOME
TAXES (Continued)
|
Due
to
the change in ownership provisions of the Tax Reform Act of 1986, net operating
loss carryforwards for Federal income tax reporting purposes are subject
to
annual limitations. Should a change in ownership occur, net operating loss
carryforwards may be limited as to use in future years.
|
|
During
the year ended March 31, 2008 the Company negotiated a settlement
on a
note payable due to an unrelated entity. According to the terms
of the
settlement agreement, the Company agreed to assign certain investments
and
notes receivable totaling $1,347,145 in as payment in full on a
note
payable totaling $1,644,818, including accrued interest. As a result
of
this transaction, the Company recorded a gain on settlement of
debt in the
amount of $ 297,673. As of March 31, 2008, the Company had no additional
obligations relating to this note
payable
|
|
|
At
March 31, 2008 the Company held investments in the amount of $3,364,330.
These investments have been classified as trading securities, pursuant
to
SFAS 115.
|
ITEM
8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
There
have been no disagreements with the Company’s independent accountants over any
item involving the Company’s financial statements. The Company’s independent
accountants are Moore & Associates, Chartered, 2675 S. Jones Blvd. Suite
109, Las Vegas, NV 89146 (702) 253 7499 Fax (702) 253 7501
PART
III
ITEM
9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH
SECTION 16(a) OF THE EXCHANGE ACT
1.
|
Directors
and Executive Officers
|
As
of
March 31, 2008, the directors and executive officers of the Company, their
ages,
positions in the Company, the dates of their initial election or appointment
as
director or executive officer, and the expiration of the terms as directors
are
as follows:
Name
|
|
Age
|
|
Position
|
|
Time
Period Served
|
Thomas
E. Stamos
|
|
51
|
|
President
& Director*
|
|
7/25/2003
- Present
|
R.
Brooke Williamsen
|
|
47
|
|
Vice-President
& Director*
|
|
7/25/2003
- Present
|
*The
Company’s directors are elected at the annual meeting of stockholders and hold
office until their successors are elected and qualified. The Company’s officers
are appointed annually by the Board of Directors and serve at the pleasure
of
the Board.
Thomas
E. Stamos,
age 51,
is the President and a Director. Mr. Stamos is a practicing attorney at law
in
Salt Lake City, Utah. He received a Bachelor of Science Degree in History and
Political Science from the University of Utah in Salt Lake City, Utah; a Masters
in Business Administration from Nova University Graduate School of Business
in
Fort Lauderdale, Florida; and a Juris Doctorate from Brigham Young University
J.
Reuben Clark Law School in Provo, Utah.
Mr.
Stamos was a financial analyst/accountant for American Express Co. from 1982
to
1986. From 1986 to 1997 he was a business analyst and manager for Fidelity
Investments Co. From 1997 to the present he has practiced general law with
an
emphasis on corporate affairs, business litigation, and bankruptcy. He has
participated in numerous trials, negotiated and prepared business contracts
and
agreements, and has prepared numerous appellate briefs. Mr. Stamos was also
a
law clerk for the Tax and Business Regulation Department of the State of Utah
in
1988. Mr. Stamos is a member of the Utah Bar Association, Salt Lake County
Bar
Association, and Bankruptcy Section.
R.
Brooke Williamsen,
age 47,
is the Vice President and a Director of the Company. He received a B.A. degree
in Arts, English Literature, with a Minor in Mandarin Chinese from the
University of Utah in Salt Lake City, Utah. He attended the East China Institute
of Politics and Law in Shanghai, China in June and July of 1988. Mr. Williamsen
received a Juris Doctorate from the J. Ruben Clark Law School at Brigham Young
University in Provo, Utah.
From
1988
to the present Mr. Williamsen has served as general counsel and super fund
project manager for Southwest Investment Company. From 1997 to present, Mr.
Williamsen has been the attorney for and part owner of Advantage Title Company
in Salt Lake City, Utah. From 1991 to the present, Mr. Williamsen has practiced
law in Salt Lake City, Utah as a sole practitioner. His practice has included
full case responsibility including preparation of pleadings and discovery.
His
primary experience has been in real estate development/transactions, corporate
construction, bankruptcy and collections.
3.
|
Directors
of Other Reporting
Companies:
|
None
of
the officers or directors of the Company are directors of any other reporting
company.
The
officers and directors who are identified above are the significant employees
of
the Company.
There
are
no family relationships between the directors, executive officers or any other
person who may be selected as a director or executive officer of the
Company.
6.
|
Involvement
in Certain Legal
Proceedings:
|
Except
as
noted below, none of the officers, directors, promoters or control persons
of
the Company have been involved in the past five (5) years in any of the
following:
(1) Any
bankruptcy petition filed by or against any business of which such person was
a
general partner or executive officer either at the time of the bankruptcy or
within two years prior to that time;
(2) Any
conviction in a criminal proceedings or being subject to a pending criminal
proceeding (excluding traffic violations and other minor offenses);
(3) Being
subject to any order, judgment or decree, not subsequently reversed, suspended
or vacated, or any Court of competent jurisdiction, permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any
type
of business, securities or banking activities; or
(4) Being
found by a court of competent jurisdiction (in a civil action), the Commission
or the Commodity Futures Trading Commission to have violated a federal or state
securities laws or commodities law, and the judgment has not been reversed,
suspended, or vacated.
ITEM
10. EXECUTIVE COMPENSATION
The
following table sets forth information about compensation paid or accrued by
the
Company during the years ended March 31, 2004 to the Company’s officers and
directors. None of the Executive Officers of the Company earned more than
$100,000 during the years ended March 31, 2008, 2007, and 2006.
Summary
of Compensation Table
Name
&
Principal
Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Annual
Compensation
|
|
Other
Restricted
Stock
Awards
|
|
Under-
Lying
Options
/SARs
|
|
Securities
|
|
LTIP
Payouts
|
|
Other
Compensation
|
|
Thomas
E.
|
|
|
2008
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
Stamos
|
|
|
2007
|
|
$
|
31,440
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
President
& Director
|
|
|
2006
|
|
$
|
97,017
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R.
Brooke
|
|
|
2008
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
Williamsen
|
|
|
2007
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
Vice
President & Director
|
|
|
2006
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Randy
S.
|
|
|
2008
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
Jorgensen
|
|
|
2007
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
Secretary/Treasurer
& Director
|
|
|
2006
|
|
$
|
113,013
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
$
|
0.00
|
|
ITEM
11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
1.
|
Security
Ownership of Certain Beneficial
Owners:
|
The
following information sets forth certain information as of March 31, 2008;
and
reflects the stock ownership of each person who is known to the Company to
be
the beneficial owner of more than five percent (5%) of the Company’s Common
Stock:
Title
of
Class
|
|
Name
and Address of Beneficial
Owner
|
|
Amount
and
Nature
of
Beneficial
Ownership
|
|
Percent
of
Class
|
|
Common
|
|
|
Camille
Froidevaux, Trustee
Budinet
& Associates
20
Rue Senebier, P.B. 166
1211
Geneva, SWITZ
|
|
|
245,554,917
|
|
|
52.56
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
SB
Trust C/O
David
G. Badger, Trustee
919
Hilltop Road
Salt
Lake City, UT 84103
|
|
|
144,450,073
|
|
|
30.93
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
Thomas
E. Stamos
5891
Sagewood
Salt
Lake City, UT 84107
|
|
|
55,382,244
|
|
|
11.86
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
of Shares
|
|
|
445,387,234
|
|
|
95.36
|
%
|
2.
|
Security
Ownership of Management:
|
Title
of
Class
|
|
Name
and Address of Beneficial
Owner
|
|
Amount
and
Nature
of
Beneficial
Ownership
|
|
Percent
of
Class
|
|
Common
|
|
|
Thomas
Stamos
5891
Sagewood
Murray,
UT 84107
|
|
|
55,382,244
|
|
|
11.86
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Common
|
|
|
R.
Brooke Williamsen
5383
S 900 E
Salt
Lake City, UT 84117
|
|
|
1,000,000
|
|
|
0.21
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
of Shares
|
|
|
56,382,244
|
|
|
12.07
|
%
|
There
is
no arrangement which may result in a change in control.
ITEM
12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On
March
12, 2003, the Company, pursuant to a Court approved Settlement agreement
authorized the issuance of a total of what was then 402,350,914 shares of its
common stock to certain individuals and/or companies; and effective March 31,
2003, the company authorized the issuance of 43,707,687 shares to National
Resources Group, Inc. The shares received were as follows:
Name
|
|
Original
Amount
|
|
Camille
Froidevaux, Trustee
Budinet
& Associates
20
Rue Senebier, P.B. 166
1211
Geneva, SWITZ
|
|
|
245,554,917
|
|
|
|
|
|
|
SB
Trust C/O
Dale
E. Anderson, Trustee
919
Hilltop Road
Salt
Lake City, UT 84103
|
|
|
144,450,073
|
|
|
|
|
|
|
Small
Business Development, LLC1
5891
Sagewood
Salt
Lake City, UT 84107
|
|
|
56,053,611
|
|
|
|
|
|
|
National
Resources Group
1122
West South Jordan
Parkway
South
Jordan, UT 84095
|
|
|
43,707,687
|
|
1 Small
Business Development, LLC is a Utah limited liability company. Thomas Stamos,
the Company’s president, is the manager of Small Business Development,
LLC.
These
shares were issued in consideration for cash and reorganization services
rendered by the above individuals in connection with the Company’s move into the
real estate finance, mortgage and development fields. Said shares were issued
pursuant to the exemption from registration contained in Section 4(2) of
the
Securities Act of 1933, as amended. The Company presently has 466,770,406
common
shares issued and outstanding.
ITEM
13. EXHIBITS
The
following exhibits are filed with this Form 10-K:
Assigned Number
|
|
Description
|
|
|
|
(2)
|
|
Plan
of acquisition, reorganization, arrangement, liquidation, or succession:
None
|
|
|
|
(3)(i)
|
|
Articles
of Incorporation: Incorporated by this reference from the
Company.
|
|
|
|
(3)(ii)
|
|
By-laws
of the Company: Incorporated by this reference from the
Company.
|
|
|
|
(4)
|
|
Instruments
defining the rights of holders including indentures:
None
|
|
|
|
(9)
|
|
Voting
Trust Agreement: None
|
|
|
|
(10)
|
|
Material
Contracts: Acquisitions Agreement regarding Springfield Finance &
Mortgage, LLC
|
|
|
|
(11)
|
|
Statement
regarding computation of per share earnings: Computations can be
determined from financial statements.
|
|
|
|
(13)
|
|
Annual
Report to Security holders for the last fiscal year:
None.
|
|
|
|
(14)
|
|
Code
of Ethics: (To
be adopted)
|
|
|
|
(16)
|
|
Letter
on change in certifying accountant: None
|
|
|
|
(18)
|
|
Letter
on change in accounting principles:
|
|
|
|
(20)
|
|
Other
documents or statements to security holders: None
|
|
|
|
(21)
|
|
Subsidiaries
of the registrant: Springfield Finance & Mortgage,
LLC
|
|
|
|
(22)
|
|
Published
reports re: matters submitted to a vote of security holders:
None
|
|
|
|
(23)
|
|
Consent
of experts and counsel: None
|
|
|
|
(24)
|
|
Power
of Attorney: None
|
|
|
|
(31)
|
|
Rule
13a-14(a)/15d-14(a) Certifications
|
|
|
|
(32)
|
|
Section
1350 Certifications
|
|
|
|
(99)
|
|
Additional
Exhibits: None
|
ITEM
14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The
aggregate fees billed to the Company by the Company's principal accountant,
Moore & Associates, Chartered, for the audit of the Company's annual
financial statements totaled $5,000 for the audit of the financial statement
for
the fiscal year end March 31, 2008. Audit fees consist of fees for the audit
and
review of the Company's financial statements, statutory audits, consents and
assistance with and review of documents filed with the SEC. No other fees were
billed to the Company by Moore & Associates, Chartered in connection with
such financials other than as described above.
SIGNATURES
In
accordance with Section 13 of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AMERICAN
RESOURCES & DEVELOPMENT COMPANY
Dated:
July 3, 2008
By:
/s/ Thomas
Stamos
Thomas
Stamos, President
In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the
dates indicated.
/s/
Thomas Stamos,
President, Director
July
3,
2008
Thomas
Stamos
/s/R.
Brooke Williamsen,
Vice
President, Director
July
3,
2008
R.
Brooke
Williamsen