Bark, Inc. current report, 01 June 2021

Full document

Bark, Inc. Form 8-K Summary

Business context and reporting period

The Original BARK Company filed this Form 8-K on June 7, 2021, reporting events occurring primarily on June 1, 2021. The filing documents the completion of the business combination between Northern Star Acquisition Corp. and BarkBox, Inc. Northern Star changed its name to The Original BARK Company, and BarkBox became its wholly owned operating subsidiary. The combined company ceased to be a shell company and began trading on the NYSE under BARK and BARK WS on June 2, 2021.

Key financial metrics, capitalization, debt and liquidity

  • PIPE financing: 20,000,000 shares were issued at $10.00 per share for gross proceeds of $200.0 million.
  • Public-share redemptions: 2,728,989 shares were redeemed for approximately $27.3 million, or approximately $10.00 per share, from Northern Star’s trust account.
  • Shares outstanding immediately after closing: 166,734,484.
  • 2025 Convertible Notes: $75.0 million principal amount of 5.50% convertible senior secured notes due 2025; convertible into approximately 7,713,121 shares based on principal and accrued interest at closing.
  • Options: 29,257,576 shares underlying options, with a weighted-average exercise price of $2.15 per share.
  • Warrants: 8,478,333 public warrants and 4,558,000 private warrants, each exercisable at $11.50 per share beginning November 13, 2021; 1,897,212 assumed warrants had a weighted-average exercise price of $1.05 per share.
  • The filing references BARK’s audited financial statements, pro forma financial information and management’s discussion and analysis in Exhibits 99.1 through 99.3, but the provided filing text does not state revenue, net income or loss, cash flow, cash balance, operating margins, working capital or post-closing liquidity figures.

Material changes versus the prior comparable period

  • The company transitioned from a special-purpose acquisition company with no operations to a holding company whose assets consist primarily of its equity interest in BARK.
  • BARK’s stockholders received an aggregate of 117,669,723 shares of the combined company.
  • The transaction added $200.0 million of PIPE capital, subject to transaction costs and other closing adjustments not quantified in the provided text, while approximately $27.3 million of trust-account proceeds were used for redemptions.
  • BARK’s existing convertible notes, options and warrants were assumed or converted into instruments exercisable for or convertible into the combined company’s common stock.
  • The company adopted its second amended and restated certificate of incorporation and amended and restated bylaws, and its 2021 Equity Incentive Plan and 2021 Employee Stock Purchase Plan became effective.

Guidance, outlook, risks and unusual items

The filing does not provide new quantitative guidance. It incorporates BARK’s annual report, pro forma financial statements and MD&A by reference. Management’s forward-looking statements are subject to risks including the ability to grow and manage the business profitably, reliance on subscription products such as BarkBox and Super Chewer, competition, customer acquisition and cross-selling effectiveness, shipping disruptions, macroeconomic and consumer-spending conditions, COVID-19 impacts, privacy and information-security compliance, potential litigation and product liability, impairment charges, and the ability to maintain NYSE listing and effective financial reporting controls.

Material transaction-related arrangements include registration rights for certain holders, resale registration obligations for PIPE shares, and generally 12-month lock-up restrictions for specified BARK and Northern Star stockholders. The lock-ups may terminate earlier for certain shares if the common stock reaches $15.00 per share for the specified trading-period condition. The filing also reports indemnification agreements with directors and executive officers.

Facts investors should verify

  • Review Exhibits 99.1–99.3 for audited historical results, pro forma adjustments, revenue growth, losses, cash flow, margins and liquidity.
  • Reconcile the $200.0 million PIPE proceeds and approximately $27.3 million of redemptions to the company’s closing cash balance and transaction expenses.
  • Assess dilution from 166.7 million shares outstanding, options, approximately 14.9 million public and private warrants, assumed warrants and the convertible notes.
  • Review the $75.0 million secured convertible debt’s terms, maturity, interest obligations, collateral and conversion mechanics.
  • Confirm the effectiveness and timing of PIPE and other resale registration statements and the expiration or early termination provisions of lock-ups.
  • Evaluate the risk disclosures in the March 31, 2021 Form 10-K, particularly subscription retention, customer acquisition costs, inventory and shipping exposure, competition, losses and cash requirements.