Securities and Exchange Commission

                             Washington, D.C. 20549

                                   Form 10-QSB

(Mark One)

(X)      Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934 for the quarterly period ended December 31, 1999

                                       OR

( )      Transition  Report  pursuant  to 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 as specified 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 and Zip Code)

                                 (801) 424-0044

              (Registrant's telephone number, including Area Code)

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

As of February 16, 2000, there were issued and outstanding  23,416,166 shares of
the Company's Common Stock, par value $.001 per share.

Transitional Small Business Disclosure Format (check one):   Yes      No  X
                                                                 ---     ---


                                        1

<PAGE>

<TABLE>

                                Table of Contents

<CAPTION>

                                                                                                                Page No.

<S>                                                                                                                <C>
Part I. Financial Information.......................................................................................3

1.   Financial Statements

         Unaudited Condensed Consolidated Balance Sheets as of December 31, 1999 and

                  March 31, 1999....................................................................................3



         Unaudited Condensed Consolidated Statements of Operations for the three
         and     nine     months     ended     December     31,     1999     and
         1998.......................................................................................................4

         Unaudited  Condensed  Consolidated  Statements  of Cash  Flows for nine
         months         ended         December        31,        1999        and
         1998.......................................................................................................5

         Notes to Unaudited Condensed Consolidated Financial Statements.............................................6


2....Management's Discussion and Analysis or Plan of Operation.....................................................13

     3.  Quantitative and Qualitative Disclosures about Market Risk................................................22
Part II.  Other Information........................................................................................22
</TABLE>

                                        2

<PAGE>

                                     PART I

ITEM 1--FINANCIAL STATEMENTS
<TABLE>

                            SUNDOG TECHNOLOGIES, INC.

                          (A Development Stage Company)

                 Unaudited Condensed Consolidated Balance Sheets

<CAPTION>
                                                         December 31      March 31
                                                           1999             1999
                                                         -----------    -----------
ASSETS

<S>                                                      <C>            <C>
    Current Assets

        Cash                                             $   995,678    $ 2,215,620
        Marketable securities                                  1,547          3,188
        Accounts receivable                                   11,890         51,200
        Prepaid expenses                                      24,988         25,550
                                                         -----------    -----------
    Total Current Assets                                   1,034,103      2,295,558
                                                         -----------    -----------
    Equipment                                                518,054        380,406
        Less: Accumulated depreciation                      (169,616)       (52,146)
                                                         -----------    -----------
    Equipment, net                                           348,438        328,260
                                                         -----------    -----------
    Other Assets

        Deposits                                              39,840        105,605
        Intangible assets, net amortization                  147,050         59,983
                                                         -----------    -----------
    Total Other Assets                                       186,890        165,588
                                                         -----------    -----------
TOTAL ASSETS                                             $ 1,569,431    $ 2,789,406
                                                         ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities

        Accounts payable                                 $   162,597    $   140,748
        Current portion of capital lease obligations          19,040         37,741
        Accrued liabilities                                   70,207         75,822
                                                         -----------    -----------
    Total Current Liabilities                                251,844        254,311
                                                         -----------    -----------
     Capital lease obligations, net of current portion        15,784         30,267
                                                         -----------    -----------
Total Liabilities                                            267,628        284,578
                                                         -----------    -----------
Stockholders' Equity

    Common stock                                              23,416         22,530
    Additional paid in capital                             8,064,407      5,557,526
    Accumulated deficit                                   (6,770,625)    (3,061,474)
    Accumulated unrealized loss on
         securities available for sale                       (15,395)       (13,754)
                                                         -----------    -----------
Total Stockholders' Equity                                 1,301,803      2,504,828
                                                         -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY               $ 1,569,431    $ 2,789,406
                                                         ===========    ===========
</TABLE>

       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                        3

<PAGE>

<TABLE>

                            SUNDOG TECHNOLOGIES, INC.

                          (A Development Stage Company)

            Unaudited Condensed Consolidated Statements of Operations

<CAPTION>

                                                                                                            Cummulative

                                                    Three Months Ended                Nine Months Ended    From Inception
                                                       December 31,                      December 31,      (June 11, 1992
                                                   1999        1998               1999             1998    to Dec 31, 1999)
                                           --------------------------------------------------------------------------------

<S>                                        <C>            <C>             <C>             <C>               <C>
Net Revenues                               $     15,060   $    12,000     $     31,257    $      23,167     $    250,695

Costs and Expenses:

  Cost of revenues                               19,476        14,848           45,176           15,846           97,042
  Research and development                      547,421       317,475        1,600,457          762,509        3,088,580
  Selling, General and Administrative           710,465       307,629        2,121,188          770,744        3,919,505
                                          ------------------------------------------------------------------------------
Operating Costs and Expenses                  1,277,362       639,952        3,766,821        1,549,099        7,105,127
                                          ------------------------------------------------------------------------------

Operating Loss                               (1,262,302)     (627,952)      (3,735,564)      (1,525,932)      (6,854,432)
                                          ------------------------------------------------------------------------------

  Interest income                                 5,886        14,762           33,441           32,830          104,805
  Interest expense                               (2,198)       (1,597)          (5,976)          (4,468)         (15,860)
  Other income (expense), net                    (1,052)         (108)          (1,052)              (8)          (5,119)

                                          ------------------------------------------------------------------------------
Net Loss                                   $ (1,259,666)  $  (614,895)    $ (3,709,151)   $  (1,497,578)    $ (6,770,606)
                                          ==============================================================================

Net loss per share                         $      (0.05)  $     (0.03)    $      (0.16)   $       (0.07)
Weighted average number

Of Shares Outstanding                        23,068,841    20,657,336       22,710,878      20,552,592
</TABLE>

       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                        4

<PAGE>

<TABLE>

                            SUNDOG TECHNOLOGIES, INC.

                          (A Development Stage Company)

            Unaudited Condensed Consolidated Statements of Cash Flows
<CAPTION>
                                                                                                          Cumulative

                                                                          Nine Months Ended             From Inception
                                                                             December 31                June 11, 1992
                                                                      1999                1998          To Dec 31, 1999
                                                            ---------------------------------------------------------
<S>                                                               <C>                 <C>                 <C>
Cash Flows From Operating Activities:
    Net Loss                                                      (3,709,151)         (1,497,578)         (6,770,625)
    Adjustments to reconcile net loss to net
    cash provided by (used in) operating activities:
        Depreciation and amortization                                119,126              32,264             171,302
        Changes in assets and liabilities:
        Decrease in accounts receivable                               39,310              (3,687)            (11,890)
        Decrease in prepaid expenses                                     562              (6,800)            (24,988)
        Increase in accounts payable                                  21,849              34,254             162,597
        Deferred revenue                                                   -             (10,417)                  -
        Decrease in deposits                                          65,766             (40,076)            (39,839)
        Decrease in accrued liabilities                               (5,616)            (34,947)             70,206
                                                            ---------------------------------------------------------
Net Cash Used In Operating Activities                             (3,468,154)         (1,526,987)         (6,443,237)
                                                            ---------------------------------------------------------

Cash Flows From Investing Activities:

    Purchase of equipment                                           (137,649)            (70,395)           (518,085)
    Sale of marketable securities                                          -             819,600             823,668
    Acquisition of other assets                                      (88,723)            (33,184)           (148,706)

                                                            ---------------------------------------------------------
Net Cash Provided By (Used In) Investing Activities                 (226,372)            716,021             156,877
                                                            ---------------------------------------------------------

Cash Flows Provided By Financing Activities:

    Proceeds from the sale of common Stock                         2,507,768             848,500           7,246,214
    Principle payments on capital lease obligations                  (33,184)             14,024              34,824
    Cash contribution                                                      -                   -               1,000
                                                            ---------------------------------------------------------
Net Cash Provided By Financing Activities                          2,474,584             862,524           7,282,038
                                                            ---------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                                   (1,219,942)             51,558             995,678
                                                            ---------------------------------------------------------

Cash, Beginning of Period                                          2,215,620             568,612                   -

                                                            ---------------------------------------------------------
Cash, End of Period                                                $ 995,678           $ 620,170           $ 995,678
                                                            =========================================================
</TABLE>

       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                        5

<PAGE>

                            SUNDOG TECHNOLOGIES, INC.

                    Notes to UNAUDITED Condensed Consolidated

                              Financial Statements

Note 1 Basis of Presentation

The Company has  prepared  the  accompanying  condensed  consolidated  financial
statements,  without  audit,  according  to the  applicable  regulations  of the
Securities and Exchange Commission. Certain information and disclosures normally
included in those financial  statements prepared according to generally accepted
accounting  principles have been condensed or omitted. The Company believes that
the  following  disclosures  are adequate and not  misleading.  These  unaudited
condensed consolidated financial statements reflect all adjustments  (consisting
only of normal  recurring  adjustments)  that,  in the  Company's  opinion,  are
necessary to present fairly the financial  position and results of operations of
the Company for the periods  presented.  It is  suggested  that these  unaudited
condensed  consolidated  financial  statements are read in conjunction  with the
consolidated  financial  statements  and  the  notes  thereto  included  in  the
Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 1999.

Note 2   Concentration

The Company is still in the development stage, and its revenues to date are from
four customers.

Note 3   Intangible Assets

The Company has applied for patent and trademark  protection for its proprietary
software and brand names and has expended  $25,846 for patent  rights during the
nine months  ended  December  31,  1999.  These  amounts  consist  primarily  of
professional services in connections with the applications.  The application for
registration of these patents are pending.

Note 4   Equipment

Effective  October 1, 1999, the Company  changed its estimate of the useful life
of its computer  equipment  from five years to three  years.  The effect of this
change in estimate will be recognized prospectively from the date of the change.

Note 5   Equity

During the nine months  ended  December  31, 1999,  the Company  issued  980,054
shares of common  stock at an average  price of $1.03 per share.  Of the 980,054
shares issued,  963,387 were issued with warrants to purchase  963,387 shares of
common  stock.  The  exercise  price of 107,667  warrants is $2.00 if  exercised
within 6 months or $3.00 if  exercised  between 6 and 18  months.  The  exercise
price for the remaining  855,720 warrants is $3.00 per share if exercised within
one year and $4.00 per share if exercised  within two years.  In  addition,  the
Company  sold  180,000  shares of Series B preferred  stock in its wholly  owned
subsidiary for $1,500,000 or $8.33 per share.  The 980,054 shares and associated
warrants were sold in connection with the 1998 Private Placement Memorandum.

                                        6

<PAGE>

Note 6 Subsequent Event

On February 10, 2000,  the Company  entered into an  Acquisition  Agreement (the
"Acquisition  Agreement")  with  Perfumania.com,  QV Acquisition Co., which is a
wholly owned subsidiary of Perfumania.com.,  and Rock Mountain Ventures Fund, LP
to sell its entire ownership in the Company's wholly owned subsidiary, Qui Vive.
If the  acquisition  is  consummated,  pursuant  to the  Acquisition  Agreement,
Perfumania.com  will  receive  550,000  of Qui Vive  Series A  Preferred  stock,
representing  the Company's  entire equity  interest in Qui Vive in exchange for
1,530,000 share of Perfumania.com  common stock (the  "Exchange").  Additionally
the  Company  will  receive  10,000  shares of  perfumania.com  common  stock in
exchange for licensing rights associated with Qui Vive technology. All shares of
Perfumania.com  common stock acquired by the Company in this transaction will be
"restricted securities" and, unless subsequently registered under the Securities
Act of 1933,  as amended  (the  "Securities  Act"),  or sold under an  available
exemption from the registration  requirements of the Securities Act, such shares
may not be sold for a period of at least one year,  and then only in  compliance
with Rule 144  promulgated  under the  Securities  Act.  The  Company can no way
insure  the  consummation  of this  transaction.  Nor can the  Company  give any
assurance  to the future price or market of  Perfumania.com  common stock if the
transaction is consummated.

       Certain Factors that May Affect Future Results, Financial Condition

                       and the Market Price of Securities

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.

The potential  acquisition of the Perfumania.com  Shares presents certain risks.
If the  Exchange  is  consummated  pursuant  to  the  terms  of the  Acquisition
Agreement,  we will  own  approximately  1,540,000  shares  of  common  stock of
Perfumania.com,   par  value  $.01  per  share  (the  "Perfumania.com  Shares").
Acquisition of the  Perfumania.com  Shares will present,  among other risks, the
following:

o    The Perfumania.com Shares will be restricted securities. The Perfumania.com
     Shares will be  "restricted  securities"  as that term is defined under the
     Securities  Act,  and may not be resold  unless  and until such time as the
     relevant  Perfumania.com Shares are registered under applicable federal and
     state  securities  laws  or  unless  an  exemption  from   registration  is
     available.  In  the  future,  the  Perfumania.com  Shares  may be  sold  in
     compliance  with  Rule 144  adopted  under  the  Securities  Act.  Rule 144
     provides, in part, that a person holding restricted securities for a period
     of one year may  sell in any  three-month  period  an  amount  equal to the
     greater of the average  weekly  trading volume of the stock during the four
     calendar  weeks  preceding  the  sale,  or  one  percent  of  the  issuer's
     outstanding   Common   Stock.   Rule  144  also   permits,   under  certain
     circumstances,  the sale of securities  without  regard to the  limitations
     described above, by  non-affiliates of  Perfumania.com,  after holding such
     securities  for at least two  years.  As a result of such  restrictions  on
     transferability,  The Company will  probably not be able to sell any of the
     Perfumania.com  Shares  for a period  of at least one  year,  and  probably
     longer.  The  Perfumania.com  Shares may  significantly  decrease in resale
     value before The Company is able to sell such shares.

o    The Perfumania.com Shares may be significantly  overvalued.  The valuations
     of  companies  such as  Perfumania.com  that  engage in  business  over the
     Internet have been volatile and,  despite such  volatility,  have generally
     increased  dramatically  over the last few years. Such valuations have been
     far out of line with the  valuations  attributed  to  companies  engaged in
     other lines of business and many investment  advisors have warned that such
     valuations  are  not  warranted  and  are  overinflated.  There  can  be no
     assurance that the valuation of the Perfumania.com Shares will not suffer a
     significant  correction  before such  Perfumania.com  Shares can be sold in
     compliance with securities laws.

                                       7
<PAGE>

o    The Company will  probably be required to recognize any gain on the sale of
     Perfumania.com  Shares.  If the  Company,  in  accordance  with  applicable
     securities  laws,  sells  some  or all of the  Perfumania.com  Shares,  the
     Company will likely recognize capital gain (or loss) on the  Perfumania.com
     Shares sold in an amount equal to the difference  between the sale price of
     such   Perfumania.com   Shares  and  the  Company's   basis  in  each  such
     Perfumania.com Share.  Moreover,  if, in connection with the Company's sale
     of any of the Perfumania.com  Shares, the Board of Directors of the Company
     declares a dividend,  shareholders of the Company  entitled to receive such
     dividend  will be required to pay income  taxes at the rate  applicable  to
     ordinary  gains.  To the  extent  you give any  weight  to the value of the
     Perfumania.com  Shares in valuing  the  Shares,  you should be aware  that,
     because of applicable taxes, the amount of money the Company may be able to
     use or distribute upon eventual  disposition of such Perfumania.com  Shares
     will be  significantly  less than the market  value of such  Perfumania.com
     Shares.

o    The Exchange  may not be  consummated.  The Exchange  will not close unless
     numerous  conditions  to the closing of the Exchange  occur.  Many of these
     conditions  are beyond the control of the  Company.  Thus,  there can be no
     assurance  that Sundog  will be able to exchange  the QV Series A Preferred
     for the Perfumania.com Shares.

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  various  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 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

                                        8

<PAGE>

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.

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 February 2000. 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  financing.  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.

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  costsrelating 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.

                                        9

<PAGE>

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
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

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<PAGE>

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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<PAGE>

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.

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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<PAGE>

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 February 16,
1999,  23,416,116  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

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<PAGE>

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.

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.

Item 2   MANAGEMENT'S DISCUSSION and Analysis or Plan of Operation

The  following  discussion  should  be read in  conjunction  with the  unaudited
condensed  consolidated  financial  statements  and the notes thereto  appearing
elsewhere in this Quarterly Report on Form 10-QSB.

Overview

Sundog Technologies,  Inc. (the "Company" or "Sundog") 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. Although the legal entity is
intact,  the Arkona  subsidiary has been effectively  absorbed by Sundog and the
Company is continuing  Arkona's  business of  developing,  marketing and selling
software  products for use in portable and distributed  network  computing under
the Sundog  Technologies  name.  Arkona projects are discussed more particularly
below under the headings Universal Update and Professional Services.

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
an e-mail  security  software  product  and  Internet  applications  more  fully
described  below. QV is majority owned by Sundog.  QV has granted options to key
personnel  of QV as an  incentive  to  further  the  development  work on the QV
products.  If  exercised  in full when  vested,  the  options  granted to the QV
development team would result in the team's  ownership of  approximately  45% of
the outstanding  preferred and common stock in QV and reduce other  shareholders
ownership proportionately.

On February 10, 2000,  the Company  entered into an  Acquisition  Agreement with
Perfumania.com,  QV  Acquisition  Co.,  which is a wholly  owned  subsidiary  of
Perfumania.com.,  and  Rock  Mountain  Ventures  Fund,  LP to  sell  its  entire
ownership in the Company's wholly owned subsidiary, Qui Vive. If the acquisition
is  consummated,  pursuant to the  Acquisition  Agreement,  Perfumania.com  will
receive 550,000 of Qui Vive Series A Preferred stock, representing the Company's

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<PAGE>

entire  equity  interest  in  Qui  Vive  in  exchange  for  1,530,000  share  of
Perfumania.com  common  stock.  Additionally,  the Company will  receive  10,000
shares  of  perfumania.com   common  stock  in  exchange  for  licensing  rights
associated  with  Qui  Vive  technology.  The  Company  can  no way  insure  the
consummation of this transaction.  Nor can the Company give any assurance to the
future  price or market of  Perfumania.com  common stock if the  transaction  is
consummated.

QV Operations

     (As disclosed  throughout this Quarterly Report on Form 10-QSB, the Company
     has entered into an  agreement to sell all of its interest in QV.  Although
     this transaction is subject to several conditions  precedent and may or may
     not be  consummated,  the  possible  sell of the  Company's  interest in QV
     should be considered in connection with the following discussion of QV).

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.  QV is in the  architecture  and  implementation  phase of developing an
enhanced e-mail product.  When the first version of the product is launched,  it
is expected to give e-mail users the chance to direct:

- how their words will be released,

- who can see  them,

- how they can be  redistributed,

- whether they can be printed, copied, or saved, and

- the ability to retract a message after it has been sent.

There can be no complete  gaurantee that the safeguards of QV's 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
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  of QV's enhanced  e-mail product will be sufficient to cover the
needs of  approximately  80% of the  e-mail  market.  Enhancements  designed  to
increase security and to further simplify the product's  usability will be added
over time.

Key Features

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

     Content Restrictions.  Authors can decide whether their e-mail messages can
     be printed, copied, or saved by the recipient.

     Forwarding  Restrictions.  Authors can prohibit  recipients from forwarding
     their e-mail.

     Lifespan Limits.  Authors can configure  messages to self-destruct  after a
     pre-defined period or to be accessed only at certain times.

     Dynamic Self-Destruction. Authors may set messages to destroy themselves as
     they are read.

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<PAGE>

     Conditions  of  Acceptance.  Authors  may  require  recipients  to agree to
     conditions the sender has composed, before gaining access to a message.

     Retraction.  Authors may retract a message after it has been sent,  denying
     all views of the message which are initiated after the retraction.

Phase I Functionality

The  key   features   listed   above  is  expected  to  include  the   following
functionality:

     E-mail  is  created  using  popular  e-mail  software  or  a  browser-based
     interface. Currently designed as an add-on to existing e-mail software, the
     enhanced  e-mail  will be capable of being  sent from  Java-enabled  e-mail
     clients,  including  e-mail products from Netscape,  Microsoft,  Lotus, and
     others.  Once an e-mail has been written,  the author  selects  appropriate
     security and auditing options from a simple, easy to graphic user interface
     or relies on either the user-preset or embedded defaults.

     The e-mail  message is secured.  A QV  appliance  on the  sender's  network
     encapsulates  and  encrypts the email  message.  The  appliance  can reside
     within a corporation or with an outsource e-mail provider.

     Recipient  access is authorized  according to the security  level chosen by
     the sender or his  corporation.  A message may be password  protected,  may
     require a personal  certificate for employees in companies using public key
     infrastructures,  or it  may  require  nothing  more  than  access  to  the
     recipient's e-mail client.

     For  recipients  using  supported  email  clients,  the message will render
     within the standard email frame as would any other message.  For recipients
     using  older  email  clients,  it  may  be  necessary  to  click  on the QV
     attachment and view the message in a web browser frame.

     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  forward,  save,  print,  or
     manipulate the original e-mail message in any way forbidden by the sender.

Future Functionality

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

How the Customer Benefits

The  Company  expects  this QV product to be a  critical  solution  to a growing
problem, 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 its secured  e-mail should be used in any situation  requiring
discretion. It 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

- Communication of any personal, corporate or other information which should not
  be public

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<PAGE>

Status of Development

The product is  currently in  prototype  stage,  and the majority of the initial
functionality has been successfully  demonstrated.  The Company anticipates that
this product will evolve from its initial  implementation,  which,  as described
above,  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.

Sundog has engaged engineers,  marketers and an administrative  staff to support
the development of the product for delivery to the marketplace.  There can be no
assurance  that Sundog  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.

Arkona Operations

During the quarter  ended  December  31,  1999,  Arkona  continued  promotion of
Universal Update;  however,  promotional  activities were slowed due to required
budget  constraints.  During this  period,  several  large  corporate  prospects
completed  in-house  evaluations  of  Universal  Update  v1.5 and are  currently
evaluating internal implementation plans.  Negotiations with these companies are
on going.

Also during this quarter, Arkona's professional service group continued work for
the Federal  Government  Department  of Financial  and  Administrative  services
(DFAS) in partnership with Digital Systems Group

Universal Update

In  1997,  Sundog's  founders  anticipated  the  growth  of an  emerging  market
requiring the seemless  exchange of information  between disparate data sources.
This market for  enterprise  information  exchange  (EIX) is 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.  In June 1999 the second  shipping
version was released.  To date, the Company has not sold any copies of Universal
Update.

ENTERPRISE INFORMATION EXCHANGE

Traditional  business  valuation  models  exhibit a fundamental  shift away from
focusing on products and assets within corporate  entities.  A driving force for
this change is the rise of the  Internet,  with  business  and  investors  alike
discovering that:

- The value of inventory is being replaced by the value of information

- Physical assets are being traded for intellectual  assets

- Closed business systems are giving way to collaborative relationships

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To gain scale and provide maximum value to share holders,  companies are turning
from vertical integration to virtual integration. Companies are actively seeking
ways to openly  share  critical  business  information  between  new and  legacy
information systems, supply chain partners,  remote workers, and even customers.
In this information-driven  economy, a company's ability to connect and leverage
"islands of information"  directly impacts  corporate  valuation and competitive
advantage.  In contrast,  the potential  value of  inaccessible  information  is
immediately lost.

THE UNIVERSAL UPDATE  SOLUTION

Universal  Update  provides  robust yet  simple  solutions  for the  information
exchange requirements of medium to large distributed enterprise customers. These
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.  Additionally,
Universal  Update  incorporates   proprietary  patent  protected  "differencing"
technology that  automatically  detects changes to data environments and updates
related data stores based on rules set by the system administrator.

The Company believes that with increasingly  distributed data environments,  the
need for synchronization and updating technology will grow. Specific markets and
system environments to which Universal Update could be applied include:

- Network Directory  Services

- Business to Business  e-commerce

- Synchronization  of  mobile  device  data,  such  as  Palm(TM)  devices,  with
  corporate data stores

- Electronic  publishing  applications,  particularly those utilizing NextPage's
  Live Publish product

Professional Services

In February 1999,  Sundog launched its  professional  services group.  The group
provides  Sundog's  customers  with both  training  and  consulting  in business
process  improvement (BPI), a service used to drive demand for Sundog's software
products  and  a   prerequisite   to  ensure   complete   client   satisfaction.
Additionally,   the  professional  services  group  has  significant  experience
developing business in the federal government market.

Sundog's BPI and related Knowledge  Management helps managers identify how their
organizations must change to meet the challenges of tomorrow and provides a road
map for implementing that change.  It is a rigorous and structured  approach for
fundamentally   rethinking  and  redesigning  how  an  organization   meets  its
objectives.  It gives managers the  analytical  tools and strategies to question
current management  assumptions about work practices and procedures.  BPI allows
managers to decide if a practice is necessary,  and if so,  whether it should be
performed  in-house or  outsourced.  It also  includes  methods to evaluate best
practices and future technology requirements.

Sundog's  approach to BPI ensures  that  clients  have the support  necessary to
revalidate  their  missions,   set  a  visionary  course  for  the  future,  and
reconfigure their operations to create an enterprise that works better and costs
less.  To that end,  Sundog  provides  comprehensive  methods,  tools,  advisory
services,  and  education  concerning  the  disciplines  of  BPI  and  Knowledge
Management.

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<PAGE>

Sundog'  professional  services group provides a perfect complement to Universal
Update.  While  Universal  Update is  designed to simplify  the  integration  of
information and processes at a technology level,  Sundog's professional services
group provides a roadmap for integration at a business level. Together Universal
Update and  professional  services  group form a complete  business  integration
package.

BPI Services include the following:

     - Strategic  Planning:  define the domain,  conduct relevant analysis,  and
     identify  major drivers and  opportunities  for  improvement  in functional
     areas.

     - Enterprise  Development and Modeling Services:  assist clients to develop
     functional  area dna  enterprise  level data models that  improve  leaders'
     understanding area of responsibility.

     - Functional  Process  Assessments:   utilize BPI  techniques  and tools to
     review  and  validate  the  design,  development,   and  implementation  of
     functional process improvements.

     -  Functional  Architectures:  assist  client in defining  the scope of the
     functional area and its functional activities;  current and future methods,
     management  processes,   and  data  structures;   objectives,   performance
     measures, and targets to support recommendations.

     - Process  and  Data  Baselines:    reviews  existing  methods,  management
     processes, and data structures to identify process and data improvements.

     - Activity Modeling:  provides a clear picture of improvement opportunities
     and non-value added processes.

     - Activity-Based  Analysis and Activity-Based  Costing:  provides basis for
     developing recommendations.

     - Business Rule  Development:  documents the  information  requirements  of
     functional activities.

     - Evaluation  of   Alternatives   and  Selection  of  Process,   Data,  and
     Information System Improvements.

     - Requirements  Prototyping:   offers  solutions  for  current  and  future
     information management requirements.

                                       19

<PAGE>

Results of Operations

Three Months Ended December 31, 1999 and 1998

Revenues  for the  quarter  ended  December  31, 1999 were  $15,060  compared to
$12,000 for the quarter ended  December 31, 1998.  Operating  costs and expenses
totaled  $1,277,362  in the  quarter  ended  December  31,  1999 as  compared to
$639,952  for the same  period in 1998.  Operating  expenses  for 1999  included
$547,421  research and development  costs and $710,465 for selling,  general and
administrative  expenses  compared to research and development costs of $317,475
and  $307,629  for  selling,  general and  administrative  expenses for the same
period in 1998. The increased  expenses in 1999 are due to costs incurred by the
company's Qui Vive  subsidiary in the  development and promotion of the enhanced
e-mail product. The Company expects expenditures to increase in all areas of its
business  during the next twelve months as development and promotion of existing
and new products continues assuming available working capital.

The Company had $5,886 in interest  income during the quarter ended December 31,
1999 as  compared  to  $14,762  for the same  period in 1998.  The  decrease  in
interest  income is due to decreased cash balances  maintained by the Company in
banks. The net loss for the quarter was $1,259,666,  or $.05 per share, compared
to a loss $614,895, or $.03 per share for the same quarter in 1998.

Revenues  for the quarter  were  generated by the  professional  services  group
through work provided to one customer.  Arkona is currently bidding for a number
of projects utilizing its core technologies but there is no assurance it will be
the succeeding bidder on any of such projects.

The primary  marketing focus for the quarter  continued to be  establishing  the
Company's  identity in the marketplace and building a secure platform for future
growth, including recruiting the key personnel and business partners required to
build end-user solutions.

Nine Months Ended December 31, 1999 and 1998

Revenues  during the nine months  ended  December 31, 1999 and 1998 were $31,257
and $23,167 respectively. Revenues for both periods were for consulting services
rendered by the  Company's  professional  services  group.  Operating  costs and
expenses totaled  $3,766,821  during the nine months ended December 31, 1999 and
$1,549,099  for the same period in 1998.  The 1999  operating  expenses  include
$1,600,457 in research and development costs and $2,121,188 in selling,  general
and  administrative  expense  compared  to  research  and  development  costs of
$762,509 and $770,774 for selling,  general and administrative  expenses for the
same period in 1998. The increased expenses in 1999 are due to costs incurred by
the  company's  Qui Vive  subsidiary  in the  development  and  promotion of the
enhanced e-mail product.  The Company expects that  expenditures in all areas of
its business will continue to increase  during the next 12 months as development
and promotion of existing and new products  continues assuming available working
capital.

The Company had $33,441 in interest income during the nine months ended December
31,  1999 and  $32,830  for the same  period  in 1998.  The  increase  is due to
increased cash balances maintained in the Company's bank accounts.  The net loss
for nine month period ended  December 31, 1999 was  $3,709,151 or $.16 per share
compared to a loss of $1,497,578 or $.07 per share in 1998.

                                       20

<PAGE>

Liquidity and Capital Resources

At December 31, 1999, the Company had cash and cash equivalents of $995,678,  as
compared to cash and cash  equivalents of $2,215,620 as of March 31, 1999.  Cash
was provided during the period through the sale of stock in a private  placement
and the exercise of Stock Warrants issued with the PPM of August 1998.

Capital  spending of $137,649 in the nine  months  ended  December  31, 1999 was
primarily for computer and related  equipment used in the Company's  operations,
including product development and research.

The Company has outstanding  warrants to purchase 339,818 shares of common stock
at a price of $2.00 per share over the next six  months.  The  Company  also has
outstanding  warrants to purchase 1,043,119 shares of common stock at a price of
$3.00 per share over the next eighteen months, 865,725 of which may be exercised
at $2.00 per share if  exercised  within the next six months.  In  addition  the
Company has outstanding  warrants to purchase  855,718 shares of common stock at
$3.00 if  exercised  by 10/31/00 or at $4.00 if  exercised  between  11/1/00 and
10/31/01.  If all warrants were exercised,  the proceeds to the Company would be
between  $5,510,422  and  $6,552229.  The Company cannot require the exercise of
these  warrants,  and  there  can  be  no  assurance  that  the  warrants,  or a
significant part of them, will ever be exercised.  In addition, if such warrants
are exercised at a time when the market price of the  Company's  common stock is
significantly  higher than the exercise  price of the warrants,  the issuance of
such shares will result in significant dilution of existing stockholders and may
result  in  a  decline  of  the  market  price  of  the  Company's   Securities.
Furthermore,  the fact that the  warrants  have been granted may have an adverse
effect  on the  price  of the  Company's  stock  because  of the  potential  for
dilution.

The Company held marketable  securities available for sale at December 31, 1999.
Although  the Company  does not intend to engage in the business of investing in
or buying and selling  securities  of other  companies,  these  securities  were
received as partial  consideration  in connection with the sale of the Company's
common stock in October 1997. These  marketable  securities were 3,000 shares of
common stock of Eurogas Corp. ("EUGS").

At December 31, 1999,  the sale price of EUGS common  stock,  as reported by the
over-the-counter  ("OTC") electronic bulletin board, was $0.52 per share. Shares
traded in the NASDAQ OTC markets are  characterized by volatile changes in price
and thin trading volumes. The relatively low volume of securities traded and the
dramatic  effect that sales of even a few shares can have on the market price of
such securities may have an adverse effect on the Company's ability to liquidate
its remaining holdings or to realize the values similar to those shown above.

On February 10, 2000,  the Company  entered into an  Acquisition  Agreement with
Perfumania.com,  QV  Acquisition  Co.,  which is a wholly  owned  subsidiary  of
Perfumania.com.,  and  Rock  Mountain  Ventures  Fund,  LP to  sell  its  entire
ownership in the Company's wholly owned subsidiary, Qui Vive. If the acquisition
is  consummated,  pursuant to the  Acquisition  Agreement,  Perfumania.com  will
receive 550,000 of Qui Vive Series A Preferred stock, representing the Company's
entire  equity  interest  in  Qui  Vive  in  exchange  for  1,530,000  share  of
Perfumania.com common stock. Additionally the Company will receive 10,000 shares
of perfumania.com  common stock in exchange for licensing rights associated with
Qui Vive  technology.All  shares of Perfumania.com  common stock acquired by the
Company  in  this  transaction  will  be  "restricted  securities"  and,  unless
subsequently  registered  under the  Securities  Act of 1933,  as  amended  (the
"Securities  Act"), or sold under an available  exemption from the  registration
requirements  of the Securities Act, such shares may not be sold for a period of
at least one year, and then only in compliance with Rule 144  promulgated  under
the  Securities  Act.The  Company  can no way  insure the  consummation  of this
transaction.  Nor can the  Company  give any  assurance  to the future  price or
market of Perfumania.com common stock if the transaction is consummated.

                                       21

<PAGE>

Cautionary Statement Regarding Forward-Looking Statements

The Company considers all forward-looking statements contained in this Quarterly
Report to be covered by and to qualify for the safe harbor  protection  provided
by Section 21E of the Securities Exchange Act of 1934, as amended.  Shareholders
and  prospective  shareholders  should  understand  that several  factors govern
whether the results described by any such  forward-looking  statement will be or
can be achieved.  Any one of those factors could cause actual  results to differ
materially from those projected in this Report.

The  forward-looking  statements  contained  in this  report  include  plans and
objectives of management for future operations, relating to the products and the
economic  performance  of the Company.  Assumptions  applicable to the foregoing
involve  judgments  with  respect  to,  among  other  things,  future  economic,
competitive, and market conditions,  future business decisions, and the time and
money required to successfully complete development  projects,  all of which are
difficult or impossible to predict  accurately  and many of which are beyond the
Company's control. Although the Company believes that the assumptions underlying
the  forward-looking  statements are reasonable,  any of those assumptions could
prove inaccurate.  Therefore,  we cannot assure that the results contemplated in
any of the  forward-looking  statements  contained herein will be realized.  The
impact of actual  experience and business  developments may cause the Company to
alter its marketing,  capital expenditure plans, or other budgets,  which may in
turn  affect the  Company's  results  of  operations.  In light of the  inherent
uncertainties in forward-looking statements, the inclusion of any such statement
does not guarantee that the objectives or plans of the Company will be achieved.
Among other  factors to consider is the possible  impact of the  following  risk
factors on the financial condition and results of operation of the Company.

Development Stage, Accumulated Deficit

The Company is a  development  stage  company and has had only limited  revenues
since its inception.  There can be no assurance that the Company will be able to
achieve a  significant  level of sales or attain  profitability.  The  Company's
operations have been limited to developing software, initial sales and marketing
efforts and fund raising activities.  There can be no assurance that the Company
will be able to grow in the  future or attain  profitability.  As a result,  the
Company  believes  that its  prior  results  of  operation  are not  necessarily
meaningful and should not be relied upon as an indication of future performance.
The  profit  potential  of the  Company's  business  is  speculative,  and to be
successful,  the Company must,  among other things,  develop and market software
that is widely  accepted  by  business  customers  at prices  that will  yield a
profit.  The Company's software products are in the development stage. There can
be no assurance  that the products of the Company will achieve broad  commercial
acceptance.  The Company's  ability to generate future revenues will depend on a
number of factors,  many of which are beyond the Company's  control and include,
among  others,  the ability of the Company to complete  its product  development
activities and to carry on timely and effective marketing campaigns.

Because  of the  foregoing  factors,  among  others,  the  Company  is unable to
forecast  its revenues or the rate at which it will add new  customers  with any
degree of accuracy.  There can be no assurance  that the Company will be able to
increase its sales in accordance with its internal  forecasts or to a level that
meets the  expectations  of investors.  There can also be no assurance  that the
Company will ever achieve favorable operating results or profitability.

                                       22

<PAGE>

Quantitative and Qualitative Disclosures about Market Risk

Market risk represents the risk of loss that may impact our financial  position,
operating  results  or cash flows due to adverse  changes  in  financial  market
prices and rates.  The Company is, or may become,  exposed to market risk in the
areas of changes in United States interest rates and changes in foreign currency
exchange rates as measured against the United States Dollar. These exposures are
directly  related to our normal operating and funding  activities.  Historically
and as of December 31, 1999, the Company has not used derivative  instruments or
engaged in hedging activities.

Foreign Currency Risk

The Company may enter into contracts  where we pay or a third party pays us in a
foreign  currency.  This would expose the Company to changes in exchange  rates.
Changes in the foreign  exchange rates may  positively or negatively  affect our
financial  position,  results of operations or cash flows.  Management  does not
believe  that  near-term  changes in  exchange  rates will  result in a material
effect on future earnings,  fair values or cash flows, and therefore have chosen
not to enter into foreign currency hedging instruments. Such an approach may not
be  successful,  especially in the event of a significant  and sudden decline in
the foreign exchange rates.

                           Part II. Other Information

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS

         Unregistered  sales of equity  securities during quarter (other than in
reliance on Regulation S).

Recent Sales of Unregistered Securities.  During the three months ended December
31, 1999, the Company issued equity  securities  that were not registered  under
the  Securities Act of 1933, as amended (the "Act").  Specifically,  the Company
received proceeds of $752,93,or an average price of $.95 per share and committed
to issue 792,562 shares of common stock and warrants to purchase  792,562 shares
of common stock. The Company issued such shares without  registration  under the
Act in reliance on exemptions  from  registration  under the Section 4(2) and/or
3(b), as well as  Regulation D  promulgated  under the Act. The shares of common
stock were (and the shares  issueable  upon  exercise of the  warrants  will be)
issued as restricted  securities and the certificates  representing  such shares
are or will be stamped with a restrictive  legend to prevent any resale  without
registration  under the Act or compliance  with an exemption.  In each case, the
purchasers of the securities were accredited investors,  as that term is defined
by Rule 501  under  the Act,  or  represented  to the  Company  that  they  were
sophisticated investors who were experienced in making investments of this type,
either  alone  or with a  purchaser  representative,  and  that  they  or  their
purchaser  representatives  were  otherwise  suitable  (under  state and federal
regulations)  and possessed  adequate means of providing for their current needs
and personal contingencies and who had no need for liquidity in an investment in
securities  such as the  Company's  common  stock,  which are subject to certain
risks, including the possible loss of a person's investment in whole or in part.

The  warrants  described  above  originally  had an exercise  price of $2.00 per
share. In October of 1999 the company offered warrant holders the opportunity to
exercise their warrants at $.95 instead of $2.00 if done between October 1, 1999
and December 31, 1999.

The Company's  common stock is quoted on the  over-the-counter  ("OTCBB") Nasdaq
electronic  bulletin  board under the symbol  SUDG.  To date there has been only
limited trading activity in the Company's stock.

                                       23

<PAGE>

The Company has outstanding  warrants to purchase 339,818 shares of common stock
at a price of $2.00 per share over the next six  months.  The  Company  also has
outstanding  warrants to purchase 1,043,119 shares of common stock at a price of
$3.00 per share over the next eighteen months, 865,725 of which may be exercised
at $2.00 per share if  exercised  within the next six months.  In  addition  the
Company has outstanding  warrants to purchase  855,718 shares of common stock at
$3.00 if  exercised  by 10/31/00 or at $4.00 if  exercised  between  11/1/00 and
10/31/01.  If all warrants were exercised,  the proceeds to the Company would be
between $ $5,510,422 and  $6,552229.  The Company cannot require the exercise of
these  warrants,  and  there  can  be  no  assurance  that  the  warrants,  or a
significant part of them, will ever be exercised.  In addition, if such warrants
are exercised at a time when the market price of the  Company's  common stock is
significantly  higher than the exercise  price of the warrants,  the issuance of
such shares will result in significant dilution of existing stockholders and may
result  in  a  decline  of  the  market  price  of  the  Company's   Securities.
Furthermore,  the fact that the  warrants  have been granted may have an adverse
effect  on the  price  of the  Company's  stock  because  of the  potential  for
dilution.

ITEM 5.  Subsequent Event

On February 10, 2000,  the Company  entered into an  Acquisition  Agreement with
Perfumania.com,  QV  Acquisition  Co.,  which is a wholly  owned  subsidiary  of
Perfumania.com.,  and  Rock  Mountain  Ventures  Fund,  LP to  sell  its  entire
ownership in the Company's wholly owned subsidiary, Qui Vive. If the acquisition
is  consummated,  pursuant to the  Acquisition  Agreement,  Perfumania.com  will
receive 550,000 of Qui Vive Series A Preferred stock, representing the Company's
entire  equity  interest  in  Qui  Vive  in  exchange  for  1,530,000  share  of
Perfumania.com common stock. Additionally the Company will receive 10,000 shares
of Perfumania.com  common stock in exchange for licensing rights associated with
Qui Vive  technology.All  shares of Perfumania.com  common stock acquired by the
Company  in  this  transaction  will  be  "restricted  securities"  and,  unless
subsequently  registered  under the  Securities  Act of 1933,  as  amended  (the
"Securities  Act"), or sold under an available  exemption from the  registration
requirements  of the Securities Act, such shares may not be sold for a period of
at least one year, and then only in compliance with Rule 144  promulgated  under
the  Securities  Act.  The  Company can no way insure the  consummation  of this
transaction.  Nor can the  Company  give any  assurance  to the future  price or
market of Perfumania.com common stock if the transaction is consummated.

See "Certain Factors that May Affect Future Results, Financial Condition and the
Market Price of Securities" beginning on page 7 of this Report.

                                       24

<PAGE>





Item 6.   Exhibits and Reports on Form 8-K


(a) Exhibit No.                Document Description

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

   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)



   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)


27                Financial Data Schedule


(b)  Reports  on form 8-K.  No  Current  Reports  on Form 8-K were filed for the
quarter ended December 31, 1999.




                                   Signatures

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

                                  SUNDOG TECHNOLOGIES, INC.
                                  (Registrant)

Date:  February 18, 2000
       -----------------
                                  /s/ Alan D. Rudd
                                  ----------------
                                  Alan D. Rudd

                                  Chairman of the Board
                                  Sundog Technologies, Inc.


                                       25