Original Bark Co (Form: 8-K, Received: 11/10/2021 16:27:42)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date Earliest Event Reported):

November 10, 2021

The Original Bark Company

(Exact name of registrant as specified in its charter)

Delaware

001-39691

83-4109918

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

221 Canal Street

New York, NY

10013

(Zip Code)

(Address of Principal Executive Offices)

(855) 501-2275

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e- 4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange on

which registered

Common Stock, par value $0.0001

BARK

New York Stock Exchange

Warrants, each warrant exercisable for one share of Common Stock at an exercise price of $11.50 per share

BARK WS

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On November 10, 2021, The Original BARK Company (the “Company”) issued a press release announcing its financial results for its fiscal second quarter ended September 30, 2021. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Resignation of Officer

On November 10, 2021, the Company announced the resignation of John Toth as Chief Financial Officer effective as of November 12, 2021. In connection with Mr. Toth’s resignation, the Company intends to enter into a release agreement with Mr. Toth, as well as an advisor agreement with Mr. Toth.

Appointment of Officer

On November 10, 2021, the Company announced that Howard Yeaton has been appointed as interim Chief Financial Officer effective as of November 12, 2021.

Mr. Yeaton, age 66, has been the managing principal of Financial Consulting Strategies, LLC (“FCS”) since 2003, a firm serving principally early stage public companies with financial reporting support and other related strategic services. Until November 2019, Mr. Yeaton served as a director, Vice Chairman and Chairman of the audit committee for Stewardship Financial Corporation, a community bank. From October 2018 to December 2019, Mr. Yeaton served as Chief Executive Officer of Akers Biosciences, Inc., a public company listed on the Nasdaq Capital Market and a client of FCS, and from October 2018 to August 2020, he also served as Interim Chief Financial Officer of Akers Biosciences, Inc. From October 2014 to November 2019, Mr. Yeaton served as Interim Chief Financial Officer of Propel Media, Inc., and from July 2014 to July 2015, Mr. Yeaton served as Interim Chief Financial Officer of Energous Corporation, a public company listed on the Nasdaq Capital Market; both clients of FCS. In addition, prior to founding FCS, Mr. Yeaton served in various financial leadership positions for Konica and Teco Energy. Mr. Yeaton began his career with Deloitte, an international accounting and auditing firm. Mr. Yeaton earned a Bachelor of Science in accounting from Florida State University and a Masters in Business Administration from the University of Connecticut.

On November 7, 2021, the Company entered into an employment agreement (the “Employment Agreement”) with Mr. Yeaton. As compensation for his services as interim Chief Financial Officer of the Company, upon his commencing employment on November 12, 2021, Mr. Yeaton will receive (1) a salary of $360,000 per annum; and (2) eligibility, subject to continued employment with the Company, to participate in the executive benefit plans maintained by the Company. The above description is a summary of the Employment Agreement and does not purport to be complete and is subject to, and is qualified in its entirety by reference to the full text of the Employment Agreement, which is filed as Exhibit 10.1 with this Current Report on Form 8-K and is incorporated herein by reference.

In connection with Mr. Yeaton joining the Company, the Company will enter into its standard indemnification agreement with Mr. Yeaton, which requires the Company under the circumstances and to the extent provided for therein, to indemnify Mr. Yeaton to the fullest extent permitted by applicable law against certain expenses and other amounts incurred by him as a result of him being made a party to certain actions, suits, investigations and other proceedings by reason of the fact that he is or was an officer or employee of the Company.

There are no family relationships between Mr. Yeaton and any of the Company’s directors or executive officers and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits


Exhibit No.						Description
10.1						Employment Agreement between the Company and Howard R. Yeaton dated November 7, 2021.
99.1						Press release dated as of November 10, 2021
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

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 hereunto duly authorized.


The Original BARK Company


By:			/s/ John Toth
			Name: John Toth
			Title: Chief Financial Officer

Date: November 10, 2021

Employment Agreement

This Agreement (the “Agreement”) is entered into by and between Howard R. Yeaton (the “Executive” or “you”) and The Original BARK Company, a Delaware corporation (the “Company”).

1.Duties and Scope of Employment.

(a)Position. Subject to the terms of this Agreement, the Company agrees to employ the Executive (the “Employment”) in the position of Interim Chief Financial Officer. The Executive shall report to the Company’s Chief Executive Officer.

(b)Obligations to the Company. During his Employment, the Executive (i) shall devote a substantial portion of his professional time to Company duties, provided, however, that the Executive may devote such time as necessary to maintain his current financial consulting business so long as it does not materially interfere with the fulfillment of duties to the Company, and provided that Executive's employment, consulting or other business activities do not create a conflict of interest with the Company, (ii) shall not assist any person or entity in competing with the Company or in preparing to compete with the Company and (iii) shall materially comply with the Company’s policies and rules, as they may be in effect from time to time.

(c)No Conflicting Obligations. The Executive represents and warrants to the Company that he is under no obligations or commitments, whether contractual or otherwise, that are inconsistent with his obligations under this Agreement. The Executive represents and warrants that he will not use or disclose, in connection with his Employment, any trade secrets or other proprietary information or intellectual property in which the Executive or any other person has any right, title or interest and that his Employment will not infringe or violate the rights of any other person.

(d)Definitions. Certain capitalized terms are defined in Section 10.

2.Salary. The Company shall pay the Executive as compensation for his services a base salary at a gross annual rate of $360,000 (as may be adjusted, the “Base Salary”). Such salary shall be payable in accordance with the Company’s standard payroll procedures and shall be subject to adjustment pursuant to the Company’s executive compensation policies in effect from time to time.

3.Executive Benefits. During his Employment, the Executive shall be eligible for paid time off in accordance with the Company’s PTO policy, as in effect from time to time. During his Employment, the Executive shall also be eligible to participate in the executive benefit plans maintained by the Company, subject in each case to the generally applicable terms and conditions of the plan in question and to the determinations of any person or committee administering such plan.

4.Term of Employment.

(a)Employment At Will. The Executive’s Employment with the Company shall be “at will,” meaning that either the Executive or the Company shall be entitled to terminate the Executive’s Employment at any time and for any reason, with or without cause. Any contrary representations that may have been made to the Executive shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between the Executive and the Company on the “at will” nature of the Executive’s Employment. Although Executive’s job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of the Executive’s employment may only be changed in an express written agreement signed by the Executive and a duly authorized officer of the Company (other than the Executive). The termination of the Executive’s Employment shall not limit or otherwise affect his obligations under Sections 5 and/or 6 below.

(b)Rights Upon Termination. Upon the termination of the Executive’s Employment, the Executive shall only be entitled to the compensation and benefits that the Executive has earned under this Agreement before the effective date of the termination. The payments under this Agreement shall fully discharge all responsibilities of the Company to the Executive (other than payments of accrued and vested executive benefits, if any, under the Company’s executive benefit plans).

5.Documents and Company Property. The Executive is prohibited from keeping in his possession in any way any correspondence, documents, other information carriers, copies thereof, and other goods made available by the Company or its affiliates to him (including, but not limited to, credit cards, mobile communication devices, keys, documents, handbooks, financial data, plans, USB sticks or other information carriers, access cards and laptop computer), except to the extent that this is necessary for the performance of his work for the Company. In any event, the Executive is obliged to immediately hand over such documents and other goods made available to him at the end of this Agreement or upon suspension of his active duties for any reason other than documents relating to his own employment and compensation.

6.Proprietary Information and Inventions Agreement. Like all Company employees, you will be required, as a condition of your employment with the Company, to sign the Company’s standard Proprietary Information and Inventions Assignment Agreement, a copy of which is attached hereto as Exhibit A.

7.Reimbursement of Expenses. The Company will reimburse business expenses reasonably incurred in the performance of your duties in accordance with the Company’s standard practice and expense reimbursement policies in place at the time (generally within thirty (30) days after you have submitted appropriate documentation, which you must do within thirty (30) days after incurring the expense) and, in any case, on or before the last day of the calendar year following the calendar year in which the relevant expense is incurred. The Company will reimburse reasonable costs of the professional use of your mobile telephone.

8.Successors.

(a)Company’s Successors. This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets. For all purposes under this Agreement, the term “Company” shall include any successor to the Company’s business and/or assets which becomes bound by this Agreement.

(b)Executive’s Successors. This Agreement and all rights of the Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

9.Indemnification. During your employment by the Company and at all times thereafter, regardless of the reason for termination, to the fullest extent permitted by its articles of incorporation and by applicable law, the Company shall indemnify you and hold you harmless against any cost, fee, expense, fine or penalty to which you may be subject as a result of serving as an employee or officer of the Company and provide for you to be covered by the insurance or other indemnity policy applicable to officers or directors of the Company (including any rights to advances or reimbursement of legal fees thereunder). The Company’s indemnification obligation shall survive any termination of your employment.

10.Definitions. The following terms shall have the meaning set forth below wherever they are used in this Agreement:

(a)Code. The term “Code” shall mean the Internal Revenue Code of 1986, as amended.

11.Miscellaneous Provisions.

(a)Notice. Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered, when delivered via email to a Company domain email address or, following the Separation, to the Executive’s personal email address on file with Human Resources, when delivered by FedEx with delivery charges prepaid, or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of the Executive, mailed notices shall be addressed to him at the home address that he most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

(b)Modifications and Waivers. No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Executive and by an authorized officer of the Company (other than the Executive). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(c)Whole Agreement. This Agreement supersedes and replaces any prior agreements, including without limitation, the Prior Agreement, representations or understandings (whether written, oral, implied or otherwise) between the Executive and the Company and constitute the complete agreement between the Executive and the Company regarding the subject matter set forth herein.

(d)Tax Matters. All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law. The Company intends that all payments and benefits provided under this Agreement or otherwise are exempt from, or comply with, with the requirements of Code Section 409A so that none of the payments or benefits will be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein will be interpreted in accordance with such intent. For purposes of Code Section 409A, each payment, installment or benefit payable under this Agreement is hereby designated as a separate payment. The Company shall not have a duty to design its compensation policies in a manner that minimizes your tax liabilities, and you agree not to make any claim against the Company or the Company’s Board of Directors related to tax liabilities arising from your compensation.

(e)Arbitration. Any controversy or claim arising out of this Agreement and any and all claims relating to your employment with the Company will be settled by final and binding arbitration. The arbitration will take place in the State of New York. The arbitration will be administered by the American Arbitration Association under its National Rules for the Resolution of Employment Disputes. Any award or finding will be confidential. You and the Company agree to provide one another with reasonable access to documents and witnesses in connection with the resolution of the dispute. You and the Company will share the costs of arbitration equally up to, for you, the filing fee to bring a civil action in the state courts of New York. Each party will be responsible for its own attorneys’ fees, and the arbitrator may not award attorneys’ fees unless a statute or contract at issue specifically authorizes such an award. This Section 11(f) does not apply to claims for workers’ compensation benefits or unemployment insurance benefits. This Section 11(f) also does not apply to claims concerning the ownership, validity, infringement, misappropriation, disclosure, misuse or enforceability of any confidential information, patent right, copyright, mask work, trademark or any other trade secret or intellectual property held or sought by either you or the Company (whether or not arising under the PIIA).

(f)Choice of Law and Severability. This Agreement shall be interpreted in accordance with the laws of the State of New York (except its provisions governing the choice of law). If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage or any other reason, then such provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect. If any provision of this Agreement is rendered illegal by any present or future statute, law, ordinance or regulation (collectively the “Law”), then such provision shall be curtailed or limited only to the minimum extent necessary to bring such provision into compliance with the Law. All the other

terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation.

(g)No Assignment. This Agreement and all rights and obligations of the Executive hereunder are personal to the Executive and may not be transferred or assigned by the Executive at any time. The Company may assign its rights under this Agreement to any entity that assumes the Company’s obligations hereunder in connection with any sale or transfer of all or a substantial portion of the Company’s assets to such entity.

(h)Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(Signatures on following page)

IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.

The Original BARK Company

Signature: /s/ Rustin Richburg

Title: Chief People Officer

Date: November 7, 2021

Executive

/s/ Howard R. Yeaton
Howard R. Yeaton

Date: November 7, 2021

Exhibit A: Proprietary Information and Inventions Assignment Agreement

BARK Reports Second Quarter Fiscal Year 2022 Results

NEW YORK, November 10, 2021 — The Original BARK Company (NYSE: BARK) (“BARK” or the “Company”), a leading global omnichannel brand for dogs and their parents, today announced its financial results for the fiscal second quarter ended September 30, 2021.

Highlights

•Delivered fiscal second quarter 2022 revenue of $120.2 million, a 39.1% increase year-over-year, and a robust gross margin of 58.2%.

•Added approximately 271,000 Active Subscriptions, bringing total to 2.1 million as of quarter-end.

•Achieved a quarterly LTV-to-CAC of 4.9x, driven by record Average Order Value, strong customer retention, and continued marketing efficiency.

•The Original Bark Company is changing its corporate name to BARK, Inc.; the Company expects this change to be effective on November 22, 2021.

“BARK continues to benefit from powerful secular and channel tailwinds, including growing dog ownership, increasing spending on pets, and an expanding share of pet sales occurring online. Last quarter, we delivered strong results across several key metrics, including a 39% increase in Active Subscriptions, a 34% increase in Subscription Shipments, and a record-high Average Order Value of $29.73”, said Manish Joneja, Chief Executive Officer of BARK. “Notwithstanding the challenging macro environment with increased freight costs and rising media rates, we delivered a robust gross margin of over 58%, and maintained a very healthy LTV-to-CAC of 4.9x in the quarter, underscoring our strong customer retention, continued marketing efficiency and strategic positioning as one of the largest digitally native dog brands in the world today.”

Fiscal Second Quarter 2022 Details:

Revenue

Total revenue increased 39.1% to $120.2 million in the second quarter of fiscal year 2022 as compared to $86.4 million in the second quarter of fiscal year 2021.

•Direct to Consumer (“DTC”) revenue increased 41.7% to $106.8 million in the second quarter of fiscal year 2022 as compared to the same period last year. The growth in DTC revenue was driven by an increase in Subscription Shipments, Average Order Value (“AOV”), and Add-to-Box revenue.

•Commerce revenue increased 20.8% to $13.3 million in the second quarter of fiscal year 2022 as compared to the same period last year. This growth reflects increases in both the number of retailers we partnered with, as well as volume increases amongst existing retailer partners.

Gross Profit

Gross profit was $69.9 million in the second quarter of fiscal year 2022 up from $51.6 million in the second quarter of fiscal year 2021. Gross margin was 58.2% in the second quarter of fiscal year 2022 compared to 59.7% in the second quarter of fiscal year 2021. The decrease in gross margin in the second quarter of fiscal year 2022 was primarily due to higher inbound freight costs as a result of worldwide shipping congestion.

Operating Expenses

General and administrative expenses were $68.2 million in the second quarter of fiscal year 2022, versus $39.3 million in the second quarter of fiscal year 2021. The year-over-year increase was driven by greater shipment volume associated with a 34.3% increase in total Subscription Shipments, higher outbound shipping and fulfillment rates associated with industry wide shipping congestion, as well as additional expenses in connection with the build out and staffing of our BARK Eats and BARK Bright businesses. The Company also incurred incremental expenses associated with being a newly public company.

Advertising and marketing expenses increased $4.1 million to $17.1 million in the second quarter of fiscal year 2022 from $13.0 million in the second quarter of fiscal year 2021. This increase was primarily due to the year-over-year increase in Customer Acquisition Costs (“CAC”) as media rates exceed pre-COVID levels in comparison with the reduced media rates in the second quarter of fiscal year 2021, stemming from the onset of the COVID-19 pandemic. CAC was $51.71 in the most recent fiscal quarter, compared to $43.98 in the same period last year and $48.36 in the first quarter of fiscal 2022. Our Lifetime Value to CAC was a healthy 4.9x in the second quarter of fiscal year 2022. The Company manages its marketing budget on an LTV-to-CAC basis, targeting an annual ratio of 4x or greater.

Adjusted EBITDA

Adjusted EBITDA was $(8.8) million, with Adjusted EBITDA margin of (7.3)%, in the second quarter of fiscal year 2022, as compared to Adjusted EBITDA of $1.1 million and Adjusted EBITDA margin of 1.2%, in the second quarter of fiscal year 2021. Fiscal year 2022 is deliberately an investment year for BARK; the Company is investing in several strategic areas, including its highly-personalized food business, BARK Eats, as well as self-managed fulfillment assets.

Balance Sheet Highlights

The Company’s cash and cash equivalents balance as of September 30, 2021 was $272.6 million. Last quarter, the Company invested in additional inventory in anticipation of the upcoming holiday season, and potential freight congestion surrounding it. As of September 30, 2021, the Company had total debt outstanding of $71.7 million, related to its outstanding convertible notes.

Third Quarter and Fiscal Year 2022 Outlook

Based on information available as of November 10, 2021, BARK is issuing guidance for the fiscal third quarter 2022 and fiscal year 2022 as follows:

•For fiscal third quarter 2022, the Company expects total revenue of $137 to $139 million.

•For the fiscal year 2022, due to uncertainty surrounding the macro freight and shipping environment, the Company anticipates roughly 2% of risk to the $516 million of revenue guidance originally provided in December of 2020.

•The Company is revising its fiscal year 2022 Adjusted EBITDA guidance to ($38) million to ($40) million, from approximately ($31) million, due to greater-than-expected shipping and fulfillment costs, as a result of macro shipping congestion and rising shipping rates; incremental public company costs, associated with preparing to comply as a large accelerated filer with the requirements of Section 404(b) of the Sarbanes-Oxley Act; higher D&O insurance, as a result of rising demand on insurers; and additional audit fees as a result of the timing of the Company's merger with Northern Star Acquisition Corp.

Conference Call Information

A conference call to discuss second quarter fiscal year 2022 results will be held today, November 10, 2021, at 4:30 p.m. ET. During the conference call, the Company may make comments concerning business and financial developments, trends and other business or financial matters. The Company's comments, as well as other matters discussed during the conference call, may contain or constitute information that has not been previously disclosed.

Those who wish to participate in the call may do so by dialing (866) 465-0807 or (639) 716-2121 for international callers, the conference ID 7141738. The conference call will also be available to interested parties through a live webcast at https://investors.bark.co/. A recording will be available for 12 months after the date of the event. Recordings may be accessed at https://investors.bark.co/.

About BARK

BARK is the world's most dog-centric company, devoted to making dogs happy with the best products, services and content. BARK's dog-obsessed team applies its unique, data-driven understanding of what makes each dog special to design playstyle-specific toys, wildly satisfying treats and wellness supplements, and dog-first experiences that foster the health and happiness of dogs everywhere. Founded in 2012, BARK loyally serves dogs nationwide with monthly subscription services, BarkBox and Super Chewer; a curated e-commerce experience on BARKShop.com; custom collections via its retail partner network, including Target and Amazon; wellness products that meet your dogs' needs with BARK Bright; and a personalized meal delivery service for dogs BARK Eats. At BARK, we want to be the people our dogs think we are and promise to be their voice until every dog reaches its full tail-wagging potential. Sniff around at bark.co for more information.

Cautionary Statement Regarding Forward Looking Statements

Certain statements included in this press release are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, statements regarding estimates and forecasts of financial and performance metrics, including all statements under the heading “Third Quarter and Fiscal Year 2022 Outlook,” and projections of market opportunity.

These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of BARK’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of BARK. Some important factors that could cause actual results to differ materially from those in any forward-looking statements could include changes in domestic and foreign business, market, financial, political and legal conditions. These forward-looking statements are subject to a number of risks and uncertainties, including but not limited to: risks relating to the uncertainty of projected financial information with respect to BARK; the risk that spending on pets may not increase at projected rates; the risk that BARK subscribers may not increase their spending with BARK; risks related to BARK sustaining its rate of revenue growth in recent periods; BARK’s ability to continue to convert social media followers and contacts into customers and to acquire and retain new subscriber and customers in a cost-effective manner; BARK’s ability to successfully expand its product lines and channel distribution; risks related to fluctuations in quarterly operating results and key metrics; competition; the uncertain effects of the COVID-19 pandemic including on BARK’s supply chain and operations; and those risks and uncertainties disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Form 10-K and Form 10-Q filed with the Securities and Exchange Commission (the “SEC”), and similar disclosures in subsequent reports filed with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that BARK presently does not know or that BARK currently believes is immaterial that could also cause actual results to differ from those contained in the forward-looking statements.

In addition, forward-looking statements reflect BARK’s expectations, plans or forecasts of future events and views as of the date of this press release. BARK anticipates that subsequent events and developments will cause BARK’s assessments to change. However, while BARK may elect to update these forward-looking statements at some point in the future, BARK specifically disclaims any obligation to do so.

These forward-looking statements should not be relied upon as representing BARK’s assessments as of any date subsequent to the date of this press release. Accordingly, undue reliance should not be placed upon the forward-looking statements.

Any financial projections in this press release are forward-looking statements that are based on assumptions that are inherently subject to significant uncertainties and contingencies, many of which are beyond BARK’s control. While all projections are necessarily speculative, BARK believes that the preparation of prospective financial information involves increasingly higher levels of uncertainty the further out the projection extends from the date of preparation. The assumptions and estimates underlying the projected results are inherently uncertain and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the projections.

Contacts

Investors:

Michael Mougias

investors@barkbox.com

Media:

Garland Harwood

press@barkbox.com

THE ORIGINAL BARK COMPANY

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)


	Three Months Ended				Six Months Ended
	September 30,		September 30,		September 30,		September 30,
	2021		2020		2021		2020
REVENUE	$	120,162	$	86,413	$	237,768	$	161,221
COST OF REVENUE	50,276		34,859		98,091		62,747
Gross profit	69,886		51,554		139,677		98,474
OPERATING EXPENSES:
General and administrative	68,235		39,279		137,734		71,315
Advertising and marketing	17,075		12,958		34,225		24,533
Total operating expenses	85,310		52,237		171,959		95,848
INCOME (LOSS) FROM OPERATIONS	(15,424)		(683)		(32,282)		2,626
INTEREST EXPENSE	(1,296)		(1,906)		(2,857)		(3,420)
OTHER INCOME—NET (1)	23,175		1,211		16,790		1,432
NET INCOME (LOSS) BEFORE INCOME TAXES	6,455		(1,378)		(18,349)		638
PROVISION FOR INCOME TAXES	—		—		—		—
NET INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)	$	6,455	$	(1,378)	$	(18,349)	$	638

(1)For the three and six-months ended September 30, 2021, Other Income, Net, is primarily due to income related to the changes in fair value of our warrant liabilities during the period of $23.4 million and $19.5 million, respectively.

GROSS PROFIT BY SEGMENT

(Unaudited)

(In thousands)


	Three Months Ended				Six Months Ended
	September 30,		September 30,		September 30,		September 30,
	2021		2020		2021		2020
Direct to Consumer:
Revenue	$	106,817	$	75,368	$	212,193	$	142,468
Costs of revenue	42,499		29,052		83,319		53,168
Gross profit	64,318		46,316		128,874		89,300
Commerce:
Revenue	13,345		11,045		25,575		18,753
Costs of revenue	7,777		5,807		14,772		9,579
Gross profit	5,568		5,238		10,803		9,174
Consolidated:
Revenue	120,162		86,413		237,768		161,221
Costs of revenue	50,276		34,859		98,091		62,747
Gross profit	$	69,886	$	51,554	$	139,677	$	98,474

Key Performance Indicators


	Three Months Ended						Six Months Ended
	September 30,			September 30,			September 30,			September 30,
	2021			2020			2021			2020
Subscription Shipments (in thousands)	3,593			2,675			7,201			5,043
Average Monthly Subscription Shipment Churn	7.1		%	5.3		%	7.2		%	5.7		%
Active Subscriptions (in thousands)	2,089			1,499			2,089			1,499
New Subscriptions (in thousands)	271			252			551			555
CAC	$	51.71		$	43.98		$	50.01		$	36.80
LTV:CAC	4.9x			7.4x			5.0x			8.4x
Average Order Value	$	29.73		$	28.18		$	29.47		$	28.25

Subscription Shipments

We define Subscription Shipments as the total number of subscription product shipments shipped in a given period. Subscription Shipments does not include gift subscriptions or one-time subscription shipments.

Average Monthly Subscription Shipment Churn

Average Monthly Subscription Shipment Churn is calculated as the average number of subscription shipments that have been cancelled in the last three months, divided by the average monthly active subscription shipments in the last three months. The number of cancellations used to calculate Average Monthly Subscription Shipment Churn is net of the number of subscriptions reactivated during the last three months.

Active Subscriptions

Our ability to expand the number of Active Subscriptions is an indicator of our market penetration and growth. We define Active Subscriptions as the total number of unique product subscriptions with at least one shipment during the last 12 months. Active Subscriptions does not include gift subscriptions or one-time subscription purchases.

New Subscriptions

We define New Subscriptions as the number of unique subscriptions with their first shipment occurring in a period.

Customer Acquisition Cost

Customer Acquisition Cost (“CAC”) is a measure of the cost to acquire New Subscriptions in our Direct to Consumer business segment. This unit economic metric indicates how effective we are at acquiring each New Subscription. CAC is a monthly measure defined as media spend in our Direct to Consumer business segment in the period indicated, divided by total New Subscriptions in such period. Direct to Consumer media spend is primarily comprised of internet and social media advertising fees.

Lifetime Value

Lifetime Value ("LV") is the dollar value of each subscription as measured by the cumulative Direct to Consumer Gross Profit for the average life of the subscription.

Average Order Value

Average Order Value (“AOV”) is Direct to Consumer revenue for the period divided by Subscription Shipments for the same period.

Non-GAAP Financial Measures

We report our financial results in accordance with GAAP. However, management believes that Adjusted Net Income (Loss), Adjusted Net Income (Loss) Margin, Adjusted Net Income (Loss) on Common Shares, Adjusted EBITDA and Adjusted EBITDA Margin, all non-GAAP financial measures (together the “Non-GAAP Measures”), provide investors with additional useful information in evaluating our performance.

We calculate Adjusted Net Income (Loss) as net income (loss), adjusted to exclude: (1) stock-based compensation expense, (2) change in fair value of warrants and derivatives, (3) sales and use tax expense, (4) one-time transaction costs associated with the financing and merger (5) demurrage fees related to freight and (6) other one-time items.

We calculate Adjusted Net Income (Loss) Margin by dividing Adjusted Net Income (Loss) for the period by Revenue for the period.

We calculate Adjusted Net Income (Loss) on Common Shares by dividing Adjusted Net Income (Loss) for the period by weighted average common shares used to compute net loss per share attributable to common stockholders for the period.

We calculate Adjusted EBITDA as net income (loss), adjusted to exclude: (1) interest expense, (2) depreciation and amortization, (3) stock-based compensation expense, (4) change in fair value of warrants and derivatives, (5) sales and use tax expense,(6) one-time transaction costs associated with the financing and merger, (7) demurrage fees related to freight and (8) other one-time items.

We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA for the period by Revenue for the period.

The Non-GAAP Measures are financial measures that are not required by, or presented in accordance with GAAP. We believe that the Non-GAAP Measures, when taken together with our financial results presented in accordance with GAAP, provides meaningful supplemental information regarding our operating performance and facilitates internal comparisons of our historical operating performance on a more consistent basis by excluding certain items that may not be indicative of our business, results of operations or outlook. In particular, we believe that the use of the Non-GAAP Measures are helpful to our investors as they are measures used by management in assessing the health of our business, determining incentive compensation and evaluating our operating performance, as well as for internal planning and forecasting purposes.

The Non-GAAP Measures are presented for supplemental informational purposes only, have limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Some of the limitations of the Non-GAAP Measures include that (1) the measures do not properly reflect capital commitments to be paid in the future, (2) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA and Adjusted EBITDA Margin do not reflect these capital expenditures, (3) Adjusted EBITDA and Adjusted EBITDA Margin do not consider the impact of stock-based compensation

expense, which is an ongoing expense for our company and (4) Adjusted EBITDA and Adjusted EBITDA Margin do not reflect other non-operating expenses, including interest expense. In addition, our use of the Non-GAAP Measures may not be comparable to similarly titled measures of other companies because they may not calculate the Non-GAAP Measures in the same manner, limiting its usefulness as a comparative measure. Because of these limitations, when evaluating our performance, you should consider the Non-GAAP Measures alongside other financial measures, including our net income (loss) and other results stated in accordance with GAAP.

A reconciliation of the projected Non-GAAP Measures has not been provided because certain items excluded from these Non-GAAP Measures such as charges related to stock-based compensation expenses and related tax effects, including non-recurring income tax adjustments, cannot be reasonably calculated or predicted at this time.

The following table presents a reconciliation of Adjusted Net Income (Loss) to net loss, the most directly comparable financial measure stated in accordance with GAAP, and the calculation of net loss margin,

Adjusted Net Income (Loss) Margin and Adjusted Net Income (Loss) on Common Shares for the periods presented:

Adjusted Net Income (Loss)


	Three Months Ended September 30						Six Months Ended September 30
	2021			2020			2021			2020
	(in thousands)						(in thousands)
Net income (loss)	$	6,455		$	(1,378)		$	(18,349)		$	638
Stock compensation expense	3,729			1,004			6,827			1,392
Change in fair value of warrants and derivatives	(23,407)			(1,229)			(19,508)			(1,263)
Sales and use tax expense (1)	—			243			—			841
Transaction costs (2)	442			—			5,640			—
Demurrage fees	735			—			735			—
Other one-time items (3)	1,014			—			3,612			—
Adjusted net income (loss)	(11,032)			(1,360)			(21,043)			1,608
Less: Earnings attributable to participating securities	—			—			—			(1,608)
Net loss attributable to common stockholders—basic and diluted	$	(11,032)		$	(1,360)		$	(21,043)		$	—
Net income (loss) margin	5.37		%	(1.59)		%	(7.72)		%	0.40		%
Adjusted net income (loss) margin	(9.18)		%	(1.57)		%	(8.85)		%	1.00		%

Adjusted net income (loss) per common share - basic and diluted	$	(0.07)		$	(0.03)		$	(0.15)		$	—
Weighted average common shares used to compute net loss per share attributable to common stockholders - basic and diluted	169,173,509			45,889,103			139,133,082			45,704,365

The following table presents a reconciliation of Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP, and the calculation of net loss margin and Adjusted EBITDA margin for the periods presented:

Adjusted EBITDA


	Three Months Ended September 30						Six Months Ended September 30
	2021			2020			2021			2020
	(in thousands)						(in thousands)
Net income (loss)	$	6,455		$	(1,378)		$	(18,349)		$	638
Interest expense	1,296			1,906			2,857			3,420
Depreciation and amortization expense	957			528			1,801			1,036
Stock-based compensation expense	3,729			1,004			6,827			1,392
Change in fair value of warrants and derivatives	(23,407)			(1,229)			(19,508)			(1,263)
Sales and use tax expense (1)	—			243			—			841
Transaction costs (2)	442			—			5,640			—
Demurrage fees	735			—			735			—
Other one-time items (3)	1,014			—			3,612			—
Adjusted EBITDA	$	(8,778)		$	1,074		$	(16,385)		$	6,064
Net loss margin	5.37		%	(1.59)		%	(7.72)		%	0.40		%
Adjusted EBITDA margin	(7.31)		%	1.24		%	(6.89)		%	3.76		%

(1)Sales and use tax expense relates to recording a liability for sales and use tax we did not collect from our customers. Historically, we had collected state or local sales, use, or other similar taxes in certain jurisdictions in which we only had physical presence. On June 21, 2018, the U.S. Supreme Court decided, in South Dakota v. Wayfair, Inc. that state and local jurisdictions may, at least in certain circumstances, enforce a sales and use tax collection obligation on remote vendors that have no physical presence in such jurisdiction. A number of states have positioned themselves to require sales and use tax collection by remote vendors and/or by online marketplaces. The details and effective dates of these collection requirements vary from state to state and accordingly, we recorded a liability in those periods in which we created economic nexus based on each state’s requirements. Accordingly, we now collect, remit, and report sales tax in all states that impose a sales tax.

(2)Transactions costs represent non-recurring consulting and advisory costs with respect to the merger agreement entered into with Northern Star Acquisition Corp. on December 16, 2020.

(3)For the three months ended September 30, 2021, other one-time items is comprised of SOX implementation fees of $0.3 million, executive transition costs, including recruiting, bonus and relocation related expense of $0.3 million, loss on exercise of warrants of $0.3 million and restructuring related expenses of $0.1 million. For the six months ended September 30, 2021, other one-time items is comprised of loss on extinguishment of debt of $2.6 million, SOX implementation fees of $0.3 million, executive transition costs, including recruiting, bonus and relocation related expenses of $0.3 million, loss on exercise of warrants of $0.3 million and restructuring related expenses of $0.1 million.

THE ORIGINAL BARK COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)


	September 30,		March 31,
	2021		2021

ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	272,599	$	38,278
Accounts receivable—net	10,921		8,927
Prepaid expenses and other current assets	6,470		7,409
Inventory	130,317		77,454
Total current assets	420,307		132,068
PROPERTY AND EQUIPMENT—NET	21,482		13,465
INTANGIBLE ASSETS—NET	3,105		2,070
OTHER NONCURRENT ASSETS	4,398		3,260
TOTAL ASSETS	$	449,292	$	150,863
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable	$	23,675	$	50,501
Accrued and other current liabilities	61,988		44,605
Deferred revenue	28,398		27,177
Total current liabilities	114,061		122,283
LONG-TERM DEBT	71,735		115,729
OTHER LONG-TERM LIABILITIES	9,617		11,834
Total liabilities	195,413		249,846
COMMITMENTS AND CONTINGENCIES
REDEEMABLE CONVERTIBLE PREFERRED STOCK:
Convertible preferred stock (Series Seed, A, B, C, and C-1) $0.0001 par value with aggregate liquidation preference of $0 and $62,800 at September 30, 2021 and March 31, 2021 respectively; 0 and 8,010,560 shares authorized; 0 and 7,752,515 shares issued and outstanding at September 30, 2021 and March 31, 2021, respectively.	—		59,987
Total redeemable convertible preferred stock	—		59,987
STOCKHOLDERS’ EQUITY (DEFICIT):
Common stock, par value $0.0001 per share—500,000,000 shares authorized; 171,069,553 shares issued and outstanding as of September 30, 2021 and 148,622,942 shares authorized; 48,071,777 shares issued and outstanding as of March 31, 2021.	1		—
Treasury stock, at cost	—		—
Additional paid-in capital	452,180		20,984
Accumulated deficit	(198,302)		(179,954)
Total stockholders’ (equity) deficit	253,879		(158,970)
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	449,292	$	150,863

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)


	Six Months Ended
	September 30,		September 30,
	2021		2020
Net cash used in (provided by) operating activities	$	(108,019)	$	8,481
Net cash used in investing activities	(11,003)		(2,838)
Net cash provided by financing activities	354,168		6,253
Net increase in cash, cash equivalents and restricted cash	235,146		11,896
Cash, cash equivalents and restricted cash — beginning of period	39,731		9,676
Cash, cash equivalents and restricted cash — end of period	$	274,877	$	21,572

Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	272,599	$	21,219
Restricted cash - Prepaid expenses and other current assets	2,278		353
Total cash, cash equivalents and restricted cash	$	274,877	$	21,572