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, 1998

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


                            THE THORSDEN GROUP, LTD.

        (Exact name of small business issuer as specified in its charter)



         Delaware                                       33-0611746

(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)

                       4505 South Wasatch Blvd., Suite 340
                           Salt Lake City, Utah 84124

              (Address of principal executive offices and Zip Code)

                                 (801) 424-0044

              (Registrant's telephone number, including Area Code)



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

As of October 31, 1998, there were issued and outstanding  20,742,335  shares of
the Company's Common Stock, par value $.001 per share.



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

<PAGE>

                                Table of Contents


                                                                        Page No.

Part I. Financial Information..................................................3


   1.   Financial Statements

        CondensedConsolidated   Balance   Sheet  as  of   September   30,  1998
        
        (unaudited) and March 31, 1998 (audited)...............................3


        Unaudited Condensed Consolidated  Statements of Income for the three and
         
        six months ended September 30, 1998 and 1997...........................4


        Unaudited Condensed Consolidated  Statements of Cash Flows for the three
        
        and six months ended September 30, 1998 and 1997.......................5


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


   2.   Management's Discussion and Analysis or Plan of Operation..............7


Part II.  Other Information...................................................16


                                  Page 2 of 18

<PAGE>

                                     Part 1


Item 1 - Financial Statements


                            The Thorsden Group, Ltd.
                          (A Development Stage Company)

                Condensed Consolidated Balance Sheets (Unaudited)


                                             September 30, 1998   March 31, 1998
                                             ------------------   --------------
ASSETS
CURRENT ASSETS
  Cash and cash equivalents                         $   955,419     $   568,612
  Marketable securities - available for sale              7,125         681,600
  Accounts receivable                                      --             8,313
  Prepaid expenses                                         --              --
                                                    -----------     -----------
     Total current assets                               962,544       1,258,525
                                                    -----------     -----------
  Equipment                                             245,313         199,099
  Less accumulated depreciation                          26,457           6,418
                                                    -----------     -----------
     Equipment, Net                                     218,856         192,681
Other Assets                                            142,589         128,980
                                                    -----------     -----------

TOTAL ASSETS                                        $ 1,323,989     $ 1,580,186
                                                    ===========     ===========


LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable                                  $   117,293     $    93,288
  Deferred income on maintenance contracts                 --            10,417
  Equipment lease obligations                            50,882          30,653
  Accrued liabilities                                    42,900          70,928
                                                    -----------     -----------
     Total current liabilities                          211,075         205,286
                                                    -----------     -----------
  Equipment lease obligations                            28,387          26,319

STOCKHOLDERS' EQUITY
  Common stock                                           20,493          20,133
  Additional paid-in capital                          2,665,315       2,192,174
  Accumulated unrealized loss on investments            (13,884)       (159,010)
  Accumulated (deficit)                              (1,587,397)       (704,716)
                                                    -----------     -----------
  Total stockholders' equity                          1,084,527       1,348,581
                                                    -----------     -----------
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 1,323,989     $ 1,580,186
                                                    ===========     ===========

                 See Notes to Consolidated Financial Statements


                                  Page 3 or 18

<PAGE>

                            THE THORSDEN GROUP, LTD.
                          (A Development Stage Company)

             Condensed Consolidated Statement of Income (Unaudited)


<TABLE>
<CAPTION>
                                      Six Months Ended                  Three Months Ended                From Inception
                                      ----------------                  ------------------                --------------
                                                                                                           June 11, 1996
                                Sept 30, 1998     Sept 30, 1997      Sept 30, 1998   Sept 30, 1997      to Sept 30, 1998

<S>                             <C>               <C>                <C>             <C>               <C>         
Net Revenues                    $    11,167       $      --          $    4,917      $      --         $    155,438
                                ------------      ------------       ------------    ------------      ------------
Costs and expenses:

   Cost of sales                        999              --                 148             --               3,109

   Research and
   development                      445,034            19,643           247,396            22,313           730,394

   Marketing, general and           463,115            33,225           217,002            29,061         1,042,166
   administrative               ------------      ------------       ------------    ------------      ------------


Total costs and expenses            909,148            52,868           464,546            51,374         1,775,669
                                ------------      ------------       ------------    ------------      ------------

Operating (loss)                   (897,981)          (52,868)         (459,629)          (51,374)       (1,620,231)

Interest income                      18,069               169            10,266               147            38,913
Interest expense                     (2,869)                             (1,633)             --              (6,071)
Other expense                          --                (110)             --                (110)             (110)
Other income                            100              --                --                --                 100
                                ------------      ------------       ------------    ------------      ------------

Net (loss)                     $   (882,681)     $    (52,809)     $   (450,996)     $    (51,337)     $ (1,587,399)
                                ------------      ------------       ------------    ------------      ------------
Net (loss) per share           $       (.04)     $      (0.12)     $      (0.02)     $      (0.12)     $      (0.08)

Weighted average number of       20,492,335           424,600        20,492,335           424,600        20,492,335
shares outstanding              ------------      ------------       ------------    ------------      ------------
</TABLE>


                 See Notes to Consolidated Financial Statements


                                  Page 4 of 18
<PAGE>

                            THE THORSDEN GROUP, LTD.
                          (A Development Stage Company)

             Condensed Consolidated Statement of Income (Unaudited)


<TABLE>
<CAPTION>
                                                                                                                   Cumulative from
                                                                                                                   ---------------
                                                           Six Months Ended               Three Months Ended          Inception
                                                           ----------------               ------------------          ---------
                                                                Sept 30                         Sept 30             June 11, 1996

                                                       1998              1997            1998              1997     to Sept 30, 1998
<S>                                                <C>              <C>              <C>              <C>              <C>         
Cash Flows (used for) Operating Activities:
    Net (Loss)                                     $  (882,681)     $   (52,809)     $  (450,996)     $   (51,337)     $(1,587,399)
    Adjustments to reconcile net income to
    net cash used for operating activities:

    Depreciation                                        20,040              223           10,054              223           26,459
  Changes in Assets and Liabilities:
    Accounts Receivable                                  8,313          (30,000)           6,250           40,000             --
    Prepaid Expenses                                      --               --               --               --               --
    Accounts Payable                                    24,005           (3,005)          (1,099)           3,685          117,294
    Deferred Income                                    (10,417)         125,000           (4,167)            --               --
    Accrued Liabilities                                (28,028)         (35,803)          10,320             --             42,901
                                                   ---------------------------------------------------------------------------------
Net Cash (used for) Operating Activities              (868,768)           3,606         (429,638)          (7,429)      (1,400,745)
                                                   ---------------------------------------------------------------------------------

Cash Flows (provided by) Investing Activities:
    Additions to Equipment                             (46,215)            --            (44,265)            --           (245,316)
    Disposition of Marketable Securities               819,600             --            520,278             --            819,600
    Lease Deposits                                        --               --               --               --           (107,247)
    Patent costs                                       (13,609)          (9,374)         (12,332)          (9,374)         (35,342)
                                                   ---------------------------------------------------------------------------------
Net Cash Flow Provided By:                             759,776           (9,374)         463,681           (9,374)         431,695
                                                   ---------------------------------------------------------------------------------
Cash Flows Provided By Financing Activities:
  Proceeds from Private Placement of Shares            473,501             --            323,250             --          1,844,199
  Increase in Lease Obligations                         22,298             --             27,256             --             79,270
  Cash Contribution                                       --               --               --               --              1,000
                                                   ---------------------------------------------------------------------------------
Net Cash Provided By Financing Activities              495,799             --            350,506             --          1,924,469
                                                   ---------------------------------------------------------------------------------

Net Increase/(Decrease) in Cash and Cash               386,807           (5,768)         384,549          (16,803)         955,419
Equivalents

Beginning Cash Balance                                 568,612           11,614          570,870           22,649             --

                                                   ---------------------------------------------------------------------------------
Ending Cash Balance                                $   955,419      $     5,846      $   955,419      $     5,846      $   955,419
                                                   ---------------------------------------------------------------------------------
</TABLE>


                 See Notes to Consolidated Financial Statements


                                  Page 5 of 18
<PAGE>

                            THE THORSDEN GROUP, LTD.

                   Notes to Consolidated Financial Statements


Preliminary Note

The Company has  prepared  the  accompanying  condensed  consolidated  financial
statements,  without  audit,  according  to the  applicable  regulations  of the
Securities and Exchange Commission. Certain information and disclosures normally
included in those financial  statements prepared according to generally accepted
accounting  principles have been condensed or omitted. The Company believes that
the  following   disclosures   are  adequate  to  present   clear,   unequivocal
information.  These  condensed  consolidated  financial  statements  reflect all
adjustments  (consisting  only of normal  recurring  adjustments)  that,  in the
Company's  opinion,  are necessary to present fairly the financial  position and
results of operations of the Company for the periods presented.  We suggest that
these condensed  consolidated  financial statements are read in conjunction with
the  consolidated  financial  statements  and the notes thereto  included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended March 31, 1998.

Note 1   Concentration

The Company is still in the development stage, and its revenues to date are from
one customer.  This customer has prepaid on a service  contract,  which has been
recorded as deferred income on maintenance contract.

Note 2   Intangible Assets

The Company has applied for patent  protection for its proprietary  software and
has expended  $33,408 for these rights.  The patents are still in the process of
being granted,  but recent  communications  with the Patent and TradeMark Office
suggests a favorable  outcome.  The Company will begin to amortize  these assets
upon  completion of patent  registration or at the point when the products begin
to generate revenue.

Note 3   New Subsidiary Company

The Board of Directors  created a new  subsidiary,  Qui Vive,  Inc.,  on June 5,
1998,  for the  development  of a new product.  This new entity has required the
restructuring of current management as well as the recruitment of new personnel.
The team members will likely  receive  equity  ownership  interests in Qui Vive,
Inc. as part of their compensation for successfully developing the project.


Note 4   Cash and 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.


                                  Page 6 of 18
<PAGE>

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

              Preliminary Note Regarding Forward-Looking Statements

The Company considers all forward-looking statements contained in this Quarterly
Report to be covered by and to qualify for the safe harbor  protection  provided
by the  Private  Securities  Litigation  Reform  Act of 1995.  Shareholders  and
prospective  shareholders  should understand that several factors govern whether
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.

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

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


Overview

The Thorsden Group, Ltd. (the "Company") is a Delaware corporation  organized in
1992 for the purpose of seeking and acquiring business opportunities. In October
1997, the Company acquired Arkona, Inc., a Utah corporation ("Arkona"),  through
a wholly-owned Subsidiary Corporation in a reverse triangular merger,  accounted
for as a purchase.  Arkona's  predecessor,  Arkona LLC, a Utah limited liability
company, was founded in September 1996 and had limited business operations prior
to the acquisition. On June 5, 1998 the Company formed a new subsidiary company,
Qui Vive Inc., in Delaware ("Qui Vive").

The core business of the Company is developing,  marketing, and selling software
products for use in portable and distributed  network computing and secure email
applications.  Business is conducted  through its  subsidiaries,  Arkona and Qui
Vive.

Arkona

During the quarter ended  September 30, 1998, and since that date, the Company's
management  has  directed  much of its  efforts  in  maintaining  the  continued
capability  required to build world class software products.  The first of these
products,  Universal  Update(TM),  will be in beta testing in the quarter ending
December  31,  1998,  and the first  revenues  from this product are expected in
1999.


                                  Page 7 of 18
<PAGE>

Arkona's  enabling  technology  allows  Arkona  and/or its  partners  to provide
dynamic  solutions  to a variety  of  end-user  markets.  The  Company's  market
strategy focuses on recruiting and motivating  solution partners in key vertical
markets.  The first of these  partnerships  is in place,  and  solutions for the
publishing industry are being developed.

During the quarter, the Company hired a seasoned Vice President of Sales to head
the  efforts  to  recruit  partners  and  penetrate  key  accounts  with  Arkona
technology.

Distributed Computing

For more than a decade, the computer industry has endeavored to extend the value
of stored  information  from  large  enterprise  systems  to  networked  desktop
computers.  Networked computing allows corporations to empower workers by giving
them direct control of information and applications.  As a result,  productivity
has  skyrocketed.  In  recent  years,  the  Internet  has made it  possible  for
companies to extend the scope and value of their networks even further.  Members
of the Internet's  "connected"  community can obtain a wide variety of corporate
data.

The Company  believes a third  iteration of this theme is quietly but forcefully
gaining momentum.  Information  access is once again being extended further than
ever before--this  time to a wave of mobile,  disconnected,  and  geographically
distributed  employees,   partners,  and  customers.   Organizations  that  take
advantage  of this third  wave can  finally  apply  corporate  knowledge  at its
ultimate and most critical destination--the customer point of service.

Intelligent Synchronization

Arkona's unique software solutions are helping to bring about this "distributed"
information wave by extending user access to a business's  applications and most
critical information--large  knowledge databases. These databases are monolithic
in size and  complexity,  making them inherently  poor  applications  for mobile
workers such as field sales and service  representatives.  However,  field sales
and service  personnel  and other  disconnected  employees  and partners have an
acute and growing need for immediate access to large corporate databases.

When field  personnel visit customers for sales or service calls, it is critical
that they arrive with all pertinent  information,  including  detailed  product,
pricing,  and contract  data and any other  information,  which might affect the
customer. Traditionally, however, this kind of structured information is ideally
suited for large corporate databases and workhorse computers,  but poorly suited
for portable devices. To complicate matters, the information is rarely stored in
a single  repository.  The result is a complex  computing  environment  which is
difficult to mobilize for field service professionals.

Efficiently  extracting   information  from  larger,   disparate  databases  and
seamlessly synchronizing it upon request from the field is a vital and necessary
requirement.  The Company  believes this current  inability  costs  corporations
millions in lost knowledge,  capital, sales, and customers.  The need to resolve
this dilemma was the genesis of the Company's software solutions.

Instead of aiming to displace  large  corporate  databases,  which function very
well in the home office  environment  where there is ample computing  power, the
Company  extends  the value of these  databases  by cleanly  extracting  mission
critical  information  for use at the point of service.  The Company's  software
thus maximizes existing software investments by working equally well with any of
the  widely  used  database  systems,   including  Oracle,   Sybase,   Informix,
PeopleSoft, BAAN, SAP, Microsoft, and others.


                                  Page 8 of 18
<PAGE>

How the Customer Benefits

The Company's products and services help customers to:

     Reduce the High Cost of Information and Application  Updates: The Company's
     synchronization  solutions  eliminate data "snapshots" mailed to the field,
     costly  downtime for application  updates,  and  time-consuming  support of
     remote  installation   procedures.   Arkona  allows  customers  to  simply,
     inexpensively, and securely update and synchronize critical information and
     distributed applications.

     Optimize  Synchronization  of Data  and  Applications:  Arkona's  Universal
     Update  technology  optimizes the process of synchronizing  distributed and
     mobile data sources.  This  technology  reduces  bandwidth  requirements by
     distributing and reconciling only  incremental  differences  between client
     and server  data  sources.  Administrators  may also  define  profiles  for
     individual users, groups, or other servers.  Information is then customized
     and distributed based on business logic stored in the user profile.

     Simplify the Delivery of Information:  End-users can update information and
     applications  with  the  click  of  a  button,  avoiding   data/application
     reconciliation problems.

     Profit From  Flexible  Synchronization  Solutions:  True object  design and
     reusable code libraries allow the Company to quickly and efficiently create
     proven  synchronization  solutions  to a customer's  exact  specifications.
     Arkona's  custom  solutions take  advantage of multiple data sources,  data
     types, OS platforms, and various mobile devices.

     Leverage and Revitalize  Legacy Systems:  Arkona's custom  solutions easily
     integrate with existing corporate  information and knowledge  systems.  The
     Company   designs   distributed   applications   that  extend  a  company's
     information system investments instead of replacing them.

The Arkona Solutions

UNIVERSAL UPDATE(TM)

The Universal Update Client and Server represent Arkona's core technology. These
modules  work  as  embedded   components  within  specific  industry  solutions.
Customers  and solution  providers  may choose to license the  Universal  Update
technology for use in their own products,  or they can work with Arkona to build
more specific vertical solutions.

ARKONA OnSite(TM) FIELD SERVice

Arkona OnSite Field Service was the Company's first industry  solution.  It used
an earlier  iteration of our  Universal  Update  enabling  technology  which was
custom designed  specifically for one customer's field service engineers to gain
access to  critical  customer,  product,  and  inventory  information  even when
disconnected  at the customer's  site.  Using this product,  these field service
workers  gather data from a legacy  database and store a replica of the database
in a laptop at the customer's  site. They can then access  information  with the
OnSite  product  without  being  connected  to a network.  Later,  when  network
connection is conveniently  available,  stored reports and other information can
be transmitted.  The system is useful where  telephones or network ports are not
readily available or where wireless networking technologies are not practical or
allowed (such as hospitals).  The OnSite product was developed in  collaboration
with OEC Medical Systems, Inc. ("OEC"), an unaffiliated customer of Arkona.


                                  Page 9 of 18
<PAGE>

ARKONA OnSite(TM) PUBLISher

Arkona OnSite  Publisher is currently  being designed in  collaboration  with an
Arkona solution provider.  The Company believes that OnSite Publisher will allow
large reference publishers to virtually eliminate production and distribution of
CD ROM publications in favor of on-line distribution.  Electronic titles will be
synchronized  automatically  with publisher  archives and placed directly into a
subscriber's own electronic library solution.


Qui Vive

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

Qui Vive is developing a solution to these problems,  the purpose of which is to
facilitate  communication  and give  content  control  back to the  author.  The
project is  presently  in the design and  architecture  phase of  developing  an
enhanced  email product.  When the first version of the product is launched,  we
expect it to give email users the chance to direct:

   how  their  words  will be  released,  

   who can see  them,  

   how they can be redistributed, and 

   if they can be printed, copied, or saved.

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

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

Key Features

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

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

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

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

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


                                 Page 10 of 18
<PAGE>

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

       Message  Withdrawal.  Authors can retract their  messages even after they
       have been sent over the Internet.

PHASE 1 FUNCTIONALITY

The key features listed above will include the following functionality:

   Email is created using the sender's existing email software.  Currently being
   designed as an add-on to existing email software,  the enhanced email will be
   sent from any  Java-enabled  email  client,  including  email  products  from
   Netscape,  Microsoft,  Lotus,  and  others.  Once an email  message  has been
   authored,  the user selects appropriate  security and auditing options from a
   simple,  easy-to-use  GUI or relies on either  the  user-preset  or  embedded
   defaults.

   The email message is secured.  The  product's  mail server  encapsulates  and
   encrypts the email  message.  The mail server can reside within a corporation
   or with an Internet service provider.

   Email  recipient is notified.  The server notifies the email recipient that a
   secured  email  message  has been  received.  Each  notification  includes  a
   hypertext link that quickly takes the recipient to the secured
   message.

   Access is granted using a personal password.  Before the recipient can open a
   secured  email  message,  the  recipient  must first be  authenticated.  This
   authentication   process  will  employ   industry   standard   authentication
   mechanisms.

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

FUTURE FUNCTIONALITY

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

How the Customer Benefits

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

   Legal  communications

   Governmental  agencies

   Contract negotiations

   Medical information 

   Sensitive human resource information

   Communication of non-public corporate information

   Any information which should not be public


                                 Page 11 of 18
<PAGE>

Additional Funding

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

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

The Company is currently  seeking  additional  capital to complete and move from
the  design  and  architecture  phase of  development,  including  securing  all
intellectual  property  protections  available,  to completion and marketing the
first product version.

The Company believes that the initial version of the product will be released by
the end of  calendar  year 1998.  However,  there can be no  assurance  that the
Company will successfully complete the project,  that as completed,  the product
will include all or substantially  all of the elements  described above, or that
any of the other risks described herein will not adversely affect the outcome of
the project.



                                 Page 12 or 18
<PAGE>

Results of Operations


Three Months Ended September 30, 1998 and 1997

Revenues for the quarter ended  September 30, 1998 were $4,917 (1997:  $0). Cost
of revenues  totaled  $464,546 in the quarter  ended  September  30, 1998 (1997:
$51,374).  The 1998  expenses  included  $247,396  in research  and  development
expense (1997:  $22,313). The increased expenses in 1998 reflect the addition of
personnel and costs  associated with the merger of the Company with Arkona.  The
Company  expects that  research and  development  expenditures  will continue to
increase  during the next  twelve  months as  development  of  existing  and new
products  continues.  We expect  that  adding  new  personnel  in this area will
increase these expenses by approximately 10% in the next quarter.

The Company had $10,266 in interest  income during the quarter  ended  September
30, 1998 (1997:  $147). The increase in interest income is due to increased cash
balances  maintained  in banks  following  private  placements  of the Company's
common  stock.  The net loss for the  quarter was  $450,996  (or $.02 per share)
compared to a loss $51,337 (or $.12 per share) in 1997.

Revenues for the quarter were  provided by an ongoing  service  contract  with a
single customer (OEC Medical Systems,  Inc. - "OEC"), and cost of sales reflects
the costs  associated  with  delivery  of these  services.  Arkona is  currently
bidding for a number of projects  utilizing its core technologies and expects to
report  successes in subsequent  quarters.  Expenses for the quarter reflect the
cost of people,  engineering research,  and marketing and selling efforts, which
will form the foundation of future increased revenue and profitability growth.

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

During the three months ended September 30, 1998, the Company  provided  support
services  for OEC  according to the service  agreement  with that  company.  The
Company has entered into a license agreement with this same customer to whom the
Company has agreed to pay a royalty on revenues  generated from the licensing or
use of a software  product  developed by Arkona in 1997. The royalty is equal to
five percent of net revenues until OEC has recovered  $125,000,  the amount paid
to Arkona to develop the product.  Thereafter, the royalty is two percent of net
revenues thereafter until OEC has been paid $250,000 and one percent of revenues
thereafter.  No  royalties  have been paid by the  Company  to date  under  this
arrangement.


Six Months Ended September 30, 1998 and 1997

Revenues during the six months ended September 30, 1998 were $11,167 (1997: $0).
Cost of revenues totaled $909,148 during the six months ended September 30, 1998
(1997: $52,868). The 1998 expenses included $445,034 in research and development
expense (1997:  $19,643). The increased expenses in 1998 reflect the addition of
personnel and costs  associated with the merger of the Company with Arkona.  The
Company  expects that  research and  development  expenditures  will continue to
increase  during the next 12 months as  development of existing and new products
continues.

The Company had $18,069 in interest income during the six months ended September
30, 1998 (1997:  $169).  The net loss for the period was  $882,681  (or $.04 per
share) compared to a loss $52,809 (or $.12 per share) in 1997.



                                 Page 13 of 18
<PAGE>

Liquidity and Capital Resources

At September 30, 1998, the Company had cash and cash equivalents of $955,419, as
compared to cash and cash equivalents of $568,612 as of March 31, 1998. Cash was
provided during the period through the private placement of its stock.

Capital  spending  of $44,265 in the  quarter was  primarily  for  computer  and
related equipment used in the Company's operations.

The Company held marketable securities available for sale at September 30, 1998.
Although  the Company  does not intend to engage in the business of investing in
or buying and selling  securities  of other  companies,  these  securities  were
received as consideration in the private placement of the Company's common stock
in October  1997.  They are comprised of 3,000 shares of common stock of Eurogas
Corp. ("EUGS"). During the six months ended September 30, 1998, the Company sold
its  remaining  shares  of  InterJetNet  Corp.  for $5.00 per share in a private
placement.

At September 30, 1998, the sale price of Eurogas Corp. common stock, as reported
by the over-the-counter  ("OTC") electronic bulletin board, was $2.38 per share.
Shares traded in the 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 holdings or to realize the values shown above.

Management  believes  that the cash  available  to the Company from the recently
completed  sales of marketable  securities,  proceeds from the continued sale of
its own securities in a private placement,  and cash provided by operations will
be  sufficient  to meet the  business  requirements  of the Company for the next
twelve months.  If the Company  expands its efforts to develop new products,  or
the projected revenues do not materialize in the timeframe anticipated,  seeking
additional  funding through the sale of its securities or through  borrowing may
be required.  Presently  the Company does not have an  established  bank line of
credit or similar facility.


Year 2000 Issues

The Year 2000 Issue is the result of computer  programs  being written using two
digits  rather than four to define the  applicable  year.  Any of the  Company's
computer programs that have  date-sensitive  software may recognize a date using
"00" as the year 1900,  rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations,  including,  among
other things, a temporary inability to process  transactions,  send invoices, or
engage in similar normal business activities.

The  Company  relies on computer  hardware,  software  and  related  technology,
together with data, in the operation of its business.  Such  technology and data
are used in the Company's internal  operations,  such as billing and accounting.
The  Company is  currently  investigating  the  technology  and data used in its
operations  and has yet to  determine  whether  Year 2000 Issues will affect its
business.  The Company  intends to evaluate its technology and data to determine
what, if any,  remedial  action may be required to address  these  issues.  This
includes  remediating  any Year 2000 Issues  that are  related to the  Company's
customers, suppliers and distributors. There is, however, no assurance that such
third parties will successfully  remediate their own Year 2000 Issues over which
the Company has no control.



                                 Page 14 of 18
<PAGE>

The  Company  believes  it  will  substantially   complete  its  evaluation  and
remediation  prior to the beginning of the year 2000, and that upon  substantial
completion of such actions, and assuming that the Company's customers, suppliers
and  distributors  successfully  remediate their own Year 2000 Issues over which
the Company has no control, the Company will have no material business risk from
such  issues.  The  Company  has not yet  determined  the total  cost of such an
evaluation and any necessary remediation.

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


Outlook

This  section  contains  forward-looking  statements,  all of which are based on
current  expectations.  The purpose of this section is to inform shareholders of
anticipated  developments  in the  Company.  We also  caution  readers  that the
Company's  business  and the  industry  in which the  Company  operates  contain
certain  risks,  some of which are outside the  Company's  control and may cause
actual results to vary from those  anticipated.  Such risks and related  factors
may include, but are not limited to the following: 

   potential financial and other effects of future acquisitions

   one-time charges and operational risks associated with such transactions

   progress  into new market  segments  and the cost of  managing  growth of the
   business

   business and economic  condition  and growth of the  Company's  target market
   segments and of the economy in general

   changes in customer order patterns,  including  timing of project  initiation
   and completion

   competitive factors

   timing of the release of new products

   failure to remediate or the cost of remediating Year 2000 problems

   possible litigation involving intellectual property matters

The  Company's  plans are  dependent on having  sufficient  funding.  Should the
Company not successfully  complete the current private offering of its stock, or
if completion of the offering is delayed beyond the end of the next quarter, the
Company will have to re-evaluate its plans.

The formal launch of Arkona's  Universal  Update(TM)  product will take place in
November 1998 during a large publishing trade show in Boston.  This product will
be showcased to a wide variety of end users and potential  partners  during this
show,  and  V1.0 of the  software  is  expected  to be  available  by the end of
calendar 1998.


                                 Page 15 of 18
<PAGE>

                           Part II. Other Information


ITEM 2.  CHANGES IN SECURITIES

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

Recent  Sales of  Unregistered  Securities.  During the  period  covered by this
report,  the Company issued equity securities that were not registered under the
Securities Act of 1933, as amended (the "Act"). Specifically, the Company issued
215,500 shares of common stock and warrants to purchase 215,500 shares of common
stock.  Gross  proceeds to the Company of $323,250 were generated by the sale of
these securities.  The Company issued such shares without registration under the
Act in reliance on exemptions  from  registration  under the Section 4(2) and/or
3(b), as well as  Regulation D  promulgated  under the Act. The shares of common
stock were (and the shares  issueable  upon  exercise of the  warrants  will be)
issued as restricted  securities and the certificates  representing  such shares
are or will be stamped with a restrictive  legend to prevent any resale  without
registration  under the Act or compliance  with an exemption.  In each case, the
purchasers of the securities were accredited investors,  as that term is defined
by Rule 501  under  the Act,  or  represented  to the  Company  that  they  were
sophisticated investors who were experienced in making investments of this type,
either  alone  or with a  purchaser  representative,  and  that  they  or  their
purchaser  representatives  were  otherwise  suitable  (under  state and federal
regulations)  and possessed  adequate means of providing for their current needs
and personal contingencies and who had no need for liquidity in an investment in
securities  such as the  Company's  common  stock,  which are subject to certain
risks, including the possible loss of a person's investment in whole or in part.

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


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At it Annual  Meeting of  Shareholders  on  Wednesday,  October  28,  1998,  the
following  actions  were  submitted  and approved by vote of the majority of the
issued and outstanding shares of the company:

        1.   Election of six directors; and

        2.   Approval  of  the  Board  of  Directors,  selection  of  Mantyla  &
             McReynolds   as  the   Company's   independent   certified   public
             accountants.

A total of 14,432,221 shares  (approximately  69%) of the issued and outstanding
shares of the Company  were  represented  by proxy or in person at the  meeting.
These shares were voted on the matters described above as follows:



                                 Page 16 of 18
<PAGE>




1.  For the directors:



<TABLE>
<CAPTION>
        Name              Number Shares For        Number Shares Against         Number Shares
                                                                              Abstaining/Withheld
<S>                          <C>                             <C>                       <C>
   John Blumenthal           14,432,221                      0                         0
   Stephen Russell           14,432,221                      0                         0
   Tim Kapp                  14,432,221                      0                         0
   John Zollinger            14,432,221                      0                         0
   Joseph Ward               14,432,221                      0                         0
   Jerral Pulley             14,432,221                      0                         0
</TABLE>


2.  For the  ratification of Mantyla & McReynolds as the  independent  certified
    accountants of the Company,  a total of 14,432,221 shares were voted for the
    ratification and no shares abstained or voted against this proposal.


Item 6.  Exhibits and Reports on Form 8-K

         (a)      Exhibits


              27  Financial Data Schedule (previously filed)



                                 Page 17 of 18
<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 by the
undersigned thereunto duly authorized.



                                  THE THORSDEN GROUP, LTD.

                                  (Registrant)







Date: November 3, 1998            /s/ John Blumenthal
                                  --------------------------------
                                  John Blumenthal, Chief Executive

                                  Officer







Date: November 3, 1998            /s/ Steve Russell
                                  ----------------------------------------------
                                  Stephen Russell, Chief Financial Officer and
                                  Controller (Principal Financial and Accounting
                                  Officer)


                                 Page 18 of 18