Business context and reporting period
This is Northern Star Acquisition Corp.’s unaudited Form 10-Q for the quarter ended December 31, 2020, not an operating-company filing by Bark, Inc. Northern Star was a blank-check company formed to pursue a business combination; it had not begun operations or generated revenue by period-end. Its fiscal year-end changed to March 31.
On December 16, 2020, Northern Star agreed to combine with BarkBox, Inc. BarkBox’s stockholders and other equity-derivative holders were to receive an aggregate of 150 million Northern Star Class A shares, subject to adjustment. The filing described BarkBox as serving over 1 million dogs monthly through subscriptions and retail distribution. The transaction was expected to close early in the second quarter of 2021, subject to approvals and other conditions.
Financial results, liquidity and obligations
| Metric | Reported value |
|---|---|
| Revenue | None; the company had no operating revenue. |
| Net loss, three months ended December 31, 2020 | $509,787; loss per share of $0.07. |
| Net loss, inception through December 31, 2020 | $510,233; loss per share of $0.08. |
| Cash outside the trust, December 31, 2020 | $1,128,851. |
| Trust assets, December 31, 2020 | $254,369,267, primarily U.S. Treasury bills. |
| Operating cash flow, inception through December 31, 2020 | $(200,122). |
| Total liabilities | $9,269,025, including $8,902,250 of deferred underwriting fees. |
Quarterly operating costs were $529,054, offset by $19,267 of trust interest and unrealized gains. The company raised $254.35 million from its public offering and $6.837 million from private warrants; reported transaction costs were $14,437,777. It reported no long-term debt or off-balance-sheet arrangements. No prior comparable operating period was available because the company was formed in July 2020.
Outlook, risks and unusual items
- Northern Star intended to use substantially all trust funds, less applicable deferred underwriting fees and taxes, toward a business combination. It had until November 13, 2022 to complete one, unless stockholders extended the period; otherwise, public shares generally would be redeemed and warrants could expire worthless.
- The merger required stockholder approvals and satisfaction of other closing conditions. The proposed consideration and closing timing were estimates, not completed outcomes.
- A $10 million success fee was payable to a third party upon successful completion of a business combination. The underwriters’ $8.902 million deferred fee was payable upon a completed combination and forfeited if none was completed.
- Management said COVID-19 could adversely affect the company’s financial position, operations or target search, but the impact was not readily determinable. Management also cautioned that available cash outside the trust could prove insufficient for transaction-search costs, potentially requiring additional financing.
- Management reported disclosure controls were effective at a reasonable-assurance level and no material change in internal control over financial reporting. No legal proceedings were reported.
Important facts for investors to verify
- Whether the BarkBox transaction closed, and the final consideration, approvals, adjustments and financing or redemption terms.
- Bark’s operating and financial performance: this filing provides no BarkBox revenue, earnings, cash-flow or margin figures.
- The level of public-share redemptions and cash available to the combined company after the transaction.
- The deferred underwriting fee, $10 million success fee, other transaction costs and any additional financing needs.
- Trust-account balances and redemption protections, including the sponsor’s limited indemnity and the November 2022 business-combination deadline.