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

[ ]      Transition report under section 13 or 15(d) of the Securities  Exchange
         Act of 1934 for the transition period from to

Commission file number 0-24372

                            Sundog Technologies, Inc.
                 (Name of small business issuer in its charter)

                            The Thorsden Group, Ltd.
                     (Former name of small business issuer)

         DELAWARE                                         33-0611746
(State or other jurisdiction of                (IRS Employer Identification No.)
incorporation or organization)


             4505 South Wasatch Blvd., Suite 340
                      Salt Lake City, Utah             84124
          (Address of principal executive offices)   (Zip Code)

                    Issuer's telephone number: (801) 424-0044


Securities registered under to Section 12(b) of the Act: None

Securities registered under to Section 12(g) of the Act: Common Stock, par value
$.001

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Securities  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 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 were $75,167.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of June 29, 1999 was not  determinable  since the Common Stock was
not traded during the period.

The number of shares  outstanding of the issuer's common stock,  par value $.001
per share, as of June 10, 1999 was 22,248,001 shares.

No documents are incorporated by reference in this report.

                     Transitional Small Business Disclosure
                               Format (Check one):

                               Yes      No  X
                                  -----   -----

<PAGE>

                                     PART I

Item 1.   Description of Business

Special note regarding  forward-looking  statements.  Certain statements in this
Item 1-Business,  and in Item 6-Management's  Discussion and Analysis or Plan of
Operation  constitute  forward-looking  statements within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act. You should regard
any statement in these sections that is not a statement of historical fact to be
a forward-looking statement of management's beliefs, expectations and plans, all
of which  may be  adversely  affected  by risks and other  factors  outside  the
control of the Company.  The Company's  actual results may differ  significantly
from the results discussed in the forward-looking statements. Factors that might
cause  actual  results  to vary  from the  views  expressed  in  forward-looking
statements  include,  but are not limited to, risk  factors  discussed  below in
"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations."

Introduction

Sundog Technologies,  Inc. ("Sundog" or the "Company") is a Delaware corporation
organized   in  1992  for  the  purpose  of  seeking  and   acquiring   business
opportunities.  The Company was formerly known as The Thorsden  Group,  Ltd. and
changed its name to Sundog  Technologies,  Inc. in April 1999.  In October 1997,
the Company acquired Arkona,  Inc., a Utah  corporation,  through a wholly owned
subsidiary  corporation.  Arkona Inc.'s predecessor,  Arkona LLC, a Utah limited
liability  company,  was  founded in  September  1996 and had  limited  business
operations prior to its acquisition by the Company. As a wholly owned subsidiary
of Sundog,  Arkona is  continuing  its  business of  developing,  marketing  and
selling software products for use in portable and distributed network computing.

On June 5, 1998,  the Company  formed a new  subsidiary  company,  Qui Vive Inc.
("QV"),  incorporated in Delaware. This company is engaged in the development of
Sundog's e-mail security  software  product and Internet  application more fully
described  below. QV is wholly owned by Sundog,  however the Company has granted
options to key personnel of QV as an incentive to further the  development  work
on the QV  products.  If all options  allocated  are  granted  and  subsequently
exercised in full, the options granted to the QV development team will result in
the team's ownership of approximately  45% of the issued and outstanding  common
stock of QV and reduce the ownership of Sundog proportionately.

Development  and launch of the e-mail  security  product has been delayed beyond
the  Company's  original  expectations.  This  has  been  due in  large  part to
unforseen  delays in raising  the  necessary  funding for this  project.  Recent
internal  restructuring has placed Sundog's former CEO, John Blumenthal,  at the
head of this project and Sundog has revised its development and launch timeline.
The QV projects are discussed  more  particularly  below under the heading,  "QV
Operations."

Arkona  Operations.  In 1997,  Sundog's  founders  anticipated  the growth of an
emerging market niche,  enterprise  information  exchange (EIX), an outgrowth of
the traditional data  replication/synchronization  marketplace.  This innovative
technology allows rapid integration of business  information  systems throughout
the  enterprise,  and the  ability to easily  share  critical  information  with
remote, occasionally connected workers and partners around the world.

During  December  1998,  the first  shipping  version of Arkona's  core product,
Universal  Update,  was publicly  introduced.  As part of the  Universal  Update
rollout,  Arkona announced a strategic  partnership with Open Market,  Inc., the
market share  leader in Internet  electronic  commerce  software and provider of
information commerce tools. Universal Update v1.5 shipped first in June 1999 and
includes special application "adapters" that integrate Universal Update and Open
Market products.  Pre-release  evaluation of the combined offering was conducted
at several Open Market customer and partner sites.

In February 1999,  Arkona launched its  professional  services group and named a
new Vice President,  Barney Leifeste. The group provides Arkona's customers with


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both training and consulting in business  process  improvement  (BPI), a service
used to drive demand for Arkona's software products and a prerequisite to ensure
complete client  satisfaction.  The professional  service group signed its first
contract in January 1999 with Cadmus Journal Services (NASDAQ: CDMS), one of the
nation's largest printing companies.

QV Operations.  The digital revolution has evolved around a simple notion:  that
information should be permanent. Unlike other media formats, digital information
(such as e-mail) can be stored forever, recovered at will, copied with ease, and
shared anywhere. Unfortunately, these attributes also give digital information a
more sinister side.  E-mail, for example,  can just as easily be saved,  copied,
recovered,  and  redistributed by anyone at any time with or without consent and
frequently  without  knowledge of the author.  Once an electronic e-mail message
has been sent, the author loses complete control of his or her words.  According
to industry  analyst  Esther  Dyson,  "The  challenge is not to keep  everything
secret, but to limit misuse of such information."

QV was  created to develop a solution to these  problems.  The purpose of the QV
solution is to  facilitate  communication  and give content  control back to the
author.  The Company  anticipates that this product will evolve from its initial
implementation,  which will  represent a level of  functionality  sufficient  to
cover most e-mail users' primary privacy concerns.  However, the Company intends
to  implement  other  designs  that  eliminate  intermediary  services,  further
simplify  the  functionality  and  usability  of the product and  simultaneously
increase the level of security in the product.

The  ultimate  design  goal is to  meet  the  most  stringent  secure  messaging
requirements  up to and including the standards of the United States  Department
of Defense.  Increasingly  rigorous  levels of security will be  implemented  en
route to achieving  this final goal.  Once the e-mail  solution is  successfully
launched,  implementations beyond e-mail will be designed and marketed.  Markets
to be targeted after the initial releases  include,  but will not necessarily be
limited to: voice mail, pagers, databases, Usenet newsgroups, and web publishing
tools.

The  Company  is  currently  seeking  to raise  additional  capital  in order to
complete  and move  from  the  design  and  architecture  phase of  development,
including the securing of all intellectual  property protections  available,  to
completion  and  marketing of the first product  version.  There is no assurance
that such funding will be obtained.

The Company has engaged  engineers,  marketers  and an  administrative  staff to
support the development of the QV product for delivery to the marketplace. There
can be no assurance that the Company will successfully  complete the product, or
that the product will include all or substantially all of the elements described
above, or that any of the other risks described herein will not adversely affect
the outcome of the project.

Development  on both  Universal  Update and the secure e-mail  product is slower
than the Company originally anticipated.  The implication for market penetration
with these  products  is that it will be behind plan and  therefore  the revenue
produced may also be behind plan. A key focus for successive quarters will be to
ensure continued product and market development plans are met.

                              Certain Risk Factors

Our short and long-term  success is subject to certain risks,  many of which are
substantial  in nature and you should  consider  carefully  the  following  risk
factors,  in  addition  to other  information  contained  in this  report as you
evaluate  the Company and its  business.  Any one of these  factors  could cause
actual results of our operations to differ materially from projected results.

We are in the development stage,  meaning that we have had only limited revenues
from sales of products or services.  The Company is in the development stage and
has a limited operating history.  There can be no assurance that we will be able
to achieve a significant level of sales or attain profitability.  Our operations
to this point have been limited to  developing  software,  making  initial sales
under  contracts with two customers and obtaining  financing for its operations.
As a result of the increase in operating  expenses caused by recent expansion of
our business,  operating results may be adversely  affected if significant sales
do not  materialize in the near term.  There can be no assurance that we will be
able to grow in the future or attain profitability. As a result, we believe that


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our prior results of operations are not necessarily meaningful and should not be
relied upon as an indication of future performance.  The profit potential of our
business is unproven and speculative.  We believe that to be successful we must,
among other  things,  develop  and market  software  that is widely  accepted by
business customers at prices that will yield a profit.

Our software and technologies are unproven and we do not know whether the market
will  accept  them.  Our  software  is in a  development  stage.  The e-mail and
Internet products in particular contain innovative  technologies for which there
may be no  established  market.  Our remote  computing  and database  management
products have  produced  only limited  sales to date.  There can be no assurance
that any of our products will achieve broad commercial  acceptance.  Our ability
to generate  future  revenues will be dependent on a number of factors,  many of
which are beyond our control and include,  among others, our ability to carry on
timely and  effective  marketing  campaigns  and the rate we can  establish  new
products and the type of competition we may encounter.  Because of the foregoing
factors,  among  others,  we are unable to forecast  our revenues or the rate at
which we will add new  customers  with any degree of  accuracy.  There can be no
assurance that we will be able to increase sales in accordance with our internal
forecasts or to a level that meets the expectations of investors. There can also
be no  assurance  that we will  ever  achieve  favorable  operating  results  or
profitability.

Our  accountants  have  included  an  explanatory  paragraph  on  our  financial
statements regarding our status as a "going concern." Our consolidated financial
statements  included in this report have been prepared on the assumption that we
will continue as a going concern.  The Company's  independent public accountants
have  issued  their  report  dated June 10, 1999 that  includes  an  explanatory
paragraph stating that our recurring losses and accumulated deficit, among other
things,  raise  substantial  doubt  about our  ability  to  continue  as a going
concern.  Our  product  line is limited and it has been  necessary  to rely upon
financing from the sale of our equity  securities and certain assets  consisting
of marketable  securities  to sustain  operations.  Additional  financing may be
required if we are to continue as a going concern.

We require  additional  capital to continue  development  of our products and to
fund day-to-day operations.  Cash flow from the sale of products and services is
not  sufficient to finance our  day-to-day  operations.  Our business is capital
intensive and we expect we will continue to incur  significant  operating losses
over the next 12 months,  primarily  due to the market  launch of new  products,
increased marketing expenditures,  and the expansion of research and development
programs.  Additional  funds will be  required in the event we have not begun to
generate  significant  revenues by the end of 1999. As a result,  we may find it
necessary  to postpone or cancel some of our planned  marketing  and/or  product
development  programs,  which could  adversely  affect  future  revenues and new
product introductions.  Notwithstanding revenues that may be produced during the
next 12 months, we anticipate that additional funds will be required to continue
the necessary levels of product development and promotional expenses to meet our
long-term  goals. We intend to seek such additional  funding through  additional
public  or  private  financings.  There  can  be no  assurance  that  additional
financing  will be  available,  or, if  available,  that it will be available on
acceptable terms or in required amounts.

Obtaining  additional  capital  through the sale of common  stock will result in
dilution of  shareholder  interests.  If additional  funds are raised by issuing
additional  shares of common stock, or securities such as options or warrants or
preferred stock  convertible  into common stock,  further dilution of the equity
ownership of existing holders of our common stock will result. If adequate funds
are not made  available  to us, we may be required to delay,  scale back or even
eliminate  one or more of our  product  candidates  and/or  product  development
programs,  and/or obtain funds through arrangements with collaborative  partners
or others that may require us to  relinquish  rights that we would not otherwise
relinquish.


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<PAGE>

Our quarterly operating results may fluctuate  significantly.  We experience and
expect to continue  to  experience  significant  fluctuations  in our  quarterly
operating results.  These fluctuations result from a variety of factors, many of
which  are  outside  our  control.  Such  factors  might  include,  but  are not
necessarily limited to:

         -   The rate at which  customers  purchase  our software and the prices
             paid for such software,

         -   The  amount  and timing of  capital  expenditures  and other  costs
             relating to the expansion of our business,

         -   The introduction of software products by us or our competitors,

         -   Price  competition or changes in Internet and computer  technology,
             and

         -   Technical  difficulties  or  economic  conditions  specific  to our
             business.

A significant  portion of our expenses  could be fixed in advance based in large
part on future revenue forecasts.  If revenue is below expectations in any given
quarter,  the adverse  impact of the shortfall on the  operating  results may be
magnified by the inability to adjust  spending to compensate  for the shortfall.
Therefore,  a shortfall in actual as compared to estimated revenue would have an
immediate  adverse  effect on our  business,  financial  condition and operating
results that could be material.

In addition, we plan to increase operating expenses to fund additional sales and
marketing,  general and administrative  activities and infrastructure  needs. To
the extent these expenses are not  accompanied  by an increase in revenues,  our
business,  financial  condition,  and results of operations  could be materially
adversely affected.

Due to all of the foregoing factors,  it is likely that our operating results in
one or more  future  quarters  will fail to meet or exceed the  expectations  of
securities analysts or investors. In such event, the trading price of the common
stock of the  Company,  to the extent  there is a market for such  stock,  would
likely be materially  adversely affected.  You should not expect past results to
be reliable indicators of future performance.

Our  expansion  into  Internet,  e-mail and other  applications,  as well as the
growth of our business, require the addition of qualified personnel and increase
our reliance on such personnel. The loss of technically  experienced,  qualified
personnel  is a risk to our  success.  We may not be  equipped  to  successfully
manage any future periods of rapid growth or expansion,  which could be expected
to place a  significant  strain on  managerial,  operating,  financial and other
resources.   We  are  highly  dependent  upon  the  efforts  of  management  and
technically skilled personnel,  including programmers and engineers,  and future
performance  will  depend,  in part,  upon the ability of  management  to manage
growth  effectively  and to retain  the  services  of these  experts.  This will
require us to implement financial controls,  systems and management  information
systems capabilities,  to develop our operating,  administrative,  financial and
accounting   systems  and  controls,   to  maintain  close   coordination  among
engineering,  accounting,  finance, marketing, sales and operations, and to hire
and  train  additional  technical  and  marketing  personnel.  There is  intense
competition for management,  technical and marketing personnel.  The loss of the
services  of any of our  management  team or the  failure to attract  and retain
additional key employees  could have a material  adverse effect on our business,
financial condition, and results of operations.

Our dependence on intellectual property and proprietary  information subjects us
to the risk  that  such  property  may be  inadequately  protected  or that such
information  may be  misappropriated.  We regard our  intellectual  property  as
critical  to our  success,  and we rely on  copyright,  patent and trade  secret
protection to protect our proprietary  rights in intellectual  property.  We are
currently pursuing and expect to pursue the registration of copyrights,  patents
and  trademarks in the United  States.  Effective  trademark,  copyright,  trade
secret or patent  protection  may not be available in every country in which our
products are or become available. We intend to effect appropriate  registrations
internationally  and  domestically  as our  operations  expand.  There can be no
assurance  that the  United  States or  foreign  jurisdictions  will  afford any
protection for our  intellectual  property.  There also can be no assurance that
any of our intellectual  property rights will not be challenged,  invalidated or
circumvented, or that the rights granted thereunder will provide any competitive
advantage.  We could also incur  substantial costs in asserting our intellectual
property  or  proprietary  rights  against  others,  including  any such  rights
obtained from third parties,  and/or  defending any  infringement  suits brought
against us. Although we enter into confidentiality and invention agreements with
our employees and  consultants,  there can be no assurance that such  agreements
will be  honored or that we will be able to  protect  effectively  our rights to
unpatented trade secrets and know-how.  Moreover, there can be no assurance that


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others  will not  independently  develop  substantially  equivalent  proprietary
information  and  techniques  or otherwise  gain access to our trade secrets and
know-how. We may be required to obtain licenses to certain intellectual property
or other proprietary  rights from third parties.  There can be no assurance that
any such licenses or proprietary rights would be made available under acceptable
terms, if at all. If we do not obtain required  licenses or proprietary  rights,
we could encounter delays in product development or find that the development or
sale of products requiring such licenses could be foreclosed.

Budget and cost overruns and delays frequently characterize development projects
such as those  conducted by us. We budget the cost of each project,  review cost
reports and update our cost  projections  and development  schedules  regularly.
However, there can be no assurance that the actual production costs for projects
will remain within budget or that development  will remain on schedule.  We have
experienced  delays in  development  objectives  in the past and there can be no
assurance we will not incur  similar  delays in the future.  Production  delays,
higher talent costs,  increased  subcontractor  costs,  and other  unanticipated
events (including,  but not limited to delays in obtaining necessary  financing)
may substantially increase production costs and delay or even prevent completion
of the production of any one or more of the programs we are now pursuing or that
we intend to pursue in the  future.  The  failure  to remain  within  budget and
deliver  products on time may have a material  adverse  effect on our  business,
financial condition and results of operations.

The software  industry,  and in particular,  the Internet,  are characterized by
rapid  development and change. We must develop products and technology that keep
pace with technological change. The software and Internet markets are recognized
for rapid  technological  developments,  frequent new product  introductions and
evolving industry standards. The emerging nature of these technologies, products
and services and their rapid evolution  require that we continually  improve the
performance,  features and reliability of our software, particularly in response
to competitive  offerings by other companies.  There can be no assurance that we
will  successfully  respond quickly,  cost effectively and sufficiently to these
developments.  There may be a time-limited  market  opportunity for our products
and there can be no assurance that we will be successful in achieving widespread
acceptance of our products before  competitors  offer products and services with
features  and  performance  similar  to  current  offerings.  In  addition,  the
widespread  adoption of new technologies or standards could require  substantial
expenditures to modify or adapt our products and services and which could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.  Furthermore, our new software enhancements may contain design flaws
or other defects that limit their marketability.  There can also be no assurance
that research and  development and discoveries by others will not render some or
all of our products or potential product offerings uncompetitive or obsolete. We
compete with a number of entities  that are currently  developing  and producing
software products that compete with our current and proposed  products.  Many of
these competitors have  substantially  greater capital  resources,  research and
development capabilities,  and production and marketing resources,  capabilities
and experience  than we have available to us. These  competitors  may succeed in
developing  products  that are more  effective  or less costly than any products
that  we may  develop,  or  that  gain  market  acceptance  prior  to any of our
products, making market penetration more difficult for us.

We depend on the technology of third parties in the development of our software.
Our use of such  technology  has been licensed to us. If our license to any such
technology were terminated or otherwise restricted beyond our current ability to
use it and incorporate it into our own products,  our development  efforts would
be adversely affected.  If we were not capable of obtaining the license to other
technology  to replace  that  which was lost  because  of the  termination  of a
license,  our  products  that are  dependent  upon the  technology  would become
inoperable or their  effectiveness  and performance  significantly  reduced.  In
addition,  if the vendors of such technology were to materially  alter or modify
or discontinue their products, we would be forced to incur additional expense to
acquire  or  develop  products  that would  enable us to  continue  with our own
products. If the cost of licensing third-party  technology materially increased,
our gross margins and earnings would decrease.

Like many software development companies, our business model is characterized by
a very high  degree  of  operating  leverage.  Many of our  operating  costs and
expenses  consist of employee and facility  related costs,  which are fixed over
the short term. Our operating expenses and hiring plans are based  substantially
on our internal  projections of future revenue,  which are inherently subject to
risks and factors that are often outside our ability to control.  If revenues do
not meet expectations, net income will be adversely affected.


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Changes in the  marketplace  may  require  the  Company  to make  changes to our
current  pricing  models.  We may choose later this year or in future periods to
make  changes to current  pricing  practices,  including  offering  discounts to
customers or a reduction of transactions  that involve perpetual use licenses of
our products,  changes in maintenance  pricing or other changes in the manner in
which we charge customers for the use of our products.  These changes may not be
well received by customers.  Furthermore,  the changes may depend on an increase
of volume and the failure to achieve  sufficient  increases in user volume would
adversely affect earnings.

Our current officers,  directors and significant  shareholders  continue to have
control of the Company. Officers, directors and certain significant shareholders
of the Company own 11,480,000 shares (or  approximately  51%) of the outstanding
common  stock.  As a  result,  these  persons  (as a group)  are able to elect a
majority  of our  Board  of  Directors,  to  dissolve,  merge,  or  sell  all or
substantially  all of our  assets,  and to direct and  control  our  operations,
policies and business decisions.

There is no  present  public  market for our  common  stock.  If and when such a
market develops,  our stock price may be volatile.  There has been no market for
our common stock and there is no  assurance  that any market will  develop.  The
common stock is not listed on any exchange.  If and when such a more established
market may  develop,  the market  price of the  common  stock,  like that of the
securities  of other  software  and high  technology  companies,  may be  highly
volatile. Broad market fluctuations may adversely affect the market price of our
common stock.  Our stock price may be affected by each of the factors  described
above, as well as:

         -   Announcements  by  us  or  competitors   concerning   technological
             innovations,  new  products or  procedures  developed  by us or our
             competitors,

         -   The adoption or amendment of  governmental  regulations and similar
             developments in the United States and foreign countries that affect
             our products or markets specifically or our markets generally,

         -   Disputes relating to patents or proprietary rights,

         -   Publicity regarding actual or potential results relating to product
             candidates under development by us or a competitor,

         -   Delays in product development,

         -   Slow acceptance of our products in new or existing markets, and

         -   Economic and other external  factors,  as well as  period-to-period
             fluctuations in financial results.

Our common stock may be deemed to be a "low-priced stock" and subject to certain
regulatory action that limits or restricts the market for such stock. Until such
time, if any, as our common stock is included in The Nasdaq  SmallCap  Market or
listed on another exchange,  the common stock will not be eligible for quotation
on Nasdaq and there can be no assurance that it will ever be so eligible.  Until
such time as we are  eligible  to  satisfy  the  listing  criteria  of Nasdaq or
another stock market, trading, if any, in our common stock would be conducted in
the  over-the-counter  market  in the  so-called  "pink  sheets"  or the  NASD's
"Electronic  Bulletin Board," under the symbol SUDG.  Consequently,  an investor
may find it more difficult to dispose of, or to obtain accurate quotations as to
the price of, the  Company's  securities.  In the  absence  of a security  being
quoted  on  Nasdaq,  or if we do not have  $2,000,000  in net  tangible  assets,
trading in the common  stock could be covered by Rule 15c2-6  promulgated  under
the Exchange Act for non-Nasdaq and non-exchange  listed securities.  Under such
rule,  broker-dealers  who  recommend  such  securities  to  persons  other than
established  customers and accredited  investors  (generally  institutions  with
assets in  excess of  $5,000,000  or  individuals  with a net worth in excess of
$1,000,000  or an annual  income  exceeding  $200,000 or $300,000,  jointly with
their  spouse) must make a special  written  suitability  determination  for the
purchaser and receive the purchaser's  written  agreement to a transaction prior
to sale.


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Securities are also exempt from this rule if the market price is at least $5 per
share.  Under the rules and  regulations  of the SEC,  additional  disclosure is
required for penny stocks and for trades in any stock  defined as a penny stock.
The SEC has defined a penny stock to be any Nasdaq or non-Nasdaq equity security
that has a market  price or exercise  price of less than $5 per share and allows
for the enforcement  against  violators of the rules.  Unless exempt,  the rules
require the delivery,  prior to any  transaction  involving a penny stock,  of a
disclosure  schedule  explaining  important  concepts  involving the penny stock
market,   the  nature  of  such  market,   terms  used  in  such   market,   the
broker-dealer's  duties  to the  customer,  a  toll-free  telephone  number  for
inquiries about the  broker-dealer's  disciplinary  history,  and the customer's
rights and remedies in case of fraud or abuse in the sale.

Disclosure must also be made about commissions payable to both the broker-dealer
and the registered representative,  current quotations for the securities,  and,
if the broker-dealer is the sole market-maker for the securities, then such fact
must also be disclosed, as well as its control over the market. Finally, monthly
statements must be sent disclosing  recent price information for the penny stock
held in the  investor's  account and  information on the limited market in penny
stocks. These requirements  significantly add to the burden of the broker-dealer
and limit the market for penny stocks.

While  many  Nasdaq  stocks  are  covered  by the  definition  of  penny  stock,
transactions in a Nasdaq stock are exempt from all but the sole market-maker for
(i) issuers who have $2,000,000 in tangible assets ($5,000,000 if the issuer has
not been in continuous  operation for three years),  (ii)  transactions in which
the customer is an institutional accredited investor and (iii) transactions that
are not recommended by the broker-dealer.  In addition, transactions in a Nasdaq
security directly with the Nasdaq market maker for such securities,  are subject
only to the sole  market-maker  disclosure,  and the  disclosure  with regard to
commissions to be paid to the broker-dealer and the registered representatives.

If our common stock is or becomes subject to the existing rules on penny stocks,
the market liquidity for the common stock could be severely affected by limiting
the  ability  of  broker-dealers  to sell the  common  stock and the  ability of
purchasers in this Offering to sell their securities in the secondary market.

Anti-takeover  provisions  of Delaware  Corporate  Law, and our ability to issue
preferred stock may affect the price of our common stock and allows the Board of
Directors to issue securities that may  significantly  dilute your ownership and
voting  power.  Under our  Certificate  of  Incorporation,  as  amended,  we are
authorized to issue up to 10,000,000  shares of preferred stock, par value $.001
per share ("Preferred  Stock"). We have not issued any Preferred Stock and there
are no present  plans to issue any Preferred  Stock.  Our Board of Directors has
the  authority  to issue the  Preferred  Stock with such voting and other rights
superior  to those of our  common  stock,  which  could  effectively  deter  any
attempted takeover of the Company. In addition, the Delaware General Corporation
Law  prohibits  certain  mergers,  consolidations,  sales of assets  or  similar
transactions between a corporation on the one hand and another company which is,
or is an affiliate of, a beneficial holder of 15% or more of such  corporation's
voting power (defined as an "Interested  Stockholder") for three years after the
acquisition of the voting power,  unless the acquisition of the voting power was
approved  beforehand by the corporation's  board of directors or the transaction
is approved  by a majority of such  corporation's  shareholders  (excluding  the
Interested  Stockholder).  These provisions  prohibiting  Interested Stockholder
transactions could also preserve management's control of Sundog.

The large number of shares of our common stock  eligible for future sale without
restrictions  can affect the market  price of the common  stock.  As of April 9,
1999,  20,520,400  shares  of  our  common  stock  outstanding  are  "restricted
securities" as that term is defined under Rule 144 of the Securities Act. Either
presently or in the future, these shares of common stock may be sold pursuant to
registration  under the Securities  Act, in compliance with Rule 144 or pursuant
to another exemption from registration. Under Rule 144 as currently in effect, a
person who has  beneficially  owned  restricted  securities of the Company for a
period  of at least  one year  may,  within  any  three  month  period,  sell in
brokerage  transactions  an amount of such  securities  that does not exceed the
greater of 1% of our then-outstanding common stock or the average weekly trading
volume of our common  stock during the four  calendar  weeks prior to such sale.
Rule 144, as currently in effect, also permits, under certain circumstances, the
sale  of  shares  without  regard  to  the  limitations   described   above,  by
non-affiliates of the Company, after holding such shares for at least two years.
Sales of  substantial  amounts of our common  stock of the Company in the public
market,  and any sales by affiliates of the Company,  particularly  officers and
directors, could adversely affect prevailing market prices for the common stock.


                                  Page 8 of 22

<PAGE>

The Company has not declared any dividends with respect to its common stock.  We
have  never  paid  cash  dividends  on our  common  stock.  We  intend to retain
earnings,  if any, to finance the  operation  and expansion of our business and,
therefore,  we do not  expect  to  pay  cash  dividends  on  the  Shares  in the
foreseeable future.

Year 2000 compliance issues could adversely affect our business. During the next
year, many software  programs may not recognize  calendar dates beginning in the
Year  2000.  This  problem  could  force  computers  or  machines  that use date
dependent  software  or  embedded  technologies  to either  shut down or provide
incorrect information.  To address this problem internally, we have examined our
computer and information systems, contacted our software and hardware providers,
and,  where  necessary,  made  upgrades to our  systems.  Our products are being
developed to address this problem without  modification by the user. Although we
believe that our products are Year 2000 compliant,  undetected errors or defects
may remain.  Disruptions to our business or unexpected costs could arise because
of  undetected  errors or  defects in the  technology  used in our  products  or
internal information systems,  which are comprised  predominantly of third party
software and hardware. If we, or any of our key suppliers or customers,  fail to
recognize and mitigate internal and external Year 2000 risks, we may temporarily
be unable to process  transactions,  send invoices, or engage in normal business
activities or we may experience a decline in sales,  which could have a material
adverse effect on our business, financial condition and results of operations.

Although our license  terms limit our liability  for product  liability  claims,
there can be no  assurance  that such a claim will not be brought in the future.
We have not experienced product liability claims to date. However,  our products
include programs designed for mission critical  applications,  creating the risk
that the failure or  malfunction of our products may result in serious damage or
loss and open the Company to a claim for damages. While contract terms limit our
exposure,  there  can also be no  assurance  that a court  would  not rule  such
provisions  to be invalid  or  unenforceable,  or that  changes in the law would
render  such  terms  void or  unenforceable.  A  successful  claim  could have a
material  adverse  effect on the  Company.  Furthermore,  the cost of  defending
against a claim, even successfully,  could be material and could have an adverse
effect on our results of  operations  and an adverse  effect on the marketing of
our products.

Item 2.   Description of Property

The  Company  owns no real  property.  The  Company  leases a 4,850  square foot
facility in Salt Lake City,  Utah from an  unaffiliated  third party at which it
conducts all of its corporate,  administrative,  research (for Universal Update)
and development activities. The lease of the Salt Lake facility expires December
31, 1999,  with an option to renew for one year.  The base monthly lease payment
for that facility totals $7,360.

The Company  also  leases a 3,550  square  foot  facility  in Colorado  Springs,
Colorado at which Qui Vive  conducts  all of its  administrative,  research  and
development  activities.  The lease of the Colorado  Springs facility expires in
March 2002 and has a base monthly payment of $4,018. These terms were negotiated
through arms-length  transactions,  and the Company believes that such terms are
consistent with prevailing market conditions.

The Company  believes the Salt Lake City and  Colorado  Springs  facilities  are
adequate  for its needs for at least the next year and does not  anticipate  any
expansion or the need to acquire,  through  lease or otherwise,  any  additional
facilities.

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

No matter was  submitted  to a vote of the  security  holders  during the fourth
quarter of the fiscal year covered by this report.

In May 1999,  the Company  changed  its name from The  Thorsden  Group,  Ltd. to
Sundog  Technologies,  Inc. The change was  accomplished  by an amendment to the
Company's  Certificate  of  Incorporation,  which was  adopted by the consent of
shareholders  holding a majority  of the issued  and  outstanding  shares of the
Company.  A notice of such change was mailed to all shareholders on or about May
21, 1999.


                                  Page 9 of 22

<PAGE>

                                     PART II

Item 5.   Market for Common Equity and Related Stockholder Matters

There is no current  public  trading  market for the Company's  common stock and
there is no assurance that any market will ever develop for such shares.  To the
extent a market does develop in the future, the market price of the common stock
will be subject to significant fluctuations as a result of several factors, over
many of which the Company has little or no control.

As of June 10, 1999 there were  approximately  22,248,001 shares of Common Stock
issued and outstanding held by approximately 425 holders of record.  The Company
has never issued any shares of preferred  stock.  The Company has never declared
or paid dividends on any class of its equity securities.

Recent sales of Unregistered Securities.

During the year ended  March 31,  1999,  the Company  sold and issued  2,115,501
shares of common  stock for cash  proceeds  of  $3,367,749  at a range of prices
between $1.50 and $2.00. Subsequent to March 31, 1999 107,667 shares were issued
for cash proceeds of $161,500.

These securities were offered and sold pursuant to exemptions from  registration
under the Securities Act of 1933, as amended, including exemptions under Section
4(2) and  Regulation  D,  promulgated  under the Act.  The  purchasers  of these
securities were  accredited  investors as that term is defined under Rule 501 of
Regulation D, as well as a limited  number of  sophisticated  purchasers who had
access to  information  concerning  the  Company  necessary  to make an informed
investment decision concerning their purchase of the Company's securities.

Item 6.   Management's Discussion and Analysis or Plan of Operation

The core business of the Company is developing,  marketing and selling  software
products for use in data distribution and secure e-mail  applications.  Business
is conducted through its subsidiaries, Arkona and Qui Vive.

Data Distribution

During the fiscal year ended March 31, 1999, and since that date, management has
directed  much of its efforts and  resources  in the  continued  development  of
Universal  Update(TM).  This  product  was beta  tested  in the  quarter  ending
December 31, 1998, and shipped as V1.5, to a number of evaluation  sites in June
1999.

Through  Arkona,  the  Company  provides  robust  yet simple  solutions  for the
information  exchange  requirements  of medium to large  distributed  enterprise
customers.  Arkona products and services help customers overcome the significant
challenge of  seamlessly  accessing,  transforming,  and  distributing  business
intelligence   between  disparate  enterprise  systems,  and  also  making  that
information easily available to distributed employees, partners and customers.

Arkona has defined a complete  EIX  solution  including  computer  software  and
requisite  professional  services.  This  product/service   combination  enables
customers to easily define, locate,  distribute, and share strategic information
assets,  making them available whenever and wherever they are needed. The result
is a dramatic increase in the value of that client's information assets.

Arkona's solutions include:

  o      Universal Update(TM): The Universal Update information exchange manager
         is the heart of Arkona's software solutions.  It provides a centralized
         platform to collect, transform, and distribute corporate information to
         various points throughout the organization.  Using Universal Update and


                                  Page 10 of 22

<PAGE>

         add-on  solution  packages,  Arkona's  customers can quickly and simply
         integrate disparate  information  sources including  distributed sites,
         mobile workers, and partners.  Projects that would normally take months
         to years to custom develop can be accomplished in a matter of hours and
         days.

o        Business Modeling:  Arkona's  professional  services group provides the
         training   and   consulting   necessary  to  ensure   complete   client
         satisfaction.  This  industry-recognized  team of  business  architects
         helps clients to identify and capture their  business rules and clearly
         articulated  those rules as the foundation for  successfully  utilizing
         Arkona's   products.   Additionally,   the  architects   will  identify
         improvements  that  should  be made to the  client's  current  business
         processes  and to  recommend  Arkona  products  that  could  facilitate
         improvement.

Currently,  the universal  Update platform is being optimized and repackaged for
specific industry  solutions.  In particular,  two packaged  solutions have been
identified  and are  under  development.  These  are (1) a sales  and  marketing
distributed  communication  package; and (2) a package designed to assist in the
development of corporate  portals.  Both solutions leverage the Universal Update
platform  and allow for  cross  development  of key  components.  Simplify  Data
Distribution

Universal  Update  provides a  centralized  data  distribution  hub for all of a
company's information sources. It easily handles the complex logistics of moving
information  throughout the  enterprise----tracking  the  information,  managing
updates and  modifications,  and selecting the best delivery methods.  Universal
Update  is  the  information   clearinghouse  for  the  mobile  and  distributed
enterprise.

Optimize Information Exchange

Universal  Update routes both inbound and outbound  information  through  unique
application  "adapters".  Adapter technology gives Universal Update the power to
communicate  with almost any  corporate  data source  including  relational  and
free-form  data, as well as enterprise  applications  and legacy  systems.  This
vendor neutral distribution  strategy gives a business a distinct advantage over
complex, proprietary replication systems.

How the Customer Benefits

Universal Update technology:

o    Extends a company's system investments

o    Eliminates the complexity of advanced data distribution

o    Lowers the cost of providing timely information updates

o    Improves  communication  between  distributed  partners,   customers,   and
     employees

o    Ensures  flexibility  for  future  integration  with new data  sources  and
     applications

Professional Services

In February 1999, the company  launched its professional  services group,  which
provides  training  and  consulting  in business  process  improvement,  product
support and knowledge management.

Business  Process  Improvement:  Through  a  wide-variety  of  Business  Process
Improvement (BPI) offerings, the Company brings corporate management the ability
to assess all activities  within their  organization for possible  improvements,
including automation of tasks.


                                  Page 11 of 22

<PAGE>

Product  Consulting and Training:  Professional  Services uses proven structured
methods to ensure the Company's enterprise products  consistently bring value to
clients. They receive the ability to identify their information requirements and
business  rules that will govern the  operation  of  Universal  Update and other
products.

Knowledge   Management:   Professional   Services  helps  companies  incorporate
appropriate knowledge management best practices into their daily operations.

Secure Email

The digital  revolution  has evolved around a simple  notion:  that  information
should be permanent.  Unlike other media formats,  digital information  (e-mail)
can be stored forever, recovered at will, copied with ease, and shared anywhere.
Unfortunately,  these  attributes  can  also  give  digital  information  a more
sinister  side.  E-mail  can just as  easily be saved,  copied,  recovered,  and
redistributed  by anyone  at any time with or  without  consent  and  frequently
without  knowledge.  Once an  electronic  email message has been sent, an author
loses all  control of his or her words.  According  to industry  analyst  Esther
Dyson, "The challenge is not to keep everything  secret,  but to limit misuse of
such information."

The Company is developing a solution to these problems;  the purpose of which is
to facilitate  communication  and give content  control back to the author.  The
project is presently in the implementation  phase. When the first version of the
product is launched, we expect it to give e-mail users the chance to direct:

o    How their words will be released,

o    Who can see them,

o    How they can be redistributed, and

o    If they can be printed, copied, or saved.

The Company  cannot assure that the  safeguards  of enhanced  e-mail will not be
abused  or  circumvented  by  someone  with the  requisite  degree  of  computer
sophistication  and a  malicious  motive.  However,  subsequent  versions of the
product will continue to raise the bar against potential abuse and compromise of
security that is so easily breached, often accidentally, with current systems.

The  Company  believes  that  the  level  of  security  embedded  in  the  first
implementation  will be  sufficient  to address  the needs of  approximately  80
percent of the market.  Enhancements to increase  security and further  simplify
the product's usability will be added over time.

Key Features

The first version is expected to include the following key features:

Content  Restrictions:  Authors can decide  whether their email  messages can be
printed, copied, or saved by the recipient.

Forwarding  Restrictions:  Authors can prohibit recipients from forwarding their
email in whole or in part.

Lifespan  Limits:  Authors  can  configure  messages  to  self-destruct  after a
predefined period.

Persistence  Limits:  Authors  can define the number of times any message can be
viewed.

Phase 1 Functionality

The key features listed above will include the following functionality:


                                  Page 12 of 22

<PAGE>

o    Email is  created  using a  browser-based  email  interface.  Once an email
     message has been authored,  the user selects appropriate  protection from a
     simple GUI

o    The Email message is secured.  The product's mail server  encapsulates  and
     encrypts  the  e-mail  message.   The  mail  server  can  reside  within  a
     corporation or with an Internet service provider.
o    Email recipient receives the protected message.  First time recipients of a
     protected message may require a one-time download  experience to obtain the
     company viewer in which the message is rendered.

o    Access may be granted using a personal  password.  Before the recipient can
     open a secured  e-mail  message,  the sender may require that the recipient
     first be authenticated.  This  authentication  process will employ industry
     standard authentication mechanisms.

o    Content is controlled through sender-defined options. Even after access has
     been   granted,   secured   e-mail   continues  to  be  restricted  by  the
     sender-defined  options.  Recipients  cannot manipulate the original e-mail
     message in any way that is forbidden by the sender.

Future Functionality

Subsequent versions of the software will include  significant  enhancements that
will be announced as the products are released.

The Company  expects this product to be a critical  solution,  which it believes
may well become the  legally  required  standard  of care for a wide  variety of
industries,  professions,  and situations. In fact, the Company believes secured
e-mail  should be used in any  situation  requiring  discretion.  The product is
intended as an ideal solution for:

-    Legal communications

-    Governmental agencies

-    Contract negotiations

-    Medical Information

-    Sensitive human resource information

-    Communication of non-public corporate information

-    Any information which should not be public

Status of Development

The  Company  anticipates  the  email  product  will  evolve  from  its  initial
implementation,   which,  as  described   above,   will  represent  a  level  of
functionality sufficient to cover most e-mail users' privacy concerns.  However,
the Company  intends to  implement  other  designs that  eliminate  intermediary
services,  further simplify the  functionality  and usability of the product and
simultaneously increase the level of security in the product.

The  ultimate  design  goal is to  meet  the  most  stringent  secure  messaging
requirements  up to and including the standards of the US Department of Defense.
Increasingly  rigorous  levels  of  security  will be  implemented  en  route to
achieving this final goal. Once the e-mail  solution is  successfully  launched,
implementations  beyond  e-mail will be  designed  and  marketed.  Markets to be
targeted after the initial releases will include, but not necessarily be limited
to: voice mail, pagers, databases, Usenet newsgroups, and web publishing tools.


                                  Page 13 of 22

<PAGE>

The Company is currently seeking to raise additional capital to complete product
development and marketing of the first product version.

The Company has engaged  engineers,  marketers  and an  administration  staff to
support the development of the product for delivery to the marketplace. However,
there can be no  assurance  that the  Company  will  successfully  complete  the
project,  and that the  product  will  include all or  substantially  all of the
elements  described  above, or that any of the other risks described herein will
not adversely  affect the outcome of the project.  The following  discussion and
analysis  should  be  read  in  conjunction  with  the  consolidated   financial
statements and notes to financial statements appearing elsewhere in this report.
See Item 7-Financial Statements.

Results of Operations

Fiscal Year Ended March 31, 1999 Compared With Year Ended March 31, 1998

Revenues  for the year ended March 31, 1999 were  $75,167,  compared to $144,271
for the previous year. Cost of revenues  totaled $49,756 in the year ended March
31,  1999,  compared  to  $2,110 in the  previous  year.  Expenses  for the year
included  $1,202,763 in research and development expense compared to $278,750 in
the  previous   year.  The  Company   expects  that  research  and   development
expenditures  (including  expenses  associated  with  recruiting  and hiring new
personnel) will continue to increase during the next 12 months as development of
existing and new products  continues.  The increased  expenses in the year ended
March 31, 1999 reflect the addition of personnel and costs  associated  with the
development of Universal  Update and the secure email  product.  The Company had
$50,520 in interest  income  during the year ended March 31,  1999,  compared to
$20,803 in the previous year. The net loss for the year was $2,356,758 (or $0.11
per share) compared to a loss of $636,180 (or $0.06 per share) in the year ended
March 31, 1998. The increased loss was due primarily to the increase in research
and development and other expenses described above.

Revenues  for the year  ended  March  31,  1999  included  fees  for  consulting
services.  Revenues for the year ended March 31, 1998 were primarily  related to
an  ongoing  service  contract  with a single  customer  (OEC) and cost of sales
reflects the costs  associated with delivery of these  services.  These services
include  customer  support and technical  services on the Company's OnSite Field
Service software product.

Expenses  incurred  during the year reflect the  additional  cost of  personnel,
engineering  research  and  marketing  and  selling  efforts,  which  management
believes will form the foundation of future increased  revenue and profitability
growth as product roll-outs commence during the second half of calendar 1999.

The Company's primary focus during the year ended March 31, 1999 was to engineer
products that were ready for market.  Universal Update V1.5 was launched in June
1999 while the alpha version of the secure  e-mail  product was also released in
June 1999.  Marketing  efforts have focussed on creating  awareness of Universal
Update with the target  customer and partner  base.  During the year and quarter
ended March 31, 1998, the Company  provided support services for OEC pursuant to
a written agreement.  The Company has entered into a license agreement with this
same  customer  under  which the  Company  has agreed to pay a royalty to OEC on
revenues  generated  from  the  licensing  or use of the  OnSite  Field  Service
software  product  first  developed  by Arkona in 1997.  The royalty  will be an
amount equal to 5% of net revenues  until OEC has  recovered  the amount paid to
Arkona to develop the product  ($125,000),  2% of net revenues  thereafter until
OEC has recovered  twice the amount of its payments to Arkona and 1% of revenues
thereafter.  No  royalties  have been paid by the  Company  to date  under  this
agreement.

During the year ended March 31, 1999, the Company  completed a private placement
of its Common  Stock,  generating  gross  proceeds of  $3,367,749  in cash.  The
Company  funded  its  operations  during the period  with the  proceeds  of this
offering.


                                  Page 14 of 22

<PAGE>

Capital  spending of $181,337  was  primarily  for the  purchase of computer and
related equipment used in the Company's operations.  During the year ended March
31, 1999, the Company's  operating  activities used $2,337,500 of cash, compared
to $543,350 during the previous fiscal year.

Liquidity and Capital Resources

The  Company  has been  unable to finance  its  operations  from cash flows from
operating activities.  Substantial funds and additional time will be required to
continue  developing  and   commercializing  the  Company's  products.   Because
operating  activities have not produced significant revenues to date and because
the Company will require  significant  capital to accomplish  the objectives set
forth above,  additional  equity and/or debt funding will be required,  although
such funding may not be  available  or may not be available on favorable  terms.
The Company has not established a credit  facility with any lending  institution
and has no formal funding or financing  arrangement,  agreement or understanding
with any related or unrelated party to provide such funding in the future.

The consolidated  financial  statements of the Company have been prepared on the
assumption  that the Company will  continue as a going  concern.  The  Company's
independent  public  accountants  have issued  their report dated June 10, 1999,
that includes an  explanatory  paragraph  stating that the  Company's  recurring
losses and accumulated  deficit,  among other things,  raise  substantial  doubt
about the  Company's  ability to  continue  as a going  concern.  The  Company's
product line is limited and it has been  necessary to rely upon  financing  from
the sale of its equity securities to sustain  operations.  Additional  financing
will be  required if the  Company is to  continue  as a going  concern.  If such
additional funding cannot be obtained, the Company may be required to scale back
or discontinue its operations. Even if such additional financing is available to
the Company, there can be no assurance that it will be on terms favorable to the
Company.  In any event,  such  financing  will result in immediate  and possibly
substantial dilution to existing shareholders.

At March 31, 1999,  the Company had cash and cash  equivalents  of $2,215,620 as
compared to cash and cash equivalents of $568,612 as of March 31, 1998.

Management  believes  that the cash  available  to the Company from the recently
completed private  placements and cash provided by operations will be sufficient
to meet the  business  requirements  of the Company  for the next 6 months.  The
Company  intends to  continue  to seek  additional  funding to meet  anticipated
operational  needs  with the aim of  having  this in place by the end of  August
1999.  The  Company  does not  expect  to make any  purchases  of new  plants or
significant equipment in the next twelve months.  However, the Company continues
to  evaluate  new  product  opportunities  and may,  if  necessary,  seek to add
equipment  and  personnel  to pursue such  opportunities  in the future.  If the
Company expands its efforts to develop new products,  it may be required to seek
additional  funding  through the sale of its  securities  or through  borrowing.
Presently  the  Company  does not have an  established  bank  line of  credit or
similar  facility.  There can be no assurance  that  additional  funding will be
available  as  required  or on terms  that are  favorable  to the  Company.  The
issuance of shares of the Company's Common Stock or other securities convertible
into such securities will result in dilution to the  shareholders of the Company
and such dilution may be material and substantial.

Year 2000 Issues

The Year 2000 Issue is the result of computer  programs  being written using two
digits  rather than four to define the  applicable  year. As a result there is a
risk  that  certain   Company   computer   programs  or   equipment   that  have
date-sensitive  software or embedded  technology may recognize a date using "00"
as the year 1900, rather than the year 2000. With the approaching  change in the
century,  this  could  result in a system  failure  or  miscalculations  causing
disruptions of operations,  including, among other things, a temporary inability
to process  transactions,  send invoices,  collect  payment or engage in similar
normal business activities or complete ongoing development projects.

The  Company  relies on computer  hardware,  software  and  related  technology,
together with data, in the operation of its business.  Such  technology and data
are used in the Company's internal  operations,  such as billing and accounting.
The Company has  investigated  the technology  and data used in its  operations.


                                  Page 15 of 22

<PAGE>

There is, however,  no assurance that third parties will successfully  remediate
their own Year 2000 Issues over which the Company has no control or that factors
in such third party  technology  caused by Year 2000 problems will not adversely
affect the Company.

The Company believes that, assuming that the Company's customers,  suppliers and
distributors  successfully  remediate  their own Year 2000 Issues over which the
Company has no control,  the Company  will have no material  business  risk from
such issues.

The Company  develops  its  software  and  designs its  products to be Year 2000
compliant.  Customers  may require the Company to certify  that its products are
Year 2000 compliant. If its products were shown to have been the cause of a Year
2000  problem in a  customer's  system or  business,  the  Company  could  incur
liabilities  for breaching the warranty,  if any, that it may give its customers
concerning the status of its products under applicable Year 2000 standards.

Recent Accounting Pronouncements

In September 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income" (SFAS 130). SFAS 130 requires entities
presenting  a  complete  set of  financial  statements  to  include  details  of
comprehensive  income that arise in the reporting period.  Comprehensive  income
consists of net earnings or loss for the current period and other  comprehensive
income,  which consists of revenue,  expenses,  gains and losses that bypass the
statement  of earnings  and are  reported  directly in a separate  component  of
equity.  Other  comprehensive  income  includes,  for example,  foreign currency
items, minimum pension liability  adjustments and unrealized gains and losses on
certain investment securities.

SFAS 130  requires  that  components  of  comprehensive  income be reported in a
financial  statement  that is  displayed  with  the  same  prominence  as  other
financial  statements.  SFAS is  effective  for  fiscal  years  beginning  after
December 15, 1997 and requires  restatement of prior period financial statements
presented  for  comparative  purposes.  Adoption of SFAS 130 is not required for
reporting on interim periods prior to the close of a fiscal year beginning after
December 15, 1997. The Company  adopted SFAS 130 commencing  with the year ended
March 31, 1999.

During  January 1998,  the American  Institute of Certified  Public  Accountants
("AICPA")  issued Statement of Position 98-5 "Reporting on the Costs of Start-up
Activities"  ("SOP  98-5).  SOP 98-5  becomes  effective  for all  fiscal  years
beginning after December 15, 1998. The Company will adopt SOP 98-5 in its fiscal
year beginning April 1, 1999.  Because the current  amortization  periods of the
product  development  costs and start-up costs averaging 12 months,  the Company
does not  expect  the  adoption  of SOP 98-5 to have a  material  impact  on the
Company's financial statements.

During January 1998, the AICPA issued Statement of Position 98-1 "Accounting for
the Costs of Computer  Software  Developed or Obtained  for Internal  Use" ("SOP
98-1"). SOP 98-1 becomes effective for all fiscal years beginning after December
15,  1998.  The  Company  does not  expect  the  adoption  of SOP 98-1 to have a
material adverse effect on the Company's financial statements.

Item 7.   Financial Statements

The Company's  consolidated  financial  statements and associated  notes are set
forth elsewhere in this report.


                                  Page 16 of 22

<PAGE>

                                    PART III

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

As of June 29, 1999, the directors and executive  officers of the Company are as
follows:

Name                      Age                           Position
-------------------       ---              -------------------------------------

Jerral Pulley             64               Chairman of the Board of Directors
Stephen Russell (1)       46               Director and Chief Financial Officer
John Blumenthal (1)       38               Director
Carl Steffens (1)         35               President and Chief Executive Officer
Joseph Ward               52               Director
John Zollinger            30               Director, Vice President Engineering,
                                           Chief Technical Officer
Tim Kapp                  30               Director and Vice President Marketing
------------------

(1) John  Blumenthal  acted as CEO until December 31, 1998 at which time Stephen
Russell  assumed that role.  Carl  Steffens was  appointed  President  and Chief
Executive Officer of Sundog on June 1, 1999.

Jerral  Pulley,  64,  Chairman of the Board of Directors.  Mr. Pulley has been a
director of the Company  since July 1, 1998.  With  expertise in  marketing  and
sales  innovation,  Mr. Pulley has held chief  executive  officer  positions and
served  as a senior  executive  for  several  nationally  recognized  companies,
including Procter & Gamble, PepsiCo,  Squibb, Ryder System, Hallmark and Borden.
Mr. Pulley's success in increasing revenues via customized channel  distribution
strategies  parallels  Sundog's focused partner  strategy and plan.  Currently a
partner in the  consulting  firm Client  Synergy Group in Bountiful,  Utah,  Mr.
Pulley  serves as a member on  several  client  boards  and  assists  with their
strategic planning, new product development, and marketing needs and services.

Stephen Russell, 46, Chief Financial Officer and Director.  Mr. Russell has been
an officer and director of the Company since October  1997.  He  specializes  in
business and financial strategies and change management, having over 20 years of
executive  experience  in such  positions as general  manager,  chief  executive
officer,  finance  director,  and  management  consultant  in a wide  variety of
industries,  including computer  software/hardware sales and services,  banking,
construction, manufacturing, engineering,  brewing/distilling,  and electronics.
With  Digital  Equipment  Corporation  (DEC),  Mr.  Russell  provided  financial
leadership to a $2 billion product division, and as chief executive officer of a
DEC  $100  million   subsidiary,   he  led  a  team  that  doubled  revenue  and
profitability  in one year.  Prior to  joining  DEC,  Mr.  Russell  was a senior
manager with Price Waterhouse in Glasgow, London, and Seattle. Mr. Russell holds
a bachelor's  degree in Physics and Mathematics  from the University of Glasgow,
and is a  Chartered  Accountant.  He is  also a  graduate  of the  International
Advanced  Management  Program from the  International  Institute for  Management
Development (IMD) in Lausanne, Switzerland.

John Blumenthal, 38, Director. Mr. Blumenthal has been a director of the Company
since  October  1997 and he  previously  served as its CEO. He is the CEO of Qui
Vive. Mr. Blumenthal has worked in the information  technology industry for more
than 12 years. His career began in New York City's  financial  industry where he
worked for Deutsche Bank AG's operations and research group. He later joined CLT
Research   Associates  to  direct  the  NYC-based   financial   research  firm's
information  technology  development efforts. In 1992, he relocated to Salt Lake
City,  Utah  continuing  in a software  and  systems  engineering  capacity  for
Rasterops,  and on  storage  and  security  consulting  projects  for a regional
telecommunications  company and a large chip  manufacturer in the western United
States.  Mr.  Blumenthal's  activity in this region  attracted  the attention of
Openvision  Technologies  (acquired by Veritas Software in 1996), which employed
him to lead the technical and partner development of their Pacific Rim and South
American  operations.  In these  projects Mr.  Blumenthal  was  instrumental  in
architecting  and  implementing  security and storage  technology for global 500
companies. His clients included some of the world's largest  telecommunications,


                                  Page 17 of 22

<PAGE>

manufacturing  and  financial  corporations.   In  1997,  Veritas  selected  Mr.
Blumenthal as systems engineer of the year for all international operations. Mr.
Blumenthal's  former  experience  also  includes  contributions  to the Internet
marketing strategy of the Openvision (Veritas) product line and as an advisor to
the U.S. House of  Representatives  Subcommittee  on Technology  concerning U.S.
encryption  export laws and network  security  during  hearings held in 1996 and
1997.  Mr.  Blumenthal  holds  a  bachelor's  degree  from  Columbia  University
(Columbia College) in NYC.

Carl Steffens,  35, CEO. Carl Steffens is the acting President and CEO of Sundog
Technologies,  joining the Company in June 1999. Mr.  Steffens was most recently
President and CEO of InterWorks Computer Products,  a privately held supplier of
modular  electronic  subsystems to  telecommunications  and data  communications
equipment manufacturers such as Cisco Systems, Nortel/Bay Networks, Alcatel, and
3Com/US  Robotics.  Prior to  InterWorks,  he served in a  variety  of  business
development and operational roles with Pacific Telesis/SBC Communications (NYSE:
SBC).  This  included  managing the launch of Pacific Bell Digital TV, a digital
wireless-cable system with market coverage of over 3.5 million homes in Southern
California.  He has also  served  as  Director  of  Product  Marketing  for Xiox
Corporation (NASDAQ: XIOX), and in engineering,  sales, and marketing capacities
at Integrated Device Technology (NASDAQ: IDTI). Mr. Steffen's education includes
a bachelor's  degree in Electrical and Computer  Engineering from the University
of  California  at  Santa  Barbara  and an MBA from the  Wharton  School  of the
University of Pennsylvania.

Joseph Ward,  52,  Director.  Mr. Ward has been a director of the Company  since
August 1, 1998. He has marked several achievements during his career,  including
the launch of new media  ventures,  the  development of  value-added  publishing
products, and the successful  implementation of direct marketing campaigns.  Mr.
Ward  currently   serves  as  executive  vice  president  of  the   Professional
Communications sector at Cadmus Communications Corporation. He is also the group
president of Cadmus Journal  Services  (CJS),  the world's  largest  provider of
production  and  information  management  solutions to publishers of scientific,
technical,   and  medical   (STM)   journals;   trade/professional   and  alumni
associations,  and  special  interest  commercial  magazines.  Prior to  joining
Cadmus, Mr. Ward served as board member at Cadmus,  president of direct response
for the book group of Bertlesmann AG,  president and chief executive  officer of
J. Ward  Consulting,  and president of the Meredith Book Group of Meredith Corp.
He  published  various book  programs  for Better  Homes & Gardens,  Ladies Home
Journal and other Meredith  magazines,  and founded  Meredith  Corp.'s new media
division.  In addition, he was publisher and senior vice president of Time-Life,
Inc.,  where he handled all book  operations  and  launched the company into the
CD-ROM and CD new media business.

John Zollinger,  30, Director and Vice President Engineering.  Mr. Zollinger has
been a director  and  officer of the Company  since  October  1997.  He has been
involved in nearly all aspects of the  software  engineering  industry  spanning
enterprise development from warehousing/processing, telecommunications, banking,
oil and gas, insurance, and commodity trading systems. In addition to his skills
in analyzing,  designing and implementing mission critical software systems, Mr.
Zollinger has a proven  ability to manage and bring  together  diverse groups of
engineers to achieve complex  software  project goals.  While working with Moore
Business  Communications  Services,  Mr. Zollinger led the engineering team that
designed and implemented a large-scale  order  fulfillment and management system
for the  telecommunications  industry.  This system enabled AT&T to launch a new
successful  business  unit and has since  been used by other  companies  such as
Sprint,  MCI and GTE. As an independent  engineering  consultant for Filoli, Mr.
Zollinger helped guide the development of a highly  distributed  claims handling
system for  Industrial  Indemnity.  Mr.  Zollinger  also  assisted  EOTT  Energy
Partners  in  establishing  standard  practices  for  object-oriented  analysis,
design, and implementation of an enterprise-wide oil and gas trading system.

Tim Kapp,  30,  Vice  President  Marketing  and  Director.  Mr. Kapp has been an
officer and director of the Company since October 1997. He began his career as a
financial analyst where he specialized in quantitative market analysis. However,
he soon found greater application for his analytical and technical skills within
high-tech  marketing,  focusing on the  software  industry  and  Internet-driven
technology.  As senior market  research  analyst at Folio and product  marketing
manager at Open Market,  leaders in Internet commerce and electronic publishing,
Mr.  Kapp  provided  analysis  of  technology  trends,  product  forecasts,  and
competitive  strategies,  and championed business and product plans. In addition
to these responsibilities,  he served on committees for the Internet Engineering
Task Force (IETF), the SGML Open Consortium,  and as a representative to the W3C
Internet  Standards  body.  Mr. Kapp holds a bachelor's  degree in Economics and
Econometric Modeling and an MBA from Brigham Young University.


                                  Page 18 of 22

<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance

Section  16(a) of the  Securities  Exchange Act of 1934  requires the  Company's
officers and directors,  and persons who  beneficially  own more than 10% of the
Company's  common stock to file  reports of  ownership  and changes in ownership
with the Securities  and Exchange  Commission.  Officers,  directors and greater
than 10%  shareholders are required by regulation of the Securities and Exchange
Commission  to furnish the Company with copies of all Section  16(a) forms which
they file.

Based solely on its review of the copies of such forms  furnished to the Company
during the fiscal year ended March 31, 1999, and representations made by certain
persons  subject to this  obligation  that no such filings  were  required to be
made,  the  Company  believes  that all  reports  required  to be filed by these
individuals and persons have been made in a timely manner.

Item 10.  Executive Compensation

During the fiscal  year ended March 31,  1999,  the total  compensation  paid to
Stephen Russell,  the Company's Chief Executive Officer,  from December 31, 1998
through the Year Ended March 31, 1999 was $95,000. No other executive officer of
the Company  received annual  compensation of $100,000 or more during the fiscal
year ended March 31, 1999.

Mr.  Steffens  has a  three-month  contract  with the Company to act as its CEO,
commencing  June 1, 1999,  under  which he is paid  $10,000  per  month.  On the
successful  conclusion  of this  contract he may be awarded  250,000  options to
purchase stock in the Company at a price of $2.00 per share.

Mr. Pulley, the Company's Chairman,  has a consulting contract pursuant to which
he has agreed to consult with the Company for 48 days during calendar year 1999.
He is paid $50,000 per annum in quarterly  installments for his services. He was
paid $25,000  during the year ended March 31, 1999. In addition,  Mr. Pulley and
Mr. Ward are each paid $1,000 fees for each Board meeting attended.

Mr.  Pulley was awarded  stock options for the purchase of 60,000 shares on July
1, 1998 (vesting March 31, 1999) and 110,000 shares on March 1, 1999 (vesting on
March 1, 2000). Mr. Ward was awarded stock options of 60,000 shares on August 1,
1998  (vesting  August 1, 1999).  All options  granted  these two  directors are
exercisable at a price of $0.50 per share.

The Company has established two stock option plans to provide  incentives to its
directors,  officers,  employees  and advisors.  Through May 31, 1999  1,445,000
non-qualified  stock options had been granted to 19  individuals.  These options
vest over two to three  years,  and,  when fully  vested,  allow the  holders to
purchase common stock under these two plans at $0.50 and $1.50 per share.

Qui Vive has its own stock  option  plan and has  granted  options  to  purchase
344,500 shares of Qui Vive common stock to 14 individuals  with exercise  prices
ranging  from $0.10 to $1.00 per share.  These  options  vest over a  three-year
period.  Certain of the holders of these Qui Vive  options are also  officers or
directors of the Company.

Item 11.  Security Ownership of Certain Beneficial Owners and Management

To the Company's knowledge, the following table sets forth information regarding
ownership  of the  Company's  outstanding  Common  Stock on June 10, 1999 by (i)
beneficial  owners of more than 5% of the  outstanding  shares of Common  Stock;
(ii) each  director and each  executive  officer;  and (iii) all  directors  and
executive officers as a group.  Except as otherwise  indicated below and subject
to  applicable  community  property  laws,  each owner has sole  voting and sole
investment powers with respect to the stock listed.  Unless otherwise indicated,
the address of each person  identified below is the Company's  principal office.
As of June 10,  1999,  there were  22,248,001  shares of Common Stock issued and
outstanding.


                                  Page 19 of 22

<PAGE>

<TABLE>
<CAPTION>
Name and Address                           Shares of Common Stock
of Beneficial Owners                          Beneficially Owned     Percentage of Class
--------------------------------------------  ------------------     -------------------
<S>                                               <C>                       <C>
Jeffrey Barlow, 5% Beneficial Owner               1,540,000                 6.82%
John Blumenthal, Director                         2,940,000                13.03%
Timothy Kapp, Director                              980,000                 4.34%
Stephen Russell, Executive Officer, Director      1,540,000                 6.82%
David Valenti, 5% Beneficial Owner                1,540,000                 6.82%
838 Edgehill Road
Salt Lake City, Utah 84103
John Zollinger, Director                          2,940,000                13.03%

All executive officers and

directors as a group (6 persons)                  8,400,000                   37%
</TABLE>


There are no arrangements known to the Company, the operation of which may, at a
subsequent date, result in a change of ownership or control of the Company.

Item 12.  Certain Relationships and Related Transactions

John Blumenthal,  a director and the former CEO of the Company and the holder of
approximately  13% of its  issued  and  outstanding  common  stock,  is also the
President of Qui Vive, a wholly owned  subsidiary  of the Company.  Qui Vive has
granted  options to its  development  team,  including  Mr.  Blumenthal.  If all
options currently outstanding and held by the development team were fully vested
and exercised,  the  developers  would own  approximately  36% of the issued and
outstanding  shares of Qui Vive and the Company's  ownership would be reduced to
approximately 64%. Mr. Blumenthal would own 70,000 shares or approximately 8% of
the issued and  outstanding  shares of Qui Vive (assuming all currently  granted
options  were  exercised).  His  ownership  interest in both the Company and its
subsidiary  could  create an  inherent  conflict  of  interest to the extent the
objectives  and  interests  of the  Company  were to  differ  from  those of the
minority owners of Qui Vive (including Mr. Blumenthal).

Item 13.  Exhibits and Reports on Form 8-K

(a) Exhibits. The following exhibits of the Company are included herein:

Exhibit No.                Document Description
-----------                --------------------

   2.1    Agreement and Plan of Merger dated October 11, 1997  (incorporated  by
          reference to Current Report on Form 8-K, filed October 28, 1997)

   3.1    Certificate  of  Incorporation  (Incorporated  by  reference  to  such
          exhibit as filed with the  Company's  registration  statement  on Form
          10-SB, File No. 0-24372)

   3.2    Amendment to Certificate of  Incorporation  (incorporated by reference
          to Definitive Information Statement on Form 14C, May 6, 1998)

   3.3    Bylaws  (Incorporated  by  reference to such exhibit as filed with the
          Company's registration statement on Form 10-SB, File No. 0-24372)

   4.1    Specimen common stock  certificate  (Incorporated by reference to such
          exhibit as filed with the  Company's  registration  statement  on Form
          10-SB, File No. 0-24372)


                                  Page 20 of 22

<PAGE>

   4.2    Form of Warrant A to Purchase Common Stock  (incorporated by reference
          to the Company's quarterly report on Form 10-QSB for the quarter ended
          March 31, 1998)

   4.3    Form of Warrant B to Purchase Common Stock  (incorporated by reference
          to the Company's quarterly report on Form 10-QSB for the quarter ended
          March 31, 1998)

   10.1   1992 Stock Option Plan  (Incorporated  by reference to such exhibit as
          filed with the Company's  registration  statement on Form 10-SB,  File
          No. 0-24372)

   10.2   Stock Option  Agreement with Jehu Hand  (Incorporated  by reference to
          such  exhibit as filed with the  Company's  registration  statement on
          Form 10-SB, File No. 0-24372)

   10.3   Stock Option  Agreement with Eric Anderson  (Incorporated by reference
          to such exhibit as filed with the Company's  registration statement on
          Form 10-SB, File No. 0-24372)

   10.4   Demand  Convertible  Promissory Note from Jehu Hand  (Incorporated  by
          reference to such exhibit as filed with the  Company's  annual  report
          for the year ended March 31, 1996)

   10.5   Agreement with OEC  (incorporated  by reference to quarterly report on
          Form 10-QSB for the quarter ended December 31, 1997, as amended)

   10.6   Service  Agreement  with OEC  (incorporated  by reference to quarterly
          report on Form 10-QSB for the quarter  ended  December  31,  1997,  as
          amended)

   10.7   Form of Employee  Confidentiality,  Work  Product and  Non-competition
          Agreement  (incorporated  by  reference  to  quarterly  report on Form
          10-QSB for the quarter ended December 31, 1997, as amended)

   10.8   1999 Stock Option Plan

   10.9   Qui Vive Stock Option Plan


                                  Page 21 of 22

<PAGE>





                            SUNDOG TECHNOLOGIES, INC.

                   formerly known as THE THORSDEN GROUP, LTD.
             Including the accounts of its wholly-owned subsidiaries
                         ARKONA, INC. and QUI VIVE, INC.

                          [A DEVELOPMENT STAGE COMPANY]

                              FINANCIAL STATEMENTS

                                 March 31, 1999

                       [WITH INDEPENDENT AUDITORS' REPORT]




<PAGE>

                            SUNDOG TECHNOLOGIES, INC.
             Including the accounts of its wholly-owned subsidiaries
                          [A DEVELOPMENT STAGE COMPANY]



                                TABLE OF CONTENTS




                                                                     Page
                                                                     ----

         Independent Auditors' Report. . . . . . . . . . . . . . . . . 1


         Balance Sheet - March 31, 1999. . . . . . . . . . . . . . . . 2


         Statements of Operations for the years ended March
         31, 1999, and 1998, and for the Period June 11, 1992
         (inception) through March 31, 1999. . . . . . . . . . . . . . 3


         Statement of Stockholders' Equity for the Period
         June 11, 1992(inception) through March 31, 1999 . . . . . . . 4


         Statements of Cash Flows for the years ended March
         31, 1999, and 1998, and for the Period June 11, 1992
         (inception) through March 31, 1999 . . . . . . . . . . . . . .5


         Notes to Financial Statements  . . . . . . . . . . . . . . 6-11




<PAGE>

                          Independent Auditors' Report


The Board of Directors and Shareholders
Sundog Technologies, Inc.[a development stage company]


We have audited the accompanying balance sheet of Sundog Technologies,  Inc., [a
development stage company] formerly known as The Thorsden Group, Ltd., including
the accounts of its wholly-owned  subsidiaries,  Arkona, Inc. and Qui Vive, Inc.
as of March 31, 1999, and the related  statements of  operations,  stockholders'
equity,  and cash flows for the years ended March 31, 1999 and 1998, and for the
period from June 11, 1992  [inception]  through March 31, 1999.  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 audit. The financial  statements of Arkona, LLC, a limited liability company
and predecessor of Arkona,  Inc., for the period from inception through December
31, 1996,  were audited by other auditors whose report dated September 30, 1997,
expressed an unqualified opinion on those statements.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards  require that we plan and perform the audit 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 audit provides a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the financial position of Sundog Technologies,  Inc., [a
development   stage  company]   including  the  accounts  of  its   wholly-owned
subsidiaries  as of March 31, 1999, and the results of operations and cash flows
for the periods  ended March 31, 1999 and 1998,  in  conformity  with  generally
accepted accounting principles.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company  will  continue  as a  going  concern.  As  discussed  in Note 10 to the
financial  statements,  the Company has experienced losses from operations since
its inception and has not yet begun generating  significant revenue which raises
substantial doubt about the ability to continue as a going concern. Management's
plans in regard to these  matters are also  described in Note 10. The  financial
statements do not include any adjustments  that might result from the outcome of
this uncertainty.


                                                 -------------------------------
                                                 MANTYLA McREYNOLDS
Salt Lake City, Utah
June 10, 1999


                                       1

<PAGE>

<TABLE>
                            SUNDOG TECHNOLOGIES, INC.
             Including the accounts of its wholly-owned subsidiaries
                          [A Development Stage Company]
                                  Balance Sheet
                                 March 31, 1999
<CAPTION>

                                     ASSETS


Current Assets
<S>                                                                         <C>
  Cash & cash equivalents - Note 1                                          $          2,215,620
  Marketable securities available for sale - Note 8                                        3,188
  Accounts receivable - Note 2                                                            51,200
  Prepaid expenses                                                                        25,550
                                                                            ---------------------
                         Total Current Assets                                          2,295,558

Property and Equipment - Note 6
  Property and equipment                                                                 380,406
  Less: Accumulated depreciation                                                         (52,146)
                                                                            ---------------------
                      Net Property and Equipment                                         328,260

Other Assets
  Deposits - Note 9                                                                      105,605
  Intangible assets - Note 4                                                              59,983
                                                                            ---------------------
                          Total Other Assets                                             165,588
                             TOTAL ASSETS                                   $          2,789,406
                                                                            =====================

                       LIABILITIES & STOCKHOLDERS' EQUITY

Current Liabilities
  Accounts payable                                                          $            140,748
  Accrued liabilities                                                                     75,822
  Current portion of capital leases - Note 5                                              37,741
                                                                            ---------------------
                          Total Current Liabilities                                      254,311

Long-Term Liabilities
  Capital leases payable - Note 5                                                         30,267
                                                                            ---------------------
                         Total Long-Term Liabilities                                      30,267
                                                                            ---------------------
                              Total Liabilities                                          284,578

Stockholders'  Equity - Notes 7, 8, 11 & 13
  Preferred stock -- 10,000,000 shares authorized, $.001 par
   value; no shares issued and outstanding
Capital stock -- 50,000,000 shares authorized, $.001 par
  value; 22,530,101 shares issued and outstanding                                         22,530
Additional paid-in capital                                                             5,557,526
Accumulated unrealized losses on investments                                             (13,754)
Deficit accumulated during the development stage                                      (3,061,474)
                                                                            ---------------------
                         Total Stockholders' Equity                                    2,504,828
                                                                            ---------------------
                  TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                  $          2,789,406
                                                                            =====================
</TABLE>


                 See accompanying notes to financial statements

                                        2

<PAGE>

<TABLE>
                            SUNDOG TECHNOLOGIES, INC.
             Including the accounts of its wholly-owned subsidiaries
                          [A Development Stage Company]
                Statements of Operations and Comprehensive Income
                   For the Years Ended March 31, 1999 and 1998
       and for the Period June 11, 1992(inception) through March 31, 1999
<CAPTION>

                                                                                Period from
                                                Year              Year         June 11,1992
                                               ended             ended            Through
                                              3/31/99           3/31/98           3/31/99
                                           ------------      ------------      ------------
<S>                                        <C>               <C>               <C>
Revenues - Note 1                          $     75,167      $    144,271      $    219,438

Operating Expenses
 Cost of sales                                   49,756             2,110            51,866
 Research and development                     1,202,763           278,750         1,488,123
 Marketing, general and
administrative                                1,219,266           517,084         1,798,317
                                           ------------      ------------      ------------
  Total Operating Expenses                    2,471,785           797,944         3,338,306
                                           ------------      ------------      ------------
       Net Loss from Operations              (2,396,618)         (653,673)       (3,118,868)

Other Income/(Expense)
  Interest income                          $     50,520      $     20,803      $     71,364
  Interest expense                               (6,684)           (3,200)           (9,884)
 Other income                                       270               -0-               270
  Other expense                                    (178)             (110)             (288)
  Loss on sale of securities available
     for sale                                    (4,068)              -0-            (4,068)
                                           ------------      ------------      ------------
     Total Other Income/(Expense)                39,860            17,493            57,394
                                           ------------      ------------      ------------

     Net Loss Before Income Taxes            (2,356,758)         (636,180)       (3,061,474)
Provision for income taxes                          -0-               -0-               -0-
Net Loss                                   $ (2,356,758)     $   (636,180)     $ (3,061,474)
                                           ------------      ------------      ------------
Other comprehensive income:
   Unrealized holding gains(loss)               145,256          (159,010)          (13,754)
                                           ------------      ------------      ------------
Comprehensive Income (Loss)                  (2,211,502)         (795,190)       (3,075,228)
                                           ============      ============      ============
Loss per share - Note 1                    $       (.11)     $       (.06)     $       (.62)
                                           ============      ============      ============
Weighted average number shares               20,922,574        10,212,250         4,863,279
                                           ============      ============      ============
</TABLE>


                 See accompanying notes to financial statements

                                        3

<PAGE>

<TABLE>
                            SUNDOG TECHNOLOGIES, INC.
             Including the accounts of its wholly-owned subsidiaries
                          [A Development Stage Company]
                       Statements of Stockholders' Equity
         For the Period June 11, 1992(inception) through March 31, 1999
<CAPTION>


                                                                                       Accum.
                                                                       Additnl.      Unrealized      Accum.         Total
                                          Shares          Common       Paid-In        Loss on      Loss Devel    Stockholders'
                                          Issued          Stock        Capital      Investments       Stage         Equity
                                        -----------    -----------   -----------    -----------    ----------    -----------
<S>                                       <C>          <C>           <C>             <C>                 <C>     <C>
Balance, June 11, 1992                        -0-      $     -0-     $      -0-      $     -0-           -0-     $      -0-
Issued common stock for cash
through March 31, 1993                    400,000            400            100                                         500
Net loss for the year ended
March 31, 1993                                                                                          (269)          (269)

Balance, March 31, 1993                   400,000      $     400     $      100      $     -0-          (269)    $      231

Capital contribution                                                        500                                         500
Issued shares in Private                   24,500             25            221                                         246
Placement for cash
Net loss for the year ended
March 31, 1994                                                                                          (221)          (221)

Balance, March 31, 1994                   424,500      $     425     $      821      $     -0-          (490)    $      756

Net loss for the year ended
March 31, 1995                                                                                        (2,262)        (2,262)

Balance, March 31, 1995                   424,500      $     425     $      821      $     -0-        (2,752)    $   (1,506)

Net loss for the year ended
March 31, 1996                                                                                        (1,078)        (1,078)

Balance, March 31, 1996                   424,500      $     425     $      821      $     -0-        (3,830)    $   (2,584)

Net loss for the year ended
March 31, 1997                                                                                       (64,706)       (64,706)

Balance, March 31, 1997                   424,500      $     425     $      821      $     -0-       (68,536)    $  (67,290)

Issued stock for assets as part
of Arkona merger                       15,575,500         15,575                                                     15,575
Issued shares in Private
Placement for cash and
securities                              4,000,000          4,000      1,926,486                                   1,930,486
Issued shares in Private
Placement for cash                        132,500            133        264,867                                     265,000
Adjustment for unrealized loss
on investments                                                                        (159,010)                    (159,010)
Net loss for the year ended
March 31, 1998                                                                                      (636,180)      (636,180)

Balance, March 31, 1998                20,132,500      $  20,133     $2,192,174      $(159,010)     (704,716)    $1,348,581

Issued shares in Private
Placement for cash                      2,397,601          2,397      3,365,352                                   3,367,749
Adjustment to unrealized loss
on investments                                                                         145,256                      145,256
Net loss for the year ended
March 31, 1999                                                                                    (2,356,758)    (2,356,758)

Balance, March 31, 1999                22,530,101      $  22,530     $5,557,526      $ (13,754)   (3,061,474)    $2,504,828
</TABLE>


                 See accompanying notes to financial statements

                                        4

<PAGE>

<TABLE>
                            SUNDOG TECHNOLOGIES, INC.
             Including the accounts of its wholly-owned subsidiaries
                          [A Development Stage Company]
                            Statements of Cash Flows
                   For the Years Ended March 31, 1999 and 1998
     and for the Period From June 11, 1992(inception) through March 31, 1999
<CAPTION>

                                                                                                  Period
                                                                                                   from
                                                                 Year             Year           6/11/92
                                                                ended            ended              to
                                                               3/31/99          3/31/98          3/31/99
                                                             -----------      -----------      -----------
<S>                                                          <C>              <C>              <C>
Cash Flows Provided by/(Used for) Operating
Activities
Net Loss                                                     $(2,356,758)     $  (636,180)     $(3,061,474)
Adjustments to reconcile net income to net cash provided
by operating activities:
    Depreciation                                                  45,758            6,418           52,176
    Increase in accounts receivable                              (42,887)          (8,313)         (51,200)
    Increase in accounts payable                                  47,460           84,517          140,748
    Increase in other current liabilities                          4,894           29,791           75,822
    (Decrease)/increase in deferred income                       (10,417)         (19,583)             -0-
    Increase in prepaid expenses                                 (25,550)            --            (25,550)
                                                             -----------      -----------      -----------
           Net Cash Used for Operating Activities             (2,337,500)        (543,350)      (2,869,478)
Cash Flows Provided by/(Used for) Investing
Activities
  Decrease in Lease deposits                                       1,641         (107,246)        (105,605)
  Sale of Marketable Securities                                  823,668             --            823,668
  Patent costs                                                   (38,249)         (21,734)         (59,983)
  Capital expenditures                                          (181,337)        (198,095)        (380,436)
                                                             -----------      -----------      -----------
           Net Cash Used for Investing Activities                605,723         (327,075)         277,644
Cash Flows Provided by Financing Activities
  Increase in capital lease obligations                           11,036           56,972           68,008
  Proceeds from Private Placement of shares                    3,367,749        1,370,451        4,738,446
  Cash contribution                                                 --               --              1,000
                                                             -----------      -----------      -----------
          Net Cash Provided by Financing Activities            3,378,785        1,427,423        4,807,454
                                                             -----------      -----------      -----------
               Net Increase/(Decrease) in Cash                 1,647,008          556,998        2,215,620
Beginning Cash Balance                                           568,612           11,614              -0-
                                                             -----------      -----------      -----------
Ending Cash Balance                                          $ 2,215,620          568,612      $ 2,215,620
                                                             ===========      ===========      ===========

Supplemental Disclosure of Cash Flow Information:
  Cash paid during the year for interest                     $     6,684            3,200      $     9,884
  Cash paid during the year for income taxes                 $       -0-              -0-      $       -0-
Noncash Financing Activities:
  Issued stock for marketable securities                     $       -0-          840,610      $   840,610
</TABLE>


                 See accompanying notes to financial statements


                                        5

<PAGE>

                            SUNDOG TECHNOLOGIES, INC.
             Including the accounts of its wholly-owned subsidiaries
                          [A Development Stage Company]
                          Notes to Financial Statements
                                 March 31, 1999

Note 1            Organization and Summary of Significant Accounting Policies
                  -----------------------------------------------------------

                  (a) Organization

                  Sundog Technologies,  Inc. [Company]  originally  incorporated
                  under  the  laws  of the  State  of  Delaware  in  1992 as The
                  Thorsden Group, Ltd., for the purpose of seeking and acquiring
                  business opportunities.  On March 25, 1999 the Company changed
                  its name to  Sundog  Technologies,  Inc.,  effective  June 10,
                  1999. In October 1997, the Company merged with Arkona, Inc., a
                  Utah  corporation   (formerly  Arkona,   LLC),  in  a  reverse
                  triangular  merger,  accounted  for as a  purchase.  Since the
                  merger,  the Company  has  continued  the  business of Arkona,
                  Inc.;  developing,  marketing,  and selling software  products
                  which incrementally and automatically update database content,
                  reference documents,  and enterprise  applications required by
                  organizations   with  distributed   business  centers,   field
                  professionals,  telecommuters,  partners,  and customers.  The
                  Company  also  has  expanded  to  provide   Business   Process
                  Improvement  (BPI) and related Knowledge  Management  services
                  through its  Professional  Services Group.  BPI helps managers
                  identify  how  their  organizations  must  change  to meet the
                  challenges   of   tomorrow   and   provides  a  road  map  for
                  implementing  that change. In June of 1998, the Company formed
                  a new  subsidiary  company,  Qui Vive,  Inc.,  to  expand  its
                  software   products   developing,   marketing,   and  selling.
                  Principal operating  activities have not yet commenced and the
                  Company is  considered  to be in the  development  stage.  The
                  ultimate  success  of the  Company  will be  dependent  on its
                  ability to adequately  fund,  develop and market its products.
                  Results  of  operations  have been  combined  for all  periods
                  presented   in   the   accompanying    financial   statements.
                  Intercompany    transactions    have   been    eliminated   in
                  consolidation.


                  (b) Income Taxes

                  Effective April 1, 1993, the Company adopted the provisions of
                  Statement  of  Financial  Accounting  Standards  No.  109 [the
                  Statement],  "Accounting  for  Income  Taxes."  The  Statement
                  requires  an  asset  and  liability   approach  for  financial
                  accounting and reporting for income taxes, and the recognition
                  of  deferred  tax assets  and  liabilities  for the  temporary
                  differences  between  the  financial  reporting  bases and tax
                  bases of the Company's  assets and  liabilities at enacted tax
                  rates  expected to be in effect when such amounts are realized
                  or settled.  For the years  ending March 31, 1999 and 1998 the
                  Company had no significant  income tax expense or liability as
                  a  result  of net  operating  losses  incurred.  Deferred  tax
                  benefits,  and the related  deferred tax assets,  arising from
                  the  recognition  of the  tax  consequences  of net  operating
                  losses have not been  recorded or  recognized  by the Company.
                  Currently,  there is no reasonable  assurance that the Company
                  will be  able to take  advantage  of  accumulated  loss  carry
                  forwards in the future.


                  (c) Net Loss Per Common Share

                  In accordance  with  Financial  Accounting  Standards No. 128,
                  "Earnings  Per Share," basic loss per common share is computed
                  using  the   weighted   average   number   of  common   shares
                  outstanding.  Diluted  earnings  per share is  computed  using
                  weighted  average number of common shares plus dilutive common
                  share  equivalents  outstanding  during the  period  using the
                  treasury  stock  method.  Common  stock  equivalents  were not
                  included in the  computation of loss per share for the periods
                  presented because their inclusion is antidilutive.



                  (d) Cash & Cash Equivalents

                  For  purposes of the  statements  of cash  flows,  the Company
                  considers  cash on deposit in the bank and other  unrestricted
                  investments  with original  maturities of three months or less
                  at the time of purchase to be cash equivalents.


                                        6

<PAGE>

                            SUNDOG TECHNOLOGIES, INC.
       INCLUDING THE ACCOUNTS OF ITS WHOLLY-OWNED SUBSIDIARY, ARKONA, INC.
                          [A Development Stage Company]
                          Notes to Financial Statements
                                 March 31, 1999
                                   [continued]

Note 1
                  Organization    and   Summary   of   Significant    Accounting
                  --------------------------------------------------------------
                  Policies[continued]
                  -------------------

                  (e) Use of Estimates in Preparation of Financial Statements

                  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;  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.

                  (f) Revenue recognition

                  The Company  recognizes  revenue upon delivery of the software
                  products to the  customer and by  providing  Business  Process
                  Improvement and related Knowledge  Management services through
                  its Professional  Services Group.  Any additional  obligations
                  related  to the  software,  such as  service  agreements,  are
                  negotiated under a separate  contract;  revenue on these items
                  is recognized over the period of service as is appropriate.


Note 2            Concentration
                  -------------

                  The Company has entered into  contracts  with two customers to
                  develop software  applications using the Company's proprietary
                  systems.

                  As an additional provision of one contract, the Company agreed
                  to pay a customer  royalties of two percent of net revenues up
                  to the  contract  amount  ($125,000)  and one  percent  of net
                  revenues  thereafter,  from  subsequent  sales or licensing to
                  third parties of the product developed for such customer.

                  Accounts  receivable consists entirely of amounts due from one
                  customer.  No  reserve  has been  provided  for  uncollectible
                  amounts. The customer paid the balance due in April, 1999.

                  The Company maintains cash balances in a financial institution
                  located  in  the  Salt  Lake  City,  Utah.  Accounts  at  this
                  institution  are  insured  by the  Federal  Deposit  Insurance
                  Corporation  up to $100,000.  The Company had cash of $190,327
                  in excess of the FDIC insured limit at March 31, 1999.

Note 3            Income Taxes
                  ------------

                  The  Company  has  available  net  operating  loss (NOL) carry
                  forwards of  approximately  $2,356,758,  the benefits of which
                  will expire in various amounts through 2014. NOLs will only be
                  usable  to the  extent  that  the  Company  is  successful  in
                  obtaining  future   profitability,   or  incurring  profitable
                  transactions.


Note 4            Intangible Assets
                  -----------------

                  The  Company  has  applied  for  patent   protection  for  its
                  proprietary  software  and  has  expended  $59,983  for  these
                  rights. The patents are still in the process of being granted.
                  The  Company   will  begin  to  amortize   these  assets  upon
                  completion  of patent  registration  or at the point  when the
                  products begin to generate revenue.


                                        7

<PAGE>

                            SUNDOG TECHNOLOGIES, INC.
       INCLUDING THE ACCOUNTS OF ITS WHOLLY-OWNED SUBSIDIARY, ARKONA, INC.
                          [A Development Stage Company]
                          Notes to Financial Statements
                                 March 31, 1999
                                   [continued]

Note 5            Leases
                  ------

                  The   Company   has   various    capital   lease    agreements
                  collateralized  with  property  and  equipment as of March 31,
                  1999.  These  leases bear  interest at 12% and have  remaining
                  terms of one to five years.  Future minimum lease payments are
                  as follows:


                          Minimum
   Year Ending            Lease               Principal         Interest
                         Payments
                  ---------------------- ------------------ -----------------
    3/31/2000     $              45,850  $          37,741  $          8,109
    3/31/2001                    18,344             16,312             2,032
    3/31/2002                     7,353              5,927             1,425
    3/31/2003                     6,351              5,686               665
    3/31/2004                     2,422              2,342                80
                  ---------------------- ------------------ -----------------
      Total       $              80,320  $          68,008  $         12,311
                  ====================== ================== =================


                  The Company  has  operating  leases for its office  facilities
                  which  expire at various  times  through  March  2002.  Future
                  minimum  lease  payments for the office  facilities  amount to
                  $115,481,  $50,228,  and $47,621 for fiscal years ending March
                  31, 2000,  2001, and 2002,  respectively.  Rent expense during
                  the current year was $44,980 for 1999 and $11,643 for 1998.


Note 6            Property and Equipment
                  ----------------------

                  Property and equipment are summarized by major classifications
                  as follows:

                                             Accumulated
                           Acquisition       Amortization/       Net Book
                               Cost          Depreciation          Value
                         ---------------  ------------------ -----------------
Office Furniture         $        24,259  $            3,566  $         20,693
Computer Software                 58,533              11,273            47,260
Computer Equipment               297,614              37,307           260,307
                         ---------------  ------------------ -----------------
     Total               $       380,406  $           52,146  $        328,260
                         ===============  ================== =================

                  The Company has  acquired  approximately  $115,366 in computer
                  equipment   financed   through  capital  lease.   Depreciation
                  expense,  including  the  amortization  of assets  acquired by
                  capital lease, amounted to $45,758 and $6,418 during the years
                  ended  March 31,  1999 and  1998,  respectively.  The  Company
                  computes depreciation using the straight-line method over five
                  years.


                                        8

<PAGE>

                            SUNDOG TECHNOLOGIES, INC.
       INCLUDING THE ACCOUNTS OF ITS WHOLLY-OWNED SUBSIDIARY, ARKONA, INC.
                          [A Development Stage Company]
                          Notes to Financial Statements
                                 March 31, 1999
                                   [continued]

Note 7            Merger with Arkona, Inc.
                  ------------------------

                  Effective  October 7, 1997,  all of the  Arkona,  Inc.  common
                  stock issued and  outstanding was converted into and exchanged
                  for  2,972,200  shares of Sundog  Technologies,  Inc.,  common
                  stock.  At that time all converted  Arkona stock was canceled.
                  Additional  shares were issued in the amount of  11,027,800 to
                  shareholders  of Arkona and  1,575,500  shares  were issued to
                  shareholders  of  Sundog.  The  financial  statements  in this
                  report have been restated, where necessary, for the effects of
                  this merger.

Note 8            Private Placement Memorandum/Marketable Securities
                  --------------------------------------------------

                  Closing of the merger  referred to in Note 7 was subject to an
                  offering of 4,000,000 shares of common stock through a private
                  placement memorandum.  The shares are exempt from registration
                  under  the  Securities  Act  of  1933,  and  applicable  state
                  securities  laws,  pursuant to exemptions  contained  therein.
                  Accordingly,  the  shares  were  offered  by the  Company to a
                  limited  number of persons.  The 4,000,000  shares ($.001 par)
                  were issued for cash  ($1,159,390  less  $69,514 in costs) and
                  securities  (valued at $840,610) to equal  $2,000,000  or $.50
                  per share, prior to settlement fees. The securities  delivered
                  in  the  placement   consisted  of  3,000  shares  of  Eurogas
                  Corporation  (valued at $7.00 per share) and 204,200 shares of
                  InterjetNet   Corporation  (valued  at  $5.00  per  share).  A
                  provision for accepting the securities allowed for the Company
                  to receive,  upon sale of said  securities,  at least $.50 per
                  share in cash proceeds for the Thorsden stock issued under the
                  offering.  Any shortfall in the value of the  securities  when
                  sold  would  result  in a  reduction  of the  number of shares
                  issued  through the offering.  Rather than reducing the number
                  of shares issued,  the subscriber made a verbal  commitment to
                  contribute additional shares of InterjetNet to ensure that the
                  Company is able to realize cash equal to the  original  market
                  value. All of the InterjetNet shares were sold in June of 1998
                  for  approximately   $820,000.  The  net  unrealized  loss  on
                  investments  was  reduced  during  the  year by  approximately
                  $145,000 due to the market value increase and subsequent  sale
                  of the  InterjetNet  stock.  The year end  unrealized  loss on
                  investments of $13,754 was related to the Eurogas  securities.
                  The  unrealized  loss is  based  on the  original  cost of the
                  securities  verses current market value. As of March 31, 1999,
                  the Company had 3,000 shares  remaining.  These securities are
                  available for sale and have been adjusted to fair market value
                  as of March, 31, 1999.

                  An additional  Private  Placement  Memorandum  (dated March 4,
                  1998) has been circulated.  This offering  originally involved
                  the issuance of up to 2,000,000 units, consisting of 2,000,000
                  shares of common  stock of the  Company and  2,000,000  common
                  stock  purchase  warrants.  In July of 1998 the memorandum was
                  amended to change  the common  stock  price from  $2/share  to
                  $1.50/share,  which  increased the total offering to 2,666,666
                  shares.   The  warrants   enable  the  purchasers  to  buy  an
                  additional  1,333,333 shares of common stock at prices ranging
                  from $2 to $3 per share over a two year period.  Proceeds from
                  this offering, of approximately $3.83 million through June 10,
                  1999,  have been used  primarily to fund the  development  and
                  marketing of the Company's two divisions.


                                        9

<PAGE>

                            SUNDOG TECHNOLOGIES, INC.
       INCLUDING THE ACCOUNTS OF ITS WHOLLY-OWNED SUBSIDIARY, ARKONA, INC.
                          [A Development Stage Company]
                          Notes to Financial Statements
                                 March 31, 1999
                                   [continued]

Note 9            Deposits
                  --------

                  In  conjunction  with its lease  obligations,  the Company has
                  placed  security  deposits with its landlord or with banks.  A
                  deposit  of $3,413  was paid at the  inception  of the  office
                  lease to the landlord. The remaining amount is composed of two
                  certificates of deposit placed in financial institutions which
                  are collateral for the equipment and office leases.

Contract Requiring Deposit       Rate        Amount           Maturity
--------------------------       ----        ------           --------
 Equipment Lease                6.160%       70,259       November 4, 1999
 Office Lease                   4.000%       35,346          June 23, 1999
 Total                                      105,605
                                           =========


Note 10           Going Concern
                  -------------

                  The Company has  incurred  losses from  inception to March 31,
                  1999   amounting  to   $2,356,758.   Financing  the  Company's
                  activities  to date has  primarily  been the result of private
                  placement offerings.  The Company's ability to achieve a level
                  of  profitable  operations  and/or  additional  financing  may
                  impact the  Company's  ability to continue as it is  presently
                  organized.   Management   anticipates   reaching  a  level  of
                  profitable   operations.   To  the   extent   that  cash  flow
                  requirements are not met by operations,  management intends to
                  raise additional capital through private placement offerings.


Note 11           Stock Option Plans
                  ------------------

                  The Company has  established  two Stock Option Plans (1992 and
                  1999)  to  provide  incentives  to  its  directors,  officers,
                  employees and advisors,  to do business with the Company,  and
                  to enable the Company to obtain and retain the services of the
                  type of directors, officers, advisors and employees considered
                  essential for  long-range  success.  Granting of options is at
                  the discretion of the Stock Option Committee of the Board. The
                  Committee may  determine the terms and  conditions of options,
                  consistent  with the Plan.  Each plan currently has authorized
                  2,000,000 shares.

                  Through  May 31,  1999,  the 1992 Plan has  granted  1,095,000
                  options to 17 individuals  with a stock purchase price of $.50
                  per share and the 1999 Plan has granted  350,000 stock options
                  to four  individuals with a purchase price of $1.50 per share.
                  These  options vest over two to three years,  and,  when fully
                  vested,  allow the holders to purchase  common  shares at $.50
                  and $1.50 per share.  In the 1992 plan,  150,000  options have
                  vested;  through the date of this report, no options have been
                  exercised.

                  Qui Vive has its own stock  option  plan  which  makes 45% (or
                  450,000  options  for  450,000   shares)of  Qui  Vive,   Inc.,
                  available to key individuals over a three year vesting period.
                  Through  May 1999,  344,500  options  have been  granted to 14
                  individuals  with exercise  prices  ranging from $.10 to $1.00
                  per share. Of these options, approximately 109,800 vested.


                                       10

<PAGE>

                            SUNDOG TECHNOLOGIES, INC.
       INCLUDING THE ACCOUNTS OF ITS WHOLLY-OWNED SUBSIDIARY, ARKONA, INC.
                          [A Development Stage Company]
                          Notes to Financial Statements
                                 March 31, 1999
                                   [continued]

Note 12           401K Profit Sharing Plan
                  ------------------------

                  On January 15, 1998, the Directors adopted an employee benefit
                  program  consisting of a 401K Profit  Sharing  Plan.  The 401K
                  Plan  provides for  employees to contribute on a pretax basis,
                  employer matching, and a broad portfolio of investment options
                  within  the  plan to be  selected  by the  employee.  Employer
                  matching  contributions  are  made at the sole  discretion  of
                  management.  Profit sharing expense recognized under this plan
                  was  $18,977 and $4,138 for the years ended March 31, 1999 and
                  1998, respectively.



Note 13           Subsequent Events
                  -----------------

                  Subsequent  to March 31, 1999 and through June 10,  1999,  the
                  Company has received approximately $161,500 for 107,667 shares
                  from additional  private  placement  subscriptions and $33,334
                  through  the  exercise of stock  warrants  to purchase  16,500
                  shares.


                                       11

<PAGE>

                                   SIGNATURES

In  accordance  with  Section 13 or 15(d) of the  Securities  Exchange  Act, the
registrant  caused  this  report to be signed on its behalf by the  undersigned,
thereunto duly authorized.


                            SUNDOG TECHNOLOGIES INC.


                                            By:    /s/ Stephen Russell
                                               ---------------------------
                                            Its:  Chief Financial Officer

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 on the dates
indicated.


By:   /s/ John Blumenthal                            Date: June 29, 1999
      ---------------------------
        John Blumenthal, Director

By:   /s/ Stephen Russell                            Date: June 29, 1999
      ------------------------------------------
        Stephen Russell, Chief Financial Officer
        Vice President Finance and Director
        (Principal Accounting Officer)

By:   /s/ John Zollinger                             Date: June 29, 1999
      --------------------------
        John Zollinger, Director

By:   /s/ Tim Kapp                                   Date: June 29, 1999
      --------------------
        Tim Kapp, Director

By:   /s/ Jerral Pulley                              Date: June 29, 1999
      --------------------------------------
        Jerral Pulley, Chairman and Director

By:   /s/ Joseph Ward                                Date: June 29, 1999
      -----------------------
        Joseph Ward, Director



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