UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 FORM 10-QSB

(Mark One)

[X]      Quarterly  report under Section 13 or 15(d) of the Securities  Exchange
         Act of 1934 for the quarterly period ended December 31, 2005

                                       OR

[ ]     Transition report under Section 13 or 15(d) of the Securities Exchange
         Act of 1934 for the transition period from   ________to ________.

                         Commission File Number 0-24372

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


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

                      10757 South River Front Parkway, Suite 400
                            South Jordan, Utah 84095
                    ----------------------------------------
                    (Address of principal executive offices)

                                 (801) 501-7100
                           ---------------------------
                           (Issuer's telephone number)

Check  whether the issuer (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 [ ]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of January 23, 2006, there were issued and outstanding  32,338,670  shares of
the Company's common stock, par value $.001 per share.

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


<PAGE>

 PART I - Item 1.  Financial Statements

                                  ARKONA, INC.
                            Condensed Balance Sheets

                                                 31-Dec-05       31-Mar-05
                                                (Un-audited)     (Audited)
                                                ------------    ------------
 ASSETS
      Current Assets:
        Cash and cash equivalents               $    424,742    $    141,179
        Accounts receivable, net of allowance        704,288         481,518
        Prepaid expenses                              57,109           3,499
        Notes receivable - current portion            21,408
                                                ------------    ------------
     Total Current Assets                          1,207,547         626,196
                                                ------------    ------------
     Property & Equipment, net of
        accumulated depreciation                     542,029         359,810
                                                ------------    ------------
     Other Assets:
        Deferred tax assets                        5,039,237       5,039,237
        Capitalized software costs, net of
             accumulated amortization              1,171,309       1,148,935
        Deposits                                     108,875         122,080
        Other intangible assets, net of
           accumulated amortization                  233,042         233,042
        Notes receivable - long term portion          43,543
                                                ------------    ------------
     Total Other Assets                            6,596,006       6,543,294
                                                ------------    ------------
TOTAL ASSETS                                    $  8,345,582    $  7,529,300
                                                ============    ============

LIABILITIES & STOCKHOLDERS' EQUITY
     Current Liabilities:

        Accounts payable                        $    159,884    $    156,074
        Accrued liabilities                          286,846         238,450
        Deferred revenue                             205,385         200,326
        Current portion long-term debt                81,575            --

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

     Total Current Liabilities                       733,690         594,850

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

Long-Term Debt                                       122,065          50,000

                                                ------------    ------------
     Total Liabilities                               855,755         644,850
                                                ------------    ------------
     Stockholders' Equity:
        Preferred stock ($.001 par value)                575             575
        Common stock ($.001 par value)                32,339          32,170
        Additional paid-in capital                23,441,063      23,394,632
        Unearned compensation                        (13,761)        (19,357)
        Accumulated deficit                      (15,970,389)    (16,523,570)
                                                ------------    ------------
     Total Stockholders' Equity                    7,489,827       6,884,450
                                                ------------    ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY      $  8,345,582    $  7,529,300
                                                ============    ============

See notes to condensed financial statements.

                                      -2-
<PAGE>

<TABLE>
<CAPTION>
                                  ARKONA, INC.

                       Condensed Statements of Operations

                                        Three Months Ended                  Nine Months Ended
                                     31-Dec-05        31-Dec-04       31-Dec-05        31-Dec-04
                                     (Unaudited)     (Unaudited)     (Unaudited)      (Unaudited)
                                                      (Restated)                      (Restated)
                                     ------------    ------------    ------------    ------------
<S>                                  <C>             <C>             <C>             <C>
Revenues                             $  2,611,319    $  2,115,579    $  7,872,823    $  5,303,118

Cost of Sales                           1,398,111       1,080,375       4,161,919       3,000,424
                                     ------------    ------------    ------------    ------------
Gross Profit                            1,213,208       1,035,204       3,710,904       2,302,694

Operating Expenses:
     Sales, marketing, general
      & administrative                    862,444         677,768       2,423,843       1,832,104
     Research and development             230,212         165,671         728,724         476,647
                                     ------------    ------------    ------------    ------------
    Total Operating Expenses            1,092,656         843,439       3,152,567       2,308,751
                                     ------------    ------------    ------------    ------------

Operating Income                          120,552         191,765         558,337          (6,057)

Other Income (Expense)                     (1,470)         (2,498)         (5,156)         63,183
                                     ------------    ------------    ------------    ------------

Net Income (Loss) Before Taxes            119,082         189,267         553,181          57,126

Income Tax Benefit                           --           869,809            --         2,609,427
                                     ------------    ------------    ------------    ------------


Net Income                           $    119,082    $  1,059,076    $    553,181    $  2,666,553

                                     ============    ============    ============    ============

Basic Earnings per Common Share:
     Net Income                      $      0.004    $      0.033    $      0.017    $      0.084
     Average Number of Shares
        Outstanding                    32,321,572      32,035,718      32,241,460      31,832,244

Diluted Earnings per Common Share:
     Net Income                      $      0.003    $      0.027    $      0.014    $      0.069
     Average Number of Shares
        Outstanding                    39,540,512      38,618,050      39,213,350      38,788,463
</TABLE>

See notes to condensed financial statements.

                                      -3-
<PAGE>

                                  ARKONA, INC.

                       Condensed Statements of Cash Flows

                                                   Nine Months Ended
                                                31-Dec-05     31-Dec-04
                                               (Unaudited)    (Unaudited)
                                                              (Restated)
                                               -----------    -----------
Cash Flows Provided By (Used In) Operating
     Activities:

     Net income                                $   553,181    $ 2,666,553
     Adjustments to reconcile net income

         to net cash provided by (used in)
         operating activities:

         Depreciation and amortization             305,391        263,770
         Stock compensation                          5,596           --
         Deferred income tax                          --       (2,609,427)
         Changes in assets & liabilities:
              Accounts receivable                 (222,770)      (194,985)
              Prepaid expense                      (53,610)          --
              Deposits                              13,205           --
              Notes receivable                     (64,951)
              Accounts payable                       3,810       (132,135)
              Accrued liabilities                   48,396         10,096
              Deferred revenue                       5,059        (17,296)

                                               -----------    -----------
Net Cash Provided By (Used In) Operating

     Activities                                    593,307        (13,424)
                                               -----------    -----------
Cash Flows Used In Investing Activities:
     Additions to equipment                       (265,527)      (102,955)
     Patents                                          --           27,086
     Software development costs                   (244,457)      (283,800)
                                               -----------    -----------

Net Cash Used In Investing Activities             (509,984)      (359,669)
                                               -----------    -----------
Cash Flows Provided By Financing Activities:

     Proceeds from issuance of common stock         46,600        173,250
     Proceeds from long-term debt                  153,640           --
                                               -----------    -----------
Net Cash Provided By Financing Activities          200,240        173,250
                                               -----------    -----------
Net Increase (Decrease)
   in Cash and Cash Equivalents                    283,563       (199,843)

Beginning Cash Balance                             141,179        360,927
                                               -----------    -----------
Ending Cash Balance                            $   424,742    $   161,084
                                               ===========    ===========


See notes to condensed financial statements.

                                      -4-
<PAGE>
                                  ARKONA, INC.

                     NOTES TO CONDENSED 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 in accordance with generally accepted
accounting  principles have been condensed or omitted. The Company believes that
the following  disclosures  are adequate and not  misleading.  These  un-audited
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  un-audited  condensed
financial statements should be read in conjunction with the financial statements
and the notes  thereto,  included in  Amendment  No. 1 to the  Company's  Annual
Report on Form 10-KSB/A for the fiscal year ended March 31, 2005, as amended.

In addition,  as explained more fully in Note 3(j), the financial statements for
the  quarters  ended June 30,  2004,  September  30, 2004 and  December 31, 2004
included  in the  Company's  Quarterly  Reports on Form 10-QSB  contain  errors,
primarily  related to the  allocation of revenue and other items among  quarters
within the fiscal year ended March 31, 2005. Therefore,  the amounts included in
the  Condensed  Statement  of  Operations  in this Report for the three and nine
months ended December 31, 2004, as well as the amounts included in the Condensed
Statement  of Cash Flows in this Report for the nine months  ended  December 31,
2004 have been labeled ("Restated") to reflect corrections of such errors.

Note 2 - Market Concentration

The   Company's   business  is  limited  in  that  its  products  are  currently
specifically  designed for customers in the auto dealership  industry.  For this
reason,  if the industry  environment  were to experience  significant  negative
conditions, the Company would also be affected.  However, the Company's products
can meet customer needs in the RV, Marine,  ATV and motorcycle  markets.  We now
have a small  number of large  customers  in the Marine  and RV markets  and are
moving  towards  providing a more tailored  software  solution to all dealers of
power sports  equipment,  such as  motorcycles,  ATVs,  snowmobiles and personal
watercraft.  Our  plan  is to  move  into  other  vertical  markets  as  soon as
development  allows.  Sales of Company  products and services are not limited to
any geographic area.

Note 3 - Significant Accounting Policies

(a)  Income Taxes

The  Company  applies  the  provisions  of  Statement  of  Financial  Accounting
Standards ("SFAS") No. 109, "Accounting for Income Taxes." SFAS No. 109 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 basis and tax basis of the
Company's assets and liabilities,  at enacted tax rates expected to be in effect
when such amounts are realized or settled.


The Company has  temporary  differences  and net operating  loss carry  forwards
("NOL")  totaling  $13,681,653 as of December 31, 2005.  The timing  differences
multiplied  by the  estimated  tax rate of 39%,  for the  period  the  temporary
differences are expected to reverse,  equate to a $5,039,237  deferred tax asset
as of December  31,  2005.  The Company has been able to  consistently  increase
revenues over the past two years.  The Company has an established  customer base
that generates  significant  recurring revenue and expects to continue to expand
that base,  generating earnings in which the loss carry forwards may be applied.
Assuming the Company continues to grow,  revenues,  related costs of operations,
server and other  capital  equipment  costs and other  expenses  could  increase
disproportionately,  or the Company may experience  unexpected  costs related to
litigation,  insurance,  acquisitions,  product development,  financing or other
items that may cause  costs to  increase at a faster  than  expected  rate.  The
Company may not be able to increase or maintain  profitability in the future and
therefore, may not be able to realize the benefits of the NOL.

                                      -5-
<PAGE>

(b)  Net Income Per Common Share

In accordance  with SFAS No. 128,  "Earnings Per Share," basic income per common
share  is  computed   using  the  weighted   average  number  of  common  shares
outstanding.  Diluted  income per common  share is computed  using the  weighted
average  number  of  common  shares   outstanding  plus  dilutive  common  share
equivalents  outstanding  during the period,  computed  using the treasury stock
method.

(c)  Cash & Cash Equivalents

For purposes of the  statements  of cash flows,  the Company  considers  cash on
deposit in banks and other unrestricted  investments with original maturities of
three months or less at the time of purchase to be cash equivalents. The Company
maintains  cash  balances  in local  financial  institutions.  Accounts at these
institutions  are insured by the Federal  Deposit  Insurance  Corporation  up to
$100,000 each.

(d) Use of Estimates in the Preparation of Financial Statements

The Company's  financial  statements  are prepared in accordance  with generally
accepted accounting principles ("GAAP").  These principles require management to
make  certain  estimates,  judgments  and  assumptions  based  upon  information
available  at the time that they are made,  historical  experience  and  various
other factors that are believed to be reasonable under the circumstances.  These
estimates,  judgments and assumptions can 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.

(e)     Revenue Recognition

During the course of business, the Company recognizes revenue from the following
activities:   Software   Licensing;   G/L  Setup  and  Data  Conversion;   Forms
Programming; Installation and Training; Monthly Technical Support & Maintenance;
Hardware Sales; and Consulting Services.

The basis for software license revenue recognition is substantially  governed by
the  provision  of the  American  Institute  of  Certified  Public  Accountants'
("AICPA")   Statement   of  Position   ("SOP")  No.  97-2,   "Software   Revenue
recognition."  Consistent  with SOP No.  97-2,  the Company  recognizes  license
revenue when  persuasive  evidence of an arrangement for the license of software
exists;  the products are delivered or services are performed;  customer payment
is  deemed  fixed or  determinable  and  free of  contingencies  or  significant
uncertainties;  and collection is probable. License fees are generally invoiced,
collected  and  recognized  together  with the final  portions of  installation,
training and setup fees.  License fees, as distinguished  from monthly technical
support  and  maintenance  fees,  represent  a small  portion  of the  Company's
revenue.  This is because use of, or access to, the Company's dealer  management
software is of limited value absent the periodic  updates,  customer support and
other services that a customer receives in connection with its monthly technical
support and maintenance fee.


G/L setup,  data conversion,  forms  programming,  and installation and training
revenues included in  multiple-element  arrangements are deferred and recognized
in  accordance  with the AICPA's  Emerging  Issues Task Force  (EITF)  Issue No.
00-21,  "Revenue  Arrangements with Multiple  Deliverables."  Revenues earned on


                                      -6-
<PAGE>

software arrangements involving  multiple-elements are allocated to each element
based on the relative fair value of the element.  The Vendor Specific  Objective
Evidence  ("VSOE")  of fair  value  of the  undelivered  elements  is  generally
determined  based on the price  charged for the  undelivered  element  when sold
separately.

Hardware revenues include the sale of standard computer systems and peripherals,
and revenue is recognized when title passes upon shipment of the hardware and/or
peripherals to the customer.  Installation of the hardware and/or peripherals is
not a required  component of the purchase  contract.  Installation  and training
service contracts require the payment of non-refundable security deposits. These
deposits are deferred and  recognized  when services are  performed.  Generally,
installation  and  training  services  are  performed  and  completed  within  a
four-week to six-week period.

Monthly  technical  support & maintenance  includes  monthly service charges for
ongoing technical support, automatic software and data upgrades, data transfers,
storage and backup, bar coding, and 24/7 server maintenance.  These services are
billed monthly as stipulated in contracts with all customers  (whether under the
ASP or run-only  model) and earned as the services are performed.  All contracts
for technical support & maintenance are on a month-to-month basis.

Consulting  services primarily include fees charged for advanced function or new
hire training and/or forms programming,  all provided  subsequent to the initial
purchase,  installation  and training  contract.  These services are outside the
scope of the original purchase,  installation and training contract. The Company
recognizes consulting service fees as the services are provided.

(f)  Software Development 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,  development
costs are capitalized in accordance with SFAS No. 86,  "Accounting for the Costs
of Computer  Software  to Be Sold,  Leased,  or  Otherwise  Marketed"  until the
product is available for general  release to customers.  Judgment is required in
determining  when  technological   feasibility  of  a  product  is  established.
Capitalized  costs,  which  consist  primarily  of payroll and  benefits of both
employees and outside  contractors,  have been amortized on a product-by-product
basis using the straight-line  method over the established  economic life of the
products  (determined to be five years). In addition,  with the issuance of SFAS
No. 142, "Goodwill and Other Intangible Assets,"  capitalized software costs are
tested  for  impairment  each  period  along with other  intangible  assets.  If
impairment is  determined,  the amount of the  impairment is written off in that
period.

(g) Stock-Based Compensation

In December 2001, the Company established a stock incentive plan (the "Plan") to
provide  incentives  to its  directors,  officers,  employees and advisors to do
business  with the  Company  and to enable the  Company to obtain and retain the
services of the type of directors,  officers,  advisors and employees considered
essential for  long-term  success.  The granting of options and other  incentive
awards is at the discretion of the Stock Option Committee of the Board.

                                      -7-
<PAGE>

As of December  31, 2005,  there were  outstanding  a total of  6,837,667  stock
options  under the Plan and  2,349,092  stand-alone  stock  warrants to purchase
Company  common stock,  all of which have an exercise price of between $0.20 and
$0.75 per share. Stock options and warrants vest over a one to four year period.
There were 740,000 stock options  granted during the three months ended December
31, 2005.

The Company has accounted for share-based payments to employees using Accounting
Principles  Board  ("APB")  Opinion  No.  25,  "Accounting  for Stock  Issued to
Employees," using the intrinsic value method and, as a result, has not generally
recognized any compensation cost for employee stock options.

On December 16, 2004, the Financial  Accounting  Standards Board ("FASB") issued
SFAS No. 123(R), "Share-Based Payments," which requires all share-based payments
to employees,  including  grants of employee stock options,  to be recognized in
the income statement based on their fair values.  For public companies that file
as small business issuers, the reporting  requirements under SFAS No. 123(R) are
effective  in the first  interim or annual  reporting  period that begins  after
December 15, 2005. The Company expects to elect the modified  prospective method
of accounting and reporting for any future share-based payments.  Until adoption
of SFAS No. 123(R),  the Company has followed only the disclosure  provisions of
SFAS  No.  123,   "Accounting  for  Stock  Based  Compensation."  The  following
represents  the impact of the  issuance of employee  stock  options for the nine
months ended December 31, 2005, had compensation cost under SFAS No. 123(R) been
recognized:

                  Net income                                  $   553,181

                  Add:     stock-based employee
                  compensation expense included
                  in reported net income                            6,722

                  Deduct:  total stock-based
                  employee compensation expense
                  determined under fair value
                  based method for all awards                     (64,069)
                                                              -----------

                  Pro forma restated net income               $   495,834
                                                              ===========

                  Basic earnings per share                    $     0.015

                  Diluted earnings per share                  $     0.013


(h)      Property & Equipment

 Included in property & equipment  as of December 31, 2005 is $158,227 of assets
 purchased under a capital lease.

(i)      Reclassifications

Certain  reclassifications  have been made to prior period  balances in order to
conform to current period classifications.

(j) Restated 2004 Income Statement and Cash Flow Data

As part of its  enhancement of its internal  controls and procedures  related to
financial statements, and in light of the change in Chief Financial Officer that
occurred after the end of the fiscal year ended March 31, 2005 ("Fiscal  2004"),
the financial staff of the Company  reviewed and attempted to reconcile  certain
revenue,  cash and other entries in the general ledger of the Company for Fiscal

                                      -8-
<PAGE>

2004 with previously  filed Quarterly  Reports on Form 10-QSB.  In this process,
the Company's financial staff has been unable to reconcile certain revenue, cash
balances and related items reported in its financial  statements for each of the
first three  quarters of Fiscal 2004 with  certain  general  ledger  entries and
external sources.  It was determined that  reconciliations  of bank accounts had
not been timely  performed and that  allocations of revenue items been correctly
recorded  according to revenue  recognition  accounting  standards.  It was also
determined that certain reclassifications of expense items between cost of sales
and  operating  expenses  were  necessary  to properly  reflect  classifications
adopted for fiscal year 2006.  Finally,  the Company has  determined  to restate
downward  the amount of the income  benefit  from its  carryover  net  operating
losses described in Note 3(a) above.

The following table  identifies the net  adjustments  necessary to the Condensed
Statements of Operations  for the three and nine months ended  December 31, 2004
to correct the errors discovered as part of the Company's review process:


        ----------------------------- ------------------ -------------------
                                          3 Months            9 Months
                                            Ended              Ended
                                          12/31/04            12/31/04
        ----------------------------- ------------------ -------------------
                  Revenues
        ----------------------------- ------------------ -------------------
        As originally reported        $   1,891,272      $   5,430,884
        ----------------------------- ------------------ -------------------
        Net adjustments               $     224,307      $    (127,766)
        ----------------------------- ------------------ -------------------
        As amended                    $   2,115,579      $   5,303,118
        ----------------------------- ------------------ -------------------
               Cost of Sales
        ----------------------------- ------------------ -------------------
        As originally reported        $     722,848      $   2,436,535
        ----------------------------- ------------------ -------------------
        Net adjustments               $     357,527      $     563,889
        ----------------------------- ------------------ -------------------
        As amended                    $   1,080,375      $   3,000,424
        ----------------------------- ------------------ -------------------
             Operating Expenses
        ----------------------------- ------------------ -------------------
        As originally reported        $     990,691      $   2,650,423
        ----------------------------- ------------------ -------------------
        Net adjustments               $    (147,252)     $    (341,672)
        ----------------------------- ------------------ -------------------
        As amended                    $     843,439      $   2,308,751
        ----------------------------- ------------------ -------------------
                Tax Benefit
        ----------------------------- ------------------ -------------------
        As originally reported        $   1,764,400      $   5,293,200
        ----------------------------- ------------------ -------------------
        Net adjustments               $    (894,591)     $  (2,683,773)
        ----------------------------- ------------------ -------------------
        As amended                    $     869,809      $   2,609,427
        ----------------------------- ------------------ -------------------
          Net Income Before Taxes
        ----------------------------- ------------------ -------------------
        As originally reported        $     173,733      $     407,109
        ----------------------------- ------------------ -------------------
        Net adjustments               $    (116,607)     $    (217,842)
        ----------------------------- ------------------ -------------------
        As amended                    $      57,126      $     189,267
        ----------------------------- ------------------ -------------------
              Net Income(Loss)
        ----------------------------- ------------------ -------------------
        As originally reported        $   1,938,134      $   5,700,309
        ----------------------------- ------------------ -------------------
        Net adjustments               $    (879,058)     $  (3,033,756)
        ----------------------------- ------------------ -------------------
        As amended                    $   1,059,076      $   2,666,553
        ----------------------------- ------------------ -------------------
                 Basic EPS
        ----------------------------- ------------------ -------------------
        As originally reported              $.06                $.18
        ----------------------------- ------------------ -------------------
        Net adjustments                    $(.056)            $(.163)
        ----------------------------- ------------------ -------------------
        As amended                          $.004              $.017
        ----------------------------- ------------------ -------------------
                Diluted EPS
        ----------------------------- ------------------ -------------------
        As originally reported              $.05                $.16
        ----------------------------- ------------------ -------------------
        Net adjustments                    $(.047)            $(.146)
        ----------------------------- ------------------ -------------------
        As amended                          $.003              $.014
        ----------------------------- ------------------ -------------------

                                      -9-
<PAGE>

The following table  identifies the net  adjustments  necessary to the Condensed
Statements of Cash Flows for the nine months ended  December 31, 2004 to correct
the errors discovered as part of the Company's review process:

        ----------------------------- ---------------- ---------------------
                                                             9 Months
                                                              Ended
                                                             12/31/04
        ----------------------------- ---------------- ---------------------
             Net Cash (Used by)
            Operating Activities
        ----------------------------- ---------------- ---------------------
        As originally reported                         $    (33,442)
        ----------------------------- ---------------- ---------------------
        Net adjustments                                $     20,018
        ----------------------------- ---------------- ---------------------
        As amended                                     $   ( 13,424)
        ----------------------------- ---------------- ---------------------
            Net Cash (Used for)
            Investing Activities
        ----------------------------- ---------------- ---------------------
        As originally reported                         $   (211,089)
        ----------------------------- ---------------- ---------------------
        Net adjustments                                $   (148,580)
        ----------------------------- ---------------- ---------------------
        As amended                                     $   (359,669)
        ----------------------------- ---------------- ---------------------
            Net Cash Provided by
            Financing Activities
        ----------------------------- ---------------- ---------------------
        As originally reported                         $    150,700
        ----------------------------- ---------------- ---------------------
        Net adjustments                                $     22,550
        ----------------------------- ---------------- ---------------------
        As amended                                     $    173,250
        ----------------------------- ---------------- ---------------------
            Ending Cash Balance
        ----------------------------- ---------------- ---------------------
        As originally reported                         $    161,084
        ----------------------------- ---------------- ---------------------
        Net adjustments                                $    107,039
        ----------------------------- ---------------- ---------------------
        As amended                                     $    268,123
        ----------------------------- ---------------- ---------------------


                                      -10-
<PAGE>

Item 2.  Management's Discussion and Analysis

Executive Overview

We primarily develop and license management software for automobile dealerships.
Because of operating similarities with automobile  dealerships,  we also license
our management  software to a few marine and RV dealerships,  and we are looking
to  expand  our  presence  among  dealers  of power  sports  equipment  (such as
motorcycles, ATVs, snowmobiles and watercraft).

The  Company's  most  important  product is its Arkona Dealer  Management  Suite
("ADMS") software. The ADMS software is a fully integrated automobile dealership
management  software  system  that  allows  automobile   dealerships  to  manage
substantially all aspects of their business operations.  It is a modular system,
which makes it scalable  for  different  types and sizes of  dealerships.  A key
advantage of the ADMS software from a customer's  perspective  is its ability to
run on an Application  Service Provider ("ASP") model. An ASP model involves the
software  provider running  software and maintaining data at central  locations,
and customers accessing and using the software over the Internet.  The ASP model
may  significantly  reduce upfront and ongoing hardware costs for the dealership
because the  significant  processing is done on computers  maintained at offsite
locations by us. The  dealership  needs only standard  personal  computers  with
reliable  Internet access.  The ASP model also may reduce the need for technical
computer  personnel  because the software and related hardware are managed by us
at our offsite  locations.  Our ADMS software  integrates with most of the major
automobile   manufacturers,   and  we  are  continuing  our  efforts  to  obtain
cooperation from the others to integrate with their systems.  In connection with
the ADMS  software,  we provide  training to  dealership  employees  and,  for a
monthly fee, provide on-going technical support and regular software updates.

The market for automobile  dealer  management  systems is dominated by two major
players:  Automatic  Data  Processing,  Inc.  ("ADP")  and  Reynolds  & Reynolds
("Reynolds").  According to a September 1, 2005 Ward's Dealer Business  article,
ADP and Reynolds  together  control  more than 80% of the market for  automobile
dealer   management   systems.   ADP  and  Reynolds  are  large,   well-financed
organizations. They have good brand name recognition and their systems integrate
with all the major  automobile  manufacturers.  Their market  dominance  creates
significant  barriers to entry for us because many  dealerships  are hesitant to
abandon their existing  systems and switch to a new system provided by a smaller
company with limited resources.  In addition,  certain automobile  manufacturers
are as yet unwilling to facilitate integration with any providers other than ADP
and  Reynolds.  However,  we  presently  offer  a  system  that  we  believe  is
technologically   superior,   functionally  equivalent,   at  a  price  that  is
substantially  lower  than the  standard  pricing of both ADP and  Reynolds.  In
addition,  our growth and financial performance have significantly  improved our
financial  stability  and our  ability to support  larger  dealerships.  We have
proven our staying power in the market.

The Company  earns  revenue  from the  following  activities:  installation  and
training  services  (which include a nominal  software  license fee),  technical
support  &  maintenance,  sales of  hardware  and  peripherals,  and  consulting
services.  Approximately  57% of the  Company's  revenues  currently  come  from
recurring  monthly technical  support & maintenance.  Additionally,  much of the
consulting  services  revenues  tend to be recurring in nature.  These  combined
recurring revenues provide long term stability for the Company.

                                      -11-
<PAGE>

eve that the Company has reached a critical point in its development.  We
have  established  a strong  sales  pipeline for our primary  product,  our ADMS
system,  after a  significant  investment in sales,  installation  and technical
personnel last year. We are experiencing  accelerated growth in our revenues and
profitability from operations.  We believe,  however,  that our size relative to
our competitors and in comparison to other public  companies  continues to be an
impediment  to our efforts to expand  sales and to increase  the market value of
the Company's common stock. We are considering  various options for accelerating
the growth of the Company and  increasing  interest in its common  stock.  These
options include, without limitation, the following:

         o    We are continuing to lay the foundation for a possible move to the
              American Stock  Exchange or the Nasdaq  Capital  Market  (formerly
              known  as  the  Nasdaq  SmallCap  Market).   We  believe  that  an
              appropriately  timed move onto an exchange or Nasdaq  market would
              increase  institutional and other interest in the Company's common
              stock.

         o    We  are  in  discussions   with  investment   banks,   shareholder
              relationship  consultants  and other  experts  about  methods  for
              increasing shareholder value and various possible transactions.

         o    We are in discussions regarding possible acquisition transactions,
              licensing  transactions,   coordinated  roll-outs  to  significant
              customer  groups and other  transactions  designed  to  accelerate
              revenue growth.  All of these discussions are in early stages, and
              we  are   uncertain   whether  any  will  lead  to  a   definitive
              transaction.

         o    We are considering  adapting, or working on the adaptation of, our
              ADMS  product  for other  vertical  markets  (in either an ADMS or
              shrink-wrap  version) and are developing  and  evaluating  various
              related  products and services  that we could offer to our current
              customer base or a core customer base.

As we move  forward  on one or  more  of  these  initiatives  we may  experience
increasing  expenses and a need to raise additional  capital, as well as, normal
pressures and disruptions associated with major transactions and expansions.  We
believe,   however,   that  when  and  if  implemented,   any  initiative  under
consideration will significantly enhance the status and value of the Company.

Results of Operations
<TABLE>
<CAPTION>
---------------- --------------------------------------------- -- ------------------------------------------------
                        Three Months Ended December 31                Nine Months Ended December 31
                              (in Thousands)                                  (in Thousands)
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
                   2005       2004       Change      % Change         2005        2004        Change     % Change
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
<S>              <C>        <C>        <C>            <C>         <C>         <C>            <C>           <C>
Revenues         $ 2,611    $ 2,116    $    495       23.4%       $ 7,873     $   5,303      $ 2,570        48.5%
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
Gross Profit
                 $ 1,213    $ 1,035    $    178        17.2%      $  3,711     $  2,303      $ 1,408        61.2%
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
% of Revenues
                   46.5%       48.9%         --          --           47.1%        43.4%         --           --
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
Operating
Expenses         $ 1,093    $   843    $    250        29.5%       $ 3,153     $  2,309      $   844        36.5%
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------

Net Income
Before Tax       $   119    $   189    $    (70)      (28.9)%      $   553     $     57      $   496       868.4%
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
% of Revenues        4.6%       8.9%         --           --           7.0%         1.1%         --            --
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------

Net Income       $   119    $  1,059   $   (940)      (88.8%)      $   553     $  2,667      $(2,114)      (79.3%)
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
Basic   EPS      $ 0.004    $  0.033   $ (0.029)      (88.9%)      $ 0.017     $  0.084      $(0.067)      (79.5%)
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
Diluted EPS      $ 0.003    $  0.027   $ (0.024)      (89.0%)      $ 0.014     $  0.069      $(0.055)      (79.5%)
---------------- ---------- ---------- ------------ ---------- -- ----------- ------------ ------------ ----------
</TABLE>

                                      -12-
<PAGE>

Quarterly and year-to-date  increases in revenues over comparable periods in the
prior year continue to reflect the Company's  success in penetrating  the dealer
management system market controlled by ADP and Reynolds.  The combination of our
products' superior features and capabilities,  the ASP model's  significant cost
savings  and  efficiencies,  our  practice of not  locking  our  customers  into
long-term  contracts,  as well as,  our  reputation  for  providing  outstanding
service and support contribute to the Company's revenue growth.

Third quarter revenues for the Company are typically impacted  negatively by the
holiday season and the impending calendar year-end.  Generally,  dealerships are
hesitant to make  system  changes  during the third  quarter.  Nonetheless,  the
Company's  $2,611,319 in revenues for the third quarter ended  December 31, 2005
approximated  the record  quarterly  revenues of $2,732,305  achieved during the
second quarter ended  September 30, 2005, and the Company expects fourth quarter
results to exceed these totals.


Revenue detail is as follows:
<TABLE>
<CAPTION>

------------------- ------------------------------------------ --- ------------------------------------------
                         Three Months Ended December 31                Nine Months Ended December 31 (in
                                 (in Thousands)                                   Thousands)
------------------- ------------------------------------------ --- ------------------------------------------
                                                    % Change                                       % Change
                      2005       2004      Change                    2005      2004      Change
------------------- ---------- ---------- --------- ---------- --- --------- ---------- ---------- ----------
<S>                 <C>        <C>        <C>        <C>           <C>       <C>        <C>         <C>
Technical Support
& Maintenance       $ 1,497    $ 1,039    $ 458      44.1%         $ 4,131   $ 2,840    $ 1,291     45.5%
------------------- ---------- ---------- --------- ---------- --- --------- ---------- ---------- ----------
Installation &
Training *          $   746    $   852    $(106)    (12.4)%        $ 2,640   $ 2,152    $   488     22.7%
------------------- ---------- ---------- --------- ---------- --- --------- ---------- ---------- ----------
Consulting
Services            $   163    $    25    $ 138     557.5%         $   435   $    74    $   361    485.1%
------------------- ---------- ---------- --------- ---------- --- --------- ---------- ---------- ----------
Hardware &
Peripheral          $   205    $   200    $   5       2.5%         $   667   $   237    $   430    180.6%
Sales
------------------- ---------- ---------- --------- ---------- --- --------- ---------- ---------- ----------
Total Revenues      $ 2,611    $ 2,116    $ 495      25.0%         $ 7,873   $ 5,303    $ 2,570     48.5%
------------------- ---------- ---------- --------- ---------- --- --------- ---------- ---------- ----------
</TABLE>

* Includes license fees, G/L setup, data conversion, forms programming, training
and related setup services.


Recurring monthly technical support & maintenance  revenues  increased over last
year by 44.1% and  45.5%,  respectively,  for the three  and nine  months  ended
December 31,  2005,  and now exceed 57% of the  Company's  total  revenues  each
month. Monthly support revenues are growing approximately 3% to 4% every month.

Installation  and training  revenues  were down 12% over last year for the three
months  ended  December  31,  2005 but year to date  installation  and  training
revenues  have  increased  22.7%.  The  decrease  for  the  current  quarter  is
attributable  to a number of new  dealership  acquisitions,  signed  during  the
quarter with the  expectation  that they would be installed  during the quarter,
that have chosen to defer  installation into the next quarter after the holidays
and calendar year end. The Company  continues to add  approximately  8 to 12 new
dealerships  each month and,  with the  addition  of two new sales reps hired in
December,  we expect  growth of new  dealership  customers to continue  into the
future.
                                      -13-
<PAGE>

Consulting  services revenues result from additional  contracts for training and
software and forms programming. For the three and nine months ended December 31,
2005,  consulting  services revenues increased 557.5% and 485.1%,  respectively,
over the prior year. As the Company's  installed customer base increases,  these
type services will also increase. Personnel changes within dealerships, evolving
programs  within   dealerships  and  a  dynamic  industry  create  training  and
programming service opportunities for the Company.

Hardware sales  increased 2.5% for the three months ended December 31, 2005, but
year-to-date  increased  180.6%  over  prior  year.  While  margins  on sales of
hardware  and  peripherals  may be small,  our  customers  appreciate  receiving
pre-installed and trouble free equipment in connection with a new install of the
ADMS system.  The Company  believes that additional  investments in hardware and
peripheral  sales will create other  consulting  services  opportunities  in the
future.

Gross  profit  increased  17.2% over the prior year for the three  months  ended
December 31, 2005 but for the  nine-month  period,  gross  profit  significantly
increased,  by 61.2%.  As a percent  of sales,  gross  profit  was 46.5% for the
quarter ended  December 31, 2005 compared with 48.9% for the prior year quarter.
This decrease can be attributed to the  investment in additional  client service
installers  in the  fourth  quarter  of last year and the  associated  increased
compensation  costs in the current  periods.  For the nine months ended December
31, 2005, gross profit as a percent of sales was 47.1%,  compared with 43.4% for
the prior year nine-month  period. The overall increase year to date is a result
of the increases in monthly support  charges and the more efficient  utilization
of client service representatives.

Operating  expenses increased 29.5% and 36.5%,  respectively,  for the three and
nine  months  ended  December  31,  2005 over prior year.  These  increases  are
attributable to investments in additional sales reps and engineers in the fourth
quarter of last year. These additional people were necessary in order to promote
and sustain the  Company's  sales  growth.  Additional  increases are due to the
impact of additional operating costs associated with the new larger office space
and  increased  research  and  development  costs  associated  with the on-going
development of new products and enhancements.

Included in net income for the three and nine months ended  December 31, 2004 is
the   recognition  of  an  income  tax  benefit  of  $869,809  and   $2,609,427,
respectively,  recorded  to account  for the future tax  benefit  from  previous
years' net  operating  losses.  No  additional  tax benefits  from net operating
losses are  expected.  The  Company  does not  expect to record a tax  provision
during the  current  year as the  Company  does not  expect to have any  taxable
earnings  because of the  previously  recorded  tax  benefits.  Because  the net
operating  loss benefits have been nearly  completely  utilized,  it is expected
that the Company will record income tax expense in future periods.  This expense
will  not,  in the  short  term,  require  the  use  of  cash  flows  due to the
considerable existence of the deferred tax asset.

Liquidity and Capital Resources
<TABLE>
<CAPTION>
              -------------------------- ---------------- ----------------- ----------
                                              As of            As of        % Change
                                             12/31/05         03/31/05
              -------------------------- ---------------- ----------------- ----------
<S>                                      <C>              <C>                <C>
              Cash & Cash Equivalents    $   424,742      $   141,179        200.9%
              -------------------------- ---------------- ----------------- ----------
              Accounts Receivable - net  $   704,288      $   481,518         46.3%
              -------------------------- ---------------- ----------------- ----------
              Current Assets             $ 1,207,547      $   626,196         92.8%
              -------------------------- ---------------- ----------------- ----------
              Current Liabilities        $   733,690      $   594,850         23.3%
              -------------------------- ---------------- ----------------- ----------
              Working Capital            $   473,857      $    31,346       1411.7%
              -------------------------- ---------------- ----------------- ----------
              Operating Cash Flows       $   593,307      $   (13,424)      4519.7%
              -------------------------- ---------------- ----------------- ----------
              Stockholders' Equity       $ 7,489,827      $ 6,884,449          8.8%
              -------------------------- ---------------- ----------------- ----------
</TABLE>
                                      -14-
<PAGE>

The Company's liquidity position continues to improve. The increasing percentage
of  recurring  revenues  relative  to  overall  revenues,  as well as  operating
efficiencies,  has created a stable  profit margin and  consistent  cash growth.
Accounts  receivables  have  increased,  as expected,  due to increased  monthly
revenues while collection days have consistently  remained at approximately 22.5
days,  providing more than enough  liquidity to meet day to day operating  needs
and future internal growth.

The  Company  moved  into  its new  offices  in  August  2005.  In  order to add
additional office cubicles to meet expanding growth,  the Company entered into a
five-year capital lease arrangement with an equipment financing company totaling
$158,227.  In  addition,  the  Company  continues  to carry a note for  $50,000,
payable to a related  party,  on which the Company only makes  monthly  interest
payments at a 12% annual rate.

In order to meet operating costs during the three and nine months ended December
31, 2005,  the Company relied solely upon cash provided from  operations.  There
were no significant funds received from the sale of equity securities. We expect
our  revenues to  continue  to  increase in the future.  We expect net income to
increase  as well;  however,  due to costs  associated  with  planned  expansion
programs, our profitability (net of income tax benefits) is not expected to grow
at the same rate as revenue. With respect to our future capital needs, we expect
our recurring  revenues and revenues from new  installations to produce adequate
cash flow to meet our costs.

As yet, we do not have a significant  cash reserve.  If we experience a material
adverse event,  expand our operations in any  significant  way or otherwise need
additional  cash, we would need to raise  additional  capital.  We believe that,
absent the  occurrence  of a  material  adverse  event,  we could  raise  needed
additional capital through the offer and sale of convertible notes, warrants and
equity  securities  or through  commercial  financing  arrangements.  We do not,
however,  have any commitments from any party to provide such capital, and there
is a risk that we would not be able to raise capital, or may be compelled to pay
a very high  price for  additional  capital,  under  certain  circumstances.  If
adequate capital is not available,  our ability to expand our operations,  or to
continue normal operations, may be limited.

The  following  table  discloses  aggregate  information  about our  contractual
obligations  including  office,  capital and  operating  lease  payments and the
demand note  payable,  and the periods in which  payments are due as of December
31, 2005:
<TABLE>
<CAPTION>

                                         Less Than
                                Total         1 Year      1-3 years      4-5 Years     After 5
                         ------------- ------------- -------------- ------------- -------------
<S>                        <C>           <C>           <C>            <C>
Office Lease               $2,263,142    $ 471,717     $1,490,134     $ 301,291          --
------------------------ ------------- ------------- -------------- ------------- -------------
Operating Leases              128,901      103,891         25,010          --            --
------------------------ ------------- ------------- -------------- ------------- -------------
Capital Leases                153,640       31,575        103,851        18,214          --
------------------------ ------------- ------------- -------------- ------------- -------------
Note Payable                   50,000       50,000           --            --            --
------------------------ ============= ============= ============== ============= =============
Total                      $2,595,683    $ 657,183     $1,618,995     $ 319,505          --
</TABLE>

                                      -15-
<PAGE>

Critical Accounting Policies and Estimates

Management is basing this discussion and analysis of our financial condition and
results of operations  on our financial  statements.  The  preparation  of these
financial statements requires us to make estimates and judgments that affect the
reported  amounts of assets,  liabilities,  revenues and  expenses,  and related
disclosure  of  contingent  assets and  liabilities.  On an on-going  basis,  we
evaluate our critical accounting policies and estimates, including those related
to revenue recognition,  valuation of accounts receivable,  property,  plant and
equipment,  long-lived assets, intangible assets, and contingencies. We base our
estimates on  historical  experience  and on various other  assumptions  that we
believe to be reasonable under the circumstances,  the results of which form the
basis for making  judgments  about the carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ from
these estimates under different assumptions or conditions.

We  believe  the  following  critical   accounting   policies  affect  the  more
significant  judgments and estimates  used in the  preparation  of our financial
statements.  These judgments and estimates affect the reported amounts of assets
and  liabilities  and the reported  amounts of revenues and expenses  during the
reporting  periods.  Changes to these  judgments and estimates  could  adversely
affect the Company's future results of operations and cash flows.


     *   Revenue  Recognition  - During  the  course of  business,  the  Company
         recognizes revenue from the following  activities:  Software Licensing;
         G/L Setup and Data  Conversion;  Forms  Programming;  Installation  and
         Training; Monthly Technical Support & Maintenance;  Hardware Sales; and
         Consulting Services.

         The basis for software  license  revenue  recognition is  substantially
         governed by the provision of the American Institute of Certified Public
         Accountants'   ("AICPA")   Statement  of  Position  ("SOP")  No.  97-2,
         "Software  Revenue  recognition."  Consistent  with SOP No.  97-2,  the
         Company  recognizes  license  revenue  when  persuasive  evidence of an
         arrangement  for the  license of  software  exists;  the  products  are
         delivered or services are performed;  customer  payment is deemed fixed
         or determinable and free of contingencies or significant uncertainties;
         and  collection  is  probable.  License  fees are  generally  invoiced,
         collected  and   recognized   together  with  the  final   portions  of
         installation,  training and setup fees.  License fees, as distinguished
         from monthly technical support and maintenance fees,  represent a small
         portion of the Company's revenue. This is because use of, or access to,
         the Company's dealer management software is of limited value absent the
         periodic  updates,  customer support and other services that a customer
         receives  in  connection  with  its  monthly   technical   support  and
         maintenance fee.

         G/L setup,  data conversion,  forms  programming,  and installation and
         training  revenues  included  in   multiple-element   arrangements  are
         deferred and recognized in accordance with the AICPA's  Emerging Issues
         Task Force (EITF) Issue No. 00-21,  "Revenue Arrangements with Multiple
         Deliverables."  Revenues  earned  on  software  arrangements  involving
         multiple-elements  are  allocated to each element based on the relative
         fair value of the  element.  The  Vendor  Specific  Objective  Evidence

                                      -16-
<PAGE>

         ("VSOE")  of  fair  value  of the  undelivered  elements  is  generally
         determined based on the price charged for the undelivered  element when
         sold separately.

         Hardware  revenues  include the sale of standard  computer  systems and
         peripherals,  and revenue is recognized when title passes upon shipment
         of the hardware and/or peripherals to the customer. Installation of the
         hardware and/or peripherals is not a required component of the purchase
         contract.  Installation  and  training  service  contracts  require the
         payment  of  non-refundable  security  deposits.   These  deposits  are
         deferred  and  recognized  when  services  are  performed.   Generally,
         installation and training services are performed and completed within a
         four-week to six-week period.

         Monthly  technical  support  &  maintenance  includes  monthly  service
         charges for ongoing  technical  support,  automatic  software  and data
         upgrades,  data  transfers,  storage and backup,  bar coding,  and 24/7
         server maintenance.  These services are billed monthly as stipulated in
         contracts with all customers  (whether under the ASP or run-only model)
         and earned as the services are  performed.  All contracts for technical
         support & maintenance are on a month-to-month basis.

         Consulting   services  primarily  include  fees  charged  for  advanced
         function or new hire training  and/or forms  programming,  all provided
         subsequent to the initial purchase, installation and training contract.
         These  services  are  outside  the  scope  of  the  original  purchase,
         installation and training contract.  The Company recognizes  consulting
         service fees as the services are provided.


     o   Equipment - We utilize  significant  amounts of  equipment in providing
         service to our customers.  We utilize  straight-line  depreciation  for
         equipment  over  our  estimate  of  their  useful  lives.   Changes  in
         technology  or changes in the intended  use of equipment  may cause the
         estimated  period of use or the value of these  assets  to  change.  We
         perform an annual analysis to confirm the  appropriateness of estimated
         economic  useful lives for each  category of  equipment.  Estimates and
         assumptions used in setting depreciable lives require both judgment and
         estimates.

     o   Income  Taxes - The  Company  applies the  provisions  of SFAS No. 109,
         "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 basis and tax
         basis of the  Company's  assets and  liabilities  at enacted  tax rates
         expected to be in effect when such amounts are realized or settled.

     [Paragraph to be added]

     o   Goodwill and Intellectual  Property - We annually evaluate goodwill and
         intellectual   property  for  potential   impairment   indicators.   If
         impairment  indicators  exist,  we measure the impairment in accordance
         with SFAS No. 142. Our judgments  regarding the existence of impairment
         indicators  are  based  on  legal  factors,   market  conditions,   and
         operational  conditions.  Future events could cause us to conclude that
         impairment  indicators  exist and that the  goodwill  and  intellectual
         property  associated  with our acquired  business is impaired.  Neither
         goodwill nor intellectual property is amortized, but instead is subject
         to impairment tests at least annually.

                                      -17-
<PAGE>

     o   Capitalization  of Software  Costs - Costs  incurred to  establish  the
         technological  feasibility of software  products to be sold,  leased or
         otherwise  marketed  are  expensed as research  and  development.  Once
         technological  feasibility  is  established,  costs are  capitalized in
         accordance  with SFAS No. 86 until the product is available for general
         release to customers.  Capitalized  costs,  which consist  primarily of
         payroll and benefits of both  employees and outside  contractors,  have
         been amortized on a  product-by-product  basis using the  straight-line
         method over the established  economic life of the products  (determined
         to be five  years).  In  addition,  with the  issuance of SFAS No. 142,
         capitalized  software costs are tested for impairment  each period and,
         if impairment is determined, the amount of impairment is written off in
         that period.

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.  Stockholders  and
prospective  stockholders  should understand that several factors govern whether
the results  described by any such  forward-looking  statement will be or can be
achieved.  Any one of  those  factors  could  cause  actual  results  to  differ
materially from those projected in this report.


The  forward-looking  statements  contained  in this  report  include  plans and
objectives of management for future  operations,  plans relating to the products
and predictions regarding the economic performance and liquidity 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 may not continue to experience net income in the future
--------------------------------------------------------------------------------

Any projection of continued  profitability  assumes that we will continue to add
new customers at a constant or increased  rate and that our  operating  expenses
will increase  slower than our  revenues.  We may not be able to continue to add
new  customers  at a constant or  increased  rate,  and we may even begin losing
customers.  Even if we add more  customers,  our labor  costs,  server and other

                                      -18-
<PAGE>

capital  equipment costs and other expenses may begin to increase  dramatically,
or  we  may  experience  unexpected  costs  related  to  litigation,  insurance,
acquisitions,  product development or other items that may cause our expenses to
increase  at a  faster  rate  than  expected.  We may not be  able  to  maintain
profitability or to increase profitability in the future.

We may require  additional  capital to  continue  development  of our  products,
pursue our expansion plan and fund our operations
--------------------------------------------------------------------------------

We do not have a  significant  cash reserve,  and our cash flow from  operations
presently slightly exceeds our cash expenditures.  In the event we experience an
unexpected  need for cash,  expand  our  operations  in any  significant  way or
otherwise need  additional  cash, we expect to continue to rely primarily on the
offer and sale of convertible  notes,  warrants and equity  securities to obtain
such  cash.  If  financing  is  needed,  we cannot  assure  you that  additional
financing  may 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 expand our operations, or to continue normal operations, may be limited.


We may be unable to continue 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  (ADP and Reynolds)  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  maintain
profitability.


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  systems
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.

                                      -19-
<PAGE>

We are subject to various regulatory  regimes,  and may be adversely affected by
allegations that we have not complied with governing rules and laws
--------------------------------------------------------------------------------

We are  subject to a variety of laws and  regulatory  regimes as a result of our
status as a public  company,  in addition to those  applicable to all businesses
generally.  Laws and rules governing public companies change  frequently and are
often complex.  In connection with such laws, we are subject to periodic audits,
inquiries and investigations.  Any such audits, inquiries and investigations may
divert  considerable  financial and human  resources  and  adversely  affect our
execution of our business plan. In addition,  through such audits, inquiries and
investigations,  we or a regulator have from time to time determined, and may in
the future  determine,  that we are out of compliance with one or more governing
rules or laws. In fact, we recently  filed a Form 8-K  indicating  that our 2004
quarterly  financial  statements  may not be relied upon and have begun restated
such data in this report. Remedying such non-compliance has, during the last few
months  diverted,  and may  continue to divert  additional  financial  and human
resources.  In  addition,  future,  we may be  subject  to a  formal  charge  or
determination  that  we  have  materially  violated  a  governing  law,  rule or
regulation.  Any  charge,  and  particularly  any  determination,  that  we  had
materially  violated a governing law would likely have a material adverse effect
on the market price of our stock,  our ability to execute our business  plan and
our ability to retain and attract qualified management.


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
single  co-location  facility  provided  by MCI.  Notwithstanding  precautionary
measures  that we and our  co-location  host have  taken,  the  occurrence  of a
natural  disaster or other  unanticipated  system or power  failure  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, bankruptcy, 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 other  factors that could cause  interruptions  in
service,  reduced  capacity for our  customers  and claims  against the Company.
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  customers  may  experience  interruptions  in  service as a
         result of the  accidental  or  malicious  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.

                                      -20-
<PAGE>

     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.

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.   Our  future
performance  will depend,  in part, upon our ability to increase  sales,  manage
growth  effectively,  and 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 or the failure to attract and retain
additional key employees  could have a material  adverse effect on our business,
financial condition and results of operations.

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 ADMS, 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
there under may not provide any competitive advantage.  In addition,  others may
independently  develop  substantially  equivalent  proprietary  information  and
techniques or otherwise gain access to our trade secrets and know-how.  We could
also  incur  substantial  costs  in  asserting  our  intellectual   property  or
proprietary rights against others, including any such rights obtained from third
parties. 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.

Third-party  claims that we infringe  upon their  intellectual  property  rights
could be costly to defend or settle
--------------------------------------------------------------------------------

Litigation regarding  intellectual property rights is common in the software and
software-based  service industry.  We expect that software products and services
may be increasingly subject to third-party  infringement claims as the number of
competitors in our industry  segment grows and the  functionality of products in
different  industry  segments  overlaps.  We may,  from time to time,  encounter
disputes over rights and obligations  concerning  intellectual  property.  Third
parties  may bring  claims of  infringement  against us,  which may be with,  or
without, merit.

                                      -21-
<PAGE>

We could be required, as a result of an intellectual property dispute, to do one
or more of the following:

     o   Cease  selling,  incorporating  or using products or services that rely
         upon the disputed intellectual property;

     o   Obtain from the holder of the intellectual  property right a license to
         sell or use the disputed intellectual  property,  which license may not
         be available on reasonable terms;

     o   Redesign  products or services that incorporate  disputed  intellectual
         property; and/or

     o   Pay  significant  monetary  damages to the  holder of the  intellectual
         property right.

The  occurrence  of any of these events could  result in  substantial  costs and
diversion of resources or could severely limit the services we can offer,  which
could seriously harm our business, operating results and financial condition.

In addition,  we have agreed,  and may agree in the future, to indemnify certain
of  our  customers   against  claims  that  our  software   infringes  upon  the
intellectual  property  rights of others.  We could incur  substantial  costs in
defending ourselves and our customers against  infringement claims. In the event
of a claim of  infringement,  we and our customers may be required to obtain one
or more  licenses from third  parties.  We, or our  customers,  may be unable to
obtain  necessary  licenses from third parties at a reasonable  cost, or at all.
Defense of any  lawsuit or failure to obtain any such  required  licenses  could
harm our business, operating results and financial condition.

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

Our primary  product,  the ADMS, 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.

Research and development and discoveries by others may 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.

                                      -22-
<PAGE>


We may be  subject  to claims  based  upon  allegations  that our  products  are
defective
--------------------------------------------------------------------------------

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,  a court may rule such  provisions  to be invalid or
unenforceable,   or  changes  in  the  law  could  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.

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
increase or  decrease  significantly  as a result of a single  trade by a single
stockholder. In addition, the limited volume of trading limits significantly the
number of shares that one can purchase or sell in a short period of time without
adversely affecting the market price. 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 management owns a significant number of our outstanding  shares,  which will
allow them to influence  the outcome of matters  submitted to  stockholders  for
approval
--------------------------------------------------------------------------------

Our officers and directors own  approximately  30% of our issued and outstanding
common stock. Eight additional stockholders have the power to vote approximately
14% 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 stockholder 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  stockholder  rights  plan,  and  declared  a
dividend  of an  associated  right,  which are  expected  to have the  effect of
deterring any takeover of the Company that is not preceded by board  approval of
the proposed  transaction.  The  existence of such  stockholder  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
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   stockholders  (excluding  the  Interested  Stockholder).   These
provisions prohibiting  Interested Stockholder  transactions could also preserve
management's control of the Company.

                                      -23-
<PAGE>

Obtaining  additional  capital  through the sale of common  stock will result in
dilution of stockholder interests
--------------------------------------------------------------------------------

We may 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 or exercisable for 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.

The market price for our common stock is volatile and may change dramatically at
 any time
--------------------------------------------------------------------------------

The market price of our common stock, like that of the securities of other early
stage companies, may be highly volatile. Our stock price may change dramatically
as the  result of  announcements  of our  quarterly  results,  new  products  or
innovations  by  us  or  our  competitors,   significant  customers'  contracts,
significant  litigation  or other  factors or events  that would be  expected to
affect our  business or financial  condition,  results of  operations  and other
factors specific to our business and future prospects.  In addition,  the market
price for our common  stock may be  affected  by various  factors  not  directly
related to our business, including the following:

     o   Intentional  manipulation  of our  stock  price by  existing  or future
         stockholders;

     o   Short selling of our common stock or related derivative securities;

     o   A single acquisition or disposition, or several related acquisitions or
         dispositions, of a large number of our shares;

     o   The interest of the market in our business  sector,  without  regard to
         our financial condition or results of operations;

     o   The adoption of governmental  regulations  and similar  developments in
         the United  States or abroad  that may affect our  ability to offer our
         products and services or affect our cost structure;

     o   Disputes relating to patents or other significant intellectual property
         rights held by others that we, our suppliers or our customers use;

     o   Developments in the automobile or automobile dealership industry; and

     o   Economic and other external market  factors,  such as a general decline
         in market prices due to poor economic indicators or investor distrust.

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.  There are presently 575,000 shares
of Series B preferred stock issued and  outstanding,  convertible into 2,875,000
shares of common  stock.  Our Board of  Directors  has the  authority  to create
various  series of  preferred  stock  convertible  into  common  stock with such
voting,  dividend,  liquidation and other rights superior to those of our common

                                      -24-
<PAGE>

stock and to issue such stock  without  stockholder  approval.  This issuance of
such preferred  stock would dilute the ownership and voting power of the holders
of our common  stock and may have a  negative  effect on the price of our common
stock.

We have not declared any dividends with respect to our common stock
--------------------------------------------------------------------------------

We have never paid a cash  dividend  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.

Item 3.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Based on the evaluation of our "disclosure  controls and procedures" (as defined
in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) required by
paragraph  (b) of Rules 13a-15 or 15d-15,  our chief  executive  officer and our
chief  financial  officer have  concluded  that,  as of December  31, 2005,  our
disclosure  controls and procedures were effective in ensuring that  information
required  to be  disclosed  by the  Company in reports  that it files  under the
Exchange Act is recorded,  processed,  summarized  and reported  within the time
periods required by governing rules and forms.

Changes in Internal Controls Over Financial Reporting

We are not presently  required to conduct quarterly  evaluations of our internal
control over  financial  reporting  pursuant to paragraph (d) of Rules 13a-15 or
15d-15  promulgated under the Exchange Act. We are,  however,  in the process of
designing,  evaluating and implementing internal controls in anticipation of the
date when we will  become  subject  to such  evaluation  requirements.  With the
participation  of  its  principal  executive  officer  and  principal  financial
officer,  management of the Company has, as required by Rule 13a-15(d) under the
Exchange Act, determined that there were the following changes during the fiscal
quarter ended December 31, 2005 in its internal control over financial reporting
that would materially  affect, or would reasonably likely to materially  affect,
its internal control over financial reporting: As part of its enhancement of its
internal controls and procedures related to financial  statements,  and in light
of the change in Chief  Financial  Officer that occurred  after Fiscal 2004, the
financial staff of the Company is reviewing and attempting to reconcile  certain
revenue,  cash and other  entries in the  general  ledger of the Company for the
fiscal year ended March 31, 2005 with  external  sources  (such as bank  account
statements) and the Company's financial statements.

                                      -25-
<PAGE>

                           PART II. OTHER INFORMATION


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

         The Company  held an Annual  Meeting of  Shareholders  on December  23,
2005, at which the Company's shareholders considered and voted as follows on the
items described below:

         1. Our shareholders  considered  whether to elect the following persons
as  directors  of the  Company,  each to serve until the next annual  meeting of
shareholders  of the Company and until his respective  successor shall have been
duly elected and shall qualify:

           Name of Nominee    Votes For     Abstentions      Broker Non-Votes


     Alan Rudd               17,531,466         6,015               0
     Richard Holland         17,531,466         6,015               0
     Marc Fuller             17,531,466         6,015               0
     Paul Henriod            17,531,466         6,015               0
     Kent Misener            17,531,466         6,015               0


         2. Our shareholders  considered and voted upon a proposal to ratify the
appointment of Mantyla McReynolds,  a Professional  Corporation,  as independent
auditors of the Company for the fiscal year ending  March 31,  2006.  There were
17,467,966 votes cast in favor,  2,000 votes cast against,  67,515  abstentions,
and no broker non-votes.

         3. Our shareholders  considered and voted upon a resolution,  including
an  amendment  to the  Certificate  of  Incorporation  of the Company  contained
therein, authorizing the Board of Directors of the Company, in its discretion at
any time prior to  November  1, 2006,  to take all steps  necessary  to effect a
consolidation  of the Common Stock of the Company on the basis of a ratio within
the  range of one  post-consolidation  share of  Common  Stock  for  every  four
pre-consolidation  shares of  Common  Stock to one  post-consolidation  share of
Common Stock for every twelve pre-consolidation shares of Common Stock, with the
ratio to be selected and implemented by the Corporation's  Board of Directors in
its sole  discretion,  if at all.  There  were  17,242,816  votes cast in favor,
228,665 votes cast against, 76,000 abstentions, and no broker non-votes.

         4. Our  shareholders  considered  and voted  upon an  amendment  to the
Certificate of Incorporation of the Company  increasing the number of authorized
shares of Common  Stock of the  Company  from 50  million  shares to 75  million
shares.  There were 16,966,700 votes cast in favor,  520,781 votes cast against,
50,000 abstentions, and no broker non-votes.

All items considered at the meeting were approved by the stockholders.

Item 6.  Exhibits

See the Exhibit Index following the signature page hereof.

                                      -26-
<PAGE>

                                   SIGNATURES


In accordance with the requirements of the Exchange Act, the registrant has duly
caused  this  report to be signed on its  behalf  on  February  21,  2006 by the
undersigned, thereunto duly authorized.


                                   Arkona, Inc.


February 21, 2006                  /s/ Alan Rudd
                                   ---------------------------------------
                                   Alan Rudd, Chief Executive Officer



February 21, 2006                  /s/ Leland H. Boardman
                                   ---------------------------------------
                                   Leland H. Boardman, Chief Financial Officer


                                      -27-
<PAGE>


<TABLE>
<CAPTION>

                                  EXHIBIT INDEX


----------------------- ---------------------------------------------------------- ---------------------------
    Exhibit Number                                 Title of Document                             Location
----------------------- ---------------------------------------------------------- ---------------------------
<S>                    <C>                                                                <C>
         3.1            Restated Certificate of Incorporation, as amended to date         Filed herewith
----------------------- ---------------------------------------------------------- ---------------------------
         31.1           Section 302 Certification of Chief Executive Officer              Filed herewith
----------------------- ---------------------------------------------------------- ---------------------------
         31.2           Section 302 Certification of Chief Financial Officer              Filed herewith
----------------------- ---------------------------------------------------------- ---------------------------
         32.1           Section 906 Certification of Chief Executive Officer              Filed herewith
----------------------- ---------------------------------------------------------- ---------------------------
         32.2           Section 906 Certification of Chief Financial Officer              Filed herewith
----------------------- ---------------------------------------------------------- ---------------------------
</TABLE>







                                      -28-