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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 September 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.)
|                                                                     |                                     
|                                                                     |                                     
|Sveavägen 17, Box 3061, SE-103 61                                    | SE-10361                            
|Stockholm, Sweden                                                    | (Zip Code)                          
|(Address of principal executive offices)                             |                                     

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 of November 22,
  2010, there were 438,462,905shares 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.                                                                                                                   | 1   
|          | Condensed Consolidated Balance Sheets as of September 30,
      2010 (unaudited) and December 31, 2009                                  | 1-2 
|          | Condensed Consolidated Statements of Operations for the
      three and nine months ended September 30, 2010 and
      2009 (unaudited) | 3   
|          | Condensed Consolidated Statements of Cash Flows for the nine
      months ended September 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.                                                                             | 29  
|Item 4 T. | Controls and Procedures.                                                                                                                | 29  
|Part II   | OTHER INFORMATION                                                                                                                       |     
|Item 1    | Recent Sales of Unregistered Securities and Use of Proceeds                                                                             | 31  
|Item 6.   | Exhibits.                                                                                                                               | 32  

- i -

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PART IFINANCIAL INFORMATION

Item 1. Financial Statements

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

|                                                                                 |   | Unaudited     |  |   |              | 
|-------------------------------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                                                 |   | September 30, |  |   | December 31, | 
|Assets                                                                           |   | 2010          |  |   | 2009         | 
|Current assets:                                                                  |   |               |  |   |              | 
|Cash                                                                             | $ | 18            |  | $ | -            | 
|Accounts receivable, net                                                         |   | 2,003         |  |   | -            | 
|Costs and estimated earnings in excess of
      billings on projects in progress |   | 247           |  |   | -            | 
|Value added tax receivable                                                       |   | 16            |  |   | -            | 
|Prepaid expenses and other current assets                                        |   | 668           |  |   | -            | 
|Current assets of discontinued
      operations                                  |   | -             |  |   | 1,308        | 
|                                                                                 |   |               |  |   |              | 
|Total current assets                                                             |   | 2,952         |  |   | 1,308        | 
|                                                                                 |   |               |  |   |              | 
|Property, plant and equipment,
      net of accumulated depreciation             |   | 142           |  |   | -            | 
|Goodwill                                                                         |   | 3,710         |  |   | -            | 
|Other intangible assets, net
      of accumulated amortization                   |   | 769           |  |   | -            | 
|Deferred financing costs, net of accumulated
      amortization                  |   | 5             |  |   | -            | 
|Other assets of discontinued
      operations                                    |   | -             |  |   | 8,394        | 
|Total assets                                                                     | $ | 7,578         |  | $ | 9,702        | 

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

1

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

|                                                                                                                                                                                                                                                                        |   | Unaudited     |   |   |              |  
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | - | - | ------------ | -
|                                                                                                                                                                                                                                                                        |   | September 30, |   |   | December 31, |  
|Liabilities                                                                                                                                                                                                                                                             |   | 2010          |   |   | 2009         |  
|Current liabilities:                                                                                                                                                                                                                                                    |   |               |   |   |              |  
|Accounts payable                                                                                                                                                                                                                                                        | $ | 2,262         |   | $ | -            |  
|Accrued liabilities                                                                                                                                                                                                                                                     |   | 1,751         |   |   | 251          |  
|Billings in excess of costs and estimated
      earnings on projects in progress                                                                                                                                                                                        |   | 43            |   |   | -            |  
|Proceed from sale of shares
      not issued                                                                                                                                                                                                                            |   | 94            |   |   | -            |  
|Current portion of long-term debt                                                                                                                                                                                                                                       |   | 693           |   |   | 96           |  
|Derivative liabilities                                                                                                                                                                                                                                                  |   | 313           |   |   | -            |  
|Debt to former shareholder - Tre Kronor                                                                                                                                                                                                                                 |   | 151           |   |   | -            |  
|Advances from related parties                                                                                                                                                                                                                                           |   | 195           |   |   | 399          |  
|Current liabilities of discontinued operations                                                                                                                                                                                                                          |   | -             |   |   | 6,464        |  
|                                                                                                                                                                                                                                                                        |   |               |   |   |              |  
|Total current liabilities                                                                                                                                                                                                                                               |   | 5,502         |   |   | 7,210        |  
|                                                                                                                                                                                                                                                                        |   |               |   |   |              |  
|Long-term debt , net of current portion                                                                                                                                                                                                                                 |   | 155           |   |   | -            |  
|Contingent considerations -
      Tre Kronor                                                                                                                                                                                                                            |   | 82            |   |   | -            |  
|Other liabilities of discontinued operations                                                                                                                                                                                                                            |   | -             |   |   | 4,162        |  
|                                                                                                                                                                                                                                                                        |   |               |   |   |              |  
|Total liabilities                                                                                                                                                                                                                                                       |   | 5,739         |   |   | 11,372       |  
|                                                                                                                                                                                                                                                                        |   |               |   |   |              |  
|Non-Controlling interests in discontinued operations                                                                                                                                                                                                                    |   | -             |   |   | 1,301        |  
|                                                                                                                                                                                                                                                                        |   |               |   |   |              |  
|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, 412,784,571 and
              351,364,254 shares issued
      and outstanding at        
      September 30, 2010 and December 31,2009,
      
              respectively |   | 413           |   |   | 351          |  
|Additional paid-in capital                                                                                                                                                                                                                                              |   | 8,820         |   |   | 2,919        |  
|Accumulated deficit                                                                                                                                                                                                                                                     |   | (7,066        | ) |   | (6,181       | )
|Treasury stock (14,000,000 common shares, at
      cost)                                                                                                                                                                                                                |   | (14           | ) |   | -            |  
|Accumulated other
      comprehensive income                                                                                                                                                                                                                            |   | (314          | ) |   | (60          | )
|                                                                                                                                                                                                                                                                        |   |               |   |   |              |  
|Total stockholders
      equity (deficiency)                                                                                                                                                                                                                           |   | 1,839         |   |   | (2,971       | )
|Totals liabilities and
      stockholders` equity (deficiency)                                                                                                                                                                                                          | $ | 7,578         |   | $ | 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 |   |  | Nine Months Ended |  
|-------------------------------------------------------------- | - | ------------------ | - |  | ----------------- | -
|                                                               |   | September 30,      |   |  | September 30,     |  
|                                                               |   | 2010               |   |  | 2009              |  
|Net revenues                                                   | $ | 4,290              |   |  | -                 |  
|Cost of revenues                                               |   | (3,958             | ) |  | -                 |  
|                                                               |   |                    |   |  |                   |  
|Gross Profit                                                   |   | 332                |   |  | -                 |  
|                                                               |   |                    |   |  |                   |  
|Selling, general and administrative expenses                   |   | (832               | ) |  | (421              | )
|Depreciation and amortization                                  |   | (46                | ) |  | -                 |  
|Impairment of goodwill                                         |   | -                  |   |  | -                 |  
|                                                               |   |                    |   |  |                   |  
|Loss from continued operations                                 |   | (546               | ) |  | (421              | )
|                                                               |   |                    |   |  |                   |  
|Other income (expense):                                        |   |                    |   |  |                   |  
|                                                               |   |                    |   |  |                   |  
|Gain on extinguishment of debt                                 |   | 184                |   |  | -                 |  
|Loss from change in fair value of
      derivative liabilities |   | (171               | ) |  | -                 |  
|Gain from change in fair value of contingent                   |   |                    |   |  |                   |  
|consideration                                                  |   | 283                |   |  | -                 |  
|Interest expense                                               |   | (169               | ) |  | (15               | )
|                                                               |   |                    |   |  |                   |  
|Total other income (expenses), net                             |   | 127                |   |  | (15               | )
|                                                               |   |                    |   |  |                   |  
|                                                               |   |                    |   |  |                   |  
|Net loss from continued operations                             |   | (419               | ) |  | (436              | )
|                                                               |   |                    |   |  |                   |  
|Discontinued operations:                                       |   |                    |   |  |                   |  
|Loss from discontinued operations                              |   | (1,878             | ) |  | (237              | )
|Gain on deconsolidation of
      subsidiaries                  |   | 3,839              |   |  | -                 |  
|                                                               |   |                    |   |  |                   |  
|Income (loss) from discontinued
      operations               |   | 1,961              |   |  | (237              | )
|                                                               |   |                    |   |  |                   |  
|Net income (loss)                                              | $ | 1,542              |   |  | (673              | )
|                                                               |   |                    |   |  |                   |  
|Earning (loss) per share - Basic:                              |   |                    |   |  |                   |  
|Continuing operations                                          | $ | (-)                |   |  | (-)               |  
|Discontinued operations                                        | $ | (-)                |   |  | (-)               |  
|Gain from disposal of assets in subsidiaries                   | $ | -                  |   |  |                   |  
|Net income (loss)                                              | $ | -                  |   |  | (-)               |  
|Earnings (loss) per share  Diluted                            |   |                    |   |  |                   |  
|Continuing operations                                          | $ | (-)                |   |  | (-)               |  
|Discontinued operations                                        | $ | (-)                |   |  | (-)               |  
|Gain on disposal of assets in
      subsidiaries               | $ | -                  |   |  |                   |  
|Net income (loss)                                              | $ | -                  |   |  | (-)               |  
|Weighted-average shares outstanding:                           |   |                    |   |  |                   |  
|Basic:                                                         |   | 406,868,929        |   |  | 316,856,739       |  
|Diluted:                                                       |   | 406,868,929        |   |  | 316,856,739       |  

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)                                            

|                                                                                  |   | Nine months ended |  
|--------------------------------------------------------------------------------- | - | ----------------- | -
|                                                                                  |   | September 30,     |  
|                                                                                  |   | 2010              |  
|Cash flows from operating activities:                                             |   |                   |  
|Net loss                                                                          | $ | (1,013            | )
|Adjustments to reconcile net loss to net
      cash used in operating activities: |   |                   |  
|Depreciation and amortization                                                     |   | 22                |  
|Amortization of intangible assets                                                 |   | 61                |  
|Amortization of deferred debt discount                                            |   | 97                |  
|Amortization of deferred financing costs                                          |   | 7                 |  
|Gain from extinguishment of debt                                                  |   | (184              | )
|Loss from change in fair value of
      derivative liabilities                    |   | 158               |  
|Accrued interest                                                                  |   | 120               |  
|Gain on change in fair value of contingent
      consideration                    |   | (283              | )
|Stock based compensation                                                          |   | 267               |  
|Non-Controlling interests                                                         |   | (22               | )
|Gain on deconsolidation of subsidiaries                                           |   | (3,839            | )
|Changes in operating assets and liabilities
      :                               |   |                   |  
|Accounts receivable                                                               |   | (929              | )
|Cost and estimated earnings in
      excess of billings on projects               |   | (108              | )
|Value added tax refund receivable                                                 |   | (16               | )
|Prepaid expenses and other
      current assets                                   |   | (483              | )
|Accounts payable                                                                  |   | 1,059             |  
|Accrued liabilities                                                               |   | 203               |  
|Billings in excess of costs and estimated
      earnings                          |   | 43                |  
|Operating activities from
      discontinued operations                           |   | 2,941             |  
|Net cash used in operating
      activities                                       |   | (1,899            | )
|Cash flows from investing activities:                                             |   |                   |  
|Cash acquired in acquisition of Tre Kronor                                        |   | 962               |  
|Sale (purchase) of equipment                                                      |   | (11               | )
|Investing activities in discontinued
      operations                             |   | -                 |  
|Net cash
      provided by (used in) investing activities                         |   | 951               |  
|Cash flows from financing activities:                                             |   |                   |  
|Repayments of debt                                                                |   | (175              | )
|Proceeds from debt, net of financing costs                                        |   | 1,113             |  
|Payment of debt to former
      shareholder                                       |   | (236              | )
|Net proceeds (repayments) from borrowings from
      related party                |   | 39                |  
|Proceeds from issuance of
      common stock, net of issuance costs               |   | 390               |  
|Financing activities from discontinued
      operations                           |   | (223              | )
|Net cash
      provided by financing activities                                   |   | 908               |  
|Effect of exchange rates on cash from continued operations                        |   | (142              | )
|Effect of exchange rates on cash from
      discontinued operations               |   | 200               |  
|Net increase (decrease) in cash                                                   |   | 18                |  
|Cash at beginning of period                                                       |   | -                 |  
|Cash at end of period                                                             | $ | 18                |  
|Supplemental information:                                                         |   |                   |  
|Cash paid for interest in continued operations                                    | $ | 4                 |  
|Cash paid for interest,
      discontinued operations                             | $ | 103               |  
|Non-cash investing and financing activities:                                      |   |                   |  
|Note payable converted into
      common shares                                   | $ | 1,434             |  
|Extinguishment of debt from related parties                                       | $ | 223               |  
|Equipment acquired under
      capital lease                                      | $ | -                 |  
|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 Group Inc, (the Company),
is a holding company that currently conducts its operations through its wholly
owned subsidiary Tre Kronor Media AB, which was acquired on May 4, 2010. Up
until September 8, 2010 Bark Group Inc owned Bark Corporation A/S (Bark
Corporation). Bark Corporation is Danish holding company conducting its
operations through its wholly owned subsidiaries Bark Advertising A/S ("Bark
Advertising"), and Bark Property ApS. As described below, Bark Corporation and
its subsidiaries were closed effective September 8, 2010 and thereinafter
considered discontinued operations.

During July and August 2010, the
Danish subsidiaries of the Company experienced losses from operations due to
clients decreasing their advertising spending combined with local managements
inability to generate sufficient new business activities. Moreover, management
determined that the fixed costs and the expected revenues in the latter half of
2010 would lead to continued substantial losses in 2010 and the first half of
2011.

The declining revenues and rising
losses would increase the Group's already large net working capital deficit and
hence, increased demands for the Group's cash capital to service its debt in the
Danish operations.

On August 31, 2010, the Danish
companies were not in possession of sufficient cash to continue its operations.
Thus, management decided to cease its Danish operations. On September 8, 2010,
management in the Danish companies filed for closing of all operations in
Denmark, with the Danish court in Copenhagen.

As a consequence of filing of
bankruptcy and control of the Danish subsidiaries being accepted by the court
effective September 8, 2010, the Company has deconsolidated the Danish
subsidiaries.

On May 4, 2010, the Company
completed the acquisition of all of the issued and outstanding shares of Tre
Kronor, a Swedish media company in accordance with a share purchase agreement
dated April 9, 2010. The Company believes that Tre Kronor Media's business model
of performance-based marketing is consistent with the Companys strategy of
acquiring professional, profitable and innovative multi-platform media
companies.

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 Barknotwithstanding 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 ($387,000) to be paid as follows
        (i) SEK 750,000 ($97,000 in May 2010, and (ii) SEK 750,000 ($97,000 in
        June 2010, and (iii) SEK 1,500,000($194,000) in July 2010. The redemption
        of the shares will be based on the valuation on the date of payment. Per
        date of acquisition the Company recorded $387,000 as a related party current
        liability. As of September 30, 2010, the Company paid $237,000, (SEK1,836,750),
        to the principal stockholder;                                                                                                                                                                                               
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |  | 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,                                                                                                                                                                                                                                                                                                                    

- 5 -

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| |  | 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:                      
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                
| |  |                                                                                                                                                                                                                                                                                                                
| |  | 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.

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

On March 31, 2010 Bark
Corporation 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 Bark Corporation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.

On August 25, 2010 the Company
entered into an agreement with Rene Lauritsen, a 10% shareholder of the Company,
and Sapiens Alliance Ltd., a private company controlled by Mr. Lauritsen, in
respect of the ownership of Anaconda.tv GmbH, a television production company
incorporated in Munich, Germany ( Anaconda) whereby:

- Bark Corporation agreed to re-convey to Mr. Lauritsen a 25.5% interest in
    Anaconda that was acquired by us in January 2010,
- as consideration for the re-conveyance, Mr. Lauritsen 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,
    and
- each party agreed to complete such transfers, assignments and surrenders
    of shares to give effect to the above agreements.

- 6 -

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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.

As a consequence of these transactions, the Company no longer
owns any ownership interest in Anaconda effective August 25, 2010.

Business     Bark Group and
its newly acquired Swedish subsidiary (collectively, the "Company") offer its
customers a network of advertising and media services. The Companys strategy is
to acquire mid-size / place equity investments in 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 $2,550,000 at
September 30, 2010) and has limited financial resources available to pay ongoing
financial obligations as they become due. The negative working capital includes
convertible debentures and related derivative liabilities of approximately
$1,006,000. Further, the negative net working capital includes proceeds from
sale of shares not issued, of $94,000.

The Company's current source of
funding, in addition to cash from operations is a operating line of credit of
approximately $293,000.

The Company plans to use both (i)
its operating line of credit 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. 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. In November 2010 two of the major
shareholders of the Company placed an equity financing of approximately
$440,000.

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 $1,010,000 (working
capital deficit of $2,550,000 less i) convertible notes with less than one year
maturity of $1,006,000 which it intends to convert, ii) proceeds from shares not
issued for $94,000 and iii) equity financing from major shareholders of
$440,000) over the next twelve months in order to sustain its current
obligations and to satisfy its working capital deficiency. The Company plan 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.

The Companys revised acquisition
strategy is based on share-for-share agreements with no immediately cash release
which means that need for additional financing in order to expand the business
is limited on a short term basis.

The Company also entered into an
engagement agreement with an investment bank with the objective of securing
additional financing, but the Company does 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. 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 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.

- 7 -

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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 September 30, 2010, and the results
of operations and cash flows for the periods presented. The results of
operations for the three and nine months ended September 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.

Foreign Currency     Prior
to September 8, 2010 the Company determined Danish Kroner as the functional
currency of its foreign operations. Effective from September 8, 2010 the
Companys functional currency is Swedish Kronor. 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 nine months ended September 30, 2010 and 2009 transaction gains and losses
were not material.

- 8 -

---

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

| |                             |   | 3 months ended September |   |   | 9 months ended September |  
| | --------------------------- | - | ------------------------ | - | - | ------------------------ | -
| |                             |   |                          |   |   |                          |  
| |                             |   | 2010                     |   |   | 2009                     |  
| |                             |   |                          |   |   |                          |  
| |                             |   |                          |   |   |                          |  
| | Net profit (loss):          | $ | 1,542,000                |   | $ | (673,000                 | )
| | Translation adjustment:     | $ | (213,000                 | ) | $ | (14,000                  | )
| | Comprehensive profit (loss) | $ | 1,329,000                |   | $ | (687,000                 | )

Loss per Share     Basic net income (loss) from continued operation
  per share has been calculated by dividing net income (loss) from continued operations
  by the weighted average number of common shares outstanding during the period.
  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 from continuing operations, 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. In addition, potential
  shares of common stock aggregating 20,111,972 are issuable upon conversion of
  debts for the three and nine months ended September 30, 2010.

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 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. The Companys reporting unit 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. Effective from September 8, 2010 the Company operates
  only by Tre Kronor.

- 9 -

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Equity Method of Accounting     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. Effective from August 25, 2010 the Company no longer
  holds any equity investments.

Note 3  Deconsolidation of Danish operation

On August 31, 2010, the Company
ceased activities of its Danish operations and management filed for bankruptcy
in its five Danish subsidiaries on September 8, 2010. Effective September 8,
2010, the control in three of the five companies has been transferred to a court
administrator and the remaining two Danish companies has been forced closed by
the Danish Commerce and Companies Agency as management has resigned and
accordingly the Danish subsidiaries have been deconsolidated.

In June 2009, the FASB issued
authoritative guidance (which was codified into ASC Topic 810, "Consolidation,"
with the issuance of ASU No. 2009-17) that requires a primarily qualitative
analysis to determine if an enterprise is the primary beneficiary of a variable
interest entity. This analysis is based on whether the enterprise has (a) the
power to direct the activities of the variable interest entity that most
significantly impact the entity's economic performance and (b) the obligation to
absorb losses of the entity or the right to receive benefits from the entity
that could potentially be significant to the variable interest entity. In
addition, enterprises are required to more frequently reassess whether an entity
is a variable interest entity and whether the enterprise is the primary
beneficiary of the variable interest entity. Finally, the guidance for
consolidation or deconsolidation of a variable interest entity is amended and
disclosure requirements about an enterprise's involvement with a variable
interest entity are enhanced. The Company adopted this guidance as of January 1,
2010 on a prospective basis. As a result, Bark Corporation A/S (Bark
Corporation), Bark Advertising A/S ("Bark Advertising"), and Bark Property ApS
was deconsolidated as the power to direct the activities completely transferred
to the trustees of Copenhagen court. The deconsolidation of these subsidiaries
resulted in a decrease in assets and liabilities as of September 9, 2010 of
$5,203,000 and $9,042,000 respectively.

As the Company is no longer in
  control of the Danish subsidiaries the Company has, in accordance with ASC 810,
  deconsolidated the fair value of assets ($5,203,000) and liabilities ($9,042,000)
  and recorded a gain on deconsolidation of Danish entities of $3,839,000.

The following table summarizes
  the deconsolidation:

UnauditedSeptember 30,Assets
      
      2010Current assets:Cash
      $
      7Accounts receivable, net
      
      230Costs and estimated earnings
        in excess of billings on projects in progress
      
      212Prepaid expenses and other current assets
      
      21Total current assets
      
      470Property, plant and equipment,
        net of accumulated depreciation
      
      4,683Deferred financing costs, net of accumulated
        amortization
      
      50Total assets
      $
      5,203


- 10 -

---

UnauditedSeptember 30,Liabilities
    
    2010Current liabilities:Accounts payable
    $
    1,752Accrued liabilities
    
    1,023Billings in excess of costs and estimated
      earnings on projects in progress
    
    91Current portion of long-term
      debt
    
    1,831Current portion of obligations under capital
      leases
    
    138Current portion of debt to
      redeemed stockholders
    
    117Total current liabilities
    
    4,952Long-term debt , net of current portion
    
    4.090Total liabilities
    $
    9,042


Note 4  Tre Kronor Media AB

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)         |  | 3,710,000  |  
|-------------------------------------------------- |  | ---------- | -
|Intangible assets                                  |  | 830,000    |  
|Liability to related parties (see Note 1)          |  | (387,000   | )
|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.

- 11 -

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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 be $830,000 with
useful lives of 5 years (see Note 5).

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 $6,597,000 and net loss totaled $214,000 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:

|                                                                   |   | Three months ended |   |   | Nine months ended |  
|------------------------------------------------------------------ | - | ------------------ | - | - | ----------------- | -
|                                                                   |   | September 30       |   |   | September 30      |  
|                                                                   |   | 2010               |   |   | 2009              |  
|                                                                   |   |                    |   |   |                   |  
|Net revenues                                                       | $ | 4,290              |   | $ | 2,825             |  
|Cost of revenues                                                   |   | (3,958             | ) |   | (2,532            | )
|Operating income (expenses)                                        |   | 927                |   |   | (1,072            | )
|Net loss from continuing operations                                |   | (419               | ) |   | (436              | )
|Net profit (loss)                                                  |   | 1,542              |   |   | (779              | )
|Weighted average shares, basic                                     |   | 406,868,929        |   |   | 316,856,739       |  
|Weighted average shares, diluted                                   |   | 406,868,929        |   |   | 316,856,739       |  
|Basic net profit (loss) from continuing operations
      per share | $ | -                  |   | $ | (-)               |  
|Diluted net profit (loss) from continuing operations per share     | $ | -                  |   | $ | (-)               |  

Note 5 - 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 nine months ended September
  30, 2010 intangible assets were amortized by $41,500 and $67,300 respectively.
  At September 30, 2010 the net carrying amount of intangible assets related to
  the acquisition of Tre Kronor was $769,466.

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

2010 (October  December):
      $
      41,5002011:
      $
      166,0002012:
      $
      166,0002013:
      $
      166,0002014:
      $
      166,0002015 (January  May):
      $
      58,930


Note 6 - Concentration of credit risk

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

During the nine months ended September
  30, 2010 customer AB accounted for approximately 23% of revenue. No other customers
  individually represented more than 10% of revenue for any period presented.

As of September 30, 2010 customers
  AC, AA and AB accounted for approximately 13%, 27% and 36% 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.

- 12 -

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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 USA,
Denmark and Sweden.

Note 7  Non-controlling interests in discontinued
operations

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 September
  30, 2010 and December 31, 2009 was DKK 637,393 ($116,737)and DKK 994,356 ($191,587),
  respectively. The redemption of shares is paid in 8 quarterly installments,
  including interest at variable rates (5% at December 31, 2009). On September
  8, 2010, the Company is no longer obligated to pay the remaining installments
  to Class B shareholder as the liabilities were transferred to the Danish Courts
  upon acceptance of control of the Danish subsidiaries by the Courts.

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 three
  holders of 51,820 Series B shares were redeemed. Two of the three holders were
  affiliates to the Company.

On August 18, 2010 the total redemption
  value of the 51,820 Series B shares of DKK 6,753,000 ($1,167,551) was converted
  to a total of 717,260 shares of common stock in Bark Group Inc. The Company
  recognized a total beneficial gain from the conversion of $1,127,385. Gain related
  to the affiliates was recognized with $943,077 as additional paid in capital,
  whereas gain related to the non-affiliate of $184,308 was recognized in the
  Companys income statement as gain on extinguishment of debts.

Note 8 - 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 10) 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:

- 13 -

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September 30,
      
      
      Date of2010
      
      
      issuance$80,000 Debenture:Discount Rate  Bond Equivalent Yield
      
      0.16%
      
      
      0.39%Annual rate of dividends
      
      -
      
      
      -Volatility
      
      154%
      
      
      152%Weighted Average life (months)
      
      3
      
      
      9$40,000 Debenture:Discount Rate  Bond Equivalent Yield
      
      0.16%
      
      
      0.42%Annual rate of dividends
      
      -
      
      
      -Volatility
      
      154%
      
      
      160%Weighted Average life (months)
      
      3
      
      
      9$37,500 Debenture:Discount Rate  Bond Equivalent Yield
      
      0.16%
      
      
      0.43%Annual rate of dividends
      
      -
      
      
      -Volatility
      
      154%
      
      
      160%Weighted Average life (months)
      
      4
      
      
      9$50,000 Debenture:Discount Rate  Bond Equivalent Yield
      
      0.16%
      
      
      0.37%Annual rate of dividends
      
      -
      
      
      -Volatility
      
      154%
      
      
      161%Weighted Average life (months)
      
      5
      
      
      9Fair Value
      $
      313,035
      
      $
      155,163 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 September 30,
    2010, the derivative liability associated with the debenture was revalued
    to $313,035. The $170,703 increase in the derivative liability at September
    30, 2010 is included as loss on change in fair value of derivative liabilities
    in the Companys condensed consolidated statement of operations for three
    months ended September 30, 2010. For the nine months ended September 30, 2010
    the loss on change in fair value was $157,872. Note 9 - Fair Value Measurement Valuation 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 September 30, 2010:


- 14 -

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|                         |   |                |  |   | Fair Value Measurements at September 30, 2010 | 
|------------------------ | - | -------------- |  | - | --------------------------------------------- | 
|                         |   | Total Carrying |  |   | Quoted prices                                 | 
|                         |   | Value at       |  |   | in active                                     | 
|                         |   | September      |  |   | markets                                       | 
|                         |   | 30,
      2010 |  |   | (Level 1)                                     | 
|                         |   |                |  |   |                                               | 
|Derivative liabilities   | $ | 313,035        |  | $ | -                                             | 
|Contingent Consideration | $ | 82,000         |  | $ | -                                             | 
|Goodwill                 | $ | 3,710,000      |  | $ | -                                             | 

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.

The contingent consideration is
measured at fair value using quoted market prices of Companys shares of common
stock.

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:

|                                                                            |   | September 30, |  |   | December 31, | 
|--------------------------------------------------------------------------- | - | ------------- |  | - | ------------ | 
|                                                                            |   | 2010          |  |   | 2009         | 
|                                                                            |   |               |  |   |              | 
|Beginning balance  Derivative liabilities                                  | $ | -             |  | $ | -            | 
|Derivative liabilities recorded                                             |   | 155,163       |  |   | -            | 
|Net unrealized loss on change in fair value
      of derivative liabilities |   | 157,872       |  |   | -            | 
|Ending balance  Derivative liabilities                                     | $ | 313,035       |  | $ | -            | 

|                                                                        |   | September 30, |   |   | December 31, | 
|----------------------------------------------------------------------- | - | ------------- | - | - | ------------ | 
|                                                                        |   | 2010          |   |   | 2009         | 
|                                                                        |   |               |   |   |              | 
|Beginning balance  Contingent consideration                            | $ | 365,000       |   | $ | -            | 
|Net unrealized gain on change in fair value of contingent consideration |   | (283,000      | ) |   | -            | 
|Ending balance  Contingent consideration                               | $ | 82,000        |   | $ | -            | 

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.

|                    |   | September 30, |   |   | December 31, | 
|------------------- | - | ------------- | - | - | ------------ | 
|                    |   | 2010          |   |   | 2009         | 
|                    |   |               |   |   |              | 
|Beginning balance   | $ | 3,289,000     |   | $ | 3,230,000    | 
|Acquired            |   | 3,710,000     |   |   | -            | 
|Impaired            |   | (2,812,000    | ) |   | -            | 
|Currency adjustment |   | (477,000      | ) |   | 59,000       | 
|Ending balance      | $ | 3,710,000     |   | $ | 3,289,000    | 

- 15 -

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Note 10  Long and short-term debt

Long and short-term debt

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). On September 9, 2010 the loan was converted into
4,000,000 new issued shares of common stock.

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. On September 23, 2010 the loan were
partly repaid in cash. As at September 30, 2010 the amount outstanding including
accrued interest was $22,248

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 September 30, 2010 the amount outstanding
including accrued interest, net of deferred discount was $65,140.

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 September 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 September 30, 2010 the amount outstanding including accrued
  interest, net of deferred discount was $29,321

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 September 30, 2010 the amount outstanding including accrued
  interest, net of deferred discount was $27,104.

On May 27, 2010 the Company obtained
  a Convertible Debenture totaling $50,000. 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 $0.05 resulting in a deferred debt discount
  of $29,142 which will be recorded as interest expenses ratably over the loans
  maturity. As at September 30, 2010 the amount outstanding including accrued
  interest, net of deferred discount was $35,501.

- 16 -

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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 September 30, 2010 the amount outstanding including accrued interest was
  $228,934. As the note holds a contingent conversion no deferred debt discount
  was recognized.

Note 11  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 nine months ended September 30, 2010 and 2009, the
Company recorded $94,753 and $175,489 of compensation expense, respectively,
related to these awards. During the three months ended September 30, 2010 and
2009 the Company recorded $0 and $61,360 of compensation expense.

Note 12  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 nine months ended September
30, 2010 and 2009 the Company recorded stock based compensation of $69,063 and
$236,979 respectively. During the three months ended September 30, 2010 and 2009
the Company recorded stock based compensation of $23,021 and $236,979
respectively. The Company will record compensation expense ratably over the
remaining period. As of September 30, 2010 there was $138,125 of total
unrecognized compensation costs related to the issuance. The cost is expected to
be recognized over a period of 6 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 three and nine
months ended September 30, 2010 the Company recorded stock based compensation of
$29,760 and $103,560.

The Company will record compensation
  expense ratably over the remaining period. As of September 30, 2010 there was
  $48,360 of total unrecognized compensation costs related to the issuance. The
  cost is expected to be recognized over a period of 2 quarters.

Note 13 - Related party transactions

Fee to Secretary and member 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 270,000
  ($49,450) during the nine months ended September 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 September 30, 2010
  and 2009 the contract entitled BH Media ApS to invoice DKK 90,000 ($16,483).
  Such services have been recorded as a component of selling, general, and administrative
  expenses. At September 30, 2010, and December 31, 2009 BH Media ApS has a receivable
  of DKK 938,100($171,810) and DKK 867,744 ($167,192) respectively which has been
  classified in advances from related parties.

Fee to Director Anders Hageskov     Lugano Communication and Entertainment (a
  company in which Anders Hageskov was employed up until October 31, 2009) invoiced
  the Company $196,875 during the nine months ended September 30, 2009, for services
  rendered by Anders Hageskov to Bark Copenhagen and Bark Advertising. For the
  three months ended September 30, 2009 Lugano Communication invoiced the Company
  $54,755. 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.

Loan to Anaconda tv GmbhOn 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. On August 25, 2010 the loan was written off, following
  the re-convey described below.

- 17 -

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Acquisition of Anaconda  re
  conveyOn June 15, 2010 and on August 25, 2010, we entered into agreements with
  Jesper Svane, a 10% shareholder of the Company, and Svaneco Ltd., a private
  company controlled by Mr. Svane and Rene Lauritsen, a 10% shareholder of the
  Company, in respect of the ownership of Anaconda.tv GmbH, whereby Bark Corporation
  agreed to re-convey to Mr. Svane and Mr. Lauritsen a total of 51% interest in
  Anaconda that was acquired by us on March 31, 2010. As consideration for the
  re-conveyance, Mr. Svane and Mr. Lauritsen agreed to surrender 14,000,000 shares
  of the common stock of the Company issued to them originally in connection with
  Bark Corporations acquisition of an interest in Anaconda.

Niclas Fröberg  CEO of Tre KronorAccording 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 ($387,000) to Mr. Fröberg. The payments were due as follows (i) SEK
750,000 ($97,000) in May 2010, and (ii) SEK 750,000 ($97,000) in June 2010, and
(iii) SEK 1,500,000 ($193,000) in July 2010. At September 30, 2010 the amount
outstanding was $150,520 which has been classified in debt to former shareholder
 Tre Kronor.

Lars Thomassen  Chairman of the
BoardDuring the third quarter of 2010 Lars Thomassen made payments of
DKK 105,489 ($19,320) to creditors on behalf of the Company. The loan is to be
repaid in full by the end of November 2010.

Note 14  Subsequent events

On November 3, 2010, two of the
  Companys majority shareholders made cash investments of approximately
  DKK 2,400,000 ($440,000) in the Company.

- 18 -

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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 nine months ended
September 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 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 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 transnational and
multi-national corporations.

Due to the changing dynamics within the communications
industry, along with an intimate knowledge concerning the needs of independent
agencies, the Board of Bark Group Inc. recently revised its business strategy to
reflect these considerations.

We are in the process of forming partnerships with strong
creative agencies and marketing service companies, to deliver a broad spectrum
of communications disciplines in selected countries. The intent is to provide
strong creative entrepreneurs with the combined advantages of retaining local
independence while enjoying the benefits of a listed company.

A number of independent local agencies have already expressed
their desire to be part of a future network which combines the advantages of a
network agency relationship, while striving to preserve their sovereignty.

Our new acquisition model is based on a share-for-share
agreement, usually starting with a minority position in the new partner. Cash is
not immediately released, which we believe will ensure a higher and more
sustainable long-term profit.

The key partners will share the ownership of Bark as a listed
company along with all other shareholders and will have a substantial incentive
in promoting the success of Bark Group Inc. This financial incentive will
further enhance and therefore drive the cooperation between the individual
companies.

- 19 -

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We have identified and initiated discussions with a number of
potential partners from highly regarded independent agencies based in London,
Sweden and Italy, in order to establish a future partnership of our network.

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.

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

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 August 25, 2010 the Company entered into an agreement with
Rene Lauritsen, a 10% shareholder of the Company, and Sapiens Alliance Ltd., a
private company controlled by Mr. Lauritsen, in respect of the ownership of
Anaconda.tv GmbH, a television production company incorporated in Munich,
Germany ( Anaconda) whereby:

- Bark Corporation agreed to re-convey to Mr. Lauritsen a 25.5% interest in
  Anaconda that was acquired by us in January 2010,
- as consideration for the re-conveyance, Mr. Lauritsen 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,
  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.

As a consequence of these transactions, we no longer own any
ownership interest in Anaconda effective August 25, 2010.

Danish subsidiaries

During July and August 2010 our Danish subsidiaries experienced
unexpected losses from operations due to clients decreasing their advertising
spending combined with local managements inability to create sufficient new
business activities. Moreover it became obvious that the fixed cost base and the
expected revenues in the latter half of 2010 would lead to a substantial loss
from operations in 2010 and a projected loss for the first half of 2011.

- 20 -

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The declining revenues and rising losses contributed to
aggravate the Group's already large net working capital deficit and hence,
increased demands for the Group's cash capital raising to repay short term
debts and to service long-term debts in the Danish operation.

On August 31, 2010, the Danish subsidiaries were not in
possession of sufficient cash to continue operating. Thus, Group Management
decided to cease operations. On September 8, 2010, management in the Danish
companies filed for closing of all operations in Denmark, at the Danish court in
Copenhagen.

As a consequence of filing of bankruptcy and control of the
Danish subsidiaries was accepted by the court effective September 8, 2010, the
Company has deconsolidated of Danish subsidiaries from Bark Group, Inc.

Results of Operations

Results of operations reflect inclusion of
Tre Kronor from May 4, 2010 to September 30, 2010 and of discontinued operations
from January 1, 2010 to August 31, 2010.

Revenues

We earn revenues from advertising and media 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 media services that
we provide.

During the three and nine months ended September 30, 2010 all
our revenues was attributable to Tre Kronor Media. Note that the revenue is
based on a 5 months period since acquisition date May 4, 2010 up until September
30, 2010.

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,
- cost of placement of media,
- photography,
- web site design,
- production of radio commercials,
- printed materials, and

- 21 -

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- layout of advertisements for newspapers and magazines.

Our cost of revenues for the three and nine months ended
September 30, 2010 was attributable to subsidiaries.

Gross Profit

Gross Profit from our affiliates in the three and nine months
ended September 30, 2010 were $332,000 and $503,000 respectively.

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.

Our selling, general and administrative expenses totaled
$1,647,000 for the nine months ended September 30, 2010 as compared to $794,000
for the nine months ended September 30, 2009, representing an increase of
$853,000. For the three months ended September 30, 2010 the expenses increased
to $832,000 as compared to $421,000 for the three months ended September 30,
2009. For the nine and the three months periods ended September 30, 2010
selling, general and administrative expenses attributable to subsidiaries was
$678,000 and $465,000 respectively.

Depreciation and Amortization

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

Depreciation and amortizations totaled $81,000 for the nine
months ended September 30, 2010 and $46,000 for the three months ended September
30, 2010. For the three and nine months, ended September 30, 2010 amortization
of intangible assets amounted to $42,000 and $61,000 respectively.

Other income and expenses

Gain on extinguishment of debt

For the three and nine months ended September 30, 2010 we
recognized a gain on extinguishment of debts of $184,000 from conversion of debt
to a redeemed minority shareholder in Bark Advertising A/S

Loss on derivatives

For the three and nine months ended September 30, 2010 we
recognized a loss of $170,703 and $157,872 respectively 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.

- 22 -

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Gain on change in fair value of contingent
consideration

For the three and nine months ended September 30, 2010 we
recognized a gain of $283,000 from contingent consideration being the difference
in fair value between date of contingent consideration agreed upon and date of
reporting. Contingent consideration related to the issuance of shares of common
stock to the previous shareholders of Tre Kronor.

Interest Expense

Interest expense includes interest that we pay on our credit
facility with Nordea Bank 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 $249,000 for the nine months ended
September 30, 2010 as compared to $18,000 for the nine months ended September
30, 2009. For the three months ended September 30, 2010 interest expenses
totaled $169,000 as compared to $15,000 in 2009.

The variance is attributable to increased interest expenses and
deferred discounts on loans and convertible notes from private investors.

Loss from discontinued operations

For the nine months ended September 30, 2010 the loss from
discontinued operations increased to $3,687,000 as compared to $1,184,000 for
the nine months ended September 30, 2009. The increased loss arises primarily
from a decreased gross profit and impairment of goodwill. For the three months
ended September 30, 2010 loss from discontinued operations was $1,878,000 as
compared to a loss of $237,000 for the three months ended September 30,
2009.

Gain on disposal of assets in subsidiaries

For the three and nine months ended September 30, 2010 we
recognized a gain on disposal of assets in subsidiaries of $3,839,000 being
comprised of fair value of liabilities ($9,042,000) less fair value of assets
($5,203,000).

Net Loss

After inclusion of loss from discontinued operations and gain
on disposal of assets in subsidiaries we recorded a net profit of $1,542,000 for
the three months ended September 30, 2010 and a loss of $1,013,000 for the nine
months ended September 30, 2010.

For the three and nine months ended September 30, 2010 we
recorded losses from discontinued operations of $1,878,000 and $3,687,000
respectively as compared to losses of $237,000 and $1,184,000 in 2009.

Continued affiliate operations contributed with expected losses
of $214,000 in the nine months ended September 30, 2010 and $181,000 for the
three months ended September 30, 2010. It is expected that affiliates will be
profitable for 2010.

Liquidity and Capital Resources

Cash and Working Capital

As at September 30, 2010 and December 31, 2009, we had cash of
$18,000 and $0 respectively. Our working capital deficit decreased from
$5,809,000 at December 31, 2009 to $2,550,000 at September 30, 2010, a decrease
of $3,259,000. The decrease in our working capital deficit is due to the ceased
Danish operations partly offset by convertible notes obtained in 2010 with a
maturity of less than 12 months. At September 30, 2010 the aggregated
outstanding amount of these notes was approximately $1,006,000.

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 $2,550,000 as of September 30, 2010. Based on our 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

- 23 -

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we estimates that we will require approximately $1,010,000
(working capital deficit of $2,550,000 less i) convertible notes with less than
one year maturity of $1,006,000 which it intends to convert, ii) proceeds from
shares not issued for $94,000 and iii) equity financing from major shareholders
of $440,000) over the next twelve months in order to sustain our current
obligations and to satisfy our working capital deficiency.

Our revised acquisition strategy is based on share-for-share
agreements with no immediately cash release which means that need for additional
financing in order to expand the business is limited on a short term basis.

Our current source of funding, in addition to cash from
operations is our operating line of credit of approximately $293,000. We plan to
use our operating line of credit to finance our operations over the next twelve
months. However, we will require additional financing to conduct our business in
accordance with our plan of operations on a long term basis. We plan to conduct
an equity financing of our 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. In November 2010 two of our major shareholders placed an equity
financing of approximately $440,000.

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 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

We have a floating rate line credit facility in Nordea Bank in
the amount of $293,000. As at September 30, 2010 the amount outstanding under
this line of credit facility was approximately $155,000. 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). On
September 9, 2010 the loan was converted into 4,000,000 new issued shares of
common stock.

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. On September 23, 2010 the loan were partly repaid in cash. As at
September 30, 2010 the amount outstanding including accrued interest was $22,248

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 September
30, 2010 the amount outstanding including accrued interest, net of deferred
discount was $65,140.

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 September 30, 2010 the amount outstanding was
$250,000.

- 24 -

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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 September
30, 2010 the amount outstanding including accrued interest, net of deferred
discount was $29,321

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 September
30, 2010 the amount outstanding including accrued interest, net of deferred
discount was $27,104.

On May 27, 2010 the Company obtained a Convertible Debenture
totaling $50,000. 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 $0.05 resulting in a deferred debt discount of $29,142 which will be
recorded as interest expenses ratably over the loans maturity. As at September
30, 2010 the amount outstanding including accrued interest, net of deferred
discount was $35,501.

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 September 30, 2010 the amount
outstanding including accrued interest was $228,934. As the note holds a
contingent conversion no deferred debt discount was recognized.

Going ConcernOur unaudited condensed
consolidated financial statements have been prepared assuming that we will
continue as a going concern. We continue to operate with negative working
capital (approximately $2,550,000 at September 30, 2010) and has limited
financial resources available to pay ongoing financial obligations as they
become due. The negative working capital includes convertible debentures and
related derivative liabilities of approximately $1,006,000. Further, the
negative net working capital includes proceeds from sale of shares not issued,
of $94,000.

Our current source of funding, in addition to cash from
operations is a operating line of credit of approximately $293,000.

We plan to use both (i) operating line of credit to finance its
operations over the next twelve months. However, we will require additional
financing to conduct our business in accordance with our plan of operations on a
long term basis. We plan to conduct an equity financing of our 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. In November 2010 two
of our major shareholders placed an equity financing of approximately $440,000.

Based on the our current forecast we anticipate that cash flow
from operations will be sufficient to cover our current ongoing operating
expenses for the next 12 months. Therefore we estimate that we will require
approximately $1,010,000 (working capital deficit of $2,550,000 less i)
convertible notes with less than one year maturity of $1,006,000 which we intend
to convert, ii) proceeds from shares not issued for $94,000 and iii) equity
financing from major shareholders of $440,000) over the next twelve months in
order to sustain our current obligations and to satisfy our working capital
deficiency. We plan to conduct an equity financing of our 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.

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Our revised acquisition strategy is based on share-for-share
agreements with no immediately cash release which means that need for additional
financing in order to expand the business is limited on a short term basis.

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. There is also a risk that cash used in
operations will be greater than anticipated in the event that projected revenues
are not achieved.

As a result of the above, we believe that a doubt about our
ability to continue as a going concern remained as at September 30, 2010, as
reflected in the notes to our condensed consolidated unaudited financial
statements for the nine months ended September 30, 2010. Our condensed
consolidated unaudited financial statements for the nine months ended September
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 $1,899,000 in the nine months ended September
30, 2010, compared to use of cash of $618,000 in the nine months ended September
30, 2009. The increased use of cash in operating activities primarily reflects
increased receivables and other current assets, decreased billings in excess of
costs and estimated earnings on projects in progress offset by our decreased
loss in 2010. Discontinued operations provided respectively $2,941,000 and
$1,034,000.

Cash From/Used in Investing Activities

We provided cash from investing activities of $951,000 in the
nine months ended September 30, 2010 by acquiring Tre Kronor offset by
purchasing equipment of $11,000. In the nine months ended September 30, 2009
discontinued operations provided cash of $3,000 from sale of equipment.

Cash from Financing Activities

We generated cash of $908,000 from financing activities during
the nine months ended September 30, 2010, which represented proceeds from
issuance of common stock of $390,000, proceeds from borrowings from related
parties of $39,000 and net proceeds from debt of $938,000, partly offset by
payment of debt to former shareholder of $236,000 and repayments of debts in
discontinued operations of $223,000.

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.

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.

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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.

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)

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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 yearsFurniture, fixtures and computer equipment
    3 - 5 years


Analysis of Impairment

In May 2010 we acquired Tre Kronor Media. We accounted for our
acquisition of this business using the purchase method of accounting, which
resulted in the recognition of approximately $3,710,000 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.

During the three month ended September 30, 2010 no events or
changes in circumstances indicates that the carrying value of our goodwill might
not be recordable.

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, Niclas Fröberg, 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 September 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 September 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 September 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 ").

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

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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 1. Unregistered Sales of Equity Securities and Use of
Proceeds Three Months Ended September 30, 2010

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

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
      CompanyJuly 21, 2010
    2,122,641
    1
    $90,000
    -August 18, 20101
    717,260
    3
    $1,167,551
    -September 9,
      20102
    4,000,000
    1
    $204,911
    -


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.

31_________________1Issued as consideration for
conversion of debts 2Issued as consideration for conversion of
debts

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Item 6. Exhibits.

|Exhibit No. | Description                                                    
|----------- | ---------------------------------------------------------------
|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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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: November 22, 2010 | By:            
|                        |                
|                        |                
|                        |                
|                        |                
|                        |                
|Date: November 22, 2010 | By:            
|                        |                
|                        |                
|                        |                
|                        |                

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EXHIBIT INDEX

|Exhibit No. | Description                                                   
|----------- | --------------------------------------------------------------
|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

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