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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 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 Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days. Yes
[X]    No [   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate website, if any, every
Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12
months (or for such shorter period that the registrant was required to submit
and post such files).

Yes [   ]    No [   ]

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

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

Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]    No [X]

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date. As of
November 16, 2009, there were 351,164,254 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 September 30, 2009 (unaudited) and
      December 31, 2008                            | 1   
|                |                                                                                                                                         |     
|                | Condensed
      Consolidated Statements of Operations for the three and nine months ended
      September 30, 2009 and 2008 (unaudited) | 3   
|                |                                                                                                                                         |     
|                | Condensed
      Consolidated Statements of Cash Flows for the nine months ended September
      30, 2009 and 2008 (unaudited)           | 4   
|                |                                                                                                                                         |     
|                | Notes
      to Unaudited Condensed Consolidated Financial Statements                                                                    | 5   
|                |                                                                                                                                         |     
|Item
      2.   | Managements
      Discussion and Analysis of Financial Condition and Results of Operations.                                            | 16  
|                |                                                                                                                                         |     
|Item
      3.   | Quantitative
      and Qualitative Disclosures about Market Risk                                                                        | 25  
|                |                                                                                                                                         |     
|Item
      4 T. | Controls
      and Procedures                                                                                                           | 25  
|                |                                                                                                                                         |     
|Part
      II   | OTHER
      INFORMATION                                                                                                                 |     
|                |                                                                                                                                         |     
|Item
      1    | Legal
      Proceeding                                                                                                                  | 27  
|                |                                                                                                                                         |     
|Item
      1 A  | Risk
      Factors                                                                                                                      | 27  
|                |                                                                                                                                         |     
|Item
      2    | Unregistered
      Sales of Equity Securities and Use of Proceeds                                                                       | 36  
|                |                                                                                                                                         |     
|Item
      6.   | Exhibits.                                                                                                                               | 37  

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     |  |   |              | 
|------------------------------------------------------------------------ | - | ------------- |  | - | ------------ | 
|                                                                         |   | September 30, |  |   | December 31, | 
|Assets                                                                   |   | 2009          |  |   | 2008         | 
|Current assets:                                                          |   |               |  |   |              | 
|Cash and cash equivalents                                                | $ | 11            |  | $ | 86           | 
|Accounts receivable, net of allowance for
      doubtful accounts of $11 |   |               |  |   |              | 
|and $251 at September 30, 2009
      and December 31, 2008               |   | 313           |  |   | 243          | 
|Costs and estimated earnings in excess of
      billings on projects in  |   | 747           |  |   | 352          | 
|progress                                                                 |   |               |  |   |              | 
|Value added tax refund receivable                                        |   | -             |  |   | 156          | 
|Prepaid expenses and other
      current assets                          |   | 116           |  |   | 97           | 
|                                                                         |   |               |  |   |              | 
|Total current assets                                                     |   | 1,187         |  |   | 934          | 
|                                                                         |   |               |  |   |              | 
|Property, plant and equipment,
      net of accumulated depreciation     |   | 5,114         |  |   | 5,011        | 
|Goodwill                                                                 |   | 3,358         |  |   | 3,230        | 
|Other intangible assets, net
      of accumulated amortization           |   | 27            |  |   | 63           | 
|Deferred financing costs, net of accumulated
      amortization          |   | 55            |  |   | 57           | 
|Total assets                                                             | $ | 9,741         |  | $ | 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     |   |   |              |  
|------------------------------------------------------------------------ | - | ------------- | - | - | ------------ | -
|                                                                         |   | September 30, |   |   | December 31, |  
|Liabilities                                                              |   | 2009          |   |   | 2008         |  
|Current liabilities:                                                     |   |               |   |   |              |  
|Accounts payable                                                         | $ | 2,371         |   | $ | 1,809        |  
|Accrued payroll and payroll related costs                                |   | 569           |   |   | 222          |  
|Accrued liabilities                                                      |   | 789           |   |   | 568          |  
|Billings in excess of costs and estimated
      earnings on projects in  |   |               |   |   |              |  
|progress                                                                 |   | 188           |   |   | 80           |  
|Current portion of long-term debt                                        |   | 2,626         |   |   | 1,567        |  
|Current portion of obligations
      under capital leases                |   | 132           |   |   | 124          |  
|Current portion of debt to redeemed
      stockholders                   |   | 172           |   |   | 156          |  
|Advances from related parties                                            |   | 412           |   |   | 543          |  
|                                                                         |   |               |   |   |              |  
|Total current
      liabilities                                          |   | 7,259         |   |   | 5,069        |  
|                                                                         |   |               |   |   |              |  
|Long-term debt , net of current portion                                  |   | 4,270         |   |   | 4,155        |  
|Long-term obligations under capital leases, net of current
      portion |   | 78            |   |   | 184          |  
|Long-term debt to redeemed stockholders,
      net of current portion    |   | 64            |   |   | 157          |  
|                                                                         |   |               |   |   |              |  
|Total liabilities                                                        |   | 11,671        |   |   | 9,565        |  
|                                                                         |   |               |   |   |              |  
|Non-Controlling interests                                                |   | 1,505         |   |   | 1,448        |  
|                                                                         |   |               |   |   |              |  
|Commitments and contingencies                                            |   |               |   |   |              |  
|                                                                         |   |               |   |   |              |  
|Stockholders Deficiency                                                 |   |               |   |   |              |  
|Stockholders' deficiency:                                                |   |               |   |   |              |  
|Preferred stock of $0.001 per
      share par value; 5,000,000           |   |               |   |   |              |  
|authorized; Nil issued and outstanding.                                  |   | -             |   |   | -            |  
|Common stock of $0.001 per
      share par value; 2,000,000,000          |   |               |   |   |              |  
|shares authorized, 327,113,720 shares issued
      and outstanding       |   |               |   |   |              |  
|at September 30, 2009 and
      324,113,720 at December 31, 2008         |   |               |   |   |              |  
|                                                                         |   | 327           |   |   | 16           |  
|Additional paid-in capital                                               |   | 1,823         |   |   | 1,844        |  
|Accumulated deficit                                                      |   | (5,609        | ) |   | (3,612       | )
|Accumulated other
      comprehensive income                             |   | 24            |   |   | 34           |  
|                                                                         |   |               |   |   |              |  
|Total stockholders
      deficiency                                     |   | (3,435        | ) |   | (1,718       | )
|                                                                         |   |               |   |   |              |  
|Totals liabilities and
      stockholders`deficiency                     | $ | 9,741         |   | $ | 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)

|                                                          |   | Three months ended |   |  | Nine months ended  |  
|--------------------------------------------------------- | - | ------------------ | - |  | ------------------ | -
|                                                          |   | September
      30 |   |  | September
      30 |  
|                                                          |   | 2009               |   |  | 2008               |  
|Net revenues                                              | $ | 903                |   |  | 2,507              |  
|Cost of revenues                                          |   | (777               | ) |  | (1,719             | )
|                                                          |   |                    |   |  |                    |  
|Gross Profit                                              |   | 126                |   |  | 788                |  
|                                                          |   |                    |   |  |                    |  
|Selling, general and administrative expenses              |   | (743               | ) |  | (884               | )
|Depreciation and amortization                             |   | (39                | ) |  | (54                | )
|Listing expenses                                          |   | (2                 | ) |  | (265               | )
|                                                          |   |                    |   |  |                    |  
|Loss from operations                                      |   | (658               | ) |  | (415               | )
|                                                          |   |                    |   |  |                    |  
|Other income (expenses):                                  |   |                    |   |  |                    |  
|Interest income                                           |   | -                  |   |  | -                  |  
|Interest expense                                          |   | (41                | ) |  | (117               | )
|                                                          |   |                    |   |  |                    |  
|Total other income (expenses), net                        |   | (41                | ) |  | (117               | )
|                                                          |   |                    |   |  |                    |  
|Loss before income taxes and minority                     |   |                    |   |  |                    |  
|Interest                                                  |   | (699               | ) |  | (532               | )
|                                                          |   |                    |   |  |                    |  
|Benefit for income taxes                                  |   | -                  |   |  | -                  |  
|                                                          |   |                    |   |  |                    |  
|Net loss                                                  |   | (699               | ) |  | (532               | )
|                                                          |   |                    |   |  |                    |  
|Net loss (gain) attributable
      to the Non-Controlling |   |                    |   |  |                    |  
|Interest                                                  |   | (26                | ) |  | 61                 |  
|                                                          |   |                    |   |  |                    |  
|Loss available to common stockholders                     | $ | (673               | ) |  | (593               | )
|                                                          |   |                    |   |  |                    |  
|Loss per share                                            |   |                    |   |  |                    |  
|Basic and diluted                                         | $ | -                  |   |  | -                  |  
|                                                          |   |                    |   |  |                    |  
|Weighted-average shares used to calculate net
      loss  |   |                    |   |  |                    |  
|per common share:                                         |   |                    |   |  |                    |  
|Basic and diluted                                         |   | 316,856,739        |   |  | 277,484,080        |  

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)

|                                                            |   | 9 Months Ended     |   |   | 9 Months Ended     |  
|----------------------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                                            |   | September 30, 2009 |   |   | September 30, 2008 |  
|Cash flows from operating
      activities:                 |   |                    |   |   |                    |  
|Net loss                                                    | $ | (1,996             | ) | $ | (2,366             | )
|Adjustments to reconcile net
      loss to net cash used in |   |                    |   |   |                    |  
|operating activities:                                       |   |                    |   |   |                    |  
|Depreciation and amortization                               |   | 98                 |   |   | 147                |  
|Amortization of customer relationship                       |   | 36                 |   |   | 79                 |  
|Allowance for doubtful
      accounts                       |   | (240               | ) |   | -                  |  
|Stock based compensation                                    |   | 413                |   |   | 195                |  
|Deferred income tax benefit                                 |   | -                  |   |   | (33                | )
|Non-Controlling interests                                   |   | (77                | ) |   | 26                 |  
|Changes in working capital:                                 |   |                    |   |   |                    |  
|Accounts receivable and related
      party receivables     |   | 170                |   |   | (571               | )
|Cost and
      estimated earnings in excess of billings on  |   | (395               | ) |   | 264                |  
|projects                                                    |   |                    |   |   |                    |  
|Value added tax
      refund receivable                     |   | 156                |   |   | 129                |  
|Prepaid expenses and other
      current assets             |   | (20                | ) |   | 1                  |  
|Accounts payable                                            |   | 562                |   |   | 1,182              |  
|Accrued expenses and other
      liabilities                |   | 568                |   |   | 454                |  
|Billings in
      excess of costs and estimated earnings    |   | 107                |   |   | (898               | )
|Net cash used in
      operating activities                 |   | (618               | ) |   | (1,391             | )
|Cash flows from investing
      activities:                 |   |                    |   |   |                    |  
|Proceeds from sale of property
      and equipment          |   | 3                  |   |   | -                  |  
|Purchase of
      property and equipment                    |   | -                  |   |   | (172               | )
|Release of restricted cash                                  |   | -                  |   |   | 597                |  
|Net cash used in investing activities                       |   | 3                  |   |   | 425                |  
|Cash flows from financing activities:                       |   |                    |   |   |                    |  
|Proceeds from
      related party                           |   | 52                 |   |   | 360                |  
|Repayment of related party                                  |   | (204               | ) |   | (95                | )
|Repayment of
      capital leases                           |   | (110               | ) |   | (75                | )
|Proceeds from debt                                          |   | 988                |   |   | 499                |  
|Repayment of
      debt                                     |   | (130               | ) |   | (462               | )
|Net cash provided
      by financing activities             |   | 596                |   |   | 227                |  
|Effect of exchange rates on
      cash and cash equivalents |   | (56                | ) |   | (2                 | )
|Net decrease in cash and cash equivalents                   |   | (75                | ) |   | (741               | )
|Cash and cash equivalents at
      beginning of period      |   | 86                 |   |   | 768                |  
|Cash and cash equivalents
      at end of period            | $ | 11                 |   | $ | 27                 |  
|                                                            |   |                    |   |   |                    |  
|Supplemental information:                                   |   |                    |   |   |                    |  
|Cash paid for
      interest                                | $ | 277                |   | $ | 290                |  
|Non-cash investing and financing activities:                |   |                    |   |   |                    |  
|Equipment
      acquired under capital leases               | $ | 87                 |   | $ | 254                |  
|Adjustment of minority interest
      to redemption value   | $ | (122               | ) | $ | (48                | )

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 (259,290,960
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 USD 6,072,000 at September 30, 2009 and limited
financial resources available to pay ongoing financial obligations as they
become due. Additionally, as of September 30, 2009, the Company had a
stockholders deficiency of approximately USD 3,435,000 which resulted primarily
from operating losses incurred up until September 30, 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 USD 7,347,000 (being comprised of (i)
negative working capital of approximately USD 6,072,000, and (ii) expected use
of cash of USD 1,275,000 over the next twelve months in order to sustain its
current operations and pay its 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 2,573,000 that becomes due and payable
during the balance of 2009.

These principal payments under
the Companys debt obligations include an aggregate of USD 2,573,000 that
becomes due and payable during the remaining period of year 2009, except for a
permitted credit facility with Danske Bank of approximately USD 393,000 which is
due in year 2010. Further, the Company has an option to convert certain debt
obligation of approximately USD 418,000, due in 2009, into 10,000,000 shares at
an average price of USD 0.0418 per share.

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 ($786,798) 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 plans to use its loan from Bark Holding as part
of its plan 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 the filing date. 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.

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 September 30, 2009, and
the results of operations and cash flows for the periods presented. The results
of operations for the three and nine months ended September 30, 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 nine months ended September 30, 2009 and 2008 transaction gains and losses
were not material.

During the three and nine months
ended September 30, 2009 and 2008 the related translation adjustment which was
included in other comprehensive loss was as follows:

| |                                            |   | 3 months ended September |  |   | 9 months ended September |  
| | ------------------------------------------ | - | ------------------------ |  | - | ------------------------ | -
| |                                            |   | 2009                     |  |   | 2008                     |  
| | Net loss available to common stockholders: | $ | 673,000                  |  | $ | 593,000                  |  
| | Translation adjustment:                    | $ | 14,000                   |  | $ | (91,000                  | )
| | Comprehensive loss                         | $ | 687,000                  |  | $ | 502,000                  |  

Loss per Share

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

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 an accounting standard which defines
fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. The Company adopted this standard on
January 1, 2008 for its financial assets and financial liabilities. The Company
adopted the fair value measurement requirements for nonfinancial assets and
nonfinancial liabilities that are not recognized or disclosed at fair value on a
recurring basis on January 1, 2009. The adoption of this standard did not have a
material impact on the Companys financial position or results of operations.
Refer to Note 3 for additional discussion on fair value measurements.

In December 2007, the FASB issued
an accounting standard related to the accounting for business combinations and
related disclosures. This standard addresses the recognition and accounting for
identifiable assets acquired, liabilities assumed and noncontrolling interests
in business combinations. The standard also expanded disclosure requirements for
business combinations. The standard became effective on January 1, 2009 and will
have an impact for any businesses acquired after the effective date of this
pronouncement.

In December 2007, the FASB issued
an accounting standard related to accounting and reporting for the non
controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. Non controlling interests are reported as a separate component of
consolidated stockholders equity, and net income allocable to non controlling
interests and net income attributable to stockholders are reported separately in
the consolidated statement of operations. This standard became effective on
January 1, 2009 and did not have a material impact on the Companys condensed
consolidated financial position or results of operations.

In March 2008, the FASB issued an
accounting standard related to disclosures about derivative instruments and
hedging activities. This standard amends and enhances disclosure requirements to
provide a better understanding of how and why a company uses derivative
instruments, how derivative instruments and related hedged items are accounted
for, and their effect on a companys financial position, financial performance
and cash flows. The Company adopted this standard on January 1, 2009 and has
included additional disclosures in its condensed consolidated financial
statements. 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 2009, the FASB issued an
accounting standard which requires disclosures about the fair value of financial
instruments whenever a public company issues financial information for interim
reporting periods. This standard became effective for interim reporting periods
ending after June 15, 2009 and did not have a material impact on the Companys
condensed consolidated financial position and results of operations.

In April 2009, the FASB issued an
accounting standard which affirmed that there is no change in the measurement of
fair value when the volume and level of activity for an asset or a liability has
significantly decreased. This standard also identifies circumstances that
indicate when a transaction is not orderly. The adoption of this standard in the
second quarter of 2009 did not have a material impact on the Companys condensed
consolidated financial position and results of operations.

8

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In June 2009, the FASB issued an
accounting standard which requires entities to disclose the date through which
subsequent events have been evaluated as well as whether that date is the date
the financial statements were issued or the date the financial statements were
made available to be issued. The Company adopted this guidance in the second
quarter of 2009. The Company has evaluated subsequent events through the
November 16, 2009 filing of its condensed consolidated financial statements with
the SEC.

In June 2009, the FASB issued the
FASB Accounting Standards Codification, (Codification). Effective this
quarter, the Codification became the single source for all authoritative
generally accepted accounting principles (GAAP) recognized by the FASB and is
required to be applied to financial statements issued for interim and annual
periods ending after September 15, 2009. The Codification does not change GAAP
and did not impact theCompanys condensed consolidated financial
position or results of operations.

In August 2009, the FASB issued
an accounting standard to provide clarification on measuring liabilities at fair
value when a quoted price in an active market is not available. This standard
will become effective for the Company on October 1, 2009 and is not expected to
have a significant impact on the Companys condensed consolidated financial
position or results of operations.

9

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Note 3 - Fair Value Measurement

Valuation Hierarchy

The FASBs accounting standard
for fair value measurements 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
September 30, 2009:

|         |   |                |  |   | Fair
      Value Measurements at September30, 2009 | 
|-------- | - | -------------- |  | - | -------------------------------------------------- | 
|         |   | Total Carrying |  |   | Quoted prices                                      | 
|         |   | Value at       |  |   | in active                                          | 
|         |   | September 30,  |  |   | markets (Level                                     | 
|         |   | 2009           |  |   | 1)                                                 | 
|         |   |                |  |   |                                                    | 
|Goodwill | $ | 3,358,000      |  | $ | -                                                  | 

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 nine months ended
September 30, 2009 customers C, D and K accounted for approximately 11%, 21%,
and 27%, respectively of revenue. During the nine months ended September 30,
2008 customers E, and L accounted for approximately 12% and 37%, respectively of
revenue. During the three month ended September 30, 2009 customers C, D, K, N
and P accounted for approximately 12%, 21%, 18%, 13% and 12% respectively of
revenue. During the three months ended September 30, 2008, customers E, K and L
accounted for approximately 15%, 25% and 30% respectively of revenue. No other
customers individually represented more than 10% of revenue for any period
presented.

As of September 30, 2009
customers K, E and C accounted for approximately 22%, 19% and 14 % of the
Companys accounts receivables, respectively. As of December 31, 2008 customers
J and M 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. As of September 30, 2009, the Company has made an
allowance of USD 11,000.

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.

10

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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 minority 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
September 30, 2009 was DKK 1,200,088 (USD 236,056) and as of December 31, 2008
DKK 1,653,000 (USD 312,800) which will be paid in 7 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 September 30, 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 as
included in ASC 810. All adjustments related to the application of the above
would be recorded within additional paid-in capital. Adjustment related to the
above has no impact on consolidated net loss of the Company, net loss
attributable to the Company or loss available to common stock holders of the
Company as the impact of the adjustment prior to January 1, 2009 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 adjustments under ASC 505 as these
adjustments are not deductible under Danish tax law.

At December 31, 2008 and at
September 30, 2009, the redemption value exceeded the value from applying
consolidation accounting according to ASC 810 and therefore the minority
interest was recorded at the redemption value of DKK 7,653,000 which amounted to
USD 1,448,000 at December 31, 2008 and USD 1,505,340 at September 30, 2009.

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           |  
|--------------------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                                      |   | September 30    |   |   | 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)                        |   |                 |   |   |                 |  
|Bark Advertising loss attributable to
      Non-Controlling interests |   | (77             | ) |   | (105            | )
|Adjustment according to ASC 505                                       |   | 122             |   |   | 51              |  
|Currency adjustment                                                   |   | 12              |   |   | (19             | )
|Redeemable shares reclassified to liabilities                         |   | -               |   |   | (313            | )
|Balance at end of period                                              | $ | 1,505           |   | $ | 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
1,376,896) which expires on November 20, 2009. As at September 30, 2009 and
December 31, 2008, the amount outstanding under this line of credit facility was
$1,427,278 and $1,353,000, respectively. The Company plans to negotiate an
extension of this maturity date to June 2010, although the Company cannot
provide assurance of a successful extension.

During the nine months ended
September 30, 2009 Bark Group Inc. obtained three additional short term
convertible loans of DKK 2,375,000 ($467,161). The loans were advanced in April
and September, 2009 in order to bridge finance until capital has been raised.
These convertible loans are convertible at market price as per date of
conversion. The loans were advanced by private non-related party investors. All
three loans are due for repayment in first quarter of 2010 together with accrued
interest of DKK 237,500 ($46,716). Two of the loans with a total of DKK
2,125,000 ($418,207) have been converted to share capital subsequent to
September 30, 2009 at an average price per share of $0.0464.

Note 7  Non-vested shares

In September 2007, the Company
issued 7,778,720 non-vested share awards to two executives of the Company having
a stated value of DKK 330,000 (USD 65,100). A weighted average grant date fair
value of USD 40 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 nine month ended September 30, 2009
and 2008, the Company recorded USD 175,489 and USD 195,346 of compensation
expense, respectively, related to these awards. For the three months ended
September 30, 2009 and 2008 the Company recorded compensation expense of USD
61,360 and USD 65,115 respectively.

As of September 30, 2009 there
was USD 167,524 of total unrecognized compensation costs related to non-vested
share-based compensation arrangements granted following currency adjustment of
USD 33,700. The cost is expected to be recognized over a period of 8 months.

Note 8  Stock based compensation

In August and September 2009 the company issued 3,000,000 shares
  to three consulting companies for services rendered during 2009 through 2012.
  The market value of the shares on the date of signing the agreements were USD
  487,500 of which USD 236,979 was expensed as selling, general and administrative
  costs in the accompanying condensed consolidated statements of operations during
  the three and nine months ended September 2009. The Company will record compensation
  expense ratably over the remaining period.

12

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

As of September 30, 2009 there
was USD 250,521 of total unrecognized compensation costs related to the
issuance. The cost is expected to be recognized over a period of 10
quarters.

Note 9- 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 51,300 and USD 180,990 during the nine months ended September 30, 2009 and
2008, respectively, for services provided to the Company relating to acquiring
new companies, strategy planning and management services. For the three months
ended September 30, 2009 and 2008 the contract entitled BH Media ApS to invoice
the Company respectively USD 17,100 and USD 60,330. Such services have been
recorded as a component of selling, general, and administrative expenses. At
September 30, 2009, Bent Helvang has a receivable from the Company of DKK
912,297 (USD 179,448) which has been classified in advances from related
parties.

Fee to CEO Anders Hageskov

Lugano Communication and
Entertainment (a Company in which Anders Hageskov is employed) invoiced the
Company USD 196,875 and USD 253,380 during the nine month period ended September
30, 2009 and 2008, respectively, for services rendered by Anders Hageskov to
Bark Copenhagen and Bark Advertising. For the three months ended September 30,
2009 and 2008 Lugano Communication and Entertainment invoiced the Company USD
54,755 and USD 84,460 respectively. 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 at September 30, 2009 is USD
217,852. This loan is due for repayment in full in 2009 when the Company gets a
positive cash flow. However, if the Company doesnt have a positive cash flow in
2009 the loan will be converted into share capital. Interest for the nine month
periods ended September 30, 2009 and 2008 was USD 10,765 and USD 7,564,
respectively. For the three month ended September 30, 2009 and 2008 the interest
expense was USD 3,762 and USD 3,902 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 to the
Company up to DKK 4,000,000 (USD 759,172)

Credit notes to share
holders

Bark Copenhagen has in the nine
months period ended September 30, 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. The loan has been partly repaid and
have a balance of DKK 73,600 (USD 14,477) by September 30, 2009. This loan is to
be repaid in full in 2009 when the Company gets a positive cash flow.

13

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Note 10 - 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 ($196,699), 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, the Company paid DKK 242,500
($51,422) 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 ($149,000), 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 nine months ended
September 30, 2009 for an amount of DKK 450,000 ($88,515) that is considered to
be a probable and reliable estimable of the amount that will be required to
settle these claims. This amount has been included as a component of accrued
liabilities. On April 28, Copenhagen City Court issued a judgement where the
Company was ordered to pay DKK 865,700 ($170,283) including court costs and
interests. The Company 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 ($78,680).
There is however no assurance that the High Court will decrease this amount.

Note 11  Net loss per share

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

|                                                          |   | Three months Ended |   |   | Nine months Ended  |  
|--------------------------------------------------------- | - | ------------------ | - | - | ------------------ | -
|                                                          |   | September
      30 |   |   | September
      30 |  
|                                                          |   | 2009               |   |   | 2008               |  
|Numerator:                                                |   |                    |   |   |                    |  
|                                                          |   |                    |   |   |                    |  
|Loss available to common shareholders                     |   | (673               | ) |   | (593               | )
|                                                          |   |                    |   |   |                    |  
|Denominator:                                              |   |                    |   |   |                    |  
|Weighted average common shares outstanding-               |   |                    |   |   |                    |  
|basic:                                                    |   | 324,635,459        |   |   | 281,373,440        |  
|Weighted average common shares outstanding                |   |                    |   |   |                    |  
|subject to repurchase                                     |   | (7,778,720         | ) |   | (3,889,360         | )
|                                                          |   |                    |   |   |                    |  
|Shares used in computing basic net loss per
      share   |   | 316,856,739        |   |   | 277,484,080        |  
|Shares used in computation - diluted:                     |   |                    |   |   |                    |  
|Weighted average shares outstanding                       |   | 316,856,739        |   |   | 277,484,080        |  
|Dilutive effect of common shares outstanding              |   |                    |   |   |                    |  
|subject to repurchase                                     |   | -                  |   |   | -                  |  
|                                                          |   |                    |   |   |                    |  
|Shares used in computing diluted net loss per
      share |   | 316,856,739        |   |   | 277,484,080        |  
|                                                          |   |                    |   |   |                    |  
|Net loss per share - basic and diluted                    | $ | -                  |   | $ | -                  |  

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.

14

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Company filed a Certificate
of Change with the Secretary of State of Nevada, with an effective date of
August 13, 2009, to effectuate a forward stock split of the Companys authorized
share capital and its issued and outstanding shares of common stock, in each
case on the basis of twenty new common shares for each one old common share. The
forward stock split was payable on August 17, 2009 to all shareholders of record
as of the record date, August 13, 2009. As a result, as of August 13, 2009, the
Companys authorized share capital increased from 100,000,000 shares of common
stock to 2,000,000,000 shares of common stock and its issued and outstanding
share capital increased from 16,355,686 shares of common stock to 327,113,270
shares of common stock. All common shares and per share information has been
retroactively restated to effectuate the aforementioned stock split.

Note 12  Subsequent events

**Subsequent to September 30,
2009 the Company issued a total of 24,050,534 shares of common stock as
described in the Companys current report on Form 8-K filed on November 16,
2009. Of the 24,050,534, 10,000,000 shares at an average share price of $0.046
were issued to two lenders for conversion of debts. The 14,050,534 shares were
issued to third party investors for cash at an average price of $0.0491.

On October 30, 2009 the Company
received a credit note of DKK 1,297,660 ($255,249) related to listing costs
expensed in 2008. The credit amount exclusive Danish VAT of 25% will be
recognized as income in the fourth quarter of 2009.

15

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

The following discussion and analysis summarizes the
significant factors affecting our condensed consolidated results of operations,
financial condition and liquidity position for the three and nine months ended
September 30, 2009 and 2008. 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.

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 $9 million in 2009, but we can provide no assurance as to whether we
will be successful in such efforts.

Revenues

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

16

---

The majority of the Companys 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 the revenues is commissions
that earned from the placement of media through media outlets. The Company
presently earn commissions from media placements from approximately five
customers. The Company also earn commissions for handling of production of
campaign elements being i.e. production of TV spots or printed materials.

Revenues declined to $2,841,000 during the nine months ended
September 30, 2009 as compared to $7,150,000 during the nine months ended
September 30, 2008, representing a decrease of $4,309,000 or 60%. This decrease
was caused by the loss of the Companys 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 37% of the Companys
revenues in the nine months ended September 30, 2008. S. Trading was lost as a
client because it ceased business operations due to financial problems. As for
the three months ended September 30, 2009 compared to September 30, 2008 the
revenue declined by $1,604,000 from $ 2,507,000 to $ 903,000. The decrease was
caused by the loss of Totempo and the general economic slowdown as stated
above.

The Company is continuously working with the objective of
expanding business with existing customers and getting new customers. For the
nine month ended September 30, 2009, the company has gained five additional new
customers.

Cost of Revenues

The Companys 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 the Company 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 $2,252,000 for the nine months ended
September 30, 2009 as compared to $5,125,000 for the nine months ended September
30, 2008, a decrease of $2,873,000, or 56%. External purchases went down by 74%
and salaries went down by approximately 13%. The main reason for the lower
external purchases was because the Company 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
effective as from January 1, 2009. Further, for the three month ended September
2009 salaries to leading staff members were cut with another 15%. As for the
three months ended September 30, 2009 and 2008 cost of revenues decreased with
$942,000 or app. 55% from $ 1,719,000 in 2008 to $777,000 in 2009. External
purchases decreased with 76% and the salaries with 16% for the same reasons as
described for the variances between the nine months ended September 30, 2009 and
2008

Gross Profit

For the nine months ended September 30, 2009 gross profit was
reduced from $2,025,000 to 589,000 compared to the

17

---

2008 period. Gross margins decreased to 21% during the 2009
period as compared to 28% during the 2008 period. The reason for the gross
profit decrease is the loss of Totempo as a customer partly set off by lower
staff costs due to a payroll cut off by 10% and per July 1, 2009 additional 15%
cut for leading staff members. As for the three months ended September 30, 2009
and 2008 the decrease in gross profit was $ 662,000 or 84% due to the loss of
Totempo as a customer and the postponing of projects - originally planned for
execution in Q 2 and Q 3 2009 - to Q4 2009.

Selling, General and Administrative Expenses

The Companys 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.

Selling, general and administrative (SG&A) expenses totaled
$2,196,000 for the nine months ended September 30, 2009 as compared to
$2,614,000 for the nine months ended September 30, 2008, representing a decrease
of $418,000, or 16%. The decrease is primarily related to use of consultants in
2008. During the nine months ended September 30, 2009 the Company expensed audit
fees related to year end auditing of 2007 and 2008. For the three months ended
September 30, 2009 SG&A expenses decreased by $141,000 to $743,000 compared
to the three months ended September 30, 2008. The decrease is mainly caused by a
general 10% cut of all salaries, an additional 15% cut off for leading staff
members and extensive consultant costs in 2008 relating to listing
preparation.

Depreciation and Amortization

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

Depreciation and amortizations totaled $134,000 for the nine
months ended September 30, 2009 as compared to $178,000 for the nine months
ended September 30, 2008, representing a decrease of $44,000, or 25%.
Amortization of customer relationships decreased to $36,000 during the 2009
period compared to $79,000 in the 2008 period. Depreciations on property, plant
and equipments decreased to $98,000 during the 2009 period as compared to
$99,000 during the 2008 period. As for the three months ended September 30, 2009
the total of depreciations and amortizations decreased by $15,000 to $39,000
compared with a total of $54,000 for the three months ended September 30, 2008.
The decrease are due to a combination of the digressive amortization of customer
relations and a full depreciation of certain fixed assets in 2009.

Listing Expenses

Listing expenses include amounts that we pay to our legal and
accounting professional advisers and under the Companys previous arrangement
with 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.

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Listing expenses totaled $5,000 for the nine months ended
September 30, 2009 as compared to $1,297,000 for the nine months ended September
30, 2008, representing a decrease of $1,292,000. Since the Companys Form S-1
registration was declared effective on December 17, 2008 the listing expenses
have been reduced significantly. Costs in the 2009 period are related to our
common stock becoming traded on the OTC Bulletin Board which commenced on March
16, 2009. For the three months ended September 30, 2009 compared to the three
months ended September 30, 2008 the total variance of listing expenses was
$263,000.

Interest Expense

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

Interest expenses totaled $327,000 for the nine months ended
September 30, 2009 as compared to $309,000 for the nine months ended September
30, 2008. In the three months ended September 30, 2009 interest expenses
decreased by $ 76,000 compared to the three months ended September 30, 2008. The
reason for the decrease being acceptance of reduced interest accruals regarding
late payments to suppliers.

Net Loss

The Company recorded a net loss of $2,073,000 for the nine
months ended September 30, 2009 as compared to a net loss of $2,340,000 for the
nine months ended September 30, 2008, a decrease of $267,000, or 11%. The main
reason for the decrease is lower gross profit partly off-set by lower listing
expenses. As for the three months ended September 30, 2009 the Companys net
loss was $699,000 as compared to a net loss of $532,000 for the three months
ended September 30, 2008. The net loss increase was caused by lower lower gross
profit partly off-set by lower listing expenses.

Liquidity and Capital Resources

Cash and Working Capital

As of September 30, 2009 the Company had cash of $11,000, a
decrease of $75,000 from cash of $86,000 as of December 31, 2008. The Companys
working capital deficit increased from $4,135,000 at December 31, 2008 to
$6,072,000 at September 30, 2009, an increase of $1,937,000. The increase in
working capital deficit is mainly due to loss in the nine months ended September
30, 2009 and delayed payments to suppliers.

Cash Requirements

The Company is presently experiencing negative cash flows from
operating activities and has a working capital deficit. Additionally, as of
September 30, 2009, the Company reported a shareholders deficit which resulted
primarily from operating losses incurred through 2009. The Companys working
capital deficit was $6,072,000 as of September 30, 2009. The Company is using
cash of approximately $319,000 per quarter in operations. Based on current
forecast, it is anticipated that that the Company will use approximately
$7,347,000 (being comprised of (i) negative working capital of approximately
$56,072,000, and (ii) expected use of cash of $1,275,000 in the next 4 quarters)
over the next twelve months in order to sustain its current operations and pay
its current liabilities. This amount does not include any funds necessary for us
to expand our business. The Company will require further additional financing in
order to pursue the expansion of its business, either through growth or
acquisitions.

Subsequent to September 30, 2009 two loans were converted to
share capital by the lenders subscription of 10,000,000 shares at an average
share price of $0.0418. The conversion improved the working capital with
$418,307.

The working capital deficit as of September 30, 2009 further
includes a permitted credit facility with Danske Bank of USD 393,000 which is
not payable during 2009.

As the Companys access to cash is limited the Company is
working closely with their present banks and credit institutes, keeping them
informed about short term cash needs and the Companys activities regarding
pursue of efforts regarding raise of additional financing.

The Companys sources of additional cash, in addition to cash
from operations and out operating line of credits, include

19

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a loan commitment of DKK 4,000,000 ($786,797) 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
the loan from Bark Holding to finance their operations over the next twelve
months. However, the Company will require additional financing beyond this loan
in order to conduct their business in accordance with their plan of operations.
In particular, the Company will require additional financing in order to repay
debt obligations as they mature and become payable. These principal payments
under debt obligations include an aggregate of $2,573,000 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 the filing date. The Company plans to
conduct an equity financing of their securities, as outlined below, in order to
raise additional financing. The Company will also pursue bridge loans and
private placements from investors located outside of the United States,
primarily in Europe, in order to raise the required funds. If the Company is not
successful in obtaining additional financing, it will reconsider its acquisition
strategy and will further reconsider whether the 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 their business. Further, the Company may not be able to make
the principal payments under debt obligations as they become due.

The Company has filed a registration statement with the SEC in
the United States and its common stock has now commenced trading on the OTC
Bulletin Board. This has been done as an initial step in the Companys efforts
to raise additional financing. It is the Companys belief that investors may be
more willing to invest in a Company which has a public market for its
securities.

The Company plans to pursue alternate financing arrangements,
which may be either debt or equity financing. The Company does not have
commitments for any such financing in place. If the Company does not succeed in
raising additional financing, it may not be able to expand its business as
anticipated. If the Company is successful in raising additional financing, it
will adjust its expansion plans based on the amount of funds available. The
Company may also determine to use a portion of any proceeds realized 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 ($1,376,896) as of September 30, 2009. The maturity date of this loan
has been extended to November 20, 2009.Current interest rate of this
loan is 5.75% . At September 30, 2009 and December 31, 2008, the outstanding
balance of line of credit was $1,427,000 and $1,353,000, respectively, including
accrued interest on the outstanding balance of line of credit. The Company plans
to negotiate an extension of this maturity date to June 2010, although the
Company cannot provide assurance of a successful extension.

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
September 30, 2009 and December 31, 2008, the outstanding balances of the loans
aggregating approximately $3,247,900 and $3,174,000, respectively.

On March 7, 2008, two new bank loans totaling DKK 7,000,000
($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 September 30, 2009 and December 31, 2008, the
outstanding balance of these loans aggregating $ 1,075,840 and $1,087,000,
respectively.

Bark Copenhagen has a floating interest rate line of credit
facility in the amount of DKK 3,000,000 ($590,098). As at September 30, 2009 and
December 31, 2008, the amount outstanding under this line of credit facility was
$588,276 and $123,000, respectively. The line of credit facility is repayable as
for $393,400 on December 2, 2009. The Company plan to negotiate an extension of
this maturity date to June 2010, although the Company cannot provide assurance
of a successful extension. The rate of interest payable under the line of credit
facility is presently 8.25% per annum.

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Bark Group Inc. obtained three additional short term
convertible loans of DKK 2,375,000 ($467,161) as of September 30, 2009. The
loans were advanced in April and September, 2009 in order to bridge finance
until capital has been raised. The loans were advanced by private non-related
party investors. All three loans are due for repayment in first quarter of 2010
together with accrued interest of DKK 237,500 ($46,716). Two of the loans with a
total of DKK 2,125,000 ($418,207) have been converted to share capital
subsequent to September 30, 2009 at an average price per share of $0.0418. Both
of the converted loans were convertible at the date of issuance at market price
per date of conversion.

Bark Holding Loan

In December 2007, the Company 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 the Company has a positive cash
flow. The interest rate is fixed at 7% per annum. In May and June 2008, the loan
was increased by DKK 112,100 ($21,200). The 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
the Company 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 September 30, 2009 was $217,852 including accrued interest. The loan is due
for repayment in full during 2009. However, if the Company doesnt have a
positive cash flow in 2009 the loan will be converted into share capital. At the
date of issuance the loan was not convertible. As of November 16, 2009 no
agreement regarding conversion of the loan has been made.

On June 11, 2008 Bark Holding committed to issue a bridge loan
to the Company in the amount of up to DKK 3,000,000 ($536,000). On September 16,
2008, Bark Holding increased the loan commitment to DKK 4,000,000 ($786,798) on
identical terms. The loan will accrue interest at 7% and will be due when the
Companys cash flow is positive for more than four consecutive weeks or when
additional sources of financing are in place. The loan had not been advancedas of the date of this quarterly report on Form 10-Q.

Going Concern

The Companys unaudited condensed consolidated financial
statements for the nine months ended September 30, 2009 have been prepared
assuming a going concern. The Company currently has and had as at both September
30, 2009 and December 31, 2008 negative working capital and limited financial
resources available to pay ongoing financial obligations as they became due.
Further, at September 30, 2009, the Company had a shareholders deficit of
$3,435,000 which resulted primarily from operating losses incurred in 2007, 2008
and 2009. These conditions raise substantial doubt about the Companys ability
to continue as a going concern.

The Company expects to use cash of approximately $319,000 per
quarter in operations and accordingly, the Company estimate that it will use
approximately $7,347,000 over the next twelve months in order to sustain its
current obligations and to continue to pay outstanding obligations as they
become due. This amount does not include any funds necessary for the Company to
expand its business or to pay costs that have been incurred in relation to the
listing. The Company will require further additional financing in order to
pursue the expansion of its business, either through growth or acquisitions. The
Companys current source of funding, in addition to cash from operations and out
operating line of credits, is the loan commitment of DKK 4,000,000 ($786,798)
from Bark Holding, a related party.

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

As a result of the above, the Company believes that a
substantial doubt about the ability to continue as a going concern

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remained as at September 30, 2009, as reflected in the notes to
the condensed consolidated unaudited financial statements for the nine months
ended September 30, 2009. The condensed consolidated unaudited financial
statements for the nine months ended September 30, 2009 do not include any
adjustment that might result from the outcome of this uncertainty.

Cash Used In Operating Activities

The Company used cash of $618,000 in the nine months ended September
  30, 2009, compared to use of cash of $ 1,391,000 in the nine months ended September
  30, 2008. The decrease in cash used in operating activities primarily reflects
  the decreased loss during the 2009 period and work in progress including billings
  in progress during the 2009 period as compared to the 2008 period. The Companys
  net loss of $1,996,000 was partly funded by increases of accounts payables,
  accrued expenses/other liabilities

Cash From/Used in Investing Activities

The Company used a total of $3,000 in the nine months ended
September 30, 2009 by buying and selling equipment. In the nine months ended
September 30, 2008 cash from investing was positive with $425,000 composed by
investment of $172,000 and release of $597,000 restricted cash on March 6, 2008
used for reduction of line of credit with Danske Bank.

Cash from Financing Activities

The Company generated cash of $596,000 from financing
activities during the nine months ended September 30, 2009, which represented
net repayments/referred accruals to related parties of $152,000, proceeds from
debt of $988,000 offset by repayments of debts of $130,000 and capital leases of
$110,000. In the nine months ended September 30, 2008 the Company generated cash
of $227,000 composed by proceeds from related parties of $360,000, proceeds from
debt of $499,000 offset by repayments of related parties of $95,000, debts of
$462,000 and capital leases of $75,000.

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.

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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
  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 accordance with ACS 605, 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 ASC 810 which 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
minority interest is recorded in accordance with ASC 505 at the higher of (1)
the redemption value required to be paid by the Company or (2) the amount that
would result from applying ASC 810 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.

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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.

Off-Balance Sheet Arrangements

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

See Note 2 of the Notes to Consolidated Financial Statements
for a full description of recent accounting pronouncements, including the
anticipated dates of adoption and the effects on the companys financial
position and results of operations.

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Item 3. Quantitative and Qualitative Disclosures about
Market Risk.

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

Item 4 T. Controls and Procedures.

Disclosure Controls and Proceduresare 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 September 30, 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 werenot effective as of September 30, 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 September 30, 2009 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

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

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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 ($196,699), 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, the Company paid DKK 242,500 ($51,422) 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
($149,000), 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 nine months ended September 30, 2009 for an amount
of DKK 450,000 ($88,515) that is considered to be a probable and reliable
estimable of the amount that will be required to settle these claims. This
amount has been included as a component of accrued liabilities. On April 28,
Copenhagen City Court issued a judgement where the Company was ordered to pay
DKK 865,700 ($170,283) including court costs and interests. The Company 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 ($78,680). 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.

The Companys 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, June 30, 2009 and September 2009 all include a note
expressing doubt about the Companys ability to continue as a going concern. The
inclusion of this note was due to the fact that the Company had negative working
capital of $4,135,000 and a shareholders deficiency of $1,718,000 as at
December 31, 2008, negative working capital of $4,485,000 and a shareholders
deficiency of $2,158,000 as at March 31, 2009, negative working capital of
$5,521,000 and a shareholder deficiency of $3,021,000 as at June 30, 2009,
negative working capital of $6,072,000 and a shareholder deficit of $3,435,000
as at September 30, 2009. This note also reflected the fact that the Company has
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 $2,073,000 for the nine
months ended September 30, 2009. The Company intends to fund its operations and
expansion through future sales and equity financing arrangements, which may be
insufficient to fund the capital expenditures, working capital and other cash
requirements for the current fiscal year. Thereafter, the Company will be
required to seek additional funds, either through sales and/ or equity
financing, to finance long-term operations. The successful outcome of future
activities cannot be determined at this time and there is no assurance that, if
achieved, the Company will have sufficient funds to execute the intended
business plan or generate positive operating results.

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These factors could raise substantial doubt about the Companys
ability to continue as a going concern.

As a result, the Company caution investors that there is a risk
that the business could fail. The working capital deficit as at December 31,
2008, March 31, 2009, June 30, 2009 and September 30, 2009 and the negative cash
flow from operations for the year ended December 31, 2008 and the nine months
ended September 30, 2009 continue to raise substantial doubt about the Companys
ability to continue as a going concern. Accordingly, there remained a
substantial doubt about the Companys 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 at September 30, 2009,
as reflected in the notes to the interim financial statements for the nine
months ended September, 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 on reasonable terms when
needed may have a material adverse effect on the Companys 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, the Companys
operations could be adversely impacted and the trading price of the common stock
may be adversely affected.

The Company is 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 the Companys 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, the Companys operations could be
adversely impacted and the trading price of the Companys common stock could be
adversely affected.

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

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.

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Both existing and new competitors will likely seek to target
the same customers that we are targeting, both using traditional advertising
models and the integrated media services business model that we are pursuing. In
addition, many of these new competitors will have greater financial and
operational resources than we do. The ability of our existing and potential
competitors to attract the customers and advertising and media service work that
we are targeting will reduce the revenues that we are able to achieve from our
business activities, will reduce our market share and decrease our ability to
generate profit from our operations.

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

We presently have approximately 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

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restrict our ability to sustain or increase our revenues.

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

We are highly dependent on Mr. Bent Helvang, our chairman, 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.

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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 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

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 agreement
terminated in accordance with its terms on June 30, 2009 as the contemplated
financing was not completed.

We are pursuing equity financing both in the U.S and in Europe,
  but as of yet we dont have agreements in place with any investors for
  any equity financing.

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

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

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

We may be, or may be joined as, a defendant in litigation
brought against our customers by third parties, our customers competitors,
governmental or regulatory authorities or consumers.

These actions could involve claims alleging, among other
things, that:

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

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

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

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

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

All of our assets are located outside the United States and we
do not currently maintain a permanent place of business within the United
States. All of our directors and officers are residents of Denmark or
Switzerland and all or a substantial portion of their assets are located outside
the United States. Consequently, it may be difficult for United States investors
to 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

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Company Accounting Oversight Board ("PCAOB").

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

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

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

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

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

• **we do not currently
  have a sufficient complement of external reporting, technical accounting or
  tax staff commensurate to support standalone external financial reporting under
  public Company or SEC requirements;

• **we do not have a fully integrated financial consolidation and reporting
  system and as a result, extensive manual analysis, reconciliation and adjustments
  are required in order to produce financial statements for external reporting
  purposes; and

• **we 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, 2010.

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

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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 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 227,671,940 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.

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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.

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 92,843,020 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

35

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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.

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

We issued 3,000,000 shares of our common stock to a three consultants
  pursuant to three separate consultant agreements in consideration for services
  provided by the consultant. We completed the share issuance pursuant to Section
  4(2) and Rule 506 of Regulation D of the Securities Act on the basis that each
  consultant is an accredited investor, as defined in Rule 501(a)
  of the Securities Act. Each investor represented its intention to acquire the
  securities for investment only and not with a view toward distribution. Appropriate
  legends have been affixed to the stock certificates issued to each consultant
  in accordance with Regulation D confirming that the shares cannot be resold
  or transferred other than pursuant registration under the Securities Act or
  an exemption from the registration requirements of the Securities Act. None
  of the securities were sold through an underwriter and, accordingly, there were
  no underwriting discounts or commissions involved. No registration rights were
  granted to the consultants.

Subsequent to September 30, 2009 and until November 16, 2009
the Company issued a total of 24,050,534 shares of common stock as described in
the Companys current report on Form 8-K filed on November 16, 2009.

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Item 6. Exhibits.

|Exhibit No. | Description                                                    
|----------- | ---------------------------------------------------------------
|31.1        | Section 302 Certification
      of Principal Executive Officer*
|31.2        | Section 302 Certification
      of Principal Financial Officer*
|32.1        | Section 906 Certification
      of Principal Executive Officer*
|32.2        | Section 906 Certification
      of Principal Financial Officer*

* Filed as an exhibit hereto

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SIGNATURES

Pursuant to the requirements of
the Securities Exchange Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.

|                        | **BARK GROUP INC.**
|----------------------- | -------------------
|                        |                    
|Date: November 16, 2009 | By:                
|                        |                    
|                        |                    
|                        |                    
|                        |                    
|                        |                    
|Date: November 16, 2009 | By:                
|                        |                    
|                        |                    
|                        |                    
|                        |                    

38

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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*

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