SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K


              CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

          DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 5, 2006

                             ON2 TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its charter)

                                    DELAWARE
                    (State of incorporation or organization)

                                     1-15117
                            (Commission File Number)

                                   84-1280679
                        (IRS Employer Identification No.)

                21 CORPORATE DRIVE, SUITE 103, NEW YORK, NY 12065
    (Address, including zip code, and telephone number, including area code,
                  of Registrant's principal executive offices)

                                 NOT APPLICABLE
       (Former name, former address and former fiscal year, if applicable)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):


|_|   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))



<PAGE>



ITEM 8.01  OTHER EVENTS

On March 2, 2006, the Company filed a Form 8-K, which disclosed that it had
voluntarily reported to the Securities and Exchange Commission ("SEC") that the
Company had undertaken an internal investigation into facts and circumstances
concerning investor and other communications made by the Company's former
Chairman, Chief Executive Officer and President (the "Former Executive"). The
Company has completed its internal investigation and a final report was
delivered to the Audit Committee of the Board of Directors on May 5, 2006 and
was delivered to the SEC and the American Stock Exchange on May 9, 2006. The
Company has agreed to work with the SEC and the American Stock Exchange in
connection with any investigations conducted by them.

The Company believes that the investigation will not have any effect on
previously filed financial statements and that the final findings of the
investigation will not lead to any restatement of reported financial results.
While the Company continues to disavow any statements made by the Former
Executive in any non-public forums and disavows any information posted on any
web-based financial message board, the Company believes that the final findings
of the investigation do not require any amendment of the disclosures previously
made by the Company.



ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

None.




<PAGE>



                                    SIGNATURE

      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 hereunto duly authorized.


Date: May 9, 2006                          ON2 TECHNOLOGIES, INC.


                                           By:   /s/ Bill Joll
                                                 ----------------------
                                           Name:  Bill Joll
                                           Title: CEO
{"company-data": {"conformed-name": "ON2 TECHNOLOGIES, INC.", "cik": "0001045280", "assigned-sic": "7372", "irs-number": "841280679", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-15117", "film-number": "06821471"}, "business-address": {"street1": "21 CORPORATE DRIVE SUITE 103", "city": "CLIFTON PARK", "state": "NY", "zip": "12065", "phone": "5183480099"}, "mail-address": {"street1": "21 CORPORATE DRIVE SUITE 103", "city": "CLIFTON PARK", "state": "NY", "zip": "12065"}, "former-company": [{"former-conformed-name": "ON2 TECHNOLOGIES INC", "date-changed": "20010615"}, {"former-conformed-name": "ON2COM INC", "date-changed": "19990622"}, {"former-conformed-name": "APPLIED CAPITAL FUNDING INC", "date-changed": "19971002"}]}
SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

              CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

          DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): MAY 5, 2006

                             ON2 TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its charter)

                                    DELAWARE
                    (State of incorporation or organization)

                                     1-15117
                            (Commission File Number)

                                   84-1280679
                        (IRS Employer Identification No.)

                21 CORPORATE DRIVE, SUITE 103, NEW YORK, NY 12065
    (Address, including zip code, and telephone number, including area code,
                  of Registrant's principal executive offices)

                                 NOT APPLICABLE
       (Former name, former address and former fiscal year, if applicable)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

|_|   Written communications pursuant to Rule 425 under the Securities Act (17
      CFR 230.425)

|_|   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
      240.14a-12)

|_|   Pre-commencement communications pursuant to Rule 14d-2(b) under the
      Exchange Act (17 CFR 240.14d-2(b))

|_|   Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))
ITEM 8.01  OTHER EVENTS

On March 2, 2006, the Company filed a Form 8-K, which disclosed that it had
voluntarily reported to the Securities and Exchange Commission ("SEC") that the
Company had undertaken an internal investigation into facts and circumstances
concerning investor and other communications made by the Company's former
Chairman, Chief Executive Officer and President (the "Former Executive"). The
Company has completed its internal investigation and a final report was
delivered to the Audit Committee of the Board of Directors on May 5, 2006 and
was delivered to the SEC and the American Stock Exchange on May 9, 2006. The
Company has agreed to work with the SEC and the American Stock Exchange in
connection with any investigations conducted by them.

The Company believes that the investigation will not have any effect on
previously filed financial statements and that the final findings of the
investigation will not lead to any restatement of reported financial results.
While the Company continues to disavow any statements made by the Former
Executive in any non-public forums and disavows any information posted on any
web-based financial message board, the Company believes that the final findings
of the investigation do not require any amendment of the disclosures previously
made by the Company.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

None.
SIGNATURE

      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 hereunto duly authorized.

Date: May 9, 2006                          ON2 TECHNOLOGIES, INC.

                                           By:   /s/ Bill Joll
                                                 ----------------------
                                           Name:  Bill Joll
                                           Title: CEO