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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 endedJune 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[  
]

Indicate the number of shares outstanding of each of the
issuers classes of common stock, as of the latest practicable date.
As of August 19, 2009, there were 326,113,270 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 June 30, 2009
      (unaudited) and December 31, 2008                           | 1   
|          |                                                                                                                             |     
|          | Condensed Consolidated Statements of Operations for the three
      and six months ended June 30, 2009 and 2008 (unaudited) | 3   
|          |                                                                                                                             |     
|          | Condensed Consolidated Statements of Cash Flows for the six
      months ended June 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.                                | 17  
|          |                                                                                                                             |     
|Item 3.   | Quantitative and Qualitative Disclosures about Market Risk                                                                  | 26  
|          |                                                                                                                             |     
|Item 4 T. | Controls and Procedures                                                                                                     | 26  
|          |                                                                                                                             |     
|Part II   | OTHER INFORMATION                                                                                                           |     
|          |                                                                                                                             |     
|Item 1    | Legal Proceeding                                                                                                            | 28  
|          |                                                                                                                             |     
|Item 1 A  | Risk Factors                                                                                                                | 28  
|          |                                                                                                                             |     
|Item 2    | Unregistered Sales of Equity Securities and Use of Proceeds                                                                 | 37  
|          |                                                                                                                             |     
|Item 6.   | Exhibits.                                                                                                                   | 38  

i

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PART I FINANCIAL INFORMATION

Item 1. Financial Statements

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

|                                                                         |   | Unaudited |  |   |              | 
|------------------------------------------------------------------------ | - | --------- |  | - | ------------ | 
|                                                                         |   | June 30,  |  |   | December 31, | 
|Assets                                                                   |   | 2009      |  |   | 2008         | 
|Current assets:                                                          |   |           |  |   |              | 
|Cash and cash equivalents                                                | $ | -         |  | $ | 86           | 
|Accounts receivable, net of
      allowance for doubtful accounts of $11 |   |           |  |   |              | 
|and $251 at June 30,
      2009 and December 31, 2008                    |   | 430       |  |   | 243          | 
|Costs and estimated earnings
      in excess of billings on projects in  |   | 703       |  |   | 352          | 
|progress                                                                 |   |           |  |   |              | 
|Value added tax refund
      receivable                                  |   | -         |  |   | 156          | 
|Prepaid expenses and other current assets                                |   | -         |  |   | 97           | 
|                                                                         |   |           |  |   |              | 
|Total current assets                                                     |   | 1,133     |  |   | 934          | 
|                                                                         |   |           |  |   |              | 
|Property, plant and equipment, net of
      accumulated depreciation     |   | 4,969     |  |   | 5,011        | 
|Goodwill                                                                 |   | 3,240     |  |   | 3,230        | 
|Other intangible assets, net of accumulated
      amortization           |   | 31        |  |   | 63           | 
|Deferred financing costs, net
      of accumulated amortization          |   | 54        |  |   | 57           | 
|Total assets                                                             | $ | 9,427     |  | $ | 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 |   |   |              |  
|---------------------------------------------------------------- | - | --------- | - | - | ------------ | -
|                                                                 |   | June 30,  |   |   | December 31, |  
|Liabilities                                                      |   | 2009      |   |   | 2008         |  
|Current liabilities:                                             |   |           |   |   |              |  
|Accounts payable                                                 | $ | 2,211     |   | $ | 1,809        |  
|Accrued payroll and payroll
      related costs                  |   | 551       |   |   | 222          |  
|Accrued liabilities                                              |   | 507       |   |   | 568          |  
|Billings in excess of costs
      and estimated earnings on      |   |           |   |   |              |  
|projects in progress                                             |   | 353       |   |   | 80           |  
|Current portion of long-term
      debt                          |   | 2,381     |   |   | 1,567        |  
|Current portion of obligations under capital
      leases        |   | 132       |   |   | 124          |  
|Current portion of debt to
      redeemed stockholders           |   | 157       |   |   | 156          |  
|Advances from related parties                                    |   | 362       |   |   | 543          |  
|                                                                 |   |           |   |   |              |  
|Total current liabilities                                        |   | 6,654     |   |   | 5,069        |  
|                                                                 |   |           |   |   |              |  
|Long-term debt , net of current portion                          |   | 4,134     |   |   | 4,155        |  
|Long-term obligations under
      capital leases, net of current |   | 106       |   |   | 184          |  
|portion                                                          |   |           |   |   |              |  
|Long-term debt to redeemed
      stockholders, net of current    |   | 101       |   |   | 157          |  
|portion                                                          |   |           |   |   |              |  
|                                                                 |   |           |   |   |              |  
|Total liabilities                                                |   | 10,995    |   |   | 9,565        |  
|                                                                 |   |           |   |   |              |  
|Non-Controlling interests                                        |   | 1,453     |   |   | 1,448        |  
|                                                                 |   |           |   |   |              |  
|Commitments and contingencies                                    |   |           |   |   |              |  
|                                                                 |   |           |   |   |              |  
|Stockholders Deficiency                                         |   |           |   |   |              |  
|Stockholders' deficiency:                                        |   |           |   |   |              |  
|Preferred stock of $0.001 per share par value;
      5,000,000   |   |           |   |   |              |  
|authorized; 0 issued and
      outstanding.                      |   | -         |   |   | -            |  
|Common stock of $0.001 per share par value;                      |   |           |   |   |              |  
|2,000,000,000 shares
      authorized, 324,113,270 shares        |   |           |   |   |              |  
|issued and outstanding at June 30, 2009 and
      December 31,   |   |           |   |   |              |  
|2008                                                             |   | 324       |   |   | 16           |  
|Additional paid-in capital                                       |   | 1,594     |   |   | 1,844        |  
|Accumulated deficit                                              |   | (4,935    | ) |   | (3,612       | )
|Accumulated other comprehensive income (loss)                    |   | (4        | ) |   | 34           |  
|                                                                 |   |           |   |   |              |  
|Total stockholders deficiency                                   |   | (3,021    | ) |   | (1,718       | )
|                                                                 |   |           |   |   |              |  
|Totals liabilities and
      stockholders`deficiency             | $ | 9,427     |   | $ | 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 |   |  | Six months ended |  
|--------------------------------------------------- | - | ------------------ | - |  | ---------------- | -
|                                                    |   | June
      30      |   |  | June
      30    |  
|                                                    |   | 2009               |   |  | 2008             |  
|                                                    |   |                    |   |  |                  |  
|Net revenues                                        | $ | 695                |   |  | 1935             |  
|Cost of revenues                                    |   | (597               | ) |  | (1189            | )
|                                                    |   |                    |   |  |                  |  
|Gross Profit                                        |   | 98                 |   |  | 746              |  
|                                                    |   |                    |   |  |                  |  
|Selling, general and administrative expenses        |   | (710               | ) |  | (1064            | )
|Depreciation and amortization                       |   | (48                | ) |  | (67              | )
|Listing expenses                                    |   | 10                 |   |  | (400             | )
|                                                    |   |                    |   |  |                  |  
|Loss from operations                                |   | (650               | ) |  | (785             | )
|                                                    |   |                    |   |  |                  |  
|Other income (expenses):                            |   |                    |   |  |                  |  
|Interest income                                     |   | -                  |   |  | 4                |  
|Interest expense                                    |   | (148               | ) |  | (85              | )
|                                                    |   |                    |   |  |                  |  
|Total other income (expenses), net                  |   | (148               | ) |  | (81              | )
|                                                    |   |                    |   |  |                  |  
|Loss before income taxes and minority interest      |   | (798               | ) |  | (866             | )
|                                                    |   |                    |   |  |                  |  
|Benefit/ (provision) for income taxes               |   | -                  |   |  | (13              | )
|                                                    |   |                    |   |  |                  |  
|Net loss                                            |   | (798               | ) |  | (879             | )
|                                                    |   |                    |   |  |                  |  
|Net loss (gain) attributable to the Non-Controlling |   |                    |   |  |                  |  
|Interest                                            |   | (34                | ) |  | (25              | )
|                                                    |   |                    |   |  |                  |  
|Loss available to common
      stockholders         | $ | (764               | ) |  | (854             | )
|                                                    |   |                    |   |  |                  |  
|Loss per share                                      |   |                    |   |  |                  |  
|Basic and diluted                                   | $ | -                  |   |  | -                |  
|                                                    |   |                    |   |  |                  |  
|Weighted-average shares used to calculate net loss  |   |                    |   |  |                  |  
|per common share:                                   |   |                    |   |  |                  |  
|Basic and diluted                                   |   | 316,334,980        |   |  | 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)

|                                                            |   | 6 Months Ended      |   |   | 6 Months Ended      |  
|----------------------------------------------------------- | - | ------------------- | - | - | ------------------- | -
|                                                            |   | June
      30, 2009 |   |   | June
      30, 2008 |  
|Cash flows from operating activities:                       |   |                     |   |   |                     |  
|Net loss                                                    | $ | (1,323              | ) | $ | (1,773              | )
|Adjustments to reconcile net loss to net
      cash used in |   |                     |   |   |                     |  
|operating activities:                                       |   |                     |   |   |                     |  
|Depreciation and amortization                               |   | 65                  |   |   | 45                  |  
|Amortization of customer relationship                       |   | 31                  |   |   | 53                  |  
|Allowance for doubtful accounts                             |   | (240                | ) |   | -                   |  
|Stock based compensation                                    |   | 114                 |   |   | 135                 |  
|Deferred income tax benefit                                 |   | -                   |   |   | -                   |  
|Non-Controlling interests                                   |   | (51                 | ) |   | (35                 | )
|Changes in working capital:                                 |   |                     |   |   |                     |  
|Accounts receivable and related party
      receivables     |   | 53                  |   |   | (15                 | )
|Cost and estimated earnings in
      excess of billings on  |   | (351                | ) |   | 316                 |  
|projects                                                    |   |                     |   |   |                     |  
|Value added tax refund
      receivable                     |   | 156                 |   |   | (20                 | )
|Prepaid expenses and other current assets                   |   | 97                  |   |   | (116                | )
|Accounts payable                                            |   | 402                 |   |   | 1,264               |  
|Accrued expenses and other liabilities                      |   | 268                 |   |   | 144                 |  
|Billings in excess of costs
      and estimated earnings    |   | 273                 |   |   | (986                | )
|Net cash used in operating
      activities                 |   | (506                | ) |   | (988                | )
|Cash flows from investing activities:                       |   |                     |   |   |                     |  
|Purchase of property and equipment                          |   | (5                  | ) |   | (429                | )
|Release of restricted cash                                  |   | -                   |   |   | 597                 |  
|Net cash used in investing
      activities                 |   | (5                  | ) |   | 168                 |  
|Cash flows from financing activities:                       |   |                     |   |   |                     |  
|Proceeds from related party                                 |   | -                   |   |   | 238                 |  
|Repayment to related party                                  |   | (183                | ) |   | (95                 | )
|Proceeds from capital leases                                |   | -                   |   |   | 311                 |  
|Repayment of capital leases                                 |   | (71                 | ) |   | (37                 | )
|Proceeds from debt                                          |   | 777                 |   |   | 408                 |  
|Repayment of debt                                           |   | (56                 | ) |   | (462                | )
|Net cash provided by financing
      activities             |   | 467                 |   |   | 363                 |  
|Effect of exchange rates on cash and cash
      equivalents |   | (42                 | ) |   | (63                 | )
|Net decrease in cash and cash equivalents                   |   | (86                 | ) |   | (520                | )
|Cash and cash equivalents at beginning of
      period      |   | 86                  |   |   | 768                 |  
|Cash and cash equivalents at end of
      period            | $ | 0                   |   | $ | 248                 |  
|                                                            |   |                     |   |   |                     |  
|Supplemental information:                                   |   |                     |   |   |                     |  
|Cash paid for interest                                      | $ | 206                 |   | $ | 133                 |  
|Non-cash investing and financing activities:                |   |                     |   |   |                     |  
|Equipment acquired under
      capital leases               | $ | -                   |   | $ | 254                 |  
|Adjustment of minority interest to redemption
      value   | $ | (56                 | ) | $ | 156                 |  

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 5,521,000 at June
30, 2009) and limited financial resources available to pay ongoing financial
obligations as they become due. Additionally, as of June 30, 2009, the Company
had a stockholders deficiency of approximately USD 3,021,000 which resulted
primarily from operating losses incurred up until June 30, 2009.

Based
on the Companys current forecast, it anticipates that it will use approximately
USD 7,000,000 (being comprised of (i) negative working capital of approximately
USD 5,500,000, and (ii) expected use of cash of USD 1,500,000 over the next
twelve months in order to sustain its current operations and pay our current
liabilities. In particular, it will require additional financing in order to
repay its debt obligations as they mature and become payable. These principal
payments under the Companys debt obligations include an aggregate of USD
2,331,000 that becomes due and payable during the balance of 2009. This amount
does not include any funds necessary for the Company to expand its business. The
Company will require additional financing in order to pursue the expansion of
its business, either through growth or acquisitions.

5

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

The Companys sources of additional cash, in addition to cash
from operations and its operating line of credits, include its loan commitment
of DKK 4,000,000 ($759,171) 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 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 June 30, 2009, and the results of operations and cash flows for the
periods presented. The results of operations for the three and six months ended
June 30, 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 six months ended June 30, 2009 and 2008
transaction gains and losses were not material.

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

| |                                            |   | 3 months ended June |  |   | 6 months ended June | 
| | ------------------------------------------ | - | ------------------- |  | - | ------------------- | 
| |                                            |   | 2009                |  |   | 2008                | 
| | Net loss available to common stockholders: | $ | 764,,000            |  | $ | 854,000             | 
| | Translation adjustment:                    | $ | 42,000              |  | $ | 93,000              | 
| | Comprehensive loss                         | $ | 806,000             |  | $ | 947,000             | 

Loss per Share

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

7

---

BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Recent Accounting Pronouncements.

Effective
January 1,2009 , the Company implemented SFAS 157-2 for its nonfinancial assets
and liabilities that are re-measured at fair value on a non-recurring basis. The
adoption did not impact the Companys financial position or results of
operations. The Company may have disclosure requirements if it completes an
acquisition or incurs an impairment of its assets in future periods (See note
3).

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

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

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

8

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

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

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

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

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

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

9

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

In
April 2009, the FASB issued FSP SFAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly, (FSP FAS 157-4)
which provides additional guidance for estimating fair value in accordance with
SFAS 157 when the volume and level of activity have significantly decreased. FSP
157-4 also includes guidance on identifying circumstances that indicate a
transaction is not orderly. This standard is effective for periods ending after
June 15, 2009. The adoption of this standard did not have a material impact on
the Companys financial position or results of operations.

In
April 2009, the FASB issued FSP SFAS 107-1 and APB 28-1, Interim Disclosures
about Fair Value of Financial Instruments, (FSP FAS 107-1 and APB 28-1). FSP
FAS 107-1 and APB 28-1 amends SFAS No. 107, Disclosures about Fair Value of
Financial Instruments, to require disclosures about fair value of financial
instruments in interim as well as in annual financial statements. FSP FAS 107-1
and APB 28-1 amends APB Opinion No. 28, Interim Financial Reporting, to
require those disclosures in all interim financial statements. This standard is
effective for periods ending after June 15, 2009. The adoption of this standard
did not have a material impact on the Companys financial position or results of
operations.

In
May 2009, the FASB issued SFAS No. 165, Subsequent Events, (FAS 165). FAS
165 establishes general standards of accounting for and disclosure of subsequent
events. In addition, FAS 165 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. FAS 165 is effective for periods ending after
June 15, 2009 and accordingly, the Company adopted this standard in the second
quarter of 2009. The Company has evaluated subsequent events through the time of
filing its financial statements with the Securities and Exchange Commission
through August 19, 2009, the issuance date of this Form 10Q.

In
June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards
CodificationTM and the Hierarchy of Generally Accepted Accounting
Principles  A Replacement of FASB Statement No. 162, (FAS 168). FAS 168
establishes The FASB Accounting Standards CodificationTM
(Codification) as the source of authoritative accounting principles recognized
by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with GAAP in the United States. The
Codification does not change current U.S. GAAP, but is intended to simplify user
access to all authoritative U.S. GAAP by providing all the authoritative
literature related to a particular topic in one place. The Codification is
effective for periods ending after September 15, 2009, and as of the effective
date, all existing accounting standard documents will be superseded. The Company
does not expect the adoption of this standard to have a material impact on the
Companys financial position or results of operations.

10

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Note 3 - Fair Value Measurement

Valuation Hierarchy

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

The
following table provides the assets and liabilities carried at fair value
measured on a recurring basis as of June 30, 2009:

|         |   |                   |  |   | Fair ValueMeasurements at June30,
      2009 | 
|-------- | - | ----------------- |  | - | -------------------------------------------- | 
|         |   |                   |  |   | Quoted prices                                | 
|         |   | Total Carrying    |  |   | in active                                    | 
|         |   | Value at June 30, |  |   | markets (Level                               | 
|         |   | 2009              |  |   | 1)                                           | 
|         |   |                   |  |   |                                              | 
|Goodwill | $ | 3,240,000         |  | $ | -                                            | 

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 six months ended June 30, 2009 customers C,D and K accounted for
approximately 11%, 26%, and 30%, respectively of revenue. During the six months
ended June 30, 2008 customers E, and L accounted for approximately 41% and 10%,
respectively of revenue. No other customers individually represented more than
10% of revenue for any period presented.

As
of June 30, 2009 customers K, E and C accounted for approximately 38%, 13% and
12 % 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. The Company has, as of June 30,
2009 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.

11

---

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 June 30, 2009 DKK 1,360,000 (USD 258,000) and as of
December 31, 2008 DKK 1,653,000 (USD 312,800) will be paid in 8 quarterly
installments during 2009 and 2010, including interest at a variable rate, which
is currently 5%, which will be accrued and paid on December 31, 2009 and 2010,
respectively. Accrued interest USD 4,000 as of June 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 under Accounting Research Bulletin No. 51,
Consolidated Financial Statements (ARB 51) (i.e., the historical cost,
increased or decreased for the minoritys share of net income or loss and
dividends). All adjustments related to the application of the above would be
recorded within additional paid-in capital. Effective January 1, 2009, the
Company adopted FASB issued SFAS N0. 160 and accordingly, adjustment relating to
above has no impact on consolidated net loss of the Company, net loss
attributable to the Company or loss available to common stock holders of the
Company. Prior to adoption of SFAS 160, the impact of the adjustment was on loss
attributable to common stockholders and accordingly the Loss Per Share (LPS) at
December 31, 2008 was reported $(0.21) . There are no deferred income tax
consequences arising from the recognition of the EITF D-98 adjustments as these
adjustments are not deductible under Danish tax law.

At
December 31, 2008, the redemption value exceeded the ARB 51 value, and therefore
the minority interest was recorded at the redemption value of DKK 7,653,000
which amounted to USD 1,448,000. At June 30, 2009, the redemption value exceeded
the ARB 51 value, and therefore the minority interest was recorded at the
redemption value of DKK 7,653,000 which amounted to USD 1,453,000.

12

---

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           |  
|-------------------------------------------------------------------- | - | --------------- | - | - | --------------- | -
|                                                                     |   | June 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)                       |   |                 |   |   |                 |  
|ARB 51 adjustment - Bark Advertising loss
      attributable to Non- |   |                 |   |   |                 |  
|Controlling interests                                                |   | (51             | ) |   | (105            | )
|EITF D-98 adjustment - excess of redemption
      amount over ARB 51 |   |                 |   |   |                 |  
|adjustment                                                           |   | 56              |   |   | 51              |  
|ARB 51 adjustment - Currency adjustment                              |   |                 |   |   | (19             | )
|Redeemable shares reclassified to liabilities                        |   | -               |   |   | (313            | )
|Balance at end of period                                             | $ | 1,453           |   | $ | 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 1,329,000) which expires on November 15, 2009. As at June
30, 2009 and December 31, 2008, the amount outstanding under this line of credit
facility was $1,368,000 and $1,353,000, respectively.

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 six
month ended June 30, 2009 and 2008, the Company recorded USD 114,000 and USD
128,000 of compensation expense, respectively, related to these awards. For the
three months ended June 30, 2009 and 2008 the Company recorded compensation
expense of USD 57,000 and USD 64,000 respectively.

As
of June 30, 2009 there was USD 209,236 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 11 months. No shares were vested during the first half year of
2009

Note 8- Related party transactions

Fee to Chairman of the Board Bent Helvang

BH
Media ApS (a Company 100% owned by Bent Helvang) is according to contract
entitled to invoice the Company USD 34.200 and USD 120,660 during the six months
ended June 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 June 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 June 30, 2009, The Company has a liability of approximately DKK
775,000 (USD 147,032) which has been classified in advances from related
parties.

13

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Fee to CEO Anders Hageskov

Lugano
Communication and Entertainment (a Company in which Anders Hageskov is employed)
invoiced the Company USD 142.120 and USD 168,920 during the six month period
ended June 30, 2009 and 2008, respectively, for services rendered by Anders
Hageskov to Bark Copenhagen and Bark Advertising. For the three months ended
June 30, 2009 and 2008 Lugano Communication and Entertainment invoiced the
Company USD 71,060 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
June 30, 2009 is USD 201,248. This loan is due for repayment in full in 2009
when the Company gets a positive cash flow. Interest expense for the six month
periods ended June 30, 2009 and 2008 was USD 7,015 and USD 3,764, respectively.
For the three month ended June 30, 2009 and 2008 the interest expense was USD
3,425 and USD 2,107 respectively.The balance of this loan, including accrued
interest, has been included in advances from related parties. Certain
stockholders of Bark Group own 100% of the outstanding shares of Bark Holding.
In addition Bark Holding has committed to issue a bridge loan up to DKK
4,000,000 (USD 759,172)

Credit notes to share holders

Bark
Copenhagen has in the six months period ended June 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 13,969) by June 30, 2009
..The Company intends to repay this loan in full in 2009 when the Company gets a
positive cash flow.

Note 9 - Commitments and contingencies

Litigation

In
March 2008, Bark Corporation received a notice of a claim from two former
employees for damages and compensation of approximately DKK 1,000,000 (USD
178,600), based on an alleged breach by Bark Corporation of the terms of
employment and non-payment for the transfer of specified intellectual property.
In March 2008, the Company paid DKK 242,500 (USD 43,300) to such employees
related to the employment element of the claim. On April 8, 2008 Bark
Corporation received a petition from the former employees reducing their claim
to DKK 757,500 (USD 135,300). The Company believes that, in order to settle this
claim, a payment will be required. Using the guidance of Statement of Financial
Accounting Standards No. 5, Accounting for Contingencies (SFAS No. 5) the
Company has as of December 31, 2008 provided for an amount of DKK 250,000 (USD
47,300). However, in April, 2009 Bark Corporation lost the case in the lower
court. The Company has decided to appeal to a higher court instance. The Company
has decided to increase the provision to DKK 450,000 (USD 85,400) using SFAS
No. 5., that is considered to be probable and reliably estimable. This amount
has been included as a component of accrued liabilities.

14

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Note 10  Net loss per share

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

|                                                          |   | Three months Ended |   |   | Six months Ended |  
|--------------------------------------------------------- | - | ------------------ | - | - | ---------------- | -
|                                                          |   | June
      30      |   |   | June
      30    |  
|                                                          |   | 2009               |   |   | 2008             |  
|Numerator:                                                |   |                    |   |   |                  |  
|                                                          |   |                    |   |   |                  |  
|Loss available to common shareholders                     |   | (764               | ) |   | (854             | )
|                                                          |   |                    |   |   |                  |  
|Denominator:                                              |   |                    |   |   |                  |  
|Shares used in computation - basic:                       |   |                    |   |   |                  |  
|Weighted average shares outstanding                       |   | 324,113,700        |   |   | 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   |   | 316,334,980        |   |   | 277,484,080      |  
|Shares used in computation - diluted:                     |   |                    |   |   |                  |  
|Weighted average shares outstanding                       |   | 316,334,980        |   |   | 277,484,080      |  
|Dilutive effect of common shares outstanding              |   |                    |   |   |                  |  
|subject to repurchase                                     |   | -                  |   |   | -                |  
|                                                          |   |                    |   |   |                  |  
|Shares used in computing diluted net loss per
      share |   | 316,334,980        |   |   | 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.

Note 11  Subsequent events

Stock Split

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.

15

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BARK GROUP INCNOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

Stock Issuance

Subsequent
to June 30, 2009, the Company issued 2,000,000 shares of common stock to
consultants in its fund raising efforts and recorded a share of approximately
$450,000 relating to their services

Termination of Repurchase and Lock-Up Agreements

In
connection with the Companys acquisition of Bark Corporation, the Company
entered into Repurchase and Lock-Up Agreements with each of its shareholders who
purchased shares of the Companys common stock prior to the completion of the
acquisition of Bark Corporation. The Repurchase and Lock-Up Agreements
originally provided that the Company would be entitled to purchase all shares
held by each shareholder for a price of $0.001 per share in the event that the
Company did not complete a major financing transaction by June 30, 2008. In July
2008, the Company delivered to the shareholders a letter confirming the
agreement to extend the right of repurchase to September 30, 2008. In April 2009
the Company delivered a further letter to the shareholders confirming the
agreement to extend the right of repurchase to June 30, 2009.

Under
these Repurchase and Lock-Up Agreements, as amended, each shareholder also
agreed to a lock-up agreement pursuant to which the number of shares that the
shareholder would be entitled to sell in any one month period for a period of
one year following the date on which the shares of our common stock become
eligible for trading on the OTC Bulletin Board has been restricted to the
greater of (i) 10% of the shares held by the shareholder, and (ii) 250,000
shares of our common stock.

The
Company determined in August,2009 to terminate the Repurchase and Lock-Up
Agreements and to release the shareholders from their respective obligations
that were included in the Repurchase and Lock-Up Agreements. As a result of this
termination and release and effective July 30, 2009, the Company no longer have
the right to purchase any shares held by original shareholders of Bark Group
Inc. and the original shareholders of Bark Group Inc. are able to resell their
shares without restriction, subject to compliance with applicable securities
laws. For clarity, each of the original shareholders of Bark Group Inc. retain
their original shares and are no longer subject to any contractual restriction
on resale between us and the shareholder

Termination of Engagement Agreement with DeBondo Capital

The
Company has terminated the engagement letter with Debondo Capital Inc.
(Debondo) originally dated October 2, 2007, as amended, as the financing
contemplated under the engagement letter was not completed by June 30, 2009.

Termination of Indemnification Agreement with DeBondo
Capital

In
addition, and as a result of the termination of the Repurchase and Lock-Up
Agreements discussed above, the Company has agreed to terminate the
indemnification agreement dated February 29, 2008 with DeBondo Capital Limited
(Hong Kong), as amended, wherein DeBondo Capital Limited (Hong Kong) agreed to
pay to the Company compensation of $25,000 if the Company exercised the right to
redeem the shares held by the Exwal shareholders pursuant to the Repurchase and
Lock-Up Agreement by June 30, 2009.

16

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

The following discussion and analysis summarizes the
significant factors affecting our condensed consolidated results of operations,
financial condition and liquidity position for the three and six months ended
June 30, 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 $10 million in 2009, but we can provide no assurance as to whether we
will be successful in such efforts.

Revenues

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

- fees for advertising services,
- commissions on media placements,

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- incentive based revenue, or
- a combination of all of the above

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 $1,938,000 during the six months ended
June 30, 2009 as compared to $4,643,000 during the six months ended June 30,
2008, representing a decrease of $2,705,000 or 58%. 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 41% of the Companys revenues in the
six months ended June 30, 2008. S. Trading was lost as a client because it
ceased business operations due to financial problems. As for the three months
ended June 30, 2009 compared to June 30, 2008 the revenue declined with $
1,240,000 from $ 1,935,000 to $ 695,000. The decrease was caused by the loss of
Totempo as stated above. Further several projects  planned for execution in Q2
2009  were postponed to the latter half of 2009.

The Company is presently working intensively with the objective
of on getting new customers and gained five additional new customers in the
first half year of 2009. These efforts will be continued during the latter half
of 2009.

Cost of Revenues

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

- a portion of salaries for professional staff attributable to providing
  professional services,
- consultancy fees,
- film production,
- photography,
- web site design,
- production of radio commercials,
- printed materials, and
- layout of advertisements for newspapers and magazines.

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

Cost of revenues totaled $1,475,000 for the six months ended
June 30, 2009 as compared to $3,406,000 for the six months ended June 30, 2008,
a decrease of $1,931,000, or 57%. External purchases went down by 67% and
salaries went down by approximately 22%. The main reason for the lower external
purchases was because we made fewer commercial films during the 2009 period
compared to the 2008 period. Salaries went down due to a reduction of staff and
a general cut of 10% in salaries for all employees. As for the three months
ended June 30, 2009 and 2008 cost of revenues decreased with $ 592,000 or app.
50% from $ 1,189,000 in 2008 to $ 597,000 in 2009. External purchases decreased
with 71% and the salaries with 22% for the same reasons as described for the
variances between the six month ended June 30, 2009 and 2008

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Gross Profit

For the six months ended June 20, 2009 gross profit was reduced
from $1,237,000 to 463,000 compared to the 2008 period. Gross margins decreased
to 24% during the 2009 period as compared to 27% 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%. As for the three
months ended June 30, 2009 and 2008 the decrease in gross profit was $ 648,000
or 87% due to the loss of Totempo as a customer and the postponing of projects
from Q 2 2009 to the latter half of 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
$1,453,000 for the six months ended June 30, 2009 as compared to $1,730,000 for
the six months ended June 30, 2008, representing a decrease of $277,000, or 16%.
The decrease is primarily related to use of consultants in the second quarter of
2008. During the six months ended June 30, 2009 the Company expensed audit fees
related to year end auditing of 2007 and 2008. For the three months ended June
30, 2009 SG&A expenses decreased by $ 354,000 to $ 710,000 compared to the
three months ended June 30, 2008. The decrease is mainly caused by a general 10%
cut of all salaries 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 $95,000 for the six
months ended June 30, 2009 as compared to $124,000 for the six months ended June
30, 2008, representing a decrease of $29,000, or 23%. Amortization of customer
relationships decreased to $30,000 during the 2009 period compared to $43,000 in
the 2008 period. Depreciations on property, plant and equipments decreased to
$65,000 during the 2009 period as compared to $81,000 during the 2008 period. As
for the three months ended June 30, 2009 the total of depreciations and
amortizations decreased by $ 19,000 to $ 48,000 compared with a total of $
67,000 for the three months ended June 30, 2008. The decrease s due to a
combination of the digressive amortization of customer relations and a full
depreciation of certain fixed assets in 2009.

Listing Expenses

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

Listing expenses totaled $3,000 for the six months ended June
30, 2009 as compared to $1,032,000 for the six months ended June 30, 2008,
representing a decrease of $1,029,000. 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 June 30, 2009 compared to the three months ended June 30,
2008 the total variance of listing expenses was $ 410,000. In the second quarter
of 2009 the Company referred to much accrued for listing expenses in the first
quarter which resulted in a income of $ 10,000 .

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 $286,000 for the six months ended
June 30, 2009 as compared to $197,000 for the six months ended June 30, 2008.
The increase is mainly relating to interest from creditors due to delayed
payments. Primarily due to delayed payments, interest expenses in the three
months ended June 30, 2009 increased with $ 63,000 compared to the three months
ended June 30, 2008.

Net Loss

The Company recorded a net loss of $1,374,000 for the six
months ended June 30, 2009 as compared to a net loss of $1,808,000 for the six
months ended June 30, 2008, a decrease of $434,000, or 24%. The main reason for
the decrease is lower listing expenses, partly off-set by lower gross profit. As
for the three months ended June 30, 2009 the Companys net loss was $ 798,000 as
compared to a net loss of $ 879,000 for the three months ended June 30, 2008.
The decrease was caused by lower listing expenses partly off-set by postponing
of projects from Q 2 2009 to the latter half of 2009.

Liquidity and Capital Resources

Cash and Working Capital

As of June 30, 2009 the Company had cash of $ 0, a decrease of
$ 86,000 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 $5,521,000 at
June 30, 2009, an increase of $1,386,000. The increase in working capital
deficit is mainly due loss in the six months ended June 30, 2009 and delayed
payments.

Cash Requirements

The Company is presently experiencing negative cash flows from
operating activities and have a working capital deficit. Additionally, as of
June 30, 2009, the Company reported a shareholders deficit which resulted
primarily from operating losses incurred through 2009. The Companys working
capital deficit was $5,521,000 as of June 30, 2009. The Company is using cash of
approximately $375,000 per quarter in operations. Based on current forecast, it
is anticipated that that the Company will use approximately $7,000,000 (being
comprised of (i) negative working capital of approximately $5,500,000, and (ii)
expected use of cash of $1,500,000 in the next 4 quarters) over the next twelve
months in order to sustain our current operations and pay our current
liabilities. This amount does not include any funds necessary for us to expand
our business. The Company will require further additional financing in order to
pursue the expansion of its business, either through growth or acquisitions.

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,

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include a loan commitment of DKK 4,000,000 ($759,171) 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 required additional financing in order to repay
debt obligations as they mature and become payable. These principal payments
under debt obligations include an aggregate of $2,331,000 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 plan 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 also entered into the engagement agreement with
PacificWave Partners Limited with the objective of securing additional financing
in the amount of $10 million. As contemplated financing were not achieved the
Company decided not to prolong the agreement with PacificWave Partners Limited.
The agreement was terminated as of June 30, 2009.

The Company plans to pursue alternate financing arrangements,
which may be either debt or equity financing. The Company doesnt have
commitments for any such financing in place. If the Company doesnt succeed in
raising additional financing, it may not be able to expand its business as
anticipated. If the Company will be 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 the proceeds to repay outstanding
debt.

Bank Indebtedness

Bark Corporation borrowed DKK 9,000,000 (equivalent to $1,773,400
  as at December 31, 2007) pursuant to a credit facility with Danske Bank in May
  2007 in order to enable Bark Corporation to complete the acquisition of Bark
  Copenhagen and Bark Media. Total credit line on this loan was DKK 7,000,000
  ($1,328,550) as of June 30, 2009. The maturity date of this loan has been extended
  to November 15, 2009.Current interest rate of this loan is 5.75% . At
  June 30, 2009 and December 31, 2008, the outstanding balance of line of credit
  was $1,368,000 and $1,353,000, respectively, including accrued interest on the
  outstanding balance of line of credit.

Bark Property obtained a DKK 14,900,000 ($2,662,300) loan on
May 16, 2008 bearing variable interest of currently 5.4% expiring in 2037 (no
installments in the first 10 years and to be repaid over the last 20 years) from
Realkredit Danmark (a credit institution). Interest is payable on the last
working day of each quarter. This loan is secured by a mortgage against our
Copenhagen office property as a first priority mortgage. On November 21, 2008
Bark Corporation obtained a loan of DKK 1,611,000 ($287,800) from Realkredit
Danmark bearing a variable interest rate of currently 5.80% expiring in 2037 (no
installments in the first 10 years and to be repaid over the last 19 years). At
June 30, 2009 and December 31, 2008, the outstanding balances of the loans
aggregating approximately $3,135,000 and $3,174,000, respectively.

On March 7, 2008, two new bank loans totaling DKK 7,000,000
(USD 1,324,500) were entered into. The two new loans are to be repaid in
quarterly installments over 15 years. The interest rate is fixed quarterly as
"Danske Bor" plus a margin of 3.00% . At June 30, 2009 and December 31, 2008,
the outstanding balance of these loans aggregating $ 1,052,000 and $1,087,000,
respectively.

Bark Copenhagen has a floating interest rate line of credit
facility in the amount of DKK 2,700,000 ($512,400). As at June 30, 2009 and
December 31, 2008, the amount outstanding under this line of credit facility was
$498,000 and $123,000, respectively. The line of credit facility is repayable in
full on September 30, 2009. The Company plan to negotiate an extension of this
maturity date to June 2010, although the Company cannot provide assurance of a

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successful extension. The rate of interest payable under the
line of credit facility is presently 8.25% per annum.

Bark Group Inc. obtained two additional short term loans of DKK
  2,125,000 ($403,310) as of June 30, 2009) on April 3, 2009 in order to bridge
  finance current financing until capital have been raised. The loan was advanced
  by private non-related party investors. Both loans are due for repayment on
  November 1, 2009 together with accrued interest of DKK 212,500 ($40,331).

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 June 30, 2009 was $201,248 including accrued interest. The loan is due for
repayment in full during 2009.

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 ($714,700)
  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 six months ended June 30, 2009 have been prepared assuming a
going concern. The Company currently has and had as at both June 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
June 30, 2009, the Company had a shareholders deficit of $3,021,000 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 continues to use cash of approximately $375,000 per
quarter in operations and accordingly, the Company estimate that it will use
approximately $7,000,000 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 ($759,172)
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.

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As a result of the above, the Company believes that a
substantial doubt about the ability to continue as a going concern remained as
at June 30, 2009, as reflected in the notes to the condensed consolidated
unaudited financial statements for the six months ended June 30, 2009. The
condensed consolidated unaudited financial statements for the six months ended
June 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 $506,000 in the six months ended June
  30, 2009, compared to use of cash of $ 988,000 in the six months ended June
  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 $1,374,000 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 six months ended June
30, 2009 by buying and selling equipment. In the six months ended June 30, 2008
cah from investing was positive with $ 168,000 composed by investment of
$429,000 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 $467,000 from financing
activities during the six months ended June 30, 2009, which represented net
repayments/referred accruals to related parties of $183,000 and proceeds from
debt of $777,000, offset by repayments of debts of $ 56,000 and capital leases
of $71,000. In the six months ended June 30, 2008 the Company generated cash of
$363,000 composed by proceeds from related parties of $ 238,000, proceeds from
debt of $408,000, proceeds from capital leases of $311,000 offset by repayments
related partys of $ 95,000, debts of 462,000 and capital leases of $37,000.

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.

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

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

•      Fixed-fee contracts are
  generally recognized as earned based on the proportional performance method
  of revenue recognition. In assessing contract performance, both input and output
  criteria 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 compliance with Emerging Issues Task Force (EITF) Issue
No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent , we
assess whether our agency or the third-party supplier is the primary obligor. We
evaluate the terms of our client agreements as part of this assessment. In
addition, we give appropriate consideration to other key indicators such as
latitude in establishing price, discretion in supplier selection and credit risk
to the vendor. For a substantial portion of our client contracts we act as
principal as we are the primary obligor and bear credit risk related to the
services we provide. In these contracts we record revenues and costs of revenues
gross. In certain contracts we record a net amount principally on those
contracts where we earn a commission.

Non controlling interests

Certain consolidated subsidiaries of Bark Group issued equity
shares to parties unrelated to the Company. The Company accounts for such
transactions in accordance with Staff Accounting Bulletin No. 51, Accounting
for Sales of Stock by a Subsidiary (SAB 5H). SAB 5H requires that the
difference between the carrying amount of the Companys investment in the
subsidiary and the underlying net book value of the subsidiary after the
issuance of the shares be recognized either as a gain or loss in the
consolidated statement of operations or as a capital transaction. In these
instances it is the Companys policy to consider gains and losses arising from
such issuances of shares by a subsidiary as equity transactions; as such no gain
or loss is recognized in the income statement.

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

Property, plant and equipment

Property, plant and equipment are stated at historical cost
less accumulated depreciation. Maintenance and repairs are charged to expense as
incurred. Additions, improvements and replacements that extend the assets life
are

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capitalized. Property, plant and equipment, less applicable
residual value, is depreciated using the straight-line method over the estimated
useful lives of such assets.

The useful lives for computing depreciation are as follows:

Buildings
    50      yearsFurniture, fixtures and computer equipment
    3 -
      5      years


Leases

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

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

Off-Balance Sheet Arrangements

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

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Item 3. Quantitative and Qualitative Disclosures about
Market Risk.

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

Item 4 T. Controls and Procedures.

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 June 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 June 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 June 30, 2009 that have materially
affected, or are reasonably likely to materially affect, our internal control
over financial reporting.

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

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,

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process, or report external financial data reliably in
accordance with generally accepted accounting principles such that there is more
than a remote likelihood that a misstatement of the Company's annual or interim
financial statements that is more than inconsequential will not be prevented or
detected. A control deficiency exists when the design or operation of a control
does not allow management or employees, in the normal course of performing their
assigned functions, to prevent or detect misstatements on a timely basis. A
deficiency in design exists when:

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

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

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

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

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

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PART IIOTHER INFORMATION

Item 1. Legal Proceedings

In March 2008, Bark Corporation received a notice of a claim
from two former employees for damages and compensation of approximately DKK
1,000,000 ($178,600), based on an alleged breach by Bark Corporation of the
terms of employment (employment element of the claim) and non-payment for the
transfer of specified intellectual property (IP element of the claim). In
March 2008, we paid DKK 242,500 ($43,300) to such employees related to the
employment element of the claim. On April 8, 2008 Bark Corporation received a
petition from the former employees reducing their claim to DKK 757,500
($135,300), representing the IP element of the claim. As at December 31, 2008
and as of the date of Annual Report, we believe that, in order to settle the IP
element of the claim, a payment will be required. We have provided in our
financial statements for the six months ended June 30, 2009 for an amount of DKK
450,000 ($85,407) that is considered to be a probable and reliable estimable of
the amount that will be required to settle these claims. On April 28, Copenhagen
City Court issued a judgement where the Company was ordered to pay DKK 865,700
($164,304) including court costs and interests. We have decided to appeal the
judgement to the Danish Eastern High Court. It is our legal adviser`s
expectation that the High Court will decrease the amount determined by the City
Court with DKK 400,000 ($75,917). 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 and June 30, 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. 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 $1,374,000 for the six months ended June 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

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generate positive operating results. These factors could raise
substantial doubt about the Companys ability to continue as a going concern. As
a result, we caution investors that there is a risk that our business could
fail.

As a result, the Company cautions investors that there is a
risk that the business could fail. The working capital deficit as at December
31, 2008, March 31, 2009 and June 30, 2009 and the negative cash flow from
operations for the year ended December 31, 2008 and the six months ended June
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 June 30, 2009, as reflected in the notes to
the interim financial statements for the six months ended June, 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

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competitors are emerging who will compete with our business
strategy of providing integrated media and advertising professional
services.

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

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

We presently have approximately 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

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same time as we attempt to expand our business and secure new
customers. There is no assurance that our existing customers will continue their
relationships with us or engage us for new advertising and marketing programs or
services.

Our inability to preserve these customers relationships and
secure new engagements from existing customers will restrict our ability to
sustain or increase our revenues.

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

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

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and retain additional key professional personnel, or if we were
unable to retain and motivate our existing key professional personnel, we may
not be able to sustain our business or execute our business expansion strategy
with the result that our business may fail.

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

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

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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.

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

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solely upon such civil liabilities. Consequently, you may be
effectively prevented from pursuing remedies under U.S. federal securities laws
against our directors and officers.

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

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

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

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

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

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

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

•      we
  do not currently have a sufficient complement of external reporting, technical
  accounting or tax staff 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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If we fail to maintain proper and effective internal
controls, our ability to produce accurate and timely financial statements could
be impaired and investors views of us could be harmed.

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

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

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

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

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

Risks Relating To Our Common Stock

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

35

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

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

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

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

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

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

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may result in further downward pressure on the price of our
common stock.

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

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

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

We completed the following sales of securities without registration
  under the Securities Act of 1933 during the quarter ended June 30, 2009.

| | 1. | We issued 2,500,000 shares of our common stock to a
      consultant pursuant to a consultant agreement in consideration for
      services provided by the consultant. We completed this offering pursuant
      to Rule 506 of Regulation D of the Securities Act on the basis that the
      consultant is an accredited investor, as defined in Rule 501(a) of the
      Securities Act. The 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 certificate issued to
      the purchaser 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
  consultant.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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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: August 19, 2009 | By: | /s/
      Anders Peter Hageskov                                     
|                      |     |                                                                     
|                      |     | Anders Peter Hageskov                                               
|                      |     | President and Chief Executive Officer                               
|                      |     | (Principal Executive Officer)                                       
|                      |     |                                                                     
|Date: August 19, 2009 | By: | /s/
      Ulrik Gerdes                                              
|                      |     |                                                                     
|                      |     | Ulrik Gerdes                                                        
|                      |     | Chief Financial Officer                                             
|                      |     | (Principal Financial Officer and Principal
      Accounting Officer)

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EXHIBIT INDEX



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

40

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