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, 2002

                                       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 Identification No.
incorporation or organization)


                      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 February 12, 2002, there were issued and outstanding  26,976,173 shares of
the Company's Common Stock, par value $.001 per share.

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




<PAGE>



          PART I - Item 1. Financial Statements

<TABLE>
<CAPTION>

                                  ARKONA, INC.
                                 Balance Sheets

                                                           31-Dec-02      31-Mar-02
ASSETS                                                    (Unaudited)     (Audited)
                                                          -----------    -----------
<S>                                                       <C>           <C>
    Current Assets
       Cash and cash equivalents                               33,392        120,290
       Marketable securities                                     --             --
       Accounts receivable, net of allowance                  124,888        182,200
       Prepaid expenses                                        11,782         12,050
                                                          -----------    -----------
    Total Current Assets                                      170,062        314,540
                                                          -----------    -----------
       Equipment                                              573,042        607,148
       Less: Accumulated depreciation                        (458,870)      (405,474)
                                                          -----------    -----------
       Equipment, net                                         114,172        201,674
                                                          -----------    -----------
    Other Assets
       Deposits                                                17,779         17,779
       Other assets, net amortization                         135,999        280,624
                                                          -----------    -----------
    Total Other Assets                                        153,778        298,403
                                                          -----------    -----------
TOTAL ASSETS                                                  438,012        814,617
                                                          ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities
       Accounts payable                                       564,972        453,487
       Accrued liabilities                                    113,997        210,384
       Deferred revenue                                       161,673        108,750
       Current portion of capital leases                       32,394         32,394
                                                          -----------    -----------
    Total Current Liabilities                                 873,036        805,015
                                                          -----------    -----------
    Long-Term Liabilities
       Capital lease obligation, net of current portion         6,993         12,889
       Note payable - related party                           200,537        100,537
                                                          -----------    -----------
    Total Long-Term Liabilities                               207,530        113,426
                                                          -----------    -----------
    Total Liabilities                                       1,080,566        918,441
                                                          ===========    ===========
    Stockholders' Equity
       Common stock                                            26,736         23,843
       Additional paid in capital                          21,307,615     20,672,508
       Accumulated unrealized loss on investment
          securities available for sale                       (16,942)       (16,942)
       Retained earnings (deficit)                        (21,959,963)   (20,783,233)
                                                          -----------    -----------
    Total Stockholders' Equity                               (642,554)      (103,824)
                                                          -----------    -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                    438,012        814,617
                                                          ===========    ===========

</TABLE>

       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                       1
<PAGE>



<TABLE>
<CAPTION>

                                  ARKONA, INC.

            Unaudited Condensed Consolidated Statements of Operations

                                   (Unaudited)



                                                Nine Months Ended            Three Months Ended
                                            31-Dec-02      31-Dec-01     31-Dec-02      31-Dec-01
                                           -------------------------    --------------------------

<S>                                         <C>            <C>              <C>            <C>
Revenues                                    2,360,674      1,666,788        801,642        364,777
Operating Expenses
    Cost of Sales                           1,253,534      1,252,771        420,406        342,626
    Research and Development                  462,829        402,657        113,270        138,722
    Marketing, Admin & Sales                1,814,342      1,832,504        620,664        547,183
    Recog. of deferred compensation              --        1,720,900           --             --
                                          -----------    -----------    -----------    -----------
Total Operating Expenses                    3,530,705      5,208,832      1,154,341      1,028,531
                                          -----------    -----------    -----------    -----------

Net Loss From Operations                   (1,170,031)    (3,542,044)      (352,699)      (663,754)
    Interest Income                              --             --             --             --
    Interest Expense                           (6,700)       (29,591)        (2,000)        (1,268)
                                          -----------    -----------    -----------    -----------
Net Loss From Operations                   (1,176,731)    (3,571,635)      (354,699)      (665,022)
                                          ===========    ===========    ===========    ===========


    Basic Net Income (Loss) per share           (0.04)         (0.15)         (0.01)         (0.03)
                                          -----------    -----------    -----------    -----------
    Weighted average number
    Of Shares Outstanding                  26,735,828     23,152,778     26,735,828     23,152,778
                                          ===========    ===========    ===========    ===========

    Diluted Net Income (Loss) per share         (0.04)         (0.15)         (0.01)         (0.03)
    Weighted Average Diluted
    Shares Outstanding                     26,735,828     23,152,778     26,735,828     23,152,778
                                          ===========    ===========    ===========    ===========

</TABLE>

       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


                                       2
<PAGE>



<TABLE>
<CAPTION>

                                  ARKONA, INC.

            Unaudited Condensed Consolidated Statements of Cash Flows


                                                           Nine Months Ended
                                                         31-Dec-02     31-Dec-01
                                                       -------------------------
<S>                                                    <C>           <C>
Cash Flows (used by) Operating Activities:
    Net (Loss)/Income                                  (1,176,731)   (3,571,634)
    Adjustments to reconcile net income to
    net cash used for operating activities:
        Depreciation and Amortization                     256,184       258,480
        Amortization of unearned compensation                --       1,720,900
        Changes in assets and liabilities:
             Accounts receivable                           57,312      (109,105)
             Prepaid Expenses                                 268           924
             Accounts Payable                             111,485       198,879
              Deferred revenue                             52,923       (33,997)
             Accrued Liabilities                          (96,387)       63,584
                                                       ----------    ----------
Net Cash (Used By) Operating Activities                  (794,946)   (1,471,969)
                                                       ----------    ----------

Cash Flows (Used for) Investing Activities:
    Additions to Equipment                                (24,056)      (67,524)
    Other assets                                             --         (33,018)
                                                       ----------    ----------
Net Cash Used for Investing Activities                    (24,056)     (100,542)
                                                       ----------    ----------

Cash Flows Provided By Financing Activities:
    Proceeds from Issuance of Common Stock                638,000     1,779,080
    Loan from officer                                     100,000       (58,591)
    Leases                                                 (5,896)      (13,111)
                                                       ----------    ----------
Net Cash Provided By Financing Activities                 732,104     1,707,378
                                                       ----------    ----------

Net Increase/(Decrease) in Cash and Cash Equivalents      (86,898)      134,867
                                                       ----------    ----------

Beginning Cash Balance                                    120,290        35,221
                                                       ----------    ----------
Ending Cash Balance                                        33,392       170,088
                                                       ==========    ==========

</TABLE>


       SEE NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




                                       3
<PAGE>

                                  ARKONA, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS


Note 1 Basis of Presentation

Arkona,  Inc. (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 for the fiscal year ended March 31, 2002.

Note 2  Concentration

The Company is limited in that its product and service are specifically designed
for  customers  in the auto  dealership  industry.  However,  sales  of  Company
products and services are not limited to any  geographic  area.  If the industry
environment  were to experience  significant  negative  conditions,  the Company
could also be affected.

The Company maintains cash balances in a financial  institution  located in Salt
Lake City, Utah. Accounts at this institution are insured by the Federal Deposit
Insurance Corporation up to $100,000.

 Note 3  Equity

During the nine months ended  December 31, 2002,  the Company  issued  2,893,030
shares of common stock at an average price of $0.20 per share.
                                       4
<PAGE>

Note 4  Significant Accounting Policies

(a) Income Taxes

The  Company  applies  the  provisions  of  Statement  of  Financial  Accounting
Standards No. 109 [the Statement],  "Accounting for Income Taxes." The Statement
requires an asset and liability approach for financial  accounting and reporting
for income taxes, and the recognition of deferred tax assets and liabilities for
the temporary differences between the financial reporting bases and tax bases of
the  Company's  assets and  liabilities  at enacted tax rates  expected to be in
effect when such amounts are realized or settled.

(b) Net Loss Per Common Share

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

(c) Cash & Cash Equivalents

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

(d) Use of Estimates in Preparation of Financial Statements

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities,  disclosure of contingent
assets and liabilities at the date of the financial  statements and the reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from those estimates.
                                       5
<PAGE>

                                  ARKONA, INC.

                    NOTES TO UNAUDITED CONDENSED CONSOLIDATED

                              FINANCIAL STATEMENTS


(e) Revenue Recognition

The Company  recognizes  revenue in accordance  with the Securities and Exchange
Commission,  Staff Accounting  Bulletin (SAB) no. 101,  "Revenue  Recognition in
Financial  Statements."  SAB 101  clarifies  application  of generally  accepted
accounting  principles to revenue  transactions.  During the course of business,
the Company recognizes revenue for the following activities:  Support,  Hardware
Sales,  Consulting,  and Implementation of Products.  Support charges are billed
monthly and are recognized as earned and stipulated in contracts with customers.
Hardware  Sales  revenue  is  recognized  when the  goods are  delivered  to the
customer.  Consulting  fees are  recognized  as services are  rendered.  Product
Installation  revenue is recognized in accordance  with terms of each  contract,
generally on a percentage of completion basis. Advance deposits are deferred and
recognized  over the life of the contract  which is often complete in one month.
Components  of the Product  Installation  process  include  software  licensing,
training, forms programming data conversion, and hardware installation.

(f) Patents

The Company has obtained  various  patents for certain  aspects of its products.
The costs of obtaining  patents are  capitalized  as incurred and are  amortized
over  estimated  useful  lives.  Amortization  is computed on the  straight-line
method.  One  patent  has been  issued as of  December  31,  2002,  and is being
amortized over seven years (see Note 4).

(g) Investment in Marketable Securities

Investments in marketable securities are  "available-for-sale"  and are recorded
at fair market value with the  associated  adjustment  recorded as an unrealized
gain  or  loss.  The  unrealized  loss  is  based  on the  original  cost of the
securities verses current market value. The December 31, 2002 unrealized loss on
investments  of $16,942 is related to securities  that have been written off but
not disposed.

(h) Software Costs

Costs incurred to establish the  technological  feasibility of software products
to be sold, leased or otherwise marketed by the Company are expensed as research
and  development.  Once  technological  feasibility  is  established,  costs are
capitalized  until the product is available  for general  release to  customers.
Capitalized  costs  are  amortized  on  a  product-by-product  basis  and  using
straight-line methods over the established economic life of the product.
                                       6
<PAGE>

(i) Advertising Costs

Advertising costs of the Company are charged to expense as incurred.

Item 2.  Management's Discussion and Analysis

Overview

         ARKONA,  Inc.  (formerly  The Thorsden  Group and Sundog  Technologies,
Inc.) was  organized in 1992 as a data base  technology  company with  Universal
Update(TM) as its primary product. Universal Update(TM) 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.  Prior to 2001,  we  primarily  worked to develop and sell the
Universal Update(TM) technology. We have since determined to suspend development
and marketing of Universal Update(TM).

         Following our acquisition of the assets of Ensign Information System in
late 2000,  our focus and direction  has changed from our  Universal  Update(TM)
products  and the mobile  computing  industry  to our Arkona  Dealer  Management
Solutions  (ADMS) and the automobile  dealership  management  industry.  When we
acquired the assets of Ensign, their predecessor to our ADMS product already had
a customer base and was a proven product. At the time of the acquisition, Ensign
had installed 9 systems in the prior 12 months. We are currently  installing 4-6
systems per month.

         We are  confident  that we can ramp our  installs in the future due to,
among other things,  our  relationship  with  Mitsubishi.  In July of this year,
Mitsubishi  announced  at its  annual  dealers  conference  that  ARKONA was its
preferred  provider of DMS  products.  ARKONA and  Mitsubishi  entered  into and
agreement to work together to roll out joint marketing  programs to all existing
and new Mitsubishi dealers.

Results of Operations for the Three Month and Nine-Month  periods Ended December
31, 2002 and December 31, 2001
                                       7
<PAGE>



Revenues  for the  three-month  period ended  December  31, 2002 were  $801,642,
compared to  $364,777  for the  three-month  period  ended  December  31,  2001,
representing  119%  increase  year over year.  The increase is  attributable  to
increases  in the number of  customers  installing  Arkona's  Dealer  Management
Software (ADMS). Revenues for the nine-month period ended December 31, 2002 were
$2,360,674,  compared to $1,666,788  for  nine-month  period ended  December 31,
2001,  representing  a 41% increase for the nine-month  period.  The increase in
revenue for the nine-month period is due to increased sales throughout the year.
More  specifically,  the  increase in sales is due to increases in the number of
installations  of ADMS and associated  monthly  maintenance and support revenue.
However,  the true increase in the sales and  implementation  of our software is
not reflected in the revenue  numbers.  The number of dealerships  installed has
doubled  for the three- and  nine-month  periods  ending  December  31,  2002 as
compared to the same periods  last year.  The reason we do not have a comparable
increase in revenues is that last year, in connection with our installations, at
least 45% of our net revenues reflected our sale to the relevant  dealerships of
computers and other hardware  products  necessary to operate our software.  This
year we have sold  only a nominal  amount of  hardware  in  connection  with our
installations. This is because we have determined to outsource hardware sales to
certain  partners,  who are able to give our customer more favorable pricing and
better  service  on  the  hardware  components.  The  effect  on  our  financial
statements is a reduction in our revenue  numbers.  However,  our outsourcing of
hardware sales has created  significant  customer  goodwill and has permitted an
approximately 20% decrease in our cost of sales.

By the end of our fiscal year,  March 31, 2003, we expect to be  installing  our
ADMS product in 8 - 10 new car dealerships  and 2 - 4 used car dealerships  each
month.  We already  have sales  lined up through the end of March and into April
and are now  scheduling  installations  well into May 2003. We strongly  believe
that  revenues  will  continue to increase  in the future and are  predicting  a
profitable fiscal year 2004.
                                       8
<PAGE>

Cost of sales totaled  $420,406 or 52% of revenues,  for the three-month  period
ended December 31, 2002, and $1,253,534,  or 51% of revenues, for the nine-month
period  ended  December  31,  2002.  This  compares  to cost of  sales  totaling
$342,626,  or 93% of revenues,  for the  three-month  period ended  December 31,
2001,  and  $1,252,771,  or 75% of  revenues  for the  nine-month  period  ended
December 31, 2001.  This decrease in cost of sales is primarily due our decision
to  outsource  hardware  sales,  which  eliminates  the  costs  associated  with
purchasing,  and then reselling,  hardware. In addition,  our installation teams
are becoming more efficient with each new  installation.  Since January of 2000,
we have hired  approximately 85% of our installation  personnel,  with more than
half of them joining Arkona in the last year. As our  installation  teams become
more experienced,  we expect our installations to be more efficient. As a result
of this  projected  increase  in  efficiency,  we expect  the cost of sales as a
percentage  of sales to continue to decrease,  but to decrease at a slower rate,
in the future.

Operating  expenses totaled $1,154,341 for the three-month period ended December
31, 2002 and $3,530,705 for the nine-month  period ended December 31, 2002. This
compares to operating  expenses totaling  $1,028,531 for the three-month  period
ended December 31, 2001 and $5,208,832 for the nine-month  period ended December
31, 2001. The increase in operating  expenses for the  three-month  period ended
December  31,  2002 over the  three-month  period  ended  December  31,  2001 is
$125,810, or 12%. Of this increase, $77,780 or 7% is due to increases in cost of
sales,  which is directly  attributable to the increase in sales for the period.
The remaining  increase of $48,030 is attributable to increases in marketing and
sales  expenses.  The decrease in operating  expenses for the nine-month  period
ended  December  31,  2002  is due to the  fact  that we were  not  required  to
recognize  deferred  compensation  in 2002.  Without the  deferred  compensation
recognized in 2001, operating expenses were $3,487,932 for the nine-month period
ended  December  31,  2001,  which is  $42,773,  or 1% less  than our  operating
expenses for the nine-month period ended December 31, 2002.

Research and  development  expenses  decreased from $138,722 for the three-month
period  ended  December 31, 2001 to $113,270  for the  three-month  period ended
December 31, 2002. Research and development expenses increased from $402,829 for
the  nine-month  period ended  December 31, 2001 to $462,829 for the  nine-month
period  ended  December  31,  2002.  The  decrease in research  and  development
expenses  for the  three-month  period  is due to  engineering  resources  being
allocated  to  customer  support.  This  decrease  is  temporary,  and we expect
increases in engineering to continue in the future. The increase in research and
development for the nine-month  period ended December 31, is due to increases in
headcount.  As we continue to grow as a company,  we expect this  portion of our
business  to  continue  to grow in  order  to meet the  demand  of an  expanding
customer base and new product innovation.
                                      9
<PAGE>


Marketing,  administrative  and sales  expenses  increased from $547,183 for the
three-month  period  ended  December  31, 2001 to $620,664  for the  three-month
period ended December 31, 2002.  However,  marketing,  administrative  and sales
expenses  decreased from $1,832,504 for the nine-month period ended December 31,
2001 to $ $1,814,342  for the  nine-month  period ended  December 31, 2002.  The
increase for the  three-month  period is due  primarily  to increased  marketing
activities and increased head count in sales. In the past we have kept our sales
and marketing activities to a minimum and have relied primarily on word of mouth
to sell our product. We attribute the decrease in marketing,  administrative and
sales  expenses for the  nine-month  period  ended  December 31, 2002 to keeping
tight reins on marketing and sales activities.

We had no  interest  income  during  the  three- and  nine-month  periods  ended
December  31,  2002  and  2001.  This  was due to  decreased  cash  balances  we
maintained in banks.

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 ADMS  product.  We  currently  have the
capacity to install the Arkona Dealer Management Suite in 8-10 stores per month.

The net loss for the three-month  period ended December 31, 2002 was ($354,699),
or ($0.01) per share,  compared to a loss of ($665,022) or ($0.03) per share for
the  corresponding  period in 2001. The net loss for the nine-month period ended
December 31, 2002  was($1,176,731),  or ($0.04) per share, as compared to a loss
of ($3,571,635), or ($0.15) per share, for the corresponding period in 2001. The
loss in the nine-month  period ended December 31, 2001, not including the charge
for  deferred  compensation,  was  $(1,850,735),  or  ($0.07)  per  share.  This
represents a substantial  improvement  in the financial  results for the Company
and is due to increased sales,  increased recurring support sales,  decreases in
expenses and increased  efficiencies  throughout  the Company.  Based upon these
results and our  projected  sales for the next year, we expect the Company to be
profitable  beginning with the quarter  beginning on April 1, 2003.  Even if the
Company does not earn a net profit  beginning such period,  in light of the fact
that two thirds of our loss for the  three-month  period ended December 31, 2002
resulted from non-cash charges for depreciation and  amortization,  we expect to
at a  minimum  become  cash  flow  positive  beginning  in  April  2003  (absent
unexpected  one-time  charges,  significant  transactions  or  other  unexpected
events).

The primary  marketing focus for the three-month  period ended December 31, 2002
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 and grow sales.
                                       10
<PAGE>

Liquidity and Capital Resources

At December 31, 2002, we had cash and cash  equivalents of $33,392,  as compared
to cash and cash equivalents of $120,290 as of March 31, 2002.

In order to meet operating costs during the nine months ended December 31, 2002,
we relied  upon  increased  revenues,  recurring  revenues  and the  issuance of
2,893,030  shares of common  stock at an average  price of $0.20 per share to an
executive officer and three accredited outside investors.

We expect our  revenues to continue to increase  and expect to become  cash-flow
positive  by the end of our 2003  fiscal  year in March  2003.  Until we  become
cash-flow positive, and probably for a period thereafter,  we will need to raise
additional capital to fund our operations, our expansion, and to develop new and
enhance existing services or products or to respond to competitive pressures. In
order to raise such funds,  we expect to  continue to rely upon the  proceeds of
sales of equity securities and convertible notes in the immediate future. During
the past year, we have sought to obtain funding from various sources,  including
many banks and other  non-affiliated  entities.  Nevertheless,  to date, we have
been unable to secure  financing on terms we deem reasonable  from  unaffiliated
funding  sources and have  continued to rely upon capital  provided by our Chief
Executive  Officer and a few other key investors.  We intend to continue to seek
for  large-block  financing  from  institutional  sources for our short-term and
long-term  financing.  We have not received any  favorable  proposals  from such
institutional  sources,  however,  and expect,  in the short run, to continue to
rely on  insiders  and key  shareholders  as  long  as  such  financing  remains
available.
                                       11
<PAGE>



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 will
be limited. If additional  financing continue to be unavailable over an extended
period of time, we may be unable to continue as a going concern.



The  following  table  discloses  aggregate  information  about our  contractual
obligations  including long-term debt,  operating and capital lease payments and
office lease payments,  and the periods in which payments are due as of December
31, 2002:

<TABLE>
<CAPTION>
                                                      Less Than
                                                                                     After 5
Contractual Obligations          Total         1 Year      1-3 years   4-5 Years      Years
                                 ----------   ----------   ----------   ----------  ----------
<S>                             <C>          <C>          <C>          <C>          <C>
Long-term debt                  $  200,000   $  100,000   $  100,000   $        0   $        0

Operating Leases                    83,483       30,054       53,429            0            0


Capital Leases                      28,520       20,784        7,736            0            0

Office Lease                       631,165      117,887      513,278            0            0

Total Contractual Obligations   $1,009,168   $  169,725   $  680,443   $        0   $        0
                                ----------   ----------   ----------   ----------   ----------
</TABLE>

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.
                                       12
<PAGE>

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

         We  acquired  the assets that  generate  all of our revenue in November
2000, and,  accordingly,  our current business has a limited  operating  history
upon  which  an  evaluation  of our  prospects  and us can  be  based.  We  have
experienced  net losses in each  three-month  period  since  inception,  with an
accumulated  deficit of approximately  $(21,959,963) as of December 31, 2002. We
expect to continue to operate at a net loss and to experience negative cash flow
from  operations  at least until early 2003,  as we seek to develop our business
and  customer  base.  In order  to  achieve  positive  operating  cash  flow and
profitability,  we must  significantly  increase the number of dealerships using
our products.  Even if we generate  significant  sales,  revenues from sales may
never exceed associated costs, and we may not be able to achieve profitability.
                                       13
<PAGE>



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 the offer
and sale of  convertible  notes,  warrants  and  equity  securities  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.

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 30, 2002 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 to
sustain operations.  Additional financing will be required if we are to continue
as a going concern.

We may be unable to increase the number of  customers  using our ADMS product or
other future offerings.

         Our Arkona 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.  Any projections or
expectations  regarding the number of customers that will accept installation of
our ADMS  product is subject to the risk that  end-users  may  determine  not to
purchase our ADMS  product at the rate  projected  because of our  insignificant
position in the market concerns over our ability to continue as a going concern,
concerns about our product and related services or various other reasons.  If we
are unable to increase  our  monthly  installations  of our ADMS  product in the
future, it is unlikely that we will be able to continue as a going concern.
                                       14
<PAGE>

Our competitors have greater resources than we do.

         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.

Our services are subject to system failure and security risks.

         Our operations,  particularly  our ASP product,  are dependent upon our
ability to protect  our  network  infrastructure  against  damage  from  natural
disasters,  such as  fire,  earthquakes  and  floods,  as well  as  power  loss,
telecommunications  failures and similar events. All of our network and computer
equipment,  including  components  critical  to our  operations,  are  currently
concentrated  in a co-location  facility  provided by WorldCom.  Notwithstanding
precautionary  measures  that  we and  our  co-location  host  have  taken,  the
occurrence of a natural disaster or other unanticipated system or power failures
could cause  interruptions in the services we provide.  In addition,  failure of
our telecommunications  providers to provide the data communications capacity we
require as a result of natural  disasters,  operational  disruptions  or for any
other reason could cause interruptions in the services we provide. Any damage or
failure  that  causes  interruptions  in our  operations  could  have a material
adverse effect on our business, financial condition and results of operations.

         Our ASP network is subject to factors that could cause interruptions in
service or reduced  capacity for our customers.  Despite the  implementation  of
security  measures,  the core of our network  infrastructure  is  vulnerable  to
unauthorized  access,  computer viruses,  equipment failure and other disruptive
problems,   including  the  following:

o    We and our users may experience interruptions in service as a result of the
     accidental or  intentional  actions of Internet  users,  current and former
     employees or others.
o    Unauthorized access may jeopardize the security of confidential information
     stored in our computer systems and our customers'  computer systems,  which
     may  result in  liability  to our  customers  and also may deter  potential
     customers.
o    We may face liability for transmitting viruses to third parties that damage
     or impair their access to computer networks, programs, data or information.
o    There may be a systemic  failure  of  Internet  communications,  leading to
     claims associated with the general unavailability of our ASP product.
o    Eliminating  computer  viruses and alleviating  other security or technical
     problems may require  interruptions,  delays or cessation of service to our
     customers.
                                       15
<PAGE>



The occurrence of any unauthorized access,  computer virus, equipment failure or
other  disruptive  problem could have a material adverse affect on our business,
financial condition and results of operations.

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. Competition for management, technical and sales personnel
is intense, and we do not have long-term  employment  agreements with any of our
employees.  As a result, 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 Arkona 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
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 enter
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.
                                       16
<PAGE>

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

         Our primary product, the Arkona 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.

We may be  subject  to claims  based  upon  allegations  that our  products  are
detective.

         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.
                                       17
<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 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 sale 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.

         Our management owns and has the power to vote  approximately 25% of our
issued and outstanding common stock. Two additional  shareholders have the power
to vote  approximately  12% 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 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 ARKONA.
                                       18
<PAGE>

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  convertible  notes,  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:

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,
o    A general lack of trust in the financial  markets as a result of accounting
     scandals or for other reasons, 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.

                                       19
<PAGE>


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 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 less than $2 million
dollars in net  tangible  assets and we have  average  revenues  of less than $6
million.  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:
                                       20
<PAGE>


         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.

Item 3.       Controls and Procedures

     (a) Under the  supervision  and with the  participation  of our management,
including our principal  executive officer and principal  financial officer,  we
conducted an evaluation of our disclosure controls and procedures,  as such term
is defined under Rule 13a-14(c) promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), within 90 days of the filing date of this
report. Based on this evaluation,  our principal executive officer and principal
financial  officer  concluded  that our  disclosure  controls and procedures are
effective in alerting them on a timely basis to material information relating to
our Company (including its consolidated subsidiaries) required to be included in
our reports filed or submitted under the Exchange Act

     (b) There have been no significant  changes  (including  corrective actions
with regard to significant  deficiencies or material weaknesses) in our internal
controls or in other  factors that could  significantly  affect  these  controls
subsequent to the date of the evaluation referenced in paragraph (a) above.
                                       21
<PAGE>

                           PART II. OTHER INFORMATION



Item 2.   Changes In Securities And Use Of Proceeds

Recent Sales of Unregistered Securities.

During the three months ended  December 31, 2002,  we issued  560,000  shares of
common stock in transactions  that were not registered  under the Securities Act
of 1933, as amended (the  "Securities  Act") to our Chief  Executive  Officer in
exchange for cash consideration of $112,000 or $0.20 per share.

The  above-described  issuances of our shares of common  stock 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  investor
represented  and  warranted  to us that  he was an  "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 investor represented and warranted that he was
acquiring  the  securities  for  his own  account  and not  with  an  intent  to
distribute such  securities;  (c) the investor was provided  certain  disclosure
materials regarding the Company and any and all other information requested with
respect to the Company, (d) the investor  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.
                                       22

<PAGE>


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.

                                       23

<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 February
18, 2003 by the undersigned thereunto duly authorized.



                              Arkona, Inc.



February 18, 2003             /s/ Alan Rudd
-------------------           --------------------------------------
                                  Alan Rudd, Chief Executive Officer



February 18, 2003             /s/ Stephen Russo
-------------------           ------------------------------------------
                                  Stephen Russo, Chief Financial Officer


                                       24
<PAGE>

                                 CERTIFICATIONS



I, Alan Rudd, certify that:



1. I have reviewed this quarterly report on Form 10-QSB of Arkona, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.The  registrant's  other  certifying   officers  and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b) evaluated the effectiveness of the registrant's  disclosure controls
         and  procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c)  presented  in this  quarterly  report  our  conclusions  about  the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a) all significant  deficiencies in the design or operation of internal
         controls  which  could  adversely  affect the  registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  registrant's
         internal controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.



Date: February 18, 2003                  /s/  Alan Rudd
                                         --------------------------------------
                                             Alan Rudd, Chief Executive Officer

                                       25
<PAGE>




I, Stephen Russo, certify that:



1. I have reviewed this quarterly report on Form 10-QSB of Arkona, Inc.;

2. Based on my  knowledge,  this  quarterly  report  does not contain any untrue
statement of a material fact or omit to state a material fact  necessary to make
the statements made, in light of the  circumstances  under which such statements
were made, not  misleading  with respect to the period covered by this quarterly
report;

3.  Based  on my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;

4.  The  registrant's  other  certifying  officers  and  I are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

         a) designed  such  disclosure  controls and  procedures  to ensure that
         material  information   relating  to  the  registrant,   including  its
         consolidated  subsidiaries,  is made known to us by others within those
         entities, particularly during the period in which this quarterly report
         is being prepared;

         b)evaluated the effectiveness of the registrant's  disclosure  controls
         and  procedures as of a date within 90 days prior to the filing date of
         this quarterly report (the "Evaluation Date"); and

         c)presented  in  this  quarterly  report  our  conclusions   about  the
         effectiveness  of the disclosure  controls and procedures  based on our
         evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation,  to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):

         a) all significant  deficiencies in the design or operation of internal
         controls  which  could  adversely  affect the  registrant's  ability to
         record,   process,   summarize  and  report  financial  data  and  have
         identified  for the  registrant's  auditors any material  weaknesses in
         internal controls; and

         b) any fraud,  whether or not  material,  that  involves  management or
         other  employees  who  have a  significant  role  in  the  registrant's
         internal controls; and

6.The  registrant's  other  certifying  officers  and I have  indicated  in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.





Date: February 18, 2003          /s/ Stephen Russo
                                 ------------------------------------------
                                     Stephen Russo, Chief Financial Officer


                                       26
<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


99.1               Certification of Chief Executive Officer          Filed herewith

99.2               Certification of Chief Financial Officer          Filed herewith

</TABLE>


                                       27