---

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-Q

(Mark One)

[X]   QUARTERLY REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

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 000-53530

BARK GROUP INC.(Exact name
of registrant as specified in its charter)

|Nevada                                                               | Not applicable                      
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|                                                                     |                                     
|Ostergade 17-19, 3rdFloor,
      DK-1100                             |                                     
|Copenhagen K, Denmark                                                | **DK-1100**                         
|(Address of principal executive offices)                             | (Zip Code)                          

Registrants telephone number: +45 7026 9926

Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 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 has submitted
electronically and posted on its corporate website, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such
files).
Yes [  
]    No [  
]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act. (Check one):

|Large accelerated filer [   ] |                                               | Accelerated filer [   ]         
|----------------------------- | --------------------------------------------- | --------------------------------
|Non-accelerated filer [   ]   | (Do not check if a smaller reporting company) | **Smaller reporting company**[X]

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

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date. As ofAugust 20, 2010, there were 405,944,670 shares of the
issuers common stock outstanding.

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BARK GROUP INC

Table of Contents

|              |                                                                                                                                   | Page
|------------- | --------------------------------------------------------------------------------------------------------------------------------- | ----
|              |                                                                                                                                   |     
|Part
      I  | FINANCIAL INFORMATION                                                                                                             |     
|              |                                                                                                                                   |     
|Item 1.       | Financial Statements.                                                                                                             |     
|              |                                                                                                                                   |     
|              | Condensed Consolidated
      Balance Sheets as of June 30, 2010 (unaudited) and December 31,
      2009                           | 1-2 
|              |                                                                                                                                   |     
|              | Condensed Consolidated Statements of Operations for the
      three and six months ended June 30, 2010 and
      2009 (unaudited) | 3   
|              |                                                                                                                                   |     
|              | Condensed Consolidated Statements of Cash Flows for the six
      months ended June 30, 2010 and 2009
      (unaudited)           | 4   
|              |                                                                                                                                   |     
|              | Notes to
      Unaudited Condensed Consolidated Financial Statements                                                              | 5   
|              |                                                                                                                                   |     
|Item 2.       | Managements Discussion and Analysis of Financial Condition
      and Results of Operations.                                      | 19  
|              |                                                                                                                                   |     
|Item 3.       | Quantitative and Qualitative Disclosures about Market
      Risk.                                                                 | 30  
|              |                                                                                                                                   |     
|Item 4 T.     | Controls
      and Procedures.                                                                                                    | 30  
|              |                                                                                                                                   |     
|Part
      II | OTHER
      INFORMATION                                                                                                           |     
|              |                                                                                                                                   |     
|Item 1        | Legal Proceeding                                                                                                                  | 32  
|              |                                                                                                                                   |     
|Item 2        | Recent Sales of Unregistered
      Securities and Use of Proceeds                                                                 | 40  
|              |                                                                                                                                   |     
|Item 6.       | Exhibits.                                                                                                                         | 42  

- i -

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|PART I                               
|-------------------------------------
|FINANCIAL INFORMATION                
|                                     
|Item 1. Financial Statements         
|                                     
|                                     
|Bark Group Inc. and Subsidiaries     
|Condensed Consolidated Balance Sheets
|(In thousands of USD)                

|                                                                                 |   | Unaudited |  |   |              | 
|-------------------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                                 |   | June 30,  |  |   | December 31, | 
|Assets                                                                           |   | 2010      |  |   | 2009         | 
|Current assets:                                                                  |   |           |  |   |              | 
|Cash                                                                             | $ | 9         |  | $ | 5            | 
|Accounts receivable, net                                                         |   | 1,416     |  |   | 526          | 
|Costs and estimated earnings
      in excess of billings on projects in progress |   | 549       |  |   | 743          | 
|Value added tax receivable                                                       |   | 83        |  |   | -            | 
|Prepaid expenses and other
      current assets                                  |   | 496       |  |   | 34           | 
|                                                                                 |   |           |  |   |              | 
|Total current assets                                                             |   | 2,553     |  |   | 1,308        | 
|                                                                                 |   |           |  |   |              | 
|Property, plant and equipment,
      net of accumulated depreciation             |   | 4,358     |  |   | 5,026        | 
|Equity investment                                                                |   | 966       |  |   | -            | 
|Goodwill                                                                         |   | 5,205     |  |   | 3,289        | 
|Other intangible assets, net of accumulated
      amortization                   |   | 804       |  |   | 22           | 
|Deferred financing costs, net
      of accumulated amortization                  |   | 56        |  |   | 57           | 
|Total assets                                                                     | $ | 13,942    |  | $ | 9,702        | 

The accompanying notes are an integral part of these
condensed consolidated financial statements

1

---

|Bark Group Inc. and Subsidiaries                 
|-------------------------------------------------
|Condensed Consolidated Balance Sheets (continued)
|(In thousands of USD)                            

|                                                                                                                                                                                                                                                     |   | Unaudited |   |   |              |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------- | - | - | ------------ | -
|                                                                                                                                                                                                                                                     |   | June 30,  |   |   | December 31, |  
|Liabilities                                                                                                                                                                                                                                          |   | 2010      |   |   | 2009         |  
|Current liabilities:                                                                                                                                                                                                                                 |   |           |   |   |              |  
|Accounts payable                                                                                                                                                                                                                                     | $ | 3,166     |   | $ | 1,736        |  
|Accrued liabilities                                                                                                                                                                                                                                  |   | 1,734     |   |   | 1,758        |  
|Billings in
      excess of costs and estimated earnings on projects in progress                                                                                                                                                                     |   | 289       |   |   | 720          |  
|Current portion of long-term
      debt                                                                                                                                                                                                              |   | 2,490     |   |   | 2,189        |  
|Current portion
      of obligations under capital leases                                                                                                                                                                                            |   | 101       |   |   | 123          |  
|Derivative
      liabilities                                                                                                                                                                                                                         |   | 142       |   |   | -            |  
|Current portion
      of debt to redeemed stockholders                                                                                                                                                                                               |   | 666       |   |   | 192          |  
|Debt to
      former shareholder - Tre Kronor                                                                                                                                                                                                        |   | 317       |   |   | -            |  
|Advances from
      related parties                                                                                                                                                                                                                  |   | 203       |   |   | 399          |  
|                                                                                                                                                                                                                                                     |   |           |   |   |              |  
|Total
      current liabilities                                                                                                                                                                                                                      |   | 9,108     |   |   | 7,117        |  
|                                                                                                                                                                                                                                                     |   |           |   |   |              |  
|Long-term debt , net of
      current portion                                                                                                                                                                                                        |   | 3,702     |   |   | 4,162        |  
|Long-term debt to redeemed
      stockholders                                                                                                                                                                                                        |   | 556       |   |   | -            |  
|Contingent considerations - Tre Kronor                                                                                                                                                                                                               |   | 365       |   |   | -            |  
|Long-term obligations under capital leases,
      net of current portion                                                                                                                                                                             |   | 33        |   |   | 93           |  
|                                                                                                                                                                                                                                                     |   |           |   |   |              |  
|Total liabilities                                                                                                                                                                                                                                    |   | 13,764    |   |   | 11,372       |  
|                                                                                                                                                                                                                                                     |   |           |   |   |              |  
|Non-Controlling interests                                                                                                                                                                                                                            |   | -         |   |   | 1,301        |  
|                                                                                                                                                                                                                                                     |   |           |   |   |              |  
|Commitments and contingencies                                                                                                                                                                                                                        |   |           |   |   |              |  
|                                                                                                                                                                                                                                                     |   |           |   |   |              |  
|Stockholders Equity (Deficiency)                                                                                                                                                                                                                    |   |           |   |   |              |  
|Stockholders' equity
      (deficiency):                                                                                                                                                                                                             |   |           |   |   |              |  
|Preferred stock $0.001 per share par
      value;       100,000,000 authorized; 0 issued
      and outstanding.                                                                                                                                      |   | -         |   |   | -            |  
|Common stock
      $0.001 per share par value;      
      2,000,000,000 shares authorized, 405,944,670 and
                  351,364,254 shares issued and
      outstanding at June 
            30, 2010 and December 31,2009,
      respectively |   | 406       |   |   | 351          |  
|Additional
      paid-in capital                                                                                                                                                                                                                     |   | 8,472     |   |   | 2,919        |  
|Accumulated deficit                                                                                                                                                                                                                                  |   | (8,589    | ) |   | (6,181       | )
|Treasury stock
      (7,000,000 common shares, at cost)                                                                                                                                                                                              |   | (7        | ) |   | -            |  
|Accumulated other comprehensive
      income                                                                                                                                                                                                         |   | (104      | ) |   | (60          | )
|                                                                                                                                                                                                                                                     |   |           |   |   |              |  
|Total stockholders
      equity (deficiency)                                                                                                                                                                                                        |   | 178       |   |   | (2,971       | )
|Totals liabilities and
      stockholders` equity (deficiency)                                                                                                                                                                                       | $ | 13,942    |   | $ | 9,702        |  

The accompanying notes are an integral part of these
condensed consolidated financial statements

- 2 -

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|Bark Group Inc. and Subsidiaries                   
|---------------------------------------------------
|Condensed Consolidated Statements of Operations    
|(Unaudited)                                        
|(In thousands of USD, except for per share amounts)

|                                                                                                     |   | Three  Months Ended June 30, |   |   | Six Months Ended June 30, |  
|---------------------------------------------------------------------------------------------------- | - | ---------------------------- | - | - | ------------------------- | -
|                                                                                                     |   | 2010                         |   |   | 2009                      |  
|Net revenues                                                                                         | $ | 3,358                        |   | $ | 695                       |  
|Cost of revenues                                                                                     |   | (2,993                       | ) |   | (597                      | )
|Gross Profit                                                                                         |   | 365                          |   |   | 98                        |  
|Selling, general and administrative expenses                                                         |   | (1,013                       | ) |   | (700                      | )
|Depreciation and amortization                                                                        |   | (93                          | ) |   | (48                       | )
|Impairment of goodwill                                                                               |   | (1,451                       | ) |   | -                         |  
|Loss from operations                                                                                 |   | (2,192                       | ) |   | (650                      | )
|Other income (expense):                                                                              |   |                              |   |   |                           |  
|Loss from equity investment                                                                          |   | -                            |   |   | -                         |  
|Gain on derivative liabilities                                                                       |   | 13                           |   |   | -                         |  
|Interest expense                                                                                     |   | (93                          | ) |   | (148                      | )
|Total other expenses, net                                                                            |   | (80                          | ) |   | (148                      | )
|Loss before income
      taxes and non-controlling interest                                          |   | (2,272                       | ) |   | (798                      | )
|Net loss attributable to non-controlling interest                                                    |   | 17                           |   |   | 34                        |  
|Net loss available to
      controlling interest                                                     | $ | (2,255                       | ) | $ | (764                      | )
|Loss per share 
     Basic and diluted                                                               | $ | (-)                          |   | $ | (-) $                     |  
|Weighted-average shares used to calculate net loss per
      common share: 
       Basic and diluted |   | 394,436,364                  |   |   | 316,334,980               |  

The accompanying notes are an integral part of these
condensed consolidated financial statements

- 3 -

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|Bark Group Inc. and Subsidiaries                                 
|-----------------------------------------------------------------
|Condensed Consolidated Statements of Cash Flows
      (Unaudited)
|(In thousands of USD)                                            

|                                                                                  |   | Six months ended June 30, |  
|--------------------------------------------------------------------------------- | - | ------------------------- | -
|                                                                                  |   | 2010                      |  
|Cash flows from operating activities:                                             |   |                           |  
|Net loss available to controlling interest                                        | $ | (2,557                    | )
|Adjustments to reconcile net loss to net cash used in
      operating activities: |   |                           |  
|Depreciation and amortization                                                     |   | 84                        |  
|Impairment of goodwill                                                            |   | 1,451                     |  
|Amortization of intangible assets                                                 |   | 47                        |  
|Amortization of deferred debt discount                                            |   | 45                        |  
|Amortization of deferred financing costs                                          |   | 3                         |  
|Gain on change in fair value of derivative liabilities                            |   | (13                       | )
|Loss on equity investment                                                         |   | 18                        |  
|Provision (credit) for doubtful accounts                                          |   | (22                       | )
|Stock based compensation                                                          |   | 215                       |  
|Non-Controlling interests                                                         |   | (23                       | )
|Changes in operating assets and liabilities :                                     |   |                           |  
|Accounts receivable                                                               |   | 129                       |  
|Cost and estimated earnings in
      excess of billings on projects               |   | 225                       |  
|Value added tax refund receivable                                                 |   | (83                       | )
|Prepaid expenses and other
      current assets                                   |   | (269                      | )
|Accounts payable                                                                  |   | 481                       |  
|Accrued
      liabilities                                                         |   | (1,013                    | )
|Billings in excess of costs and estimated
      earnings                          |   | (327                      | )
|Net cash used in
      operating activities                                       |   | (1,609                    | )
|Cash flows from investing activities:                                             |   |                           |  
|Cash acquired in acquisition
      of Tre Kronor                                  |   | 962                       |  
|Purchase of equipment                                                             |   | (5                        | )
|Net cash
      provided by (used in) investing activities                         |   | 957                       |  
|Cash flows from financing activities:                                             |   |                           |  
|Repayments of debt                                                                |   | (23                       | )
|Repayment of capital leases                                                       |   | (55                       | )
|Payment to redeemed
      stockholder                                             |   | (72                       | )
|Proceeds from debt                                                                |   | 955                       |  
|Payment of debt to former
      shareholder                                       |   | (95                       | )
|Net proceeds (repayments) from borrowings from
      related party                |   | 85                        |  
|Proceeds from issuance of
      common stock, net of issuance costs               |   | 140                       |  
|Net cash provided by financing
      activities                                   |   | 935                       |  
|Effect of exchange rates on cash                                                  |   | (279                      | )
|Net increase (decrease) in cash                                                   |   | 4                         |  
|Cash  at beginning of
      period                                                |   | 5                         |  
|Cash at end of
      period                                                       | $ | 9                         |  
|Supplemental information:                                                         |   |                           |  
|Cash paid for interest                                                            | $ | 106                       |  
|Non-cash investing and financing
      activities:                                |   |                           |  
|Note payable converted into common shares                                         | $ | 62                        |  
|Extinguishment of debt from
      related parties                                 | $ | 223                       |  
|Issuance of common stock to acquire a 25.5%
      interest in Anaconda.tv GmbH    | $ | 983                       |  
|Issuance of common stock to
      acquire Tre Kronor                              | $ | 2,825                     |  
|Adjustment of Non-Controlling interest to
      redemption value                  | $ | 118                       |  

*The accompanying notes are an integral part of these
condensed consolidated financial statements*

- 4 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Nature of Business

Bark Corporation, (the
Company), is a holding company that conducts its operations through its 90.05%
owned subsidiary Bark Advertising A/S ("Bark Advertising"), and its wholly owned
subsidiaries Bark Property ApS ("Bark Property") and Trekronor Media AB (Tre
Kronor).

On March 31, 2010 we completed
the acquisition of a 51% interest in Anaconda.tv GmbH (Anaconda), a television
production company incorporated in Germany. In accordance with the authoritative
guidance contained in ASC 805, Business Combinations, and ASC 810,
Consolidation, management has performed an assessment based on all
relevant facts and circumstances, and concluded that the minority shareholder of
Anaconda has been granted a substantive participating right that precludes the
Companys majority voting interest from being considered a controlling financial
interest. As such, the Company required its investment in Anaconda under the
equity method, in accordance with ASC 323, InvestmentsEquity Method and
Joint Ventures.On June 15, 2010, the Company entered into an agreement with
Jesper Svane, a 10% shareholder of the Company, and Svaneco Ltd., a private
company controlled by Mr. Svane, in respect to the ownership of Anaconda.tv
GmbH, whereby:

- Bark Corporation agreed to re-convey to Mr. Svane a 25.5% interest in
  Anaconda that it acquired on March 31, 2010, thereby reducing the Companys
  ownership interest from 51% to 25.5%;
- as consideration for the re-conveyance, Mr. Svane surrendered, in July
  2010, 7,000,000 shares of the common stock of the Company issued to him in
  connection with Bark Corporations acquisition of its interest in Anaconda,
- Mr. Svane further granted to Bark Corporation the option to re-acquire the
  25.5% interest in Anaconda in exchange for issuance of an additional 7,000,000
  shares of the Companys common stock, such option is exercisable on or before
  September 15, 2010, and
- each party agreed to complete such transfers, assignments and surrenders
  of shares to give effect to the above agreements.

The agreement was entered into as a result of Anacondas
failure to deliver audited financial statements. The Company anticipates that
any determination to exercise the option to re-acquire the 25.5% interest from
Mr. Svane would be contingent upon (i) audited financial statements of Anaconda
for the year ended December 31, 2009 being completed, and (ii) 2010 financial
performance of Anaconda in accordance with the agreed upon budgets. As a
consequence of the June 15, 2010 agreement, the Company presently owns a 25.5%
interest in Anaconda.

The Company completed the
acquisition of all of the issued and outstanding shares of Tre Kronor, a Swedish
media company on May 4, 2010 in accordance with a share purchase agreement dated
April 9, 2010.

The Company issued an aggregate of 35,000,000 shares of common
stock to the shareholders of Tre Kronor, pro rata with their respective
ownership interests in Tre Kronor, to complete the acquisition. Additional
principal terms of the Tre Kronor agreement are summarized as follows:

- all shares issued to the Tre Kronor shareholders will be subject to a three
  year lock-up period;
- notwithstanding the above lock-up agreement, three of the shareholders will
  be permitted to sell annually a portion of their shares provided that (i) the
  total accumulated aggregate sales price does not exceed Swedish Kroner (SEK)
  3,000,000, and (ii) the transfers do not exceed 10% of the daily registered
  turnover of Barks common stock on the Nasdaq OTC Bulletin Board, however in
  2010 the shareholders cannot sell any shares in the initial six months;
- in 2010 only, one of the principal shareholders, will redeem a portion of
  his shares against a cash payment from the Company in the aggregate amount of
  SEK 3,000,000 ($412,000) to be paid as follows (i) SEK 750,000 ($103,000 in
  May 2010, and (ii) SEK 750,000($103,000 in June 2010, and (iii) SEK
  1,500,000($206,000) in July 2010. The redemption of the shares will be based
  on the valuation on the date of payment. Per date of acquisition we recorded
  $412,000 as a related party current liability. As of June 30, 2010 and through
  August 23, 2010, the Company paid $95,000 and $23,750, (an aggregate of
  SEK886,523) respectively, to the principal stockholder.

- 5 -

---

- in the event that the Company does not raise a minimum of either
  $3,000,000 either as debt or equity financing by December 31, 2010, the Tre
  Kronor shareholders will have the right to re-acquire all of the issued and
  outstanding shares of Tre Kronor by (i) delivering written notice by January
  15, 2011 and returning to the Company all consideration issued to such
  shareholders within 30 days of such notice, including the cash value of any
  shares that may have been sold by the Tre Kronor shareholders,
- the Company have also agreed to issue up to an additional 6,000,000 shares
  of its common stock based on Tre Kronor achieving certain Earnings Before
  Tax ( EBT), as determined in accordance with the agreement,
  thresholds for the accounting years 2010 to 2012:
- EBT being more than SEK 2 million ($274,667) for 2010;
  issuance of additional 2,000,000 Bark shares
- EBT being more than SEK 3 million ($412,000) for 2011;
  issuance of additional 2,000,000 Bark shares
- EBT being more than SEK 4 million ($549,333) for 2012;
  issuance of additional 2,000,000 Bark shares,

- as an alternative to the above, the Tre Kronor shareholders will receive
  4,000,000 shares if the accumulated EBT for 2010 and 2011 is more than SEK 5
  million ($686,667),  or 6,000,000 shares if the accumulated EBT for 2010, 2011 and 2012 is
  more than SEK 9 million.On the date of the acquisition, the Company
  recorded an accrual of $365,000 as a long-term contingent consideration. The
  Company based this accrual on the fair value of the amount anticipated to be
  incurred as a result of the projections available at the date of the
  acquisition.

Subsequent to June 30, 2010 the former share holders renounced
their right to re-acquire the issued and outstanding shares of Tre Kronor.

Business     Bark Group and
its subsidiaries (collectively, the "Company") offer its customers a network of
advertising and media services. The Companys strategy is to acquire mid-size
well established businesses throughout Europe in order to form a European
network of advertising and media agencies.

Going Concern     The
accompanying unaudited condensed consolidated financial statements have been
prepared assuming that the Company will continue as a going concern. The Company
continues to operate with negative working capital (approximately $6,555,000 at
June 30, 2010) and has limited financial resources available to pay ongoing
financial obligations as they become due. The negative working capital includes
convertible debentures of approximately $927,000. Further, the negative net
working capital includes a current portion of debt to redeemed shareholders of
approximately $556,000 which were converted into shares of common stock
subsequent to June 30, 2010 (see note 14).

The Company's current source of
funding, in addition to cash from operations and its operating line of credit of
approximately $880,000, is a loan commitment of DKK 4,000,000 ($658,957) from
Bark Holding. No advances have been made on this loan commitment as of August
23, 2010

The Company plans to use both (i)
its operating line of credit and (ii) loan from Bark Holding to finance its
operations over the next twelve months. However, the Company will require
additional financing to conduct its business in accordance with its plan of
operations on a long term basis. Further, there is no assurance that Bark
Holding will advance the loan that it has committed to make. The Company plans
to conduct an equity financing of its securities in order to raise additional
financing. The Company will also pursue bridge loans and private placements from
investors located outside of the United States, primarily in Europe, in order to
raise the required funds. If the Company is not successful in raising additional
financing, then the Company will attempt to reduce its operating expenses
significantly such that the Company would within a six month period be able to
generate cash from operating activities. In the event that the Company fails to
achieve additional financing, it will reconsider its acquisition strategy, and
will further reconsider whether its status as a public company is beneficial,
from a cost benefit perspective. The reduction in costs related to business
development activities may impact on the Companys ability to expand its
business. These consolidated financial statements do not include any adjustment
that might result from the outcome of this uncertainty.

- 6 -

---

Based on the Companys current
forecast it anticipates that cash flow from operations will be sufficient to
cover its current on-going operating expenses for the next 12 months. Therefore the Company estimates
that it will require approximately $5,072,000 (working capital deficit of
$6,555,000 less i) convertible notes with less than one year maturity of
$927,000 which it intends to convert and ii) conversion of debt to redeemed
shareholders subsequent to June 30, 2010 for approximately $556,000) over the
next twelve months in order to sustain its current obligations and to satisfy
its working capital deficiency. This amount does not include any funds necessary
for the Company to expand its business. The Company also entered into an engagement agreement with an investment bank with the objective of securing additional financing, but the Company do not have any commitment from the investment bank to complete any financing. There is no assurance that the Company will raise any additional financing from either this investment bank or any other investors. Accordingly, the Company will require
additional financing in order to pursue the expansion of its business, either
through growth or acquisitions. There is also a risk that cash used in
operations will be greater than anticipated in the event that projected revenues
are not achieved.

These conditions raise
substantial doubt about the Companys ability to continue as a going concern.
Accordingly, the accompanying unaudited condensed consolidated financial
statements have been prepared in conformity with accounting principles generally
accepted in the United States of America, which contemplates continuation of the
Company as a going concern and the realization of assets and the satisfaction of
liabilities in the normal course of business. The carrying amounts of assets and
liabilities presented in the financial statements do not necessarily purport to
represent realizable or settlement values. These unaudited condensed
consolidated unaudited financial statements do not include any adjustment that
might result from the outcome of this uncertainty.

Note 2. Summary of Significant Accounting Policies

Basis of
Presentation     The unaudited condensed
consolidated financial statements have been prepared in accordance with
accounting principles generally accepted in the United States of America for
interim financial statements and with Form 10-Q and Article 10 of Regulation S-X
of the Securities and Exchange Commission. Accordingly, they do not contain all
information and footnotes required by accounting principles generally accepted
in the United States of America for annual financial statements. The condensed
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries and majority owned subsidiary as described in note 1.
All significant intercompany balances and transactions have been eliminated in
consolidation. In the opinion of management, the accompanying unaudited
condensed consolidated financial statements contain all the adjustments
(consisting only of normal recurring accruals) necessary for fair presentation
of the Companys financial position, as of June 30, 2010, and the results of
operations and cash flows for the periods presented. The results of operations
for the three and six months ended June 30, 2010, are not necessarily indicative
of the operating results for the full fiscal year or any future period. The
Company has evaluated and included subsequent events through the filing date of
this Form 10-Q.

These unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes thereto included in the
Companys Annual Report on Form 10-K for the year ended December 31, 2009. The
Companys accounting policies are described in the Notes to consolidated
Financial Statements in its Annual Report on Form 10-K for the year ended
December 31, 2009, and updated, as necessary, in this Quarterly Report on Form
10-Q.

Use of Estimates     The
preparation of consolidated financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts reported in
the consolidated financial statements and accompanying notes. Actual results
could differ from those estimates.

The most significant areas that require management judgment are
the Companys revenue recognition, income taxes, impairment of goodwill, stock
valuation, debt discounts on notes payable, other intangible assets, bad debts
and depreciation.

Derivative Financial
Instruments.     The Company does not use
derivative instruments to hedge exposures to cash flow, market or foreign
currency risks. The Company evaluates all of its financial instruments to
determine if such instruments are derivatives or contain features that qualify
as embedded derivatives. For derivative financial instruments that are accounted
for as liabilities, the derivative instrument is initially recorded at its fair
value and is then re-valued at each reporting date, with changes in the fair
value reported in the condensed consolidated statement of operations. For
stock-based derivative financial instruments, the Company uses the Black-Scholes
option pricing model to value the derivative instruments at inception and on
subsequent valuation dates. The classification of derivative instruments,
including whether such instruments should be recorded as liabilities or as
equity, is evaluated at the end of each reporting period.

- 7 -

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Foreign Currency     The
Company has determined Danish Kroner is the functional currency of its foreign
operations. Accordingly, these foreign subsidiaries income and expenses are
translated into U.S. dollars, the reporting currency of the Company, at the
average rates of exchange prevailing during the year. The assets and liabilities
are translated into U.S. dollars at the rates of exchange on the balance sheet
date and the related translation adjustments are included in accumulated other
comprehensive income (loss). During the three and six months ended June 30, 2010
and 2009 transaction gains and losses were not material.

During the three and six months
ended June 30, 2010 and 2009 the related translation adjustment which was
included in other comprehensive income (loss) was as follows:

|                                            |   | 3 months ended June |   |   | 6 months ended June | 
|------------------------------------------- | - | ------------------- | - | - | ------------------- | 
|                                            |   |                     |   |   |                     | 
|                                            |   | 2010                |   |   | 2009                | 
|                                            |   |                     |   |   |                     | 
|Net loss available to controlling interest: | $ | 2,255,000           |   | $ | 764,000             | 
|Translation adjustment:                     | $ | (67,000             | ) | $ | 42,000              | 
|Comprehensive loss                          | $ | 2,188,000           |   | $ | 806,000             | 

Loss per Share     Basic
and diluted net loss per share has been calculated by dividing net loss by the
weighted average number of common shares outstanding during the period. All
potentially dilutive common shares have been excluded since their inclusion
would be anti-dilutive. As per June 30, 2009 the Company had 7,778,720
non-vested shares subject to repurchase which were excluded in the weighted
average number of common shares outstanding.

Impairment of Long-Lived
Assets     The Company annually, or whenever
events or changes in circumstances indicate that the carrying amounts of such
assets may not be recoverable, assesses the carrying value of long-lived assets
in accordance with FASB ASC 360 10, formerly SFAS No. 144, Accounting for the
Impairment or Disposal of Long-Lived Assets. The Company evaluates the
recoverability of long-lived assets not held for sale by measuring the carrying
amount of the assets against the estimated undiscounted future cash flows
associated with them. If such evaluations indicate that the future discounted
cash flows of certain long-lived assets are not sufficient to recover the
carrying value of such assets, the assets are adjusted to their estimated fair
values.

The Company accounts for its
acquisitions utilizing the purchase method of accounting. Under the purchase
method of accounting, the total consideration paid is allocated to the
underlying assets and liabilities, based on their respective estimated fair
values. The excess of purchase price over the estimated fair values of the net
assets acquired is recorded as goodwill. Determining the fair value of certain
acquired assets and liabilities, identifiable intangible assets in particular,
is subjective in nature and often involves the use of significant estimates
assumptions.

Finite-lived identifiable
intangible assets are amortized over its expected life on a straight-line basis,
as this basis approximates, the expected cash flows from the Companys existing
finite-lived identifiable intangible assets over the expected future.

Bark Advertising acquired all the
shares of Bark Copenhagen on May 14, 2007. The acquisition was completed
pursuant to a share transfer agreement entered into between Bark Advertising and
the shareholders of Bark Copenhagen. The Company recorded goodwill in connection
with the excess cost over fair value of the net assets acquired.

Bark Group Inc acquired all the
shares of Tre Kronor on May 4, 2010. The acquisition was completed pursuant to a
share transfer agreement entered into between Bark Group Inc and the
shareholders of Tre Kronor. The Company recorded goodwill in connection with the
excess cost over fair value of the net assets acquired.

Goodwill is accounted for under
FASB ASC 350, Goodwill and other. Under FASB ASC 350, the Companys
goodwill is tested for impairment on an annual basis or whenever facts or
circumstances indicate that the carrying amounts may not be recoverable. The
Company elected to conduct its impairment tests in May as a result of continuing
shortfall in the revenue budgets and managements focus on the available growth
in Tre Kronor. Since inception and up until the acquisition of Tre Kronor the
Company has operated in one reporting unit (Bark Copenhagen). The Companys reporting units is tested individually for impairment
by comparing the fair value of the reporting unit with the carrying value of
that unit. Fair value is determined based on a valuation study performed by the
Company using the discounted cash flow method and the estimated market values of
the reporting units. Goodwill related to the Companys acquisition of Bark
Copenhagen was impaired by DKK 8,149,000 ($1,451,000) during the three and six
month ended June 30, 2010 due to decreased profit expectations for fiscal 2010,
2011 and 2012.

- 8 -

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Equity
investments     Investments in business
entities in which the Company lacks a controlling financial interest but does
have the ability to exercise significant influence over operating and financial
policies are accounted for using the equity method. The Companys proportionate
share of net income or loss of such entity is recorded in Loss from equity
investment included in Other income (expense), net on the Condensed
Consolidated Statements of Operations. Anaconda has minmal net loss in the
second quarter of 2010.

Note 3  Acquisition of Tre Kronor

On May 4, 2010, the Company
completed the acquisition of all of the issued and outstanding shares Tre
Kronor, a Swedish media company.

The Company has determined that
the acquisition of Tre Kronor was a business combination to be accounted for
under the acquisition method. The following table summarizes the consideration
transferred and the amounts of identified assets acquired and liabilities
assumed at the acquisition date:

|Fair value of consideration transferred:                                                |            
|--------------------------------------------------------------------------------------- | -----------
|Stock issuance on the date of
      acquisition                                         | $ 4,200,000
|Estimated contingent consideration to be earned                                         | 365,000    
|                                                                                        | 4,565,000  
|                                                                                        |            
|Recognized amounts of identifiable assets
      and liabilities acquired at fair value: |            
|Cash                                                                                    | 962,700    
|Accounts receivable                                                                     | 1,073,936  
|Work in progress                                                                        | 138,547    
|Equipment and deposits                                                                  | 189,858    
|Prepaid expenses                                                                        | 148,262    
|Account payable                                                                         | (1,203,465)
|Corporate income tax                                                                    | (13,351)   
|Accrued expenses and other
      liabilities                                            | (1,296,487)
|Total identifiable net assets                                                           | -          
|Total purchase value                                                                    | $ 4,565,000
|                                                                                        |            
|The Company recognized
      the total purchase as summarized in the following table:   |            
|                                                                                        |            
|Goodwill (100% deductable for tax purpose)                                              | 3,735,000  
|Intangible assets                                                                       | 830,000    
|Liability to related parties (see
      Note 1)                                         | (412,000)  
|Earn out to former shareholders - Tre Kronor                                            | (365,000)  
|Equity, issuance of common shares as
      consideration                                | (3,788,000)

Earn out to former shareholders were calculated on a basis of a
total consideration of 4,000,000 of the Companys shares of common stock at the
fair value of the market closing price per date of acquisition. As the
calculated consideration is based on Tre Kronors projected EBT (Earnings Before
Tax) in fiscal 2011 and 2012 the fair value per date of acquisition was
discounted back to a present value of $365,000 which the Company recorded as a
long term liability.

The total common shares issued as part of the consideration
paid to Tre Kronor was 35,000,000 shares.

The intangible assets is
identified and recognized in accordance with Accounting Standards Codification
805 (ASC 805), Business Combinations. Based on a discounted cash flow model
the fair value of the intangible assets was determined to $830,000, with useful
lives of 5 years (see Note 4).

- 9 -

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The results of operations of Tre Kronor have been included in
the Companys condensed consolidated statements of operations since the
completion of the Tre Kronor acquisition on May 4, 2010. Revenues totaled
approximately $3,369,000 and net loss totaled $85,800 since the date of
acquisition.. The following table reflects the unaudited pro forma consolidated
results of operations had the Tre Kronor acquisition taken place at the
beginning of 2010 and 2009 periods:

|                         |   | 3 Months ended June 30 |   |   | 6 Months ended June 30 |  
|------------------------ | - | ---------------------- | - | - | ---------------------- | -
|                         |   | 2010                   |   |   | 2009                   |  
|                         |   |                        |   |   |                        |  
|Net revenues             | $ | 4,733                  |   | $ | 3,968                  |  
|Cost of revenues         |   | (4,145                 | ) |   | (3,406                 | )
|Operating expenses       |   | (2,281                 | ) |   | (990                   | )
|Net loss                 |   | (1,849                 | ) |   | (550                   | )
|Weighted average shares  |   | 394,436,364            |   |   | 316,334,980            |  
|Basic net loss per share | $ | -                      |   | $ | -                      |  

Note 4 - Other intangible assets

In accordance with Accounting
Standards Codification 805 (ASC 805), Business Combinations, the Company has
identified and recognized trade name and customer relationships in Tre Kronor as
intangible assets. Based on a discounted cash flow model the fair value of the
intangible assets was determined to $610,000 and $220,000 respectively, both
having a useful life of 5 years. For the three and six months ended June 30,
2010 intangible assets were amortized by $25,800. At June 30, 2010 the net
carrying amount of intangible assets related to the acquisition of Tre Kronor
was $804,200.

Intangible assets related to the Companys acquisition of Bark
Copenhagen/Bark Media, was fully amortized during the three months ended June
30, 2010. For the six months ended June 30 2010 these intangible assets were
amortized for $19,164 as compared to $31,316 for the six months ended June 30,
2009.

The following table set forts the future amortization of
intangible assets:

|2010 (May  December): | $ | 108,822 | 
|---------------------- | - | ------- | 
|2011:                  | $ | 166,000 | 
|2012:                  | $ | 166,000 | 
|2013:                  | $ | 166,000 | 
|2014:                  | $ | 166,000 | 
|2015 (January  May):  | $ | 57,178  | 

Note 5 - Concentration of credit risk

Credit risk represents the loss
that would be recognized if counterparties failed to completely perform as
contracted.

During the six months ended June
30, 2010 no customer accounted for more than 10% of revenue. During the six
months ended June 30, 2009 customers C,D, and K accounted for approximately 11%,
26% and 30%, respectively of revenue. No other customers individually
represented more than 10% of revenue for any period presented.

As of June 30, 2010 customers AB,
AC and AD accounted for approximately 11%, 14% and 15% of the Companys accounts
receivables, respectively. As of December 31, 2009 customers E and K accounted
for approximately 37% and 14% of the Company's accounts receivables,
respectively. No other customers individually represented more than 10% of
accounts receivables at the end of any period presented.

- 10 -

---

The Company's loss of these or
other customers, or any decrease in sales to these or other customers, could
have a material adverse effect on the Company's business, financial condition or
results of operations.

The Company monitors its exposure to customers to minimize
potential credit losses.

The Company maintains cash and
cash equivalent balances at several financial institutions throughout its
operating area, and at times, may exceed insurance limits and expose the Company to
credit risk. As part of its cash management process, the Company periodically
reviews the relative credit standing of these financial institutions.

The Companys cash and cash
equivalent balances are maintained at financial institutions located in Denmark
and Sweden.

Note 6  Non-controlling interests

For consolidated majority-owned
subsidiaries in which the Company owns less than 100% of the total outstanding
shares, the Company recognizes a non-controlling interest for the ownership
interest of the holders.

In May 2007, 651 Class B shares
in Bark Advertising were issued to the selling shareholders of Bark Copenhagen
at a price of DKK 12,912 ($2,373) per share and 50 Class B shares were sold to
two senior employees of the Company at a price of DKK 12,000 ($2,206) per share.
In November 2007 Bark Advertising sold 25 Class B shares to one senior employee
at a price of DKK 12,000 ($2,206) per share.

In January 2009, two Class B
shareholders representing 131 shares were redeemed. The redeemable amount as of
June 30, 2010 was DKK 667,393 ($109,946) and as of December 31, 2009 was DKK
994,356 ($191,587). The redemption of shares is paid in 8 quarterly
installments, including interest at variable rates (5% at December 31, 2009). At
June 30, 2010, 2 installments are remaining.

In November 2009 three additional
Class B shareholders representing 75 shares were redeemed for DKK 900,000
($180,000). The redeemable amount was converted to a total of 2,000,000 shares
of common stock in Bark Group.

On June 1, 2010 the remaining
holders of 51,820 Series B shares were redeemed. The redemption of shares is
paid in 8 quarterly installments, including interest at variable rates (5% at
December 31, 2009). At June 30, 2010, 8 installments are remaining. The first
installment is due on August 31, 2010.

At each reporting date the Company records the Class B shares at the higher of (1) the redemption value or (2) the amount that would result from applying consolidation as included in ASC 810. All adjustments related to the application of the above would be recorded within additional paid-in capital. Adjustment related to the above has no impact on consolidated net loss of the Company, net loss attributable to the Company or loss available to controlling interest of the Company as the impact of the adjustment prior to January 1, 2009 was on loss attributable to controlling interest and accordingly the Loss Per Share (LPS) at December 31, 2008 was reported $(0.01). There are no deferred income tax consequences arising from the recognition of adjustments under ASC 505 as these adjustments are not deductible under Danish tax law.

At June 1, 2010 (redemption day), the redemption value exceeded the value from applying consolidation accounting according to FASB ASC 810, and therefore the non-controlling interest was recorded at the redemption value of $1,117,000. At December 31, 2009, the redemption value exceeded the value from applying consolidation accounting according to FASB ASC 810, and therefore the non-controlling interest was recorded at the redemption value of $1,301,000.

- 11 -

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The change in carrying amount of non-controlling interest is as
follows:

|                                                                                                          |   | As of         |   |   | As of        |   |   | As of        |  
|--------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | - | - | ------------ | -
|                                                                                                          |   | June 30, 2010 |   |   | June 1, 2010 |   |   | December 31, |  
|                                                                                                          |   |               |   |   |              |   |   | 2009         |  
|Balance at beginning of period                                                                            | $ | 1,117         |   | $ | 1,301        |   | $ | 1,448        |  
|Shares issued in subsidiary Bark Advertising   
      loss
      attributable to Non-Controlling interest |   |               |   |   | (23          | ) |   | (79          | )
|                                                                                                          |   |               |   |   |              |   |   |              |  
|Adjustment according to FASB ASC 810                                                                      |   | -             |   |   | (124         | ) |   | 101          |  
|                                                                                                          |   |               |   |   |              |   |   |              |  
|Currency adjustment                                                                                       |   | (5            | ) |   | (37          | ) |   | 4            |  
|Conversion to shares in Bark Group Inc                                                                    |   |               |   |   |              |   |   | (173         | )
|Redeemed shares, reclassified to liabilities                                                              |   | (1,112        | ) |   | -            |   |   | -            |  
|Balance at end of period                                                                                  | $ | -             |   | $ | 1,117        |   | $ | 1,301        |  

Note 7 - Derivative Liabilities

In June 2008, the FASB finalized
ASC 815, Determining Whether an Instrument (or Embedded Feature) is indexed to
an Entitys Own Stock. Under ASC 815, instruments which do not have fixed
settlement provisions are deemed to be derivative instruments. The Company has
determined that it needs to account for 4 convertible debentures (see note 9)
issued during the second quarter 2010 for its shares of common stock, as
derivative liabilities, and apply the provisions of ASC 815. The instruments
have a ratchet provision that adjust either the exercise price and/or quantity
of the shares as the conversion price equals to 55% - 65% of the "market price"
at the time of conversion, which "market price" will be calculated as the
average of the three lowest "trading prices" for the Company's common stock
during the ten day trading period prior to the date the conversion note is sent
to the Company.

As a result, the instruments need
to be accounted for as derivative liabilities. In accordance with ASC 815, these
convertible debentures have been re-characterized as derivative liabilities. ASC
815, Accounting for Derivative Instruments and Hedging Activities (ASC 815)
requires that the fair value of these liabilities be re-measured at the end of
every reporting period with the change in fair value reported in the
consolidated statement of operations.

The fair value of the derivative liabilities was measured using
the Black-Scholes option pricing model and the following assumptions:

|                                      |   | June 30, |  |   | Date of  | 
|------------------------------------- | - | -------- |  | - | -------- | 
|                                      |   | 2010     |  |   | issuance | 
|$80,000 Debenture:                    |   |          |  |   |          | 
|Discount Rate  Bond Equivalent Yield |   | 0.22%    |  |   | 0.39%    | 
|Annual rate of dividends              |   | -        |  |   | -        | 
|Volatility                            |   | 171%     |  |   | 152%     | 
|Weighted Average life (months)        |   | 6        |  |   | 9        | 
|                                      |   |          |  |   |          | 
|$40,000 Debenture:                    |   |          |  |   |          | 
|Discount Rate  Bond Equivalent Yield |   | 0.22%    |  |   | 0.42%    | 
|Annual rate of dividends              |   | -        |  |   | -        | 
|Volatility                            |   | 171%     |  |   | 160%     | 
|Weighted Average life (months)        |   | 6        |  |   | 9        | 
|                                      |   |          |  |   |          | 
|$37,500 Debenture:                    |   |          |  |   |          | 
|Discount Rate  Bond Equivalent Yield |   | 0.22%    |  |   | 0.43%    | 
|Annual rate of dividends              |   | -        |  |   | -        | 
|Volatility                            |   | 171%     |  |   | 160%     | 
|Weighted Average life (months)        |   | 7        |  |   | 9        | 
|                                      |   |          |  |   |          | 
|$50,000 Debenture:                    |   |          |  |   |          | 
|Discount Rate  Bond Equivalent Yield |   | 0.22%    |  |   | 0.37%    | 
|Annual rate of dividends              |   | -        |  |   | -        | 
|Volatility                            |   | 171%     |  |   | 161%     | 
|Weighted Average life (months)        |   | 8        |  |   | 9        | 
|                                      |   |          |  |   |          | 
|Fair Value                            | $ | 142,332  |  | $ | 155,163  | 

- 12 -

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The discount rate was based on
rates established by the Federal Reserve. The Company based expected volatility
on the historical volatility for its common stock. The expected life of the
debentures was based on their full term. The expected dividend yield was based
upon the fact that the Company has not historically paid dividends, and does not
expect to pay dividends in the future.

On the date of issuance the
derivative liabilities associated with the debentures was $155,163. At June 30,
2010, the derivative liability associated with the debenture was revalued to
$142,332. The $12,831 decrease in the derivative liability at June 30, 2010 is
included as gain on change in fair value of derivative liabilities in the
Companys condensed consolidated statement of operations for the three and six
months ended June 30, 2010

Note 8 - Fair Value MeasurementValuation
Hierarchy     ASC 820 establishes a valuation
hierarchy for disclosure of the inputs to valuation used to measure fair value.
This hierarchy prioritizes the inputs into three broad levels as follows. Level
1 inputs are quoted prices (unadjusted) in active markets for identical assets
or liabilities. Level 2 inputs are quoted prices for similar assets and
liabilities in active markets or inputs that are observable for the asset or
liability, either directly or indirectly through market corroboration, for
substantially the full term of the financial instrument. Level 3 inputs are
unobservable inputs based on the Companys own assumptions used to measure
assets and liabilities at fair value. A financial asset or liabilitys
classification within the hierarchy is determined based on the lowest level
input that is significant to the fair value measurement.

The following table provides the
assets and liabilities carried at fair value measured on a recurring and non-recurring basis as of
June 30, 2010:

|                       |   |                     |  |   | Fair Value Measurements at June 30, 2010 | 
|---------------------- | - | ------------------- |  | - | ---------------------------------------- | 
|                       |   |                     |  |   | Quoted prices                            | 
|                       |   | Total Carrying      |  |   | in active                                | 
|                       |   | Value at            |  |   | markets                                  | 
|                       |   | June
      30, 2010 |  |   | (Level 1)                                | 
|                       |   |                     |  |   |                                          | 
|Derivative liabilities | $ | 142,332             |  | $ | -                                        | 
|Goodwill               | $ | 5,205,000           |  | $ | -                                        | 

The derivative liabilities are
measured at fair value using quoted market prices and estimated volatility
factors based on historical quoted market prices for the Companys common stock,
and are classified within Level 3 of the valuation hierarchy.

Goodwill is measured at fair value on a non-recurring basis using discounted cash flows and is classified within level 3 of the value hierarchy.

The following table sets forth a
summary of the changes in the fair value of the Companys Level 3 financial liabilities
that are measured at fair value on a recurring basis:

|                                                                            |   | June 30,  |   |   | December 31, | 
|--------------------------------------------------------------------------- | - | --------- | - | - | ------------ | 
|                                                                            |   | 2010      |   |   | 2009         | 
|                                                                            |   |           |   |   |              | 
|Beginning balance                                                           | $ | -         |   | $ | -            | 
|Derivative liabilities recorded                                             |   | 155,163   |   |   | -            | 
|Net unrealized gain on change in fair value
      of derivative liabilities |   | (12,831   | ) |   | -            | 
|Ending balance                                                              | $ | 142,332 $ |   |   | -            | 

- 13 -

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The following table set forth a summary of the changes in the fair value of goodwill that is measured at fair value on a non-recurring basis.

|                    |   | June 30,   |   |   | December 31, | 
|------------------- | - | ---------- | - | - | ------------ | 
|                    |   | 2010       |   |   | 2009         | 
|                    |   |            |   |   |              | 
|Beginning balance   | $ | 3,289,000  |   | $ | 3,230,000    | 
|Acquired            |   | 3,735,000  |   |   | -            | 
|Impaired            |   | (1,342,000 | ) |   | -            | 
|Currency adjustment |   | (477,000   | ) |   | 59,000       | 
|Ending balance      | $ | 5,205,000  |   | $ | 3,289,000    | 

Note 9  Long and short-term debt

Long and short-term debt

Bark Corporation has a floating
interest rate line of credit facility in the amount of DKK 7,000,000 (USD
1,153,175) which expires on November 15, 2010. As at June 30, 2010 and December
31, 2009, the amount outstanding under this line of credit facility was
$1,153,000 and $1,421,000, respectively.

The Company obtained a short term
loan from a private investor in the amount of DKK 1,000,000 ($186,000) on
February 4, 2010 in order to fund working capital until additional capital could
be raised. The loan matured on April 30, 2010 together with accrued interest of
DKK 200,000 ($37,970), the loan was not called on date of maturity. As at June
30, 2010 the amount outstanding including accrued interest was $197,687.

The Company obtained a short term
loan from a private investor in the amount of DKK 1,000,000 ($179,953) on March
4, 2010 in order to fund working capital until additional capital could be
raised. The loan matured on June 30, 2010 together with accrued interest of DKK
200,000 ($37,970). On June 25, 2010 the loan, which was not called on the date
of maturity, were partly repaid in cash. As at June 30, 2010 the amount
outstanding including accrued interest was $32,948

On March 10, 2010 the Company
obtained a Convertible Debenture totaling $80,000. The note bears interest at a
rate of 8% per annum and is due nine months from date of issuance. The Note is
convertible into shares of common stock of the Company at a conversion price
equal to 65% of the "market price" at the time of conversion, which "market
price" will be calculated as the average of the three lowest "trading prices"
for the Company's common stock during the ten day trading period prior to the
date the conversion note is sent to the Company. Based on the Black Scholes
model the Company calculated a call option value of $0.08 resulting in a
deferred debt discount of $71,033 which will be recorded as interest expenses
ratably over the loans maturity. As at June 30, 2010 the amount outstanding
including accrued interest, net of deferred discount was $39,862.

On March 15, 2010 the Company
obtained a loan from a private investor of $250,000. The loan bears no interest
and is due one year from date of issue. If the Company choose not to repay the
loan in cash the holder of the note is entitled to convert the note into shares
of common stock at a price equal to 85% of the market price of the Companys
common stock at the time of conversion. Based on the Black  Scholes model the
Company calculated a call option value of $0.08 resulting in a possible deferred
debt discount of $149,603. As the note holds a contingent conversion no deferred
debt discount was recognized. As at June 30, 2010 the amount outstanding was
$250,000.

On April 20, 2010 the Company
obtained a Convertible Debenture totaling $40,000. The note bears interest at a
rate of 8% per annum and is due nine months from date of issuance. The Note is
convertible into shares of common stock of the Company at a conversion price
equal to 55% of the "market price" at the time of conversion, which "market
price" will be calculated as the average of the three lowest "trading prices"
for the Company's common stock during the ten day trading period prior to the
date the conversion note is sent to the Company. Based on the Black Scholes
model the Company calculated a call option value of $0.06 resulting in a
deferred debt discount of $29,702 which will be recorded as interest expenses
ratably over the loans maturity. As at June 30, 2010 the amount outstanding
including accrued interest, net of deferred discount was $18,621

On May 4, 2010 the Company
obtained a Convertible Debenture totaling $37,500. The note bears interest at a
rate of 8% per annum and is due nine months from date of issuance. The Note is
convertible into shares of common stock of the Company at a conversion price
equal to 65% of the "market price" at the time of conversion, which "market price" will be calculated as the average of the three
lowest "trading prices" for the Company's common stock during the ten day
trading period prior to the date the conversion note is sent to the Company.
Based on the Black Scholes model the Company calculated a call option value of
$0.07 resulting in a deferred debt discount of $25,286 which will be recorded as
interest expenses ratably over the loans maturity. As at June 30, 2010 the
amount outstanding including accrued interest, net of deferred discount was
$17,925.

- 14 -

---

On May 27, 2010 the Company
obtained a Convertible Debenture totaling $50,500. The note bears interest at a
rate of 8% per annum and is due nine months from date of issuance. The Note is
convertible into shares of common stock of the Company at a conversion price
equal to 65% of the "market price" at the time of conversion, which "market
price" will be calculated as the average of the three lowest "trading prices"
for the Company's common stock during the ten day trading period prior to the
date the conversion note is sent to the Company. Based on the Black Scholes
model the Company calculated a call option value of $0.05 resulting in a
deferred debt discount of $29,142 which will be recorded as interest expenses
ratably over the loans maturity. As at June 30, 2010 the amount outstanding
including accrued interest, net of deferred discount was $24,787.

The Company obtained a short term
loan from a private investor in the amount of DKK 1,000,000 ($165,166) on June
25, 2010 in order to fund working capital until additional capital could be
raised. The loan matures on September 30, 2010 together with accrued interest of
DKK 250,000 ($41,292). The loan agreement includes an option to convert the loan
including interest into shares of common stock at a price of $0.06. As at June
30, 2010 the amount outstanding including accrued interest was $167,339. As the
note holds a contingent conversion no deferred debt discount was recognized.

Note 10  Non-vested shares

In September 2007, the Company
issued 7,778,720 non-vested share awards to two executives of the Company having
a stated value of DKK 330,000 ($65,100). A weighted average grant date fair
value of per share. The fair value of the non-vested share awards on the date of
issuance was DKK 3,939,000 ($777,000). The non-vested awards became fully vested
on May 31, 2010. The Company records compensation expense ratably over the
vesting period. During the six months ended June 30, 2010 and 2009, the Company
recorded $94,753 and $114,000 of compensation expense, respectively, related to
these awards. During the three months ended June 30, 2010 and 2009 the Company
recorded $37,901 and $57,064 of compensation expense.

As of June 30, 2010 there was no unrecognized compensation costs related to any other non-vested share-based compensation arrangements.

Note 11  Stock based compensation

In August and September 2009 the
Company issued 3,000,000 shares to three consulting companies for services
to be rendered during 2009 through 2012. The market value of the shares, on the date
of signing the agreements was $487,500. During the six months ended June 30,
2010 and 2009 the Company recorded stock based compensation of $46,042 and
$128,645 respectively. During the three months ended June 30, 2010 and 2009 the
Company recorded stock based compensation of $96,821 and $0 respectively.The
Company will record compensation expense ratably over the remaining period. As
of June 30, 2010 there was $161,146 of total unrecognized compensation costs
related to the issuance. The cost is expected to be recognized over a period of
7 quarters.

During the second quarter of 2010
the Company issued 1,348,000 shares of common stock to five consultants for
services to be rendered during 2010 and 2011. The market value of the shares, on the
date of signing the agreements was $151,920. During the six months ended June
30, 2010 the Company recorded stock based compensation of $73,800. The Company
will record compensation expense ratably over the remaining period. As of June
30, 2010 there was $78,120 of total unrecognized compensation costs related to
the issuance. The cost is expected to be recognized over a period of 3
quarters.

Note 12 - Related party transactions

Fee to Chairman of the Board Bent Helvang
       BH Media ApS (a company 100%
owned by Bent Helvang) is according to contract entitled to invoice the Company
DKK 180,000 ($32,041) during the six months ended June 30, 2010 and 2009,
respectively, for services provided to the Company relating to acquiring new
companies, strategy planning and management services. For the three months ended
June 30, 2010 and 2009 the contract entitled BH Media ApS to invoice DKK 90,000
($16,020).

- 15 -

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Such services have been recorded as a component of selling,
general, and administrative expenses. At June 30, 2010, and December 2009 BH
Media ApS has a receivable of DKK 1,193,037($196,540) and DKK 867,744 ($167,192)
respectively which has been classified in advances from related parties.

*Fee to CEO Anders
Hageskov*     Lugano Communication and
Entertainment (a company in which Anders Hageskov was employed up until October
31, 2009) invoiced the Company $142,120 during the six months ended June 30,
2009, for services rendered by Anders Hageskov to Bark Copenhagen and Bark
Advertising. For the three months ended June 30, 2009 Lugano Communication
invoiced the Company $71,060. The fees included reimbursement of costs incurred
by Lugano Communication and Entertainment for operating an office in Lugano,
Switzerland and has been recorded as a component of selling, general, and
administrative expenses. Since November 1, 2009 Anders Hageskov has been
employed by the Company.

*Loan to Anaconda tv
Gmbh*On April 8 and May 27, 2010, the Company made payments to creditors
on behalf of Anaconda at a total amount of $16,047. Anaconda will repay this
loan no later than December 31, 2010. At June 30, 2010 the amount outstanding
was $16,047 which was classified in receivables from related parties.

*Acquisition of Anaconda  re
convey*On June 15, 2010, we entered into an agreement with Jesper Svane,
a 10% shareholder of the Company, and Svaneco Ltd., a private company controlled
by Mr. Svane, in respect of the ownership of Anaconda.tv GmbH, whereby Bark
Corporation agreed to re-convey to Mr. Svane a 25.5% interest in Anaconda that
was acquired by us on March 31, 2010. As consideration for the re-conveyance,
Mr. Svane agreed to surrender 7,000,000 shares of the common stock of the
Company issued to him originally in connection with Bark Corporations
acquisition of an interest in Anaconda.

*Niclas Fröberg  CEO of Tre
Kronor*According to the Share Purchase Agreement with the former
shareholders of Tre Kronor, the Company is committed to pay an aggregate amount
of SEK 3,000,000 ($412,000) to Mr. Fröberg. The payments were due as follows (i)
SEK 750,000 ($103,000) in May 2010, and (ii) SEK 750,000 ($103,000) in June
2010, and (iii) SEK 1,500,000 ($206,000) in July 2010. At June 30, 2010 the amount outstanding was $317,000 which has been classified in debt to former shareholder  Tre Kronor.

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Note 13  Net loss per share

The following is a reconciliation of the numerators and
denominators used in computing basic and diluted net loss per share (in 000's
USD except share and per share data):

|                                                                         |   | Three months Ended |   |   | Six months Ended |  
|------------------------------------------------------------------------ | - | ------------------ | - | - | ---------------- | -
|                                                                         |   | June
      30      |   |   | June
      30    |  
|                                                                         |   | 2010               |   |   | 2009             |  
|Numerator:                                                               |   |                    |   |   |                  |  
|                                                                         |   |                    |   |   |                  |  
|Net loss available to controlling interest                               | $ | (2,255             | ) |   | (764             | )
|                                                                         |   |                    |   |   |                  |  
|Denominator:                                                             |   |                    |   |   |                  |  
|Shares used in computation - basic:                                      |   |                    |   |   |                  |  
|Weighted average shares outstanding                                      |   | 394,436,364        |   |   | 324,113,700      |  
|Weighted average common shares outstanding subject
      to repurchase   |   | -                  |   |   | (7,778,720       | )
|                                                                         |   |                    |   |   |                  |  
|Shares used in computing basic net loss per share                        |   | 394,436,364        |   |   | 316,334,980      |  
|Shares used in computation - diluted:                                    |   |                    |   |   |                  |  
|Weighted average shares outstanding                                      |   | 394,436,364        |   |   | 316,334,980      |  
|Dilutive effect of common shares
      outstanding subject to repurchase |   | -                  |   |   | -                |  
|                                                                         |   |                    |   |   |                  |  
|Shares used in computing diluted net loss
      per share                |   | 394,436,364        |   |   | 316,334,980      |  
|                                                                         |   |                    |   |   |                  |  
|Net loss per share - basic and diluted                                   | $ | (-)                |   | $ | (-)              |  

Bark Group had securities
outstanding which could potentially dilute basic earnings per share in the
future, but the incremental shares from the assumed exercise of these securities
were excluded in the computation of diluted net loss per share, as their effect
would have been anti-dilutive. Such outstanding securities consist of 7,778,720
non-vested shares issued to two executives. The shares were fully vested on May
31, 2010.

Note 14  Geographic information

The Company does not have
reportable operating Segments as defined in the ASC 280 Disclosures about
Segments of an Enterprise and related information The method for attributing
revenues to individual customers is based on the destination to which invoiced
are shipped.

The Company operates facilities
in  Denmark and Sweden. The following is a summary of information by area for
the three and six months ended June 30, 2010 and 2009.

|              |   | Six months ended |  |   | Three months  |  |   | Six months     |  |   | Six months     | 
|------------- | - | ---------------- |  | - | ------------- |  | - | -------------- |  | - | -------------- | 
|              |   | June 30, 2010    |  |   | ended June30, |  |   | ended June 30, |  |   | ended June 30, | 
|              |   |                  |  |   | 2009          |  |   | 2010           |  |   | 2009           | 
|Net Revenues: |   |                  |  |   |               |  |   |                |  |   |                | 
|Denmark       | $ | 2,387,000        |  | $ | 1,364,000     |  | $ | 1,938,000      |  | $ | 1,243,000      | 
|Sweden        | $ | 2,344,000        |  | $ | 2,344,000     |  |   | -              |  |   | -              | 
|Totals        | $ | 4,731,000        |  | $ | 3,708,000     |  | $ | 1,938,000      |  | $ | 1,243,000      | 

- 17 -

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|                     |   | June 30, 2010 |  |   | December 31, 2009 | 
|-------------------- | - | ------------- |  | - | ----------------- | 
|                     |   |               |  |   |                   | 
|Identifiable Assets: |   |               |  |   |                   | 
|Denmark              | $ | 4,888,000     |  | $ | 6,334,000         | 
|Sweden               | $ | 2,024,000     |  |   | -                 | 
|                     |   |               |  |   |                   | 
|Totals               | $ | 6,912,000     |  | $ | 6,334,000         | 

Note 15  Subsequent events

On August 18, 2010 the Company
entered into an agreement to convert an aggregate debt of DKK 6,753,000
($1,112,484) to redeemed shareholders into 717,260 newly issued shares of its
common stock. The conversion of debt will affect the Companys financial
statements as follows:

|Decrease in net working capital deficit: | $ | 556,242   | 
|---------------------------------------- | - | --------- | 
|Decrease in total liabilities:           | $ | 1,112,484 | 
|Increase in stockholders equity:        | $ | 1,112,484 | 

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Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations.

The following discussion and analysis summarizes the
significant factors affecting our condensed consolidated results of operations,
financial condition and liquidity position for the three and six months ended
June 30, 2010 and 2009. This discussion and analysis should be read in
conjunction with our audited financial statements and notes thereto included in
our Annual Report on Form 10-K for our year-ended December 31, 2009 and the
condensed consolidated unaudited financial statements and related notes included
elsewhere in this filing. The following discussion and analysis contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those discussed in the
forward-looking statements.

Forward-Looking Statements

Forward-looking statements in this Quarterly Report on Form
10-Q, including without limitation, statements related to our plans, strategies,
objectives, expectations, intentions and adequacy of resources, are made
pursuant to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that such forward-looking statements
involve risks and uncertainties including without limitation the following: (i)
our plans, strategies, objectives, expectations and intentions are subject to
change at any time at our discretion; (ii) our plans and results of operations
will be affected by our ability to manage growth; and (iii) other risks and
uncertainties indicated from time to time in our filings with the Securities and
Exchange Commission.

In some cases, you can identify forward-looking statements by
terminology such as may, will, should, could, expects,
plans, intends, anticipates, believes, estimates,
predicts, potential, or continue or the negative of such terms or
other comparable terminology. Although we believe that the expectations
reflected in the forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance, or achievements. Moreover,
neither we nor any other person assumes responsibility for the accuracy and
completeness of such statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of the date
hereof. We are under no duty to update any of the forward-looking statements
after the date of this Report.

Overview

We are a commercial communication services company that
provides integrated traditional and new media advertising and marketing
consulting services to our clients. We conduct our business through various
subsidiaries which enables us to merge various communication expertise including
traditional advertising (creativity and strategy), media consulting, digital
know-how and television production. We believe this mix of skills allows us to
customize advertising and marketing communication services to create the most
value for our clients and their businesses.

Our clients are comprised primarily of European businesses that
range in size from small local businesses to larger trans-national and
multi-national corporations. These clients include a range of businesses
including financial institutions and banks, consumer products companies and
luxury goods companies

Our strategic plan is to combine traditional advertising agency
skills with the media agency and relevant digital knowhow in order to create a
communications company that is able to deliver effective integrated advertising
and marketing campaigns and activities. We believe that this transformation from
a traditional advertising agency to an integrated communications company has
only been done on a limited scale to date. We believe this presents us with a
market opportunity to expand our business and compete with much larger
competitors in the marketplace.

Our strategy moving forward is to pursue the acquisition of
additional businesses in our industry with the objective of increasing the size
of our business, with the overall objective of increasing our revenue and
profits. We intend to finance these acquisitions with the proceeds from the
issuance of additional equity or debt. We are currently pursuing an equity
financing. Allthough the total amount of financing is uncertain. We are unable
to provide assurance as to whether we will be successful in such efforts.

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Anaconda

We completed the acquisition of a 51% interest in Anaconda.tv
GmbH, a television production company incorporated in Munich, Germany
(Anaconda) effective March 31, 2010. Under the terms of the Share
Purchase Agreement, we agreed to purchase a 25.5% interest in the issued and
outstanding share capital of Anaconda. The Share Purchase Agreement also
included the grant by Bark Holding to Bark Corporation A/S of the option to
purchase an additional 25.5% interest in Anaconda. We were entitled to exercise
this option on or before March 31, 2010. We determined to exercise this option
and completed the acquisition of the 51% interest in Anaconda effective March
31, 2010. As consideration for this acquisition, we have issued an aggregate of
14,000,000 shares of our common stock (the Consideration Shares). Of
the Consideration Shares, 7,000,000 shares were issued to Mr. Jesper Svane, one
of our principal shareholders, and 7,000,000 shares were issued to Mr. René
Lauritsen, at the direction of Bark Holding. Bark Holding is a private
corporation owned by Mr. Lauritsen and Mr. Svane, each of whom is the owner of
more than 10% of our outstanding common stock.

On June 15, 2010, we entered into an agreement with Jesper
Svane, a 10% shareholder of the Company, and Svaneco Ltd., a private company
controlled by Mr. Svane, in respect of the ownership of Anaconda.tv GmbH,
whereby:

- Bark Corporation agreed to re-convey to Mr. Svane a 25.5% interest in
  Anaconda that was acquired by us on March 31, 2010,
- as consideration for the re-conveyance, Mr. Svane surrendered, in July
  2010, 7,000,000 shares of the common stock of the Company issued to him
  originally in connection with Bark Corporations acquisition of an interest in
  Anaconda,
- Mr. Svane further granted to Bark Corporation the option to re-acquire the
  25.5% interest in Anaconda in exchange for issuance of an additional 7,000,000
  shares of our common stock, which option will be exercisable by us on or
  before September 15, 2010, and
- each party agreed to complete such transfers, assignments and surrenders
  of shares to give effect to the above agreements.

The agreement was entered into as Anaconda had failed to
deliver to us audited financial statements of Anaconda for the year ended
December 31, 2009 in the manner that Anaconda had represented that it would
deliver. The Company anticipates that any determination to exercise the option
to re-acquire the 25.5% interest from Mr. Svane would be contingent upon (i)
audited financial statements of Anaconda for the year ended December 31, 2009
being completed, and (ii) financial performance of Anaconda in 2010 according to
agreed budgets.

Acquisition of Tre Kronor Media AB

We completed the acquisition of all of the issued and
outstanding shares of Tre Kronor Media AB, a Swedish media company (Tre
Kronor) on May 4, 2010. The acquisition was completed further to a share
purchase agreement dated April 9, 2010 entered into between Bark Group and each
of the shareholders of Tre Kronor. We issued an aggregate of 35,000,000 shares
of common stock to the shareholders of Tre Kronor, pro rata with their
respective ownership interests in Tre Kronor, to complete the acquisition. In
the event that we do raise share capital injections or external financing via
convertible notes before 31 December 2010 in the minimum amount of $3,000,000,
the Tre Kronor shareholders will have the right to re-acquire all of the issued
and outstanding shares of Tre Kronor from us by (i) delivering written notice by
15 January 2011 and returning to us all consideration issued to such
shareholders within 30 days of such notice, including the cash value of any
shares that may have been sold by the Tre Kronor shareholders. Additional
principal terms of the Tre Kronor are summarized in our current report on Form
8-K/A filed with the SEC on July 19, 2010

On August 11, 2010 the former shareholders of Tre Kronor
renounced their right to re-acquire the issued and outstanding shares as
described above.

Tre Kronor is a Swedish media and
advertising business founded September 2007 by Niclas Froberg (Former Nordic CEO
for MindShare and owner of MindShare Sweden), Carl Johan Grandinson and Jacob de
Geer (co-founders of Tradedoubler). Bark Group will operate Tre Kronor as Bark
Stockholm following completion of the acquisition. Tre Kronor is a result based
advertising agency that works hand in hand with clients to determine their
requirement needs. To get the most efficient value for their media investment
they coordinate and negotiate with different suppliers andcollaborative business partners online as
well as offline. Tre Kronor Media has staff of 10 people who are employed at its
offices at Sveavägen 17 in Stockholm where they handle media and advertising
campaigns in Sweden for more than 30 Swedish national and international clients.
Tre Kronor Media has received awards for Agency of the Year and Media Agency
of the Year in Sweden in 2010.

- 20 -

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Bark Group believes that Tre Kronor Media's business model of
performance-based marketing is consistent with Bark's strategy of acquiring
professional, profitable and innovative multi-platform media companies. Bark
Groups objective is to expand its presence globally following targeted
acquisitions of small media businesses with high profile and top creative staff.

Results of Operations

Results of operations reflect inclusion of
Tre Kronor from May 4, 2010 to June 30, 2010.

Revenues

We earn revenues from the advertising and marketing services
that we provide based on various different fee arrangements, including:

- fees for advertising services,
- fees for strategic counseling,
- commissions on media placements,
- performance based revenue, and
- a combination of all of the above.

The majority of our revenues are attributable to revenues
earned on a fee for services basis for the advertising and marketing services
that we provide.

During the six months ended June 30, 2010 our revenues
increased to $4,722,000 as compared to $1,938,000 during the six month ended
June 30, 2009, representing an increase of $2,784,000. As for the three months
ended June 30, 2010 compared to the three months ended June 30, 2009 our
revenues increased from $695,000 to $3,358,000. The increased revenues in both
compared periods, arises primarily due to the acquisition of Tre Kronor Media
and reflect operations of Tre Kronor Media from May 4, 2010 to June 30, 2010.

Exclusive of consolidation of Tre Kronor Media, our revenues
for the six months ended June 30, 2010 increased by approximately $412,000 or
18% compared to the six months ended June 30, 2009. As for the three months
ended June 30, 2010 compared to the three months ended June 30, 2009 the
revenues, exclusive of Tre Kronor Media, increased to approximately $1,002,000
from $682,000 representing an increase of $320,000 or 47%. The increased
revenues arise from projects from new customers. We anticipate further revenues
from these new customers from recurring projects based on discussions with these
new clients and proposed marketing budgets, however we do not have long term
contracts with these new customers and there is no assurance that client
indications of future projects will materialize into revenues.

Cost of Revenues

Our cost of revenues is attributable to direct costs that we
incur to produce a final communication product incorporating the marketing and
advertising concepts that we develop. The final communication product is then
delivered to media outlets who then broadcast to the public. These direct costs
include, for example, the following:

- a portion of salaries for professional staff attributable to providing
  professional services,
- consultancy fees,
- film production,

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- cost of placement of media,
- photography,
- web site design,
- production of radio commercials,
- printed materials, and
- layout of advertisements for newspapers and magazines.

These expenses represent external costs that we pay to third
parties as part of the creation and implementation of advertising and marketing
campaigns for our clients.

Due to our acquisition of Tre Kronor Media our cost of revenues
increased for the six month ended June 30, 2010 to $4,045,000 as compared to
$1,475,000 for the six months ended June 30, 2009, an increase of $2,570,000.
For the three months ended June 30, 2010 cost of revenues increased from
$597,000 to $2,993,000. The increases relates primarily to our acquisition of
Tre Kronor Media as described in the revenue section.

Cost of revenues in Tre Kronor Media contributes with
$2,144,000 both for the six and the three months ended June 30, 2010. For the
Danish operation exclusively cost of revenues increased to $1,901,000 for the
six month ended June 30, 2010 as compared to $1,475,000 for the six month ended
June 30, 2009. As for the three month ended June 30 cost of revenues increased
with $252,000 in 2010 compared to 2009. The increased cost of revenues in both
periods arises from i) higher external purchases from projects and ii) higher
salary expenses as all employees in 2009 accepted to reduce their salary with
10%.

Gross Profit

Gross profit increased to $677,000 for the six months ended
June 30, 2010 as compared to $463,000 the six months ended June 30, 2009. As for
the three months ended June 30, 2010, gross profit increased from $98,000 to
$365,000. As Tre Kronor Media contributes with $190,000 in both periods of 2010,
the gross profit in the Danish operation for the six months ended June 30, 2010
increased by $24,000 compared to 2009, whereas for the three months ended June
30, 2010 the gross profit increased in the Danish operation from $98,000 to
$175,000. The increased gross profits arises from the increased revenues partly
offset by increased cost of revenues.

Selling, General and Administrative Expenses

Our selling, general and administrative expenses include the
following expenses:

- salaries for administrative staff and administrative functions,
- fees to our chairman which are not included in salaries,
- a portion of stock based compensation relating to stock issued to 2
  employees,
- office rental and associated office costs,
- professional expenses, including lawyers, auditors and other consultancy
  costs
- client marketing, travel and entertainment expenses,
- allowance for doubtful accounts, and
- information technology costs.

- 22 -

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Our selling, general and administrative expenses totaled
$1,463,000 for the six months ended June 30, 2010 as compared to $1,456,000 for
the six months ended June 30, 2009, representing an increase of $7,000. For the
three months ended June 30, 2010 the expenses increased to $1,013,000 as
compared to $700,000 for the three months ended June 30, 2009. For both the six
and the three months periods ended June 30, 2010 selling, general and
administrative expenses attributable to Tre Kronor Media were $213,000.

Depreciation and Amortization

Depreciation includes depreciation on building, plant,
equipment and amortization of customer relationships.

Depreciation and amortizations totaled $131,000 for the six
months ended June 30, 2010 as compared to $95,000 for the six months ended June
30, 2009, representing an increase of $36,000. As for the three months ended
June 30, 2010 depreciations and amortizations was $93,000 as compared to $48,000
in 2009.

The increase in both periods is caused by the inclusion of
depreciation on equipment from Tre Kronor Media and amortization of customer
relationships and trademark.

Other income

Gain on derivatives

For the three and six months ended June 30, 2010 we recognized
a total gain of $12,831 from derivative liabilities being the difference in fair
value between date of issuance and date of reporting. Derivative liabilities
relates to convertible debentures issued to private investors.

Loss from equity investment

On January 10, 2010 we acquired a 25.5% interest and on March
31, 2010 we acquired additional 25.5% interest in Anaconda GmbH. According to
Anacondas unaudited financial statements for the three month ended March 31,
2010 Anaconda reported a total loss of $77,458 of which $17,777 was allocated to
us. No unaudited financial statements was drawn for the three months ended June
30, 2010. According to local management the net loss for the six months ended
June 30, 2010 is equal to the total loss for the three months ended March 31,
2010.

Impairment of goodwill

For the three months ended June 30, 2010 we recorded an
impairment loss of $1,451,000 on the carrying value of goodwill related to our
May 2007 acquisition of Bark Copenhagen/Bark Media.

Interest Expense

Interest expense includes interest that we pay on our loans
from Danske Bank, Realkredit Denmark and interest plus deferred discounts from
loans and convertible notes issued to private investors. These loans and notes
are described in detail below under Liquidity and Capital Resources  Bank
Indebtedness.

Interest expenses totaled $207,000 for the six months ended
June 30, 2010 as compared to $286,000 for the six months ended June 30, 2009.
For the three months ended June 30, 2010 interest expenses totaled $93,000 as
compared to $148,000 in 2009.

The variance is attributable to decreased interest rate on
mortgage to Realkredit Denmark partly ofsett by increasing interest expenses and
deferred discounts on loans and convertible notes from private investors.

Net Loss

After inclusion of impairment of goodwill of $1,451,000 during
the three months ended June 30, 2010, we recorded a net loss of $2,557,000 for
the six month ended June 30, 2010.

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Exclusive of goodwill impairment we recorded a net loss of
$1,106,000 for the six months ended June 30, 2010 as compared to a net loss of
$1,323,000 for the six months ended June 30, 2009 representing a decrease in our
loss of $217,000. For the three months ended June 30, 2010 we recorded a loss,
exclusive of goodwill impairment, of $804,000 as compared to a loss of $764,000
for the three months ended June 30, 2009. In both periods of 2010 we recorded a
loss of $33,000 from Tre Kronor Media. Thus, our Danish operation decreased the
net loss for the six month ended June 30, 2010 with $250,000 and increased the
net loss for the three month ended June 30, 2010 with $7,000 as compared to
2009.

The main reason for the decrease, exclusive of goodwill
impairment, is higher gross profit and lower selling, general and administrative
expenses.

Liquidity and Capital Resources

Cash and Working Capital

As at June 30, 2010 and December 31, 2009, we had cash of
$9,000 and $5,000 respectively. Our working capital deficit increased from
$5,809,000 at December 31, 2009 to $6,555,000 at June 30, 2010, an increase of
$746,000. The increase to our working capital deficit is due to convertible
notes obtained in 2010 with a maturity of less than 12 months. At June 30, 2010
the aggregated outstanding amount of these notes was approximately $927,000.

Cash Requirements

We are presently experiencing negative cash flows from our
operating activities and we have a working capital deficit. Our working capital
deficit was $6,555,000 as of June 30, 2010. Based on our current forecast we
anticipate that cash flow from operations will be sufficient to cover our
current on-going operating expenses for the next twelve months. Therefore we estimate that we will require
approximately $5,072,000 (working capital deficit $6,555,000 less i) convertible
notes of $927,000 and ii) conversion of debt to redeemed shareholders subsequent
to June 30, 2010 of $556,000)) over the next twelve months in order to sustain
our current obligations and to satisfy our working capital deficiency. This
amount does not include any funds necessary for us to expand our business.
Accordingly, we will require additional financing in order to pursue the
expansion of our business, either through growth or acquisitions. There is also
a risk that cash used in operations will be greater than anticipated in the
event that projected revenues are not achieved.

Our sources of additional cash, in addition to cash from
operations and our operating line of credits, include our loan commitment of DKK
4,000,000 ($658,957) from Bark Holding. Bark Holding is a company registered in
British Virgin Islands. We plan to use our loan from Bark Holding to finance our
operations over the next twelve months. However, we will require additional
financing beyond this loan in order to conduct our business in accordance with
our plan of operations. Further, there is no assurance that Bark Holding will
advance the loan that it has committed to make. No advances have been made on
this loan commitment as of August 23, 2010. We plan to conduct an equity
financing of our securities, as outlined below, in order to raise additional
financing. We will also pursue bridge loans and private placements from
investors located outside of the United States, primarily in Europe, in order to
raise the required funds. If we are not successful in obtaining additional
financing, we will reconsider our acquisition strategy and will further
reconsider whether our status as a public company is beneficial from a cost
benefit perspective. Any decisions made in this regard, may impact our ability
to expand our business.

We also entered into an engagement agreement with an investment
bank with the objective of securing additional financing, but we do not have any
commitment from the investment bank to complete any financing. There is no
assurance that we will raise any additional financing from either this
investment bank or any other investors. We believe that the current volatility
in the financial markets will make it more difficult for us to complete an
equity financing, either through the investment bank or through any other party.
We also plan to pursue alternate financing beyond the arrangement with this
investment bank, which may be either debt or equity financing. We do not have
any commitments for any such financing in place. If we are not successful in
raising additional financing, then we may not be able to expand our business as
anticipated. If we are successful in raising additional financing, then we will
adjust our expansion plans based on the amount of funds available to us. We may
also determine to use a portion of the proceeds to repay outstanding debt.

Bank Indebtedness

Bark Corporation borrowed DKK 9,000,000 (equivalent to
$1,773,400 as at December 31, 2007) pursuant to a credit facility with Danske Bank in May 2007 in order to enable Bark
Corporation to complete the acquisition of Bark Copenhagen and Bark Media. Total
credit line on this loan was DKK 7,000,000 ($1,153,175) as of June 30, 2010. The
maturity date of this loan has been extended to November 15, 2010.Current interest rate of this loan is 13.75% . At June 30, 2010 and December
31, 2009, the outstanding balance of line of credit was $1,153,211 and
$1,420,900, respectively, including accrued interest on the outstanding balance
of line of credit.

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Bark Property obtained a DKK 14,900,000 ($2,819,300) loan on
May 16, 2008 bearing variable interest of currently 1.766% expiring in 2037 (no
installments in the first 10 years and to be repaid over the last 20 years) from
Realkredit Denmark (a credit institution). Interest is payable on the last
working day of each quarter. This loan is secured by a mortgage against our
Copenhagen office property as a first priority mortgage. On November 21, 2008
Bark Corporation obtained a loan of DKK 1,611,000 ($304,800) from Realkredit
Denmark bearing a variable interest rate of currently 1.766% expiring in 2037
(no installments in the first 10 years and to be repaid over the last 19 years).
At June 30, 2010 and December 31, 2009, the outstanding balance of the loans
aggregated approximately $2,720,174 and $3,181,442, respectively.

On March 7, 2008, two new bank loans totaling DKK 7,000,000
(USD 1,324,500) were entered into. The two new loans are to be repaid in
quarterly installments over 15 years. The interest rate is fixed quarterly as
"Danske Bor" plus a margin of 3.00% . At June 30, 2010 and December 31, 2009,
the outstanding balance of these loans aggregating $981,575 and $1,097,469,
respectively.

Bark Copenhagen has a floating interest rate line of credit
facility in the amount of DKK 3,000,000 ($494,218). As at June 30, 2010 and
December 31, 2009, the amount outstanding under this line of credit facility was
approximately $493,558 and $555,000, respectively. By November 15, 2010 $165,000
of the $493,558 is to be repaid to the bank. The rate of interest payable under
the line of credit facility is presently 7.35% per annum.

Tre Kronor Media has a floating rate line credit facility in
the amount of SEK 3,000,000 ($386,000). As at June 30, 2010 the amount
outstanding under this line of credit facility was approximately $60,486. The
rate of interest payable under the line of credit facility is presently 4.25 %
per annum.

Loans from private investors

The Company obtained a short term loan from a private investor
in the amount of DKK 1,000,000 ($186,000) on February 4, 2010 in order to fund
working capital until additional capital could be raised. The loan matured on
April 30, 2010 together with accrued interest of DKK 200,000 ($37,970). As at
June 30, 2010 the amount outstanding including accrued interest was
$197,687.

The Company obtained a short term loan from a private investor
in the amount of DKK 1,000,000 ($179,953) on March 4, 2010 in order to fund
working capital until additional capital could be raised. The loan matures on
June 30, 2010 together with accrued interest of DKK 200,000 ($37,970). On June
25, 2010 the loan were partly repaid in cash. As at June 30, 2010 the amount
outstanding including accrued interest was $32,948

On March 10, 2010 the Company obtained a Convertible Debenture
totaling $80,000. The note bears interest at a rate of 8% per annum and is due
nine months from date of issuance. The Note is convertible into shares of common
stock of the Company at a conversion price equal to 65% of the "market price" at
the time of conversion, which "market price" will be calculated as the average
of the three lowest "trading prices" for the Company's common stock during the
ten day trading period prior to the date the conversion note is sent to the
Company. Based on the Black  Scholes model the Company calculated a call option
value of $0.08 resulting in a deferred debt discount of $71,033 which will be
recorded as interest expenses ratably over the loans maturity. As at June 30,
2010 the amount outstanding including accrued interest, net of deferred discount
was $39,862.

On March 15, 2010 the Company obtained a loan from a private
investor of $250,000. The loan bears no interest and is due one year from date
of issue. If the Company chooses not to repay the loan in cash the holder of the
note is entitled to convert the note into shares of common stock at a price
equal to 85% of the market price of the Companys common stock at the time of
conversion. Based on the Black  Scholes model the Company calculated a call
option value of $0.08 resulting in a possible deferred debt discount of
$149,603. As the note holds a contingent conversion no deferred debt discount
was recognized. As at June 30, 2010 the amount outstanding was $250,000.

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On April 20, 2010 the Company obtained a Convertible Debenture
totaling $40,000. The note bears interest at a rate of 8% per annum and is due
nine months from date of issuance. The Note is convertible into shares of common
stock of the Company at a conversion price equal to 55% of the "market price" at
the time of conversion, which "market price" will be calculated as the average
of the three lowest "trading prices" for the Company's common stock during the
ten day trading period prior to the date the conversion note is sent to the
Company. Based on the Black  Scholes model the Company calculated a call option
value of $0.06 resulting in a deferred debt discount of $29,702 which will be
recorded as interest expenses ratably over the loans maturity. As at June 30,
2010 the amount outstanding including accrued interest, net of deferred discount
was $18,621

On May 4, 2010 the Company obtained a Convertible Debenture totaling
  $37,500. The note bears interest at a rate of 8% per annum and is due nine
  months from date of issuance. The Note is convertible into shares of common
  stock of the Company at a conversion price equal to 65% of the "market price" at
  the time of conversion, which "market price" will be calculated as the average
  of the three lowest "trading prices" for the Company's common stock during the
  ten day trading period prior to the date the conversion note is sent to the
  Company. Based on the Black  Scholes model the Company calculated a call option
  value of $0.07 resulting in a deferred debt discount of $25,286 which will be
  recorded as interest expenses ratably over the loans maturity. As at June 30,
  2010 the amount outstanding including accrued interest, net of deferred discount
  was $17,925.

On May 27, 2010 the Company obtained a Convertible Debenture
totaling $50,500. The note bears interest at a rate of 8% per annum and is due
nine months from date of issuance. The Note is convertible into shares of common
stock of the Company at a conversion price equal to 65% of the "market price" at
the time of conversion, which "market price" will be calculated as the average
of the three lowest "trading prices" for the Company's common stock during the
ten day trading period prior to the date the conversion note is sent to the
Company. Based on the Black  Scholes model the Company calculated a call option
value of $0.05 resulting in a deferred debt discount of $29,142 which will be
recorded as interest expenses ratably over the loans maturity. As at June 30,
2010 the amount outstanding including accrued interest, net of deferred discount
was $24,787.

The Company obtained a short term loan from a private investor
in the amount of DKK 1,000,000 ($165,166) on June 25, 2010 in order to fund
working capital until additional capital could be raised. The loan matures on
September 30, 2010 together with accrued interest of DKK 250,000 ($41,292). The
loan agreement includes an option to convert the loan including interest into
shares of common stock at a price of $0.06. As at June 30, 2010 the amount
outstanding including accrued interest was $167,339. As the note holds a
contingent conversion no deferred debt discount was recognized.

On June 11, 2008 Bark Holding committed to issue a bridge loan
to us in the amount of up to DKK 3,000,000 ($567,700). On September 16, 2008,
Bark Holding increased this loan commitment to DKK 4,000,000 ($658,957) on
identical terms. This loan will accrue interest at 7% and will be due when our
cash flow is positive for more than four consecutive weeks or when additional
sources of financing are in place. This loan had not been advanced as of the
date of this quarterly report on Form 10-Q.

Going Concern

Our unaudited condensed consolidated financial statements for
the six months ended June 30, 2010 have been prepared assuming that we will
continue as a going concern. We currently have and had as at both June 30, 2010
and December 31, 2009 negative working capital and limited financial resources
available to pay ongoing financial obligations as they became due. Our net
working capital deficit at June 30, 2010 was $6,555,000 including i) $927,000 in
convertible notes and ii) conversion of debt to redeemed shareholders subsequent
to June 30, 2010 of $556,000).

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Based on our current forecast we anticipate that cash flow from
operations will be sufficient to cover our current ongoing operating expenses for the next twelve months.
Therefore we estimate that we will require approximately $5,072,000 over the
next twelve months in order to sustain our current obligations and to satisfy
our working capital deficiency. This amount does not include any funds necessary for us to expand our business.
Accordingly, we will require additional financing in order to pursue the
expansion of our business, either through growth or acquisitions. There is also
a risk that cash used in operations will be greater than anticipated in the
event that projected revenues are not achieved.

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Our current source of funding, in addition to cash from
operations and our operating line of credits, is our loan commitment of DKK
4,000,000 ($658,957) from Bark Holding, a related party.

We plan to use both (i) our operating line of credit and (ii)
the loan from Bark Holding to finance our operations over the next twelve
months. However, we will require additional financing beyond this in order to
conduct our business in accordance with our plan of operations. Further, there
is no assurance that Bark Holding will advance the loan that it has committed to
make. We plan to conduct an equity financing of its securities in order to raise
additional financing. We will also pursue bridge loans and private placements
from investors located outside of the United States, primarily in Europe, in
order to raise the required funds. If we are not successful in raising this
additional financing, then we will attempt to reduce our operating expenses
significantly such that we would within a six month period be able to generate
cash from operating activities. In the event that we fail to achieve additional
financing, we will reconsider our acquisition strategy, and will further
reconsider whether our status as a public company is beneficial, from a cost
benefit perspective. The reduction in costs related to business development
activities may impact on our ability to expand our business. Our consolidated
financial statements do not include any adjustment that might result from the
outcome of this uncertainty.

As a result of the above, we believe that a substantial doubt
about our ability to continue as a going concern remained as at June 30, 2010,
as reflected in the notes to our condensed consolidated unaudited financial
statements for the six months ended June 30, 2010. Our condensed consolidated
unaudited financial statements for the six months ended June 30, 2010 do not
include any adjustment that might result from the outcome of this
uncertainty.

Cash Used In Operating Activities

We used cash of $1,609,000 in the six months ended June 30,
2010, compared to use of cash of $506,000 in the six months ended June 30, 2009.
The increased use of cash in operating activities primarily reflects decreased
accrued liabilities, decreased billings in excess of costs and estimated
earnings on projects in progress offset by our decreased loss in 2010.

Cash From/Used in Investing Activities

We provided cash from investing activities of $957,000 in the
six months ended June 30, 2010 by acquiring Tre Kronor offset by purchasing
equipment of $5,000. In the six months ended June 30, 2009 we used cash of
$5,000 by purchasing equipment.

Cash from Financing Activities

We generated cash of $935,000 from financing activities during
the six months ended June 30, 2010, which represented proceeds from issuance of
common stock of $140,000, proceeds from borrowings from related parties of
$85,000 and net proceeds from debt of $837,000, partly offset by repayments of
capital leases of $55,000, and repayments to redeemed stockholders of $72,000.
In the six months ended June 30, 2009 we generated cash of $467,000.

Critical Accounting Policies and Estimates

Our financial statements are prepared in conformity with
accounting principles generally accepted in the United States of America which
require us to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of our financial statements, and the reported amounts of revenues and
expenses during the reporting periods. Critical accounting policies are those
that require the application of managements most difficult, subjective, or
complex judgments, often because of the need to make estimates about the effect
of matters that are inherently uncertain and that may change in subsequent
periods.

In preparing the financial statements, we utilized available
information, including our past history, industry standards and the current
economic environment, among other factors, in forming our estimates and
judgments, giving due consideration to materiality. Actual results may differ
from these estimates. In addition, other companies may utilize different estimates which may impact the comparability of our
results of operations to other companies in our industry. We believe the
following significant accounting policies may involve a higher degree of
judgment and estimation.

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Revenue recognition

Most of our client contracts are individually negotiated and
accordingly, the terms of client engagements and the bases on which it earns
commissions and fees vary significantly. Direct costs include fees paid to
external suppliers where they are retained to perform part or all of a specific
project for a client and the resulting expenditure is directly attributable to
the revenue earned. Revenue is stated exclusive of VAT (value added tax), sales
taxes and trade discounts.

Revenue is typically derived from commissions on media
placements and fees for advertising services. Revenue may consist of various
arrangements involving fixed fees, commissions, or incentive-based revenue, as
agreed upon with each client.

We earn commissions from referrals of services to other
vendors, marketing agencies, who ultimately provide the end service to the
customer. Commissions are generally earned on the date of broadcast or
publication.

Revenue for our fixed-fee contracts is recognized when all of
the following criteria are satisfied: (i) persuasive evidence of an arrangement
exists; (ii) the price is fixed or determinable; (iii) collectability is
reasonably assured; and (iv) services have been performed. Depending on the
terms of a client contract, fees for services performed can be recognized in two
principal ways: proportional performance or completed contract.

- Fixed-fee contracts are generally recognized as earned based on the
  proportional performance method of revenue recognition. In assessing contract
  performance, both input and output criteria reviewed. Costs incurred are used
  as an objective input measure of performance. The primary input of all work
  performed under these arrangements is labor. As a result of the relationship
  between labor and cost, there is normally a direct relationship between costs
  incurred and the proportion of the contract performed to date. Costs incurred
  as a proportion of expected total costs is used as an initial proportional
  performance measure. This indicative proportional performance measure is
  always subsequently validated against other more subjective criteria (i.e.
  relevant output measures) such as the percentage of interviews completed,
  percentage of reports delivered to a client and the achievement of any project
  milestones stipulated in the contract. In the event of divergence between the
  objective and more subjective measures, the more subjective measures take
  precedence since these are output measures.
- Certain fees (such as for marketing services related to rebates offered by
  clients to their external customers) are deferred until contract completion as
  the final act is so significant in relation to the service transaction taken
  as a whole. Fees are also recognized on a completed contract basis if any of
  the criteria of FASB ASC 605-10-S99, formerly Staff Accounting Bulletin
  (SAB) No. 104, Revenue Recognition,were not satisfied prior to job
  completion or if the terms of the contract do not otherwise qualify for
  proportional performance.

Incentive-based revenue typically comprises quantitative
criteria. Revenue is recognized when the quantitative targets have been
achieved.

In compliance with FASB ASC 605-45 Principal Agent
Considerations, formerly Emerging Issues Task Force (EITF) Issue No.
99-19, Reporting Revenue Gross as a Principal versus Net as an Agent , we assess
whether our agency or the third-party supplier is the primary obligor. We
evaluate the terms of our client agreements as part of this assessment. In
addition, we give appropriate consideration to other key indicators such as
latitude in establishing price, discretion in supplier selection and credit risk
to the vendor. For a substantial portion of our client contracts we act as
principal as we are the primary obligor and bear credit risk related to the
services we provide. In these contracts we record revenues and costs of revenues
gross. In certain contracts we record a net amount principally on those
contracts where we only earn a commission.

Business Combinations

We account for our business combination transactions utilizing
the acquisition method of accounting. Under the acquisition method of
accounting, the total consideration paid is allocated to the underlying assets
and liabilities, based on their respective estimated fair values. The excess of
the purchase price over the estimated fair values of the net assets acquired is
recorded as goodwill. Determining the fair value of certain acquired assets and
liabilities, identifiable intangible assets in particular, is subjective in nature and
often involves the use of significant estimates and assumptions. Finite-lived
identifiable intangible assets are amortized over its expected life on a
straight-line basis, as this basis approximates the expected cash flows from the
Companys existing definite-lived identifiable intangible assets over the
expected future.

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Non controlling interest

Certain consolidated subsidiaries of Bark Group issued equity
shares to parties unrelated to the Company.

The Company accounts for such transactions in accordance with
FASB ASC 810, Consolidation, formerly Staff Accounting Bulletin No. 51,
Accounting for Sales of Stock by a Subsidiary. FASB 810 requires that the
difference between the carrying amount of the Companys investment in the
subsidiary and the underlying net book value of the subsidiary after the
issuance of the shares be recognized either as a gain or loss in the
consolidated statement of operations or as a capital transaction. In these
instances it is the Companys policy to consider gains and losses arising from
such issuances of shares by a subsidiary as a capital transaction; as such no
gain or loss is recognized in the income statement.

In instances where subsidiary shares issued are redeemable, the
Non-controlling interest is recorded in accordance with FASB ASC 810, formerly
EITF No. D-98 Classification and Measurement of Redeemable Securitiesat
the higher of (1) the redemption value required to be paid by the Company or (2)
the amount that would result from applying consolidation accounting under FASB
ASC 810, formerly Accounting Research Bulletin No. 51 Consolidated Financial
Statements.Adjustments recorded by the
Company in relation to the recording of these costs are recorded within
additional paid-in capital.

Property, plant and equipment

Property, plant and equipment are stated at historical cost
less accumulated depreciation. Maintenance and repairs are charged to expense as
incurred. Additions, improvements and replacements that extend the assets life
are capitalized. Property, plant and equipment, less applicable residual value,
is depreciated using the straight-line method over the estimated useful lives of
such assets.

The useful lives for computing depreciation are as follows:

|Buildings                                  |  | 50 years    | 
|------------------------------------------ |  | ----------- | 
|Furniture, fixtures and computer equipment |  | 3 - 5 years | 

Analysis of Impairment

In May 2007 we acquired Bark Copenhagen and Bark Media We
accounted for our acquisition of this business using the purchase method of
accounting, which resulted in the recognition of approximately $3,091,000 of
goodwill. In accordance with applicable standards specified in the Accounting
Standards Codification, we test goodwill at the reporting units level for
possible impairment at least once annually and in between annual testing dates
if events or changes in circumstances indicate that the carrying value of our
goodwill might not be recoverable. We have designated December 31 as our as the
formal date of our annual goodwill impairment test.

Goodwill related to the Companys acquisition of Bark
Copenhagen was impaired by DKK 8,149,000 ($1,451,000) during the three and six
month ended June 30, 2010 due to decreased profit expectations for fiscal 2010,
2011 and 2012.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, financings, or other
relationships with unconsolidated entities known as Special Purposes
Entities.

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Item 3. Quantitative and Qualitative Disclosures about
Market Risk.

We are a smaller reporting company as defined by Rule 12b2 of
the Exchange Act and are not required to provide the information required under
this item.

Item 4 T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
by our Company is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms of the SEC. Our Chief Executive
Officer, Anders Hageskov, and our Chief Financial Officer, Ulrik Gerdes, are
responsible for establishing and maintaining disclosure controls and procedures
for our Company.

Our management has evaluated the effectiveness of our
disclosure controls and procedures as of June 30, 2010 (under the supervision
and with the participation of the Chief Executive Officer and the Chief
Financial Officer), pursuant to Rule 13a15(b) promulgated under the
Securities Exchange Act of 1934, as amended. As part of such evaluation,
management considered the matters discussed below relating to internal control
over financial reporting. Based on this evaluation, our Companys Chief
Executive Officer and Chief Financial Officer have concluded that our Companys
disclosure controls and procedures were not effective as of June 30, 2010 due to
the material weakness in Internal Control over Financial Reporting identified
below.

Internal Control over Financial Reporting

The term internal control over financial reporting is defined
as a process designed by, or under the supervision of, the registrants
principal executive and principal financial officers, or persons performing
similar functions, and effected by the registrants board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles and includes those policies and procedures that:

- pertain to the maintenance of records that in reasonable detail accurately
  and fairly reflect the transactions and dispositions of the assets of the
  registrant;
- provide reasonable assurance that transactions are recorded as necessary to
  permit preparation of financial statements in accordance with generally
  accepted accounting principles, and that receipts and expenditures of the
  registrant are being made only in accordance with authorizations of management
  and directors of the registrant; and
- provide reasonable assurance regarding prevention or timely detection of
  unauthorized acquisition, use or disposition of the registrants assets that
  could have a material effect on the financial statements.

Changes in Internal Control over Financial
Reporting

There were no changes in our internal control over financial
reporting during the three months ended June 30, 2010 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

Our management completed an evaluation of our internal control
as of December 31, 2009 and concluded that our internal control over financial
reporting is not effective as of December 31, 2009. In connection with the audit
of our financial statements as of December 31, 2009 and for the year ended
December 31, 2009 our auditors and we have identified certain matters involving
our internal control over financial reporting that constitute a material
weakness under standards established by the Public Company Accounting Oversight
Board (" PCAOB").

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The PCAOB defines a material weakness as a significant
deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that a material misstatement of our annual or interim
financial statement will not be presented or detected by our employees. A
significant deficiency is defined as a control deficiency, or a combination of
control deficiencies, that adversely affects the company's ability to initiate,
authorize, record, process, or report external financial data reliably in
accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the company's annual or interim
financial statements that is more than inconsequential will not be prevented or detected. A
control deficiency exists when the design or operation of a control does not
allow management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. A deficiency in
design exists when:

- a control necessary to meet the control objective is missing; or
- an existing control is not properly designed so that, even if the control
  operates as designed, the control objective is not always met.

A deficiency in operation exists when a properly designed
control does not operate as designed, or when the person performing the control
does not possess the necessary authority or qualifications to perform the
control effectively.

The material weakness identified results from currently
inadequate external reporting, technical accounting and tax staff, inadequate
integrated financial systems and financial reporting and closing processes, and
inadequate written policies and procedures. Specifically, the following items
were identified:

- we do not currently have a sufficient complement of external reporting,
  technical accounting or tax staff commensurate to support standalone external
  financial reporting under public company or SEC requirements;
- we do not have a fully integrated financial consolidation and reporting
  system and as a result, extensive manual analysis, reconciliation and
  adjustments are required in order to produce financial statements for external
  reporting purposes; and

We are in the process of implementing changes to strengthen our
internal controls. Additional measures may be necessary and the measures we
expect to take to improve our internal controls may not be sufficient to address
the issues identified, to ensure that our internal controls are effective or to
ensure that such material weakness or other material weaknesses would not result
in a material misstatement of our annual or interim financial statements. In
addition, other material weaknesses or significant deficiencies may be
identified in the future. If we are unable to correct deficiencies in internal
controls in a timely manner, our ability to record, process, summarize and
report financial information accurately and within the time periods specified in
the rules and forms of the SEC will be adversely affected. This failure could
negatively affect the market price and trading liquidity of our common stock,
cause investors to lose confidence in our reported financial information,
subject us to civil and criminal investigations and penalties, and generally
materially and adversely impact our business and financial condition.

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PART IIOTHER INFORMATION

Item 1A. Risk Factors

Much of the information included in this quarterly report on
Form 10-Q includes or is based upon estimates, projections or other forward
looking statements. Such forward looking statements include any projections or
estimates made by us and our management in connection with our business
operations. While these forward looking statements, and any assumptions upon
which they are based, are made in good faith and reflect our current judgment
regarding the direction of our business, actual results will almost always vary,
sometimes materially, from any estimates, predictions, projections, assumptions,
or other future performance suggested herein. We undertake no obligation to
update forward looking statements to reflect events or circumstances occurring
after the date of such statements.

Such estimates, projections or other forward looking
statements involve various risks and uncertainties as outlined below. We
caution readers of this quarterly report that important factors in some cases
have affected and, in the future, could materially affect actual results and
cause actual results to differ materially from the results expressed in any such
estimates, projections or other forward looking statements. In evaluating us,
our business and any investment in our business, readers should carefully
consider the following factors.

Risks Relating To Our Business And Financial
Condition

As there is a substantial doubt as to our ability to
continue as a going concern, there is a significant risk that our business could
fail.

Our audited financial statements for the year ended December
31, 2009 and our interim financial statements for the six months ended June 30,
2010 both include a note expressing doubt about our ability to continue as a
going concern. The inclusion of this note was due to the fact that we have
negative working capital of $5,809,000 and we reported a shareholders
deficiency of $2,971,000 as at December 31, 2009 and we had negative working
capital of $6,555,000 at June 30, 2010. This note also reflects the fact that we
have incurred losses to date without achieving profitable operations, including
a net loss of $3,197,000 for the year ended December 31, 2008, a net loss of
$2,569,000 for the year ended December 31, 2009 and a net loss of $2,557,000
(including impairment of goodwill) for the six month ended June 30, 2010. We
intend to fund our operations and expansion through future sales and equity
financing arrangements, which may be insufficient to fund our capital
expenditures, working capital and other cash requirements for the current fiscal
year. Thereafter, we will be required to seek additional funds, either through
sales and/ or equity financing, to finance our long-term operations. The
successful outcome of future activities cannot be determined at this time and
there is no assurance that, if achieved, we will have sufficient funds to
execute our intended business plan or generate positive operating results. These
factors raise substantial doubt about our ability to continue as a going
concern. As a result, we caution investors that there is a risk that our
business could fail. Our current working capital deficit as at June 30, 2010 and
our negative cash flow from operations for the six month ended June 30, 2010
raise substantial doubt about our ability to continue as a going concern.
Accordingly, there remained a substantial doubt about our ability to continue as
a going concern as at June 30, 2010, as reflected in the notes to our interim
consolidated financial statements for the six months ended June 30, 2010.

Our business strategy of development through acquisitions
and investments can be risky.

Our business growth strategy includes, among other things,
acquiring established advertising and communication boutique firms. We acquired
Bark Copenhagen and Bark Media during fiscal 2007. We also acquired a 25.5%
interest in Anaconda in the first quarter of 2010 and Tre Kronor in the second
quarter of 2010. The identification of acquisition candidates is difficult and
we may not correctly assess the risks related to such acquisitions and
investments. In particular, our determinations and assessments of acquisition
candidates involve assessments of the financial performance of the acquisition
candidates and past financial performance that we observe may not be indicative
of future financial performance. In addition, acquisitions could be effected on
terms less satisfactory to us than expected and the newly acquired companies may
not be successfully integrated into our cohesive operations or in a way that
produces the synergies or other benefits we hope to achieve. We may not be able
to successfully integrate new acquired businesses into our group of companies.
In particular, loss of key personnel will adversely impact our ability to
continue operations of these acquisition companies after we have completed their
acquisition. Further, in our inability to raise capital may adversely impact on
our ability to invest in these acquired businesses in order to achieve projected
growth and returns on investment. If these risks materialize, the benefit that
we derive from businesses that we acquire may be less than the costs to us of acquiring these businesses,
with the result that our operating losses could increase.

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Current global economic conditions may adversely impact our
financial condition, our ability to obtain financing, our ability to collect
accounts receivable and the ability of our customers to continue to use our
services

Recent market events and conditions, including disruptions in
the international credit markets and other financial systems and the
deterioration of global economic conditions, could impede our access to capital
or increase its cost of capital. Since 2007, the U.S. credit markets experienced
serious disruption due to a deterioration in residential property values,
defaults and delinquencies in the residential mortgage market and a decline in
the value and credit quality of mortgage-backed securities. Other adverse events
include delinquencies in non-mortgage consumer credit and a general decline in
consumer confidence. These conditions worsened in 2008 and in 2009, contributing
to reduced confidence in credit and financial markets around the world and the
collapse of, and governmental intervention in, major financial institutions.
Asset price volatility and solvency concerns have increased, and there has been
less liquidity, a widening of credit spreads, a lack of price transparency,
increased credit losses and tighter credit conditions. Notwithstanding various
government actions, concerns about the general condition of the capital markets,
financial instruments and financial institutions persist, and stock markets have
declined substantially.

These market disruptions have had a significant material
adverse impact on companies in many sectors of the economy and have limited
their access to capital and credit. These disruptions could, among other things,
make it more difficult for us to obtain, or increase our cost of obtaining,
financing for our operations. Failure to raise capital when needed or on
reasonable terms may have a material adverse effect on our business, financial
condition and results of operations.

Additionally, these factors, as well as other related factors,
may cause decreases in asset values that are deemed to be other than temporary,
which may result in impairment losses. If these factors continue, our operations
could be adversely impacted and the trading price of the common stock may be
adversely affected.

We are also exposed to liquidity risks in meeting its operating
and capital expenditure requirements in instances where cash positions are
unable to be maintained or appropriate financing is unavailable. These factors
may impact our ability to obtain loans and other credit facilities in the future
and on favorable terms. If these increased levels of volatility and market
turmoil continue, our operations could be adversely impacted and the trading
price of our common stock could be adversely affected.

All of the above factors may adversely impact on our ability to
secure new financing for our business, to enable us to negotiate new credit
facilities, to achieve equity financing, to secure new business from our
existing clients and new clients, to achieve payment of outstanding accounts
receivable to and to enable our customers to engage us for our services.

Our competitors may be successful in attracting the clients
that we are targeting for our advertising and media services, with the result
that our revenues and ability to generate profit from our operations may be
reduced.

We compete in the advertising and communications industry which
is highly competitive and which we believe will become more competitive as the
business of commercial communication and advertising advances. Our competitors
range from large multinational companies to smaller agencies that operate in our
target markets. These potential competitors also range from traditional
advertising agencies to new media companies that are integrating traditional
advertising services with new media advertising services, such as digital media
counseling. In addition, new competitors are emerging who will compete with our
business strategy of providing integrated media and advertising professional
services. Both existing and new competitors will likely seek to target the same
customers that we are targeting, both using traditional advertising models and
the integrated media services business model that we are pursuing. In addition,
many of these new competitors will have greater financial and operational
resources than we do. The ability of our existing and potential competitors to
attract the customers and advertising and media service work that we are
targeting will reduce the revenues that we are able to achieve from our business
activities, will reduce our market share and decrease our ability to generate
profit from our operations.

The present size of our business may impede or limit our
ability to secure new advertising and marketing engagements from the customers
that we target for our professional service.

We presently have approximately thirty-two (32) employees, all
but three of whom are professional services personnel.

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Our relatively small size will limit the scope of the projects
that we are able to undertake for our existing and potential customers. As a
result of our limited capacity, there is a limit both to the number of new
customers that we can take on. Existing and potential customers may view our
size as a limiting factor when assessing whether to engage us to undertake
marketing and advertising campaigns. These customers may view their requirements
as being beyond the scope or ability of our firm due to the limited number of
professional personnel that employ. The determinations of our existing and
potential customers not to engage us or to limit our engagement on a project may
result in us losing business and corresponding revenues to our competitors with
the result that our ability to achieve revenues and to expand our business may
be limited.

Our location in Denmark may impede our ability to secure
internationally based customers who believe that they require a more globally
based advertising and media professional service provider in order to address
their business and marketing requirements.

We are headquartered in Copenhagen, Denmark where our principal
business operations are conducted from. Our location in Denmark, while providing
access to the European Union, may be an impediment for competing in
international markets, including the United States. Existing and potential
customers may view our location in Denmark and our lack of international and
North American offices as a limiting factor in our ability to implement their
advertising and marketing campaigns. Such determinations by existing and
potential customers may result in their decisions not to engage us to undertake
advertising and marketing campaigns or to only engage us for a local portion of
an advertising or marketing campaign, which would limit our ability to earn
revenues and to expand our business.

Our inability to retain our existing customers will restrict
our ability to sustain or increase our revenues.

We rely significantly on new advertising and media engagements
from our existing customers in order to generate future revenues. The
preservation of these relationships are subject to many intangible factors,
including the perceived success of our business in the market-place, the
relationships between our professional personnel and individual employees of our
customers and our clients perception of the benefit and success of past
services that we have provided for our customers. Further, we will have to be
careful to work to preserve these relationships at the same time as we attempt
to expand our business and secure new customers. There is no assurance that our
existing customers will continue their relationships with us or engage us for
new advertising and marketing programs or services. Our inability to preserve
these customers relationships and secure new engagements from existing customers
will restrict our ability to sustain or increase our revenues.

We rely heavily on our key executive officers and their
experience and knowledge of our business would be difficult to replace in the
event any of them left our company.

We are highly dependent on Mr. Bent Helvang, our chairman, Mr.
Anders Hageskov, our chief executive officer and Mr. Niclas Fröberg our chief
executive officer in Tre Kronor Media, for the management of our business and
the implementation of our business strategy. While each of Mr. Helvang, Mr.
Hageskov and Mr. Fröberg provides their services to us pursuant to written
agreements and we are not aware of either Mr. Helvang, Mr. Hageskov or Mr.
Fröberg intention to leave us, there is no assurance that we will not lose the
services of Mr. Helvang, Mr. Hageskov or Mr. Fröberg. We do not have key
person life insurance policies for any of our officers and key employees,
including either Mr. Helvang, Mr. Hageskov or Mr. Fröberg. The loss of the
technical knowledge and management and industry expertise that would result in
the event that either Mr. Helvang, Mr. Hageskov or Mr. Fröberg left us could
result in the disruption to our business operations and our inability to
successfully implement our business strategy.

If our customers businesses experience reduced revenues,
our customers may decide to reduce their budgets for advertising and
communications which could decrease our revenues.

We depend upon the business activities of our existing and
potential customers in order to generate revenues from operations. The
advertising and communications industry and our ability to generate revenues is
subject to changes in our customers underlying businesses. If our customers
experience declines in their business and reduced revenues, they may decide to
decrease their marketing budgets. In our experience, downturns in general
economic conditions that result in our customers experiencing declines in their
business can have a more severe impact on advertising and communications
expenditures than on other areas, in part because many of our customers view
advertising and communications expenditures as more discretionary than other
operating expenditures. Accordingly, our customers may respond to economic
downturns where their businesses are adversely impacted by reducing their
advertising and communications budgets in order to meet their earnings goals. If
our existing and potential customers decide not to proceed with advertising and marketing campaigns as a result of
downturns in their businesses or decreases in their revenues, then our ability
to generate revenues from providing our professional services will be reduced.
As a result, our development, prospects, business, financial condition and
consolidated results of operations may be materially adversely affected by
downturns in the businesses of our customers.

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If we are unable to collect amounts that are owed to us by
our customers, then we may not be able to realize on our accounts receivable and
our corresponding cash flows will be reduced.

We invoice our clients for the marketing and advertising
services that we provide and, as a result, generate account receivables that are
payable by our customers for the professional advertising and media services
that we provide to them. We do not in all circumstances obtain payment of these
amounts from our customers in advance of our providing services. Accordingly, we
are at risk to the extent that we provide services that our customers either
refuse or are unable to repay. Our ability to generate cash flows from
operations is contingent upon the ability of our customers to pay these
accounts. If our customers experience financial distress as a result of
downturns in their businesses or downturns in general economic conditions, then
they may not be able to pay our accounts with the result that we may not be able
to realize on our accounts receivable and our corresponding cash flows will be
reduced. Further, our customers may dispute the amount of the invoices that we
render and in such an event we may be paid less than the amount that we have
invoiced or payment may be delayed.

Our business is highly dependent on the services of our
management and our employees who are specialized advertising and marketing
professionals. If we cannot retain our key personnel, our business may
fail.

Our business is highly dependent on the talent, creative
abilities and technical skills of our specialized advertising and marketing
professionals, as well as on the relationships between our professional
personnel and our customers. The industry is also known for high mobility among
its professionals. If we lose the services of certain management members or our
other professional personnel, our ability to continue to provide professional
advertising and marketing services and to maintain our client relationships
could be harmed. If we are unable to continue to attract and retain additional
key professional personnel, or if we were unable to retain and motivate our
existing key professional personnel, we may not be able to sustain our business
or execute our business expansion strategy with the result that our business may
fail.

We may be unsuccessful in evaluating material risks involved
in completed and future acquisitions.

As part of our business strategy we will be regularly reviewing
potential acquisitions of businesses to add to our Bark network of advertising
and media agencies. As part of these reviews, we will conduct business, legal
and financial due diligence with the goal of identifying and evaluating material
risks involved in any particular transaction. Despite our efforts, we may be
unsuccessful in ascertaining or evaluating all such risks. As a result, we might
not realize the intended advantages of any given acquisition. If we fail to
realize the expected benefits from one or more acquisitions, our results of
operations and financial condition could be adversely affected.

If we do not raise the necessary capital to fully develop
our business, our business may not be able to continue its growth.

Our business concept involves the creation and expansion of a
network of affiliated advertising and marketing agencies under the Bark brand
name which will require us to obtain additional capital that we presently do not
have. Our ability to create this network will be contingent upon our ability to
raise the necessary capital to fund contemplated and future acquisitions. In
addition, even if we are successful in acquiring new advertising and marketing
agencies, there is no assurance that we will be able to generate sufficient cash
flows to continue to fund the operations of these acquired businesses or to
generate a positive return on our investment. If we are not able to raise the
necessary capital, we may not be able to acquire new businesses in accordance
with our strategic plan or to adequately fund the new businesses that we
acquire.

If we do not successfully integrated advertising and
marketing agencies that we acquire into our business model, our business may not
be able to continue its growth and we may not be able to achieved planned
revenues or cash flows.

Our business concept involves the creation and expansion of a
network of affiliated advertising and marketing agencies under the Bark brand
name, and the integration and creation of consistency of our brand values
throughout all of our agencies. Our ability to create this network will be contingent
upon our ability to successfully integrate acquired advertising and marketing
agencies into our business model in order that we can expand our client base and
increase our revenues. In particular, if we are unable to ensure the continuity
of the professional employees at the advertising and marketing agencies that we
acquire, our ability to expand our business through acquisitions and continue
our growth will be impaired. In addition, there is no assurance that customers
of the advertising and marketing agencies that we acquire will continue their
association with the agency as a Bark affiliated agency. Our inability to retain
the customers of the advertising and marketing agencies that are acquired or
implement our business plan to use these acquired agencies to expand our
business and revenues, will impair our ability to grow in accordance with our
business strategy and we may not be able to achieve anticipated revenues or cash
flows.

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Government regulations and consumer advocates may limit the
services that we are able to provide, which could affect our ability to meet our
customers needs, which could reduce the revenues that we are able to achieve in
the future.

Government agencies and consumer groups have directly or
indirectly from time to time affected or attempted to affect the scope, content
and manner of presentation of advertising, marketing and corporate
communications services, whether through regulations or other governmental
actions. Any such limitations on the scope of the content of our services could
affect our ability to meet our customers needs, which could reduce the revenues
that we are able to earn from client revenues and have a material adverse effect
on our results of operations and financial condition. In addition, there has
been an increasing tendency on the part of businesses to resort to the judicial
system to challenge advertising practices. We cannot assure investors that such
claims by businesses or governmental agencies will not reduce the revenues that
we are able to achieve in the future.

We may be exposed to liabilities from allegations that
certain of our customers advertising claims may be false or misleading or that
our customers products may be defective.

We may be, or may be joined as, a defendant in litigation
brought against our customers by third parties, our customers competitors,
governmental or regulatory authorities or consumers. These actions could involve
claims alleging, among other things, that:

- advertising claims made with respect to our customers products or
  services are false, deceptive or misleading;
- our customers products are defective or injurious and may be harmful to
  the others; or
- marketing, communications or advertising materials created for our
  customers infringe on the proprietary rights of third parties since
  client-agency contracts generally provide that the agency agrees to indemnify
  the client against claims for infringement of intellectual or industrial
  property rights.

The damages, costs, expenses or attorneys fees arising from
any of these claims could have an adverse effect on our prospects, business,
results of operations and financial condition to the extent that we are not
adequately insured against such risks or indemnified by our customers. In any
case, the reputation of our agencies may be negatively affected by such
allegations.

U.S. investors who obtain judgments against our officers or
directors for breaches of U.S. securities laws may have difficulty in enforcing
such judgments against our officers and directors.

All of our assets are located outside the United States and we
do not currently maintain a permanent place of business within the United
States. All of our directors and officers are residents of Denmark or
Switzerland and all or a substantial portion of their assets are located outside
the United States. Consequently, it may be difficult for United States investors
to affect service of process within the United States upon our directors and
officers or to enforce, inside or outside of the United States, any judgments of
United States courts predicated upon civil liabilities under the United States
Securities Exchange Act of 1934, as amended. A judgment of a U.S. court
predicated solely upon such civil liabilities may not be enforceable in Denmark
by a Danish court if the U.S. court in which the judgment was obtained is
determined by the Danish court not to have had jurisdiction in the matter. Even
if the Danish court was to find jurisdiction, the judgment as a rule would not
be enforceable against any director or officer in Denmark. Furthermore, an
original action might not be able to be brought successfully in Denmark against
any of such persons predicated solely upon such civil liabilities. Consequently,
you may be effectively prevented from pursuing remedies under U.S. federal
securities laws against our directors and officers.

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We have identified a material weakness in our internal
controls over financial reporting that, if not corrected, could result in
material misstatements in our financial statements.

In connection with our assessment of the effectiveness of our
internal controls over financial reporting as at December 31, 2009 and in
connection with the audit of our financial statements as of December 31, 2009,
2008 and 2007 and for the years ended December 31, 2009, 2008 and December 31,
2007, our auditors and we have identified certain matters involving our internal
control over financial reporting that constitute a material weakness under
standards established by the Public Company Accounting Oversight Board
("PCAOB").

The PCAOB defines a material weakness as a significant
deficiency, or combination of significant deficiencies, that results in more
than a remote likelihood that a material misstatement of our annual or interim
financial statement will not be presented or detected by our employees. A
significant deficiency is defined as a control deficiency, or a combination of
control deficiencies, that adversely affects the company's ability to initiate,
authorize, record, process, or report external financial data reliably in
accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the company's annual or interim
financial statements that is more than inconsequential will not be prevented or
detected. A control deficiency exists when the design or operation of a control
does not allow management or employees, in the normal course of performing their
assigned functions, to prevent or detect misstatements on a timely basis. A
deficiency in design exists when:

- a control necessary to meet the control objective is missing; or
- an existing control is not properly designed so that, even if the control
  operates as designed, the control objective is not always met.

A deficiency in operation exists when a properly designed
control does not operate as designed, or when the person performing the control
does not possess the necessary authority or qualifications to perform the
control effectively.

The material weakness identified results from currently
inadequate external reporting, technical accounting and tax staff, inadequate
integrated financial systems and financial reporting and closing processes, and
inadequate written policies and procedures. Specifically, the following items
were identified:

- we do not currently have a sufficient complement of external reporting,
  technical accounting or tax staff commensurate to support standalone external
  financial reporting under public company or SEC requirements;
- we do not have a fully integrated financial consolidation and reporting
  system and as a result, extensive manual analysis, reconciliation and
  adjustments are required in order to produce financial statements for external
  reporting purposes; and

We are in the process of implementing changes to strengthen our
internal controls. Additional measures may be necessary and the measures we
expect to take to improve our internal controls may not be sufficient to address
the issues identified, to ensure that our internal controls are effective or to
ensure that such material weakness or other material weaknesses would not result
in a material misstatement of our annual or interim financial statements. In
addition, other material weaknesses or significant deficiencies may be
identified in the future. If we are unable to correct deficiencies in internal
controls in a timely manner, our ability to record, process, summarize and
report financial information accurately and within the time periods specified in
the rules and forms of the SEC will be adversely affected. This failure could
negatively affect the market price and trading liquidity of our common stock,
cause investors to lose confidence in our reported financial information,
subject us to civil and criminal investigations and penalties, and generally
materially and adversely impact our business and financial condition.

If we fail to maintain proper and effective internal
controls, our ability to produce accurate and timely financial statements could
be impaired and investors views of us could be harmed.

As a public company, we are required to document and test our
internal controls and procedures for compliance with Section 404 of the
Sarbanes-Oxley Act of 2002, or the Sarbanes Oxley Act, which requires annual
management assessment of the effectiveness of our internal controls over
financial reporting. Ensuring that we have adequate internal financial and
accounting controls and procedures in place so that we can produce accurate
financial statements on a timely basis is a costly and time-consuming effort
that needs to be re-evaluated frequently. Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with accounting principles generally accepted in the United
States.

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During the course of our testing we may identify deficiencies
which we may not be able to remediate in time to meet the deadline imposed by
the Sarbanes-Oxley Act for compliance with the requirements of Section 404. In
addition, if we fail to achieve and maintain the adequacy of our internal
controls, as such standards are modified, supplemented or amended from time to
time, we may not be able to ensure that we can conclude on an ongoing basis that
we have effective internal controls over financial reporting in accordance with
Section 404 of the Sarbanes-Oxley Act. Moreover, effective internal controls are
necessary for us to produce reliable financial reports and are important to
helping prevent financial fraud. If we cannot provide reliable financial reports
or prevent fraud, our business and operating results could be harmed, investors
could lose confidence in our reported financial information, and any trading
price of our stock could drop significantly.

We are incurring a significant portion of our operating
expenses in Europe and we are therefore subject to currency risks.

Our consolidated financial statements are reported in United
States Dollars. Our main operations are currently based in Europe and the
majority of the operating expenses are incurred in Danish Crowns (DKK) or the
Euro and we have a loan in Swiss Francs (CHF), while investments into the
Company will be in United States Dollars. Therefore, our expenses and any future
investments or income may be vulnerable to fluctuations in exchange rates. We
currently do not enter into foreign exchange contracts to cover our exposure to
exchange rate fluctuations. Any failure to adequately manage foreign exchange
risk may adversely affect our business.

Risks Relating To Our Common Stock

Our principal shareholders will be able to exert significant
control over the election of our directors and the management of our business
and their interests may differ from those of our other shareholders

Our principal shareholders include our directors, Mr. Bent Helvang ,Mr. Klaus Aamann, Mr. Anders Hageskov, our chief executive officer, Svaneco Ltd, a private company controlled by Mr. Jesper Svane  and Sapiens Alliance Ltd., a private company controlled by Mr. Rene Lauritsen. These shares are held both directly and indirectly through privately controlled corporations. As of August 15, 2010, these principal shareholders owned or controlled 236,206,521shares of common stock, representing 58% of our outstanding shares of common stock. By virtue of their shareholdings, our principal shareholders will be able to elect members of our board of directors, control our management and affairs and cause or prevent corporate transactions such as mergers, consolidation or the sale of all or substantially all of our assets.  The interests of our principal shareholders may differ from that of other shareholders, with the result that our principal shareholder may cause us to enter into transactions that may be not be viewed as favorable by our other shareholders.

We have not paid any dividends and there is no assurance
that we will pay dividends in the future.

Payment of dividends on our common stock is within the
discretion of the board of directors and will depend upon our future earnings,
our capital requirements, financial condition and other relevant factors. There
is no assurance that we will pay dividends in the future.

We may issue additional shares in the future and these sales
will result in dilution to our existing shareholders and may reduce the market
price of our shares

We will require additional financing in order to achieve our
acquisition strategy and to expand our business operations. We may determine to
offer additional shares in the future in order to achieve this financing. This
may include additional shares that we issue pursuant to any equity financing
completed by us. Any additional offering of shares will result in dilution of
the proportionate interests of our existing shareholders in the Company.
Further, any sales of additional shares by us or a public perception that such
an offering or such sales may occur, could have an adverse effect on the market
price of our shares.

For reasons outside our control, our stock price can be
volatile.

The market price of our common stock can be highly volatile and
fluctuate widely in price in response to various factors, many of which are
beyond our control, including:

- the success of our competitors in attracting the customers and business
  that we are targeting;
- additions or departures of key personnel;

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- sales of our common stock;
- our ability to integrate operations, technology, products and services;
- our ability to execute our business plan;
- operating results below expectations;
- loss of any strategic partner or relationship;
- industry developments;
- economic and other external factors; and
- period-to-period fluctuations in our financial results.

Because we have a limited operating history and have earned
minimal revenues to date, any one of these factors may have a material adverse
effect on our business, results of operations and financial condition. Our stock
price may fluctuate widely as a result of any of the above listed factors.

In addition, the securities markets have from time to time
experienced significant price and volume fluctuations that are unrelated to the
operating performance of particular companies. These market fluctuations may
also materially and adversely affect the market price of our common stock.

Sales of a substantial number of shares of our common stock
into the public market by our current shareholders who are eligible to sell in
reliance of Rule 144 may result in significant downward pressure on the price of
our common stock.

Many of our existing shareholders are presently entitled to
publicly resell their shares of our common stock that they have acquired from us
in resale transactions under Rule 144 of the Act. These shareholders include
those shareholders who acquired their shares prior to our acquisition of Bark
Corporation and the former shareholders of Bark Corporation who were issued
shares of our common stock upon completion of our acquisition of Bark
Corporation. These shareholders are no longer subject to any lock-up agreements.
Sales of a substantial number of shares of our common stock into the public
market by the selling shareholders pursuant to Rule 144 may result in
significant downward pressure on the price of our common stock. Further, if we
complete any additional sales of our equity securities, then resale of these
securities pursuant to Rule 144 could also result in significant downward
pressure on the price of our common stock. This downward pressure could result
in the market price of our common stock being depressed. Further, we are
planning to complete additional equity financings involving the issuance of
shares of our common stock. Sales by new investors in reliance of Rule 144 may
result in further downward pressure on the price of our common stock.

Since our shares became quoted on the OTC Bulletin Boards,
our common stock is subject to the Penny Stock rules of the SEC, which make
transactions in our common stock cumbersome and may reduce the value of an
investment in our common stock.

Our common stock is presently eligible for trading on the
Financial Industry Regulatory Authority Inc.s OTC Bulletin Board, which is
generally considered to be a less efficient market than markets such as NASDAQ
or other national exchanges, and which may cause difficulty in conducting trades
and obtaining future financing. Further, our securities are subject to the
penny stock rules adopted pursuant to Section 15(g) of the Exchange Act. The
penny stock rules apply generally to companies whose common stock trades at less
than $5.00 per share, subject to certain limited exemptions. Such rules require,
among other things, that brokers who trade penny stock to persons other than
established customers complete certain documentation, make suitability
inquiries of investors and provide investors with certain information concerning
trading in the security, including a risk disclosure document and quote
information under certain circumstances. Many brokers have decided not to trade
penny stock because of the requirements of the penny stock rules and, as a
result, the number of broker-dealers willing to act as market makers in such
securities is limited. In the event that we remain subject to the penny stock
rules for any significant period, there may develop an adverse impact on the
market, if any, for our securities. Because our securities are subject to the
penny stock rules, investors will find it more difficult to dispose of our
securities. Further, it is more difficult: (i) to obtain accurate quotations,
(ii) to obtain coverage for significant news events because major wire services,
such as the Dow Jones News Service, generally do not publish press releases
about such companies, and (iii) to obtain needed capital.

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Item 2. Unregistered Sales of Equity Securities and Use of
Proceeds

Three Months Ended June 30, 2010

During the three months ended June 30, 2010, we have completed
the following issuances of securities without registration under the Act:

Tre Kronor Media:We completed the issuance of
35,000,000 shares of our common stock which is based on a share price of $0.12
established via the market closing price of our share on May 4, 2010 (date of
acquisition) in connection with our acquisition of all issued and outstanding
shares in Tre Kronor Media. The acquisition was completed with economic effect
on May 4, 2010.

Regulation S Share Subscriptions:We have completed the
following sales of common stock in private placement transactions:

|Date of Completion of Sale | Number of Shares Sold | Number of Investors | Aggregate Consideration
      Paid by Investors | Aggregate Commission Paid
      by Company
|-------------------------- | --------------------- | ------------------- | ----------------------------------------------- | ------------------------------------------
|April 20, 2010             | 1,788,909             | 1                   | $89,445                                         | $8,944                                    
|April 26, 20101            | 300,000               | 1                   | $44,640                                         | -                                         
|May 5, 20102               | 500,000               | 3                   | $74,400                                         | -                                         
|May 25, 20103              | 548,000               | 1                   | $32,880                                         | -                                         

All private placement offerings of
shares (the Shares) were completed pursuant to and in accordance with Rule 903
of Regulation S of the Act. No commissions were paid in connection with the
completion of these offerings. We completed the offerings of the Shares pursuant
to Rule 903 of Regulation S of the Act on the basis that the sale of the Shares
was completed in an offshore transaction, as defined in Rule 902(h) of
Regulation S. We did not engage in any directed selling efforts, as defined in
Regulation S, in the United States in connection with the sale of the Shares.
Each investor represented to us that the investor was not a U.S. person, as
defined in Regulation S, and was not acquiring the Shares for the account or
benefit of a U.S. person. The subscription agreement executed between us and
each investor included statements that the securities had not been registered
pursuant to the Act and that the securities may not be offered or sold in the
United States unless the securities are registered under the Act or pursuant to
an exemption from the Act. Each investor agreed by execution of the subscription
agreement for the Shares: (i) to resell the securities purchased only in
accordance with the provisions of Regulation S, pursuant to registration under
the Act or pursuant to an exemption from registration under the Act; (ii) that
we are required to refuse to register any sale of the securities purchased
unless the transfer is in accordance with the provisions of Regulation S,
pursuant to registration under the Act or pursuant to an exemption from
registration under the Act; and (iii) not to engage in hedging transactions with
regards to the securities purchased unless in compliance with the Act. All
certificates representing the Shares were or upon issuance will be endorsed with
a restrictive legend confirming that the securities had been issued pursuant to
Regulation S of the Act and could not be resold without registration under the
Act or an applicable exemption from the registration requirements of the
Act.

______________________1Issued as consideration
for consulting services rendered during 2010 2Issued as
consideration for consulting services rendered during 2010/2011 3Issued as consideration for consulting services in the second quarter of
2010

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| |  | Secured Convertible Notes:Bark Group has issued
      an 8% secured convertible note of $40,000 on April 20, 2010. The Note
      bears interest at the rate of 8% per annum. And mature on January 20,
      2011. The Note are convertible into shares of common stock of the Company
      at a conversion price equal to the "market price" at the time of
      conversion, which "market price" will be calculated as the average of the
      three lowest "trading prices" for the Company's common stock during the
      ten day trading period prior to the date the conversion note is sent to
      the Company. The Note also provide for adjustment to the Conversion price
      in the event of certain dilutive issuances and in the event of specified
      corporate transactions. The Company paid a fee of $2,500 in connection
      with the sale of the Note. The Note were issued in reliance of Rule 506 of
      Regulation D based on the representation of the investor that it is an
      "accredited investor" under Rule 501(a) of the Securities Act of 1933, as
      amended (the 1933 Act). The Note were endorsed with a legend confirming
      that they have been issued pursuant to an exemption from the registration
      requirements of the 1933 Act and may not be transferred in the absence of
      a registration statement under the 1933 Act or an exemption from the
      registration requirements of the 1933 Act. We issued further 8% secured
      convertible note on similar terms in the principal amounts of $37,500 and
      $50,000 for which proceeds were received May 4 and May 27 respectively.
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | Convertible Loan:We obtained a short term loan
      from a private investor in the amount of DKK 1,000,000 ($165,166) on June
      25, 2010, in order to fund working capital until additional capital could
      be raised. The loan matures on September 30, 2010 together with accrued
      interest of DKK 250,000 ($41,292). If the Company chooses not to repay the
      loan in cash the holder of the note is entitled to convert the note into
      shares of common stock at a price of $0.06 per share. Conversion will be
      contingent upon delivery of subscription agreements for the shares
      issuable which will include agreements regarding issuance of the stock in
      reliance of Rule 903 of Regulation S of the Act.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

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Item 6. Exhibits.

|Exhibit No. | Description                                                      
|----------- | -----------------------------------------------------------------
|10.1        | Amendment to Share Purchase
      Agreement with Tre Kronor Media
|31.1        | Section 302 Certification of Principal
      Executive Officer*  
|31.2        | Section 302 Certification of
      Principal Financial Officer*  
|32.1        | Section 906 Certification of Principal
      Executive Officer*  
|32.2        | Section 906 Certification of
      Principal Financial Officer*  

* Filed as an exhibit hereto

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Table of Contents

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.

|                      | BARK GROUP INC.
|--------------------- | ---------------
|                      |                
|Date: August 23, 2010 | By:            
|                      |                
|                      |                
|                      |                
|                      |                
|                      |                
|Date: August 23, 2010 | By:            
|                      |                
|                      |                
|                      |                
|                      |                

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EXHIBIT INDEX

|Exhibit No. | Description                                                      
|----------- | -----------------------------------------------------------------
|10.1        | Amendment to Share Purchase
      Agreement with Tre Kronor Media
|31.1        | Section 302 Certification of Principal
      Executive Officer   
|31.2        | Section 302 Certification of
      Principal Financial Officer   
|32.1        | Section 906 Certification of Principal
      Executive Officer   
|32.2        | Section 906 Certification of
      Principal Financial Officer   

---