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 September 30, 2001

                                       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

                                  ARKONA, Inc.
                                  ------------
           (Name of small business issuer as specified in its charter)


                            Sundog Technologies, Inc.
                            -------------------------
                     (Former name of small business issuer)

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


                      10542 South Jordan Gateway, Suite 200
                            South Jordan, Utah 84095
                            ------------------------
              (Address of principal executive offices and Zip Code)

                                 (801) 501-7100
                                 --------------
              (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 November 14, 2001, there were issued and outstanding  18,162,230 shares of
the Company's Common Stock, par value $.001 per share.



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


<PAGE>

                      PART I - Item 1. Financial Statements

                                  ARKONA, INC.
                          (A Development Stage Company)
                                 Balance Sheets
             ASSETS                                30-Sep-01      31-Mar-01
                                                  -----------    -----------
    Current Assets
        Cash and cash equivalents                      15,992         35,221

        Marketable securities                             450          1,410

        Accounts receivable                           327,064         90,223

        Prepaid expenses                               12,839         10,787
                                                  -----------    -----------

    Total Current Assets                              356,344        137,641
                                                  -----------    -----------

    Equipment                                         583,892        550,163

        Less: Accumulated depreciation               (334,773)      (286,276)
                                                  -----------    -----------

    Equipment, Net                                    249,119        263,887
                                                  -----------    -----------

    Other Assets
        Deposits                                       17,779         17,779

        Intellectual property, net amortization       229,775        241,998

        Goodwill, net amortization                    208,832        261,037

        Other assets, net amortization                 41,382         42,605
                                                  -----------    -----------

    Total Other Assets                                497,768        563,419
                                                  -----------    -----------

TOTAL ASSETS                                        1,103,231        964,947
                                                  ===========    ===========


LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities
        Accounts payable                              623,123        421,740

        Accrued liabilities                            68,167         13,959

        Deferred revenue                               92,433        174,653

        Current portion of capital leases              28,672         28,672
                                                  -----------    -----------

    Total Current Liabilities                         812,395        639,024
                                                  -----------    -----------

     Long-Term Liabilities
       Capital Lease Obligations,
          net of current portion                       18,255         33,118

     Note payable - related party                     665,575        109,128
                                                  -----------    -----------

     Total Long-Term Liabilities                      683,830        142,246
                                                  -----------    -----------

Total Liabilities                                   1,496,225        781,270
                                                  ===========    ===========

Stockholders' Equity
    Common Stock                                       16,922         14,409

     Treasury Stock
    Additional paid in Capital                     18,930,355     18,322,868

   Unearned Compensation                           (1,182,350)    (2,903,250)

    Accumulated unrealized loss on investment
        securities available for sale                 (16,492)       (15,532)

    Retained Earnings (Deficit)                   (18,141,429)   (15,234,817)
                                                  -----------    -----------

Total Stockholders' Equity                           (392,994)       183,678
                                                  -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY          1,103,231        964,948
                                                  ===========    ===========


       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                       1
<PAGE>

<TABLE>
<CAPTION>
                                  ARKONA, INC.

                          (A Development Stage Company)

            Unaudited Condensed Consolidated Statements of Operations

                                                                            Three Months Ended          From
                                               Six Months Ended                                       Inception
                                                                                                    June 11, 1992
                                          30-Sep-01      30-Sep-00      30-Sep-01      30-Sep-00      30-Sep-01
                                         -----------    -----------    -----------    -----------    -----------
<S>                                        <C>               <C>           <C>             <C>         <C>
Revenues                                   1,302,011         72,133        683,127         29,932      1,894,439

Operating Expenses
  Cost of Sales                              910,146          3,352        471,932          1,673      1,192,584

  Research and Development                   263,936        285,144        101,591        144,721      2,644,644

  Marketing, Admin & Sales                 1,255,436      1,514,952        630,071        746,120      7,898,363

  Recog. of deferred compensation          1,720,900        925,000      1,720,900           --        6,363,900

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

Total Operating Expenses                   4,150,417      2,728,448      2,924,494        892,514     18,099,490
                                         -----------    -----------    -----------    -----------    -----------


Net Loss From Operations                  (2,848,406)    (2,656,315)    (2,241,367)      (862,582)   (16,205,051)


  Interest Income                               --            4,299           --              190        112,428

  Interest Expense                           (28,321)       (15,753)       (17,777)       (14,866)       (41,336)

                                                --             (152)          --             (152)           785
  Other Income
  Other Expense                                 --             --             --             --             (288)

  Realized loss on disposal of                  --             --             --             --      (20,469,897)
securities
  Loss on sale of securities avail for          --             --             --             --           (4,068)
sale                                            --             --             --             --             --

Net Loss From Contining Operations        (2,876,727)    (2,667,921)    (2,259,144)      (877,410)   (36,607,427)
                                         -----------    -----------    -----------    -----------    -----------


  Gain on disposal of segment                   --       21,531,555           --             --       21,531,555

  Loss from discontinued operations             --             --             --             --       (3,065,557)
                                         -----------    -----------    -----------    -----------    -----------

Net Loss                                  (2,876,727)    18,863,634     (2,259,144)      (877,410)   (18,141,429)
                                         ===========    ===========    ===========    ===========    ===========



Baset Net Income (Loss) per share              (0.16)          1.58          (0.12)         (0.07)         (3.67)
                                         -----------    -----------    -----------    -----------    -----------

Weighted average number
Of Shares Outstanding                     18,082,230     11,929,540     18,082,230     11,929,540      4,937,764
                                         -----------    -----------    -----------    -----------    -----------


Diluted Net Income (Loss) per share            (0.16)          1.48          (0.12)         (0.07)         (3.67)

Weighted Average Diluted
Shares Outstanding                        18,082,230     12,740,153     18,082,230     12,740,153      4,937,764
                                         -----------    -----------    -----------    -----------    -----------
</TABLE>


       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                       2
<PAGE>

<TABLE>
<CAPTION>
                                  ARKONA, INC.

                          (A Development Stage Company)

            Unaudited Condensed Consolidated Statements of Cash Flows

                                                            Six Months Ended
                                                        30-Sep-01      30-Sep-00
                                                       -----------    -----------
<S>                                                     <C>            <C>
Cash Flows (used by) Operating Activities:
    Net (Loss)/Income                                   (2,876,727)    18,863,633

    Adjustments  to  reconcile  net  income  to
    net cash  used for operating activities:
        Depreciation and Amortization                      152,729         72,923

                                                              --      (21,531,554)
        Gain on disposal of segment
        Amortization of unearned compensation            1,720,900        925,000

        Changes is assets and liabilities:
             Accounts receivable                          (236,841)       (72,198)

             Prepaid Expenses                               (2,052)        (9,488)

                                                              --           (4,800)
             Inventory
             Accounts Payable                              201,383        870,158

              Deferred revenue                             (82,220)          --

             Accrued Liabilities                            54,208         (6,156)
                                                       -----------    -----------

Net Cash (Used By) Operating Activities                 (1,069,698)      (892,482)
                                                       -----------    -----------


Cash Flows (Used for) Investing Activities:
    Additions to Equipment                                 (88,491)       (79,977)

    Other assets                                           (13,773)        (4,207)
                                                       -----------    -----------

Net Cash Used for Investing Activities                    (102,264)       (84,184)
                                                       -----------    -----------


Cash Flows Provided By Financing Activities:
    Proceeds from Issuance of Common Stock                 610,000        466,526

    Loan from officer                                      556,447        100,000

    Leases                                                 (14,863)        (8,784)
                                                       -----------    -----------

Net Cash Provided By Financing Activities                1,151,584        557,742
                                                       -----------    -----------


Net Increase/(Decrease) in Cash and Cash Equivalents       (20,378)      (418,924)
                                                       -----------    -----------


Beginning Cash Balance                                      35,221        489,297
                                                       -----------    -----------

Ending Cash Balance                                         15,992         70,373
                                                       ===========    ===========
</TABLE>


       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                       3
<PAGE>

                            SUNDOG TECHNOLOGIES, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS


Note 1 Basis of Presentation

The  Company has  prepared  the  accompanying  condensed  financial  statements,
without  audit,  according to the  applicable  regulations of the Securities and
Exchange  Commission.  Certain information and disclosures  normally included in
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
financial  statements  reflect  all  adjustments   (consisting  only  of  normal
recurring  adjustments) that, in management'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  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/A
for the fiscal year ended March 31, 2001.


Note 2  Concentration

The Company's  automobile  dealer's  management product is currently selling and
beginning to generate  revenues.  The Company  currently has  approximately  125
customers using its automobile dealer's management product.


Note 3  Equity

During the three months ended  September 30, 2001, the Company issued  1,780,000
shares of common stock at a price of $0.25 per share.

                                       4
<PAGE>

Item 2.  Management's Discussion and Analysis


Overview

From 1996  through  late 2000,  the primary  product of Arkona,  Inc.  (formerly
Sundog  Technologies,  Inc.) was a data base technology called Universal Update.
Universal  Update  allows  rapid  integration  of business  information  systems
throughout the enterprise and easy sharing of critical  information with remote,
occasionally  connected workers and partners around the world. Until early 2001,
the Company worked to develop and sell the Universal Update technology.

During  late 2000 and early  2001,  our focus  and  direction  changed  from our
Universal  Update  products  and the  mobile  computing  industry  to our  newly
acquired Centari Dealer Management Solution (CDMS) and the automobile dealership
management  industry.  In November  2000, we acquired  substantially  all of the
assets and specific  liabilities of Ensign  Information  Systems, a developer of
automotive dealership software. In late 2000 and early 2001, we became concerned
over  the  amount  of  additional  work  required  to make  Universal  Update  a
profitable  endeavor  and,  in light of our  limited  resources,  determined  to
suspend  further  development  and  marketing of Universal  Update and focus our
resources  and  attention  on CDMS  and  the  automobile  dealership  management
industry. Our present focus is to develop the growth potential in the automotive
dealership software industry of our CDMS product.


Results of Operations--Three Months Six Months Ended September 30, 2001 and 2000

Revenues for the quarter  ended  September  30, 2001 were  $683,127  compared to
$29,932 for the same period in 2000. For the six months ended September 30, 2001
revenues were $1,302,011 as compared to $72,133 for the same period in the prior
year. The increase in revenue is due to a substantial  increase in the sales and
implementation of the Company's  dealership  management  software and associated
monthly  maintenance  and support  revenue.  Our revenues  from our software and
reoccurring  monthly  maintenance of $683,127 during the quarter ended September
30, 2001  represented  an increase of $64,241 over our revenues of $618,884 from
software and  reoccurring  monthly during the quarterly ended June 30, 2001. The
increase in revenue from last  quarter to this  quarter is due  primarily to the
increase in reoccurring revenue. Each time the Company completes an installation
of its software  reoccurring  revenue increases by $1,500 to $2,500 depending on
the size of the installation.

Cost of sales totaled $471,932 for the quarter ended September 30, 2001 compared
to $1,673 for  quarter  ended  September  30,  2000.  For the six  months  ended
September 30, 2001 cost of sales was $910,146 as compared to $3,352 for the same
period in the prior  year.  This  significant  increase in cost of goods sold is
largely due to a substantial  increase in sales and the  difference in the costs
associated with selling CDMS compared to Universal  Update.  Our primary product
at this time last year was Universal  Update,  a software product that customers
purchased  out of the box.  Today,  our primary  product is our CDMS  automobile
dealer  management  software,  which  requires a  significant  installation  and
training process and hardware.  As a percentage of sales,  cost of sales was 69%
for the quarter.  This  unusually  high  percentage  is due to the small margins
realized on hardware sales and the growth in our installation organization. With
the training requirements for an installation technician best met on the job, we
send new technicians  with trained  technicians  together on our installs.  As a
result, we incurred unusually high salary expense on each  installation.  We are
still  experiencing  growth in the  installation  part of the  business,  and we
expect  to the cost of  sales as a  percentage  of  sales  to  decrease,  but to
decrease  slowly in the near  future.  We are also  looking at  alternatives  to
increase the margins on hardware sold as a part of the installation process.

                                       5
<PAGE>

Operating  expenses  totaled  $2,924,494 in the quarter ended September 30, 2001
compared to $892,514  for quarter  ended  September  30,  2000.  The increase in
operating  expenses  is due to a charge  for  deferred  compensation  expense of
$1,720,900  in the quarter ended  September  30, 2001. No deferred  compensation
expense was recognized  during the quarters ended June 30, 2001 or September 30,
2000; a similar deferred  compensation expense of $925,000 was recognized in the
quarter  ended June 30, 2000.  The  deferred  compensation  expenses  recognized
during the quarters  ended  September  30, 2001 and September 30, 2000 relate to
options  granted below market by shareholders of the Company on their own shares
to  management  and other  persons.  When  options are granted  below the market
value,  the Company records  deferred  compensation in the equity section of its
balance  sheet.  As the options vest, the Company  recognizes  the  compensation
expense  (whether or not it granted the  options).  It is important to note that
substantially  all of the options with  respect to which the Company  recognized
deferred  compensation  expense during the quarter ended September 30, 2001 were
granted by  shareholders  and cover  outstanding  shares of common stock held by
such  shareholders.  The Company will not be required to issue additional shares
upon exercise of such options, which are non-dilutive to shareholders other than
those whose shares are subject to the grant.

Without  the  non-cash  charge for  deferred  compensation,  operating  expenses
actually  decreased  from $890,840 for the quarter  ended  September 30, 2000 to
$731,662  for the quarter  ended  September  30,  2001.  For the  quarter  ended
September  30,  2001,  marketing,  sales  and  administrative  expenses  totaled
$630,071 as compared to $746,120  for the  quarter  ended  September  30,  2000.
Similarly,  for the six months ended  September 30, 2001,  marketing,  sales and
administrative  expenses  totaled  $1,255,436 as compared to $1,514,952  for the
six-month period ended September 30, 2000. This decrease resulted primarily from
the  reorganization  of sales to meet the needs of a new product and its selling
requirements.  Operating  expenses  for the  quarter  ended  September  30, 2001
included  $101,591 for research and  development as compared to $144,721 for the
quarter ended  September  30, 2000.  Similarly,  operating  expenses for the six
months ended  September 30, 2001 included  $263,936 for research and development
as compared to $285,144 for the six-month  period ended  September 30, 2000. The
decrease in research and  development  is due to an  allocation  of  engineering
resources to customer service in order to meet customer needs and requests.

We expect  expenditures to increase in all areas of our business during the next
twelve  months  as  development  and  promotion  of  existing  and new  products
continues,  assuming  available working capital.  One of our biggest  challenges
currently is meeting the demand for our Centari Dealer Management  Solution.  We
currently have the capacity to install the Ensign Management Suite in 5-6 stores
per month. Our sales of CDMS are presently  outpacing our ability to install it.
We are working to bring on board and train skilled people.

We had no interest income during the quarter ended September 30, 2001,  compared
to $4,299 for the quarter  ended  September  30, 2000.  The decrease in interest
income is due to decreased cash balances we maintained in banks.

The net loss for the  quarter  ended  September  30,  2001 was  ($2,259,144)  or
($0.12) per share, compared to a loss of ($877,410) or $(0.07) per share for the
quarter ended  September 30, 2000.  For the six months ended  September 30, 2001

                                       6
<PAGE>

the net loss  was  ($2,876,727)  or  ($0.16)  per  share  compared  to a gain of
$18,863,634  or $1.58 per share for the six months  ended  September  30,  2000.
Without  the charge for  deferred  compensation,  the loss for the three and six
month  periods  ended  September  30,  2001  were  ($538,244)  and  ($1,158,827)
respectively.  With non-cash deferred compensation expenses excluded,  this loss
of ($538,244) for the quarter ended September 30, 2001 is $339,166 less than the
loss of  ($877,410)  for the quarter  ended  September  30, 2000.  Management is
continuing  to look  for ways to  become  more  efficient  in its  execution  of
operations.  The gain in 2000  resulted  from our sale to  Envision  Development
Corp.  (Envision) of our interest in Qui Vive, Inc. in April of 2000. During the
quarter  ended  December  31, 2000,  we were  required to write down to zero the
value of the stock  received  from  Envision for our interest in Qui Vive,  Inc.
after Envision ceased operations.

The primary  marketing focus for the quarter  continued to be  establishing  our
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.


Liquidity and Capital Resources

At September 30, 2001, we had cash and cash equivalents of $15,992,  as compared
to cash and cash  equivalents  of $35,221 as of March 31, 2001.  As of September
30, 2001 and November 14, 2001,  we did not have working  capital  sufficient to
meet its short-term obligations.

We expect our revenues to continue to increase and expect to reach break even by
the end of this fiscal year.  Nonetheless,  it is unlikely that such anticipated
increase in revenues will be  sufficient  to fund our ongoing  operations in the
near future. We will need to raise additional funds to fund our rapid expansion,
to  develop  new or  enhance  existing  services  or  products  or to respond to
competitive  pressures.  We cannot provide  assurance that additional  financing
will be available on terms favorable to us, or at all. If adequate funds are not
available or are not  available  on  acceptable  terms,  our ability to fund our
marketing  and planned  product  development  programs or  otherwise  respond to
competitive pressures would be limited.

We hold a small amount of marketable  securities available for sale at September
30, 2001.  Although we are not in the business of investing in, buying,  selling
or holding  securities of other  companies,  these  securities  were received as
partial  consideration  in  connection  with the sale of common stock in October
1997. These marketable  securities were 3,000 shares of common stock of Eurogas,
Inc.  ("EUGS").  At September  30,  2001,  the closing sale price of EUGS common
stock, as reported by the  over-the-counter  ("OTC") electronic  bulletin board,
was $0.15 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  values
similar to those shown above.


Cautionary Statement Regarding Forward-Looking Statements

We consider 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,  plans relating to the products
and predictions  regarding the economic performance of the Company.  Assumptions

                                       7
<PAGE>

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 our control.  Although we believe 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 risk factors to consider are the factors identified in the
subsection entitled "Factors That May Affect Future Results" below.



                     Factors That May Affect Future Results

Our short and long-term  success is subject to certain risks,  many of which are
substantial in nature. 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 and may never have significant sales.

         We  are is in the  development  stage  and  have  a  limited  operating
history. There can be no assurance that we will be able to achieve a significant
level of sales or  attain  profitability.  As of  September  30,  2001,  we have
installed  our  Centari  Dealer   Management  Suite  in  approximately  125  car
dealerships.  We must significantly increase the number of dealerships using our
products in order to attain  profitability.  We may never  generate  significant
sales.  Even if we generate  significant  sales,  revenues  from sales may never
exceed associated costs.

We have  incurred  substantial  losses since our  inception  and may continue to
incur losses indefinitely into the future.

         We have  incurred  operating  losses each year since our  inception  in
1992.  As of  September  30, 2001,  our  accumulated  deficit was  approximately
$18,141,429.  We expect to incur  additional  losses during the remainder fiscal
year ending on March 31, 2002.  Our operating  expenses are expected to increase
as we expand our sales force,  installation  employees and technical  employees.
Our sales  revenues may not increase  during our upcoming  fiscal year.  Even if
sales revenues do increase,  sales revenues may not exceed  operating  expenses,
and we may continue to incur losses indefinitely into the future.

We require  additional  capital to meet our short term  obligations and continue
development of our products.

         We do not  presently  have  working  capital  sufficient  to  meet  our
immediate term  obligations.  We expect to continue to rely primarily on outside
financing to fund our  operations  for the near term and cannot  assure you that
additional  financing will be available on terms  favorable to us, or at all. If
adequate funds are not available,  or are not available on acceptable terms, our
ability to fund our  marketing  and  planned  product  development  programs  or
otherwise respond to competitive  pressures would be significantly  limited.  If
capital  were to  continue  to be  unavailable,  we  would  be  forced  to cease
operations.

                                       8
<PAGE>

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.  Our
independent public accountants have issued their report dated June 22, 2001 with
respect to the fiscal  year ended March 31,  2001 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, a promissory note, and certain
assets  consisting of marketable  securities to sustain  operations.  Additional
financing will be required if we are to continue as a going concern.

The market may not accept our CDMS product or other future offerings.

         Our Centari Dealer  Management  Suite product is relatively new, and we
are  operating in a market where two  competitors  control 80% of the market and
have a  significant  advantage  relative  to market  acceptance.  End-users  may
determine not to purchase our CMDS product because of our insignificant position
in the market, because of concerns about our product and related services or for
various  other  reasons.  We can provide no  assurance  that  end-users  will be
interested in purchasing any of our existing or future products in the near term
or the longer term.

We face significant competition from data management software developers.

         The market for automobile dealership data management software is highly
competitive,  and we must compete with companies that possess greater financial,
technical and marketing  resources than we do. These  advantages may enable them
to respond more quickly to new or emerging  technologies and changes in customer
preferences.  These  advantages  may also allow them to engage in more extensive
research and development,  undertake extensive far-reaching marketing campaigns,
adopt  more  aggressive  pricing  policies  and make more  attractive  offers to
potential  employees and strategic  partners.  As a result,  we may be unable to
obtain a significant  market share in the automobile dealer management  software
business. In addition, competition may result in price reductions, reduced gross
margin and loss of market share. We may not be able to compete successfully, and
competitive  pressures may adversely affect our business,  results of operations
and financial condition.

We are dependent upon highly qualified personnel, and the loss of such personnel
is a risk to our success.

         We are highly  dependent upon the efforts of management and technically
skilled personnel,  including programmers,  installers and engineers, and future
performance  will  depend in part upon our  ability to  increase  sales,  manage
growth effectively,  and to retain the services of our management, our technical
staff and sales staff.  Because competition for management,  technical and sales
personnel  is intense,  we may be unable to retain our key  employees or attract
other highly qualified  employees in the future. The loss of the services of any
of our management,  technical or sales team of the failure to attract and retain
additional key employees  could have a material  adverse effect on our business,
financial condition and results of operations.

We rely on our  intellectual  property  rights,  and if we are unable to protect
these  rights  we  may  face  increased  competition  and  our  business  may be
materially adversely affected.

         We regard our  intellectual  property,  particularly our Centari Dealer
Management Suite, as critical to our success, and we rely on copyright and trade
secret  protection to protect our proprietary  rights in intellectual  property.
Any of our  intellectual  property  rights  may be  challenged,  invalidated  or

                                       9
<PAGE>

circumvented,  or the rights granted  thereunder may not 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 each of our employees and  consultants is asked to entered
into a confidentiality and invention  agreement,  there can be no assurance that
such agreements  will be honored or that we will be able to protect  effectively
our rights to trade secrets and know-how.

         In  addition,   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.  Such licenses or proprietary rights may
not 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 is foreclosed.

Software  products  tend to evolve  rapidly,  and our  competitors  may  develop
products that are technically superior to our products.

         Our primary product,  the Centari Dealer Management Suite, is primarily
a software  product.  The software market is recognized for rapid  technological
developments,   frequent  new  product   introductions   and  evolving  industry
standards. The rapid evolution of software products requires 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.

         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.

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 us to a claim for damages. Although contract terms limit
our  exposure,  there  can 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 our operations and finances. 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.

                                       10
<PAGE>

Trading in our common  stock is thin,  and there is a limit to the  liquidity of
our common stock.

         Our common stock is quoted on the Nasdaq OTC Bulletin Board. The volume
of  trading  in our  common  stock is  limited  and  likely  dominated  by a few
individuals.  Because of the thinness of the market for our stock,  the price of
our common stock may be subject to manipulation by one or more shareholders.  In
addition,  the  limited  volume of trading  limits  significantly  the number of
shares that one can purchase or sell in a short period of time. Consequently, an
investor may find it more  difficult to dispose of shares of our common stock or
obtain a fair price for our common stock in the market.

Our founders and officers hold a significant  number of our outstanding  shares,
which  will  allow  them to  influence  the  outcome  of  matters  submitted  to
stockholders for approval.

         The  founders of Arkona,  Inc.,  most of whom are no longer  affiliated
with the Company, and Caldera Holdings, L.C. collectively own and have the power
to  vote  10.7%  of our  issued  and  outstanding  common  stock.  In  addition,
management of Arkona, Inc. owns and has the power to vote approximately 27.1% of
our issued and outstanding  common stock. As a result,  these  stockholders have
substantial control over matters requiring approval by our stockholders, such as
the election of directors and approval of significant corporate transactions. In
addition,  this  concentration of ownership may also have the effect of delaying
or preventing a change in control.

Our shareholder rights plan and certain provisions in the Delaware corporate law
may permit the our board to block a takeover  attempt and  adversely  affect the
value of our common stock.

         Our board of directors adopted a shareholder  rights plan, and declared
a  dividend  of an  associated  right,  which are  expected  to have the  effect
deterring any takeover of the Company that is not preceded by board  approval of
the proposed  transaction.  The  existence of such  shareholder  rights plan may
deter potential tender offers for our common stock or other  acquisition  offers
and may have the effect of delaying or preventing a change of control.

         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 the Company.

Obtaining  additional  capital  through the sale of common  stock will result in
dilution of shareholder interests.

We plan to raise additional funds in the future by issuing  additional shares of
common stock, or securities such as options or warrants or preferred stock, that
are  convertible  into  common  stock.  Any such sale of  common  stock or other
securities  will lead to further  dilution of the equity  ownership  of existing
holders of our common stock.

Our stock price is volatile and subject to manipulation.

The  market  price of our common  stock,  like that of the  securities  of other
development stage companies,  may be highly volatile. Our stock price may change
dramatically as the result of various factors, including the following:

                                       11
<PAGE>

   o     Manipulation of our stock price by existing or future shareholders;

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

   o     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,

   o     Disputes relating to patents or proprietary rights,

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

   o     Delays in product development,

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

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

Our ability to issue  preferred  stock may  significantly  dilute  ownership and
voting power and negatively affect the price of our common stock.

Under our Certificate of Incorporation,  as amended,  we are authorized to issue
up to  10,000,000  shares of preferred  stock.  Our Board of  Directors  has the
authority to create various series of preferred stock with such voting and other
rights  superior  to those of our common  stock and to issue such stock  without
shareholder  approval.  This issuance of such  preferred  stock would dilute the
ownership  and voting  power of the  holders of our common  stock and may have a
negative effect on the price of our common stock

We have not declared any dividends with respect to our 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 our shares of common stock
in the foreseeable future.

Our common stock may be a "low-priced  stock" and subject to certain  regulatory
action that limits or restricts the market for such stock.

Shares of our  common  stock may be deemed  to be "penny  stock,"  resulting  in
increased risks to our investors and certain  requirements being imposed on some
brokers who execute  transactions in our common stock. In general, a penny stock
is a an equity security that:

   o     Is priced under five dollars;

   o     Is not traded on a national stock exchange,  the Nasdaq National Market
         or the Nasdaq SmallCap Market;

   o     May be listed in the "pink  sheets" or the NASDAQ OTC  Bulletin  Board;
         and

   o     Is issued by a company  that has less than $5  million  dollars  in net
         tangible  assets (if it has been in business  less than three years) or
         has less than $2 million dollars in net tangible assets (if it has been
         in business for at least three years); and

   o     Is  issued  by a  company  that has  average  revenues  of less than $6
         million for the past three years.

Our common stock has a trading price below five dollars; our common stock is not
trading on an  exchange  or NASDAQ;  we have  average  revenues  of less than $6

                                       12
<PAGE>

million  and,  as a result of the  recent  write-off  of our  share of  Envision
Development  Corporation  common stock,  we have less than $2 million dollars in
net tangible assets.  Accordingly, we believe that our common stock is presently
a "penny  stock." At any time the common stock  qualifies as a penny stock,  the
following requirements, among others, will generally apply:

         o        Certain  broker-dealers  who recommend  penny stock to persons
                  other than established customers and accredited investors must
                  make a  special  written  suitability  determination  for  the
                  purchaser and receive the purchaser's  written  agreement to a
                  transaction prior to sale.

         o        Prior to executing  any  transaction  involving a penny stock,
                  certain  broker-dealers  must deliver to certain  purchasers a
                  disclosure  schedule  explaining  the risks involved in owning
                  penny stock,  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.

         o        In connection with the execution of any transaction  involving
                  a penny stock,  certain broker dealers must deliver to certain
                  purchasers the following:

                  o        bid and offer price quotes and volume information;

                  o        the broker-dealer's compensation for the trade;

                  o        the compensation received by certain salespersons for
                           the trade;

                  o        monthly accounts statements; and

                  o        a  written  statement  of  the  customer's  financial
                           situation and investment goals.

These  requirements  significantly  add to the burden of the  broker-dealer  and
limit the market for penny stocks.  These regulatory burdens may severely affect
the liquidity and market price for our common stock.

                                       13
<PAGE>

                           PART II. OTHER INFORMATION



Item 2.  Changes In Securities And Use Of Proceeds

Recent Sales of Unregistered Securities.
---------------------------------------


During the three months ended September 30, 2001, we issued  1,780,000 shares of
common  stock to six  accredited  investors  in exchange  for  consideration  of
$445,000  ($0.25  per  share)  in a series  of  related  transactions  that were
effected in reliance upon the exemptions for sales of securities not involving a
public offering set forth in Rule 506  promulgated  under the Securities Act and
Section 4(2) of the Securities Act, based upon the following:  (a) the investors
represented  and  warranted  to us that they  were  "accredited  investors,"  as
defined in Rule 501 of Regulation D promulgated  under the  Securities  Act, and
had such background, sophistication,  education, and experience in financial and
business   matters  as  to  be  able  (alone,   or  together  with  a  purchaser
representative)  to  evaluate  the  merits  and  risks of an  investment  in the
securities;  (b) there was no  public  offering  or  general  solicitation  with
respect to the offering,  and the investors  represented and warranted that they
were  acquiring the  securities  for their own account and not with an intent to
distribute such securities;  (c) the investors were provided certain  disclosure
materials regarding the Company and any and all other information requested with
respect to the Company, (d) the investors acknowledged that all securities being
purchased were  "restricted  securities" for purposes of the Securities Act, and
agreed to transfer such securities only in a transaction registered with the SEC
under the Securities Act or exempt from  registration  under the Securities Act;
and (e) a legend was placed on the certificates and other documents representing
each such security  stating that it was restricted and could only be transferred
if  subsequently  registered  under  the  Securities  Act  or  transferred  in a
transaction exempt from registration under the Securities Act.


Item 6.   Exhibits And Reports On Form 8-K

         (a) Exhibits.See the Exhibit Index following the signature page hereof.

         (b) Reports on form 8-K.  None.

                                       14
<PAGE>

                                   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 on November
13, 2001 by the undersigned thereunto duly authorized.



                           Arkona, Inc.



November 13, 2001          /s/ Alan Rudd
                           -------------
                               Alan Rudd, Chief Executive Officer


November 13, 2001          /s/ Stephen Russo
                           -----------------
                               Stephen Russo, Chief Financial Officer
                               (Principal Accounting Officer)

                                       15
<PAGE>

<TABLE>
<CAPTION>
                                  EXHIBIT INDEX



   Exhibit
    Number                       Title of Document                                  Location
---------------    ----------------------------------------------    ---------------------------------------
<S>                <C>                                               <C>
3.1                Certificate of Incorporation                      Incorporated by reference to
                                                                     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 filed with the SEC on May 6,
                                                                     1998

3.3                Certificate of Designation regarding Series       Incorporated by reference to the
                   A Preferred Stock                                 Current Report on Form 8-K filed with
                                                                     the SEC on January 18, 2001.

3.4                Amendment to Certificate of Incorporation         Incorporated by reference to the
                   (reverse stock split; name change)                Company's Quarterly Report on Form
                                                                     10-QSB filed with the SEC on February
                                                                     13, 2001

3.5                Certificate of Merger (Company and Arkona         Incorporated by reference to the
                   Utah)                                             Company's Quarterly Report on Form
                                                                     10-QSB filed with the SEC on February
                                                                     13, 2001

3.6                Bylaws                                            Incorporated by reference to
                                                                     Company's registration statement on
                                                                     Form 10-SB, File No. 0-24372

4.1                Specimen Stock Certificate                        Incorporated by reference to
                                                                     Company's registration statement on
                                                                     Form 10-SB, File No. 0-24372

4.2                Rights Agreement dated December 22, 2000          Incorporated by reference to the
                                                                     Current Report on form 8-K filed with
                                                                     the SEC on January 18, 2001
</TABLE>


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