Securities and Exchange Commission
                             Washington, D.C. 20549

                                   Form 10-QSB



(Mark One)

(X)      Quarterly  report  pursuant  to Section  13 or 15(d) of the  Securities
         Exchange Act of 1934 for the quarterly period ended December 31, 1998

                                       OR

( )      Transition  Report  pursuant  to Section 13 or 15(d) of the  Securities
         Exchange Act of 1934 for the transition  period from  _____________  to
         _____________



Commission File Number 0-24372
------------------------------



                            THE THORSDEN GROUP, LTD.

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



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


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

              (Address of principal executive offices and Zip Code)

                                 (801) 424-0044

              (Registrant's telephone number, including Area Code)



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

As of February 10, 1999, there were issued and outstanding  21,141,670 shares of
the Company's Common Stock, par value $.001 per share.



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


<PAGE>



                                Table of Contents



                                                                        Page No.

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


1.   Financial Statements

         Condensed   Consolidated   Balance   Sheet  as  of  December  31,  1998
         (unaudited) and

                  March 31, 1998 (audited)....................................3



         Unaudited Condensed Consolidated Statements of Income for the three and
         nine months ended

                  December 31, 1998 and 1997..................................4



         Unaudited Condensed Consolidated  Statements of Cash Flows for the nine
         months ended

                   December 31, 1998 and 1997.................................5



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


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


Part II. Other Information...................................................15

                                 Page 2 of 18
<PAGE>


                                     PART I

ITEM 1--FINANCIAL STATEMENTS



                            THE THORSDEN GROUP, LTD.

                          (A Development Stage Company)

                Consolidated Condensed Balance Sheets (Unaudited)
<TABLE>
<CAPTION>
                                                                                  December 31               March 31
                                                                                      1998                    1998
                                                                             -----------------------    ------------------

ASSETS
<S>                                                                                       <C>                   <C>    
    Current Assets
        Cash and Cash Equivalents                                                         $ 620,170             $ 568,612
        Marketable Securities                                                                 4,680               681,600
        Accounts Receivable                                                                  12,000                 8,313
        Prepaid Expenses                                                                      6,800                     -
                                                                             -----------------------    ------------------
    Total Current Assets                                                                    643,650             1,258,525
                                                                             -----------------------    ------------------
    Property and  Equipment                                                                 269,494               199,099
        Less: Accumulated Depreciation                                                       38,682                 6,418
                                                                             -----------------------    ------------------
    Property and  Equipment, Net                                                            230,812               192,681
                                                                             -----------------------    ------------------
    Other Assets
        Deposits                                                                            147,322               107,246
        Intangible Assets                                                                    54,918                21,734
                                                                             -----------------------    ------------------
    Total Other Assets                                                                      202,240               128,980
                                                                             -----------------------    ------------------
TOTAL ASSETS                                                                            $ 1,076,702           $ 1,580,186
                                                                             =======================    ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
    Current Liabilities
        Accounts Payable                                                                  $ 127,542              $ 93,288
        Deferred Income on Maintenance Contracts                                                  -                10,417
        Equipment Lease Obligations                                                          46,672                30,653
        Accrued Liabilities                                                                  35,981                70,928
                                                                             -----------------------    ------------------
    Total Current Liabilities                                                               210,195               205,286
                                                                             -----------------------    ------------------
       Equipment Lease Obligations                                                           24,324                26,319
       Other Current Liabilities                                                                  -                     -
                                                                             -----------------------    ------------------
Total Liabilities                                                                           234,519               231,605
                                                                             -----------------------    ------------------

Stockholders' Equity
    Common Stock                                                                             20,742                20,133
    Additional paid in Capital                                                            3,040,065             2,192,174
    Accumulated (Deficit)                                                                (2,202,294)             (704,716)
    Accumulated unrealized loss on investments                                              (16,330)             (159,010)
                                                                             -----------------------    ------------------
Total Stockholders' Equity                                                                  842,183             1,348,581
                                                                             -----------------------    ------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                              $ 1,076,702           $ 1,580,186
                                                                             -----------------------    ------------------
</TABLE>



                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                 Page 3 of 18
<PAGE>

                            THE THORSDEN GROUP, LTD.

                          (A Development Stage Company

             Consolidated Condensed Statement of Income (Unaudited)
<TABLE>
<CAPTION>

                                                   Nine Months Ended             Three Months Ended         From Inception
                                                      December 31                   December 31              June 11, 1992
                                                ------------------------     ------------------------       to Dec 31, 1998 
                                                   1998           1997           1998          1997         ---------------
                                                ----------    ----------     ----------    ----------       
                                                                                                       
<S>                                               <C>          <C>             <C>           <C>              <C> 
Net Revenues                                      $ 23,167     $ 135,958       $ 12,000      $ 10,959         $ 167,438
                                                ----------    ----------     ----------    ----------        ----------
Costs and Expenses:                                                                                    
                                                                                                       
  Cost of Sales                                     15,846           852         14,848           852            17,957
  Research and Development                         762,509        73,164        317,475        55,062         1,047,869
  Marketing, Admin & Sales                         770,744       244,658        307,629       193,904         1,349,795
                                                ----------    ----------     ----------    ----------        ----------
Operating Costs and Expenses                     1,549,099       318,674        639,952       249,818         2,415,621
                                                ----------    ----------     ----------    ----------        ----------
Operating (Loss)                                (1,525,932)     (182,716)      (627,952)     (238,859)       (2,248,183)
                                                                                                       
  Interest Income                                   32,830        11,513         14,762        11,344            53,675
  Interest Expense                                  (4,468)                      (1,597)                         (7,668)
  Other Expense                                       (178)                        (178)                           (288)
  Other Income                                         170                           70                             170
                                                ----------    ----------     ----------    ----------        ----------
Net (Loss)                                     $(1,497,578)    $(171,203)     $(614,895)    $(227,515)     $ (2,202,294)
                                                ----------    ----------     ----------    ----------        ----------
Net (Loss) per share                               $ (0.07)      $ (0.01)       $ (0.03)      $ (0.01)          $ (0.11)
                                                ----------    ----------     ----------    ----------        ----------
Weighted average number                                                                                
Of Shares Outstanding                           20,742,336    20,000,000     20,742,336    20,000,000        20,742,336
                                                ----------    ----------     ----------    ----------        ----------
</TABLE>                                                                      
                                                                            

                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                  Page 4 of 18
<PAGE>



                            THE THORSDEN GROUP, LTD.

                         (A Development Stage Company)

           Consolidated Condensed Statement of Cash Flows (Unaudited)
<TABLE>
<CAPTION>

                                                                                                                 Cumulative From
                                                                                     9 Months Ended                 Inception
                                                                                -----------------------------
                                                                                      December 31                 June 11, 1992
                                                                                   1998               1997       to Dec 31, 1998
                                                                                -----------         ---------   ------------------
<S>                                                                           <C>                 <C>                <C>          
Cash Flows (Used By) Operating Activities:
    Net (Loss)                                                                $ (1,497,578)       $ (171,203)        $ (2,202,294)
    Adjustments to reconcile net income to
    net cash used for operating activities:
        Depreciation                                                                32,264               705               38,684
    Changes in Assets and Liabilities:
        Increase Accounts Receivable                                                (3,687)          (45,125)             (12,000)
        Prepaid Expenses                                                            (6,800)           (3,650)              (6,800)
        Accounts Payable                                                            34,254            59,512              127,543
        Deferred Income                                                            (10,417)           16,667                    0
        Accrued Liabilities                                                        (34,947)           (6,661)              35,982
                                                                                -----------         ---------          -----------
Net Cash (Used By) Operating Activities                                         (1,486,911)         (149,755)          (2,018,885)
                                                                                -----------         ---------          -----------
Cash Flows Provided by/(Used for) Investing Activities:
    Additions to Equipment                                                         (70,395)         (113,267)            (269,497)
    Disposition of Marketable Securities                                           819,600                 -              819,600
    Lease Deposits                                                                 (40,076)                -             (145,388)
    Patent/Trademark Costs                                                         (33,184)                -              (56,853)
                                                                                -----------         ---------          -----------
Net Cash Provided by/(Used for) Investing Activities                               675,945          (113,267)             347,862
                                                                                -----------         ---------          -----------
Cash Flows Provided By Financing Activities:
    Proceeds from Private Placement of Shares                                      848,500         1,105,451            2,219,199
    Increase in Lease Obligations                                                   14,024            55,418               70,994
    Cash Contribution                                                                    -                 -                1,000
                                                                                -----------         ---------          -----------
Net Cash Provided By Financing Activities                                          862,524         1,160,869            2,291,193
                                                                                -----------         ---------          -----------
                                                                                -----------         ---------          -----------
Net Increase/(Decrease) in Cash and Cash Equivalents                                51,558           897,847              620,170
                                                                                -----------         ---------          -----------
Beginning Cash Balance                                                             568,612            11,614                    -
                                                                                -----------         ---------          -----------
Ending Cash Balance                                                              $ 620,170         $ 909,461            $ 620,170
                                                                                -----------         ---------          -----------
</TABLE>


                 SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                  Page 5 of 18
<PAGE>


                            THE THORSDEN GROUP, LTD.

                   Notes to Consolidated Financial Statements


Preliminary Note

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

Note 1   Concentration

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

Note 2   Intangible Assets

The Company has applied for patent and trademark  protection for its proprietary
software and brand names and has expended  $45,461 for patent  rights and $9,457
for trademark rights. These expenses are primarily for professional  services in
connections  with the  applications.  The application for  registration of these
patents and  trademarks  are still in the process of being  granted,  but recent
communications  with the  Patent  and  TradeMark  Office  suggests  a  favorable
outcome,  although no assurance can be given as to any such outcome. The Company
will begin to amortize these assets upon completion of patent registration or at
the point when the products begin to generate revenue.

Note 3   Subsidiary Company

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

Note 4   Cash and Cash Equivalents

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


                                  Page 6 of 18
<PAGE>


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


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


Overview


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

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


Arkona

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

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

Distributed Computing

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

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


                                  Page 7 of 18
<PAGE>


Intelligent Synchronization

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

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

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

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

How the Customer Benefits

The Company's products and services help customers to:

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

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

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

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


                                  Page 8 of 18
<PAGE>



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

The Arkona Solutions

UNIVERSAL UPDATE(TM)

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

ARKONA OnSite(TM) FIELD SERVice

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

ARKONA OnSite(TM) PUBLISher

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


Qui Vive

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

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

o how their words will be released,

                                  Page 9 of 18
<PAGE>

o who can see them, 

o how they can be redistributed, and 

o if they can be printed, copied, or saved.

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

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

Key Features

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

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

       Forwarding Restrictions.  Authors can prohibit recipients from forwarding
       their e-mail in whole or in part.

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

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

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

        PHASE 1 FUNCTIONALITY

        The key features listed above will include the following functionality:

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

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

             E-mail  recipient  is  notified.  The  server  notifies  the e-mail
             recipient that a secured  e-mail  message has been  received.  Each
             notification  includes  a  hypertext  link that  quickly  takes the
             recipient to the secured message.

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

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


                                 Page 10 of 18
<PAGE>


        FUTURE FUNCTIONALITY

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

        How the Customer Benefits

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

        o Legal communications
        
        o Governmental agencies

        o Contract negotiations

        o Medical information

        o Sensitive human resource information
                 
        o Communication of non-public corporate information
                 
        o Any information which should not be public
                 

        Status of Development

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

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

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

        The Company has engaged engineers, marketers and an administration staff
        to  support  the   development  of  the  product  for  delivery  to  the
        marketplace.  However,  there can be no assurance  that the Company will
        successfully complete the project, and that the product will include all
        or substantially all of the elements described above, or that any of the
        other risks  described  herein will not adversely  affect the outcome of
        the project.


                                 Page 11 of 18
<PAGE>

        Results of Operations


        Three Months Ended December 31,
        1998 and 1997

        Revenues for the quarter  ended  December  31, 1998 were $12,000  (1997:
        $10,959).  Cost  of  revenues  totaled  $639,952  in the  quarter  ended
        December 31, 1998 (1997: $249,818).  The 1998 expenses included $317,475
        in research and  development  expense  (1997:  $55,062).  The  increased
        expenses in 1998 reflect the addition of personnel  primarily to work on
        the enhanced  e-mail  product.  The Company  expects  that  research and
        development  expenditures  will  continue  to  increase  during the next
        twelve months as development of existing and new products continues.  We
        expect  that  adding  new  personnel  in this area will  increase  these
        expenses by approximately 10% in the next quarter.

        The  Company had $14,762 in  interest  income  during the quarter  ended
        December 31, 1998 (1997:  $11,344).  The increase in interest  income is
        due to increased cash balances maintained in banks following the sale of
        the Company's common stock in a private placement.  The net loss for the
        quarter was $614,895 (or $.03 per share) compared to a loss $227,515 (or
        $.01 per share) in 1997.

        Revenues for the quarter were  provided by a stage payment on a contract
        with Cadmus Journal Services, Inc., and cost of sales reflects the costs
        associated with delivery of these services.  Arkona is currently bidding
        for a number of projects utilizing its core  technologies,  but there is
        no assurance it will be the  succeeding  bidder on any of such projects.
        Expenses  for  the  quarter  reflect  the  cost of  people,  engineering
        research,  and  marketing  and  selling  efforts,  which  will  form the
        foundation of future increased revenue and profitability growth.

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

        The  Company  has  entered  into a license  agreement  with OEC  Medical
        Systems,  Inc.  (OEC) to whom the Company has agreed to pay a royalty on
        revenues  generated  from the  licensing  or use of a  software  product
        developed by Arkona in 1997. The royalty is equal to five percent of net
        revenues until OEC has recovered $125,000,  the amount paid to Arkona to
        develop  the  product.  Thereafter,  the  royalty is two  percent of net
        revenues  thereafter until OEC has been paid $250,000 and one percent of
        revenues thereafter.  No royalties have been paid by the Company to date
        under this arrangement.


        Nine Months Ended December 31,
        1998 and 1997

        Revenues  during the nine months  ended  December  31, 1998 were $23,167
        (1997:  $135,958).  Cost of revenues totaled  $1,549,099 during the nine
        months ended December 31, 1998 (1997: $318,674). The decline in revenues
        is due primarily to time taken to develop the Universal  Update product,
        which is a generic variant of the product built to specification for OEC
        in 1997. The 1998 expenses included $762,509 in research and development
        expense  (1997:  $73,164).  The  increased  expenses in 1998 reflect the
        addition of personnel  as well as costs  (including  professional  fees)
        associated  with the merger of the  Company  with  Arkona.  The  Company
        expects that  research and  development  expenditures  will  continue to
        increase  during the next 12 months as  development  of existing and new
        products continues.

        The Company had $32,830 in interest  income during the nine months ended
        December  31,  1998  (1997:  $11,513).  The net loss for the  period was
        $1,497,578  (or $.07 per share)  compared to a loss of $171,203 (or $.11
        per share) in 1997.


                                 Page 12 of 18
<PAGE>



        Liquidity and Capital Resources

        At December  31,  1998,  the Company  had cash and cash  equivalents  of
        $620,170,  as  compared to cash and cash  equivalents  of $568,612 as of
        March 31, 1998.  Cash was provided during the period through the sale of
        stock in a private placement.

        Capital  spending of $70,395 in the 9 months was  primarily for computer
        and  related  equipment  used  in the  Company's  operations,  including
        product development and research.

        The Company held  marketable  securities  available for sale at December
        31, 1998. Although the Company does not intend to engage in the business
        of investing  in or buying and selling  securities  of other  companies,
        these  securities were received as partial  consideration  in connection
        with the sale of the  Company's  common  stock in  October  1997.  These
        marketable securities were 3,000 shares of common stock of Eurogas Corp.
        ("EUGS").

        At December 31, 1998,  the sale price of EUGS common stock,  as reported
        by the over-the-counter ("OTC") electronic bulletin board, was $1.56 per
        share.  Shares  traded in the NASDAQ OTC  markets are  characterized  by
        volatile changes in price and thin trading  volumes.  The relatively low
        volume of securities traded and the dramatic effect that sales of even a
        few shares can have on the market price of such  securities  may have an
        adverse  effect on the  Company's  ability to  liquidate  its  remaining
        holdings or to realize the values  similar to those shown above.  During
        the six months ended  September 30, 1998, the Company sold its remaining
        shares of InterJetNet Corp. for $5.00 per share.

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


        Year 2000 Issues

        The Year 2000 Issue is the result of  computer  programs  being  written
        using two digits  rather than four to define the  applicable  year. As a
        result  there is a risk that  certain  Company's  computer  programs  or
        equipment that have  date-sensitive  software or embedded technology may
        recognize a date using "00" as the year 1900, rather than the year 2000.
        With the  approaching  change in the  century,  this  could  result in a
        system  failure or  miscalculations  causing  disruptions of operations,
        including,   among  other  things,  a  temporary  inability  to  process
        transactions, send invoices, collect payment or engage in similar normal
        business activities or complete ongoing development projects.

        The  Company   relies  on  computer   hardware,   software  and  related
        technology,  together with data, in the operation of its business.  Such
        technology and data are used in the Company's internal operations,  such
        as billing and accounting.  The Company is currently  investigating  the
        technology  and data  used in its  operations  and has yet to  determine
        whether  Year  2000  Issues  will  affect  its  business.  Based  on its
        assessment  of  activities  to date,  the Company is not aware of a Year
        2000 problem with any of its internal  systems.  The Company  intends to
        evaluate its  technology  and data to determine  what, if any,  remedial
        action may be required to address  these issues.  This includes  seeking
        and/or requiring remediation of any Year 2000 Issues that are related to
        the Company's customers, suppliers and distributors.  There is, however,
        no assurance that such third parties will  successfully  remediate their
        own Year 2000 Issues over which the Company has no control.


                                 Page 13 of 18
<PAGE>


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

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


        Outlook

            Cautionary Statement Regarding Forward-Looking Statements

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

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

                     Development Stage, Accumulated Deficit
                    
        The Company is a  development  stage  company  and has had only  limited
        revenues since its inception. There can be no assurance that the Company
        will  be able  to  achieve  a  significant  level  of  sales  or  attain
        profitability.  The Company's operations have been limited to developing
        software,  initial  sales and fund raising  activities.  There can be no
        assurance  that the Company will be able to grow in the future or attain
        profitability.  As a result, the Company believes that its prior results
        of operation  are not  necessarily  meaningful  and should not be relied
        

                                 Page 14 of 18
<PAGE>


         upon as an indication of future  performance.  The profit  potential of
         the  Company's  business  is  speculative,  and to be  successful,  the
         Company must,  among other things,  develop and market software that is
         widely  accepted  by  business  customers  at prices  that will yield a
         profit.  The Company's  software products are in the development stage.
         There can be no assurance that the products of the Company will achieve
         broad commercial  acceptance.  The Company's ability to generate future
         revenues  will depend on a number of factors,  many of which are beyond
         the Company's  control and include,  among  others,  the ability of the
         Company to complete its product development  activities and to carry on
         timely and effective marketing campaigns.

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



                           Part II. Other Information


        ITEM 2.   CHANGES IN SECURITIES

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

        Recent Sales of Unregistered  Securities.  During the three months ended
        December 31, 1998,  the Company issued equity  securities  that were not
        registered  under the  Securities  Act of 1933,  as amended (the "Act").
        Specifically,  the Company  issued  250,000  shares of common  stock and
        warrants to purchase  250,000 shares of common stock.  Gross proceeds to
        the Company of $375,000 were generated by the sale of these  securities.
        The Company  issued such shares  without  registration  under the Act in
        reliance on exemptions from  registration  under the Section 4(2) and/or
        3(b), as well as  Regulation D promulgated  under the Act. The shares of
        common  stock  were  (and the  shares  issueable  upon  exercise  of the
        warrants will be) issued as restricted  securities and the  certificates
        representing  such  shares  are or will be  stamped  with a  restrictive
        legend to  prevent  any  resale  without  registration  under the Act or
        compliance  with an  exemption.  In each  case,  the  purchasers  of the
        securities  were accredited  investors,  as that term is defined by Rule
        501  under  the Act,  or  represented  to the  Company  that  they  were
        sophisticated  investors who were  experienced in making  investments of
        this type,  either  alone or with a purchaser  representative,  and that
        they or their purchaser  representatives  were otherwise suitable (under
        state and federal regulations) and possessed adequate means of providing
        for their current needs and personal  contingencies  and who had no need
        for  liquidity in an  investment  in  securities  such as the  Company's
        common stock, which are subject to certain risks, including the possible
        loss of a person's investment in whole or in part.

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

        In connection  with the offer and sale of its common stock,  the Company
        has issued  warrants to  purchase  335,081  shares of common  stock at a
        price of $2.00 per share. These warrants become  exercisable  throughout
        the calendar year 1999.  In addition the Company has issued  warrants to
        purchase 335,081 shares of common stock at a price of $2.00 per share if
        exercised in the  calendar  year 1999 or $3.00 per share if exercised in
        the calendar year 2000. If all of these  warrants  were  exercised,  the
        proceeds to the Company would be between  $670,162 and  $1,675,405.  The
        Company cannot require the exercise of these warrants,  and there can be
        no assurance  that the warrants or a significant  part of them will ever


                                 Page 15 of 18
<PAGE>


        be exercised. In addition, if such warrants are exercised at a time when
        the market price of the Company's common stock is  significantly  higher
        than the  exercise  price of the  warrants,  the issuance of such shares
        will result in  significant  dilution of existing  stockholders  and may
        result in a decline of the  market  price of the  Company's  Securities.
        Furthermore,  the fact that the  warrants  have been granted may have an
        adverse  effect  on the  price of the  Company's  stock  because  of the
        potential for dilution.

                                 Page 16 of 18
<PAGE>



        Item 6.   Exhibits  and Reports on Form 8-K

                 (a) Exhibits

                      27 Financial Data Schedule (previously filed)

                                 Page 17 of 18
<PAGE>

             Signatures


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




                       
                            THE THORSDEN GROUP, LTD.
                                  (Registrant)







                        
Date: February 12, 1999           /s/Stephen Russel
                                  -----------------
                                  Stephen Russell, 
                                  Chief Executive Officer, and Controller
                                  (Principal Financial and Accounting Officer)