SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Room 4561
      September 23, 2005

Leland H. Boardman
Chief Financial Officer
Arkona, Inc.
10542 South Jordan Gateway
South Jordan, Utah 84095
(801) 501-7100

Re: 	Arkona, Inc.
      Form 10-K for the fiscal year ended March 31, 2005
      Filed July 14, 2005
      File No. 000-24372

Dear Mr. Boardman:

      We have reviewed the above referenced filing and have the
following comments.  Please note that we have limited our review
to
the matters addressed in the comments below.  We may ask you to
provide us with supplemental information so we may better
understand
your disclosure.  Please be as detailed as necessary in your
explanation.  After reviewing this information, we may raise
additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-KSB:  For the Fiscal Year Ended March 31, 2005

Controls and Procedures, page 22
1. Tell us how you considered the prior period adjustments
disclosed
in Note 15 related to software development costs in your
assessment
that the disclosure controls and procedures were effective as of
March 31, 2005.  Also tell us what consideration you gave to
disclosing any changes in internal control over financial
reporting
resulting from the discovery of this error.

2. We note your statement that your "principal executive officer,
president and principal financial officer concluded that the
disclosure controls and procedures are effective in alerting them,
in
a timely basis, to material information relating to the Company
required to be included in reports filed or submitted under the
Exchange Act."  This disclosure does not address the effectiveness
of
your disclosure controls and procedures with respect to whether
the
information required to be disclosed is recorded, processed,
summarized and reported within the time periods specified in the
rules and forms of the SEC.  Please confirm whether your
disclosure
controls and procedures were also effective with respect to the
foregoing requirement.  Similarly, tell us whether your disclosure
controls and procedures were effective with respect to the
foregoing
requirement as of the interim period ended June 30, 2005.  See
Exchange Act Rule 13a-15(e).

3. You disclose that there were no significant changes in the
internal controls or other factors subsequent to March 31, 2005.
Consistent with the evaluation required by Rule 13a-15(d) of the
Exchange Act, please confirm to us definitively whether there were
any changes in your internal control over financial reporting
identified in connection with your evaluation that occurred during
the period covered by the annual report that have materially
affected, or are reasonably likely to materially affect, your
internal control over financial reporting.  Similarly, tell us
whether there were any such changes in your internal control over
financial reporting during the interim period ended June 30, 2005.

Financial Statements

Report of Independent Registered Public Accounting Firm, page F-2
4. We note that the date of the Report of Independent Registered
Public Accounting Firm is July 23, 2005, a date after the filing
of
the Form 10-KSB on July 14, 2005.  Please tell us how the issuance
date of the report is after the date of the filing.

Notes to Financial Statements

Note 1. Organization and Summary of Significant Accounting
Policies

Revenue Recognition, page F-10
5. We note that your arrangements involve multiple elements.  Cite
the authoritative literature you follow for each of the activities
from which you generate revenue and the basis for this
determination.
Tell us the criteria you consider in determining how to allocate
and
when to recognize revenue.  Explain how you consider the
separation
criteria in EITF 00-21 and EITF 03-5.  Indicate how you determine
fair value for each deliverable.  We may have further comment.
6. You indicate that you recognize Product Installation and
Training
revenue on the basis of percentage of completion.  Explain your
basis
for this accounting treatment.  Cite the authoritative literature
relied upon in your accounting.  Tell us whether the installation
is
essential to the functionality of the software and/or hardware and
whether the installation involves significant modification or
customization.
7. We note on page 18 of the filing that you allow customers to
decrease front-end installation charges in return for larger
monthly
support charges.  Tell us how you consider these types of
concessions
in allocating and recognizing revenue.
8. Your disclosure indicates that advance deposits are deferred
and
recognized over the life of the contract, which is usually less
than
one month.  Explain in detail what the advanced deposits
represent,
and how you determine the contract period of usually less than one
month.
9. We note from disclosure throughout your filing that the ADMS
software is able to run on an Application Service Provider ("ASP")
model.  Explain your revenue recognition policy for arrangements
under the ASP model.  Tell us how you consider the guidance in
EITF
00-3 in accounting for these types of arrangements.  In this
regard,
indicate whether the customer has the right to take possession of
the
software at any time without significant penalty or costs and
whether
it is feasible for the customer to either run the software on its
own
hardware or contract with another unrelated party to host the
software without significant penalty.  Tell us the amount of
revenue
generated for arrangements under the ASP model in all periods
presented.
10. Considering our comments above related to your revenue
recognition policy, provide us with any proposed revisions to your
revenue recognition policy disclosures.

Note 2. Income Taxes, page F-11
11. We note that your reversals of the valuation allowance on your
deferred tax asset during the fiscal years ended March 31, 2005
and
2004.  Provide us with your analysis of the change in
circumstances
and the positive and negative evidence considered in both of these
years in your reduction of the valuation allowance.  The analysis
should address the guidance in paragraphs 20 through 25 of SFAS
109.
Tell us how you considered the net losses incurred prior to fiscal
2004 and the net loss before income taxes in fiscal 2005.  We also
note your discussion on pages 7 and 8, respectively, of the risk
factors section entitled "The Company has incurred substantial
losses
since its inception and may incur losses in the future" and "The
Company may be unable to increase the number of customers..."

Note 15. Prior Period Adjustments, page F-17
12. We note from your disclosure that you inappropriately expensed
software development costs prior to the software being placed in
service.  Further explain the facts and circumstances leading to
this
restatement.  Tell us how and when the error was discovered.  Also
tell us what consideration you gave to labeling the prior period
financial statements as restated and disclosing the impact of the
restatement on your financial statements for all periods presented
and for the fiscal year 2005 interim periods.  Refer to paragraph
37
of APB 20.  In addition, tell us whether the capitalized software
is
within the scope of SFAS 86 or SOP 98-1.  Explain the basis for
capitalizing costs incurred through their being placed in service
rather than until the software is ready for its intended use under
paragraph 29 of SOP 98-1 or until the product is available for
general release to customers under paragraph 6 of SFAS 86.  We
note
that the impact on the statements of operations was a net decrease
to
SG&A.  To the extent applicable, tell us how you considered the
guidance in question 17 of the FASB Staff Implementation Guide to
SFAS 86, which indicates that you should report amortization of
these
types of costs as a component of cost of sales.  Also, tell us
what
consideration you gave to reporting the restatement on Item 4.02
of
Form 8-K.

*	*	*	*	*

      As appropriate, please amend your filing and respond to
these
comments within ten business days or tell us when you will provide
us
with a response.  Please submit all correspondence and
supplemental
materials on EDGAR as required by Rule 101 of Regulation S-T.  You
may wish to provide us with marked copies of any amendment to
expedite our review.  Please furnish a cover letter with any
amendment that keys your responses to our comments and provides
any
requested information.  Detailed cover letters greatly facilitate
our
review.  Please understand that we may have additional comments
after
reviewing any amendment and your responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision.  Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures they
have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.

	If you have any questions, please call Morgan Youngwood at
(202)
551-3479, Melissa Walsh at (202) 551-3224 or Stephen Krikorian at
(202) 551-3730.

							Sincerely,

							Stephen Krikorian
							Accounting Branch Chief

??

??

??

??

Leland H. Boardman
Arkona, Inc.
September 23, 2005
Page 1

</TEXT>
</DOCUMENT>