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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 March 31, 2009

OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
For the transition period from __________ to __________.

Commission file number 000-53530

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

|Nevada                                                               | Not applicable                      
|-------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or
      organization) | (I.R.S. Employer Identification No.)
|                                                                     |                                     
|Ostergade 17-19, 3rdFloor,
      DK-1100                             | DK-1100                             
|Copenhagen K, Denmark                                                | (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
SecuritiesExchange 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 May 20, 2009, there were 16,205,686 shares of the issuers
common stock outstanding.



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BARK GROUP INC

Table of Contents

|              |                                                                                                                            | Page
|------------- | -------------------------------------------------------------------------------------------------------------------------- | ----
|              |                                                                                                                            |     
|Part
      I  | FINANCIAL
      INFORMATION                                                                                                |     
|              |                                                                                                                            |     
|Item
      1. | Financial
      Statements.                                                                                                | 1   
|              |                                                                                                                            |     
|              | Condensed
      Consolidated Balance Sheets as of March 31, 2009 (unaudited) and December
      31, 2008                   | 1-2 
|              |                                                                                                                            |     
|              | Condensed
      Consolidated Statements of Operations for the three months ended March 31,
      2009 and 2008 (unaudited) | 3   
|              |                                                                                                                            |     
|              | Condensed
      Consolidated Statements of Cash Flows for the three months ended March 31,
      2009 and 2008 (unaudited) | 4   
|              |                                                                                                                            |     
|              | Notes
      to Unaudited Condensed Consolidated Financial Statements                                                       | 5-13
|              |                                                                                                                            |     
|Item
      2. | Managements
      Discussion and Analysis of Financial Condition and Results of Operations.                               | 15  
|              |                                                                                                                            |     
|Item
      3. | Quantitative
      and Qualitative Disclosures about Market Risk.                                                          | 23  
|              |                                                                                                                            |     
|Item
      4. | Controls
      and Procedures.                                                                                             | 23  
|              |                                                                                                                            |     
|Part
      II | OTHER
      INFORMATION                                                                                                    | 25  
|              |                                                                                                                            |     
|Item
      1  | Legal
      Proceeding                                                                                                     | 25  
|              |                                                                                                                            |     
|Item
      1A | Risk Factors                                                                                                               | 25  
|              |                                                                                                                            |     
|Item
      6. | Exhibits.                                                                                                                  | 35  

- i -

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PART I FINANCIAL INFORMATION

Item 1. Financial Statements

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

|                                                                          |   | Unaudited |  |   |              | 
|------------------------------------------------------------------------- | - | --------- |  | - | ------------ | 
|                                                                          |   | March 31, |  |   | December 31, | 
|                                                                          |   | 2009      |  |   | 2008         | 
|Assets                                                                    |   |           |  |   |              | 
|Current assets:                                                           |   |           |  |   |              | 
|Cash and cash equivalents                                                 | $ | 197       |  | $ | 86           | 
|Accounts receivable, net of allowance for
      doubtful accounts of $247 |   |           |  |   |              | 
|and
      $251 at March 31, 2009 and December 31, 2008                    |   | 427       |  |   | 243          | 
|Costs and estimated earnings in excess of
      billings on               |   | 427       |  |   | 352          | 
|projects in progress                                                      |   |           |  |   |              | 
|Value added tax refund receivable                                         |   | 44        |  |   | 156          | 
|Prepaid expenses and other
      current assets                           |   | 61        |  |   | 97           | 
|                                                                          |   |           |  |   |              | 
|Total current assets                                                      |   | 1,156     |  |   | 934          | 
|                                                                          |   |           |  |   |              | 
|Property, plant and equipment,
      net of accumulated depreciation      |   | 4,697     |  |   | 5,011        | 
|Goodwill                                                                  |   | 3,050     |  |   | 3,230        | 
|Other intangible assets, net
      of accumulated amortization            |   | 45        |  |   | 63           | 
|Deferred financing costs, net of accumulated
      amortization           |   | 53        |  |   | 57           | 
|Total assets                                                              | $ | 9,001     |  | $ | 9,295        | 

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 |   |   |              |  
|---------------------------------------------------------------- | - | --------- | - | - | ------------ | -
|                                                                 |   | March 31, |   |   | December 31, |  
|                                                                 |   | 2009      |   |   | 2008         |  
|Liabilities                                                      |   |           |   |   |              |  
|Current liabilities:                                             |   |           |   |   |              |  
|Accounts payable                                                 | $ | 1,956     |   | $ | 1,809        |  
|Accrued payroll and payroll related costs                        |   | 333       |   |   | 222          |  
|Accrued liabilities                                              |   | 652       |   |   | 568          |  
|Billings in excess of costs and estimated
      earnings on      |   |           |   |   |              |  
|projects in
      progress                                       |   | 198       |   |   | 80           |  
|Current portion of long-term debt                                |   | 1,639     |   |   | 1,567        |  
|Current portion of obligations
      under capital leases        |   | 108       |   |   | 124          |  
|Current portion of debt to redeemed
      stockholders           |   | 185       |   |   | 156          |  
|Advances from related parties                                    |   | 570       |   |   | 543          |  
|                                                                 |   |           |   |   |              |  
|Total current
      liabilities                                  |   | 5,641     |   |   | 5,069        |  
|                                                                 |   |           |   |   |              |  
|Long-term debt , net of current portion                          |   | 3,907     |   |   | 4,155        |  
|Long-term obligations under capital leases,
      net of current |   | 149       |   |   | 184          |  
|portion                                                          |   |           |   |   |              |  
|Long-term debt to redeemed stockholders, net
      of current    |   | 95        |   |   | 157          |  
|portion                                                          |   |           |   |   |              |  
|                                                                 |   |           |   |   |              |  
|Total liabilities                                                |   | 9,792     |   |   | 9,565        |  
|                                                                 |   |           |   |   |              |  
|Non-controlling interests                                        |   | 1,367     |   |   | 1,448        |  
|                                                                 |   |           |   |   |              |  
|Commitments and contingencies                                    |   |           |   |   |              |  
|                                                                 |   |           |   |   |              |  
|Stockholders Deficiency                                         |   |           |   |   |              |  
|Stockholders' deficiency:                                        |   |           |   |   |              |  
|Preferred stock of $0.001 per
      share par value; 5,000,000   |   |           |   |   |              |  
|authorized; 0 issued and outstanding.                            |   | -         |   |   | -            |  
|Common stock of $0.001 per
      share par value; 100,000,000    |   |           |   |   |              |  
|shares authorized, 16,205,686 shares issued
      and            |   |           |   |   |              |  
|outstanding at March 31, 2009
      and December 31, 2008        |   | 16        |   |   | 16           |  
|Additional paid-in capital                                       |   | 1,930     |   |   | 1,844        |  
|Accumulated deficit                                              |   | (4,171    | ) |   | (3,612       | )
|Accumulated other comprehensive income                           |   | 67        |   |   | 34           |  
|                                                                 |   |           |   |   |              |  
|Total stockholders deficiency                                   |   | (2,158    | ) |   | (1,718       | )
|                                                                 |   |           |   |   |              |  
|Totals liabilities and
      stockholders deficiency            | $ | 9,001     |   | $ | 9,295        |  

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)

|                                                   |   | 3 Months
      Ended March 31, |  
|-------------------------------------------------- | - | ------------------------------ | -
|                                                   |   | 2009                           |  
|Net revenues                                       | $ | 1,243                          |  
|Cost of revenues                                   |   | (878                           | )
|                                                   |   |                                |  
|Gross Profit                                       |   | 365                            |  
|                                                   |   |                                |  
|Selling, general and administrative expenses       |   | (743                           | )
|Depreciation and amortization                      |   | (47                            | )
|Listing expenses                                   |   | (13                            | )
|                                                   |   |                                |  
|Loss from operations                               |   | (438                           | )
|                                                   |   |                                |  
|Other income (expenses):                           |   |                                |  
|Interest income                                    |   | -                              |  
|Interest expense                                   |   | (138                           | )
|                                                   |   |                                |  
|Total other income (expenses), net                 |   | (138                           | )
|                                                   |   |                                |  
|Loss before income taxes and non-controlling       |   | (576                           | )
|interest                                           |   |                                |  
|                                                   |   |                                |  
|Benefit for income taxes                           |   | -                              |  
|Net loss                                           |   | (576                           | )
|                                                   |   |                                |  
|Net loss attributable to the Non-Controlling       |   |                                |  
|interest                                           |   | 46                             |  
|                                                   |   |                                |  
|Loss available to common
      stockholders        | $ | (530                           | )
|                                                   |   |                                |  
|Loss per share                                     |   |                                |  
|Basic and diluted                                  | $ | (0.03                          | )
|                                                   |   |                                |  
|Weighted-average shares used to calculate net loss |   |                                |  
|per common share:                                  |   |                                |  
|Basic and diluted                                  |   | 15,816,749                     |  

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)

|                                                                      |   | 3 Months Ended |   |   | 3 Months Ended |  
|--------------------------------------------------------------------- | - | -------------- | - | - | -------------- | -
|                                                                      |   | March 31, 2009 |   |   | March 31, 2008 |  
|Cash flows from operating activities:                                 |   |                |   |   |                |  
|Net loss                                                              | $ | (559           | ) | $ | (915           | )
|Adjustments to reconcile net loss to net
      cash used in operating |   |                |   |   |                |  
|activities:                                                           |   |                |   |   |                |  
|Depreciation and amortization                                         |   | 32             |   |   | 23             |  
|Amortization of customer relationship                                 |   | 15             |   |   | 34             |  
|Allowance for doubtful accounts                                       |   | 10             |   |   | -              |  
|Stock based compensation                                              |   | 57             |   |   | 64             |  
|Deferred income tax benefit                                           |   | -              |   |   | (33            | )
|Non-controlling interests                                             |   | (17            | ) |   | (14            | )
|Changes in working capital:                                           |   |                |   |   |                |  
|Accounts receivable and related party
      receivables               |   | (180           | ) |   | (125           | )
|Cost and estimated earnings in
      excess of billings on projects   |   |                |   |   |                |  
|                                                                      |   | (75            | ) |   | 346            |  
|Value added tax refund
      receivable                               |   | 112            |   |   | 67             |  
|Prepaid expenses and other current assets                             |   | 36             |   |   | 44             |  
|Accounts payable                                                      |   | 147            |   |   | 618            |  
|Accrued expenses and other liabilities                                |   | 195            |   |   | 137            |  
|Billings in excess of costs
      and estimated earnings              |   | 118            |   |   | (912           | )
|Net cash used in operating
      activities                           |   | (109           | ) |   | (666           | )
|Cash flows from investing activities:                                 |   |                |   |   |                |  
|Sales (Purchase) of property and equipment                            |   | 3              |   |   | (171           | )
|Proceeds from loan from
      related party                           |   | -              |   |   | 95             |  
|Release  of restricted cash                                           |   | -              |   |   | 597            |  
|Net cash
      provided by investing activities                       |   | 3              |   |   | 521            |  
|Cash flows from financing activities:                                 |   |                |   |   |                |  
|Proceeds from borrowings from
      related party                     |   | 57             |   |   | 50             |  
|Repayment of capital leases                                           |   | (34            | ) |   | -              |  
|Proceeds from debt                                                    |   | 143            |   |   |                |  
|Repayments of debt                                                    |   | (16            | ) |   | (462           | )
|Net cash
      provided by (used in) financing activities             |   | 150            |   |   | (412           | )
|Effect of exchange rates on cash and cash equivalents                 |   | 67             |   |   | 39             |  
|Net increase (decrease) in cash and cash
      equivalents            |   | 111            |   |   | (518           | )
|Cash and cash equivalents at beginning of period                      |   | 86             |   |   | 768            |  
|Cash and cash
      equivalents at end of period                      | $ | 197            |   | $ | 250            |  
|                                                                      |   |                |   |   |                |  
|Supplemental information:                                             |   |                |   |   |                |  
|Cash paid for interest                                                | $ | 70             |   | $ | 75             |  
|Non-cash investing and financing
      activities:                    |   |                |   |   |                |  
|Equipment acquired under capital leases                               | $ | -              |   | $ | 254            |  
|Adjustment of non-controlling
      interest to redemption value      | $ | 29             |   | $ | (175           | )

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

- 4 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Organization and Nature of Business

Bark Corporation, incorporated on October 9, 2006, is a holding
company that conducts its operations through its 87.3% owned subsidiary Bark
Advertising A/S ("Bark Advertising"), that was incorporated on October 12, 2006
and the wholly owned subsidiary Bark Property ApS ("Bark Property") that was
incorporated on September 28, 2007. On May 14, 2007 Bark Advertising purchased
100% of the capital stock of Bark Copenhagen A/S ("Bark Copenhagen"), formerly
known as LivingBrands A/S, and 100% of the capital stock of Bark Media ApS
("Bark Media), formerly known as Radar 360 ApS.

On February 29, 2008, Bark Group Inc. (Bark Group), formerly
known as Exwal Inc. completed the acquisition of Bark Corporation A/S (Bark
Corporation) in an acquisition transaction that was completed as a share
exchange with the former stockholders of Bark Corporation. This transaction
involved the issuance of equity of Bark Group (12,964,548 common shares) to the
stockholders of Bark Corporation, resulting in the former stockholders of Bark
Corporation controlling the majority of the shares of Bark Group. This
transaction is considered to be a capital transaction in substance, rather than
a business combination. That is, the transaction is equivalent to the issuance
of stock by the private company, namely Bark Corporation, for the net monetary
assets of a shell corporation, namely Bark Group, accompanied by a
recapitalization. The accounting is identical to that of a reverse acquisition,
except that no goodwill or other intangible assets should be recorded. As such,
Bark Corporation is considered the acquirer for accounting purposes and Bark
Group is treated as the acquiree for accounting purposes, each notwithstanding
the legal form of the acquisition.

Business

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

Going Concern

The accompanying unaudited condensed consolidated financial
statements have been prepared assuming that the Company will continue as a going
concern.

The Company continues to operate with negative working capital
(approximately USD4,485,000 at March 31, 2009) and limited financial resources
available to pay ongoing financial obligations as they become due. Additionally,
as of March 31, 2009, the Company reported had a stockholders deficiency of
approximately USD2,158,000 which resulted primarily from operating losses
incurred through 2009. These conditions raise substantial doubt about the
Companys ability to continue as a going concern.

Based on the Company’s current forecast, it anticipates that it will use approximately USD6,000,000 (being comprised of (i) negative working capital of approximately USD4,500,000, and (ii) expected use of cash of USD1,500,000 over the next twelve months in order to sustain its current operations and pay our current liabilities. In particular, it will require additional financing in order to repay its debt obligations as they mature and become payable. These principal payments under the Company’s debt obligations include an aggregate of USD 1,627,000 that becomes due and payable during the balance of 2009. This amount does not include any funds necessary for the Company to expand its business. The Company will require additional financing in order to pursue the expansion of its business, either through growth or acquisitions.

- 5 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Company’s sources of additional cash, in addition to cash from operations and its operating line of credits, include its loan commitment of DKK 4,000,000 ($714,700) from Bark Holding. Bark Holding is a company registered in British Virgin Islands and is controlled by two of the Company’s major shareholders.  The Company plan to use its loan from Bark Holding to finance its operations over the next twelve months.  However, the Company will require additional financing beyond this loan in order to conduct its business in accordance with its plan of operations.  Further, there is no assurance that Bark Holding will advance the loan that it has committed to make.  No advances have been made on this loan commitment as of May 20, 2009. The Company plans to conduct an equity financing of its securities, in order to raise additional financing.  It will also pursue bridge loans and private placements from investors located outside of the United States, primarily in Europe, in order to raise the required funds.  If the Company is not successful in obtaining additional financing, it will reconsider its acquisition strategy and will further reconsider whether our status as a public company is beneficial from a cost benefit perspective.  Any decisions made in this regard, may impact the Company’s ability to expand its business.

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

- 6 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Note 2. Summary of Significant Accounting Policies

Basis of Presentation.

The 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 March 31, 2009, and the results of operations and cash flows for the
periods presented. The results of operations for the three months ended March
31, 2009, are not necessarily indicative of the operating results for the full
fiscal year or any future period.

These 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, 2008. 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, 2008, 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, other
intangible assets, bad debts and depreciation.

Foreign Currency

The Company has determined Danish Kroner is the functional currency of its foreign operations. Accordingly, these foreign subsidiaries income and expenses are translated into U.S. dollars, the reporting currency of the Company, at the average rates of exchange prevailing during the year. The assets and liabilities are translated into U.S. dollars at the rates of exchange on the balance sheet date and the related translation adjustments are included in accumulated other comprehensive income(loss). During the three months ended March 31, 2009 and 2008 transaction gains and losses were not material.

|                                           | 2009         |  | 2008            | 
|------------------------------------------ | ------------ |  | --------------- | 
|Net loss available to common stockholders: | USD 530,000  |  | USD 1,090,000   | 
|Translation adjustment:                    | USD   33,000 |  | USD      21,000 | 
|Comprehensive loss                         | USD 563,000  |  | USD 1,111,000   | 

Loss per Share

SFAS No. 128, Earnings per Share (SFAS 128) requires
entities to present both basic and diluted earnings per share. Basic earnings
per common share are computed by dividing net income (loss) available to common
shareholders by the weighted average number of common shares outstanding during
each period.

- 7 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Recent Accounting Pronouncements.

In September 2006, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standard No. 157, Fair Value
Measurements, (SFAS 157) which is effective for fiscal years beginning after
November 15, 2007 and for interim periods within those years. This statement
defines fair value, establishes a framework for measuring fair value and expands
the related disclosure requirements. This statement applies under other
accounting pronouncements that require or permit fair value measurements. The
statement indicates, among other matters, that a fair value measurement assumes
that the transaction to sell an asset or transfer a liability occurs in the
principal market for the asset or liability or, in the absence of a principal
market, the most advantageous market for the asset or liability. FAS 157 defines
fair value based upon an exit price model. Relative to FAS 157, the FASB issued
FASB Staff Positions (FSP) 157-1, FSP 157-2, and proposed FSP 157-c. FSP 157-1
amends FAS 157 to exclude SFAS No. 13, Accounting for Leases, (FAS 13), and
its related interpretive accounting pronouncements that address leasing
transactions, while FSP 157-2 delays the effective date of FAS 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis. FSP 157-c clarifies the principles in FAS 157 on the fair value
measurement of liabilities. The Company adopted FAS 157 as of January 1, 2008.
The adoption of SFAS 157 did not have a material impact on the fair value
measurements of the Company's financial instruments.

Effective this quarter, the Company implemented SFAS 157-2 for
its nonfinancial assets and liabilities that are remeasured at fair value on a
non-recurring basis. The adoption did not impact the Companys financial
position or results of operations. The Company may have disclosure requirements
if it completes an acquisition or incurs an impairment of its assets in future
periods (See note 3).

In December 2007, the FASB issued SFAS No. 141(R), "Business
Combinations," (FAS 141(R)) which replaces SFAS No. 141, Business
Combinations. FAS 141(R) establishes principles and requirements for
determining how an enterprise recognizes and measures the fair value of certain
assets and liabilities acquired in a business combination, including
non-controlling interests, contingent consideration and certain acquired
contingencies. FAS 141(R) also requires that acquisition-related transaction
expenses and restructuring costs be expensed as incurred rather than capitalized
as a component of the business combination. FAS 141(R) became effective on
January 1, 2009. SFAS 141R will have an impact for any businesses acquired after
the effective date of this pronouncement.

In June 2008, the FASB ratified EITF Issue No. 07-5,
Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an
Entity's Own Stock (EITF 07-5). EITF 07-5 provides that an entity should use a
two step approach to evaluate whether an equity-linked financial instrument, or
embedded feature, is indexed to its own stock, including evaluating the
instrument's contingent exercise and settlement provisions. It also clarifies on
the impact of foreign currency denominated strike prices and market-based
employee stock option valuations. EITF 07-5 is effective for fiscal years
beginning after December 15, 2008 and interim periods within those fiscal years.
The adoption of EITF 07-5 did not have a material impact on the Companys
condensed consolidated financial position and results of operations.

In June 2008, the FASB issued FSP EITF 03-6-1, Determining
Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities (FSP EITF 03-6-1). FSP EITF 03-6-1 clarified that all
outstanding unvested share-based payment awards that contain rights to
nonforfeitable dividends participate in undistributed earnings with common
shareholders. Awards of this nature are considered participating securities and
the two-class method of computing basic and diluted earnings per share must be
applied. FSP EITF 03-6-1 is effective for fiscal years beginning after December
15, 2008 and will apply retrospectively to our earnings per share (EPS) as
previously reported. The adoption of FSP EITF 03-6 did not have a material
impact on EPS.

- 8 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In November 2008, the FASB issued EITF No. 08-6, Equity Method
Accounting Considerations (EITF 08-6), which clarifies accounting and
impairment considerations involving equity method investments after the
effective date of both SFAS 141 (R) and SFAS 160. EITF 08-6 provides
clarification of how business combination and non-controlling interest
accounting will impact equity method investments. EITF 08-6 is effective for
fiscal years, and interim reporting periods within those fiscal years, beginning
on or after December 15, 2008 and early adoption is prohibited. The adoption of
EITF 08-6 did not have a material impact on the Companys condensed consolidated
financial position and results of operations.

In December 2007, the FASB issued SFAS No. 160, "Non-controlling Interests in Consolidated Financial  Statements, an Amendment of ARB No. 51", (“FAS 160”). FAS 160 establishes accounting and reporting standards  for the non-controlling interest in a subsidiary (previously referred to as minority interests). FAS 160 also requires that a retained non-controlling interest upon the deconsolidation of a subsidiary be initially measured at its fair value. Under FAS 160, non-controlling interests are reported as a separate component of consolidated stockholders’ equity. In addition, net income allocable to non-controlling interests and net income attributable to stockholders are  reported separately in the condensed consolidated statements of operations. FAS 160 became effective beginning January 1, 2009.  Upon adoption of FAS 160 , the Company has separately reported net loss allocable to non-controlling interests and net loss attributable to stockholders of the company in the condensed consolidated statement of operations.

In March 2008, the FASB issued SFAS No. 161, Disclosures about
Derivative Instruments and Hedging Activities, (FAS 161). The new standard
amends SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, (FAS 133) and enhances disclosures about how and why a company
uses derivatives; how derivative instruments are accounted for under FAS 133
(and the interpretations of that standard); and how derivatives affect a
companys financial position, financial performance and cash flows. FAS 161 is
effective for financial statements issued for fiscal years and interim periods
beginning after November 15, 2008. The Company has adopted this standard as of
January 1, 2009. The Company does not use derivatives to hedge operating
performance or its financial position. Accordingly, there was no impact on the
Company's condensed consolidated financial position or results of operations
upon adoption.

In April 2008, the FASB issued FASB Staff Position (FSP) FAS
142-3, Determination of the Useful Life of Intangible Assets, (FSP 142-3).
FSP 142-3 amends the factors that should be considered in developing renewal or
extension assumptions used to determine the useful life of a recognized
intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets,
(FAS 142). The objective of FSP 142-3 is to improve the consistency between
the useful life of a recognized intangible asset under FAS 142 and the period of
expected cash flows used to measure the fair value of the asset under FAS 141(R)
and other United States GAAP principles. FSP 142-3 is effective prospectively
for intangible assets acquired or received after January 1, 2009. SFAS 142-3
will have an impact for any intangible assets acquired after the effective date
of this pronouncement.

In May 2008, the FASB issued FASB APB Staff Position 14-1,
Accounting for Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (Including Partial Cash Settlement), (FSP APB 14-1). FSP APB 14-1
specifies that for convertible debt instruments that may be settled in cash upon
conversion, issuers of such instruments should separately account for the
liability and equity components in the statement of financial condition. FSP APB
14-1 is effective beginning January 1, 2009 and is to be applied
retrospectively. The Companys debt may not be settled in cash upon conversion.
Accordingly, there was no impact on the Companys financial position or results
of operation upon adoption.

- 9 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In April 2009, the FASB issued FSP SFAS 157-4, Determining
Whether a Market Is Not Active and a Transaction Is Not Distressed, (FSP FAS
157-4). FSP FAS 157-4 provides guidelines for making fair value measurements
more consistent with the principles presented in SFAS 157. FSP FAS 157-4
provides additional authoritative guidance in determining whether a market is
active or inactive, and whether a transaction is distressed, is applicable to
all assets and liabilities (i.e. financial and nonfinancial) and will require
enhanced disclosures. This standard is effective for periods ending after June
15, 2009. The Company is evaluating the impact that this standard will have on
the Companys financial position and results of operations.

In April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1,
  Interim Disclosures about Fair Value of Financial Instruments, (FSP FAS 107-1
  and APB 28-1). FSP FAS 107-1 and APB 28-1 amends SFAS No. 107, Disclosures
  about Fair Value of Financial Instruments, to require disclosures about fair
  value of financial instruments in interim as well as in annual financial
  statements. FSP FAS 107-1 and APB 28-1 also amends APB Opinion No. 28, Interim
  Financial Reporting, to require those disclosures in all interim financial
  statements. This standard is effective for periods ending after June 15, 2009.
  The Company is evaluating the impact that this standard will have on the
  Companys financial position and results of operations.

Note 3 - Fair Value Measurement

Valuation Hierarchy

FAS 157 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 basis as of March 31, 2009:

|         |   |                |  |   | Fair
      Value Measurements at March 31, 2009 | 
|-------- | - | -------------- |  | - | ----------------------------------------------- | 
|         |   |                |  |   | **Quoted prices**                               | 
|         |   | Total Carrying |  |   | in active                                       | 
|         |   | Value at March |  |   | markets                                         | 
|         |   | 31, 2009       |  |   | (Level 1)                                       | 
|         |   |                |  |   |                                                 | 
|Goodwill | $ | 3,050,000      |  | $ | -                                               | 

Goodwill is measured at fair value using discounted cash flows
and is classified within Level 3 of the valuation hierarchy.

Note 4 - Concentration of credit risk

Credit risk represents the loss that would be recognized if
counterparties failed to completely perform as contracted. During the three
months ended March 31, 2009 customers K and C accounted for approximately 36%,
and 35%, respectively of revenue. During the three months ended March 31, 2008
customers A, and F accounted for approximately 42% and 15%, respectively of
revenue. No other customers individually represented more than 10% of revenue
for any period presented.

- 10 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

As of March 31, 2009 customers C and L accounted for
approximately 46% and 21% of the Companys accounts receivables, respectively.
As of December 31, 2008 customers J and C accounted for approximately 19% and
17% 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.

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. Customer A
  went bankrupt in February 2009. The Company has made an allowance of USD 237,000
  covering 100% of the receivable excluding Value Added Tax (VAT) of USD 59,250,
  which is refundable. The Company has made allowances for USD 14,000 for other
  customers Apart from Customer A the Company has not experienced significant
  losses in the past from the customers. 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, at times, may
exceed insurance limits and expose the Company to credit risk. As part of its
cash management process, the Company periodically reviews the relative credit
standing of these financial institutions. The Companys cash and cash equivalent
balances are maintained at financial institutions located in Denmark.

Note 5  Non-controlling interests

For consolidated majority-owned subsidiaries in which the
Company owns less than 100% of the total outstanding shares, the Company
recognizes a non-controlling interest for the ownership interest of the
non-controlling 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 (USD 2,373) per share and 50 Class B shares were issued to two senior
employees of the Company at a price of DKK 12,000 (USD 2,206) per share. In
November 2007 Bark Advertising issued 25 Class B shares to one senior employee
at a price of DKK 12,000 (USD 2,206) per share.

In January 2009, two Class B share holders representing 131
shares were redeemed. The redeemable amount as of March 31, 2009 DKK 1,567,000
(USD 280,000) and as of December 31, 2008 DKK 1,653,000 (USD 312,800) will be
paid in 8 quarterly installments during 2009 and 2010, including interest at a
variable rate, which is currently 5%, which will be accrued and paid on December
31, 2009 and 2010, respectively. Accrued interest USD 4,000 as of March 31, 2009
is classified as accrued liabilities

At each reporting date the Company records
  the Class B shares at the higher of (1) the redemption value or (2) the amount
  that would result from applying consolidation accounting under Accounting
  Research Bulletin No. 51, Consolidated Financial Statements (ARB 51) (i.e.,
  the historical cost, increased or decreased for the non-controlling holders
  share of net income or loss and dividends). All adjustments related to the
  application of the above would be recorded within additional paid-in capital.
  Effective January 1, 2009, the Company adopted FASB issued SFAS N0. 160 and
  accordingly, adjustment relating to above has no impact on consolidated net loss
  of the Company, net loss attributable to the Company or loss available to common
  stock holders of the Company. Prior to adoption of SFS 160, the impact of the
  adjustment was on loss attributable to common stockholders and accordingly the
  Loss Per Share (LPS) at December 31, 2008 was reported $(0.21) . There are no
  deferred income tax consequences arising from the recognition of the EITF D-98
  adjustments as these adjustments are not deductible under Danish tax law.

At December 31, 2008, the redemption value exceeded the ARB 51
value, and therefore the non-controlling interest was recorded at the redemption
value of DKK 7,653,000 which amounted to USD 1,448,000. At March 31, 2009, the
redemption value exceeded the ARB 51 value, and therefore the non-controlling
interest was recorded at the redemption value of DKK 7,653,000 which amounted to
USD 1,367,000.

- 11 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The change in carrying amount of Non-Controlling interest is as
follows:

|                                                                                |   | As of           |   |   | As of           |  
|------------------------------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                                                |   | March 31        |   |   | December 31,    |  
|                                                                                |   | 2009            |   |   | 2008            |  
|                                                                                |   | USD
      000`s |   |   | USD
      000s |  
|Balance at beginning of period                                                  | $ | 1,448           |   | $ | 1,834           |  
|Shares issued in subsidiary (Bark Advertising)                                  |   |                 |   |   |                 |  
|ARB 51 adjustment - Bark Advertising loss
      attributable to Non-Controlling |   |                 |   |   |                 |  
|interests                                                                       |   | (17             | ) |   | (105            | )
|EITF D-98 adjustment - excess of redemption
      amount over ARB 51            |   |                 |   |   |                 |  
|adjustment                                                                      |   | (29             | ) |   | 51              |  
|ARB 51 adjustment - Currency adjustment                                         |   | (35             | ) |   | (19             | )
|Redeemable shares reclassified to liabilities                                   |   | -               |   |   | (313            | )
|Balance at end of period                                                        | $ | 1,367           |   | $ | 1,448           |  

Note 6  Long and short-term debt and obligations under
capital leases

Long and short-term debt

Bark Corporation has a floating interest rate line of credit
facility in the amount of DKK 7,000,000 (USD 1,250,700) which was expiring on
May 18, 2009. This line of credit facility has been extended to November 15,
2008. As at March 31, 2009 and December 31, 2008, the amount outstanding under
this line of credit facility was $1,272,000 and $1,353,000, respectively.

Note 7  Non-vested shares

In September 2007, the Company issued 388,936 non-vested share
awards to two executives of the Company having a stated value of DKK 16,500 (USD
3,255). A weighted average grant date fair value of USD 2 per share. The fair
value of the non-vested shares awards on the date of issuance was DKK 3,939,000
(USD 777,000). The non-vested awards become fully vested on May 31, 2010. The
Company will record compensation expense ratably over the vesting period. During
the three months ended March 31, 2009 and 2008, the Company recorded USD 57,000
and USD 64,000 of compensation expense, respectively, related to these
awards.

As of March 31, 2009 there was USD 266,300 of total unrecognized compensation costs related to non-vested share-based compensation arrangements granted following currency adjustmemt of USD 33,700. The cost is expected to be recognized over a period of 14 months. No shares were vested during the three months ended March 31, 2009.

Note 8- Related party transactions

Fee to Chairman of the Board Bent Helvang

BH Media ApS (a company 100% owned by Bent Helvang) is
according to contract entitled to invoice the Company USD 47,160 and USD 60,330
during the three months ended March 31, 2009 and 2008, respectively, for
services provided to the Company relating to acquiring new companies, strategy
planning and management services. Such services have been recorded as a
component of selling, general, and administrative expenses. At March 31, 2009,
Bent Helvang has a receivable of DKK 1,938,000 (USD 346,270) which has been
classified in advances from related parties.

- 12 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Fee to CEO Anders Hageskov

Lugano Communication and Entertainment (a company in which
Anders Hageskov is employed) invoiced the Company USD 68,120 and USD 84,460
during the 3 month periods ended March 31, 2009 and 2008, respectively, for
services rendered by Anders Hageskov to Bark Copenhagen and Bark Advertising.
This fee includes 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 from Bark Holding, British Virgin Islands

During 2008 the Company received a loan from Bark Holding. The
balance of the loan is at March 31, 2009 USD 207,980. This loan is due for
repayment in full in 2009 when the Company gets a positive cash flow. Interest
payable for the three month periods ended March 31, 2009 and 2008 was USD 3,590
and USD 1,657, respectively. The balance of this loan, including accrued
interest, has been included in advances from related parties. Certain
stockholders of Bark Group own 100% of the outstanding shares of Bark Holding.
In addition Bark Holding has committed to issue a bridge loan up to DKK
4,000,000 (USD 714,700)

Credit notes to share holders

Bark Copenhagen has in the 3 months period ended March 31, 2008
issued credit notes of USD 36,000 to three companies owned by share holders in
Bark Group due to disputes over the quality of services provided. Furthermore
management has decided not to provide any advertising services to the three
companies in the future.

Loan from Jesper Svane and Rene Lauritsen

Shareholders Jepser Svane and Rene Lauritsen have in April 2008
made payments of DKK 91,600 (USD 16,400) to trade creditors on behalf of the
Company. This loan is to be repaid in full in 2009 when the Company gets a
positive cash flow.

Note 9 - Commitments and contingencies

Litigation

In March 2008, Bark Corporation received a notice of a claim
from two former employees for damages and compensation of approximately DKK
1,000,000 (USD 178,600), based on an alleged breach by Bark Corporation of the
terms of employment and non-payment for the transfer of specified intellectual
property. In March 2008, the Company paid DKK 242,500 (USD 43,300) to such
employees related to the employment element of the claim. On April 8, 2008
Bark Corporation received a petition from the former employees reducing their
claim to DKK 757,500 (USD 135,300). The Company believes that, in order to
settle this claim, a payment will be required. Using the guidance of Statement
of Financial Accounting Standards No. 5, Accounting for Contingencies (SFAS
No. 5) the Company has as of December 31, 2008 provided for an amount of DKK
250,000 (USD 47,300). However, in April, 2009 Bark Corporation lost the case in
the lower court. The Company has decided to appeal to a higher court instance.
The Company has decided to increase the provision to DKK 450,000 (USD 80,400)
using SFAS No. 5., that is considered to be probable and reliably estimable.
This amount has been included as a component of accrued liabilities.

- 13 -

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
    CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Note 10  Net loss per share

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

|                                                                         |   | 3 Months
      Ended March 31, |  
|------------------------------------------------------------------------ | - | ------------------------------ | -
|                                                                         |   | 2009                           |  
|Numerator:                                                               |   |                                |  
|Net loss                                                                 | $ | (559                           | )
|EITF D-98 adjustment  excess of redemption amount
      over ARB 51     |   |                                |  
|Adjustment                                                               |   | 29                             |  
|                                                                         |   |                                |  
|Loss available to common shareholders                                    |   | (530                           | )
|                                                                         |   |                                |  
|Denominator:                                                             |   |                                |  
|Shares used in computation - basic:                                      |   |                                |  
|Weighted average shares outstanding                                      |   | 16,205,685                     |  
|Weighted average common shares outstanding subject to
      repurchase   |   | (388,936                       | )
|                                                                         |   |                                |  
|Shares used in computing basic net loss per share                        |   | 15,816,749                     |  
|Shares used in computation - diluted:                                    |   |                                |  
|Weighted average shares outstanding                                      |   | 15,816,749                     |  
|Dilutive effect of common shares outstanding
      subject to repurchase |   | -                              |  
|                                                                         |   |                                |  
|Shares used in computing diluted net loss per
      share                |   | 15,816,749                     |  
|                                                                         |   |                                |  
|Net loss per share - basic and diluted                                   | $ | (0.04                          | )

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

Note 11  Subsequent events

Bark Group Inc. obtained two additional short term loans aggregating DKK 2,125,000 ($379,700) on April 3, 2009 in order to fund working capital until additional capital can be raised.  The loans were advanced by private investors.  Both mature on August 1, 2009 together with accrued interest of DKK 212,500 ($37,970).

- 14 -

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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 months ended March 31,
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, 2008 and the condensed consolidated
unaudited financial statements and related notes included elsewhere in this
filing. The following discussion and analysis contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in the forward-looking
statements.

Forward-Looking Statements

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

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

Overview

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

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

During the first three months of 2009, our managements focus
was on operating the business and becoming eligible for trading on the OTC
Bulletin Board. Trading of our common stock on the OTC Bulletin Board commenced
on March 16, 2009. These efforts caused us considerable time and effort by our
management.

Our strategy moving forward is to pursue the acquisition of
additional businesses in our industry with the objective of increasing the size
of our business, with the overall objective of increasing our revenue and
profits. We intend to finance these acquisitions with the proceeds from the
issuance of additional equity or debt. We plan to pursue an equity financing in
the amount $10 million in 2009, but we can provide no assurance as to whether we
will be successful in such efforts.

Revenues

We derive revenues from fees charged by us in connection with
the provision of advertising and media services. We earn revenues based on
various different fee arrangements, including:

- fees for advertising services,

- 15 -

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- commissions on media placements,
- incentive based revenue, or
- a combination of all of the above

The majority of our revenues are attributable to revenues
earned on a fee for services basis for the advertising and marketing services
that we provide. The next key component of our revenues are commissions that we
earn from the placement of media through media outlets. We presently earn
commissions from media placements from approximately five customers. We also
earn commissions for our handling of production of campaign elements being i.e.
production of TV spots or printed materials.

Our revenues declined to $1,243,000 during the three months
ended March 31, 2009 as compared to $2,708,000 during the three months ended
March 31, 2008, representing a decrease of $1,465,000 or 54%. In Danish currency
the decrease was 48%. This decrease was caused by the loss of our biggest
customer S. Trading (Totempo) in the fourth quarter of 2008 and the general
decline in business activities due to the global economic downturn. S. Trading
represented 42% of our revenues in the three months ended March 31, 2008. S.
Trading was lost as a client because it ceased business operations due to
financial problems.

We are presently working intensively with the objective of on
getting new customers and have received many positive reactions in the market.
We have gained three additional new customers in the first quarter of 2009. We
plan to continue our efforts to increase our client base during 2009.

Cost of Revenues

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

These expenses represent external costs that we pay to third
parties as part of the creation and implementation of advertising and marketing
campaigns for our clients. These expenses do not include the cost of placement
of media through media outlets as these costs are incurred directly by our
clients.

Cost of revenues totaled $878,000 for the three months ended
March 31, 2009 as compared to $2,217,000 for the three months ended March 31,
2008, a decrease of $1,339,000, or 60%. External purchases went down by 70% and
salaries went down by approximately 30%. The main reason for the lower external
purchases was because we made fewer commercial films during the 2009 period
compared to the 2008 period. Salaries went down due to a reduction of staff and
a general cut of 10% in salaries for all employees.

- 16 -

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Gross Profit

Gross profit was reduced from $491,000 to 365,000 during the
2009 period compared to the 2008 period. Gross margins increased to 29% during
the 2009 period as compared to 18% during the 2008 period representing a 61%
increase on a percentage basis. Generally, we have a higher margin on our own
work than we have on external purchases.

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 chief executive officer and our chairman which are not included
  in salaries,
- a portion of stock based compensation relating to stock issued to 2
  employees on September 30, 2007 with a vesting period of 37 months,
- office rental and associated office costs,
- professional expenses, including lawyers, auditors and other consultancy
  costs (excluding expenses
- classified as listing expenses),
- client marketing, travel and entertainment expenses,
- allowance for doubtful accounts, and
- information technology costs.

Our selling, general and administrative expenses totaled
$743,000 for the three months ended March 31, 2009 as compared to $666,000 for
the three months ended March 31, 2008, representing an increase of $77,000, or
12%. In local currency the increase is 30%. This increase is primarily related
to higher legal and audit expenses as well as higher staff expenses. Legal
expenses and staff expenses are higher due to search for acquisition targets
while audit expenses are higher due to filing our first annual report on Form
10-K with the United States Securities and Exchange Commission.

Depreciation and Amortization

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

Depreciation and amortizations totaled $47,000 for the three
months ended March 31, 2009 as compared to $57,000 for the three months ended
March 31, 2008, representing a decrease of $10,000, or 18%. Amortization of
customer relationships decreased to $15,000 during the 2009 period compared to
$34,000 in the 2008 period. Depreciations on property, plant and equipments
increased to $32,000 during the 2009 period as compared to $23,000 during the
2008 period.

Listing Expenses

Listing expenses include amounts that we pay to our legal and
accounting professional advisers and to DeBondo Capital in connection with
efforts to achieve trading of our common stock on a public market in the United
States. These expenses include legal, audit and related expenses attributable to
the filing of a registration statement with the SEC.

Listing expenses totaled $13,000 for the three months ended
March 31, 2009 as compared to $632,000 for the three months ended March 31,
2008, representing a decrease of $619,000. Since our Form S-1 registration was
declared effective on December 17, 2008 our listing expenses have been reduced
significantly. Costs in the 2009 period are

- 17 -

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related to our common stock becoming traded on the OTC Bulletin
Board which commenced on March 16, 2009.

Interest Expense

Interest expense includes interest that we pay on our loans
from Danske Bank and Realkredit Danmark. These loans are described in detail
below under Liquidity and Capital Resources  Bank Indebtedness.

Interest expenses totaled $138,000 for the three months ended
March 31, 2009 as compared to $112,000 for the three months ended March 31,
2008. The increase is mainly relating to interest from creditors due to delayed
payments.

Net Loss

We recorded a net loss of $559,000 for the three months ended
March 31, 2009 as compared to a net loss of $915,000 for the three months ended
March 31, 2008, a decrease of $356,000, or 39%. The main reason for the decrease
is lower listing expenses which is partly off-set by lower gross profit and
higher selling, general and administrative expenses.

Liquidity and Capital Resources

Cash and Working Capital

As at March 31, 2008, we had cash of $197,000, an increase of
$111,000 from cash of $86,000 as at December 31, 2008. Our working capital
deficit increased from $4,135,000 at December 31, 2008 to $4,485,000 at March
31, 2009, an increase of $350,000. The increase to our working capital deficit
is mainly due to our loss in the three months ended March 31, 2009.

Cash Requirements

We are presently experiencing negative cash flows from our
operating activities and we have a working capital deficit. Additionally, as of
March 31, 2009, we reported a shareholders deficit which resulted primarily
from operating losses incurred through 2009. Our working capital deficit was
$4,485,000 as of March 31, 2009. We are using cash of approximately $400,000 per
quarter in operations. Based on our current forecast, we anticipate that we will
use approximately $6,000,000 (being comprised of (i) negative working capital of
approximately $4,500,000, and (ii) expected use of cash of $1,500,000 in the
next 4 quarters) over the next twelve months in order to sustain our current
operations and pay our current liabilities. This amount does not include any
funds necessary for us to expand our business. We will require further
additional financing in order to pursue the expansion of our business, either
through growth or acquisitions.

Our sources of additional cash, in addition to cash from operations and out operating line of credits, include our loan commitment of DKK 4,000,000 ($714,700) from Bark Holding. Bark Holding is a company registered in British Virgin Islands and is controlled by two of our major shareholders.  We plan to use our loan from Bark Holding to finance our operations over the next twelve months.  However, we will require additional financing beyond this loan in order to conduct our business in accordance with our plan of operations.  In particular, we will required additional financing in order to repay our debt obligations as they mature and become payable.   These principal payments under our debt obligations include an aggregate of $1,627,000 that becomes due and payable during the balance of 2009.  Further, there is no assurance that Bark Holding will advance the loan that it has committed to make.  No advances have been made on this loan commitment as of May 20, 2009. We plan to conduct an equity financing of our securities, as outlined below, in order to raise additional financing.  We will also pursue bridge loans and private placements from investors located outside of the United States, primarily in Europe, in order to raise the required funds.  If we are not successful in obtaining additional financing, we will reconsider our acquisition strategy and will further reconsider whether our status as a public company is beneficial from a cost benefit perspective.

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We have filed a registration statement with the SEC in the United States and our common stock has now commenced trading on the OTC Bulletin Board. This has been done as an initial step in our efforts to raise additional financing. We are of the belief that investors may be more willing to invest in a company which has a public market for its securities. We also entered into the engagement agreement with PacificWave Partners Limited with the objective of securing additional financing in the amount of $10 million. There is no assurance that we will raise any additional financing from either PacificWave Partners Limited 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 PacificWave Partners Limited or through any other party. Our agreement with PacificWave Partners Limited has been extended until June 30, 2009. We also plan to pursue alternate financing beyond the arrangement with PacificWave Partners Limited, which may be either debt or equity financing. We do not have any commitments for any such financing in place. If we are not successful in raising additional financing, then we may not be able to expand our business as anticipated. If we are successful in raising additional financing, then we will adjust our expansion plans based on the amount of funds available to us. We may also determine to use a portion of the proceeds to repay outstanding debt.

Bank Indebtedness

Bark Corporation borrowed DKK 9,000,000 (equivalent to $1,773,400
  as at December 31, 2007) pursuant to a credit facility with Danske Bank in May
  2007 in order to enable Bark Corporation to complete the acquisition of Bark
  Copenhagen and Bark Media. Total credit line on this loan was DKK 7,000,000
  ($1,250,700) as of March 31, 2009. The maturity date of this loan has been extended
  to November 15, 2009.Current interest rate of this loan is 5.75% . At
  March 31, 2009 and December 31, 2008, the outstanding balance of line of credit
  was $1,272,000 and $1,353,000, respectively, including accrued interest on the
  outstanding balance of line of credit.

Bark Property obtained a DKK 14,900,000 ($2,662,300) loan on
May 16, 2008 bearing variable interest of currently 5.4% expiring in 2037 (no
installments in the first 10 years and to be repaid over the last 20 years) from
Realkredit Danmark (a credit institution). Interest is payable on the last
working day of each quarter. This loan is secured by a mortgage against our
Copenhagen office property as a first priority mortgage. On November 21, 2008
Bark Corporation obtained a loan of DKK 1,611,000 ($287,800) from Realkredit
Danmark bearing a variable interest rate of currently 5.80% expiring in 2037 (no
installments in the first 10 years and to be repaid over the last 19 years). At
March 31, 2009 and December31, 2008, the outstanding balance of the loans
aggregating approximately $2,950,000 and $3,174,000, respectively.

On March 7, 2008, two new bank loans totaling DKK 7,000,000
(USD 1,324,500) were entered into. The two new loans are to be repaid in
quarterly installments over 15 years. The interest rate is fixed quarterly as
"Danske Bor" plus a margin of 3.00% . At March 31, 2009 and December 31, 2008,
the outstanding balance of these loans aggregating $ 1,003,000 and $1,087,000,
respectively.

Bark Copenhagen has a floating interest rate line of credit
facility in the amount of DKK 2,000,000 ($357,300). As at March 31, 2009 and
December 31, 2008, the amount outstanding under this line of credit facility was
$286,000 and $123,000, respectively. The line of credit facility is repayable in
full on June 30, 2009. We plan to attempt to negotiate an extension to this
maturity date to June 2010, although we can provide no assurance that we will be
successful in obtaining the extensions. The rate of interest payable under the
line of credit facility is presently 8.25% per annum.

Bark Group Inc. obtained two additional short term loans of DKK
  2,125,000 ($379,700 as of March 31, 2009) on April 3, 2009 in order to bridge
  finance current financing until capital have been raised. The loan was advanced
  by private non-related party investors. Both loans are due for repayment on
  August 1, 2009 together with accrued interest of DKK 212,500 ($37,970).

Bark Holding Loan

In December 2007, we received a loan from Bark Holding, a party
that is related to us, of DKK 556,000 ($109,600 as at December 31, 2007), which
will be repaid in 2009 when we have a positive cash flow. The interest rate is
fixed at 7% per annum. In May and June 2008, this loan was increased by DKK
112,100 ($21,200). This loan was again increased by DKK 1,010,000 ($191,100) in
July and August 2008. On September 30, 2008 the loan was reduced by DKK 575,800
($109,000) as Bark Holding took over the loan issued by us to Anaconda.tv Ltd
including costs to a consultant. On December 31, 2008 the loan was increased by
DKK 25,000 ($4,700). The balance of the loan as of March 31, 2009 was $208,000
including accrued interest. The loan is due for repayment in full during 2009.

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On June 11, 2008 Bark Holding committed to issue a bridge loan
to us in the amount of up to DKK 3,000,000 ($536,000). On September 16, 2008,
Bark Holding increased this loan commitment to DKK 4,000,000 ($714,700) on
identical terms. This loan will accrue interest at 7% and will be due when our
cash flow is positive for more than four consecutive weeks or when additional
sources of financing are in place. This loan had not been advancedas of
the date of this quarterly report on Form 10-Q.

Going Concern

Our unaudited condensed consolidated financial statements for
the three months ended March 31, 2009 have been prepared assuming that we will
continue as a going concern. We currently have and had as at both March 31, 2009
and December 31, 2008 negative working capital and limited financial resources
available to pay ongoing financial obligations as they became due. Further, at
March 31, 2009, we had a shareholders deficit of $2,158,000 which resulted
primarily from operating losses incurred in 2007, 2008 and 2009. These
conditions raise substantial doubt about our ability to continue as a going
concern.

We continue to use cash of approximately $400,000 per quarter
in operations and accordingly, we estimate that we will use approximately
$6,000,000 over the next twelve months in order to sustain our current
obligations and to continue to pay our outstanding obligations as they become
due. This amount does not include any funds necessary for us to expand our
business or to pay costs that have been incurred in relation to the listing. We
will require further additional financing in order to pursue the expansion of
its business, either through growth or acquisitions. Our current source of
funding, in addition to cash from operations and out operating line of credits,
is our loan commitment of DKK 4,000,000 ($714,700) from Bark Holding, a related
party.

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

As a result of the above, we believe that a substantial doubt
about our ability to continue as a going concern remained as at March 31, 2009,
as reflected in the notes to our condensed consolidated unaudited financial
statements for the three months ended March 31, 2009. Our condensed consolidated
unaudited financial statements for the three months ended March 31, 2009 do not
include any adjustment that might result from the outcome of this uncertainty.

Cash Used In Operating Activities

We used cash of $109,000 in the three months ended March 31,
  2009, compared to use of cash of $666,000 in the three months ended March 31,
  2008. The decrease in cash used in operating activities primarily reflects our
  decreased loss during the 2009 period and work in progress including billings
  in progress during the 2009 period as compared to the 2008 period. Our loss
  of $559,000 was partly funded by increases of accounts payables and accrued
  expenses and other liabilities.

Cash From/Used in Investing Activities

We generated cash of $3,000 in the three months ended March 31,
2009 by selling equipment. In the three months ended March 31, 2008 we generated
cash of $521,000, primarily due to the release of $597,000 restricted cash on
March 6, 2008 we reduced our line of credit with Danske Bank.

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Cash from Financing Activities

We generated cash of $150,000 from financing activities during
the three months ended March 31, 2009, which represented proceeds from
borrowings from related parties of $57,000 and proceeds from debt of $143,000,
partly offset by repayments of capital leases of $34,000 and repayments of debt
of $16,000. In the three months ended March 31, 2008 we used cash of $412,000
due to repayment of debt of $462,000, partly offset by proceeds from related
parties of $50,000.

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

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

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

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

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

•      Fixed-fee
  contracts are generally recognized as earned based on the proportional performance
  method of revenue recognition. In assessing contract performance, both input
  and output criteria are 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

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as a whole. Fees are also recognized on
a completed contract basis if any of the criteria of 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 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 earn a commission.

Non controlling interests

Certain consolidated subsidiaries of Bark Group issued equity
shares to parties unrelated to the Company. The Company accounts for such
transactions in accordance with Staff Accounting Bulletin No. 51, Accounting
for Sales of Stock by a Subsidiary (SAB 5H). SAB 5H 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 equity transactions; 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 Emerging Issues Task
Force No. D-98 Classification and Measurement of Redeemable Securities (EITF
D-98) at the higher of (1) the redemption value required to be paid by the
Company or (2) the amount that would result from applying consolidation
accounting under Accounting Research Bulletin No. 51 Consolidated Financial
Statements (ARB 51). 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


Leases

The costs of operating leases are charged to operations on a
straight-line basis over the lease term, even if rental payments are not made on
such a basis.

Assets acquired under capital leases are included in the
balance sheet as property, plant and equipment and are depreciated over the
shorter of the period of the lease or their useful lives. The capital elements
of future lease payments are recorded as liabilities, while the interest element
is charged to operations over the period of the lease to produce a level yield
on the balance of the capital lease obligation.

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Off-Balance Sheet Arrangements

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

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. 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 and our Chief Financial Officer 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 March 31, 2009 (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 Chief Executive Officer
and Chief Financial Officer have concluded that our Companys disclosure
controls and procedures were not effective as of March 31, 2009 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 March 31, 2009 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

We are not currently required to comply with Section 404 of the
Sarbanes Oxley Act of 2002, and are therefore not required to make an assessment
of the effectiveness of our internal controls over financial reporting for that
purpose. However, in connection with the audit of our financial statements as of
December 31, 2008 and 2007 and for the years ended December 31, 2008 and
December 31, 2007, our auditors and we have identified certain matters involving
our internal control over financial reporting that constitute a material
weakness under standards established by the Public Company Accounting Oversight
Board (" PCAOB ").

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

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

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

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

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

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. Legal Proceedings

In March 2008, Bark Corporation received a notice of a claim
from two former employees for damages and compensation of approximately DKK
1,000,000 ($178,600), based on an alleged breach by Bark Corporation of the
terms of employment (employment element of the claim) and non-payment for the
transfer of specified intellectual property (IP element of the claim). In
March 2008, we paid DKK 242,500 ($43,300) to such employees related to the
employment element of the claim. On April 8, 2008 Bark Corporation received a
petition from the former employees reducing their claim to DKK 757,500
($135,300), representing the IP element of the claim. As at December 31, 2008
and as of the date of Annual Report, we believe that, in order to settle the IP
element of the claim, a payment will be required. We have provided in our
financial statements for the three months ended March 31, 2009 for an amount of
DKK 450,000 ($80,400) that is considered to be a probable and reliable estimable
of the amount that will be required to settle these claims. On April 28,
Copenhagen City Court issued a judgement where the Company was ordered to pay
DKK 865,700 ($154,700) including court costs and interests. We have decided to
appeal the judgement to the Danish Eastern High Court. It is our legal adviser`s
expectation that the High Court will decrease the amount determined by the City
Court with DKK 400,000 ($71,500). There is however no assurance that the High
Court will decrease this amount.

Item 1A. Risk Factors

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

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

Risks Relating To Our Business And Financial Condition

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

Our audited financial statements for the years ended December
31, 2008 and 2007 and our interim financial statements for the three months
ended March 31, 2009 both include a note expressing doubt about our ability to
continue as a going concern. The inclusion of this note was due to the fact that
we had negative working capital of $4,135,000 and we reported a shareholders
deficiency of $1,718,000 as at December 31, 2008, and we had negative working
capital of $4,485,000 and reported a shareholders deficiency of $2,158,000 as
at March 31, 2009. This note also reflected the fact that we have incurred
losses to date without achieving profitable operations, including a net loss of
$407,000 for the year ended December 31, 2007, a net loss of $3,197,000 for the
year ended December 31, 2008 and a net loss of $559,000 for the three months
ended March 31, 2009. We intend to fund our operations and expansion through
future sales and equity financing arrangements, which may be insufficient to
fund our capital expenditures, working capital and other cash requirements for
the current fiscal year. Thereafter, we will be required to seek additional
funds, either through sales and/ or equity financing, to finance our long-term
operations. The successful outcome of future activities cannot be determined at
this time and there is no assurance that, if achieved, we will have sufficient
funds to execute our intended business plan or generate positive operating
results. These factors could raise substantial doubt about our ability to
continue as a going concern. As a result, we caution investors that there is a
risk that our business could fail. Our current working capital deficit as at
December 31, 2008 and March 31, 2009 and our negative cash flow from operations
for the year ended December 31, 2008 and the

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three months ended March 31, 2009 continue to raise substantial
doubt about our ability to continue as a going concern. Accordingly, there
remained a substantial doubt about our ability to continue as a going concern as
at December 31, 2008, as reflected in the notes to our consolidated financial
statements for the year ended December 31, 2008, and as March 31, 2009, as
reflect in the notes to our interim financial statements for the three months
ended March 31, 2009.

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

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

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

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

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

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

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

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

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service work that we are targeting will reduce the revenues
that we are able to achieve from our business activities, will reduce our market
share and decrease our ability to generate profit from our operations.

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

We presently have approximately twenty-five (25) employees, all
but three of whom are professional services personnel. Our relatively small size
will limit the scope of the projects that we are able to undertake for our
existing and potential customers. As a result of our limited capacity, there is
a limit both to the number of new customers that we can take on. Existing and
potential customers may view our size as a limiting factor when assessing
whether to engage us to undertake marketing and advertising campaigns. These
customers may view their requirements as being beyond the scope or ability of
our firm due to the limited number of professional personnel that employ. The
determinations of our existing and potential customers not to engage us or to
limit our engagement on a project may result in us losing business and
corresponding revenues to our competitors with the result that our ability to
achieve revenues and to expand our business may be limited.

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

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

The loss of our key customers could cause significant
reduction in our business.

As at December 31, 2008, two customers accounted for
approximately 36% of our accounts receivables. Three customers accounted for
approximately 62% of our revenue in the year ending December 31, 2008. One of
these customers, representing 29% of our revenue in fiscal 2008, has filed
bankruptcy and ceased being a customer in 2008. Other than these five customers,
no other customers represented more than 10% of our accounts receivable or our
revenue in the year ended December 31, 2008. There can be no assurance that we
will be able to continue to retain our relationships with these key customers or
that these key customers will engage us for future advertising and marketing
programs. Any negative changes involving our key customers, including any
adverse changes in the customers financial condition or desire or ability to
continue to engage us for future advertising and marketing programs, could
result in a significant reduction in our business which would impair our ability
to sustain or increase our revenues. As far as we are aware, none of these
customers are presently experiencing financial distress, other than the one
customer that has filed for bankruptcy. However, there is no assurance that
these customers are not presently experiencing financial distress or will not
experience financial distress in the future.

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

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

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

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

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

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

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

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

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

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

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

Our business growth strategy includes, among other things,
acquiring established advertising and communication boutique firms. We acquired
Bark Copenhagen and Bark Media during fiscal 2007. In addition, we anticipate
making several additional acquisitions and investments in the future. The
identification of acquisition candidates is difficult and we may not correctly
assess the risks related to such acquisitions and investments. In particular,
our

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determinations and assessments of acquisition candidates
involve assessments of the financial performance of the acquisition candidates
and past financial performance that we observe may not be indicative of future
financial performance. In addition, acquisitions could be effected on terms less
satisfactory to us than expected and the newly acquired companies may not be
successfully integrated into our cohesive operations or in a way that produces
the synergies or other benefits we hope to achieve. If these risks materialize,
the benefit that we derive from businesses that we acquire may be less than the
costs to us of acquiring these businesses, with the result that our operating
losses could increase.

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

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

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

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

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

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

There is no assurance that we will secure any financing
through our engagement agreement with PacificWave Partners Limited.

Bark Corporation entered into an engagement agreement with
PacificWave Partners Limited on August 17, 2007 wherein Bark Corporation engaged
PacificWave to act as financial advisor to Bark Corporation in connection with
the potential financing of Bark Corporation. This engagement was amended to
provide for an extension to the termination date of September 30, 2008. Although
this engagement agreement terminated on September 30, 2008 due to the fact that
the $10 million financing contemplated by the engagement agreement had not been
concluded by that date, we have continued to negotiate with PacificWave for an
extension to this agreement. The agreement was in March 2009 extended to June
30, 2009 on unchanged terms. The engagement agreement contemplates that
PacificWave will assist us in raising $10 million through the sale of no more
than 2,857,143 shares of our common stock at a price of not less than $3.50 per
share for aggregate gross proceeds of not less than $10 million. There are

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presently no agreements in place with any investors for this
financing and there is no assurance that our engagement agreement with
PacificWave, will result in us securing any financing. PacificWave has not given
us any commitment as to the completion of this financing and accordingly there
is a significant risk that this financing will never occur. Our inability to
secure financing through PacificWave will mean that we will have less financial
resources with which to pursue our acquisition strategy. We believe that the
current volatility in the financial markets will make it more difficult to
secure the equity financing that we are seeking through PacificWave.

If we do not raise $10 million in equity financing and we
elect to repurchase shares held by the original shareholders of Bark Group Inc.,
then we may not have sufficient public distribution for our shares to be
publicly traded on the OTC Bulletin Board.

If we are unable to raise $10 million in equity financing by
June 30, 2009, we have the right to repurchase shares held by the original
shareholders of Bark Group Inc. who acquired their shares prior to our
acquisition of Bark Corporation. These original shareholders are named as
selling shareholders in our outstanding Form S-1 registration statement. If we
exercise this right to repurchase these shares, then these selling shareholders
would no longer be shareholders of Bark Group Inc. The effect of this repurchase
would have the result of decreasing the number of our shareholders and the
number of shares that may be sold pursuant to our outstanding Form S-1
registration statement. This could result in there being insufficient
distribution in the shares of our common stock for a public market to develop,
with the result that our shares may not be eligible for trading on the OTC
Bulletin Board. Under a second amendment agreement entered into between us and
the Exwal shareholders, (i) the date for completion of the $10 million financing
has been extended from September 30, 2008 to June 30, 2009, and (ii) the
repurchase right is agreed not apply to any shares in respect of which we
exercise the option subsequent to any sales by any such original shareholders
after the effectiveness of the registration statement. Accordingly, there is a
risk that we would not be able to acquire all of the shares held by the original
shareholders in the event we exercise the repurchase option subsequent to the
date of effectiveness of the registration statement. We presently are not
certain and can give no assurance as to the likelihood of our raising the $10
million financing on the terms contemplated in our engagement letter with
PacificWave or on any other terms. We do not have any guarantees for this
financing and the current uncertainty in the capital markets means that there is
a significant risk that we will not be able to raise this $10 million equity
financing. Accordingly, there is a risk that we will exercise this repurchase
right. In the event that the repurchase right is exercised, then the number of
our shareholders will be reduced to approximately 42 shareholders which we
believe but cannot provide assurance will be sufficient public distribution for
our shares to be publicly traded on the OTC Bulletin Board.

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

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

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

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

•      advertising
  claims made with respect to our customers products or services are false,
  deceptive or misleading;

•      our
  customers products are defective or injurious and may be harmful to the
  others; or

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•      
  marketing, communications or advertising materials created for our customers
  infringe on the proprietary rights of third parties since client-agency contracts
  generally provide that the agency agrees to indemnify the client against claims
  for infringement of intellectual or industrial property rights.

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

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

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

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

We are not currently required to comply with Section 404 of the
  Sarbanes Oxley Act of 2002, and are therefore not required to make an assessment
  of the effectiveness of our internal controls over financial reporting for that
  purpose. However, in connection with the audit of our financial statements as
  of December 31, 2008 and 2007 and for the years ended December 31, 2008 and
  December 31, 2007, our auditors and we have identified certain matters involving
  our internal control over financial reporting that constitute a material weakness
  under standards established by the Public Company Accounting Oversight Board
  ("PCAOB").

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

•      a
  control necessary to meet the control objective is missing; or

•      an
  existing control is not properly designed so that, even if the control operates
  as designed, the control objective is not always met.

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

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

•      we
  do not currently have a sufficient complement of external reporting, technical
  accounting or tax staff

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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
  have not commenced design, implementation and documentation of the policies
  and procedures used for external financial reporting, accounting and income
  tax purposes.

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

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

As a public company, we will be required to document and test
our internal controls and procedures for compliance with Section 404 of the
Sarbanes-Oxley Act of 2002, or the Sarbanes Oxley Act, which requires annual
management assessment of the effectiveness of our internal controls over
financial reporting and a report by our independent auditors on our internal
control over financial reporting. Our first report on compliance with Section
404 is expected to be in connection with the audit of our financial statements
for the year ending December 31, 2009.

Ensuring that we have adequate internal financial and
accounting controls and procedures in place so that we can produce accurate
financial statements on a timely basis is a costly and time-consuming effort
that needs to be reevaluated frequently. Our internal control over financial
reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
in accordance with accounting principles generally accepted in the United
States.

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

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

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

Risks Relating To Our Common Stock

Our principal shareholders will be able to exert significant
control over the election of our directors and the

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management of our business and their interests may differ
from those of our other shareholders

Our principal shareholders include our directors, Mr. Bent
Helvang, Mr. Klaus Aamann and Mr. Jesper Svane, Mr. Anders Hageskov, our chief
executive officer, and Sapiens Alliance Ltd., a private company controlled by
Mr. Rene Lauritsen. These shares are held both directly and indirectly through
privately controlled corporations. As of April 5, 2009, these principal
shareholders owned or controlled 11,383,597 shares of common stock, representing
70.2% of our outstanding shares of common stock. By virtue of their
shareholdings, our principal shareholders will be able to elect members of our
board of directors, control our management and affairs and cause or prevent
corporate transactions such as mergers, consolidation or the sale of all or
substantially all of our assets. The interests of our principal shareholders may
differ from that of other shareholders, with the result that our principal
shareholder may cause us to enter into transactions that may be not be viewed as
favourable by our other shareholders.

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

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

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

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

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

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

- the success of our competitors in attracting the customers and business
  that we are targeting;
- additions or departures of key personnel;
- sales of our common stock;
- our ability to integrate operations, technology, products and services;
- our ability to execute our business plan;
- operating results below expectations;
- loss of any strategic partner or relationship;
- industry developments;
- economic and other external factors; and
- period-to-period fluctuations in our financial results.

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

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

Sales of a substantial number of shares of our common stock
into the public market by the selling shareholders named in our outstanding Form
S-1 registration statement and by other shareholders who become eligible to sell
in reliance of Rule 144 may result in significant downward pressure on the price
of our common stock.

We have registered the resale by the selling shareholders named
in our outstanding Form S-1 registration statement of 4,642,151 shares of our
common stock, representing approximately 28.6% of our current issued and
outstanding shares of common stock. In addition, additional shares became
eligible for resale pursuant to Rule 144 of the Securities Act of 1933 on March
1, 2009, being the date that is one year from the date that we completed the
acquisition of Bark Corporation. Sales of a substantial number of shares of our
common stock into the public market by the selling shareholders pursuant to our
outstanding Form S-1 registration statement or pursuant to Rule 144 may result
in significant downward pressure on the price of our common stock. Further, if
we complete any additional sales of our equity securities, then resales of these
securities pursuant to Rule 144 could also result in significant downward
pressure on the price of our common stock. This downward pressure could result
in the market price of our common stock being depressed. Further, we are
planning to complete additional equity financings involving the issuance of
shares of our common stock. Sales by new investors in reliance of Rule 144 may
result in further downward pressure on the price of our common stock.

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

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

- 34 -

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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

- 35 -

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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: May 28, 2009 | By:                
|                   |                    
|                   |                    
|                   |                    
|                   |                    
|                   |                    
|Date: May 28, 2009 | By:                
|                   |                    
|                   |                    
|                   |                    
|                   |                    

- 36 -

---

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*



---